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April 29, 2020 11:01 pm

The IRS has not yet provided guidance on what to do if checks are mailed to the wrong address or deposited into the wrong accounts. Eventually everything will be straightened out. This problem illustr...

April 29, 2020 11:00 pm

It depends on whether you itemized medical deductions for the year in which you pay the premiums on the policy you purchased on the individual market. If you took the standard deduction, you don’t r...

April 29, 2020 10:58 pm

Tax-exempt dividends represent interest earned by ETFs or mutual funds holding tax-exempt bonds. Thus, the dividends are reported as tax-exempt interest on the federal income tax return (line 2a of Fo...

March 25, 2020 2:48 am

For income tax purposes, you cannot deduct funeral and burial expenses. If the decedent’s estate was large enough to be subject to federal estate tax, then these costs are deductible on the estate t...

March 25, 2020 2:47 am

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...

March 25, 2020 2:46 am

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...

March 2, 2020 9:07 pm

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. ...

March 2, 2020 9:04 pm

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...

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...

The IRS has not yet provided guidance on what to do if checks are mailed to the wrong address or deposited into the wrong accounts. Eventually everything will be straightened out. This problem illustr...

It depends on whether you itemized medical deductions for the year in which you pay the premiums on the policy you purchased on the individual market. If you took the standard deduction, you don’t r...

Tax-exempt dividends represent interest earned by ETFs or mutual funds holding tax-exempt bonds. Thus, the dividends are reported as tax-exempt interest on the federal income tax return (line 2a of Fo...

For income tax purposes, you cannot deduct funeral and burial expenses. If the decedent’s estate was large enough to be subject to federal estate tax, then these costs are deductible on the estate t...

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...

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 ...

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...

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...

The annual exclusion for 2013 is $14,000 per recipient. This amount is doubled if you are married and your spouse consents to split the gift. If your children are married, you can effectively multiply...

No. The first-time homebuyer credit ended in 2010 and it has not been extended. There’s probably no chance that Congress will change its mind anytime soon because the housing market has picked up....

The annual exclusion for 2013 is $14,000 per recipient. This amount is doubled if you are married and your spouse consents to split the gift. If your children are married, you can effectively multiply...

You can treat the distribution from the IRA as exempt from the penalty if you are disabled. Just be sure that you meet the strict definition of disability that applies in this case. To be disabled in ...

No. The first-time homebuyer credit ended in 2010 and it has not been extended. There’s probably no chance that Congress will change its mind anytime soon because the housing market has picked up....

Usually, the IRS is rather prompt in asking for additional money. You can contact the IRS by calling 800-829-1040 (Monday–Friday, 7:00 a.m.–7:00 p.m. your local time). When calling, have a copy of...

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 ...

If you sell before or after you marry and the sales take place in the year of your wedding, on a joint return you can each use the $250,000 home exclusion. However, if either excludes less than $250,0...

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...

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