Typically, the income you receive from the sale of real estate or other property is taxable in the year it is received. However, there’s a way you can spread out the tax bite on a profitable sale. Strategy: Sell property on the installment basis. As long as you receive payments in more than one year, you pay tax only on the portion of each payment attributable to your gain plus interest.
Losses from “passive” activities such as rental real estate may be used only to offset income from other passive activities. A passive activity is generally one where the investor does not materially participate in the undertaking. However, you may benefit from a special tax break if you own rental real estate.
Business blogger Steven Berglas has been pondering whether self-starters can be made, or whether they’re born that way. At a minimum, he’s identified a few questions you can ask to ferret out true enterprising natures. Don’t take their answers literally—any version of self-starting behavior will do.
“My senior admin recently asked us what we should discuss during our monthly admin meetings,” a reader wrote. With time at a premium, this is a good point, as there’s an ever-increasing need for groups to get more real work done during regular meetings. Suggestions for making your next admin meeting more productive:
Women leaders in Generations X and Y don’t go it alone or count on legal remedies to break the glass ceiling. They are highly interdependent. This distinguishes them from their predecessors. Today’s high-watt Silicon Valley women make heavy use of social networking to get ahead.
Do you aspire to work in the C-suite? You can safely assume that top executives will require a prized package of office skills. But most high-level execs say they also want assistants who have the “X Factor.” Love it or hate it, high-ranking executives want employees who can read minds, anticipate needs and supply that indescribable “something” that propels an executive toward success.
A recent government study showed that the average small business overpaid its taxes by $11,638. That’s sad enough. But sadder still is the fact that the tax code is actually written to favor small businesses like yours.
Tens of thousands of homes that were appraised prior to the real estate crash are valued (for property tax purposes) at higher levels than today’s housing prices. Strategy: Appeal a property tax assessment if you have reasonable grounds. If your appeal is successful, your property-tax bill will be reduced. But you may have to move quickly. Here are five tips:
Earlier this week, I was talking with an executive who’s recently been promoted to run a business unit that earlier this decade was generating a few million dollars a year in revenue and this year will gross a few hundred million dollars. Through acquisitions and organic growth, the business could be twice its current size in a few more years. As we were talking about the changes she might have to make in her leadership style as the business grows, I remembered a conversation I had last year with another executive who was facing the same sort of situation.
No one expects bad things – and by bad, I mean catastrophically bad – to happen to them. Yet terrible tragedies happen to people who didn’t expect them every day of the year. You can’t take a vaccine to immunize yourself against ill fortune. But you can prepare for disasters before they happen.
At 26,000 feet in the air and only 400 feet from the summit of Broad Peak in Pakistan, two climbers were forced to stay in a snow cave for the night. The pair strategized a survival plan. Three things are critical to survival in those conditions, which work in other situations when you have to hunker down:
Sure, at one time or another, we’ve all worked for some great bosses and some bad bosses. But nothing can be more debilitating than working for someone who is ignorant of the laws. In the following case, a company president walked right into an FMLA lawsuit because he had never even heard of the Family and Medical Leave Act. He knows about it now ...
The enhanced Sec. 179 deduction is a tax bonanza for small business owners. You can write off up to $250,000 of new business assets placed in service in tax years beginning in 2009. But remember: The Sec. 179 deduction is limited to the amount of annual taxable income from the business. Strategy: Buy new assets soon and place them in service before Oct. 1. Here's why.
Lauretta Simmons was convicted of embezzling $93,500 from then Pennsylvania Gov. Tom Ridge’s campaign in 2000. Ridge went on to become the nation’s first Secretary of Homeland Security. Simmons apparently went on to greater things as well—to the tune of more than $300,000.
A savvy real estate owner can postpone tax by selling property on the installment sale basis. But you may be able to postpone the tax bill even further. Strategy: Consider using a “wraparound sale.” In effect, you offer to carry the buyer’s note to facilitate the sale of the property.
You now have a new tax incentive to invest in fledgling corporations, thanks to the new economic stimulus law. You might even want to plow some money into your own company. Strategy: Buy new “qualified small business stock” (QSBS).
