This article discusses the issues involved in determining whether a charitable contribution is deductible, what the amount of a contribution is, and when and how much of a contribution is deductible.
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Individuals
IRS Intensifies Focus on Worker Classification
As the IRS intensifies its scrutiny of worker classification, businesses may want to take a fresh look at how their policies, procedures, and documentation around engaging independent contractors might withstand IRS review.
Government Loses Son of Boss Tax Shelter Case
In a rare tax shelter loss for the IRS, a federal district court has allowed a taxpayer to offset income with losses from a “son of boss” transaction.
Taxpayer Must File Jointly to Qualify as Innocent Spouse
The Ninth Circuit has held that to be eligible for innocent spouse relief under Sec. 6015, a taxpayer must have filed a joint return with his or her spouse and that Sec. 6015’s equitable relief provision also requires that a joint return had been filed.
Converting a Residence to Rental Property
A decision to convert to rental should consider factors such as the taxpayer’s marginal tax rate, availability of excluding gain from the sale of a personal residence, expected growth rate of the rental property, length of time the house will be rented before being sold, cash flow from renting, effect of the passive activity rules, and rate of return on other invested funds.
IRS Previews Sec. 529 Plan Anti-abuse Regs.
The IRS has announced that because of the potential for the abuse of Sec. 529 accounts, it intends to issue proposed regulations and is requesting written comments from tax practitioners on the rules it is contemplating.
Alternative Motor Vehicles and the AMT
Effective for 2006, Congress provided a credit for alternative motor vehicles in an effort to reduce U.S. reliance on fossil fuels and imported oil.
Compensation Issues for Self-Employed S Corp. Owners
This item discusses how reporting a higher wage can actually maximize long-term profits for the owner-employee of an S corporation.
The Mortgage Forgiveness Debt Relief Act of 2007
In response to the subprime mortgage crisis, the Mortgage Forgiveness Debt Relief Act of 2007 excludes from income the discharge of qualified principal residence indebtedness. Its discharge provisions are temporary and apply to discharges during 2007, 2008, and 2009.
Defendant May Claim Improper Diversions of Corporate Funds Were Returns of Capital
The Supreme Court, reversing the Ninth Circuit, held that where a taxpayer is charged with criminal tax evasion related to funds he diverted from a corporation for his own use, the taxpayer may claim as a defense that the funds he received were a nontaxable return of capital without proving that they were intended as a return of capital at the time the diversion occurred.
Federal, State, and Local Tax Incentives for Environmental Remediation Costs
This item provides a high-level overview of the most common federal, state, and local tax incentives and a brief update of the federal rules regarding the expensing of environmental remediation costs.
Financial Literacy: University-Focused Activities
A well-planned university-based financial literacy effort can benefit students and communities beyond the campus.
IRS Provides Sec. 1031 Personal Use Safe Harbor for Dwellings
The IRS has provided a safe harbor, under which it will not challenge whether a dwelling unit qualifies as held for productive use in a trade or business or for investment purposes under Sec. 1031, governing like-kind exchanges.
Rules Issued for Rebate Checks for Individuals with No Tax Liability
The IRS has issued rules for individuals to follow to claim their rebate checks under the Economic Stimulus Act of 2008 if they do not owe taxes for 2007
Disposing of an Activity to Release Suspended Passive Losses
Unused PALs are suspended and carried forward to future years until the taxpayer (1) disposes of the particular activity that generated the losses, (2) generates net passive activity income in the case of a personal service corporation, or (3) generates net passive activity income or net active income in the case of a closely held corporation.
IRS Develops New Form for Misclassified Workers
The IRS has developed a new form for employees who have been misclassified as independent contractors to report their share of uncollected Social Security and Medicare taxes: Form 8919, Uncollected Social Security and Medicare Tax on Wages.
Deducting Interest on Qualified Education Loans
Interest due and paid on a qualified education loan for qualified higher education expenses can be deducted (within limits) from adjusted gross income (AGI).
Late Legislation Affects AMT, Mortgage Foreclosures, FUTA
Congress passed several pieces of legislation that affecting 2007 tax returns.
Early Retirement Payments to Former Tenured Faculty Members Are Subject to FICA
The Third Circuit held that payments under several early retirement plans made by a university to former tenured faculty members were compensation for services subject to the FICA tax.
Recent Developments in Individual Taxation
This article covers recent significant developments affecting taxation of individuals, including cases, regulations, and legislative changes.
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.
