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March 2, 2020 9:01 pm

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?” (...

January 20, 2020 9:32 pm

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...

January 20, 2020 9:28 pm

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...

January 20, 2020 9:26 pm

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...

January 5, 2020 10:14 pm

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 ...

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...

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...

Uniform Transfers to Minors Act (UTMA) accounts are owned by a minor, even though a parent or other adult acts as custodian. Once the minor reaches the age of majority (18 in most states), the funds b...

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...

Probably not. An IRA contribution can be based only on earned income. A fellowship or grant type of payment is different from income for services provided. Grant recipients at the NIH are not consider...

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...

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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