As certain as I am that General Hospital will exceed 13, 125 episodes, as a CPA, you will be asked to serve on a governing board of a nonprofit. Serving on a nonprofit board is a big commitment. The question you need to ask yourself is, are you ready? Continue Reading »

In PLR 201431036 (http://www.irs.gov/irs-wd/201431036.pdf) the IRS granted relief from the 60 day rollover period to a taxpayer who intended to take funds out of the IRA to benefit from a short term investment opportunity—the type of situation that advisers might expect would not lead to an IRS waiver of the rollover period. As you might expect, though, the particular facts of this situation was likely key to obtaining relief.

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In the case of Schumann v. Commissioner, TC Memo 2014-138, http://www.ustaxcourt.gov/InOpHistoric/SchumannMemo.Kerrigan.TCM.WPD.pdf, a number of issues related to passive activities and rental real estate were before the court.  However an interesting issue arose as a taxpayer discovered that positions taken in one legal proceeding can come back to haunt the taxpayer in another.

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If a taxpayer sells a rental property formerly used as the taxpayer’s principal residence that has been used as a rental, there is the possibility that §121 may be available to be used to exclude gain from the sale of the rental.  But if the rental activity has unused passive losses, does invoking §121’s gain exclusion prevent the ability to release the excess losses under IRC §469(g)(1)’s special rule for dispositions?

Generally, IRC §121 allows for exclusion of up to $250,000 of gain ($500,000 for a married couple filing a joint return) from the sale of property that was owned and used by the taxpayers as their principal residence for two of the five years immediately before the sale.

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Reasonable reliance on a tax professional can serve to get taxpayers out of the accuracy related penalty of IRC §6662.  In the case of English v. Commissioner, TC Summary Opinion 2014-66, http://www.ustaxcourt.gov/InOpHistoric/EnglishSummary.Gerber.SUM.WPD.pdf, the taxpayers were able to use what turned out be erroneous advice to escape the penalty (albeit, not the tax) on an assessment.

Cheryl English had been receiving disability payments from Hartford Insurance after she became disabled in 2007 and could no longer work.  The policy provided that her benefits would be reduced if she qualified for Social Security disability benefits.  While she applied for such benefits in 2007, she did not receive any in 2007, 2008 or 2009.

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In Chief Counsel Advice 201427016 (http://www.irs.gov/pub/irs-wd/201427016.pdf) the IRS addressed the question of whether there’s an impact on whether a taxpayer may qualify as a real estate professional depending on whether or not the taxpayer makes an election to combine rental properties under Reg. §1.469‑9(g).

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The IRS unveiled a new voluntary Annual Filing Season Program in response to the Service’s loss in the case of Loving v. IRS, 742 F.3d 1013,113 AFTR 2d 2014-867, (D.C. Cir. 2014) in its attempt to provide a mandatory preparer licensing program.  The details of the new program are found in Revenue Procedure 2014-42, http://www.irs.gov/pub/irs-drop/rp-14-42.pdf.

The program is designed for preparers who not attorneys, CPAs or enrolled agents—what are referred to as “unenrolled preparers” generally.  The ruling revokes, effective for returns and claims for refunds signed after December 15, 2015, Revenue Procedure 81-38.

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