While many taxpayers want to pay less in tax and there are legitimate ways to do so, some of the tax planning concepts that are frequently discussed miss the mark. The so-called Augusta rule is often one of them. Tax planners often cite this rule and provide tax savings estimates based on unreasonable assumptions. This……
Tag: Real Estate
Tax Deductions for Non-Facilitating Costs for IP, M&A & Real Estate
One of the most common disputes between taxpayers and the IRS revolves around the question of whether certain expenses are deductible in the current year or need to be capitalized and recovered over time. This expense versus capitalization issue arises in various contexts. We have considered a number of these disputes on this site. It……
Explaining Real Estate Profesional Status to IRS Employees
In the complex realm of the legal system, judges hold the vital responsibility of making impartial decisions, drawing from their wealth of life experiences. These experiences, in turn, have a profound influence on the judgments they render. This principle extends to other government officials as well, such as IRS agents, auditors, and attorneys, who are……
Amount of 179D Tax Deduction for Building Designer
Congress often creates tax incentives, but it is up to the IRS and courts to determine their implementation and interpretation. The Sec. 179D tax deduction is an example of this. The statute provides broad concepts but lacks substance, leading to the courts playing a crucial role in determining its implementation and interpretation. The details matter……
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……
Do Vacation Rentals Trigger Self-Employment Tax?
Short-term rental or vacation rental properties have increased in popularity. They are also popular investments. This includes real estate rented on Airbnb and its competitors, such as Vrbo, Booking.com, Tripadvisor, Agoda, Expedia, TUI Villas, TravelStaytion, HomeToGo, Plum Guide, and Google. Taxes are one reason for the increase in popularity. Short-term rentals can provide a number……
Defining Real Estate Activities Broadly
There are quite a few uses for raw land. It can be used for just about any type of business activity. If someone purchases raw land and starts to take steps to prepare the land for a business, how one characterizes the intended business use can allow or limit the deductions related to the property.……
Tax Planning for Demolished Buildings
It is often said that bad things happen in threes. This is a nice way of saying that too many bad things have happened in quick succession, so hopefully, the person will not suffer further calamities in the short term. Tax attorneys view calamities in terms of tax losses and/or net operating losses. As tax……
Rental Tax Losses for Those With Irregular Hours
Tax cases are interesting in that they apply a fairly well-developed set of rules to varying fact patterns. These varying fact patterns can result in surprising, and often unintended, consequences. The more complex the tax law in question, the more likely it is that the outcome will be something other than what Congress may have……