Do you own a “vacation home” near a beach or in the mountains? It’s a great place, but maybe your children have grown up and moved away or the place has become too expensive to maintain—or both. Strategy: Rent out the home part of the year. Although it can be a hassle, the cash flow and tax benefits may outweigh the inconvenience.
The U.S. Department of Labor has filed suit against TMG National Holdings, a real estate development company based in Chicago, alleging it diverted funds intended for employee retirement benefits.
Here’s a simple way to prevent lawsuits when you have to fire a recently hired employee: Direct the person who hired the employee to also do the firing. If the employee belongs to a protected class, courts will conclude that the termination wasn’t discriminatory. Otherwise, why would the employee have been hired in the first place?
Everybody knows iconic individuals who have branded themselves: national domestic advisor Martha Stewart, for example, and real estate hotshot Donald Trump. Lower lights do it, too, and we can learn from them.
If, like many employers, you have adopted a smoke-free workplace policy, you may think your organization won’t be liable if an employee lights up on the premises and starts a fire. Unfortunately, it’s not quite that simple. Your organization still could be liable if an employee’s careless smoking caused damage to another’s property.
A forecast by the U.S. Conference of Mayors says the Los Angeles area will suffer some of the largest job losses in the nation in 2009. It's expected to lose about 164,000 jobs this year ...
Fifteen companies headquartered in California have made the 2009 Fortune magazine “100 Best Companies to Work For” list. Why did so many California companies make the list? Great benefits seem to be the reason.
On the money front, it’s time to get back to basics. An oft-repeated piece of advice is to keep better track of the money we spend and save. To help with expense-tracking, tap into online tools. The best of the breed recently chosen by Money magazine and Slate.com are Mint.com and QuickenOnline.com.
If you go by the book, you should buy equipment late in the year. Reason: Under the Modified Accelerated Cost Recovery System (MACRS), you can claim a depreciation deduction based on a half-year’s use, even if you use the equipment only for a few days in the year. Of course, you might not be able to wait that long to replace outdated or obsolete equipment ...
The economy is in trouble. But good marketing can still lure plenty of qualified buyers. It’s just harder to close the deal. A “shared risk” offer can warm up those with cold feet.
A little-noticed tax provision that’s been on the books for almost 80 years may come in handy now due to the recent volatility in the stock market. It could save hundreds of thousands of estate tax dollars if you’re the executor of a recently deceased relative’s estate. Similarly, you might incorporate this provision into your own estate plan.
With the global economy sagging, your company tightening its belt, your
stock worth dwindling and your children thinking you don’t understand
what they are going through, there is a lot of duress and stress in
life. To step up as a leader, manage your attitude – don’t leave it to
others. Take on and stick with a productive and constructive
perspective. Don’t let the press, family, friends or colleagues sway
you with a negative and destructive perspective.
If your child is in college, he or she may be planning to move off-campus at some point. At the same time, you could be looking to buy real estate to shelter your income. Here’s how to kill two birds with one stone.
Congress has changed the deadline for providing copy B of certain 2008 information returns. (P.L. 110-343) The new due date is Tuesday, Feb.17, 2009, instead of Feb. 2, 2009, as reported in the IRS instructions. The change applies to the following forms ...
The IRS is putting more “Sec. 1031 exchanges” under its watchful eye. One reason: The Treasury Inspector General has issued a report titled “Like-Kind Exchanges Require Oversight to Ensure Taxpayer Compliance.”If you arrange a like-kind exchange of real estate or other property, watch out for increased IRS scrutiny.
If your business pays nonemployees for services, you have only until Jan. 31 to give copies of Form 1099 to recipients of certain payments. That includes independent-contractor compensation, dividends, interest, real estate transactions, attorney fees and retirement plan distributions.
These days, smart businesses are leveraging cost-effective guerilla marketing
strategies, including social networking and viral marketing, to market
their products and services to customers and best prospects. All it
takes is a little time, energy, and ingenuity. Consider these five tips
to enhance your guerilla marketing plan:
If you want support from the C-suite for work/life benefits, tout flexible schedules and telework as tools that do more than aid recruiting and retention. In a recent survey, CFOs said that for flexibility to succeed, organizations have to perceive it as more than an employee perk.
