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If you use a dwelling unit as a residence and rent it for fewer than 15 days during the year, you don’t report any of the rental income; it’s tax free. But you can’t deduct any expenses as renta...
No. While the SECURE Act raised the age from 70-1/2 to 72 for commencing RMDs for those who attain age 70-1/2 after 2019, the age for qualified charitable distributions (QCDs) has not changed. It is s...
Because the stock loss produced a tax benefit to you, the recovery is taxable. The question is whether you report the recovery as a capital gain (since you took a capital loss) or as ordinary income. ...
If you failed to claim the QBI deduction on your 2018 return but were eligible to do so, you’re not alone. The Treasury Inspector General for Tax Administration identified nearly 900,000 2018 return...
No. There’s a new question on the 2019 Schedule 1 asking: “At any time during 2019, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?” (...
You cannot simply net your gambling losses against your winnings. You must report all of the lottery money as income. Then, if you itemize personal deductions (using Schedule A) instead of claiming th...
As a self-employed person, you cannot receive a salary. You can take a draw from your business bank account to cover your personal expenses, but this has no impact on your taxes. You are taxed on your...
No. The conversion triggers taxable income (the full amount of what’s in the traditional IRA if no nondeductible contributions were ever made). But the mere fact that the original contributions were...
The qualified business income deduction applies only to a trade or business. Under an IRS-created safe harbor, a rental real estate activity may be treated as a trade or business for purposes of this ...
If you change investments from one mutual fund to another within a taxable account, then it’s as if you sold your holdings in one account to buy holdings in another. If there is a gain on the transa...
If you use a dwelling unit as a residence and rent it for fewer than 15 days during the year, you don’t report any of the rental income; it’s tax free. But you can’t deduct any expenses as renta...
No. While the SECURE Act raised the age from 70-1/2 to 72 for commencing RMDs for those who attain age 70-1/2 after 2019, the age for qualified charitable distributions (QCDs) has not changed. It is s...
Because the stock loss produced a tax benefit to you, the recovery is taxable. The question is whether you report the recovery as a capital gain (since you took a capital loss) or as ordinary income. ...
If you failed to claim the QBI deduction on your 2018 return but were eligible to do so, you’re not alone. The Treasury Inspector General for Tax Administration identified nearly 900,000 2018 return...
No. There’s a new question on the 2019 Schedule 1 asking: “At any time during 2019, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?” (...
You cannot simply net your gambling losses against your winnings. You must report all of the lottery money as income. Then, if you itemize personal deductions (using Schedule A) instead of claiming th...
As a self-employed person, you cannot receive a salary. You can take a draw from your business bank account to cover your personal expenses, but this has no impact on your taxes. You are taxed on your...
No. The conversion triggers taxable income (the full amount of what’s in the traditional IRA if no nondeductible contributions were ever made). But the mere fact that the original contributions were...
The qualified business income deduction applies only to a trade or business. Under an IRS-created safe harbor, a rental real estate activity may be treated as a trade or business for purposes of this ...
If you change investments from one mutual fund to another within a taxable account, then it’s as if you sold your holdings in one account to buy holdings in another. If there is a gain on the transa...
Mortgage insurance paid in 2013 can be deductible as mortgage interest (the deduction is scheduled to expire at the end of this year). However, income limits apply to limit or prevent a deduction....
No, unless your disability is blindness. This is the only condition for which an additional personal exemption can be claimed on a federal income tax return. However, if your income is very modest and...
It’s not clear. The IRS has not issued any official guidance on this very common question as yet. The law says that the policy must be established, or considered to be established, under her busines...
In 2013, the AGI floor for someone under age 65 is 10% of AGI. The 7.5% floor applies to those 65 or older. Since it is you, and not your mom, who is taking the deduction, you must use the 10%-of-AGI ...
You can take distributions from your IRA to satisfy required minimum distributions (RMDs) in cash or in kind, meaning in stock. The option you use depends on what’s in your account and what you want...
No. An inheritance, regardless of amount, is tax free to the heir. It does not matter whether the person who died was a U.S. citizen or a foreign national....
The inheritance is fully tax free, regardless of amount. You do not have to report the inheritance on an income tax return or any other form....
Yes, if the credit card borrowing is for consumer purchases. There is no exemption from cancellation of debt (COD) income for personal borrowing other than a home mortgage if forgiveness is completed ...
Contributions to an HSA are deductible from gross income (page 1 of Form 1040) even if you don’t itemize other deductions. You must file Form 8889 with your return if you had any activity in the acc...
While life insurance proceeds received on the death of the insured are tax free, you may owe taxes when you cash in the policy early. What’s taxable: the excess of the cash surrender value over the ...
No. An inheritance, regardless of amount, is tax free to the heir. It does not matter whether the person who died was a U.S. citizen or a foreign national....
The inheritance is fully tax free, regardless of amount. You do not have to report the inheritance on an income tax return or any other form....
Yes, if the credit card borrowing is for consumer purchases. There is no exemption from cancellation of debt (COD) income for personal borrowing other than a home mortgage if forgiveness is completed ...
Contributions to an HSA are deductible from gross income (page 1 of Form 1040) even if you don’t itemize other deductions. You must file Form 8889 with your return if you had any activity in the acc...
No. CDD fees are imposed by a developer to finance the cost of amenities within a community. HOA fees are imposed by the association. These fees are not treated as taxes even though they relate to you...
Because you are not at least 65 years old by the end of the year, you apply the 10% threshold to all of your itemized medical costs (which include costs related to your mother). If she claimed them on...
While interest on municipal bonds is tax free for federal income tax purposes, gain or loss on the sale of the bonds must be reported. The loss is treated as a capital loss, which is deductible within...
Because you receive a stepped-up basis for the home (equal to its value on the date of your mother’s death), you may have no gain from the sale if it occurs soon. If you sell it for less than this b...
It depends. If you qualify for the home sale exclusion, then gain up to $250,000 ($500,000 on a joint return) is tax free; there is no capital gain. If your gain excludes your applicable exclusion amo...
Roth IRAs are designed for retirement savings. While contributions are not tax deductible, withdrawals of earnings after age 591/2 are tax free as long as the account has been open for at least 5 year...
