Legally separated
A husband and wife who are required to live apart from each other by the terms of a decree of separate maintenance. Payments under the decree are deductible by the payor and taxable to the payee as alimony.
Tax Glossary
Like-kind exchange
An exchange of similar assets used in a business or held for investment on which gain may be deferred.
Lump-sum distribution
Payments within one tax year of the entire amount due to a participant in a qualified retirement plan. Qualifying lump sums may be directly rolled over tax free, or, in some cases, are eligible for current tax under a favorable averaging method.
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Ask JK
Advanced- For purposes of the 3.8% additional Medicare tax on net investment income in 2013, how does this relate to rental income?
- Can I make a direct transfer of my IRA to my church and qualify for tax-free treatment (up to $100,000)? I’m 72 years old.
- I traveled to Africa on a mission trip with my church. I paid for the airfare. Can I deduct it?
- I sold my residence at a loss. How do I report this on my tax return?
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Tax Tips
Tuition and Fees Deduction
The tax law allows you to claim a limited deduction when you pay for higher education. The deduction applies whether you pay out-of-pocket from savings or borrow the money. You may claim the deduction each year you qualify for it. The deduction expires at the end of 2009, unless Congress extends it.
If you pay tuition and fees for higher education for you, your spouse, or a dependent, you may be able to deduct up to $4,000 in 2009 as an adjustment to gross income, even if you don’t itemize your other deductions.
Factoids
FACT:
The IRS reports that seven out of 10 Form 1040s now include a Schedule C or Schedule C-EZ.
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