How to Prepare a Request for an Appeal of an IRS Examination – IRS Form 12203

If you decide you want to present your dispute to IRS Appeals, you will need to prepare a request for Appeals and mail it to the office that sent you the decision letter. There are essentially 2 types of requests

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Posted in Amended Tax Return, Appeals & Audit Resolution, Colorado Department of Revenue, IRS Appeal, IRS Audit, IRS Collections, IRS Enforcement, IRS Examination, IRS Levy, IRS Lien, IRS Mediation, IRS Penalties, IRS Penalty and Interest Abatement, Self Employ, Small Business, Social Security Tax, Statutory Notice of Deficiency, Sub-chapter S, Tax Guidance & Preparation, Tax Problems & Requests, Tax Relief

What is a short term rental requiring material participation?

A 'Short Term Rental' usually involves Condos, B&B’s, Hotels, Etc.  These 'short term rentals' fall outside of the definition for tax purposes of rental real estate.  As such these investments are treated as a business and the owner must materially

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Posted in Rental Real Estate

Who is not considered a ‘real estate professional’ for tax purposes?

Attorney specializing in real estate CPA’s specializing in real estate Banker or mortgagor Investment advisor Financial planner or consultant Interior decorator Taxpayer who works on a building but is not in the real property business Taxpayer who is less than

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Posted in Rental Real Estate

Difference between a real estate professional, a dealer in real property and an investor in real estate for tax purposes

A real estate professional must spend more than one half his/her time on ‘real property business.’  Unless the real estate professional ‘materially participates’ in rental activity losses are passive. A real estate dealer of real property sells and buys properties

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Posted in Rental Real Estate

Passive Activities and the Real Estate Professional – IRC 469(c)(7) and Reg. 1.469-9

A qualifying real estate professional may deduct rental real estate losses for each rental in which he/she materially participates provided 3 tests are passed: More than one half of the taxpayer’s personal services must be in real property business.  ‘Real

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Posted in Passive Activity, Rental Real Estate

Common Mistakes with Passive Activities – IRC 469 – IRS Form 8582

Not grouping related activities as one activity Treating equipment leasing as non-passive by placing the revenue from such on Schedule ‘C’ or Schedule K-1 line 3.  Rentals are passive even if the taxpayer materially participated Deduct rental real estate losses

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Passive Asset Disposition

There are two distinct issues to evaluate when disposing of a passive  asset: Is the disposition considered to be a qualifying disposition under reg 1.469 making the losses deductible? Is the gain on the sale truly passive income and entered

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Adoption Tax Credits including Tax Credit Carry Forwards are now FULLY REFUNDABLE in tax year 2010 According to IRS Notice 2010-66

According to Marilyn E. Brookens, an attorney in the IRS Office of Associate Chief Counsel (Income Tax and Accounting), “Effective for the 2010 tax year, the adoption tax credit is a FULLY REFUNDABLE TAX CREDIT.  The credit was made refundable

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Reporting 1099-C income, cancellation of debt income exclusion – IRS form 982

Debt that is forgiven is considered income for taxes purposes and is reportable to the IRS.  The debt forgiven is reported by the lender to the IRS on form 1099-C.  The debt forgiven is reported by the taxpayer as other

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Posted in Cancelled Debt

New IRS Forms for Reporting Exercise of Stock Options

The IRS has issued two new forms for reporting stock options. Form 3921, Exercise of an Incentive Stock Option Under Section 422(b), and Form 3922, Transfer of Stock Acquired Through An Employee Stock Purchase Plan Under Section 423(c), reflect the

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Posted in Stock Options
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