The Tax Professionals Blog
Rentals & Section 199A Qualified Business Income Deduction – Unanswered Questions?
Posted by Lee Reams Sr. on
Neither the statute nor the committee reports directly addresses whether a rental is trade or business in the context of Section 199A.Careful Making Out Those Tax Extensions
Posted by Lee Reams Sr. on
The 4868 Automatic Extension form includes Part II where the amount of the year’s tax liability is determined.
Taking Advantage of the Zero Tax on Long-Term Capital Gains
Posted by Lee Reams Sr. on
Taxpayers whose top marginal tax bracket is less than 25% enjoy a long-term capital gain tax rate of zero. As a result, the tax on any long-term capital gains within the 10% or 15% tax bracket is zero for these taxpayers. This provides an interesting strategy for lower income taxpayers or those whose income is abnormally low due to other reasons
Recaptured and Unrecaptured Real Estate Rental Section 1250 Gain
Posted by Lee Reams Sr., BSME, EA on
A frequent question we receive is the tax treatment of recaptured depreciation from the sale of real estate rental property. Gain from selling Sec 1250 property (real estate) is subject to recapture – the excess of the actual amount of depreciation previously claimed for the property over the amount of depreciation that would have been allowable under the straight-line method, limited to the gain on the sale, is taxed as ordinary income. However, this means that as long as the property is being depreciated using a straight-line method and held over a year, there is no Sec 1250 recapture but there will be “unrecaptured Sec 1250 gain,” which is taxed at a maximum rate of 25%.Tracing Rules That Apply For Deductibility Of Interest
Posted by Lee Reams Sr. on
One of the more complicated, misunderstood and often-violated tax issues is the interest tracing rules. Even though you can encounter some complicated situations, the tracing rules are generally summed up as follows: