Generally when §1231 gains exceed §1231 losses during the year, the net §1231 gain is taxed as a long-term capital gain. However, if there are nonrecaptured §1231 losses from prior years, the net §1231 gain is taxed as ordinary income [§1231(c)]. Nonrecaptured §1231 losses are the...
Generally the five tax benefits of having children are the: dependency exemption, child tax credit, earned income credit (EIC), child and dependent care credit and head of household filing status. These benefits can be split only when the parents are separated under a divorce or separation...
In tax year 2011 the IRS created Form 8949, Sales and Other Dispositions of Capital Assets, for taxpayers to calculate capital gains and losses. List all capital gain and loss transactions on this form. The subtotals from this form will then be carried over to...
This post is an overview of IRS Form 3903 as well as IRS Publication 521, Moving Expenses Generally your move must be closely related to when you start work. You should be safe if moving expenses were incurred within one year from the date you first reported to a...
When adjusting to civilian life it is important to understand what is taxable and what is not taxable in regard to your pay after service to the US Military. This post is a rudimentary overview to some of those issues that were garnered from perusing the...
According to IRS Publication 501 if you are not married, but provide a home for a qualifying dependent, you may be able to use the head of household filing status. The head of household filing status provides a higher standard deduction, lower tax brackets, and generally a better tax...
According to IRS Publication 970 the modified version of the Hope Credit is now referred to as the American Opportunity Tax Credit (AOTC) and extended through 2012. The AOTC is available for the first four years of post-secondary education. It has been expanded so that qualified tuition and related expenses now...
Interim changes for issuing Individual Taxpayer Identification Numbers (ITIN) have been announced by the IRS. ITINs are only issued to people who are not eligible to obtain a Social Security Number. During this interim period WHICH IS TO LAST UNTIL THE START OF THE 2012 TAX FILING...
According to IRS administrative guidelines to its examiners concerning Rev. Rul. 2012-18, published in the 2012-26 Internal Revenue Bulletin, when performing a tip examination (aka audit), IRS examiners must ensure that service fees or charges are properly characterized as wages and not tips. If the payment is...
Taxpayers who inherit IRAs also inherit the decedent’s basis or amount invested in those IRAs, regardless of the relationship between the beneficiary and the decedent. Ideally, the decedent will have filed IRS Form 8606 (Nondeductible IRAs), showing the amount of basis in the IRA. Any remaining basis in the IRA shown...