One of the challenges in the tax classroom is to develop students’ ability to recognize when a tax issue exists as a result of a situation/transaction so that the students can then research an answer or planning opportunity and communicate that idea. This column describes a project designed to be used in the first introductory tax class, which accomplishes the learning outcomes described above while engaging Generation Y’s digital interest and desire for collaboration.
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TOPICS
Individuals
A Practitioner’s Guide to theTaxation of Telecommuting
This article discusses how state and local tax laws affect telecommuting and what the federal and state governments can do to prevent taxes from having a negative effect on the growth of the telecommuting movement.
Renewable Energy Tax Incentives
As part of the economic stimulus, federal and state governments are stepping up their efforts to encourage individuals and businesses to take advantage of renewable energy technologies to be more energy efficient. These incentives include income tax incentives, sales or property tax incentives, rebates, grants, loans, industry support, and bonds (these vary by jurisdiction).
Homebuyer Credit, NOL Carrybacks Extended; Mandatory E-Filing Enacted
The Worker, Homeownership, and Business Assistance Act of 2009 contains a handful of tax provisions. These include changes to the first-time homebuyers’ credit, increased NOL carrybacks for small businesses, and mandatory e-filing for most tax return preparers.
Commissioner Announces High-Wealth Taxpayers Group
IRS Commissioner Douglas Shulman addressed the AICPA’s National Tax Conference in Washington, DC, on October 26. During his speech, Shulman announced the formation of a global high-wealth industry group within the IRS’s Large and Mid-Size Business (LMSB) division. This group will centralize and focus the IRS’s compliance efforts involving high-wealth
IRS Finalizes Regs. on Reporting for Discharges of Indebtedness
The IRS has issued final regulations (T.D. 9461) on information returns for cancellation of indebtedness by certain entities under Sec. 6050P.
IRS Memo Allows Taxpayer to Deduct Interest on $1.1 Million Mortgage
The IRS Office of Chief Counsel has issued a memorandum in which it reinterprets the definition of “acquisition indebtedness” to allow a taxpayer to deduct interest on the first $1.1 million of his or her mortgage instead of the usual $1 million limit.
Tax Ramifications of a Foreclosure: A Debtor’s Perspective
The tax ramifications of a foreclosure, from a debtor’s perspective, can best be understood by first exploring the general approach to determining the tax treatment of any particular debt forgiveness event. This approach begins with a twostep process. The first step is to divide the debt into two components: (1) discharged principal and (2) discharged, but previously deducted, accrued unpaid interest (if any). The first step is necessary because the tax treatment applicable to the discharge of principal is generally not the same as the treatment applicable to previously deducted accrued unpaid interest.
The Benefits of Individual 401(k) Plans
This item highlights the features of the still relatively new individual 401(k) plan and shows how, in certain circumstances, this type of plan can provide for a more powerful contribution.
ARRA Expands Hope Scholarship Credit
The American Recovery and Reinvestment Act includes an expansion of the Hope scholarship credit that will provide additional support to many American families that have members attending post-secondary educational institutions. The expanded credit, called the American opportunity tax credit, modifies the existing Hope credit for tax years 2009 and 2010.
Real Estate Professionals: Do Their Rentals Qualify for Nonpassive Status?
Taxpayers who make their living in a trade or business related to real property are held to a different standard than other taxpayers when it comes to the rental passive activity loss rules of Sec. 469.
Grouping Activities Under Sec. 469
Generally, a taxpayer may group one or more trade, business, or rental activities as one activity if the activities represent an appropriate economic unit in determining gain or loss for Sec. 469 purposes.
Charitable Contribution of Qualified Conservation Easement
The Tax Court held that a conservation easement of air space over an historic structure that was donated by a taxpayer to a nonprofit organization did not meet the requirements to be considered a qualified conservation easement.
IRS Provides 2009 RMD Rollover Relief for IRA, 401(k) Distributions
The IRS provided relief for taxpayers who have received required minimum distributions (RMDs) in 2009 from an IRA or similar account. Such taxpayers have until November 30, 2009 (or within 60 days of the distribution, whichever is later), to roll over the distribution into another plan.
Proposed Procedures for Simplifying Employer-Provided Cell Phone Substantiation Rules
In June 2009 the IRS published Notice 2009-46, requesting comments on several proposed procedures for simplifying the substantiation and reporting requirements of employees’ personal use of employer-provided cellular telephones.
Tax Treatment of Employment-Related Judgments and Settlements
Recent program manager technical assistance provides a detailed analysis of the IRS’s position on dealing with income and employment tax consequences, as well as appropriate reporting, of employment-related judgment or settlement payments.
Treatment of Foreign Currency Option Gains
Sec. 988 treats most (but not all) gains and losses from foreign currency transactions as ordinary in character. Depending on the taxpayer’s circumstances, this treatment can be favorable or otherwise.
New Rules Seek to Clarify Allocation and Reporting of Mortgage Insurance Premiums
The IRS recently issued temporary regulations that explain how to properly determine the deductible amount of mortgage insurance premiums.
Dependency Exemption for Divorced or Separated Parents
When a child is supported by his or her parents, the dependency exemption is normally a simple matter. However, the situation is much more complicated when it comes to divorced or separated parents.
Aggregating Activities to Avoid the Hobby Loss Rules
Sec. 183 limits deductions for activities that are “not engaged in for profit,” commonly called hobbies. To sidestep this requirement, taxpayers often attempt to combine activities that would separately be considered hobbies with other activities to avoid the Sec. 183 limits.
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.
