Abandon All Hope? If a Partnership, Maybe

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. read more

Act Now! Protect Yourself From Tax Fraud

By:  Amanda Wilson

Tax identity theft is a big issue right now, with people only discovering that they are victims when they go to file their tax return with the IRS.  Instead of having their returns accepted, these people find themselves having their returns rejected by the IRS becuase an identity thief has already filed a fraudulent return (and received a huge refund check).  The next year will be a nightmare of frustration and red tape as they try to resolve the issue with the IRS. read more

Common Traps When Selling Partnerships

By:  Amanda Wilson

Because of the flexibility and tax benefits that tax partnerships provide, many small businesses and family partnerships use tax partnerships. For tax purposes, a partnership can be in the form of a general partnership, limited partnership, limited liability company or limited liability limited partnership.  While these forms offer great tax advantages, they can also result in unexpected surprises and traps for the unwary when a partnership interest is bought or sold. read more