This article is a semiannual review of recent developments in the area of individual taxation.
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TOPICS / INDIVIDUALS
Income
Passive activity credits and recharacterized income
Passthrough owners that do not materially participate in a trade or business may find their tax credits suspended.
Tax treatment of loans from hospitals to newly recruited physicians
The loans may be recharacterized as compensation, which can trigger unexpected income and payroll taxes for the doctor.
Tax issues for nontraditional households
This article explores the income tax issues that arise from owning or living in a home with a person other than a spouse.
Current Developments in Taxation of Individuals
A number of recent significant developments affect
taxation of individuals.
Navigating the Real Estate Professional Rules
This article lays out the steps for determining whether a taxpayer qualifies as a real estate professional.
Tax Court Takes a Scalpel to Surgeon’s Passive Loss Deductions
Court rejected doctor’s deduction of passive activity losses carried forward from the years when he treated
the interest as a nonpassive activity.
Reexamining tax-loss harvesting: Better results through enhanced understanding
Tax-loss harvesting offers the potential for significantly increased after-tax returns.
Recourse vs. Nonrecourse Indebtedness: Implications for Disregarded Entities Under Sec. 108
This item explores the underlying federal income tax issues that accompany disregarded entities acting as
borrowers in lending transactions.
COD Reporting No Longer Triggered by Three-Year Nonpayment Period
The IRS finalized a proposed rule eliminating the three-year testing period for determining when debt was discharged for cancellation of debt information reporting purposes.
Inflation Adjustments for 2017 Issued for Employer-Provided Vehicles
The IRS released its annual notice containing the 2017 inflation-adjusted amounts for the maximum vehicle values to determine the amount that is included in employees’ income for personal use of an employer-provided vehicle.
Prize Money Exempt From Federal Tax
The United States Appreciation for Olympians and
Paralympians Act of 2016 excludes the value of medals or prize money received from the United States Olympic Committee.
Royalties on Pharmaceutical Technology Taxable as Ordinary Income, Tax Court Holds
Tax Court held that royalties received by an S corporation under a license agreement are taxable as ordinary income to the S corporation’s individual shareholder.
Final Rules Remove 3-Year Nonpayment Testing Period for COD Reporting
The IRS finalized a proposed rule eliminating the three-year testing period for determining when debt was discharged for cancellation of debt information reporting purposes.
Payments Under State’s In-Home Supportive Care Programs Can Be Excluded From Gross Income
The IRS ruled payments made under a state’s
in-home supportive care programs should be treated as difficulty-of-care payments excludable from the gross income of the care provider.
Tax Court Rules in Favor of Taxpayers in Passive Activity Loss Case
Tax Court ruled that couple could deduct passive losses from their rental real estate activities because they met the real estate professional
and material participation rules.
Net Investment Income Tax: How Does It Affect You?
Proper planning may allow this tax to be deferred, reduced, or, in some cases, avoided completely.
New Rules Allow More Time to Elect to Take Disaster Loss in Prior Year
The IRS issued regulations giving taxpayers in federally declared disaster areas more time to elect to take a disaster loss on their prior year’s federal income tax return.
Olympic Tax Break Enacted
Legislation excluding prize money earned by Olympians and Paralympians from gross income was signed into law.
Tax Relief for Executive Compensation Clawbacks Under Proposed Dodd-Frank Rules
This article discusses difficult tax problems faced by executive officers whose compensation is clawed back and the limited availability of relief under Sec. 1341.
PRACTICE MANAGEMENT
2026 tax software survey
CPAs rate their return preparation software’s performance during this year’s tax season.
