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August 27, 2020 10:41 pm

A business that loses money year after year may draw the attention of the IRS; it may question whether this is a business with a profit motive or a mere hobby activity for which losses (expenses in ex...

August 27, 2020 10:39 pm

For the costs of assisted living to be deductible as an itemized medical expense, the resident must be chronically ill. This means the resident is (1) unable to perform at least two of the six activit...

August 27, 2020 10:38 pm

The IRS interest rate on underpayments is set quarterly. For the third quarter of 2020 (July 1 through September 30), the rate for an individual is 3%. Interest compounds daily. It’s wise to request...

July 15, 2020 11:24 pm

Check with your new financial institution to see whether it offers fee reimbursement (some do). You may add the $20 out of pocket to complete the rollover amount, but this must be done within 60 days ...

July 15, 2020 11:23 pm

Yes. Whether you’re paid in cash, property, or services, you must report it all as rent. If you’re accepting the services as equal to the rent owed to you, then that means the fair market value of...

July 15, 2020 11:22 pm

No. Payouts from a long-term care policy for long-term care are tax free....

July 15, 2020 11:21 pm

There is no such deduction allowed for 2019 returns. The $300 limit on charitable contributions by individuals using the standard deduction is allowable only for 2020 returns (unless Congress extends ...

June 1, 2020 10:54 pm

Economic Impact Payments are tax credits. As such, they cannot automatically be taken by nursing homes or assisted living facilities. The payments don’t count as “resources” for federal benefits...

June 1, 2020 10:53 pm

The company deducts the expenses related to the truck because it belongs to it. However, your spouse’s personal use of a company vehicle is a taxable fringe benefit. The amount usually is reported a...

June 1, 2020 10:34 pm

The wash sale rules bar an individual from recognizing a loss from the sale of securities if substantially identical ones are purchased within 30 days before or after the date of sale. The loss become...

A business that loses money year after year may draw the attention of the IRS; it may question whether this is a business with a profit motive or a mere hobby activity for which losses (expenses in ex...

For the costs of assisted living to be deductible as an itemized medical expense, the resident must be chronically ill. This means the resident is (1) unable to perform at least two of the six activit...

The IRS interest rate on underpayments is set quarterly. For the third quarter of 2020 (July 1 through September 30), the rate for an individual is 3%. Interest compounds daily. It’s wise to request...

Check with your new financial institution to see whether it offers fee reimbursement (some do). You may add the $20 out of pocket to complete the rollover amount, but this must be done within 60 days ...

Yes. Whether you’re paid in cash, property, or services, you must report it all as rent. If you’re accepting the services as equal to the rent owed to you, then that means the fair market value of...

No. Payouts from a long-term care policy for long-term care are tax free....

There is no such deduction allowed for 2019 returns. The $300 limit on charitable contributions by individuals using the standard deduction is allowable only for 2020 returns (unless Congress extends ...

Economic Impact Payments are tax credits. As such, they cannot automatically be taken by nursing homes or assisted living facilities. The payments don’t count as “resources” for federal benefits...

The company deducts the expenses related to the truck because it belongs to it. However, your spouse’s personal use of a company vehicle is a taxable fringe benefit. The amount usually is reported a...

The wash sale rules bar an individual from recognizing a loss from the sale of securities if substantially identical ones are purchased within 30 days before or after the date of sale. The loss become...

If you itemize deductions, likely the convenience fee is tax deductible. The IRS hasn’t said whether this specific convenience fee is deductible as part of your real estate taxes (which has no incom...

There’s no clear answer, and you may have to argue your position for this deduction if your return is questioned. On the one hand, the Tax Court allowed a deduction for the extra cost of organic foo...

If the CD is in a tax-deferred or tax-free account, such as an IRA or Roth IRA, interest on the CD is not currently taxed; the rollover of the CD when it matures is not a taxable event. If the CD is i...

The above-the-line deduction for tuition and fees for higher education can be claimed by a taxpayer only for him/herself, spouse, or dependent. If your grandchild is your dependent, then you qualify f...

While Medicare does not cover the cost of long-term care services, they may qualify as a deductible medical expense. Since your spouse is chronically ill and requires personal care services, the cost ...

Capital losses can be carried forward only to offset capital gains (and up to $3,000 of ordinary income) in future years. The capital losses of a deceased spouse can be used on the final joint return,...

These two tax breaks, along with more than 4 dozen more, expired at the end of 2013. To date, they have not been extended, but later this year or even in 2015 Congress could reinstate them retroactive...

The favorable rule allowing debt forgiveness on a principal residence mortgage up to $2 million expired at the end of 2013. It could be extended, but given the resurgence in the housing market, it may...

First, you must determine whether this was a business or nonbusiness bad debt. A business bad debt is fully deductible as an ordinary loss; a nonbusiness bad debt is treated as a short-term capital lo...

No. An individual’s charitable contributions can be deducted only as an itemized deduction. Even if the rental property is a trade or business, with income and expenses reported on Schedule C rather...

The IRS says: “For the year of the account owner’s death, use the RMD the account owner would have received. For the year following the owner’s death, the RMD will depend on the identity of the ...

The special capital gain rates are supposed to allow taxpayers to pay less tax on these gains than on ordinary income. Thus, the special 28% capital gains rate for collectibles applies for taxpayers i...

Yes. The deductions for mortgage interest and real estate taxes are separate items. Claiming one has no impact on claiming the other. The only limitation on the deduction for property taxes is the app...

No. Gifts are not taxed to the recipient, regardless of amount or whether they are from people in or outside the United States. If you make gifts, you need to check on whether you must pay any gift ta...

Probably not. A revocable trust of which you are a trustee and beneficiary is a grantor trust. You are taxed on the income from this trust to the same extent that you would be if there were no trust. ...

Yes, assuming you each meet the eligibility tests for the home office deduction. Each of you would need to complete a separate Form 8829 and attach it to your separate Schedule Cs if you figure the de...

Tax rates are applied to taxable income, not to adjusted gross income (AGI). Taxable income is arrived at by subtracting your personal exemptions and the standard deduction or itemized deductions from...

Unfortunately, no. The fees were payable by the estate and deductible only by the estate. If there had been a federal estate tax, you would have been entitled to a write-off for the federal estate tax...

If you take a deduction for a bond premium, you must reduce the basis of the bond by this amount. If you sell the bond before maturity, you’ll have a capital gain if the selling price exceeds your b...

While the fundamental rules are the same for estates of those who died in 2012 and those who die this year, some of the important numbers are different. For example, the exemption amount (the value of...

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