The Tax Professionals Blog

Excess Deductions on Trust Termination

Posted by Lee Reams Sr., BSME, EA on

There has been some confusion related to the deductibility of excess deductions flowing through to beneficiaries from a trust on Form 1041-K1 upon termination of the trust. Prior to the passage of the TCJA excess deductions on the termination of a trust were included as part of the beneficiary’s tier 2 (subject to the 2% of AGI limitation) miscellaneous itemized deductions.

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In Vitro Fertilization as a Medical Deduction?

Posted by Lee Reams Sr., BSME, EA on

The cost of In vitro fertilization treatment is expensive. Can the payments be deducted as a medical expense and can payments be made from a Flexible Spending Account for In vitro fertilization treatments? 

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401(k) Contribution Limits

Posted by Lee Reams Sr., BSME, EA on

It is not uncommon for individuals to have multiple employers, each with a 401(k) plan. This can possibly create a situation where the employee makes an excess elective deferred compensation contribution.  The maximum annual contribution for 2018 is $18,500 ($24,500 if age 50 and over). These amounts are increased for 2019 to $19,000 and $25,000, respectively.

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Partial Disposition of a Passive Activity

Posted by Lee Reams Sr., BSME, EA on

Any gain or loss from the disposition of a passive activity is generally also passive. However, special rules apply to dispositions.

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Insight: Basis of Property Transferred Between Spouses Incident to a Divorce

Posted by Lee Reams Sr., BSME, EA on

When one spouse transfers property to another spouse the basis of the recipient spouse is the same as the transferor-spouse's adjusted basis in the property (Code Sec. 1041(b)).  

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