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January 5, 2020 10:11 pm

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...

January 5, 2020 10:09 pm

Capital improvements made to a principal residence are not tax deductible. Instead, they are added to the basis of the home (usually what you paid for it). This increased basis serves to reduce the am...

November 25, 2019 10:16 pm

The spread between the fair market value of the shares on the date of exercise and the amount paid for the shares is a tax preference item for purposes of the AMT in the calendar year in which ISOs ar...

November 25, 2019 10:14 pm

Employees cannot deduct any unreimbursed employee business expenses in 2018 through 2025. However, you may be eligible for certain “above-the-line” deductions that can be taken without itemizing, ...

November 25, 2019 10:12 pm

It appears that your daughter is your dependent, assuming she’s listed as such on your return. But whether you qualify to take the American opportunity credit or the lifetime learning credit depends...

October 6, 2019 10:47 pm

When you have a casualty event and receive insurance reimbursements that are greater than your adjusted basis in the property, for tax purposes you have a gain (even though you may feel like you’ve ...

October 6, 2019 10:45 pm

If you are reimbursed under an accountable plan, then reimbursements may be tax free. For example, if reimbursements for your mileage exceed the IRS standard mileage rate, then only amounts up to the ...

August 20, 2019 12:02 am

No. Depending on your income (including tax-exempt interest) and your filing status, as much as 85% of Social Security benefits may be includible in gross income. If your income is lower, you may only...

August 20, 2019 12:00 am

The deduction from gross income (no itemizing required) for tuition and fees expired at the end of 2017. However, there is still some hope that it may be extended retroactively for 2018. And there is ...

August 19, 2019 11:58 pm

Cash contributions made to charity in 2018 and beyond are deductible up to 60% of adjusted gross income. If you have a carryover of a cash contribution because of the application of the 50% limit that...

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...

Capital improvements made to a principal residence are not tax deductible. Instead, they are added to the basis of the home (usually what you paid for it). This increased basis serves to reduce the am...

The spread between the fair market value of the shares on the date of exercise and the amount paid for the shares is a tax preference item for purposes of the AMT in the calendar year in which ISOs ar...

Employees cannot deduct any unreimbursed employee business expenses in 2018 through 2025. However, you may be eligible for certain “above-the-line” deductions that can be taken without itemizing, ...

It appears that your daughter is your dependent, assuming she’s listed as such on your return. But whether you qualify to take the American opportunity credit or the lifetime learning credit depends...

When you have a casualty event and receive insurance reimbursements that are greater than your adjusted basis in the property, for tax purposes you have a gain (even though you may feel like you’ve ...

If you are reimbursed under an accountable plan, then reimbursements may be tax free. For example, if reimbursements for your mileage exceed the IRS standard mileage rate, then only amounts up to the ...

No. Depending on your income (including tax-exempt interest) and your filing status, as much as 85% of Social Security benefits may be includible in gross income. If your income is lower, you may only...

The deduction from gross income (no itemizing required) for tuition and fees expired at the end of 2017. However, there is still some hope that it may be extended retroactively for 2018. And there is ...

Cash contributions made to charity in 2018 and beyond are deductible up to 60% of adjusted gross income. If you have a carryover of a cash contribution because of the application of the 50% limit that...

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...

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