If you sell investment real estate at a gain before year-end, you’ll have to pay the full amount of the tax on the 2008 return due in just a few short months. But you can stretch out payment with some tax-smart planning. Strategy: Arrange an installment sale of the property ...
For five years, Eric McAlpine worked on an independent contractor basis as a bookkeeper for American Titleworks. During that period, he stole a staggering $800,000 in checks from real estate buyers and sellers and banks, plus almost $1.5 million from escrow accounts ...
In the normal course of events, your company can benefit from the “half-year convention” under the Modified Accelerated Cost Recovery System for property placed in service by Dec. 31. The property is treated as being placed in service on July 1, so you benefit from a half-year’s worth of depreciation on this year’s return ...
Is fear of real or perceived risk keeping your customers from committing?If so, spend some time brainstorming about shared-risk offers that could turn your sale from cold … to gold.
You may think that you won’t qualify for a moving expense deduction if you’re not switching jobs from one company to another. But you still might qualify if you go into business for yourself.
With the unemployment rate at a two-year high and the housing market in a slump, “recession” is the word on everyone’s lips. Consider these tips, both professional and personal, for protecting your career and your finances.
Finding responsive lawyers and establishing critical rules early are two of the most effective ways to ensure your business has high-quality, high-value legal service with very few surprises. Follow this 4-step guide to finding great legal advice.
This national audio seminar lays out a step-by-step guide for everyone—even the nervous, pushy, impulsive or tongue-tied—who wants to negotiate a better deal in the office, in the boardroom ... and in life!
Employers that take the time to create good paper trails seldom lose discrimination lawsuits. Those who can show the rationale behind a decision find that few employees can come up with anything to counter that rationale ...
Although you might not get top dollar now for prime rural real estate, recently renewed tax breaks could cut your tax bill while you continue to hold the property. Then you could sell it for a decent price when the market rebounds.
If you are an Illinois employer with 15 or more employees and your application asks job-seekers to detail their criminal histories, expunged criminal records pose a hidden trap for you ...
The Equal Pay Act was passed to ensure that women are paid the same as men for substantially equal work. The law does allow for differences based on any factor “other than sex,” but you must be prepared to explain pay differentials in a way that clearly demonstrates why two employees in the same job receive different wages ...
A former executive assistant for Farash Corp. is suing the Rochester-based real estate company for sexual harassment. Susan Poulter claims she was fired without warning in June 2006, four months after she complained about inappropriate comments allegedly made by male executives ...
Question: “I am the administrative assistant to the vice president. I have been
with the company four years and recently had a wonderful annual review;
however, the pay increase was not so wonderful. I have researched the
local job service office, and according to its web site, I should be
making about $3.55 more per hour for my position and experience.
That’s more than $7,000 annually. How do I approach my employer and
let it know I am not being compensated fairly? I have been underpaid
since I began working for the company and my workload continues to
increase.” — Administrative Assistant to VP
A reader recently inquired about private annuities.Unfortunately, this tax technique is virtually dead in the water. As of Oct.18, 2006, the IRS no longer permits private annuity trusts as a capital gains deferral. Prior arrangements may continue to exist under a “grandfather rule.”
If you find out that a worker out on FMLA leave is actually working for someone else, it’s time to check the employee’s FMLA certification. If the certificate says he’s “unable to perform work of any kind,” you can and should take action ...
In the past, Small Business Tax Strategies has advised you about a tax technique for certain families. It may be used when aging parents live in a home that has appreciated in value, but they’re no longer reaping the full tax benefits of home ownership.
The most recent UCLA Anderson Forecast lowered its California job-growth estimates from the already weak numbers that it forecast last year, but included a silver lining in an otherwise cloudy report by predicting that the state would avoid recession ...
Look into new mutual funds designed as “AMT-free.” In a twist from previously offered tax-exempt mutual funds, these new financial products don’t invest in bonds that could cause AMT complications.
HDG Mansur, a multinational property company based in Indianapolis, is poised to launch the first global real estate investment fund compliant with Islamic sharia law. But the firm has drawn complaints from a U.S. imam, Indiana clergy and unions ...
The maximum tax rate for long-term capital gains in 2007 is only 15 percent for high-income taxpayers. Even better, the rate is a minuscule 5 percent for some lower-income taxpayers. But how low can you go if you really try?
