FREE Yourself from IRS Problems

CALL 212-490-0704

Congratulations on your New Home Purchase…Oops! You’re liable for Seller’s Taxes!

Leave a comment Capital Gains, Civil Liabilities, FIRPTA, News, Representation

Congratulations on your New Home Purchase…Oops!  You’re liable for Seller’s Taxes!

 

As a buyer, no more rude shock can intrude on your new home celebration than finding out you are liable for Seller’s taxes.  Understandably, by the time of your closing, you may have nearly depleted your bank account, paying the purchase price plus the myriad fees and charges for your new home.  When the IRS comes calling soon afterwards, asking you to also pay Seller’s taxes, you can be excused for being very astonished.  Yes, this can happen; this scenario is not as far-fetched as it may sound.

This is a preview of Congratulations on your New Home Purchase…Oops! You’re liable for Seller’s Taxes!. Read the full post (518 words, estimated 2:04 mins reading time)

If I convert a home to a rental, when can I deduct any losses related thereto?

Leave a comment Business Expense, Business Expenses, Deductions, Income, Qualified Expenses

If I convert a home to a rental, when can I deduct any losses related thereto?Issue

If a taxpayer converts a home to a rental, when can the taxpayer deduct any losses related thereto?

Related Tax Rules or Regulations

Internal Revenue Code Section 262, which provides that except as otherwise expressly provided, no deduction is allowed for personal, living, or family expenses.

Internal Revenue Code Section 165 permits a deduction for any “loss sustained that is not otherwise compensated for.” In order for an individual to deduct such a loss, the loss must be incurred in a trade or business, be incurred in any transaction entered into for profit, though not connected with a trade or business, or arise from some sort of casualty or theft. If such property purchased or constructed as a primary residence if, before its sale, it is “rented or otherwise appropriated to income-producing purposes and is used for such purposes up to the time of sale.”

This is a preview of If I convert a home to a rental, when can I deduct any losses related thereto?. Read the full post (997 words, 1 image, estimated 3:59 mins reading time)

Negligence or Tax Fraud? What is “Negligent” and What Is “Willful” Conduct to the IRS?

Leave a comment Civil Liabilities, Civil Penalties, Criminal Liabilities, Delinquent Taxes, Fraudulent Return, News, Punitive Damages, Tax Evasion, Tax Fraud, Tax fraud & evasion

What does the IRS consider to be negligent or non-wilful conduct when it comes to tax-related activity like filing income tax returns and making deductions? What does it consider wilful conduct? When is such activity tax fraud?

Tax fraud is a general term which is defined as taxpayer’s intent to defraud the government by not paying taxes that the taxpayer knows are lawfully due. Tax fraud can be punishable either civilly, criminally, or both. Under federal law, civil violations are primarily located in Title 26 and criminal violations mainly in Title 18, respectively, of the United States Code (“U.S.C.”).

This is a preview of Negligence or Tax Fraud? What is “Negligent” and What Is “Willful” Conduct to the IRS?. Read the full post (799 words, 1 image, estimated 3:12 mins reading time)

Who qualifies as a real estate professional for tax purposes?

Leave a comment Business Expense, Business Expenses, Deductions, Expenses Deductions, Ordinary and Necessary Expenses, Taxable Income

Issue

Who qualifies as a real estate professional for tax purposes? More specifically, how does a taxpayer establish that he or she materially participate in rental activities, so that the rentals become non-passive, and any losses can be used without limitation?

Related Tax Rules and/or Regulations

Internal Revenue Code Section 469

Facts

Escalante earned income from teaching and his ownership of rental properties that he managed himself. His teaching contract required him to work a minimum of six hours per scheduled work day. As is customary with this type of contract, it contemplated that there would be a substantial number of hours spent outside the classroom engaging in tasks and activities like lesson planning, grading papers, parent-teacher consultations, and faculty meetings.

This is a preview of Who qualifies as a real estate professional for tax purposes?. Read the full post (780 words, 1 image, estimated 3:07 mins reading time)

Relating to the allocation of partnership liabilities and the tax implication of a foreclosure

Leave a comment Civil Liabilities, Debt Cancellation, Deductions, Income, Taxable Income

Issue

What is the allocation of partnership liabilities and the tax implication of a foreclosure?

