Real estate has been a great investment. In addition to the potential for appreciation of the property, it may also have the added benefit of producing rental or other income. Real estate can also have income tax advantages. This can help reduce one’s income tax liability during their peak earning years. Many taxpayers buy real… Continue reading Court Recasts Gift of LLC Interests
Category: Tax
Contribution to Corporation, then Sale of the Corporation
Most income tax planning involves questions about income, deductions or credits, character, or timing, or some combination of these questions. When viewed from these categories, even simple transactions can present tax planning opportunities. The contribution of property to a corporation by its shareholder is an example. A contribution triggers taxable income to the shareholder. Our… Continue reading Contribution to Corporation, then Sale of the Corporation
Charter Boat Expenses are Miscellaneous Itemized Deductions
We live in a complex society. Even common activities can be exceedingly complex. Take a charter boat operation, for example. One has to consider the various laws for registering the boat; laws that dictate where and when the boat can operate; the laws governing the crew and its activities; and financing and loan and insurance… Continue reading Charter Boat Expenses are Miscellaneous Itemized Deductions
Tax Planning for Demolished Buildings
It is often said that bad things happen in threes. This is a nice way of saying that too many bad things have happened in quick succession, so hopefully, the person will not suffer further calamities in the short term. Tax attorneys view calamities in terms of tax losses and/or net operating losses. As tax… Continue reading Tax Planning for Demolished Buildings
Rental Tax Losses for Those With Irregular Hours
Tax cases are interesting in that they apply a fairly well-developed set of rules to varying fact patterns. These varying fact patterns can result in surprising, and often unintended, consequences. The more complex the tax law in question, the more likely it is that the outcome will be something other than what Congress may have… Continue reading Rental Tax Losses for Those With Irregular Hours
Qualifying for Section 1244 Stock Losses
The Tax Cuts & Jobs Act of 2017 changed the choice of entity decision quite a bit. It affords corporate taxpayers the benefit of the lower flat 21 percent tax rate. It provides non-corporate businesses a 20% qualified business income deduction. There were other changes too. This is in addition to the existing tax rules… Continue reading Qualifying for Section 1244 Stock Losses
Defense Contractor Able to Exclude Foreign Income
United States citizens pay tax on their worldwide income. This general rule can result in double taxation–with the United States imposing tax on the same income that was already taxed by a foreign government. The United States has tax treaties with many countries that help avoid this type of double taxation. The United States also… Continue reading Defense Contractor Able to Exclude Foreign Income
Tax Deductions Associated With “Other Income”
The IRS was recently given a significant increase in its budget. Its request for more money was premised on the need to hire more IRS revenue agents to audit more non-compliant tax returns. While the IRS has in fact reduced its headcount significantly, it has also benefitted from recent tax law changes. Some of these… Continue reading Tax Deductions Associated With “Other Income”
Tax Consequences of a Loan vs. Capital Contribution
Taxpayers often structure their affairs to their advantage. Our legal system and even our tax laws allow for this. With many transactions, one way this is done is structuring transfers as either loans or capital contributions. The tax ramifications for the transfers can vary widely based on this type of broad classification. This distinction is… Continue reading Tax Consequences of a Loan vs. Capital Contribution
Foreign Trust Owner Liable for 35% IRS Penalty
The IRS shifted its focus to international issues about ten years ago. This included having the penalty group within the IRS’s Small Business/Self-Employed division focus on international reporting penalties. This is in addition to the Treasury’s FBAR filing requirements. The SB/SE division’s focus on penalties started with a few penalty notices. The number of these… Continue reading Foreign Trust Owner Liable for 35% IRS Penalty