IRS Form 1040 Line 21 and Subsequent CP2000 Notices

IRS CP2000 notices are annoying for a wide variety of reasons but mostly because the IRS assumes that most all items reported on line 21 of IRS From 1040 are subject to self-employment (SE) tax. Much of what goes on

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Posted in Self Employ, Small Business

Are You A Trader or an Investor? Van Der Lee v. Commissioner TC Memo 2011-234

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 Memo 2011-234 we learn in my humble opinion that the facts and circumstances of each and every specific taxpayer's

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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

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

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

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Posted in Artists, Asset Classification, Basis, Capital Gain, Charitable Contribution, Cost Basis, Estate Tax, Tax Abuse, Tax Guidance & Preparation

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

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Posted in Tax Guidance & Preparation, Tax Preparer, Taxpayer Advocate, Taxpayer Identification Number

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

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Posted in Basis, IRS Audit, Tax Court

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

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Posted in Dependent

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

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Posted in Social Security

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

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Posted in Business Expense, Deductible Expense, Partnership

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

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Posted in Self Employ, Sole Proprietor
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