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 information reporting required by the...
If the current year non-passive activity triggers deductibility of prior year suspended passive activity losses, IRC 469(f) permits a prior year passive loss to offset current year income from the same activity, even though that income might be non-passive in the current year. While net...
This new IRS Revenue Procedure is hugely important. Beginning in tax years after 1/24/2010 the IRS is requiring a written statement to accompany the tax return that lists how passive investment activities are grouped. The statement must include your name, address, employer ID #, and/or...
Material participation is regular, consistent and substantial personal involvement in operations. It is required in businesses, farms, rental real estate owned by real estate professionals, most vacation rentals, hotels, motels, and B&B’s, etc.. Basically most anything reported on IRS form K-1 Line 1 for partnership...
According to Revenue Procedure 2010-13 starting in 2010: A written statement is required to group similar business/activities. Managing LLC members must pass any of 7 tests for material participation the most popular of which is the...
The PPIA is an installment agreement that pays back less than what is owed to the IRS because of the expiration of the statue of limitations for collection. It is requested by filing out IRS form 433. The PPIA was formally authorized in the American...
A Collection Appeal Request (CAP) - IRS Form 9423 - is filed in response to the IRS enforcing collection against an accrued amount they believe they are owed by you or the denial or termination of an installment agreement. Except in specific cases involving asset seizure,...
The IRS Restructuring and Reform Act of 1998 established the Collection Due Process or Equivalent Hearing (CDP), which is an appeal filed in response to the following collection actions: Notice of Federal Tax Lien Filing and Your Right to a Hearing under IRC Sec. 6320;...
The following are the top issues for the IRS regarding passive losses: Airplane Leasing Farm loss - particularly when the taxpayer lives out of state Rental Real Estate Real Estate Professionals demonstrating 'material participation' Equipment leasing losses 1120S and 1065 losses on the Schedule 'E'...