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

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Posted in Business Expense, Deductible Expense, Disallowed Expenses, IRS Penalties, NOL, Tax Guidance & Preparation, Tax Problems & Requests, Taxable Income

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

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Posted in Medical Expenses, Self Employ, Small Business, Sole Proprietor, Tax Deductible Expenses, Tax Guidance & Preparation

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

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Posted in Business Expense, Cost Basis, Deductible Expense, Home Office, Self Employ, Small Business, Sole Proprietor, Sub-chapter S, Tax Abuse, Tax Guidance & Preparation

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

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Posted in Capital Gain, Capital Loss, Casualty Loss, Estimated Taxes, Tax Fraud, Tax Guidance & Preparation, Taxable Income

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

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Posted in Disallowed Expenses, Tax Abuse, Tax Court, Tax Deductible Expenses, Tax Fraud, Tax Guidance & Preparation

Do You Have A Business? Or Is It A Hobby?

The IRS has developed a rule of thumb for analyzing business losses called the Hobby Loss Rule of Thumb that basically says if a business reports a net profit in 3 out of the last 5 years it is presumed to

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Posted in Appeals & Audit Resolution, Audit Reconsideration, Business Expense, Correspondence Audit, Deductible Expense, Disallowed Expenses, Entity Classification, IRS Audit, IRS Examination, Tax Deductible Expenses

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

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Posted in Capital Gain, Capital Loss, Cost Basis, Deductible Expense, Organizational Costs, Passive Activity, Start up costs, Tax Deductible Expenses, Tax Guidance & Preparation

Simple Trusts – Basic Observations

For tax purposes a Simple Trust requires that all income generated by the trust be distributed each year to the trust’s beneficiaries.  Even if a trust distributes all its income every year this alone does not necessarily make it a

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Posted in Entity Classification, Estate Tax, Gift Tax, Tax Guidance & Preparation, Trusts

Colorado Sales Tax Update

General Be mindful of your new tax account number. The Colorado Department of Revenue has moved sales tax into its new tax accounting system. The improved system allows the department to process and distribute taxes more efficiently and assist businesses better

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Posted in Colorado Department of Revenue

Summary, Deficiency and Jeopardy IRS Assessments

Collection of federal taxes starts with an assessment of tax due. The assessment serves two functions. It is the government’s mechanism for keeping records and recording a liability. The assessment, authorizing the government to collect, is equivalent to the final

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Posted in Amended Tax Return, Appeals & Audit Resolution, Back Taxes Owed, Installment Agreement, Intent To Levy, Intent To Lien, IRS Appeal, IRS Audit, IRS Centralized Insolvency, IRS Collections, IRS Enforcement, IRS Examination, IRS Levy, IRS Lien, IRS Mediation, IRS Penalties, IRS Penalty and Interest Abatement
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