Blog Archives

Tax Implications of Installment Sales

More and more taxpayers it seems are finding themselves compelled to engage in a structured installment sale of closely held business assets or rental real estate and I couldn't help but notice that there are some common misconceptions about the

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Posted in 1031 Exchange, 1231 Exchange, Installment Agreement, Tax Deductible Expenses, Tax Guidance & Preparation

What is a ‘Qualifying Relative’ for US Tax Purposes: IRC 152

Wading through the convolution required to identify specifically who qualifies as a relative for income tax reporting purposes oftentimes can be difficult, not because the actual tax code is difficult to understand in these regards or even subject to much

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Posted in Adoption, Child Tax, Children, Earned Income Tax Credit, IRS Enforcement, Tax Credit, Tax Deductible Expenses, Tax Filing Status, Tax Guidance & Preparation, Tax Problems & Requests

IRS Regulations on Deduction and Capitalization of Tangible Assets

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

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Posted in Asset Classification, Cost Basis, Deductible Expense, Tax Deductible Expenses, Tax Guidance & Preparation, Tax Problems & Requests

Investor or Trader

I have another new client who is a day trader and wow is he good at it! Even though he has another job he makes so much more money as a trader that this ultimately is his primary vocation. The

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Posted in 1031 Exchange, 1231 Exchange, Business Expense, Business Income, Capital Gain, Capital Loss, Income, Investment Income, Mark to Market, Self Employ, Small Business, Tax Deductible Expenses

The New Home Office Deduction Safe Harbor – IRS Rev. Proc. 2013-13

The Internal Revenue Service announced a simplified option that many owners of home-based businesses and some home-based workers may use to figure their deductions for the business use of their homes. The new simplified option is available starting with the

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Posted in Business Expense, Deductible Expense, Employee Business Expense, Home Office, Self Employ, Small Business, Tax Deductible Expenses, Tax Guidance & Preparation, Tax Records

Tax-Free Transfers to Charity in January 2013 Can Still Count for 2012 For IRA Owners 70½ or Older

Act now! According to the IRS IRA owners age 70½ or older have until Thursday, Jan. 31 2013 to make a direct transfer, or alternatively, if they received IRA distributions during December 2012, to contribute, in cash, part or all

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Posted in IRA, Retirement, Tax Deductible Expenses, Tax Guidance & Preparation, Tax Relief

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

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

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

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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

IRS Publication 587: Business Use of Home

Business Entity Selection and the Tax Consequences of Converting

I am not a big fan of this deduction for a wide variety of reasons but mostly because there can be a substantial administrative burden associated with recapturing depreciation expense taken in previous tax years upon the sale of one's

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Posted in Home Office, Tax Deductible Expenses, Tax Guidance & Preparation, Tax Problems & Requests

IRS and Federally Declared Disaster Areas

People living in a federally declared disaster area are entitled to a wide variety of tax benefits. Around the Nation provides IRS news specific to local areas, primarily disaster relief or tax provisions that affect certain states. 2012 federally declared disaster areas

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Posted in Disaster Loss, Tax Credit, Tax Deductible Expenses, Tax Guidance & Preparation, Tax Problems & Requests

IRS Guidelines for Determining Noncompliance – The Cohan Rule

Business Entity Selection and the Tax Consequences of Converting

As I understand the Cohan rule under the IRS' Guidelines For Determining Noncompliance, taxpayers are allowed a deduction for an estimated amount of expenses when it is clear the taxpayer is entitled to a deduction but is unable to establish the exact amount of

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Posted in Cash, Cash Transaction, Cohan, Tax Court, Tax Deductible Expenses, Tax Guidance & Preparation, Tax Problems & Requests
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