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Tax Articles

Schumann v. IRS: Reg. 1.469-2(f)(6) – The Nuanced Relationship Between Passive Losses & Self Rental Gains

Back to my friends that I previously wrote about who misunderstood passive activity and material participation. They are a married couple filing jointly and own a very successful business together structured as an S-corporation as well as a portfolio of rental real estate properties.  They actually consider themselves privileged to have their their tax woes shared…

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Defining Passive Activity Between Spouses – Beyond the Bedroom: What Is Material Participation?

One would imagine this is the script to a low budget B-rated film by the title, it is not. But if it got you reading all the better because you may want to know about my friends, a professionally successful and happily married couple who jointly own rental real estate that generated losses for tax…

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Why is Halloween So Scary – 2015 Tax Planning Will Be Hugely Complicated and Profoundly Significant for most ALL Taxpayers

Once again another year is almost behind us and right after the new year income taxes are coming. The forthcoming tax environment is extraordinarily unusual and can subsequently be very scary. Basically what you need to know is that ALL Americans will be seeing changes on their tax returns many of which congress ONCE AGAIN still…

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What is the best Business Structure to form If Any?

What I love most about Colorado, more than the 300+ days of sun every year and the glorious rocky mountains, are the people.  For the most Coloradans are risk taking job creators, starting new businesses from scratch out of their garages and turning passions for a hobby into a business with a profit motive. Of…

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Odujinrin v. IRS Commissioner Reinforces the Significance of Engaging a Reputable Enrolled Agent

In Wole Odujinrin v. IRS Commissioner the petitioner, a hematology oncologist who represented himself, did not have adequate substantiation to support his petition and was not entitled to claim a net operating loss. He was also liable for an accuracy-related penalty under IRC 6662 – the expensive kick in the shorts. This petitioner moronically showed up with little…

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How to Calculate Basis of a Primary Residence Converted to Rental Property [Reg. §1.168(i)-4(b)] [Reg. §1.165-9(b)(2)]

Many people have built impressive residential real estate portfolios one property at a time, living in the property while fixing it up thus declaring it their primary residence for income tax purposes and then moving onto a new house to fix up and subsequently rent out, and repeat. Several of my friends in Colorado, Minnesota…

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Worker Classification & the Colorado Department of Labor & Employment CRS 8-70-115

This post is about my experiences with C.R.S. 8-70-115 as they pertain to the Colorado Employment Security Act of 2013.  First off let me start by saying that there are some really good hard working bureaucrats paid by our tax dollars working inside the Colorado Department of Labor & Employment.  Unfortunately like most all organizations for every…

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What is an FTE? What is a Seasonal Employee?

My friend, confidant, mentor and expert in the procedural ramifications of ObamaCare, Debbie Nash of D. Nash & Associates, got to talking with me about some of the nuances of this legislation and our discussion quickly digressed into what the definition is of a ‘Full Time Equivalent’ (FTE) employee for IRS tax purposes. One of…

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Tax Considerations When Supporting Parents

As I have been helping my Mom transition into life as a widow many interesting facts have begun to resonate. Particularly intriguing for me today under Regs. §1.2-2(b)(4) parent(s) can be claimed as a dependent if you meet the usual support, citizenship, gross income, and joint return tests. Interestingly enough if you are single you can file…

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