Planning for Commercial Solar Tax Credits

The solar tax credit can significantly reduce Federal income taxes. Congress has recently reaffirmed its desire to spur these investments to curb reliance on foreign energy and to help the environment. As with most tax incentives, such as the research tax credit, there are a number of rules that have to be followed to be…

A New Beginning for Innocent Spouse Relief

The Taxpayer First Act of 2019 made several changes that impact how tax cases are handled. We are just now seeing some of these changes play out administratively and in court. The recent Bacigalupi v. Commissioner, Docket No. 20480-21 (U.S. Tax Court 2022) is an example of this. It is an innocent spouse case that…

Reasonable Cause & Reporting Charitable Donations

The IRS is tasked with enforcing our tax laws. The task should be to ensure “substantial compliance” by taxpayers. But all too often the audit process is nothing more than the IRS examining a handful of go-to-adjustment issues. These go-to-adjustment issues involve tax laws that Congress passed that leave room for interpretation. These issues often…

Married Filing Separate Spouse Liable for Tax

Marriage, Divorce & Taxes

Marriage presents a number of difficult tax questions. One question is whether both spouses can be held liable when they file separately and one spouse fails to pay their taxes. This is a common marriage tax question that we are asked. One might think that the married filing separate status fully protects the other spouse.…

IRA Excess Contribution Tax for Stock Sale

There are a lot of unanswered questions when it comes to the tax rules for IRAs and other qualified plans. IRAs and qualified plans can shelter a significant amount of income from tax. Defined benefit plans are an example. A business owner can contribute and shelter up to $245,000 in these plans in 2022. This…

Website Development Tax Deductions & the Start-Up Rules

There are several tax laws that have to be considered to determine when and how costs to develop websites are deductible. These expenses are almost always deductible. These tax laws raise timing questions. It’s a matter of when the expenses are deductible. For those who are developing website businesses as side-hustles, the issue takes on…

IRS Substantiation for Charitable Contributions & Gifts

Our tax laws allow a deduction for contributions and gifts made to charities. The idea is that the charity is relieving the government of some service or function that the government would have to otherwise have provided. The amount of the charitable contribution deduction can be significant. This benefit has been part of tax planning…

Choice of Entity: Tax Plans for Pharmacies

Our laws have long said that taxpayers are free to structure their legal affairs to minimize their taxes. Congress has even provided very specific provisions to accomplish this. Section 1202 stock is an example. This provision is intended to encourage start-ups to take business risks by rewarding those who are successful by allowing them to…

Restructured Business Fails Passive Activity Loss Rules

Successful businesses change over time. We often see this when a business gets ready for the founder or owner to exit the business. The business is often reorganized and maybe even divided up. Various tax strategies come into play to help facilitate the transfer, like the F Reorganization for S corporations. Other plans to minimize…

Is Military Pension Taxable (Answered)

There are a number of tax breaks afforded to those in the military. This includes collection holds on unpaid taxes owed by members of the military to laws that exempt certain income from tax altogether. The exemption from paying tax on military pay for injuries is an example. The recent Valentine v. Commissioner, T.C. Memo.…