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Federal Income Tax Tax Tax Loss

Tax Loss Planning: The At-Risk Rules

Are you purchasing a business or real estate that involves financing a business or investment that is likely to produce tax losses in the future? Or have you already made the purchase? If so, there may be ways to ensure that you can take the loss in the future. To do so, you have to […]

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Federal Income Tax Tax Tax Loss

Can “Business Synergies” be an Asset that Increases a Tax Loss?

The tax consequence of a transaction often depends on how one characterizes or describes the transaction. Business synergies are often cited as the rationale for merger and acquisition deals. In a M&A deal, are “business synergies” a separate asset for tax purposes? Can you list “business synergies” as a separate asset and then take a […]

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Federal Income Tax Tax Tax Loss

Tax Planning for the Start-up Limitation Rules

Our tax laws include start-up rules that limit the ability to deduct certain business and investment expenses. For business owners and investors with other sources of income, this can result in funds being sent to the IRS to pay taxes at a time when the capital is needed to fund the business or investment growth. […]

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Federal Income Tax S Corporation Tax Tax Tax Loss

Loan to an S Corporation to Allow Tax Loss

Tax basis can limit a shareholder’s loss from an S corporation. If an S corporation has a tax loss but the shareholder doesn’t have sufficient tax basis to take the loss, the shareholder will typically have to loan money to the S corporation. This tax debt basis makes the loss allowable in the current year. […]

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Federal Income Tax Tax Tax Loss

Bad Debt Tax Deduction for Guarantee Payment?

If you guarantee a loan for a third party and have to make payments due to the guarantee, do you get to deduct the payment as a bad debt for tax purposes? The court addresses this in Baker Hughes, Inc. v. United States, No. 18-20585 (5th Cir. 2019) in the context of a payment made […]

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Federal Income Tax Tax Tax Loss

Avoiding Hobby Loss Limits for Long-Term Projects

Long-term projects often lose money. They often do so for several years. This is the result of a project that needs capital to build infrastructure or to develop a new market or to capture market share. Taxpayers may be disappointed to learn that the tax losses coming from these long-term projects in the early years […]

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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 […]