Taxing Definitions

Tax Benefit Rule

Image source: Frank C. Müller via Wikimedia Commons Sometimes financial events straddle more than a single year. That can be a problem when your tax return needs to be filed on an annual basis. The tax benefit rule is one way to address this timing difference. For instance, say you take an itemized deduction on your federal income tax return for…

Continue Reading

 ... Read This Post

Taxing Definitions

Contemporaneous

Image source: Dvortygirl via Wikimedia Commons The US tax code requires you to maintain contemporaneous records to substantiate several types of deductions, including vehicle mileage and charitable contributions of $250 or more. For charitable contributions, a “contemporaneous written acknowledgment” means you obtain the acknowledgment on or before the earlier of the date on which you file your return for the taxable…

Continue Reading

 ... Read This Post

Taxing Definitions

Qualified Joint Ventures

Image source: Public domain via Wikimedia Commons A Qualified Joint Venture is an exception to the general rule classifying a joint venture as a partnership for tax purposes. Generally, a joint venture is an unincorporated business consisting of two or more parties who are working together to conduct a project or transaction. A qualified joint venture, added to the Internal…

Continue Reading

 ... Read This Post

Taxing Definitions

Coordinated Issue Papers

Coordinated Issue Papers (CIPs) provide guidance on technical tax questions, such as medical reimbursement plans for the self-employed, that is reviewed by the Office of Chief Counsel and provided to revenue agents. CIPs are numbered using the Uniform Issues List (UIL), an index of issues based on Internal Revenue Code Sections. For example, a CIP about medical reimbursement plans for…

Continue Reading

 ... Read This Post