Charitable Contribution: Donated Real Estate

I have a new case involving donated rental real estate and in preparation for appeal I stumbled across the US Tax Court case of Theodore R. Rolfs, et ux. v. Commissioner 135 TC No. 24 in which the taxpayer donated a lake house with conditions to the local Volunteer Fire Department (VFD) for training purposes.  The…

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Tax Scams by Tax Practitioners Including CPA’s and ‘Tax’ Attorneys Have Been on the Rise

Most paid tax return preparers provide honest and professional service, but there are some who engage in fraud and other illegal activities.   Regardless of professional designation unscrupulous promoters, even those with CPA’s and Law degrees, deceive people into paying for advice on how to file false claims. Some promoters may charge unreasonable amounts for…

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Hazardous Duty Pay IS Included in Gross Income

This is a review of of tax court case John T. Bayse v. Commissioner TC Summary Opinion 2010-118.  The bottom line is that if you are injured on the job be sure to think carefully about whether you wish to be relieved via worker’s compensation which is customarily not considered taxable income or some other method…

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Hobby v. Business determined based on how records were kept: TC Memo 2010-92

If you think you have a viable ongoing business with a profit motive be sure to maintain adequate financial records on a computer that you back up off site on a regular and consistent basis.  Also be aware that in the tax court case of Chandler v. Commissioner (TC Memo 2010-92) the significance of inadequate hand…

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Medical Expense Deductions

Many medical costs are deductible including the cost of treatment to alleviate conditions or diseases and the cost of prescriptions and certain diagnostic services. Additional deductible medical expenses include: Capital expenses for special equipment installed in, or improvements made to, a home that provides a medical benefit; these include wider doorways, entrance ramps, modified bathroom or…

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Home Office Deduction: IRS Publication 587

Okay I’m taking another case to IRS appeals regarding the home office deduction.  In preparation I reviewed IRS Publication 587: Business Use of Your Home and I pulled some relevant quotes. “You can have more than one business location, including your home, for a single trade or business. To qualify to deduct the expenses for…

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Taxable and Non Taxable Settlements

I’ve been getting quite a few calls lately from taxpayers that have received ‘settlement’ money and are confused over the prospective tax ramifications of receiving such money.   The Internal Revenue Service recognizes that receiving a settlement award (amount) from a personal injury suit may create new tax issues for some individuals. The following information…

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Millennium Multiple Employer Welfare Benefit Plan Settles with IRS

The Internal Revenue Service announced that it reached an agreement with the Millennium Multiple Employer Welfare Benefit Plan (Millennium Plan) which is presently the subject of a bankruptcy proceeding filed on June 9, 2010, in the U.S. Bankruptcy Court for the Western District of Oklahoma (Case No. 10-13528).  Those disrespecting the Code have been brought down.…

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Amortization of Intangible Costs

Also commonly referred to as 197 Intangibles, the following costs must be amortized (deducted as an expense) over 15 years (180 months) starting with the later of (a) the month the intangibles were acquired or (b) the month the trade or business or activity engaged in for the production of income begins: Goodwill; Going concern…

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