Tax Treatment of Charitably Donated Artwork

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 of artwork that tax examiners focus on: 1. The charitable contribution deduction for artwork by Art…

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IRS Standards for Continuing Education Providers and Accrediting Organizations

The Internal Revenue Service announced the standards to become an IRS-approved Continuing Education (CE) Provider and the requirements to become an IRS CE Accrediting organization.  The guidance paves the way for the implementation of new CE requirements for certain tax return preparers starting next year. Individuals who are required to take the Registered Tax Return…

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US v. Home Concrete Reinforces IRS’ Limited Audit Authority

Generally, the IRS has a three year statute to audit a return. However this changes to six years if there is a substantial understatement of income, when 25% of more of gross income is omitted. The definition of what it means to omit gross income is often up for debate as shown by numerous tax…

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When Several Different People Provide Support IRS Form 2120 – Multiple Support Declaration

It seems that more and more children are providing support to parents living on fixed income. Quite often several brothers and sisters collectively are providing support and when this collective support exceeds 1/2 of the parents living expenses if the parents are subsisting on little more than social security benefits one of the children should…

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IRS Treatment of Social Security Benefits – SSA Form 1099

If you receive Social Security benefits (checks) you should also receive a Form 1099-SSA from the Social Security Administration. Use the data on this form to help determine if your benefits are taxable. Basically the tax depends on total income and marital status. If Social Security benefits were your only income, your benefits are not taxable. If…

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Reporting Non-Reimbursed Partnership Expenses

In regards to the correct treatment of deductible expenses incurred by a partner essentially the partnership agreement, or the general practice of the partnership, should clearly represent that the partners are responsible for certain expenses and that the partners are not eligible for reimbursement from the partnership, even upon request. This has been critical in…

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The Self-Employment Contributions Act

The Self-Employment Contributions Act (SECA) imposes two taxes on self-employed individuals: an old-age survivors and disability insurance tax (OASDI) commonly referred to as Social Security tax, and a hospital insurance or Medicare tax (HI). These SECA taxes apply to net earnings from self-employment above a $400 minimum for the tax year. There is an annually-adjusted ceiling limitation on the amount subject to…

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How To Report Gains and Losses from Securities Transactions – IRS Form 8949

The requirements for reporting short-term and long-term transactions on separate IRS Form 8949‘s by type A, B or C are still required. When the totals on brokerage statements include both type A and type B transactions, you will need to manually subtotal the transactions between the two types and report each on separate 8949 forms.…

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Determining Tax Basis and Holding Period

According to IRS Publication 544 holding period is generally speaking the length of time a capital asset is owned. It is important because of the tax benefits of long term capital gain or loss treatment according to IRC Sec 1223. If the capital gain property is held for more than 12 months, gain or loss is long-term…

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IRS Form 982 – Reducing Tax Attributes of Depreciable Property for Cancelled Debt

If debt is canceled in a bankruptcy case or during insolvency you must use the excluded amount of debt to reduce certain “tax attributes” including the basis of certain assets as well as losses and credits. Essentially by reducing tax attributes, the tax on the canceled debt is partially postponed instead of being entirely forgiven…

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