Decisions — Respectfully Yours

Image source: rrafson (Own work) [CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons

You may think of inheritances as tax-free. But in some cases—such as traditional individual retirement accounts—your inheritance includes what’s called “income in respect of a decedent.”

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Decisions — Forgiven

Image source: Taking Change ID: 102942 © Jackie Egginton Dreamstime Stock Photos

In tax law, to err is easy; to forgive generally creates income.

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Decisions — Taxing the Selfie

Image source: By NASA/JPL-Caltech/Malin Space Science Systems. Derivative work including colour correction, correction of dark areas and vignette, denoising: Julian Herzog (http://photojournal.jpl.nasa.gov/catalog/PIA16149) [Public domain], via Wikimedia Commons

You’ve heard, time and again, that rental activities are passive under the passive activity loss rules in internal revenue code section 469. That’s true, except when it isn’t.

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Case — Crummey Illusion

TL Case Summ

THE QUESTION: Are a trust’s Crummey provisions illusory?

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Decisions — Do You Know Where You’re Going To?

Image source: By Jbeyerl (Own work) [CC0], via Wikimedia Commons, Public Domain

In tax law, the only thing transportation, travel and commuting expenses have in common is that you’re away from home when you incur them.

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Definition — An Interesting Deduction

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Did you deduct home mortgage interest on your tax return? According to the IRS statistics of income, home mortgage interest is one of the four largest itemized deductions claimed by taxpayers.

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Definition — Recovering the Benefit

Image source: HL Carpenter

The tax benefit rule (section 111) is a seemingly simple common sense attempt at equity that turns out to be a bit complicated in practice.

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Definition — Quoting Lincoln

Picture of Abraham Lincoln

The tax court quoted Abraham Lincoln this week, decided the difference between a tax and a penalty, and declined to ease the definition of an easement.

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Decisions — Bonding Matters

Image source: United States Treasury, Bureau of Public Debt [Public domain], via Wikimedia Commons

You may not have thought about them in a while, but US savings bonds are still around. In general, the taxation of these bonds is fairly straightforward. But sometimes the simple things can trip up a taxpayer.

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Decisions — Excluding Hardship

Image source: Ebyabe (Own work) [GFDL (http://www.gnu.org/copyleft/fdl.html) or CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons

As Humphrey Bogart said in The African Queen, “Things are never so bad they can’t be made worse.” That’s true when you take an early distribution from your retirement account, even if you need the money to avoid eviction.

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Useful Tax Law Links

US Tax Code- Cornell University Law School Legal Information Institute. Searchable.

http://uscode.house.gov/ - Office of the Law Revision Counsel. Searchable. Downloadable.

US Tax Court - TC Opinions, Memorandum Opinions, Summary Opinions. Searchable. Downloadable.

Treasury Regulations - Government Printing Office provides the Federal Tax Regulations. Searchable. Downloadable.

Other Official US Tax Guidance - US Internal Revenue Service. Searchable. Downloadable.

Useful Downloads by Taxing Lessons

Foreign Earned Income Exclusion - free PDF - Graphic of Internal Revenue Code Section 911

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