Tax incentives are available for contributions of inventory for the care of the ill, needy, or infants, but many taxpayers may be unaware of them. This item outlines the current rules for an increased deduction and analyzes events leading up to the current rules.
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Individuals
Overpayment Interest Accrues on First-Time Homebuyer Credit
The Office of Chief Counsel (OCC) advised that the Sec. 6111 general interest rules applicable to overpayments of tax apply to the first-time homebuyer credit.
Final Regs. Govern Deductibility of State Legislators’ Deemed Living Expenses
The IRS and Treasury released final regulations on the availability of a special deduction for deemed living expenses of state legislators (T.D. 9481).
Energy Star Rebates Reduce Basis
The Office of Chief Counsel (OCC) advised that a taxpayer should treat a rebate for purchasing an Energy Star product as a reduction of the basis of the product purchased and not as income.
Tax Court Holds Invalid Temporary Regulations on Overstatement of Partnership Basis
The Tax Court held that temporary regulations issued by the IRS last year that defined an overstatement of partnership basis as an omission from gross income are invalid.
Revenue Procedure Adds New Disclosure Requirements for Grouping of Passive Activities
Regs. Sec. 1.469-4 sets forth rules for grouping a taxpayer’s trade or business activities and rental activities for purposes of applying the passive activity loss and credit limitations. Under Rev. Proc. 2010-13, a taxpayer is required to file a statement with his or her income tax return for the first tax year in which the taxpayer originally groups two or more trade or business activities or rental activities as a single activity.
Lessons from Federal Tax Court
A tax court experience is a valuable one for students at many levels and across a broad spectrum of accounting programs.
Health Care Reform Adds New Taxes
The Patient Protection and Affordable Care Act (the Patient Protection Act) and the Health Care and Education Reconciliation Act of 2010 (the Reconciliation Act) add a number of new taxes and make various other revenue-increasing changes to the Code in order to help finance health care reform.
IRS Will Process Medical Residents’ FICA Refund Claims for Periods Before April 1, 2005
The IRS has announced that it will accept that medical residents are exempt from FICA taxes under the student exception in Sec. 3121(b)(10) for periods ending before April 1, 2005.
Final Interim Regulations Issued on Adult Dependent Health Coverage
The IRS, along with the Department of Labor and Department of Health and Human Services, issued interim final regulations for group health plans and health insurers relating to dependent coverage for children under the age of 26
IRS Provides Guidance on Health Coverage for Adult Dependents; Addresses Discrepancies in Law
The IRS issued guidance April 27 on the tax treatment of health coverage for children who have not yet turned 27.
Using a Qualified Plan Account to Fund a Roth IRA Conversion
Recent tax law changes expand the Roth IRA to all taxpayers who have or could have traditional IRA accounts. Determining whether a Roth conversion is the right strategy takes thoughtful consideration.
Court Adopts “Reason to Know” Test for Innocent Spouse Cases
The Sixth Circuit adopted the “reason to know” test for determining whether a taxpayer was eligible for innocent spouse relief from tax liability for an understatement arising out of an erroneous deduction on a tax return.
Tax Court Allows Medical Deduction for Sex Change Operation
In a case of first impression, the Tax Court has held that a taxpayer can take a medical expense deduction for the costs of her sex change operation (O’Donnabhain, 134 T.C. No. 10).
Tax Court Rules on Valuation of Life Insurance Policy in Bargain Sale
The Tax Court held that where the profit-sharing plan of an S corporation wholly owned by the taxpayers distributed to them a life insurance policy on their lives, the taxpayers could not reduce the taxable value of the policy by the amount of the surrender charge for purposes of determining their income from the transfer
Individual Taxation: Digest of Recent Developments
This article covers recent significant developments affecting taxation of individuals, including legislative changes, cases, regulations, and other IRS guidance.
Obtaining Tax Benefits with Health Savings Accounts
The Medicare Prescription drug and Modernization Act established health savings accounts (HSAs), which are aimed primarily at self-employed taxpayers, small business owners, and employees of small to medium-sized firms. Eligible individuals can make tax-deductible contributions into HSA accounts. The earnings inside the HSA are free from federal income tax, and funds can be withdrawn tax free to pay health care costs.
Improved Education Credit Opportunities for High-IncomeTaxpayers
For 2009 and 2010, the American opportunity tax credit provides increased credit amounts for higher education expenses. This article discusses how taxpayers can best take advantage of the credit.
Sec. 475 Mark-to-Market Election
Under Sec. 475(f), taxpayers who are traders of stocks or other securities can make an election to mark to market the stock and securities they own in their capacity as traders at the end of each year.
Proposed Regs. on Basis Reporting by Brokers
The IRS issued proposed regulations relating to how securities brokers report sales to the IRS and how stock basis is determined.
INDIVIDUALS
Current Developments in Taxation of Individuals: Part 1
This update surveys recent federal tax developments involving individuals, including court cases, rulings, and guidance issued during the six months ending October 2025.