The quarterly UCLA Anderson Forecast predicts that accelerating job losses in construction and real estate finance will weaken California’s economy further than expected. However, unless another factor emerges, California will narrowly avoid a recession and instead will record “very weak but positive payroll growth through late 2008” ...
Although your business doesn’t have quite the same flexibility at year-end as individual filers, you still can reduce your 2007 tax bill. Here are eight top techniques usually available to small business owners.
Saving taxes is a year-round proposition, but tax planning takes on added significance at year-end. This Special Issue primarily is devoted to year-end tax strategies that can literally save you thousands of tax dollars. On the other hand, if you stand by idly, you’ll be missing out on valuable tax breaks.
Make a few smart moves as the year winds down, and you can slash the tax bills for both you and your business. The overall strategy: push income into next year and pull deductions into this year.
For your convenience, we’ve divided this year-end issue into two main sections: personal and business. We offer you 10 ways to cut your personal taxes (starting below) and eight ways to trim business taxes.
Several key tax breaks are going off the books at the end of 2007 (unless Congress extends them), so take a look at our seven last-chance tax opportunities to cash in your tax chips now.
Bonus-depreciation deductions are a thing of the past. But that doesn’t mean you can’t pump up deductions for business assets this year. Take advantage of enhanced Section 179 provisions.
A sluggish real estate market is putting pressure on some organization's hiring practices. The problem: New employees can't sell their old houses. The solution: Taking a fresh look at relocation policies and assistance.
A woman from Queens is suing her boss and their employer for $2.5 million, claiming she began suffering panic attacks after the boss handed her 15 photos of himself stark naked ...
Under the Indiana Civil Rights Act, it’s unlawful to subject people to differential treatment based on race, religion, color, sex, disability, national origin or ancestry. The law prohibits discrimination in education, employment, access to public conveniences and accommodations, as well as real estate transactions ...
A federal judge has overturned his earlier decision in a Fair Labor Standards Act case involving several women who had been hired to sell houses in a new subdivision. The women claimed Brayson Homes owed them overtime and minimum wages ...
The home-sale capital-gain exclusion is one of the biggest tax breaks on the books. But it still may not be enough to shelter all your gain when you sell a highly appreciated home.
Brusque Chicagoan Sam Zell made his billions by timing the real estate
market. So until recently, only the business press paid much attention
to him, his motorcycle and his elaborate holiday gift-giving.
Q. In a recent issue, you mentioned that lots of capital gains and depreciation deductions on investment real estate could put you at risk for the Alternative Minimum Tax (AMT) (SBTS, June 2007). Does this apply directly to capital gains and all real estate? H.T.P., via e-mail
The quarterly University of California at Los Angeles’ (UCLA) Anderson Forecast predicts a significant slowing of California’s economic growth in 2007. The forecast contradicts revised employment figures ...
The mantra in real estate is “location, location, location.” But the mantra in employee discipline must always be “consistency, consistency, consistency” ...
If you’re a procrastinator, you might wait until the last minute to
file your personal tax return. Perhaps you’re delaying the inevitable
because you figure that you’ll owe a hefty tax bill. You still can cut your tax bill at this late date. Here are seven strategies:
The mantra in real estate is "location, location, location." But the mantra in employee discipline must always be "consistency, consistency, consistency" ...
The so-called paperless society ushered in by the computer age may mean fewer file cabinets and storage rooms full of paper records, but storing company records on hard drives has its own set of problems ...
Sun Microsystems’ iWork program is more than telecommuting: it’s flexible working, says Lynn Williamson, openwork marketing manager for the Menlo Park, Calif.-based systems manufacturer ...
HR Law 101: The Employee Retirement Income Security Act of 1974 (ERISA) governs the administration of employee benefit plans and the rights of plan beneficiaries. While many tend to associate ERISA only with retirement benefits, the law covers many other areas ...
HR Law 101: When a new hire comes on board, you must determine whether to classify him or her as exempt or nonexempt under the FLSA. The key consideration: Exempt workers aren’t eligible for overtime pay. Rather, they’re paid for the job they do, not the hours they keep ...
