Decisions–Carrying On

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In order to deduct ordinary and necessary business expenses paid or incurred during a taxable year, you must be carrying on a trade or business. That’s internal revenue code section 61(a), and it sounds deceptively simple.

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Definition — But For

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Medical expenses are an exception to the general rule that personal, living or family expenses are not deductible.

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Case — A Facade of Relief

TL Case Summ

THE QUESTION: After an exception to a penalty has been eliminated from the tax code, will it apply if the penalty results from carryover deductions from years prior to the elimination?

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Decisions – Taxes and the Constitution

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Tax protesters generally seek to support their positions by citing the US constitution, such as stating the Sixteenth Amendment was never ratified. These claims are dismantled in tax court opinions on a regular basis.

But the US constitution does have a bearing on tax cases, particularly in criminal matters.

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Definition — Joint and Several

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Joint and several liability goes along with the election to file a joint federal income tax return, which has been an option in the tax code since 1918.

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Definition — Cost of Goods Sold

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If your business manufactures or buys products for resale, you’re probably familiar with cost of goods sold. You might even know the formula for figuring these direct expenses–

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Case — Group Rates

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THE QUESTION: What tax rate applies when one member of a consolidated tax return is a personal service corporation?

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Definitions — Being Reasonable

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When it comes to compensation, what’s “reasonable?” The answer varies by entity type and can encompass too much compensation as well as too little.

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Decisions — Rollover Rulemaking

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When is a rollover not a rollover?

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Decisions – A Triangle of Debt

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When your lender cancels all or part of a debt that you owe, you generally have to recognize income, unless you qualify for an exception.

But what if you’re the guarantor of the loan and not the signer? Do you have cancellation of debt income when the original signer fails to pay?

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Useful Tax Law Links

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