Our gift tax rules impose a tax on certain transfers. This gift tax is required given our income tax rules. Absent a gift tax, taxpayers could simply sidestep income taxes by making non-taxable gifts to everyone rather than paying for goods and services. So what happens when a business makes a gift? Does the recipient… Continue reading Is a Gift to a Former Employee Taxable?
Category: Federal Income Tax
Federal income tax advice, articles, tips, & more.
The Federal income tax is the largest expenditure for most individuals and businesses. It dwarfs the costs for insurance and basic necessities. This is only going to increase in the future. Tax planning is needed.
This page provides timely and thorough coverage of various Federal income tax law questions, court cases, and rulings.
If you need help with a Federal income tax matter, we can probably help. We help clients minimize their Federal income tax liabilities. Please call our tax attorneys to see how we can help.
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COD Income: Do You Count Pension Payments?
If you have a right to receive $1 in the future, is that right an asset? Our tax laws would generally say that it is. What if you cannot assign the right to receive the $1 and you cannot accelerate the payment? At what point is the right to receive the $1 not an asset… Continue reading COD Income: Do You Count Pension Payments?
Unpacking the Moving Expense Deduction
There are several issues that the IRS frequently challenges on audit. For individual taxpayers, this includes moving expenses. Taxpayers are entitled to deduct moving expenses. Our tax laws impose several limitations on what expenses can be deducted and when. The recent Doyle v. Commissioner, Docket No. 6532-20S (2021) case provides an opportunity to consider these… Continue reading Unpacking the Moving Expense Deduction
Using an Old NOL Carryforward
The things we take for granted these days. If you are younger than me, you may not realize it but there was a significant change that happened in the 1990s. Personal computers were just starting to actually be useful in the workplace. The ability to type and use a 10-day calculator were sought after job… Continue reading Using an Old NOL Carryforward
Enough is Enough, But An Amended Tax Return is Not
The process for reporting taxes can be more difficult than discerning whether a tax provision applies. This complexity stems from the level of information is required to be reported. The IRS reporting requirements continue increase every year. The IRS’s decision to require partnership tax capital accounts is an example. Why is that information required and… Continue reading Enough is Enough, But An Amended Tax Return is Not
Fixing Self-Directed IRA Errors
There are ways to structure transactions to avoid income taxes. Creative taxpayers and tax attorneys have used qualified retirement accounts for this purpose (the tax savings from ESOPs is an example). One has to be careful when structuring transactions involving these qualified plans. Given the flexibility in the rules and the absence of financial advisors,… Continue reading Fixing Self-Directed IRA Errors
Hobby Loss vs. Start-Up Expense?
Just about every business starts out with losses. This is the nature of start-ups. The activity will either gain traction and produce income and possibly a profit or, eventually, the activity end. This is basic economics and capitalism at work. The U.S. economy is based on these concepts, allowing would-be entrepreneurs the opportunity and motive… Continue reading Hobby Loss vs. Start-Up Expense?
Tax on Damages for Loss of Consortium
Those who receive damages from physical injuries or sickness are not required to pay tax on the damage award or settlement. That is the general rule. But what about ancillary claims by others? What about a lawsuit for physical damage that also includes a claim for the injured parties spouse? What if the taxpayer-husband was injured and the… Continue reading Tax on Damages for Loss of Consortium
Tax Reporting for Returns & Allowances
Our tax laws create categories–income/exclusion, deduction, and credit. Taxpayers are presented with structured forms that set out these categories. The IRS expects taxpayers to fill out the forms by correctly identifying what items go in each category. But it is not always clear what items go in each category. Taxpayers may engage in tax planning… Continue reading Tax Reporting for Returns & Allowances
How to Substantiate Gambling Tax Losses
There are several types of tax disputes that are frequently litigated. Gambling losses are an example. Taxpayers who gamble often incur significant losses. If the taxpayer is found to be a professional gambler, these losses can be counted for income tax purposes and used to offset the taxpayer’s other income. These tax losses can reduce… Continue reading How to Substantiate Gambling Tax Losses