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February 24, 2017 8:00 am

If the distribution was a required minimum distribution, it cannot be rolled over to an IRA (the proceeds can be used to fund an IRA if you are eligible to make an IRA contribution for the year). If t...

February 24, 2017 8:00 am

No. A taxpayer who has not reported interest annually but opted to defer it must take all of the accrued interest into income on the earlier of these events:When the bonds are cashed in When yo...

February 24, 2017 8:00 am

The total amount of itemized medical expenses that are deductible are entered on Schedule A of Form 1040. There is no separate form used to list the specific medical expenses. You do not have to attac...

February 10, 2017 9:00 am

It may be possible to claim a dependency exemption for a relative living in Mexico. While the niece cannot be a qualifying child because she does not live with you, the niece may be a qualifying relat...

February 10, 2017 9:00 am

You cannot deduct the interest that accrues on a reverse mortgage until it is actually paid, which doesn't happen until the mortgage is paid off in full. At that time, the mortgage interest usually is...

February 10, 2017 9:00 am

A vacation home is a capital asset. As such, gain is reported on Schedule D (after entering the transaction on Form 8949 in the space for long-term transactions not reported on Form 1099-B). If the sa...

January 27, 2017 9:00 am

Usually, a spin-off does not result in any gain or loss to a shareholder. A portion of the basis of the old stock is allocated to the new stock in the spin-off company. The IRS usually gives a ruling ...

January 27, 2017 9:00 am

The amount of premiums for a long-term care policy that are treated as a deductible medical expense if you itemize deductions is based on your age as of the end of the year. The fact that you paid a l...

January 27, 2017 9:00 am

When a taxpayer dies, the tax basis of the property is the value of the property on the date of death. As such, if property is sold for this date-of-death value, there is no gain or loss....

December 30, 2016 2:09 pm

Fellowship payments used for incidental expenses, including room and board, travel, and optional equipment are taxable. So too are amounts received for teaching, research, and other services required ...

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The total amount of itemized medical expenses that are deductible are entered on Schedule A of Form 1040. There is no separate form used to list the specific medical expenses. You do not have to attac...

It may be possible to claim a dependency exemption for a relative living in Mexico. While the niece cannot be a qualifying child because she does not live with you, the niece may be a qualifying relat...

You cannot deduct the interest that accrues on a reverse mortgage until it is actually paid, which doesn't happen until the mortgage is paid off in full. At that time, the mortgage interest usually is...

A vacation home is a capital asset. As such, gain is reported on Schedule D (after entering the transaction on Form 8949 in the space for long-term transactions not reported on Form 1099-B). If the sa...

The amount of premiums for a long-term care policy that are treated as a deductible medical expense if you itemize deductions is based on your age as of the end of the year. The fact that you paid a l...

When a taxpayer dies, the tax basis of the property is the value of the property on the date of death. As such, if property is sold for this date-of-death value, there is no gain or loss....

If such care is medically necessary, as prescribed and certified by a licensed health care provider, then it can be treated as a deductible medical expense if you itemize deductions. For 2016, only ou...

Yes. If your income is too high to allow you to benefit from the credit, you can let your child use it. To do this, you must forego the dependency exemption you would otherwise have claimed for her....

Probably not. These likely are considered nondeductible personal expenses for you. Legal fees are usually deductible only if they are related to:The collection of taxable income, such as legal fe...

An employee who receives sick pay is taxed on it. It is treated the same as other taxable compensation, which means it is taxable for income tax purposes and subject to FICA.Employers who give sic...

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Yes. Even though you are required to start drawing down the account, you can continue to add to it through deductible contributions as long as you have net earnings from self-employment. However, you ...

No. Having a decal or a removal sign that helps to advertise your business does not entitle you to deduct all of your driving as business mileage. You’re limited to the actual miles driving for busi...

Job-loss mortgage insurance is a policy that pays some or all of the mortgage payments (and, under some policies, real estate taxes and homeowners insurance) if you lose your job. The IRS has not rule...

A Form 1099-MISC is required to be issued only by a business that pays $600 or more to an independent contractor. If your rental activity is only an investment and not a business, you don’t have to ...

The cost of housekeeping services are never a deductible medical expense; only personal care services may be deductible under certain conditions. However, the cost of housekeeping services incurred to...

No. A Schedule C is required if you are in a trade or business. However, you can report miscellaneous income on line 21 of Form 1040 (“other income”). This miscellaneous income is not subject to s...

Unreimbursed employee business expenses can be deducted as a miscellaneous itemized deduction on Schedule A of Form 1040. So you must itemize, and only amounts in excess of 2% of adjusted gross income...

Earned income remains taxable regardless of age. Similarly, such income continues to be subject to Social Security and Medicare taxes (FICA for an employee; self-employment tax for a self-employed per...

No. The value of employer-paid health insurance for an employee, spouse, and dependent is a tax-free fringe benefit. However, under the Affordable Care Act, employers (other than small employers curre...

