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Individuals
Individual Taxation: Filing Season Update
This article covers recent significant developments affecting taxation of individuals, including cases, regulations, and legislative changes, and important information for the upcoming filing season.
Volunteer Board President “Responsible Person” for Payroll Taxes
Taxpayer who served (without compensation) as the president of a daycare center was responsible person under Sec. 6672.
AICPA Comments on Charitable Contribution Substantiation Prop. Regs.
The Forensic and Valuation Services Executive Committee and the Tax Executive Committee of the AICPA have sent comments to Treasury on proposed regulations’ provisions regarding appraisals and individuals performing appraisals.
Lenders Allowed Nonrecognition Treatment for Certain Securities Loans Terminated Due to Bankruptcy
Rev. Proc. 2008-63 permits securities lenders continued nonrecognition treatment under Sec. 1058(a) for certain securities loans terminated due to the bankruptcy of the securities borrower, provided the lender applies the collateral to the purchase of identical securities within 30 days of the default.
New Rules Seek to Reduce Tax Advantages of Converting Second Home to Principal Residence
Beginning January 1, 2009, the full $250,000/$500,000 exclusion under Sec. 121 will no longer be available on the sale of a taxpayer’s principal residence if the residence was subject to nonqualifying use prior to its ultimate disposition.
Economic Stabilization Act Extends Expired Provisions and Repeals MLTN Standard
The Emergency Economic Stabilization Act extends various tax benefits that expired at the end of 2007 and repeals the “more likely than not” standard for return preparers
Reminder: Support Your Auto Expense
Editor: Michael D. Koppel, CPA, PFS Auto expenses are a very common deduction for business owners and employees who must travel. Often the taxpayer does not know the exact amounts necessary to calculate the proper deduction and the tax preparer must estimate the mileage, business percentage, and ultimate auto deduction
Nonphysical Injury Awards After Murphy
The taxation of nonphysical injury awards is far from settled, and taxpayers and practitioners should be diligent in monitoring future developments.
Widow of 9/11 Victim Is Not a Terrorist Victim
A federal court ruled, in a case of first impression, that a widow who committed suicide after her husband was killed in the 2001 World Trade Center attack does not qualify as a victim of terrorism and therefore her estate does not qualify for the reduced estate tax rates under Sec. 2201(c).
Income Splitting: Issues and Opportunities
Tax law generally prohibits a parent from shifting income from personal services to a child; however, a parent can in some cases effectively shift income to a child by transferring income-producing property to the child.
IRS Provides Guidance on Contributions to HSAs
The Tax Relief and Health Care Act of 2006, P.L. 109-432, made changes to the treatment of contributions to health savings accounts (HSAs) under Sec. 223. The IRS issued two notices explaining those changes.
When Plaintiffs in Class Actions Pay Tax on Attorneys’ Fees
The taxation of attorneys’ fees in opt-out class actions has become relatively clear, as long as certain elements are established. In opt-in cases, class members risk being tagged with income in the amount of the attorneys’ fees.
Tax Aspects of Contributing a House to a Fire Department
Taxpayers can obtain a charitable contribution deduction for the fair market value of property donated to a fire department to be burned down. The taxpayer needs to properly structure the transaction so that the property, and not just the right to use the property, is being donated.
IRS Announces Disaster Relief for Hurricane Victims
The IRS announced tax relief under Sec. 7508A for Louisiana and Texas taxpayers who were affected by Hurricanes Gustav and Ike.
Tax-Deferred Exchanges of Vacation Homes
The IRS carved out a safe harbor for the exchange of vacation homes to qualify for Sec. 1031 treatment.
Teaching Tax Through the Socratic Method
This column explores a type of active learning pedagogy that university and continuing education instructors should consider using in order to help students attain more permanent and meaningful learning.
Service Provides Guidance on Children of Divorced Parents
The IRS released guidance on the circumstances under which it will treat a child of parents who are divorced, separated, or living apart as the dependent of both parents for various purposes when the custodial parent has not released the claim to the child’s exemption.
When Are Payments Treated as Child Support?
Payments are child support for tax purposes if they are either so designated in the divorce or separation agreement (fixed child support) or deemed to be child support.
Tax Aspects of an Author’s First Book
The IRS’s longstanding position is that “if an individual writes only one book as a sideline and never revises it, he would not be considered to be ‘regularly engaged’ in an occupation or profession and his royalties therefrom would not be considered net earnings from self-employment.”
TAX PRACTICE MANAGEMENT
2025 tax software survey
AICPA members in tax practice assess how their return preparation software performed during tax season and offer insights into their procedures.
