The IRS is tasked with enforcing our tax laws. The task should be to ensure “substantial compliance” by taxpayers. But all too often the audit process is nothing more than the IRS examining a handful of go-to-adjustment issues. These go-to-adjustment issues involve tax laws that Congress passed that leave room for interpretation. These issues often……
Tag: Federal Income Tax
Married Filing Separate Spouse Liable for Tax
Marriage presents a number of difficult tax questions. One question is whether both spouses can be held liable when they file separately and one spouse fails to pay their taxes. This is a common marriage tax question that we are asked. One might think that the married filing separate status fully protects the other spouse.……
IRA Excess Contribution Tax for Stock Sale
There are a lot of unanswered questions when it comes to the tax rules for IRAs and other qualified plans. IRAs and qualified plans can shelter a significant amount of income from tax. Defined benefit plans are an example. A business owner can contribute and shelter up to $245,000 in these plans in 2022. This……
Website Development Tax Deductions & the Start-Up Rules
There are several tax laws that have to be considered to determine when and how costs to develop websites are deductible. These expenses are almost always deductible. These tax laws raise timing questions. It’s a matter of when the expenses are deductible. For those who are developing website businesses as side-hustles, the issue takes on……
IRS Substantiation for Charitable Contributions & Gifts
Our tax laws allow a deduction for contributions and gifts made to charities. The idea is that the charity is relieving the government of some service or function that the government would have to otherwise have provided. The amount of the charitable contribution deduction can be significant. This benefit has been part of tax planning……
Restructured Business Fails Passive Activity Loss Rules
Successful businesses change over time. We often see this when a business gets ready for the founder or owner to exit the business. The business is often reorganized and maybe even divided up. Various tax strategies come into play to help facilitate the transfer, like the F Reorganization for S corporations. Other plans to minimize……
Is Military Pension Taxable (Answered)
There are a number of tax breaks afforded to those in the military. This includes collection holds on unpaid taxes owed by members of the military to laws that exempt certain income from tax altogether. The exemption from paying tax on military pay for injuries is an example. The recent Valentine v. Commissioner, T.C. Memo.……
Retired Pilot Taxed on Flights Employer Provided to Relatives
A fringe benefit is a perk provided to an employee. These benefits can make many forms. It may include a company car, company meals, or even insurance. These benefits may or may not be taxable for the employee. The Mihalik v. Commissioner, T.C. Memo. 2022-36, case provides an opportunity to consider these rules. The Mihalik……
Section 1031 Exchange Into Jointly-Held Partnership Property
The Section 1031 exchange rules can help real estate investors defer paying tax on the transfer of property. Many real estate investors use these rules to upgrade their real estate portfolio over time. This tax deferral can be helpful as monies that would have been paid to the IRS in taxes can be rolled into……