Personal Casualty Losses

Taxpayers may generally deduct losses that are sustained during the tax year and not compensated for by insurance or otherwise (Sec. 165). For individuals, deductible losses must fall within one of three categories: losses incurred in a trade or business;

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Investment Theft Losses

Victims of investment schemes or fraud may find themselves under the casualty loss rules, rather than using the net capital loss rules to salvage their position. Sec. 165(e) allows reporting a deduction for theft losses in the year in which

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Section 1231 losses

Code Sec. 1231 makes available the best of both worlds to businesses with a certain combination of capital gains and losses. Net gains from the disposal of Sec. 1231 property are taxed at capital gain rates, while net losses from

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Posted in Rental Real Estate, Tax Guidance & Preparation, Tax Problems & Requests

Net Capital Losses

After the netting of long-term and short-term capital gains and losses for any tax year, any remaining net capital loss in excess of $3,000 ($1,500 for married taxpayers filing separately) must be carried forward into the next tax year. That

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At Risk Losses

Code Sec. 465 generally limits a taxpayer's deductible loss applicable to a trade or business or production of income to the amount that the taxpayer has at risk with respect to an activity. The rules apply to individuals and certain

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Posted in Passive Activity, Rental Real Estate

Passive Activity Losses

Code Section 469 provides that individuals, trusts, estates, personal service corporations and closely held C corps may only deduct passive-activity losses from passive-activity income. The rules do not apply to S corps and partnerships, but do apply to their respective

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Posted in Business Expense, Passive Activity

Order your IRS Transcripts – form 4506T-EZ

The Internal Revenue Service has issued a new form that will make it easier to order tax transcripts and help process mortgage modification applications. The new forms are being issued in conjunction with the Obama administration’s push to help more

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Posted in IRS Appeal, IRS Audit, IRS Transcript, Tax Guidance & Preparation

Biomass fuel is an energy-efficient building property

The American Recovery and Reinvestment Act of 2009 provides that certain expenditures made by the taxpayer for energy-efficient building property are eligible for the nonbusiness energy property credit. The term "energy-efficient building property" includes a biomass fuel stove that burns

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IRS Publication 4128 – Tax Impact of Job Loss

IRS Publication 4128 Tax Impact of Job Loss was released in August of 2009. The publication explains the job loss tax issues connected to severance pay, unemployment compensation, pension plans, IRAs, expenses for a job search, and possible moving costs. It also

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Discharge income tax debt through bankruptcy

If the income tax debt meets all five of these rules, then the tax debt is dischargeable in Chapter 7 and Chapter 13 bankruptcy petitions. The due date for filing a tax return is at least 3 years ago. The

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