The Tax Consequences of a Short Sale of Your Residence
The real estate boom appears to be over for now. Morgan Stanley predicts that house prices could fall by 10 percent by the end of 2024, perhaps twice as much in a worst-case scenario. Homeowners who purchased their homes at the top of the market could be in trouble, especially if the U.S. falls into […]
$80 billion to the IRS – What it Means for You
You may have noticed that the IRS is in a bad way. It has a backlog of millions of unprocessed paper tax returns, and taxpayers can’t get through to the agency on the phone. Congress noticed and took action by passing a massive funding of the IRS in the recently enacted Inflation Reduction Act. The […]
Use In-Kind RMDs to Avoid Selling Your Retirement Account Assets
Are you 72 or older? If so, you must take a required minimum distribution (RMD) from your traditional IRA, SEP-IRA, or SIMPLE IRA by the end of the year. If you turn 72 this year, you can wait until April 1 of next year to take your first RMD—but you’ll also have to take your […]
Crowdfunding – Is It Taxable?
Crowdfunding is a national and international phenomenon. Over $17 billion is raised yearly in North America through world-famous websites such as GoFundMe and Kickstarter. But is crowdfunding taxable? All this crowdfunding activity leads to an obvious question: Is the money raised this way taxable income for the recipients? You might be surprised to learn that […]
Do You Owe Self-Employment Tax on Airbnb Rental Income?
Do you owe self-employment tax on Airbnb rental income? That’s a good question. In Chief Counsel Advice (CCA) 202151005, the IRS opined on this issue. But before we get to what the IRS said, understand that the CCA’s conclusions cannot be cited as precedent or authority by others, such as you or your tax professional. […]
Grouping 101: Tax Strategy for Owners of Multiple Businesses
When you own more than one business, you need to consider the grouping rules that apply for passive-loss purposes. Should one of your businesses lose money, you may not deduct the losses from that business during the current tax year unless you materially participate in the business or, if grouped, materially participate in the group; […]
Health Savings Accounts: The Ultimate Retirement Account
It isn’t easy to make predictions, especially about the future. But there is one prediction we’re confident in making: you will have substantial out-of-pocket expenses for health care after you retire. Personal finance experts estimate that an average retired couple age 65 will need at least $300,000 to cover health care expenses in retirement. You […]
Selling Your Highly Appreciated Vacation Home? What About Taxes?
The tax-code-defined vacation home rules come into play when you have both rental and personal use of a home. Thus, you can have tax-code-defined vacation homes in the city, in the suburbs, and in recreation areas. If you have no combined rental and personal use of the home, the rules are easy. The property is […]
Change Independent Contractors into Employees, Trouble Free
You have read horror stories about how the IRS audits business owners and deems their 1099 independent contractors W-2 employees—and then assesses tens (or hundreds) of thousands of dollars in back payroll taxes, interest, and penalties. Are you one of those horror stories? Okay, let’s say you are one of them. You know that you […]
New Law Improves Energy Tax Benefits for Business Owners and Landlords
The federal government wants you to go green if you own a commercial or residential rental building. Read about these energy tax benefits for business owners and landlords. The newly enacted Inflation Reduction Act extends and expands valuable tax credits for solar panels or other renewable energy installations and electric vehicle charger units. Also, the […]