By month: July 2016
Tax savings when renting to relatives depend on your compliance with the tax law’s fair-rent standards and your relatives’ use of the property. Violate these rules and you face the triple whammy of additional taxation. And it’s easy to violate the rules, especially if you don’t know what they are.
What happens when you locate a commercial office (an office in the home or a regular office) in a duplex or apartment building? It’s possible that this location can produce tax-favored depreciation for the office. This seems a little strange at first, but once you see how the rules work, it’s pretty logical.
You have special tax-planning considerations when you sell a business that has zero-basis receivables and/or self-created goodwill. If you operate as a C corporation, you need additional planning because of double taxation. And the good news is that planning helps reduce the tax burden.
The sale or trade-in of a business vehicle has positive or negative tax ramifications. You have a choice in this matter. But first you need to know the dollar amount of your gain or loss. This article gives you the six steps to finding your gain or loss.
The IRS tax form for deducting the home office contains the gross-square-footage method and makes no mention of other permissible methods. But the instructions for that form and the IRS publication on the home-office deduction both mention other reasonable methods. This article shows you how one other reasonable method, the net-square-footage method, works—and why it is always superior to the gross-square-footage method found on the IRS form.
Business-related classes or seminars can put a serious dent in your wallet, so, of course, you’d like to write off those costs as business expenses. But there are some strict and somewhat tricky rules for deducting business education expenses. In some cases, the education can fail the tax deduction test but qualify for business deductions following an alternative path.
Personal service corporations pay taxes at a hefty flat tax rate of 35 percent. As a result, many personal service corporations pay their shareholder-employees year-end bonuses to zero out the taxable income. A recent court case put the kibosh on this for a law firm and should put you on notice.