Do you have a classic or antique car that you use for business? If you do, can you deduct it the same way you would deduct any car you use in business? The short answer is “yes,” but you must meet two criteria imposed by the courts: The car must be of a type that’s subject to “wear and tear, decay, decline, or exhaustion”The car must be used in your trade or … [Read more...]
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Good News: Most Rentals Likely Qualify as Section 199A Businesses
As you probably know by now (and definitely know if you’re a regular reader of The Tax Reduction Letter), tax reform added tax code Section 199A. This new section created a new 20-percent tax deduction possibility for you if your rental property has profits and can qualify as a trade or business. Which means that if your rental property satisfies the above two conditions, … [Read more...]
Arguing with the IRS: How the courts can help (Part 2)
Got a beef with the IRS? Want to fight the penalty they assessed? Then you need to rely on “authority” to come out a winner. I explained this in an article last month titled “Arguing with the IRS: You Need Tax Authority (Part 1)". In this issue I’ll explain the role of the courts when you take on Uncle Sam, and how they can help you beat the IRS. If you feel you’ve … [Read more...]
How to win a dispute with the IRS (Part 1)
The IRS is not always right. And when the IRS wants you to pay taxes you really don’t owe, or tries to assess a penalty you feel is undeserved, you don’t have to cave. You can fight. But to win a dispute with the IRS, you need to base your arguments on “substantial authority.” There are three types of substantial authority you can call upon to come out a winner: … [Read more...]
Want to survive an IRS audit? Know the law!
Usually, in a tax audit, you’re discussing facts, not the law. If the IRS auditor questions your deductions, you prove the facts with receipts, canceled checks, log books, etc. But once you get into matters of law, not matters of fact, you need a lot more information. That’s where my new article comes in. It will show you how to use the law, court rulings, and IRS documents … [Read more...]