By Joe Zitzka
Many people have vacation homes they’ve purchased over the years but don’t use often because life gets in the way. So what do you do when someone suggests converting that unused vacation home into a rental property that gives rise to deductions and might even result in a useable loss if you sell it for less than you paid for it when you bought at the height of the market? Well, according to the Tax Court, you take the rental process seriously.
By: Amanda Wilson
Recently, I was at the ABA Tax Section meeting in DC, and one refrain that I heard over and over is that tax reform is a major priority for Congress. The Obama administration has basically shut down the possibility of personal tax reform by threatening a veto on any legislation that lowers the top individual tax rate from 39.6%. However, business tax reform continues to be open for discussion, and there is a strong appetite for lowering the corporate tax rate. The key issue, though, is that any tax reform will have to come soon – before the presidential campaign over shadows everything.
by Matt O’Kane and Jason Palmisano
The laws governing the U.S. estate and gift tax system are complex. For Non-U.S. Citizens, the U.S. estate and gift tax system is more onerous and requires a much higher degree of awareness. We recently hosted a seminar discussing several issues Non-U.S. Citizens face in transferring their asset to their loved ones and providing strategies to minimize U.S. transfer taxes, including:
By: Amanda Wilson
Several years ago, many taxpayers faced with underwater partnerships would abandon their partnership interests, thereby triggering an ordinary loss. This ordinary loss was often preferred over the capital loss that would be triggered if the taxpayer’s sold their partnership interests or liquidated the partnership. Capital losses are less advantageous, as they can generally only be used to offset capital gains. By contrast, ordinary losses can offset ordinary income, providing a much bigger tax benefit.
By: Amanda Wilson
An S corporation is a popular tax vehicle for family owned businesses, as it allows for a single layer of tax instead of the double layer of tax imposed on regular corporations. Instead of the S corporation paying tax, the taxable income of the S corporation passes through to the shareholders and is reported on the shareholders’ personal tax returns. The S corporation can generally then distribute the accompanying profits to the shareholders free of federal tax.
