Sale of Partnership Interest A partner sells some interest in the partnership. Entity theory Section 741. Business is treated as a separate business, and gain or loss on the sale is treated as a capital loss. Exchange Gift Death Abandonment Computation of gain or loss: Proceeds received minus tax basis in the interest in the…
Form 1116, Claim the Foreign Tax Credit Per IRS link https://www.irs.gov/instructions/i1116 , no requirement to file Form 1116 if all prerequisites are met: -(1) Your foreign source gross income was all passive income, such as interest and dividends. -(2) All income was reported to you on Schedule K-1, Schedule K-3 (Form 1065), Schedule K-3 (Form…
On February 23rd, the U.S. Tax Court filed T.C. Memo. 2022-5 deciding whether the Office of Appeals abused its discretion in rejecting an offer-in-compromise (OIC) . The United States Tax Court found no abuse of discretion and granted summary judgment in favor of the IRS. Why? The petitioner submitted form 12153 timely requesting Collection Due…
January 24, 2022 Owner of a network of health care and rehabilitation facilities willfully failed to withhold and pay over employment taxes on behalf of his employees. Charged with tax evasion, and failing to file benefit plan reports. January 24, 2022 a North Carolina man did not file any federal income tax returns, allegedly submitted…
charitable contribution and social security benefits taxable
The IRS will send Letter 6419 (information letters) to taxpayers in 2022 with the total amount of advance CTC they received. To claim the third recovery/stimulus credit (if you have not received it), you’ll need to submit a 2021 tax return, even if you don’t have the requirement to do so. In early 2022, the IRS will send Letter 6475,…
Disallowing Deductions.
If your ITIN has expired and you will be filing a federal tax return, you merely need to renew it. The CP565 ITIN Assignment notification contains the ITIN assignment date. If you’ve lost your CP565, call 1-800-829-1040 or 1-267-941-1000, meet the requirements for an ITIN and submit a complete application.
The husband ran a successful medical practice earning over $650,000 in gross income. He employed his wife as a sales representative and paid her a little over $30,000/year. The couple had four small children. The wife didn’t participate in her husband’s meeting over finances and management.
The IRS found that the medical practice underreported its income by over $100,000. Over $40,000 tax liability notice of deficiency was mailed to the couple. The couple also faced a significant penalty for the underreporting/ underpayment.
On December 28th, 2021 the US Tax Court reviewed and decided whether “the taxpayer has paid more than was owed, where such a determination is necessary for a correct and complete determination of whether the proposed collection action should proceed”. (per T.C. Memo. 2021-142 UNITED STATES TAX COURT Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent…
The IRS paid out more than $7.6 million in fraudulent tax refunds. This case is being investigated by the IRS Criminal Investigation Division. Tax Refunds Fraud. Stealing tax money.
Investment Strategy. Options. Important. This post is NOT investment advice. Investments in Etrade options are NOT FDIC-insured and may lose value all the way to $0. Buying puts/shorting a stock has severe or unlimited risks. Day trading option has very big leverage and serious potential to profit (or to lose money). One of my favorite…
IRS tax forms change all the time. The most beneficial way to find the latest forms is: IRS.gov/latestforms IRS.gov/allforms IRS.gov/draftforms IRS.gov/formchanges IRS.gov/formsupdates Sometimes forms are not updated by the April 15th. You can view a draft of the form to see approximate expectations of what might be new and changed. For example, in 2018 form…
What’s new in 2020 tax? Let’s recap 2020 deductions from adjusted gross income: jury duty 199A deduction capital losses unemployment benefits repayments foreign housing (limitations applies) unreimbursed travel expenses (National Guards and Reserve members) certain attorney fees unreimbursed employee expenses self-employment medical insurance certain moving expenses (limitations apply) 50% SE tax now you can deduct…
You can be audited by: mail, you visiting an IRS office, the IRS visits your office. What are your options: you can agree with the audit opinion respond with a written protest (file an Appeal) https://www.irs.gov/appeals/preparing-a-request-for-appeals? ? More information about the appeal request You may submit a Small Case Request if the entire amount of…
As not that many people know, a lot of people and companies work in the business of bringing whistleblower case to the IRS and get paid well doing it.
