Basis Archives - Page 2 of 3 - John R. Dundon II, Enrolled Agent

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Basis

The Perturbing New Treatment of Patents Under the Tax Cut & Jobs Act (TCJA)

30 Nov Trader or Investor? Van Der Lee v. Commissioner TC Memo 2011-234

Posted at 00:00h in Basis, Business Expense, Business Income, Capital Gain, Capital Loss, Cost Basis, Deductible Expense, Mark to Market, Net Operating Loss, NOL, Tax Court, Tax Deductible Expenses, Tax Records

Trader or an Investor in Securities? Van Der Lee v. Commissioner TC Memo 2011-234 helps clarify matters. While many individual taxpayers claim to be traders in securities as compared to investors, in Henricus C. van der Lee, et ux. v. Commissioner TC Memo 2011-234 we learn in my...

27 Nov Tax Treatment of Charitably Donated Artwork

Posted at 00:00h in Artists, Asset Classification, Basis, Capital Gain, Charitable Contribution, Cost Basis, Estate Tax, Tax Abuse, Tax Guidance & Preparation

Please refer to IRC 170 as well as Publication 526, Charitable Contributions (PDF), Publication 561, Determining the Value of Donated Property (PDF), and Publication 1771, Charitable Contributions Substantiation and Disclosure Requirements (PDF) for detailed information on charitable contributions. This is what I've learned about issues involving charitable contributions of artwork that tax examiners...

26 Nov US v. Home Concrete Reinforces IRS’ Limited Audit Authority

Posted at 00:00h in Basis, IRS Audit, Tax Court

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 means to omit gross income...

12 Nov Determining Tax Basis and Holding Period for Non Passive Activities

Posted at 00:00h in 1031 Exchange, 1231 Exchange, Asset Classification, Basis, Capital Gain, Capital Loss, Cost Basis, Tax Guidance & Preparation

Determining Tax Basis and Holding Period for Non Passive Activities is one of those 'Secrets of the Golden Flower' that seems to be both completely esoteric and yet oh so real at the same time. Let's take a closer look under the hood, shall we...

Business Entity Selection and the Tax Consequences of Converting

16 May Calculating Adjusted Basis in an S-Corporation

Posted at 00:00h in Basis, Corporation, Sub-chapter S

It seems to me that a relatively significant problem for most Sub chapter S Corporations is accounting for the capital accounts of each and every single shareholder. The company must maintain reasonably detailed records of each shareholder's equity investments of cash and property, loans that...

22 Mar Acquisition Debt and Divorce

Posted at 00:00h in Basis, Debt, Family, Gift Tax, Home Office, Marriage, Tax Guidance & Preparation

Generally speaking IRS regulations provide that debt incurred to acquire the interest of a spouse or former spouse in a residence, incident to divorce or legal separation, may be treated as acquisition indebtedness under IRC Sec. 163 (mortgage interest deductions) without regard to the treatment of the transaction under IRC...

31 Jan Lessons From Mitt Romney’s Tax Return

Posted at 00:00h in Abusive Tax Shelter, Accounting Method, Alternative Minimum Tax (AMT), Asset Classification, Audit Technique Guide, Basis, Business Expense, Business Income, Charitable Contribution, Cost Basis, Mitt Romney Taxes

Check out Mitt Romney's 2010 tax return and learn how he does it. The most important lesson I learned in perusing his return (besides the significance of sheltering your $$ outside of the USA) is the immediate impact of targeted charitable contributions. In my professional opinion the...

04 Oct Communicating with the IRS Requires Organized + Detailed Note Taking

Posted at 00:00h in Appeals & Audit Resolution, Basis, IRS Appeal, IRS Audit, IRS Collections, IRS Enforcement, IRS Examination, Tax Court, Tax Guidance & Preparation, Tax Problems & Requests

When you call the IRS I suggest doing it as early in the work day as possible to minimize wait time. Have a pen and pad of paper in hand and ideally be sitting in front of a computer. Write your questions down in advance...

04 Oct Overstated Basis Causes Understated Income However …..

Posted at 00:00h in Asset Classification, Basis, Business Expense, Rental Real Estate

The lesson I learned today is that an overstatement of basis (cost of an asset) could result in an understatement of income in the future when the asset is sold but is not necessarily the same as under reported income that, if in excess of 25%...

20 Sep Basis Calculation

Posted at 00:00h in Basis, Net Operating Loss, NOL

Under §165, in general, the basis of a partnership interest equals the sum of the amount of money contributed, the partner’s share of partnership liabilities and the partner’s distributive share of partnership income and losses. How to compute the adjusted basis of the partnership interest when there is an initial contribution to...