Solving The Client 's Current Tax Situation And The Tax Problem Encountered By Tom Jensen

In order to deduct her moving expenses, she must meet certain conditions outlined in Reg. 1.217-2 (c). Helen meets the first two requirements (relevance to work test and distance test) without any issue. The third requirement has not yet been met yet though. This requirement is a minimum period of employment. Since she is a full-time employee, she must work full-time in this general location for at least 39 weeks during the 12 month period after the move. This does not mean she is not required to remain employed at her current place of work to meet this test. Even though she does not meet this requirement yet, she can deduct these expenses on the current years return or the year the reimbursement is paid to her by her employer. If she recognizes the expenses on this year’s return and does not end up meeting the requirement, she will have to include the deductions she took on this year’s return in next year’s gross income.

I appreciate the opportunity to advise you regarding the tax treatment for your loss of $25,406 in 2015 from your dog breeding activities. I understand that you decided to start breeding purebred terriers to keep yourself busy after your divorce with your husband in January. There are two possible ways to treat the loss under rulings in the Internal Revenue Code. One option is to treat your dog breeding activity as a business and deduct the losses on Schedule C, Profit or Loss from Business, of your individual income tax return. The second option is to treat your dog breeding as an activity not engaged in for profit, which does not allow you to deduct the

A federal tax deduction of up to $25,000 that is available to non-real estate professionals who own at least a 10% interest in a rental property that they actively manage and that operates at a loss during a particular tax year.

In regards to buying the building that John is leasing his office in, he could reduce his taxable income be depreciating the building. By depreciating the building John would deduct the amount that would be depreciated and then that amount wouldn’t be considered taxable income. The lease payment would be deductable through the LLC. John does have to remember that he will also be receiving payments from the other tenants. I think in this case it would be advantageous to purchase the building with different tax advantages of depreciating the building.

Will prepare the tax returns based on information and documentation provided by Client. If needed, bookkeeping services are available at our current published rate.

Analysis: The prospective deductions include interest expense, real property tax, utilities, insurance, maintenance and depreciation, which may generate tax savings limited to the income from

Since it is difficult for the IRS to go through every single tax return submitted, it is the responsibility of the preparer to make sure that the return is in compliance with the law, as much as possible. Much of tax is up for discussion, as there are many guidelines for what can be done in certain situations. As the preparer of the return for Haddock Corporation, it is important that I acknowledge the ethical dilemmas that come to light with the rental expenses issue and try to prevent them from happening. If I decided to sign and submit the return with the rental expense deduction on it based on the fact that it had been done like that in prior years, I would face an ethical dilemma. Without further research I wouldn’t know whether the high rental payments were actually in the range they should be in. One of the core principles, the responsibility principle, in the AICPA Code of Professional Conduct states that “members should exercise sensitive professional and moral judgments in all their activities” (AICPA Code, 2014). Doing my research into the company and making sure all financial information is sound is how I would uphold the responsibility principle. Statement no. 6 of the Standards for Tax Services brings forth the issue of reporting an error found in a client’s current or past tax returns to the client (AICPA Standards, 2010). If I find the rental amount is incorrect and has been reported incorrectly on Haddocks past returns, then I would be inclined to inform him of the issue and the consequences that could

Based on my discussions with Morty, I am now aware of a potential $30,000 understatement of gross receipts on his 2016 tax return. According to Treasury Department Circular No. 230 (Circular No. 230) §10.21, “a practitioner who…knows the client has…made an error in or omission from any return…must advise the client promptly of the fact of such noncompliance, error, or omission.” Additionally, I am required to “advise the client of the consequences…of such noncompliance, error, or omission.” Morty may be subject to an accuracy-related penalty for substantial understatement of tax in accordance with Title 26 USC §6662(b)(2). “To be substantial, the understatement must exceed the greater of ten percent of the tax required to be shown on the return or $5,000 for individuals.” This 20-percent accuracy penalty is applied to the portion of income that was substantially understated on an individual’s income tax return. Based on the information available to date, it appears Morty understated his gross receipts by 25 percent.

and tax attorneys who find and leverage the many deductions buried within the language of the

BACKGROUND: Sue Growne, client G14159, is looking to purchase a tavern, which would include both realty and personality. So ReaLand CPA’s could better serve this client, I, Bobbi Paternico was tasked with researching the legal and tax options available to the client, based upon the entity utilized for the purchase and the method of purchase.

Diligent Tax & Bookkeeping is a full-service tax preparation and bookkeeping firm that is located in Flower Mound, Texas. They are serving the Lewisville, Frisco, Plano, Grapevine, and North Dallas areas. Diligent Tax & Bookkeeping was established in the spring of 2013. Their valuable services include bookkeeping services, tax solutions, and payroll. Diligent Tax & Bookkeeping creates the monthly or quarterly business data and financial statements. They are striving to use new and innovative ways to meet their clients’ needs.

Tax deductions are allowed to taxpayers only if specifically authorized by the Internal Revenue Code. Deductions allowable to individual taxpayers fall into three categories: trade or business deductions, production of income deductions, and personal deductions. This chapter is also concerned with business deductions as they appear on a sole proprietor 's Schedule C, which is included as part of the taxpayer 's individual income tax return.

In this composition, we will be discussing two topics that go hand in hand when it is dealt with in tax accounting. To fully understand the scope of this article, passive activity is defined by the IRS as “any rental activity or any business in which the taxpayer gains income but does not materially participate in the activity”(IRS). Examples of passive activities can include equipment leasing and real estate leasing, in contrast to salaries, wages which are generally considered non-passive activities. As the article “Skip the dorm, buy your kid a condo” states, there are tax benefits when renting a property, but now individuals have exploited loopholes in the tax code that can be controversial and even illegal.

of house to handle the K-1 prakaps from Bluecap Founding, LLC and Carona Investment Properties,

Chief Justice M. Hameedullah Beg., Justice N. L. Untwalia, Justice P. N. Bhagwati, Justice P. S. Kailasam, Justice S. Murtaza Fazal Ali, Justice V. R. Krishna Iyer and Justice Y. V. Chandrachud.