Business Expense
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Business Expense

The Internal Revenue Code is a complex beast.  In the lunacy of it all I've been asked to define 'trafficking' as it relates to 26 USC § 280E - Expenditures in connection with the illegal sale of drugs which states as follows: "No deduction or credit shall be allowed...

The Internal Revenue Service announced a simplified option that many owners of home-based businesses and some home-based workers may use to figure their deductions for the business use of their homes. The new simplified option is available starting with the 2013 return most taxpayers file...

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...

According to IRS administrative guidelines to its examiners concerning Rev. Rul. 2012-18, published in the 2012-26 Internal Revenue Bulletin, when performing a tip examination (aka audit), IRS examiners must ensure that service fees or charges are properly characterized as wages and not tips. If the payment is...

I learned 2 things this week about the Domestic Production Activity Deduction (DPAD) on IRS Form 8903: 1. Business activity alone is not the only factor used in determining qualification for the Domestic Production Activity Deduction (DPAD). The actual deduction reported on IRS Form 8903 (Line 22)...

In my dealings with the US Treasury Department regarding worker classification disputes I have learned that although in reality there may be shades of gray distinguishing between what constitutes an employee and what constitutes an independent contractor the US Treasury has some very specific positions....

You are allowed deductions for ordinary and necessary expenses incurred in the course of business under §162, but you must also keep adequate records to substantiate expenses which can at times seem esoteric if not convoluted. Deductible travel expenses for example under §274(d) are based on whether or not the...

If you incur interest expense on loans you should use the tracing rules of Reg. §1.163-8T to determine whether the interest expense is for: 1. business 2. investment 3. passive activities. or is 4. personal in nature The regulation focuses on the use of the loan proceeds, not the item or items used...

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