Tax Credits

Breaking Down Tax Benefits for Higher Education

With the rising cost of higher education and greater reliance on student loans, taxpayers are looking for every opportunity to ease the financial burden of earning a degree. Fortunately, several higher education tax benefits are available to help offset the high cost of tuition, student loans and other education-related expenses. However, certain eligibility requirements — such as income limits and tax filing status — often trip up taxpayers along the way. Understanding the nuances of these tax benefits for higher education can ensure your clients take full advantage of available tax savings.

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CURRENT EDITION

Just How “Hot” Should IRC Section 751 Be?

Annette Nellen, CPA, CGMA, Esq.

Tax rules are generally designed with a purpose in mind. Most rules serve to define the tax base and tax rates. Many others serve a behavioral purpose to encourage or discourage certain activities. The focus of this article stems from tax rules that are a combination of favoring certain activity such as generation of capital gains, and a limitation on such gains for certain taxpayers, such as the so-called “hot assets” rule for partners under IRC Section 751, Unrealized Receivables and Inventory Items. While Section 751 has been in the tax law for decades, a new application of it was raised by both the IRS and California FTB. This article summarizes Rawat, TC Memo 2023-14, rev’d, No. 23-1142 (DC Cir., 2024), and FTB Legal Ruling 2022-02, and offers observations on their relevance to tax research and practice.

1099 K(ickstarter): Crowdfunding and Taxes

Jeff Stimpson

Astronomical expenses crop up more than ever in our economy. From medical bills, business startups, a long-cherished artistic project, it feels like things are harder to afford now than ever. But the internet has also helped create a revolutionary way to raise large amounts of money for some of these causes: crowdfunding. But what does that mean for when the Tax Man comes calling?

Dave Ramsey And His Critics

Peter J Reilly CPA

Somehow I got through the last thirty years without ever hearing of Dave Ramsey. Now when I go on YouTube, which I do way too often, there is usually a Dave Ramsey video or a video by one of his critics in my feed, sometimes several. I have also looked at a few of his books. I was once told that because I am an Aquarian I want everybody to get along. So I am going to try to reconcile Ramsey’s recommendations and the significant criticism of them.