Tax law grants tax-free income status to the proceeds from income replacement disability insurance policies. You pay a price for this tax-free income: You may not deduct the premiums. Special treatment applies to overhead disability and also S corporation payments on behalf of “more than 2 percent” shareholders.

When you are up against the two-out-of-five-year rule for enabling the $250,000 home-sale exclusion ($500,000 if you are married), your strategy might include creating an S corporation to which you would sell your home.

The cabin at the ski hill could be a hotel, a residential rental property, or a personal residence. It depends on your personal use of the property; the length of rental periods; and documentation of your time, others’ time, expenses, and activities.

Learn how you treat monies spent when your attempted purchase of a rental property fails. Tax law provides you with a path of special, mostly favorable tax rules.

The IRS is in the midst of its largest hiring initiative in years. Therefore, the increase in IRS audits seen during the last few years is expected to continue at an even greater rate.

Special documentation rules apply to entertainment and vehicles. One rule requires you to document your entertainment and vehicle use within one week of the activity. Another rule says you don’t need receipts if the expenditure is less than $75—but you still carry the burden of proof.

Should you buy or rent your home? What gives you the best quality of life and monetary value? Here is what you need to consider.

The IRS deemed that frequent flyer miles and hotel reward points are tax-free until further notice. However, cash rewards are another matter. First, cash rewards are not gross income. Second, they reduce basis. Third, they produce a deduction when you donate them to charity.

Follow these three easy steps to an IRS audit-proof exchange of your SUV for a car.