Even if you are not a tax professional, many people have heard of a 1031 exchange or like-kind exchange. This tax deferral provision has been a permanent part of the Internal Revenue Code for a long time. Usually, if a taxpayer swaps an asset for another asset it is usually a taxable sale. However, if the exchange comes within Section 1031, then it can generate no tax or limited tax due. Essentially, a taxpayer can change their investment without, according to the IRS, cashing out or recognizing capital gain.
Collecting Separate Tax Debts from Community Property
Texas is a “community property” state; but all property in Texas is not “community property”.
In Texas, each spouse can have his or her own “separate” property, which generally consists of property that was acquired by gift or inheritance, and that which was owned by the spouse prior to marriage. All other property is generally presumed to be community property.
Love Don’t Cost a Thing? Drawing the Line Between Wages and Gifts
A good friend called me recently with a question for one of his clients. The client, an elderly client with health problems, wanted to know if the payments she has been making to her caregivers could be treated as non-taxable gifts, or if she has to report the payments to the IRS as wages?
Could a Cadillac Health Plan Put the Brakes on Obamacare?
The Supreme Court is hearing oral arguments Wednesday, March 4 on certain aspects of the Affordable Care Act. This has the potential to unravel President Barack Obama’s beloved health care plan.
Another aspect of Obamacare that will affect many people is the excise tax on “Cadillac” health care plans. A Cadillac plan is one that
What You Need To Prove – Deducting Travel Expenses
All too often, people don’t keep adequate records to demonstrate they are entitled to deduct travel expenses.
The general rule from the Supreme Court is that deductions are a matter of legislative grace, and taxpayers must maintain sufficient records to substantiate the amounts of their income and entitlement to any deductions or credits claimed.
So
Does Filing for Bankruptcy Really Give You Tax Relief?
When times get desperate and tax liabilities pile up – filing for bankruptcy is an option many people consider. Taxes are “dischargable” in bankruptcy, but there are important rules you need to know.
TIMING
Taxes are only dischargable if they have reached a certain vintage. Here are the basic rules:
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More than three years must
Tax and Business Planning for Farmers to Avoid Higher Taxes and Loss of Subsidies
The Agricultural Act of 2014 (aka – the 2014 Farm Bill) has been controversial, to say the least. Among its many changes are an $8 billion cut to the “food stamp” program. The Farm Bill also drastically modifies or ends farm “subsidies.”
In our global marketplace, these subsidies are often necessary to help American farmers
Application for Tax Exempt Status To Be Eased by IRS – Except for the Tea Party
In 2013, the IRS revealed that it had selected “social welfare” groups (like the Tea Party) applying for tax-exempt status for closer scrutiny. That investigation is still ongoing and it has given the IRS a black eye.
The Tea Party is a 501(c)(4) organization – not your traditional 501(c)(3) which must be “organized and operated
New Guidance From IRS On At-Risk Rules For LLC Member Guarantees
The IRS recently released a chief counsel memorandum AM2014-003 on LLC Member Guarantees of LLC Debt and “Qualified Nonrecourse Financing.” These memorandums are very helpful because they provide the IRS’ interpretation of complicated issues. These memorandums do not have the force and effect of law – thus a taxpayer is not bound by them. However,
IRS Makes Bitcoins a Tax Headache
The IRS just published Notice 2014-21 which explains the IRS’ vision on how general tax principals apply to “virtual currency” transactions like Bitcoin.
If you’re not familiar with Bitcoin, it’s a currency that isn’t issued by a central government. And just to be clear, there isn’t an actual “coin” associated with it either. The currency