HR Law 101: To be considered exempt from overtime, an employee must generally be paid on a salary basis and his or her job duties must meet the Labor Department’s standards for one of the six exemption categories. Use this self-audit to test whether you’re properly classifying your workers as exempt under the FLSA ...
HR Law 101: Your contract with an independent contractor establishes payment rates and methods, the nature of the work to be completed, the deadline for completing the job and performance standards. No matter how casual the relationship or how well you know the contractor, you should always have a signed contract describing the work to be done ...
HR Law 101: When independent contractors are acting as a company’s agents, the company is liable for their actions, according to a U.S. Supreme Court ruling in 2003 ...
The Pennsylvania Workers’ Compensation Act covers all employers in the state and provides wage replacement for employees hurt on the job. The law provides payments to employees regardless of fault. That is, to earn benefits, injured employees don’t have to prove that their employers were negligent; they need only prove that the injury occurred at work. Sounds simple, right? It’s not ...
Under California’s Fair Employment and Housing Act (FEHA), it’s unlawful to subject people to differential treatment based on race, religious creed, color, national origin, ancestry, physical or mental disability, medical condition, marital status, sex, age or sexual orientation ...
Under the Illinois Human Rights Act (IHRA), it’s illegal to subject people to differential treatment based on race, color, religion, sex, national origin, ancestry, citizenship status (with regard to employment), age (40 and over), marital status, familial status (with regard to housing), arrest record, physical or mental disability, military status, sexual orientation or unfavorable discharge from military service ...
Crash! That was the sound of the IRS coming down hard on private annuities. In the form of proposed regulations, the IRS wants to eliminate some of the income-tax advantages of selling appreciated property, such as real estate, in exchange for a private annuity.
Chances are, your parents or in-laws are still living in a big, sprawling place that’s worth a ton more than they paid for it. If the mortgage is paid off — or close to it — they can’t squeeze much tax juice from the home other than property-tax deductions.
They say that imitation is the best form of flattery. So, improve your company’s productivity by borrowing the practices of the nation’s best small companies.
Despite continued public outcry, Congress failed to enact any significant tax relief from the Alternative Minimum Tax (AMT) this year. All it did was Band-Aid a couple of tax-law sections. So, no matter how you twist and turn, you may not be able to dodge a tax hit from this lethal “stealth tax.”
Despite conventional wisdom, year-end planning isn’t just for personal tax savings. Your business can do plenty between now and Dec. 31 to cut its tax bill. Nine tips:
Suppose your company bought a building many years ago for $1 million and has depreciated it down to zero. The building and the land it sits on are currently worth $2 million. You want to expand your product line, but you need some cash to do it.
In the middle of negotiations over a demolition job last year, the
owner of Dole Food Co. suddenly chewed out his adversary, the 285-pound
founder of a wrecking company. “Mr. Griffin,” the 150-pound, 83- year-old David Murdock told the man, “you’re fat and you’re going to die.”
In many parts of the country, the value of real estate is leveling off or declining. So, if you bought your main home within the past few years, it may actually be worth less now than what you paid for it.
It’s likely that you hold property jointly with your spouse. Unfortunately, that can lead to tax confusion when you sell, bequeath or transfer your property. Plus, seemingly innocuous withdrawals can cause tax complications if you’re not careful.
Q My brother and I inherited a beach house from our mother three years ago. I moved into the house permanently two years ago. If we sell the house now, do we each qualify for tax-free gain? L.M., Belmar, N.J.
Paul McDermott moved up from a high-volume producer in commercial real estate to a vice president at Freddie Mac. Along the way to becoming an executive, he learned a most important lesson:
With hurricane season here and memories of last year’s natural disasters still fresh in our minds, the IRS has released recordkeeping tips for taxpayers.
If you’re a serious real estate investor, you may be gearing up to unload appreciated property so you can snap up other property with stronger growth potential. Boy, do we have a tax deal for you!
Do you owe the feds money? In a worstcase scenario, the IRS could slap a lien on your assets until you’re able to pay the tab. It doesn’t matter if other creditors already have dibs on the assets.
Generally, you can deduct moving expenses only if they’re related to your job. You must meet a tough two-part test to qualify for deductions even if you’re pulling up stakes for a job switch.