Energy credits for home and vehicle: (IRS source)?Internal Revenue Code Section 30D provides a credit for Qualified Plug-in Electric Drive Motor Vehicles, including passenger vehicles and light trucks. For vehicles acquired after 12/31/2009, the credit is equal to $2,500 plus a car that draws propulsion energy from a battery with at least 5-kilowatt hours of…
I didn’t file FBAR and now owe $10,000 in penalties! If you are a US citizen, a Green card holder, a US organization have an interest in a foreign account, foreign entity, have several accounts, have signature authority, foreign stock or securities held in a foreign bank, indirect interest in foreign assets through an entity,…
College Tax Credits What does the U.S. tax code say about college tax credits? 26 U.S. Code ??25A.American Opportunity and Lifetime Learning credits The code says, there are two credits that shall be allowed against the tax imposed by this chapter for the taxable year the amount equal to the sum of? (1)the American Opportunity…
Biden Tax Plan Proposal Biden proposes a 10% offshore surtax penalty and a 10% onshore “Made in America” tax credit.? The 10% penalty applies to US multinational companies that manufacture their products offshore. Income outside the US is subject to GUILTI (GILTI is the income earned by foreign affiliates of US companies) now. What Biden…
Who is responsible for reporting foreign accounts? Entities that don’t comply with FATCA are subject to 30% withholding. FATCA is about disclosing accounts, not about collecting taxes. What are the key participants? Who is required to certify? Foreign financial institutions Non-financial foreign entities Withholding agents US taxpayers, form 8938 irs.gov/FATCA is where entities register to…
Section 199A -Qualified Business Income Deduction What business are eligible: available to individuals with Qualified Business Income C-Corporations and pass-through entities are not eligible. Qualified Business Income may be generated by Sole proprietors S-Corporation partnerships trusts estates and reduced by self-employment tax, self-employed health insurance, contributions to retirement plans, etc Real estate – taxpayer chooses…
What help can I get from an Enrolled Agent? Communication with the IRS for a taxpayer regarding the taxpayer’s rights, privileges, or liabilities Representing a taxpayer at hearings and/or meetings with the IRS. Responding to the IRS letters and notices. Providing with a Written Tax Advice Are Enrolled Agents Lawyers? No, Enrolled Agents are not…
FIRPTA Withholding Requirements: What is FIRPTA? If you bought US real Estate from a foreign person, you may be subject to U.S. income tax on foreign persons selling U.S. real estate or FIRPTA. The tax is 15% of the purchase price. What transactions subject to FIRPTA? a foreigner (non-US citizen, a foreign corporation, foreign partnership,…
What Does Business Analysis Help You With?Business Analysis Help Business Owners To Find Errors. Finding errors in your accounting records are beneficial to your business. While finding the errors you may discover such unfortunate events as: theft, embezzlement, or business deficiencies. Also, as a business owner you know it pretty well, that audit happens and…
Presentation of Balances and Disclosure When adding notes to your Financial Statements, don?t forget about: Occurrence Does your company really have the rights for the assets or obligations? Completeness Did you include all of the balances and disclosures? Accuracy Do the numbers match receipts, titles, vouchers, any other proper documentation? Classification and Understandability Can an…
Assets are?resources or things of value that are owned by a company. When making assertions about an asset, management needs to remember several key points: Existence-Check depreciation and anything else related to the claimed asset to make sure that your balance sheet is accurate.? -Check that you have the right to this equipment. -Check with…
How Cost of Gods Sold Affects Income & Tax Bracket An increase in the Beginning Inventory decreases?income for the year. An increase in the Ending Inventory increases?income for the year. An increase in Beginning Inventory means that you will pay tax on the sale of that inventory?later?(when you sell it). An increase in the Ending…
Liabilities are company obligations Notes Payable: Rights and obligations Existence Check with banks about your company liabilities. Never look for a way to produce fictitious paperwork-proof. Check loans, collateral, and checks for correct amounts. Send confirmations to creditors about your accounts payable, to lenders about notes payable, to customers about customers’ advances, to mortgagor and…
Your retirement account is not always what you will get into your pocket when you withdraw the money. The actual real value of your retirement account depends on many factors. Is it pre-tax? Is it after-tax? What is your tax bracket? Do you owe the IRS back taxes? What is the market risk of your…
I?m here to assist you with your substantive business and tax tasks. The services are?business bookkeeping, payroll, individual and business taxes, as well as negotiating your tax debt with the IRS!? I have years of experience and a variety of qualifications. My services are very flexible and can be added or changed per your requests….
