News - John R. Dundon II, Enrolled Agent
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News

The IRS has released a new tax form, Schedule L, Standard Deduction for Certain Filers (2 pages including instructions, pdf) for use with 2009 tax returns. Taxpayers may need to use this form if they are claiming various additions to their standard deduction, such as...

Sec. 172(a) allows taxpayers to deduct against a tax year's income those net operating losses both carried over to the tax year from previous tax years and carried back from later tax years. An NOL basically is the excess of allowed deductions over gross income....

Sec. 183 denies loss deductions beyond income earned from activities in which the taxpayer does not intend to make a profit. These deductions are typically referred to as "hobby losses." Generally, an activity is presumed to be carried on for-profit if it makes a profit...

Sec. 165(d) limits all but professional gamblers from taking losses incurred in a wagering activity to the amount of any gains. As a result, a taxpayer cannot claim a deduction for losses incurred while gambling or betting in excess of the amount they gained from...

While a taxpayer conducts a trade or business, one or more items of business property may suddenly stop being useful. For a variety of reasons, the taxpayer may choose to stop conducting business with the property or permanently discard it. The IRS allows these businesses...

Code Sec. 166, titled "Bad Debts," generally controls who is entitled to a bad debt deduction and when a bad debt may be deducted. Sec. 166 conditions treatment generally on whether a bad debt is incurred in a trade or business. Further, Sec. 166 defers...

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; losses incurred in transactions entered...

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 a "reasonable taxpayer" discovers that...

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 the disposal of Sec. 1231...

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 carryforward retains its character as...

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