As taxpayers are preparing their 2020 income tax returns, several will face questions related to remote working. Can they deduct employment related expenses for new furniture, new equipment, and other items to facilitate working remotely? Can they take a home office deduction? In what state(s) should they file income tax returns? These questions are nothing…
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When starting a new business, an important consideration to is to determine at what point expenses become deductible as a business expense under §162[1] as opposed to being classified as startup expenditures which must be amortized over 15 years under §195[2]? In general, expenses eligible to be deducted as an ordinary and necessary expense of…
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On January 7, 2021, the IRS issued final regulations under § 1061 of the Internal Revenue Code (“Code”)[1]. These final regulations largely adopt the proposed regulations issued in July 2020[2] but contain a number of taxpayer favorable changes. As discussed below, the rules under § 1061 can apply in a number of situations such as…
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In a recent case from the Fourth Circuit Court of Appeals, Mann v. U.S., 127 AFTR 2d 2021-XXXX (4th Cir. Jan. 6, 2021), the Court determined that the donation of a house which was subject to demolition failed to satisfy two requirements under Section 170 of the Code. First, the taxpayer failed to donate the…
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Introduction The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) authorized approximately $350 billion to fund the Paycheck Protection Program (“PPP”). The PPP was designed to provide a direct incentive for small businesses to keep their workers on the payroll via potentially forgivable loans (“PPP Loans”), assuming certain criteria were met. The Consolidated Appropriations…
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Hobby loss tax rules of IRC § 183 are nothing new. However, there are a couple of recent developments that make the application of those rules especially relevant: Starting in 2018, the Tax Cuts and Jobs Act (“TCJA”) went into effect. Under the TCJA, taxpayers lost the ability to take miscellaneous itemized deductions. Previously, taxpayers…
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In recent elections, Mississippians overwhelmingly voted to pass Initiative 65 legalizing medical marijuana. This paves the way for an entire new business industry to operate in Mississippi, creating opportunities for business owners, investors, and those who serve them. With businesses possibly being allowed to open sometime in the summer of 2021, it will be important…
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INTRODUCTION In a prior article, Charles J. Allen previously discussed the tax plans of the democratic presidential candidates, while Josh Sage discussed some of Biden’s potential changes here. With the Associated Press calling the presidential race for former vice president Joe Biden on November 7th, time is running short for many taxpayers to take advantage…
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Introduction A couple of years ago, I wrote about the state income taxation of trusts.[1] Since that time, there have been some significant developments relating to the issues raised in that writing. Primary among those developments include the United States Supreme Court decision in the Kaestner[2] case and the United States Supreme Court’s decision to…
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In a recent opinion out of the United States Court of Appeals for the Tenth Circuit, the Court affirmed the Tax Court’s decision denying taxpayers loss on the sale of a residential property as well as depreciation deductions on property that was purportedly used in taxpayer’s business.[1] Additionally, the Court upheld the imposition of the…
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