With an increased capital gain tax rate of 20 percent for tax years 2013 and after, small-business owners should be aware of a provision that eliminates one-half or more of capital gains recognized on the sale of their C corporation stock. Enacted in the early ’90s, Internal Revenue Code Section 1202 excludes 50 percent of […]
In a highly anticipated decision that could save substantial taxes for trusts that manage real estate investments, the Tax Court recently ruled in favor of a Michigan real estate developer’s estate that an estate can be treated as a “real estate professional.” The Tax Court ruled in favor of the taxpayer – the Frank Aragona […]
Home builders won a significant victory in a recent Tax Court case, allowing them to defer income recognition until the entire development is complete, not on a house-by-house basis under the completed contract method of accounting. The U.S. Tax Court concluded in the case of California-based Shea Homes (Shea Homes, Inc. v. Commissioner, 142 TC No. […]
Are you an investor or a developer with questions about historic tax credits? You should be aware that the IRS issued new safe-harbor rules in Revenue Procedure 2014-12 on Dec. 30, 2013, in direct response to the holding in Historic Boardwalk Hall, LLC v. Commissioner 694 F.3rd 425 (3rd Cir 2012). In the Historic Boardwalk Hall case, the 3rd […]
The U.S. tax code provides multiple tax-saving opportunities related to higher education costs for yourself and your dependents. To take advantage of these breaks, you must first know what is available and which may apply to you. While the tax code has a marvelous way of complicating even the simplest concepts, making every situation unique, […]
It is no secret that business owners generally – with some exceptions – prefer to deduct as much as possible up front rather than capitalize and then depreciate over time. For this reason, it has become increasingly important for business owners to be aware of the tax laws associated with materials and supplies. These laws […]
The business use of vehicles seems to be an inexhaustible topic with a new twist or wrinkle every year. A review of the basics, specifically for automobiles, SUVs and pickup trucks, can serve as a foundation for a proper understanding of how vehicle expenses relate to tax deductions. Ownership, risk management and business-use percentages are […]
As the 2013 year-end closes in, it’s a good time to revisit the proper treatment of health insurance premiums and S corporation “2 percent shareholders.” If you own more than 2 percent of the outstanding stock of an S corporation (or stock giving you more than 2 percent of the total voting power), a good […]
The recent Supreme Court decision to invalidate a section of the Defense of Marriage Act has far-reaching tax implications. Section 3 of the Defense of Marriage Act (DOMA) defines marriage for federal law purposes as the “legal union between one man and one woman as husband and wife.” The Supreme Court case reviewed a surviving […]
Offshore reporting is filled with sinkholes that can entrap the unwary taxpayer. With some of the largest civil penalties found anywhere, it’s an area where even the smallest mistake can be costly. The Report of Foreign Bank and Financial Accounts, or FBAR, is one of the most common offshore reporting forms (Form TD F 90-22.1). […]