There are a number of benefits for investing in renewable energy projects. The energy investment tax credits is one such benefit. Given the specialized nature of energy projects, these tax credits are often sold to taxpayers as investments by firms that organize and operate these investments. After making the investment and receiving allocation notices from……
Tag: Tax
Can Self-Employed Taxpayers Deduct the Value of Their Own Time?
Small business owners and self-employed professionals often spend countless hours developing products, services, or processes that enhance their business operations. A construction contractor might spend weekends designing custom software to track job costs. An engineer might devote evenings to developing a proprietary modeling program. In these situations, many entrepreneurs wonder: if they had hired someone……
Distributions From Forfeited IRA are Not Taxable
You commit a crime, you are convicted, and you do your time. Then the IRS steps in to collect taxes. The IRS takes your assets to pay the tax that arose from your criminal activity. As part of this, the IRS seizes your IRA funds. Are you responsible for paying income taxes on the IRA……
Do FBAR Penalties Die With the Taxpayer?
When someone has an undisclosed foreign bank account that the government has not yet assessed penalties for and they die, can the government still pursue the penalties? The answer hinges on a fundamental legal classification that courts are actively debating—are FBAR penalties primarily punitive fines or remedial damages? If FBAR penalties are primarily punitive, they……
Claiming a Casualty Loss for Property You Don’t Own
Natural disasters can be expensive. This is particularly true for those who own or have an interest in real estate. Our tax laws provide some relief through casualty loss deductions and theft loss deductions. But what happens when someone pays to repair property they don’t legally own? This question is particularly relevant when parents continue……
Section 179D Tax Deduction Claimed in Final Year
Architects and engineers who design energy-efficient government buildings can qualify for a Section 179D tax deduction. Technically, it is the building owner who qualifies, but since the government is the owner of the building and does not pay tax, our tax law allows the allocation of the deduction to the designer. This allocation provides an……
Immediate Expensing for Real Estate Costs
When a taxpayer has a capital outlay, they generally want to deduct the expense when the money leaves their bank account or when the liability is incurred. However, the accounting matching principle dictates that expenses should be deducted when the related income is received. The matching principle aligns the income and expense recognition. Our income……
Can the IRS Collect When the IRS Owes the Taxpayer?
The federal tax system provides various procedural safeguards to protect taxpayers while ensuring efficient tax collection. These protections become particularly important when taxpayers face immediate collection actions while simultaneously pursuing tax credits or refunds that could eliminate their tax debt. Many businesses have recently found themselves in this situation after filing amended returns to claim……
Evaluation of Valuations for Charitable Contributions
The valuation of property for charitable contribution deductions represents one of the most challenging areas of tax compliance for both practitioners and taxpayers. While the tax code encourages charitable giving through deductions, it also demands rigorous substantiation and accurate valuations to prevent abuse. For real estate donations in particular, determining the appropriate value requires careful……