Small Business Tax Strategies

Starting in 2006, taxpayers will be able to give cash gifts of up to $12,000 to each recipient without facing gift-tax issues. That’s up from $11,000 this year. Married couples can give twice as much.

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"Passive activity loss" (PAL) rules say that losses from passive activities are limited to annual passive activity income. In general, rental real estate is treated as a passive activity.

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Q: My daughter is a college freshman and I bought her a new laptop through the school. Does that qualify for a tax-free withdrawal? C.K., Syracuse, N.Y.

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Q: I bought stock for about $5,000 and gave it to my son when it was worth $4,000. Now the stock has fallen further and is worth about $3,500. My broker says my son will only have a $500 loss (not $1,500) if he sells it. Is that true? E.B., Miami

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Q: I’m still confused about guaranteed withdrawal benefits and guaranteed monthly income benefits available with some variable annuities. I am interested in the guaranteed monthly income benefit. Can you explain the difference? V.G., via e-mail

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Q: If I inscribe the name of my business on the side panels of my car, can I write off the full cost of my car expenses? My accountant isn’t sure. L.D., West Mifflin, Pa.

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Health insurance costs continue to skyrocket without any end in sight. As a result, companies both large and small are exploring alternate means to cover their employees.

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As you thumb through the mail one day, an unassuming letter catches your eye. Return address: The IRS. You nervously tear open the envelope and your worst fears are confirmed: The IRS has chosen your return for a correspondence audit.

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If you operate a business that’s open to the public, you’re legally required to make the premises accessible to disabled customers. That may include creating wheelchair ramps, wider aisles or reconfiguring your restrooms.

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Q: I bought a second home computer recently because my new job requires communication at all times, and my kids are always on our other computer. I use the new machine to interact with clients from home. Since my employer is all for it, can I deduct the computer’s cost? M.L.P., New York

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