By month: January 2008
Gambling requires good strategies not only in your gambling activity, but also for tax purposes. You need to report your gambling income and losses in your tax returns and keep tax records whether you win or lose, whether the gambling is legal or illegal, and whether the gambling is a tax defined business or hobby.
The combination of a Section 105 medical plan and a $15,500 salary to the spouse generated a $32,875 tax deduction for the business, no taxable income for the spouse, and a cash contribution to the spouse’s 401(k) retirement account of $19,375.
The IRS ruled that this real estate broker who gives commission rebates and commission reductions at closing does not have to give Form 1099s to his customers who receive the rebates and reductions.
In what is becoming an every year outrageous event, lawmakers patched the alternative minimum tax (AMT), adding $50 billion to the federal deficit.
Despite the new law’s press, the Mortgage Forgiveness Debt Relief Act of 2007 only offers relief to a limited number of qualified homes.
To pay for the “Heroes Earnings Assistance and Relief Tax Act of 2007,” lawmakers increased the minimum penalties for failing to file a tax return.
Terry Gerber was sentenced to two years and six months in federal prison for tax evasion.
The taxpayer in this case relied on his lawyer, but that lawyer did not know the home-office rules. Then, the judge misapplied outdated rules to his home-office deduction, costing this taxpayer $7,000.
When you claim Section 179 expensing or MACRS depreciation, you make a contract with the government. When you quit your business, you probably violate the terms of your tax-law contract and, thereby, trigger recaptures taxes.
Under the “objective test,” entertainment does not mean only the entertainment of others. The objective test sanctions Dutch-treat entertainment.
Talking business with your husband does not create a tax deduction for entertainment. For this to work, you need to create a situation where you can use the closely connected rule.
The IRS applies a recapture tax, even when no depreciation is claimed.
Technically, cash basis taxpayers deduct checks when they are delivered and negotiable. For the most part, the courts and the IRS employ practical applications to make this rule easy for you.