Blog Archives

How much can you deduct for the gently used goods donated to charity?

Without a doubt one of the best ways for us middle-class folks to reduce our income tax burden is to donate charitably with intent. Most of my clients find themselves pleasantly surprised at the tax benefits received when they go

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Posted in Charitable Contribution, Deductible Expense

Meal Expense – Navigating Between Internal Revenue Code Sections 162, 274, 132; IRS Technical Advice Memorandum 200030001; and, Churchill Downs v. Commissioner

As per usual I'm swimming in areas where the tax code is seemingly at odds. The latest matter across my desk regards meals and entertainment (M&E) expense. These are the two questions at hand: Specifically at what point does a meeting expense

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Posted in Business Expense, Deductible Expense, Disallowed Expenses, Employee Business Expense, Meal Expense, Tax Court, Tax Deductible Expenses, Taxable Income, Uncertain Tax Position

Final Tangible Property Regulations Necessitate that Many Businesses Apply for Change Of Accounting Method: IRS Form 3115; Rev Procs 2015-13 & 2015-14

Back in June 2014 I blogged about the new IRS Regulations governing tangible personal property. These regulations prompted a vigorous debate over the last 7 months between the most astute students of the US Tax Code as to what constitutes

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Posted in Accounting Method, Asset Classification, Basis, Business Expense, Capital Gain, Capital Loss, Cost Basis, Cost Segregation, Deductible Expense, Depreciation, Tax Guidance & Preparation

Can You Establish a SEP Plan if you are a Sole Proprietor? What if that Sole Proprietorship Had Historically Passive Income?

Regardless of their nature or topic matter, off beat questions are one of the spices of life. When it comes to the realm of taxation generally speaking the answers frequently distill down to - it depends. These two questions were

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Posted in Business Expense, Deductible Expense, Employee Business Expense, Employment Tax, Partnership, Passive Activity, Payroll Tax Problems, Self Employ, Sole Proprietor, Sub-chapter S, Tax Deductible Expenses, Unemployment

Schumann v. IRS: Reg. 1.469-2(f)(6) – The Nuanced Relationship Between Passive Losses & Self Rental Gains

Back to my friends that I previously wrote about who misunderstood passive activity and material participation. They are a married couple filing jointly and own a very successful business together structured as an S-corporation as well as a portfolio of rental

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Posted in 1031 Exchange, Appeals & Audit Resolution, Business Expense, Business Income, Deductible Expense, Disallowed Expenses, IRS Examination, Material Participation, Passive Activity, Rental Real Estate, Self Rental, Sub-chapter S, Tax Court, Tax Guidance & Preparation

Tax Considerations When Supporting Parents

As I have been helping my Mom transition into life as a widow many interesting facts have begun to resonate. Particularly intriguing for me today under Regs. §1.2-2(b)(4) parent(s) can be claimed as a dependent if you meet the usual support, citizenship,

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Posted in Deductible Expense, Dependent, Family, Filing Status, Health Insurance, Tax Deductible Expenses, Tax Filing Status, Tax Guidance & Preparation

IRS Regulations on Deduction and Capitalization of Tangible Assets

The IRS has issued final regulations affecting all taxpayers that acquire, produce, or improve tangible property. The final regulations define materials, supplies, de minimus, safe harbor and related repairs as well as the election to capitalize certain materials and supplies among

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Posted in Asset Classification, Cost Basis, Deductible Expense, Tax Deductible Expenses, Tax Guidance & Preparation, Tax Problems & Requests

Tax Treatment of Liabilities Assumed by a Corporation IRC 357 – What is Boot?

According to IRC 357(a) if property transferred to a corporation in an IRC 351 nonrecognition transaction is subject to a liability, the assumption of that liability by the corporation generally is not treated as taxable "boot" for purposes of determining the amount

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Posted in Abusive Tax Shelter, Basis, Boot, Capital Gain, Capital Loss, Cash Transaction, Deductible Expense, Distributions, Tax Guidance & Preparation

The New Home Office Deduction Safe Harbor – IRS Rev. Proc. 2013-13

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

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Posted in Business Expense, Deductible Expense, Employee Business Expense, Home Office, Self Employ, Small Business, Tax Deductible Expenses, Tax Guidance & Preparation, Tax Records

Are You A Trader or an Investor? Van Der Lee v. Commissioner TC Memo 2011-234

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 humble opinion that the facts and circumstances of each and every specific taxpayer's

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Posted 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
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