Most Recent Posts
The Hazards Of Being Kent Hovind
I'm really pleased to have Lamar Smith back with a guest post. _________________________________________________________________________ In the opening...
Last Of The Pensacola Properties Will Be Applied To Kent Hovind’s Criminal Penalties
The mills of the gods grind slowly, but they grind exceeding small. Well the mills of the IRS are still grinding Kent Hovind as we see from a new flurry of...
New Tax Law Immediate Write-Off Increases Demand For Tax Savvy Engineers
One thing that troubles me about these discussions is that the implication is that cost segregation is some sort of election. In principle, if there is all sorts of five-year property mixed in with your building, you really should break it out to file an accurate return. Also, in principle, the Cohan rule should apply, if you are too thrifty to hire an engineer.
I discussed the application of the Cohan rule (Named for the famous Broadway producer who was too much of a yankee-doodle dandy to keep track of his receipts) with Mr. Bagne. One of the things he admitted was that if somebody was knocking out multiple copies of the same sort of building, they should be entitled to a pretty deep discount on subsequent studies after the first one. Applying that logic I could see some developers taking the function in-house, although I suspect it might not be worth the trouble.
Forfeited Deposit Income Ordinary Not Capital Gain
Why Capital Gain?
Code Section 1234A provides that gain or loss attributable to the cancellation, lapse, expiration or other termination of a right or obligation which is or would be a capital asset in the hands of the taxpayer shall be treated as gain or loss from the sale of a capital asset. Well, there you have it. If CRI-Leslie had sold the hotel it would have gotten capital gain treatment on the sale. Nobody questions that. So it should get capital gains treatment on the forfeited deposit it got to keep if you follow along with Code Section 1234A.
Why Not Capital Gain?
There is this subtle nuance, that can be quite important, but is often ignored. CRI-Leslie was not just sitting on the hotel, holding it as an investment. It was operating and they were taking depreciation deductions. That fact throws it out of the definition of a capital asset which is in Code Section 1221. Code Section 1221 defines capital asset negatively. It is pretty much everything except certain things including:
Lamar Smith Joins The Ranks Of Hovindologists
Things have been quiet here on Your Tax Matters Partner. The raison d'etre of this blog is tax matters that I don't find forbes worthy. The recent tax bill has kept...
Religious Liberty Suit Against Obamacare Will Move Forward
At any rate, the arguments in Mr. Cash’s complaint are mostly pretty familiar. He argues that the Patient Protection and Affordable Care Act (PPACA) exceeds Congress’s taxing power and its legislative power when you consider the Tenth Amendment. Mr. Cash told me believes that it is possible that a state might have the power to require insurance, as happened in Massachusetts. Before Obamacare there was Romneycare. That doesn’t bother him so much, because he could move.
Cost Segregation Consultant Subjected To Severe IRS Penalties
There are two types of quality. One is the technical quality, which will make the report stand up on audit. The other is how much the thing is saving you by pushing as much as conceivably possible into the five-year category. The second factor can create a race to the bottom in terms of the first factor. That is the tension poor P ran into and at least in the eyes of the auditor P got a little carried away.
Appeals Filed On Ruling That Exemption Of Clergy Housing Allowances Is Unconstitutional
The United States and intervenors represented by the Becket Fund have filed appeals in the Seventh Circuit challenging Judge Barbara Crabb’s October ruling that tax exemption of cash housing allowances to “ministers of the gospel” violates the Establishment Clause of the First Amendment.
Miami Developer Denied Large Loss Due To S Corporation Basis Issues
Being an accountant, I think that Mr. Meruelo really did get a raw deal here. If Merco had been an LLC taxed as a partnership instead of an S corporation, it likely would have worked out. Of course there might have been medicare tax then if the project had been a winner instead of a loser, but maybe not. The other thing that might have saved him was more meticulous bookkeeping among the various entities, rather than a lot of “due to” “due from” transactions to be sorted out by the accountant preparing the tax returns. This case is a good illustration of Reilly’s Fourth Law of Tax Planning – Execution isn’t everything but it is a lot.
Cooperative Glitch In Tax Bill May Mean Food Fight In Congress
The glitch is the result of the way TCJA was pushed through Congress. 1986 was real tax reform. There was a lot of upfront work and it was bipartisan and revenue-neutral. They still needed technical corrections, but those were doable. There was no gaping loophole like this one created, which seems to demand a fix that may be politically infeasible.