The Tax Professionals Blog

Home Office as Qualified Property for Section 199A Purposes

Posted by Lee Reams Sr., BSME, EA on

A question was raised as to whether a home office can be included in the total of qualified property used in determining QBI when using the section 199A(b)(2)(B)(ii) 2.5% of unadjusted basis of qualified property (UBIA) limitation.

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Disaster Loss FMV Safe Harbor is Misleading

Posted by Lee Reams Sr., BSME, EA on

Rev. Proc. 2018-8 can be quite misleading. Under the “purpose” the Rev. Proc. leads the reader to believe that the Rev. Proc. provides an alternate and more taxpayer-beneficial way of determining a casualty loss. The following is an exact quote from the Rev. Proc. with the misleading wording italicized.  

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Failing to Correct an Excess 401(k) Contribution May Have Consequences

Posted by Lee Reams Sr., BSME, EA on

One of our ClientWhys forum members asked what the options were where a client had changed jobs and total contributions to the 401(k) plans of the two employers exceeded the maximum allowable 401(k) contributions for the year. The client was aware of the excess and reported it to the plan administrator prior to April 1st (the plan’s due date for reversing additional contributions) expecting the plan administrator to distribute the excess prior to the April 15th deadline for making a corrective distribution. However, the plan administrator failed to make the corrective distribution by April 15. So now what happens? Finding...

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Acquisition Debt: Must It Be Concurrent with The Purchase?

Posted by Lee Reams Sr., BSME, EA on

Recently an interesting question arose whether a loan must be obtained simultaneously with the close of an escrow for the purchase of property to be treated as acquisition debt? 

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Lease Buy-Out: Tax Free or Taxable?

Posted by Lee Reams II on

An interesting situation arises when a landlord makes an offer to a tenant to buy out the tenant’s lease. This recently occurred when an apartment building was changing hands and the new landlord wanted all the current tenants out. The new landlord is offering the tenants $35,000 to move out plus giving them three months free rent and also telling them this is all tax free.  

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