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Determining Tax Basis and Holding Period for Non Passive Activities

The Perturbing New Treatment of Patents Under the Tax Cut & Jobs Act (TCJA)

Determining Tax Basis and Holding Period for Non Passive Activities is one of those 'Secrets of the Golden Flower' that seems to be both completely esoteric and yet oh so real at the same time. Let's take a closer look

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Posted in 1031 Exchange, 1231 Exchange, Asset Classification, Basis, Capital Gain, Capital Loss, Cost Basis, Tax Guidance & Preparation

Lessons From Mitt Romney’s Tax Return

Business Entity Selection and the Tax Consequences of Converting

Check out Mitt Romney's 2010 tax return and learn how he does it. The most important lesson I learned in perusing his return (besides the significance of sheltering your $$ outside of the USA) is the immediate impact of targeted charitable contributions.

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Posted in Abusive Tax Shelter, Accounting Method, Alternative Minimum Tax (AMT), Asset Classification, Audit Technique Guide, Basis, Business Expense, Business Income, Charitable Contribution, Cost Basis, Mitt Romney Taxes

How to Report a Foreclosure to the IRS

Business Entity Selection and the Tax Consequences of Converting

A foreclosure on rental property technically involves the sale of the property back to the lender. Form 1099-A Acquisition or Abandonment of Secured Property reports that the lender has repossessed or foreclosed on the property. Box 2 is the amount of the outstanding mortgage debt, and

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Posted in Asset Classification, Capital Gain, Capital Loss, Foreclosure, Passive Activity, Rental Real Estate, Taxable Income

Overstated Basis Causes Understated Income However …..

The lesson I learned today is that an overstatement of basis (cost of an asset) could result in an understatement of income in the future when the asset is sold but is not necessarily the same as under reported income that,

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Posted in Asset Classification, Basis, Business Expense, Rental Real Estate

Sale Leaseback

From a tax perspective the fundamental issue is whether a legitimate business purpose exists for the formation of a distinct entity to do a sale leaseback. If one exists and this is pursued all elements of the transaction should meet

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Posted in Asset Classification, Capital Gain, Capital Loss, Cost Basis, Cost Segregation, Entity Classification, Estate Tax, Family, Gift Tax, Self Employ, Small Business, Sole Proprietor, Tax Guidance & Preparation, Tax Problems & Requests, Tax Relief

How to Properly Close Down Your Business

Closing down your business is hard and heart breaking and if you are at the point that you are actually reading this post then people have probably been nagging you for money and you are at the end of your

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Posted in Appeals & Audit Resolution, Asset Classification, Back Taxes Owed, Debt, Disallowed Expenses, Distributions, Entity Classification, IRS Collections, IRS Enforcement, IRS Levy, IRS Lien, Net Operating Loss, NOL, Paying Taxes, Self Employ, Small Business, Sole Proprietor, Stock Options, Tax Guidance & Preparation, Tax Problems & Requests, Tax Relief

Determining the Amout of Disaster Loss to Claim for a Business Asset

Start with the cost basis of each asset along with a fair market value (FMV) of each asset both before and after the disaster.  Be prepared to substantiate.  The next piece of data needed is the amount of reimbursement you

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Posted in Asset Classification, Business Expense, Casualty Loss, Disaster Loss

Casualty, Disaster and Theft Loss Deduction

Losses incurred because of a casualty, disaster, or theft may be tax-deductible. Casualty and theft losses are reported on Form 4684 and Form 1040 Schedule A. Casualty Loss A casualty is the loss of property (including damage and destruction) because

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Posted in Asset Classification, Casualty Loss, Disaster Loss, Theft Loss

Grouping Passive Activities – IRS Disclosure Rules

The Perturbing New Treatment of Patents Under the Tax Cut & Jobs Act (TCJA)

As part of the IRS's continuing efforts to require greater disclosure of tax positions and strategies on returns, it recently released new, mandatory disclosure rules for grouping passive activities. Rev. Proc. 2010-13 for the first time mandates that passive-activity groupings

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Posted in Appeals & Audit Resolution, Asset Classification, Cost Segregation, Passive Activity, Rental Real Estate, Tax Deductible Expenses
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