Blog Archives

Tax Considerations When Supporting Parents

As I have been helping my Mom transition into life as a widow many interesting facts have begun to resonate. Particularly intriguing for me today under Regs. §1.2-2(b)(4) parent(s) can be claimed as a dependent if you meet the usual support, citizenship,

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Posted in Deductible Expense, Dependent, Family, Filing Status, Health Insurance, Tax Deductible Expenses, Tax Filing Status, Tax Guidance & Preparation

Gift Tax on Transferred Real Estate

The person or entity transferring a property has a capital gain to the extent that the amount realized exceeds the adjusted basis of the property. However according to Reg § 1.1001-1(e) no loss is allowed on a transfer that is part

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Posted in Estate Tax, Family, Gift Tax, Rental Real Estate

Tax Treatment of a Reverse Mortgage

A reverse mortgage is generally a loan where a lender pays a lump sum, a monthly advance, a line of credit, or a combination of all three to you while you continue to live in your home and retain title to it.

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Posted in Death, Debt, Deductible Expense, Dependent, Distributions, Family, Mortgage

Acquisition Debt and Divorce

Business Entity Selection and the Tax Consequences of Converting

Generally speaking IRS regulations provide that debt incurred to acquire the interest of a spouse or former spouse in a residence, incident to divorce or legal separation, may be treated as acquisition indebtedness under IRC Sec. 163 (mortgage interest deductions) without regard to the treatment

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Posted in Basis, Debt, Family, Gift Tax, Home Office, Marriage, Tax Guidance & Preparation

Domestic Partners: Income Reporting

The IRS issued three rulings in 2010 to address how the income of registered domestic partners in California should be reported and taxed for both state and federal income tax purposes. In Chief Counsel Advice 201021050, the IRS determined that for tax years beginning after December

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Posted in Family, Foreign Income, Marriage, Offer In Compromise, Paying Taxes, Private Letter Ruling, Tax Guidance & Preparation, Uncertain Tax Position

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

Tax Benefits for Parents

1. Dependents In most cases, a child can be claimed as a dependent in the year they were born. For more information see IRS Publication 501, Exemptions, Standard Deduction, and Filing Information. 2. Child Tax Credit You may be able

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Posted in Dependent, Family, Marriage

Education Expenses – Are They Tax Deductible?

According to IRS Publication 970, Tax Benefits for Education, questions exist to help determine if education expenses are tax deductible. These questions include: Is the expense associated with the education 'work related'? It must be to be deductible. Is the

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Posted in Child Tax, Deductible Expense, Dependent, Disallowed Expenses, Family, Student Loan, Tax Credit, Tax Deductible Expenses, Tax Relief

Charitable Deduction of Parochial School Tuition

Meir Katz (J.D. 2010, Georgetown) has posted The Economics of § 170: A Case for the Charitable Deduction of Parochial School Tuition on SSRN. It is fascinating. Here is the abstract: That payments for parochial school tuition are not deductible

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Posted in Charitable Contribution, Child Tax, Education Expense, Family, Student Loan, Tax Deductible Expenses, Tax Problems & Requests, Tax Relief

American Opportunity Tax Credit

There is still time left to take advantage of the American Opportunity Tax Credit, a credit that will help many parents and college students offset the cost of college. This tax credit is part of the American Recovery and Reinvestment

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Posted in Education Expense, Family, Tax Credit
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