Tax

Avoiding the Real Estate Dealer Status A real estate dealer is one who is in the business of owning property with the primary intent of resale. Think of a real estate flipper here. Landlords should strive to avoid qualifying as a real estate dealer as negative tax consequences, such as being subject to FICA taxes, can…

Tax Tidbits H & R BLOCK AND TURBO TAX have been accused of steering taxpayers away from their free tax software to their more costly services. The media reported that both H & R Block and Turbo Tax tried to hide their free programs. So, for profit companies, under the guise of offering free services, persuaded…

Is Rental Income Eligible for the 20% QBI Deduction? My Answer is Still “It Depends” The QBI (Qualified Business Income) deduction is the new 20% deduction calculated on non-C Corporation trade or business income. A trade or business is defined in such a way that it can apply to some rentals. Your specific situation will determine…

Where is your Residency? You: I own homes in more than one state. CPA: You have residency issues. You: Can this be cured? CPA: Possibly, but you must follow my prescription exactly as stated. States are constantly looking for ways to increase their revenue. One method they employ is finding people living in the state…

Retirement Planning PART 1: WHERE & WHEN TO INVEST What accounts are best to use to save for retirement? I advise my tax and financial planning clients to have the following three types of accounts: Traditional retirement accounts ROTH retirement accounts Outside of retirement accounts This allows us to reap the benefits of planning distributions…

Referring to Referrals We all know that a referral increases the chance of converting a prospect into a client. According to Nielsen, people are four times more likely to buy when referred by a friend to your business. However, many of us feel awkward asking our clients for referrals. What is a small business owner…

2018 Tax Season Court Cases Loss on Sale of Couple’s Home is Not Deductible. After living in the house for years the couple moved out and began substantial renovations. Five years of renovations later, the couple leased the house to a friend, but for below market rent. (Renting out for below FMV rent will cause problems…

New Tax Law Limitations on Home Ownership Benefits Mortgage Interest Deduction on Your Principal (or Second) Residence: Home mortgage interest and points are deductible as itemized deductions. Home Mortgage Interest. Generally, home mortgage interest is any interest you paid on a loan secured by your home (main or second). The loan may be a first or…

Fishing (or should I say swinging) for a Better Income Tax State? Mike Trout of the Anaheim Angels has signed a record 10-year, $360 million contract extension. Trout will now receive $426.5 million over the next 12 years for his services. According to ESPN, he is the highest paid athlete in North America. Assuming that…

Foreign Tax Credit, Form 1116 If you paid taxes to a foreign country, you may be able to take a credit for those taxes. This occurs frequently when you own foreign stocks or bonds. If both the U.S. and a foreign country tax your income, you can claim a tax credit of the lesser of…