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Federal Income Tax Tax Tax Deductions

Travel Expenses Allowed for Repetitive Pattern of Travel

The IRS frequently challenges travel expenses.  These expenses have a higher substantiation requirement, which the IRS uses to disallow every expense no matter how reasonable or how certain it is that the expense was incurred.  But what if it was exceedingly certain that the expense was incurred and there is a method for computing the […]

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Federal Income Tax Tax Tax Deductions

M&A Finders Fee Not Deductible for Acquirer

If a company acquires another company and pays a finders fee to the party who connected the two for the sale, is the finders fee deductible by the acquirer? This question touches on whether an expense is deductible if the real benefit is to another company. The court addresses this in Plano Holding LLC v. […]

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Federal Income Tax Tax Deductions Tax Loss

Bad Debt Deduction for Real Estate Lender for Non-Real Estate Loan

If a taxpayer regularly makes real estate loans from their personal accounts, they would be entitled to a bad debt deduction for loans that are not repaid. But what if they venture beyond real estate loans and make a single non-real estate loan? If the non-real estate loan goes bad, can they deduct the bad […]

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Federal Income Tax Tax Tax Deductions

Court’s Take on How to Avoid the Interest Expense Limitation

Interest one pays is generally deductible for income tax purposes. For real estate owners who borrow against the value of their properties, the interest expense deduction is often one of their largest tax deductions. This tax deduction can be limited. The court in Lipnick v. Commissioner, 153 T.C. 1 highlights how one might avoid this […]

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Federal Income Tax Tax Tax Deductions

Taxpayer Cannot Recoup Attorney Travel Costs

If the IRS wrongfully denies your refund claim and you are successful in litigating the matter in court, you are entitled to recoup some of your court costs. But what about the taxpayer’s tax attorney’s travel costs? And what if the travel costs were necessary as the tax issue was complex and a tax attorney […]

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Federal Income Tax Tax Tax Deductions

The Sec. 179D Government-Owned Building Allocation

Section 179D provides an incentive for building owners to install energy efficient systems. The IRS released CCA 2018-005, which addresses one of the controversial aspects of Sec. 179D–namely, the ability for government building owners to allocate the deduction to the designer of the energy efficient property. About Section 179D Section 179D was enacted in 2005, […]

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Federal Income Tax Tax Tax Deductions

How to Allocate Tax Basis for Real Estate

If you sell real estate, you pay tax on the gain. Gain is the product of the sales price less tax basis. Tax basis in turn is the amount invested in the property. But how do you calculate and then prove tax basis for buildings located on the property when you sell some but keep […]