Taxes may be the last thing on your mind when you’re bogged down in a messy legal battle. But errors in the way you draft a settlement agreement could mean thousands of dollars going to Uncle Sam instead of into your pocket.
After about 10 years of trying unsuccessfully to persuade major
retailers to come to America’s urban centers, Joe Sitt started building
a retail empire of his own in the nation’s inner cities. Here’s how Sitt succeeded:
Taxes may be the last thing on your mind when you’re bogged down in a messy legal battle. But errors in the way you draft a settlement agreement could mean thousands of dollars going to Uncle Sam instead of into your pocket.
Generally, you can deduct moving expenses only if they’re related to your job. You must meet a tough two-part test to qualify for deductions even if you’re pulling up stakes for a job switch.
Some of the key provisions in the new tax law signed by the president last month won’t take effect for years to come. But that doesn’t mean you should sit on your hands in the meantime.
Sorry, but you can’t take a summer vacation from tax planning. Take your eye off the ball midway through the year, and you could miss out on valuable tax deductions and credits ripe for picking. Here are 11 summertime tax moves that could make you smile come tax-return time.
Sorry, but you can’t take a summer vacation from tax planning. Take your eye off the ball midway through the year, and you could miss out on valuable tax deductions and credits ripe for picking.
You’ve spent years building up your C corporation business into a successful operation. But how can you take more cash out of the company now without facing a tax disaster?
With the alternative minimum tax (AMT) becoming a maximum nuisance for many taxpayers, it’s smart to recognize the AMT danger zones early. But the AMT “stealth tax” can also blindside investors who normally don’t face AMT problems.
If you own a second home in a resort area and you’re using the place less often than before, why not turn that beach cottage or mountain cabin into a revenue producer by renting it out? This can turn out to be a tax-efficient strategy.
Suppose your business has patented various processes or products that are vital to its existence. Now, you have to obtain another company’s proprietary information in order to expand your operation.
In the waning days of last year, the president inked the Gulf Opportunity Zone Act of 2005. This new legislation, following close on the heels of the Katrina Emergency Tax Relief Act (KETRA), includes various tax measures benefiting victims of Hurricanes Katrina, Rita and Wilma.
For parents and grandparents, a basic tax strategy is to transfer income-producing assets (e.g., cash, stock, real estate) to the young ones. The subsequent income is generally taxed at the child’s low tax rate, rather than the elder’s higher one.
Are you sitting on a potential small fortune in stocks or real estate? Or maybe you own a business interest that you’re planning to sell at a tidy sum. You’ll have to pay the tax piper one way or another through income tax, estate tax or gift tax … or some combination of all three.
Real estate titan Sam Zell has no patience for how business schools
teach leadership. He’s candid about how they’re always “canonizing”
empirical tools but drop the ball on people skills.
For too many people, the tax season is a February-to-April affair. But trying to plan your tax strategies after Dec. 31 is as futile as a football team drawing up its game plan with two minutes left in the fourth quarter: You can't do much to affect the score.
Barbara Corcoran overcame poverty and a series of setbacks to become
one of the most powerful real estate brokers in America, heading New
York-based the Corcoran Group. Corcoran says she excels at failure and does her best in a crisis. Examples:
Q: I own real estate that I plan to sell to my son through an installment sale. My CPA says this can't be done because we're related parties. Is this true? D.R.T., St. Petersburg, Fla.
"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.
Question: I work for a real estate company that manages apartment buildings. Problem:
Proper filing as it pertains to our building names. Each apartment building we
manage has a name, i.e., The Residences at Morgan Falls.
When I put names in the database, should I be filing those apartments that
have the word "The" in their name under "T"? Example: "The Residences ..." Is
that to be filed under "T" or "R"?
When people are looking for the name in the database, some people look under
"R" and assume it's not in the database, and some people look under "T" because
they are including the word "The" with the name. Which is proper?
When we refer to some of these properties, we call them by name, i.e., The
Residences, or The Estates, but I thought I remembered that, a long time ago,
there were something called "Proper Filing Rules." That's when the word "the"
was part of a name. It would be presented like so: "Residences at Morgan Falls
(The)." It showed that the word "The" preceded "Residences" but it allowed the
name to be filed under "R".
