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…
charitable contribution and social security benefits taxable
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…
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…
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…
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 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…
?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,…
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…
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…
