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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Decisions – Led Astray

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When you sue your tax preparer and win, are the proceeds taxable?

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Definition — The Fruit of the Slot Machine

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As you have heard repeatedly, gross income includes all income from whatever source derived. In fact, under the anticipatory assignment of income doctrine, you may realize income even though no amount is actually paid to you.

And yet…

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Decisions — The 25% Solution

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There are several exceptions to the general rule that taxes must be “assessed within three years after a return is filed.” (Internal revenue code section 6501(a))

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Case – S Corporation Material Participation

TL Case Summ

THE QUESTION: Did a taxpayer continue to materially participate in an S corporation when he turned the day-to-day operations over to his son and focused on product development and customer retention?

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Definition – Benefits and Burdens

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Once again the tax court deals with the zombie-like first-time homebuyer credit. In this iteration, the case turns on when the taxpayers assumed the “benefits and burdens” of home ownership.

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Decisions – Flying into a Loss

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Does a company that trains automobile dealership employees how to handle phone calls belong on the same Schedule C as an airplane rental activity?

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Definition — Unreimbursed Employee Business Expenses

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Think you know the rules for deducting employee business expenses? Take the quiz.

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Case — The All-Events Test

TL Case Summ

THE QUESTION: When can a taxpayer take a deduction for a customer loyalty program?

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Definition — Fines and Penalties

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Internal revenue code section 162 starts out with a general rule of allowing a deduction for all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business.

But when the business expenses are fines and penalties paid to a government for the violation of any law, the general rule no longer applies. Those expenses are not deductible (section 162(f)).

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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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