Federal Income Tax Archives

IRS Levy for a Debt It Already Agreed to Payment Over Time?

Most people think a tax debt is a tax debt. You owe the money, the IRS collects it, and that is the end of the story. But there is often more than one legal mechanism the government can use to collect the same dollars. Sometimes those mechanisms overlap. That overlap can create problems. Suppose the…

Married Filing Separate, Community Property Reduction

Most small business owners think of their income as their own. You do the work. You bill the client. The money lands in your account. So when the IRS audits you and says you left income off your return, it feels like a problem that belongs to you alone. But that is not always how…

Lose the Hobby Loss Fight, But Save the Farm

Most people who run a side venture know the IRS can be a difficult business partner. It happily takes a cut when the venture makes money. It often refuses to share in the pain when the venture loses money. The hobby loss rules are one of the tools the IRS uses to do this. So…

When Are Cryptocurrency Staking Rewards Taxed?

Plenty of people who hold cryptocurrency never sell a single coin. They buy a token, leave it sitting in an account, and watch the balance grow. With some cryptocurrencies, that balance grows on its own. The platform “stakes” the tokens, and new tokens show up in the account every month. The owner does nothing. The…

Can a Missing Statement in a Donation Letter Cost You the Entire Deduction?

Donating land to a city seems like a straightforward charitable act. You find a piece of property, decide to give it away, get an appraisal, file the paperwork, and claim the deduction. For many taxpayers, the assumption is that as long as the donation actually happened and the value is reasonable, the deduction should stand.…

Can Your Business Deduct Credit Card Interest When the Card Is in Your Name?

Small businesses often struggle to get credit. Banks want collateral, financial history, and revenue figures that newer or smaller operations cannot always produce. When the business itself cannot qualify for a loan or a credit card, the owners step in. They open credit cards in their own names, charge business expenses to those cards, and…

Who Gets the Tax Credit When You Outsource Payroll to a PEO?

Many businesses outsource their payroll, human resources, and employment tax responsibilities to professional employer organizations. These arrangements make sense. The PEO handles the administrative burden of onboarding workers, processing wages, withholding taxes, and managing benefits. The business owner focuses on running the business and directing the workers. But when it comes time to claim employment-related…

Selling a Furnished Vacation Home: Allocating Between Real & Personal Property

A vacation home is nice to have. Many vacation homes are owned for years–if not decades. The capital gains tax can be substantial when the owner goes to sell the property. And unlike a primary residence, the $250,000 or $500,000 gain exclusion under Section 121 is not available for a property that was never the…

Missed Opportunity When a Partner Dies: the Section 754 Election

There are tax opportunities that come up when someone dies. Many of these relate to those who own real estate in LLCs or partnerships. One such a opportunity the Section 754 election for partnerships. This is a valuable election–one of the most commonly missed–thatallows the partnership to adjust its inside basis in assets to match…

Short-Term Vacation Rentals and Material Participation

Real estate can offer significant tax benefits. This is largely due to depreciation deductions which allow taxpayers to deduct their cost of investment in the property. Given the tax benefits, Congress has put in place some nuanced rules that allow some real estate owners to get immediate benefits and that deny or defer benefits to…