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The Significance of Stepped Up Basis in Estate Planning IRC 1014

Posted on June 28, 2017 by John R. Dundon II, EA — No Comments ↓

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

According to Internal Revenue Code Section 1014 the basis of property acquired from a decedent is the fair market value of the property at the date of the decedent’s death. In an environment of inflating asset prices this usually means that the…

Tagged with: 1014, Basis, IRC 1014, stepped up basis
Posted in Basis, Cost Basis, Death, Estate Tax, Generation Skipping Transfer Tax, Gift Tax, Tax planning, Trusts

Final Tangible Property Regulations Necessitate that Many Businesses Apply for Change Of Accounting Method: IRS Form 3115; Rev Procs 2015-13 & 2015-14

Posted on January 18, 2015 by John R. Dundon II, EA — No Comments ↓

Back in June 2014 I blogged about the new IRS Regulations governing tangible personal property. These regulations prompted a vigorous debate over the last 7 months between the most astute students of the US Tax Code as to what constitutes…

Tagged with: 2014-16, 2014-17, 2015-13, 2015-14, Change in accounting periods and methods of accounting, IRB 2015-5, IRS Form 3115, IRS Rev Proc 2015-13, IRS Rev Proc 2015-14, IRS Rev. Proc. 2014-16, IRS Rev. Proc. 2014-17
Posted in Accounting Method, Asset Classification, Basis, Business Expense, Capital Gain, Capital Loss, Cost Basis, Cost Segregation, Deductible Expense, Depreciation, Tax Guidance & Preparation

Take Care Closing Down An LLC – IRC 752 – Treatment of Certain Liabilities

Posted on December 11, 2014 by John R. Dundon II, EA — No Comments ↓

A taxpayer reading one of my blog posts from Ishpeming, Michigan was compelled to call me today. She was a member in a Limited Liability Company (LLC) who had ultimately resigned herself to abandoning her interest in the LLC. In…

Tagged with: Closing an LLC, IRC 752, Limited Liability Company Closure, Treatment of liabilities when closing an LLC
Posted in Accumulated Adjustment Account, Basis, Cost Basis, Limited Partnership, LLC, Partnership, Small Business, Tax Deductible Expenses, Uncertain Tax Position

IRS Regulations on Deduction and Capitalization of Tangible Assets

Posted on October 3, 2013 by John R. Dundon II, EA — No Comments ↓

The IRS has issued final regulations affecting all taxpayers that acquire, produce, or improve tangible property. The final regulations define materials, supplies, de minimus, safe harbor and related repairs as well as the election to capitalize certain materials and supplies among…

Tagged with: Betterments, Capital Asset Expense, Capitalization of Tangible Assets, Determining Unit of Property, Election to Capitalize, Leasehold improvements', Major Component, Materials and Supplies, Optional Regulatory Accounting Method, Repairs, Restoration, Safe harbor for small taxpayers, Salvage Value, Substantial Structural Part
Posted in Asset Classification, Cost Basis, Deductible Expense, Tax Deductible Expenses, Tax Guidance & Preparation, Tax Problems & Requests

Traders in Securities

Posted on July 24, 2013 by John R. Dundon II, EA — No Comments ↓

If you are an individual who buys and sells securities you may qualify as a “trader in securities,” for tax purposes. This post attempts to explain how traders must report the income and expenses from being in the trading business.…

Tagged with: Application for Change in Accounting Method, dealer, Investor, IRC 1211, IRC 1236, IRC 163, IRC 475, IRS Form 3115, IRS Publication 550, IRS Publication 550 Investment Income and Expense, mark to market election, Securities Traders, Traders in Securities
Posted in Accounting Method, Business Expense, Capital Gain, Capital Loss, Cost Basis, Investment Income, Mark to Market, Paying Taxes, Self Employ, Tax Guidance & Preparation

How to calculate stock and loan basis in an S Corp for tax purposes

Posted on February 27, 2013 by John R. Dundon II, EA — No Comments ↓

How to calculate stock and loan basis in an S Corp for tax purposes? Or as my hippie friends call it, "The secret of the Golden Flower." Seemingly elusive and yet oh so real. If you are a shareholder of…

Tagged with: Basis Calculation, debt basis, S, S Corp, stock basis
Posted in Basis, Corporation, Cost Basis, Depreciation, Self Employ, Small Business, Sole Proprietor, Sub-chapter S, Tax Guidance & Preparation, Tax Problems & Requests

Trader or Investor? Van Der Lee v. Commissioner TC Memo 2011-234

Posted on November 29, 2012 by John R. Dundon II, EA — No Comments ↓

Trader or an Investor in Securities? Van Der Lee v. Commissioner TC Memo 2011-234 helps clarify matters. While many individual taxpayers claim to be traders in securities as compared to investors, in Henricus C. van der Lee, et ux. v. Commissioner TC…

Tagged with: Capital Gain, Capital Loss, Investor, IRC 1211, IRC 212, IRC 475, TC Memo 2011-234, Trader, Van Der Lee v. Commissioner
Posted in Basis, Business Expense, Business Income, Capital Gain, Capital Loss, Cost Basis, Deductible Expense, Mark to Market, Net Operating Loss, NOL, Tax Court, Tax Deductible Expenses, Tax Records

Tax Treatment of Charitably Donated Artwork

Posted on November 27, 2012 by John R. Dundon II, EA — No Comments ↓

Please refer to IRC 170 as well as Publication 526, Charitable Contributions (PDF), Publication 561, Determining the Value of Donated Property (PDF), and Publication 1771, Charitable Contributions Substantiation and Disclosure Requirements (PDF) for detailed information on charitable contributions. This is what I've learned about issues involving charitable contributions…

Tagged with: Art, Art Appraisal Service, Donation, IRC 1221, IRC 170, IRM 4.48.2, IRS Form 8282, IRS Form 8283, IRS Notice 2006-45, IRS Notice 2006-96, IRS Pub 1771, IRS Pub 526, IRS Pub 561
Posted in Artists, Asset Classification, Basis, Capital Gain, Charitable Contribution, Cost Basis, Estate Tax, Tax Abuse, Tax Guidance & Preparation

Determining Tax Basis and Holding Period for Non Passive Activities

Posted on November 11, 2012 by John R. Dundon II, EA — No Comments ↓

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…

Tagged with: Capital Gain, Capital Loss, Holding Period, IRS Publication 544, Ordinary income, Ordinary loss
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

Posted on January 30, 2012 by John R. Dundon II, EA — No Comments ↓

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.…

Tagged with: Mitt Romney
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

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