The tax law isn’t always crystal clear, and when it comes to a question of interpretation, the IRS doesn’t always agree with the Tax Court. The tax agency may appeal a ruling, or simply announce that it will continue to take a contrary position. Normally this happens when the IRS believes the Tax Court has been too generous. In a man-bites-dog story, the IRS recently announced it won’t follow a Tax Court interpretation relating to the mortgage interest deduction because it was too strict. (more…)
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Archive for the ‘Taxation of Investments’ Category
Boost in Deduction for Large Mortgages
October 23, 2010
October 23, 2010
Deadline Looms for Homebuyer Credit
September 11, 2010
If you entered into a contract to buy a home by the end of April, you have until the end of September to close on the purchase if you want to claim the homebuyer credit. For details see the IRS guidance here.
September 11, 2010
If you entered into a contract to buy a home by the end of April, you have until the end of September to close on the purchase if you want to claim the homebuyer credit. For details see the IRS guidance here.
Planning for Higher Capital Gains Rates
September 9, 2010
For people in the higher tax brackets, capital gains rates are likely to be higher in the near future. Many investors may wonder whether they should cash gains before the end of the year. Our analysis reveals that this strategy won’t always produce benefits. Paradoxically, some people end up with better results when paying more tax. (more…)
September 9, 2010
For people in the higher tax brackets, capital gains rates are likely to be higher in the near future. Many investors may wonder whether they should cash gains before the end of the year. Our analysis reveals that this strategy won’t always produce benefits. Paradoxically, some people end up with better results when paying more tax. (more…)
Basis Rules for 2010 Decedents
August 5, 2010
No doubt you’re aware that the estate tax has been repealed, solely for people dying in 2010. It’s less well known that repeal of the estate tax was accompanied by a change in the rules for adjusting the basis of inherited assets. For a description of the rules that apply when you inherit from someone who dies this year, see our new page on basis of property inherited from 2010 decedents.
August 5, 2010
No doubt you’re aware that the estate tax has been repealed, solely for people dying in 2010. It’s less well known that repeal of the estate tax was accompanied by a change in the rules for adjusting the basis of inherited assets. For a description of the rules that apply when you inherit from someone who dies this year, see our new page on basis of property inherited from 2010 decedents.
Friday Wrapup
July 23, 2010
Tax news of interest to investors came mainly from the courts this week, though the IRS gave paid tax return preparers something to groan about. (more…)
July 23, 2010
Tax news of interest to investors came mainly from the courts this week, though the IRS gave paid tax return preparers something to groan about. (more…)
Stock Loan Treated as Sale
July 23, 2010
The Tax Court has sided with the IRS in a case where they sought to collect over $100 million in taxes from billionaire Philip Anschutz. At issue was a complicated arrangement known as a variable prepaid forward contract, in which Anschutz received cash up front for a sale to occur later. Anschutz loaned the shares that were covered by this contract to the firm providing the up front payment, permitting that firm to sell the shares. The court found that the prepaid contract and the lending arrangement had to be seen as part of a single deal, with the result being that the sale is viewed as taking place at the time of the up front payment rather than later as Anschutz intended. (more…)
July 23, 2010
The Tax Court has sided with the IRS in a case where they sought to collect over $100 million in taxes from billionaire Philip Anschutz. At issue was a complicated arrangement known as a variable prepaid forward contract, in which Anschutz received cash up front for a sale to occur later. Anschutz loaned the shares that were covered by this contract to the firm providing the up front payment, permitting that firm to sell the shares. The court found that the prepaid contract and the lending arrangement had to be seen as part of a single deal, with the result being that the sale is viewed as taking place at the time of the up front payment rather than later as Anschutz intended. (more…)
Part-Time Gambler Is Professional
July 20, 2010
In a summary opinion, the Tax Court has found that an individual can qualify as a professional gambler despite pursuing the activity part-time. While the decision doesn’t have precedential value, it should help inform us in determining who qualifies as a professional trader. (more…)
July 20, 2010
In a summary opinion, the Tax Court has found that an individual can qualify as a professional gambler despite pursuing the activity part-time. While the decision doesn’t have precedential value, it should help inform us in determining who qualifies as a professional trader. (more…)
Friday Wrapup
July 2, 2010
A rare break in congressional gridlock produced some actual tax legislation this week, albeit of limited scope. In addition, it appears we may be heading toward an expansion in the use of Roth retirement accounts. (more…)
July 2, 2010
A rare break in congressional gridlock produced some actual tax legislation this week, albeit of limited scope. In addition, it appears we may be heading toward an expansion in the use of Roth retirement accounts. (more…)
Homebuyers May Get Reprieve
June 30, 2010
Update: this legislation has been passed by the Senate as well as the House, and becomes law upon being signed by President Obama.
Under current law, the homebuyer tax credit is available only if you had a binding contract by April 30 and close on your transaction by June 30. The June 30 closing deadline has posed problems for some purchasers, and on June 29 the House of Representatives passed a law that would extend the closing deadline to September 30. The Senate must act before this bill can become law.
This bill would extend the closing deadline but does not make the credit available to people who did not have a binding contract by the April 30 deadline.
June 30, 2010
Update: this legislation has been passed by the Senate as well as the House, and becomes law upon being signed by President Obama.
Under current law, the homebuyer tax credit is available only if you had a binding contract by April 30 and close on your transaction by June 30. The June 30 closing deadline has posed problems for some purchasers, and on June 29 the House of Representatives passed a law that would extend the closing deadline to September 30. The Senate must act before this bill can become law.
This bill would extend the closing deadline but does not make the credit available to people who did not have a binding contract by the April 30 deadline.
Roth Conversions and the Medicare Tax
June 24, 2010
This is the fifth in our series on Roth conversions and tax rates. (For earlier ones, click on the “Roth conversion” tag below this entry.) Our focus here is on how the new Medicare tax on investment income may affect planning for a Roth conversion in 2010 — even though the new tax doesn’t take effect until 2013. (more…)
June 24, 2010
This is the fifth in our series on Roth conversions and tax rates. (For earlier ones, click on the “Roth conversion” tag below this entry.) Our focus here is on how the new Medicare tax on investment income may affect planning for a Roth conversion in 2010 — even though the new tax doesn’t take effect until 2013. (more…)
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