CURRENT EDITION
How to Advise on the EV Tax Credit
At one time, a federal tax credit toward the cost of an electric car seemed like a permanent idea to help fight pollution and climate change. Now, a political shift in the U.S. endangers the notion and, more to the point, makes advising clients tougher in a tighter timeframe. How and when can those clients interested in an electric car and the credit still secure a tax break?
READ MOREMy Client Stuck with a Mistaken C Corporation Election?
My client formed three limited liability companies (LLCs) to hold his rental properties. Without consulting me, he filed Form 8832, Entity Classification Election, to elect C corporation treatment, effective January 1, 2020, for these LLCs. I want the LLCs to be disregarded entities, which is the most tax-efficient structure for his situation. What is the best way to undo these elections?
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GOFUNDME & KICKSTARTER: TAXABLE? DEDUCTIBLE?
Millions of taxpayers in the United States are using crowdfunding websites like GoFundMe and Kickstarter to raise money for important needs, such as paying medical bills, paying legal fees, or funding a new business venture. Both the IRS and the courts have been surprisingly silent on the tax consequences of crowdfunding platforms. The good news is that established tax law provides a clear road map for answering most tax questions created by raising money from a crowdfunding website. By knowing these rules, taxpayers can use crowdfunding to raise cash and minimize their overall tax exposure.
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How Business Owners Can Boost Income by Avoiding the $10,000 SALT Cap
Taxpayers have been whipsawed by confusing rules for the $10,000 limit on deducting state and local taxes (SALT), the most politically charged piece of the Tax Cuts and Jobs Act (TCJA) of 2017. The cap has caused nearly 11 million individuals to lose an annual deduction worth $323 billion. But many owners of private businesses known as passthroughs can avert that financial pain. If you own your company and thus report your business income on your personal federal income tax return, here’s what you need to know.
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Avoiding Passive Loss Limitations Through Short-term and Alternative Rentals
Short-term rentals like AirBnb are becoming increasingly popular with taxpayers who invest in real estate. For many taxpayers, the appeal of these properties is the flexibility and cash flow potential. However, there may be an overlooked third tax benefit. In many situations these short-term rentals may not qualify as a rental activity to the IRS, and that may offer a big tax break. While many rental activities generate losses, this can leave taxpayers facing the frustrations of not always getting to deduct those losses right away due to the passive activity limitations.
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CURRENT EDITION
How to Advise on the EV Tax Credit
At one time, a federal tax credit toward the cost of an electric car seemed like a permanent idea to help fight pollution and climate change. Now, a political shift in the U.S. endangers the notion and, more to the point, makes advising clients tougher in a tighter timeframe. How and when can those clients interested in an electric car and the credit still secure a tax break?
Leaving the United States, Part II: Renouncing Your Citizenship
In Part I of this 3-part series, we discussed the tax ramifications of living abroad, becoming an expat. In Part II, we go to the extreme by leaving America and renouncing our citizenship. And as you would guess, there are tax consequences to such an action. Before we step into renouncing our U.S. citizenship, we need to address how we can lose our citizenship.
Is Student Loan Forgiveness Taxable? It Depends…
Is student loan forgiveness taxable? Yes. No. Maybe. Sometimes. It primarily depends on the student loan forgiveness program. But like everything else with student loans, there are a number of other factors at play. Why make it easy when you can thoroughly confuse taxpayers, federal student loan servicers and financial planners for years to come? Keep reading to learn when student loan forgiveness might be tax-free and how to prepare your clients for taxable loan forgiveness.