Page 1 of 212

If the distribution was a required minimum distribution, it cannot be rolled over to an IRA (the proceeds can be used to fund an IRA if you are eligible to make an IRA contribution for the year). If t...

No. A taxpayer who has not reported interest annually but opted to defer it must take all of the accrued interest into income on the earlier of these events:When the bonds are cashed in When yo...

A vacation home is a capital asset. As such, gain is reported on Schedule D (after entering the transaction on Form 8949 in the space for long-term transactions not reported on Form 1099-B). If the sa...

Usually, a spin-off does not result in any gain or loss to a shareholder. A portion of the basis of the old stock is allocated to the new stock in the spin-off company. The IRS usually gives a ruling ...

Charitable contributions are fully deductible for estate tax purposes. Unlike donations for income tax purposes, there are no adjusted gross income percentages or other limits.However, be sure to ...

Lump-sum benefits are treated the same as monthly benefits. Thus, if your income is low enough, no benefits are includible in gross income. Otherwise, the benefits may be includible in gross income to...

Interest on federal savings bonds is taxable; the portion of the redemption representing principal (your initial cost for the bond) is not.If bonds (Series EE and I) are issued after 1989 and rede...

If you are at least 70-1/2 years old by the end of the year, you can make a direct transfer to a public charity up to $100,000. The portion transferred is not taxable, and it counts toward your requir...

Assuming your spouse died after 1981 and that your spouse was a U.S. citizen, you owned a "qualified joint interest" with your spouse. As such, your basis is 50% of the date-of-death fair market value...

Knowing your holding period enables you to determine whether gain or loss on the sale of the stock is short-term or long-term. Short-term is a holding period of one year or less; long-term is more tha...

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If such care is medically necessary, as prescribed and certified by a licensed health care provider, then it can be treated as a deductible medical expense if you itemize deductions. For 2016, only ou...

Yes. Those age 70-1/2 and older can transfer up to $100,000 annually directly from an IRA to a public charity. The distribution is not taxed, although no charitable contribution deduction can be taken...

Some marketers are touting a "consumer rebate" in order to get individuals to subscribe to certain newsletters or buy other materials. The so-called rebate is nothing more than a tax deduction for sta...

Unfortunately, no. Of course, you are free to make donations to whomever you choose,  but the tax law limits deductible contributions to those made to 501(3)(c) organizations. Explore the organizatio...

Probably not. These likely are considered nondeductible personal expenses for you. Legal fees are usually deductible only if they are related to:The collection of taxable income, such as legal fe...

An employee who receives sick pay is taxed on it. It is treated the same as other taxable compensation, which means it is taxable for income tax purposes and subject to FICA.Employers who give sic...

A child can be a parent's dependent if under age 24 and a full-time student who does not provide more than half of his/her support. A full-time student means the child is enrolled in school on a full-...

If you made a nonbusiness loan to someone and the loan is completely worthless, you can take a nonbusiness bad debt deduction. A nonbusiness bad debt is treated as a short-term capital loss. A busines...

It depends. Interest on a loan used for personal purposes is not deductible. Interest on a home equity loan, however, is deductible regardless of what you use the proceeds for. In order for a loan to ...

Legal fees paid by an estate are deductible by the estate for estate tax purposes. If you paid the fees out of your own pocket, the estate can reimburse you. If you don't seek reimbursement, you will ...

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Fellowship payments used for incidental expenses, including room and board, travel, and optional equipment are taxable. So too are amounts received for teaching, research, and other services required ...

Dependents must file a tax return and pay taxes if income exceeds set limits. For 2016, a single dependent under age 65 who is not blind must file a return if any of the following applies:Unearne...

All interest income must be reported on Form 1040, unless there is a special rule that applies (such as interest on U.S. savings bonds redeemed for higher education costs). Thus, whether or not you re...

Yes. Sick pay is treated as taxable compensation. It is reported to you on Form W-2....

You don't have to file an amended return or contact the IRS. The IRS will contact you by mail and ask that you send the schedule. The IRS letter will have instructions on where to mail it....

The fact that you don't claim the exemption for a dependent child does not prevent you from using head of household status on your tax return. As long as you meet the other conditions for this status,...

Probably not. As part of the installment agreement, you agreed to have any future tax refunds applied to your outstanding bill. Of course, if the amount of the refund exceeds what you still owe, you'l...

Report the interest from these loans as you would report any other type of interest income. Depending on the amount of your interest, you may enter it directly on your return or need to complete Sched...

Yes. IRAs are taxed on unrelated business income. This may be received if your IRA holds an interest in a master limited partnership (MLP). This income is reported to an IRA owner on Schedule K-1 and ...

This is a perennial tax question. Usually filing jointly saves a couple taxes. And joint filing is required in order to use certain tax breaks. However, there are instances where filing separately mak...

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