You and I have something in common. We both hate getting hit with tax penalties. That’s why we should be grateful that the most recent court cases dealing with Section 6751(b) of the tax code have given us a powerful weapon against IRS penalties. Want to learn more about how to put these new rulings to work for you? Read my new article title Tax Tips: Update on New … [Read more...]
Tax Policy
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Tax reform sticks it to business startups that lose money
There’s a provision in the Tax Cuts and Jobs Act that we believe is terribly unfair to business start-ups and struggling business owners. You see, the rule prevents you from using all your business losses against non-business income if the losses are considered to be too large. (That determination is made by Congress.) If you want to find out how this onerous new law can … [Read more...]
The IRS allows client and prospect business-meal deductions
Here’s good news from the IRS. You read that right. Good news! You see, in Notice 2018-76 the IRS states that client and prospect business meals continue as tax deductions under the Tax Cuts and Jobs Act. As we’ve mentioned in past issues of the Tax Reduction Letter, the Tax Cuts and Jobs Act eliminated entertainment deductions. But thanks to Notice 2018-76, that’s … [Read more...]
Defining “real estate investor” and “real estate dealer”
Here’s a good news double header… Good news #1: You can be both a real estate investor and a real estate dealer with respect to your real estate portfolio. This puts you where you want to be. In control. Good news #2: By knowing just a few rules about dealer/investor classifications, you can dramatically increase your net worth. Want to find out more? Read my new article … [Read more...]
Deductions for defunct S corporation expenses
Let’s say you closed your S corporation in 2016. Let’s also assume that you incurred unexpected expenses from your defunct S corporation in 2017 and 2018. Finally, let’s stipulate that you personally paid for them as the S corporation’s president and sole shareholder. Now comes the big question… Can you deduct those expenses? Now comes the big answer… Nope. You’re out … [Read more...]