Related Tax Rule or Regulation

Internal Revenue Code Section 465

Internal Revenue Code Section 704

Internal Revenue Code Section 731

Internal Revenue Code Section 752

Internal Revenue Code Section 1001

Tax Regulation § 1.1001-2(c),

Case Study

This is a preview of Relating to the allocation of partnership liabilities and the tax implication of a foreclosure. Read the full post (1068 words, 1 image, estimated 4:16 mins reading time)

Is there a business deduction for expenses incurred in marijuana related enterprises?

Leave a comment Business Expense, Deductions, IRC Section 61, News, Ordinary and Necessary Expenses, Qualified Expenses

Issue

Is there a business deduction for expenses incurred in marijuana related enterprises?Is there a business deduction for expenses incurred in marijuana related enterprises?

Related Tax Rules or Regulations

Internal Revenue Code Section 61

Internal Revenue Code Section 280E

Prior to 1982, an illegal business was able to reduce its revenue by the cost of any product it sold (Cost of Goods Sold, or COGS), as well as other ordinary and necessary general and administrative (G&A) business expenses like rent, packaging, utilities, travel expenses, and even the cost of a small scale used to weigh the controlled substances sold by the taxpayer. In 1982, the IRS enacted Section 280E which dictated that businesses that trafficked in controlled substances, as defined by the Controlled Substance Act, could no longer deduct its expenses.

This is a preview of Is there a business deduction for expenses incurred in marijuana related enterprises?. Read the full post (686 words, 1 image, estimated 2:45 mins reading time)

Do The Monies Or Amounts Received By An Egg Donor In Exchange For Her Eggs Constitute Taxable Income?

Leave a comment Income, News, Physical Injury

Issue

Do the monies or amounts received by an egg donor in exchange for her eggs constitute taxable income?

Related Tax Rules or Regulations

Internal Revenue Code Section 61 provides that gross income includes all income from whatever sources derived, including compensation for services.

Internal Revenue Code Section 104(a)(2) excludes from taxable income the amount of any damages (other than punitive damages) received on account of personal injuries or physical sickness.

Income Tax Regs sec. 1.104-1(c)(1) defines the term “damages” as “an amount received (other than workers’ compensation” through prosecution of a legal suit or action, or through a settlement agreement entered into in lieu of prosecution.”

This is a preview of Do The Monies Or Amounts Received By An Egg Donor In Exchange For Her Eggs Constitute Taxable Income?. Read the full post (712 words, 1 image, estimated 2:51 mins reading time)

Tax Provisions Of The Trade Preferences Extension Act of 2015

Leave a comment Affordable Care Act, Child Tax Credit, Deductions, Education Tax Credit, Tax Credit

Tax Provisions Of The Trade Preferences Extension Act of 2015As well as the trade provisions that were the bill’s focus, the Trade Preferences Extension Act of 2015 (H.R. 1295), signed into law in June of 2015, contains provisions regarding tax law. The Act revises several Tax Code provisions, and extends a number of trade agreements as well as programs like trade adjustment assistance (TAA) and the Health Coverage Tax Credit (HCTC). TAA consists of programs that provide federal job training and assistance to workers, firms, farmers and communities that have been adversely impacted by foreign trade.

This is a preview of Tax Provisions Of The Trade Preferences Extension Act of 2015. Read the full post (723 words, 1 image, estimated 2:54 mins reading time)

2016 Impact Of Provisions Of The ACA On Businesses

Leave a comment Affordable Care Act

2016 Impact Of Provisions Of The ACA On BusinessesJust as it does for employees, the Affordable Care Act (“ACA”) contains benefits and responsibilities for employers. The size and structure of an employer’s workforce is primarily determinative of how ACA rules apply to a particular covered situation. This information only applies if a business owner has employees, Otherwise, if there are no employees, other tax provisions, such as the insurance provider fee may affect the business enterprise.

An employer’s size is determined by the number of its employees. Employer benefits, opportunities and requirements are dependent upon the employer’s size and the applicable rules. Generally, an employer with 50 or more full-time employees or equivalents will be considered an applicable large employer.

This is a preview of 2016 Impact Of Provisions Of The ACA On Businesses. Read the full post (688 words, 1 image, estimated 2:45 mins reading time)
- Sitemap