Under Sec. 6050P and its regulations, cancellation-of-debt (COD) income of $600 or more must be reported on Form 1099-C when any of eight identifiable events occur.
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TOPICS / INDIVIDUALS
Income
Taxpayers Do Not Have Standing to Challenge Parsonage Exemption
The Seventh Circuit held that an atheist group and two of its members did not have standing to challenge the Sec. 107(2) parsonage exemption because the members had never actually tried to claim the exemption and had therefore suffered no injury.
Land Sales: Is the Taxpayer Considered a Dealer or Investor?
Recent court decisions are reminders that land may not always be a capital asset that gives rise to a capital gain when sold. Land may also be held for sale to customers in the ordinary course of business, in which case gain on the sale of the land will be ordinary income.
Capital Gains Treatment for Patent Royalties Denied
The Tax Court held that a taxpayer had not transferred all substantial rights in patents to an unrelated corporation because he was in control of the corporation; therefore, he was not entitled to capital gain treatment under Sec. 1235 for royalties on the patents that the corporation paid to him.
Final Regulations Address Gain or Loss Recognition for Identified Mixed Straddles
The IRS issued final regulationsaddressing the time for recognizing gain or loss accruing up to the date a taxpayer enters into an identified mixed straddle for such positions identified after Aug. 18, 2014.
Forfeited Gambling Winnings Not Included in Income
The IRS advised that gambling winnings that a taxpayer surrenders to a state as part of a program intended to help treat gambling addiction do not have to be reported by a casino to the taxpayer on Form W-2G and are not includible in gross income by the taxpayer.
Qualified Dividends and Capital Gains Flowchart
The capital gain tax computation seemingly should be easy, but often it is not. The flowchart in this article is designed to quickly determine the tax on capital gains and dividends, based on the taxpayer’s taxable income.
3.8% Net Investment Income Tax and Real Estate Professionals
The interaction of Secs. 469 and 1411 present special challenges for real estate professionals and their advisers.
Understanding How Corporate Dividends Are Taxed to Shareholders
Shareholders recognize a taxable dividend to the extent a distribution is paid out of corporate earnings and profits. If the distribution exceeds E&P, the excess reduces the shareholder’s stock basis. Any amount in excess of the shareholder’s stock basis is capital gain.
The Tax Adviser 2013 Best Article Award
The winner of The Tax Adviser’s 2013 Best Article Award is Donald T. Williamson for his article, “Planning for the ‘Parallel Universe’ of the Net Investment Income Tax,” in the August 2013 issue.
Real Estate Professionals: Avoiding the Passive Activity Loss Rules
Qualifying as real estate professionals allows taxpayers to avoid having their rental real estate activities treated as per se passive. This article discusses the requirements for qualifying as a real estate professional and how the requirements have been interpreted by the IRS and the courts.
Like-Kind Exchange Rules: Continued Evolution
For many years, taxpayers have been able to defer recognition of gain on the disposition of assets by engaging in Sec. 1031 like-kind exchanges. Consequently, many questions and issues surrounding these transactions have been addressed, but many cases and rulings continue to arise each year. This article analyzes these cases and rulings and identifies questions that still need to be answered.
TIGTA Finds $2.3 Billion Alimony Tax Gap
The discrepancies between alimony income reported by taxpayers and alimony deductions claimed resulted in $2.3 billion in excess deductions in 2010, TIGTA reported.
Final Rules Govern Tax Treatment of Distributions to Pay Accident or Health Insurance Premiums
The IRS finalized regulations that provide that distributions from qualified retirement plans to pay accident or health insurance premiums are taxable unless a statutory exclusion applies.
Tax Owed on Full Sale Price Where Taxpayer Won’t Provide Cost Basis Information
The Eleventh Circuit upheld a deficiency notice of more than $5 million against a taxpayer who reported adjusted gross income of $22,921 and taxable income of $13,221 on his late-filed 2006 return.
Goodwill as Part of a Corporate Asset Sale
This article offers guidance on helping clients take advantage selling personal goodwill as a tax strategy.
Income From Partnership Is Community Property
The Tax Court held that a taxpayer was taxable on her community property share of the income from a partnership that her husband funded without her consent with community property.
Final Rules on Substantial Risk of Forfeiture Are Released
The IRS finalized regulations that clarify when a substantial risk of forfeiture exists on the transfer of stock to an employee that is treated as compensation under Sec. 83.
Individual Taxation: Digest of Recent Developments: Part II
This is the second of a two-part article covering recent developments affecting taxation of individuals, including regulations, cases, and IRS guidance.
Americans Living Abroad and the Net Investment Income Tax
This article describes how the net investment income tax may affect Americans living abroad.
employee benefits & pensions
Profits interests: The most tax-efficient equity grant to employees
By granting them a profits interest, entities taxed as partnerships can reward employees with equity. Mistakes, however, could cause challenges from taxing authorities.
