Tax Basis Planning for Inherited Property
When you sell a property, you are typically required to pay income tax on the gain, which is calculated as the difference between the sales price and the tax basis. The tax basis is usually the amount...
View ArticleIRS Says When a Grape is No Longer a Grape
The tax law is filled with artificial distinctions and deadlines that often don’t match up with the way businesses actually operate. One area where this is particularly true is in the realm of...
View ArticleParking Garages: Parking Lot Depreciation Life
In recent Chief Counsel Memo #20125201F, the IRS concludes that open-air parking garages are considered buildings rather than land improvements for tax purposes. The IRS attorneys go on to say that the...
View ArticleInsurance Agent Denied Depreciation Deduction For Airplane
In Brown v. Commissioner, T.C. Memo. 2013-275, the U.S. Tax Court denied an insurance salesman’s bonus depreciation deduction for his private jet as it was not placed in service in the tax year. The...
View ArticlePlanning for Start-Up Businesses, Yacht Rental Example
New businesses may not be immediately profitable. To help mitigate the financial risk, many businesses are started by workers who have a day job. If the business is not immediately profitable it can...
View ArticleHow to Allocate Tax Basis for Real Estate
If you sell real estate, you pay tax on the gain. Gain is the product of the sales price less tax basis. Tax basis in turn is the amount invested in the property. But how do you calculate and then...
View ArticleRecords Needed for Partial Asset Dispositions
Taxpayers often overlook “partial asset dispositions.” Their tax advisers do too. This may be due to it being a depreciation issue that seems unimportant. It may also be that the partial asset...
View ArticleWhen is Real Estate Placed in Service?
Several tax laws are triggered by when property is purchased. Other tax laws are triggered when property is placed in service. Depreciation on real estate is a good example. It is triggered when...
View ArticlePlanning for Commercial Solar Tax Credits
The solar tax credit can significantly reduce Federal income taxes. Congress has recently reaffirmed its desire to spur these investments to curb reliance on foreign energy and to help the environment....
View ArticleThe Qualified Nonpersonal Use Vehicle
What Congress provides with one provision, it often takes away with another. This can result in legal challenges whereby the court creates exceptions. The exceptions can be modified and qualified by...
View ArticleTax 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...
View ArticleThe Short-Term Rental Tax Rules
While short-term rentals have fallen out of favor as of late, they do still offer tax benefits. There are reasons why short-term rentals have more favorable tax treatment than long-term rentals....
View ArticleImmediate 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...
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