Category: Taxes

Interesting IRS Facts

As 2013 has come to an end, we all must start gathering our 2013 tax records to start preparing for the dreaded tax man.  Do you ever wonder how many returns or how much money the IRS collects?  Or how many audits are conducted? In the 2012 IRS Data Book, released by the IRS, contains …

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IRS finalizes delayed start date to start accepting returns

In October the IRS announced that the government shutdown would delay the start of the 2014 tax filing season at least a week and likely more.  According to the IRS announcement: “The government closure came during the peak period for preparing IRS systems for the 2014 filing season. Programming, testing and deployment of more than …

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No GAAP yet for Bit Coins

Bit Coins are increasingly in the news.  Denise Lugo of Bloomberg BNA describes “Bit Coins” as: a type of virtual currency, which loosely put, is created when a complex mathematical algorithm is solved using high power computers.  It seems like overnight bit coins have become legitimate.” Ms. Lugo also summarized the FASB’s recent position at a …

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Accelerate equipment purchases to preserve an important 2013 tax break

The first-year bonus depreciation law which allows rapid write-off of equipment purchases is expiring at the end of 2013. Companies who can do so are well advised to accelerate their equipment and software purchase(s) before the end of 2013. Combined, the two laws allow 60% of equipment to be written off in the first year. …

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Charitable remainder trusts are a now more useful

In 2013, the tax rate on capital gains increased to 20%, plus a 3.8% Medicare surtax for affluent taxpayers. This substantial capital gains tax increase causes charitable remainder trusts to be more attractive. Typically, the trust is funded with highly appreciated assets. The trust can sell these assets and avoid tax on any capital gain. …

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California Franchise Tax Board Provides Tax Relief for Short Sales

The California Franchise Tax Board (“FTB”) issued a letter summarizing their position regarding the tax impact of short sales.  The FTB followed suit with the IRS’ position, meaning there will not be any California state tax impact for a majority of taxpayers in this position (See my previous blog post regarding the IRS’s position).  The FTB …

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Your Loan to A Start Up May Be Treated as a Gift

When starting a business, it is common for entrepreneurs to seek initial funding from family and friends.  Since the holidays are creeping upon us, this means spending time with family members and loved ones.  During the festivities, discussions surrounding what people have been doing or planning on doing are bound to surface.  You may get …

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Federal Tax Relief for California Short Sales

Many people in California continue to short sell their homes.  A short sale is when the home is sold for less than the outstanding loan balance.  In California, borrowers are generally protected from owing the deficiency resulting from a short sale.  However, the debt that is forgiven is taxable at both the state and federal …

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Most S-Corporations should pay greater attention to shareholder/employee compensation

The IRS continues to pursue S-Corporations that do not pay employment/payroll taxes on what the IRS considers to be reasonable compensation. Following other cases on this subject, in Sean Mcalary Ltd, Inc., vs. Commissioner Of Internal Revenue, T.C. Summary Opinion 2013-62 (August 12, 2013), the Tax Court generally ruled in favor of the IRS. The …

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IRS Announces 2014 Inflation Adjustments

On October 31, 2013, the IRS released their 2014 inflation adjusted numbers.  The following table summarizes some of the more common numbers that relate to most of us:   Description 2013 2014 Difference Personal Exemption $3,900 $3,950 $50 Standard Deduction – Single $6,100 $6,200 $100 Standard Deduction – Married Filing Jointly $12,200 $12,400 $200 Annual …

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