Purchasing and renting real estate can be profitable. It can also generate significant tax benefits. However, the Internal Revenue Code limits some of the tax benefits to taxpayers who are not “real estate professionals,” as defined in IRC Section 469(c)(2). In most circumstances, real estate rental activities are passive activities. The losses from a passive [...]
In Scharf v. Comm’r 32 T.C. Memo 1247 (1973) acq, in result, 1974 WL 36031, the United States Tax Court decided, and the IRS had acquiesced to the decision, that a charitable contribution deduction was available for the donation of a building (albeit partially destroyed) to a volunteer fire department for demolition in firefighter training [...]
In the early 1980s, there was an almost endless supply of tax shelters promising deductions and credits that produced benefits far in excess of the investor’s contribution. These shelters were not just for wealthy, promoters pushed them on the average income earner as both a great business opportunity and an investment that would more than [...]
This is the third post in the Collection Options series. This series is dedicated to presenting individuals and businesses with options for dealing with outstanding tax obligations. Audit Reconsideration. Through audit reconsideration, a taxpayer may get a second chance at an audit. He may have been previously notified of an audit but been unable to [...]
The audit examination process is one of the procedural safeguards the IRS uses to ensure taxpayers are complying with our voluntary tax system. Being selected for an Internal Revenue Service (IRS) audit examination does not, however, necessarily mean that the taxpayer did not comply, filed his or her return incorrectly, or abused the system. In [...]