Revenue or Sales When recording or showing your revenues or sales on your Income Statement, make sure that you accounted for: Occurrence Make sure there are no fictitious customers Completeness Make sure your company recorded ALL sales or revenues. Check for overstatement of sales or revenues by vouching and understatement of sales and revenues by…
IMPORTANT! There are new updates to this tax topic that have not been added here yet. As you already know, the Tax Cuts and Jobs Act removed personal property from the deferred tax treatment for like-kind exchanges. In most real-estate changes some amount of personal property is still included.? Likely, there is a proposed regulation…
Financial Statements Bookkeeping and Reporting (unaudited, unattested) We Analyze Your Business Based On Average Industry Reports and Based On Your Reports Understanding the client?s industry and business is one of the keys to the analysis. Finding industry average gross profit margin and checking that the company?s Sales and COGS match average gross profit in the…
What Does Business Analysis Help You With?Business Analysis Help Business Owners To Find Errors. Finding errors in your accounting records are beneficial to your business. While finding the errors you may discover such unfortunate events as: theft, embezzlement, or business deficiencies. Also, as a business owner you know it pretty well, that audit happens and…
What To Do If You Can’t Pay Your Taxes? Let’s say you got a letter from the IRS and you are shocked, of course. Well, first of all, breathe and open it. Second, read it carefully. Let’s say this is the first letter the IRS has sent you. It is most likely just a bill…
Financial Calculators: Credits to:?https://widgetscode.com/widget/fin
Bookkeeping and Payroll Software We currently only offering Quickbooks Online software & Manager software for accounting needs.? Quickbooks Online includes:? -inventory, -automation of your workflow, -safeguarding your transactions, -users access from anywhere, -integration with most used applications,?etc Payroll software: -Intuit Full Service Payroll, or ?Gusto Full Service Payroll. We currently only offering Quickbooks Online software…
Paycheck Processing Online Access For Employers and Employees Direct Deposit Payroll Tax Filing ? Before We Start Processing Payroll, we need such information from the employer: Company address and tax filing address Pay schedules and pay dates Prior pay history Chart of accounts for payroll Your bank account routing number and account number Federal and…
Business Tax Deductions: Home Office Deduction.? According to the IRC?26 U.S. Code???280A,?https://www.law.cornell.edu/uscode/text/26/280A home-office must be in connection with your trade or business (or with your income-producing activity) (1)Certain business use?Subsection (a) shall not apply to any item to the extent such item is allocable to a portion of the?dwelling unit?which is exclusively used on a…
?Returns relating to cash in excess of $10,000 received in a trade or business. What forms to use when reporting receiving cash in trade or business in excess of $10,000? If you look at 26 CFR ? 1.6050I-1 – Returns relating to cash in excess of $10,000 received in a trade or business, you will…
Recapture of Excess Employment Tax Credits Under the Families First Act and the CARES Act If you are taking advantage of Employment tax Credit under the Families First Act and the CARES Act, please read this Federal Register document to get details on it (as of 07/29/2020). There might be more changes to this document,…
This article is a compilation of explanations by the Federal Register, Law Cornell, USA Tax Court cases, and the IRS, all referenced in the text.? Meals and Entertainment are surprisingly under-explained.? Let?s start with the basics: https://www.law.cornell.edu/uscode/text/26/274?explains the basics of what can be deducted https://www.federalregister.gov/documents/2020/02/26/2020-03723/meals-and-entertainment-expenses-under-section-274? explains in details? https://www.ustaxcourt.gov/UstcInOp2/OpinionViewer.aspx?ID=11982? Court Case Fitch v Commr. Court…
Cryptocurrency Profit and Tax to the IRS The IRS has increased the number of audits they perform regarding foreign accounts. As you may already know, if you don?t report your foreign accounts, you will be subject to very severe penalties from the IRS. ? Not disclosing or abusing your cryptocurrency tax techniques can be tied…
Like-Kind Exchanges As you already know, the Tax Cuts and Jobs Act removed personal property from the deferred tax treatment for like-kind exchanges. In most real-estate changes some amount of personal property is still included.? Likely, there is a proposed regulation that states that if the personal property was transferred together with the real estate…
Common errors investors make: Realtors are usually not familiar with tax requirements regarding foreigners. When a foreigner is looking to invest in Real estate in the US, the first thing I notice is that the tax system at where they are from is much different from the system in the US.? Under Code Section 1445,…
Sales Tax or Retail Sales Tax Have you paid your Retail Sales Tax this month? States are adding more audits monthly to find sales tax evasion businesses. You may have to pay sales tax in a state where you ?had (1) more than 200 transactions or (2) $100,000 in in-state sales. If you want to…
Estimated Federal Taxes Below you can find an example of what happens if a business owner doesn?t make ESTIMATED TAX PAYMENTS throughout the year:
Tax Implications When Foreigners Investing In Real Estate in the US The tax would be reported to the US because the property is located in the US. Under the treaty, it states ARTICLE 6 Income from Real Property1. Income derived by a resident of a Contracting State from real property (including income from agriculture or…
Tax Saving Strategy HSA as a tax savings strategy. I?m sure you have heard of HSA as a tax savings strategy. Now, let?s talk more about it, in case, you missed out on the key benefits of it. ? Let?s start by saying that a Health Savings Account (HSA) is a tax-advantaged (pre-tax) savings account….
Financial Planning Financial Planning Doesn?t Start One Day Before the April 15th Tax Filing Deadline. Is it April 15th and you are dragging your tax files to your accountant, thinking, ?I wish I put money in a retirement account this year so I don?t have this huge tax bill now??Right? So, let?s review what retirement…
Revenue or Sales When recording or showing your revenues or sales on your Income Statement, make sure that you accounted for: Occurrence Make sure there are no fictitious customers Completeness Make sure your company recorded ALL sales or revenues. Check for overstatement of sales or revenues by vouching and understatement of sales and revenues by…
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How To Abate Penalties? Before we start working on your penalties abatement, please, check out this IRS Handbook that shows how you can get in trouble with the IRS: https://www.irs.gov/pub/irs-utl/tax_crimes_handbook.pdf 1-1.01 Statutory Language I.R.C. ? 7201 – ATTEMPT TO EVADE OR DEFEAT TAX Any person who willfully attempts in any manner to evade or defeat…
Will My Unpaid Taxes Be Forgotten by the IRS? Most of us are tempted to save money. We work very hard to earn it and we don’t want to give it away to the government, no matter how much they claim they use it for our benefit. We never see any receipts from the government…
