US v. Home Concrete Reinforces IRS’ Limited Audit Authority

Generally, the IRS has a three year statute to audit a return. However this changes to six years if there is a substantial understatement of income, when 25% of more of gross income is omitted. The definition of what it

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Posted in Basis, IRS Audit, Tax Court

When Several Different People Provide Support IRS Form 2120 – Multiple Support Declaration

It seems that more and more children are providing support to parents living on fixed income. Quite often several brothers and sisters collectively are providing support and when this collective support exceeds 1/2 of the parents living expenses if the

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Posted in Dependent

IRS Treatment of Social Security Benefits – SSA Form 1099

If you receive Social Security benefits (checks) you should also receive a Form 1099-SSA from the Social Security Administration. Use the data on this form to help determine if your benefits are taxable. Basically the tax depends on total income and

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Posted in Social Security

Reporting Non-Reimbursed Partnership Expenses

In regards to the correct treatment of deductible expenses incurred by a partner essentially the partnership agreement, or the general practice of the partnership, should clearly represent that the partners are responsible for certain expenses and that the partners are

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Posted in Business Expense, Deductible Expense, Partnership

The Self-Employment Contributions Act

The Self-Employment Contributions Act (SECA) imposes two taxes on self-employed individuals: an old-age survivors and disability insurance tax (OASDI) commonly referred to as Social Security tax, and a hospital insurance or Medicare tax (HI). These SECA taxes apply to net earnings from self-employment above a

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Posted in Self Employ, Sole Proprietor

How To Report Gains and Losses from Securities Transactions – IRS Form 8949

The requirements for reporting short-term and long-term transactions on separate IRS Form 8949's by type A, B or C are still required. When the totals on brokerage statements include both type A and type B transactions, you will need to

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Posted in Capital Gain, Capital Loss

Determining Tax Basis and Holding Period

According to IRS Publication 544 holding period is generally speaking the length of time a capital asset is owned. It is important because of the tax benefits of long term capital gain or loss treatment according to IRC Sec 1223. If

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Posted in 1031 Exchange, 1231 Exchange, Asset Classification, Basis, Capital Gain, Capital Loss, Cost Basis, Tax Guidance & Preparation

IRS Form 982 – Reducing Tax Attributes of Depreciable Property for Cancelled Debt

If debt is canceled in a bankruptcy case or during insolvency you must use the excluded amount of debt to reduce certain “tax attributes” including the basis of certain assets as well as losses and credits. Essentially by reducing tax

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Posted in Bankruptcy

Self Employed Health Insurance Insurance Deduction: Worksheet v. IRS Publication 535

If you qualify to take the deduction, use the Self-Employed Health Insurance Deduction Worksheet to figure the amount you can deduct. However use IRS Publication 535 instead if any of the following applies. You had more than one source of income subject

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Posted in Deductible Expense, Health Insurance, Partnership, Self Employ, Small Business, Sub-chapter S

IRC 108 Tax Obligations in Bankruptcy

First off regarding income, do not include a canceled debt in gross income if any of the following situations apply: The cancellation takes place in a bankruptcy case under the U.S. Bankruptcy Code. The cancellation takes place when the debtor

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Posted in Bankruptcy, Cancelled Debt
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