Help me, please. This is driving me nuts as what to do about filing our
property names.
Normally, you must depreciate the cost of business or commercial real estate over 39 years. In comparison, you can depreciate residential rental property much faster over 27.5 years.
Unless you're a CPA or a tax nerd, the term MACRS can be daunting. It stands for Modified Accelerated Cost Recovery System, which is the standard federal-income tax method for depreciating the cost of your business assets.
Despite the recent talk in Congress about alternative minimum tax (AMT) reform (see page 3), the "stealth tax" is still expected to hit millions of unsuspecting taxpayers this year ... maybe even you.
All work and no play can make Jack (or Jill) a disgruntled employee or client. So, you may decide to treat some of your top customers or valued employees to an outing as the summer draws to a close. By knowing the tax-law rules for entertainment costs, you can double your pleasure with top-dollar write-offs.
It's not too often that we advise you to turn up your nose at a tax break. But if you're selling real estate this year, you may want to pay more tax than required up-front. Why? Because you'll end up ahead of the game in the end.
Do your aging parents live in a home that's soared in value? Chances are, they've paid off the house, so they're not claiming mortgage interest deductions anymore. Even if they still deduct mortgage interest, they're probably in a low tax bracket now, so those deductions don't do much good anyway.
Q: I own a rental home that I could sell for $100,000. Excluding land, I have depreciated $20,000. I know I have to recapture the $20,000 depreciation at 25 percent. Does it matter if I am in the 15 percent tax bracket? I.G., Louisville, Ky.
Question: I would like to get feedback about a job description. The job is for a
secretary at a real estate office. The job has been open for several months.
A portion of it states: “You need to be okay with being micromanaged and
prepared to continuously check in. You need to be "thick skinned."
I showed this job description to a friend who wanted to apply. When she asked
if I had considered it, because the salary is about $10,000 more than I make
now, I said that I wouldn't apply because it sounds as though you'd have to put
up with a lot. She said that she didn't get that impression from the job
description and that maybe "thick skinned" means you need to be versatile. I
disagree. Just interested in what everyone else thinks. -- Anonymous
The bonus-depreciation deduction was great while it lasted, but it's gone for 2005. Still, you can generate top-dollar deductions this year when buying equipment and other business assets. That's because your not-so-secret weapon—the Section 179 expensing allowance—lets you write off most or all of the cost of most business assets in the very first year of ownership! Here's the lowdown on the rules and four ways to maximize your deductions.
It's already Memorial Day, so summer is right around the corner. While you're enjoying the warmer weather, heat up your tax savings with some timely tax techniques.
Despite the chummy-sounding acronym, PALs (short for passive-activity losses) are anything but friendly to taxpayers, particularly those who invest in real estate. Fortunately, you can gain more tax saving value from your PALs with some astute tax planning.
The word is out on REITs. These investments aren't as desirable for your taxable brokerage-firm accounts anymore because of the income tax repercussions. (They're fine for tax-advantaged retirement accounts.) But the word on the street doesn't give you the whole picture.
Back in 1949, psychologist George Kingsley Zipf discovered the
“Principle of Least Effort”: Most people, most of the time, are turned
back by modest hurdles that they could overcome with only a little
effort. Donald Trump consciously applies Zipf’s Principle (also known as “Ziff ’s Principle”) by negotiating in ways that take advantage of the other side’s laziness. Here’s how:
While you can still claim top-dollar deductions for your charitable donations, the massive new tax law signed last October—the American Jobs Creation Act of 2004—imposed new limits on certain donations. Now that the dust has settled, this much is clear: It's more important than ever to keep proper donation records. If you don't, you could lose all or part of your deductions.
Real estate remains rock-solid in this economy. If you bought property years ago, you may be sitting on a gold mine. Of course, when you finally sell, you could face a whopping tax bill, too.
Recent tax law changes offer potentially big benefits to shareholders who want to take cash out of their closely held C corporations without sharing too much with the IRS. You can also achieve the same goal through several time-honored cash-withdrawal strategies. This special report examines today's five best ways to pull cash from your C corporation in the most tax-wise manner.
Camera phones now make up more than 4 percent of all worldwide cell phone sales. By 2007, more than half of all cell phones will be equipped with cameras, and cell ...
If you want to pay the absolute minimum to Uncle Sam, tax planning must be a year-round pursuit. With summer right around the corner, you can cash in on several key tax breaks by springing into action now. If you procrastinate until the end of the year, you'll miss out on valuable deductions and credits for yourself, your business and your family. This special report explains a dozen timely moves you should take before the leaves begin to fall.
Did you buy a place in the country in the days before suburban sprawl? If so, you can nail down a tax deduction this year simply by agreeing to preserve the land in its pristine state.
Real estate values are scorching hot in many parts of the United States. If you're sitting on some big-time appreciated property, check out the following three strategies for minimizing your tax bill
Yes, the new 15 percent top rate on capital gains is good news for real estate investors. But if you sell investment property, your actual tax bill can be much higher than 15 percent of your gains, due to earlier depreciation deductions. (Gains from prior depreciation write-offs are taxed at a 25 percent maximum federal rate.)
Suppose you've been holding raw land that you bought years ago as an investment. Now you figure it's time to cash in on the building boom in your area.
For nonbusiness assets, you can deduct casualty losses from sudden usual events (storms, fires, etc.) once those losses exceed 10 percent of your adjusted gross income (AGI). Also, you can't write off the first $100 per event. Here are some tips to expand your write-off
Q: About 10 years ago, I paid $750 to an attorney to prepare a living trust. Recently, I asked him to update the trust to reflect a change in real estate properties. He charged me $350—almost half the original cost!—so I sent him a check for only $100. He returned the check with a note suggesting I find another attorney. Was I wrong? L.S.C., via e-mail
Limited liability companies (LLCs) have become the entity of choice for many businesses. That's largely because LLCs combine the S corporation benefits of flow-through taxation and limited liability along with partnership-type flexibility for distributions and ownership interests.
With the top individual federal income tax rate falling to 35 percent last year (down from 38.6 percent), now is a great time to consider converting your existing C corporation to an S corporation. In addition to taking advantage of the lower rates, such a switch lets you avoid double taxation of future corporate income and gains. This Special Report explains how a conversion would work and whether you should make the switch.
Q: As always, I mailed my 2003 tax return as soon as possible. But soon after I mailed it, my broker sent me a corrected Form 1099 that restated dividend income. Do I have to file an amended return, even though it was the brokerage firm's error? K.R., Crawfordsville, Ind.
If you've already run the numbers on your 2003 return, you may have gotten an ugly surprise on Line 42. If you haven't completed your Form 1040 yet, look out.
Lower rates. The 27, 30, 35 and 38.6 percent individual federal rates that applied for 2002 are reduced to 25, 28, 33 and 35 percent, respectively, for 2003. The 10 and 15 percent federal rates are unchanged.
Thanks to the recent Bush tax acts, you can deduct on your 2003 tax return either 30 percent or 50 percent of the cost of qualifying new assets that you bought and placed in service last year. The remaining amount is then depreciated using standard tax rules.
Between Feb. 1 and April 30, many U.S. employers must post a summary of the number of job-related injuries and illnesses that occurred in their workplace last year (OSHA Form 300A, not the complete Form 300 log).
If your business pays nonemployees for services, you're responsible for providing that information to the IRS each year.
The timing is critical, and the clock is running down.
Q: I own a residential real estate building that I bought in 1995. The building is 40 years old and needs a new roof. If I have a new roof installed this year, can I deduct the entire cost in 2004? M.S., Raleigh, N.C.
Issue: Some courts consider agreements, signed or unsigned, to be valid, binding contracts. Risk: A manager's verbal promise could lock your company into legal agreements it must follow ...
At the start of 2002, the Occupational Safety and Health Administration (OSHA) revamped its regulations on which companies must keep injury and illness records. OSHA gave companies six months to get ...
A new government report could spark more claims under the Equal Pay Act. It says that not only do women managers earn less than their male peers, but the wage gap ...
In a survey of 906 large firms by the American Management Association,
35 percent said they monitor their workers by recording their phone
calls and voice mail, inspecting their computer files or even
videotaping them on the job.
