The Tax Professionals Blog
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.
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.
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)).
Acquisition Debt - It’s All About the Timing.
Posted by Lee Reams Sr., BSME, EA on
Although in most cases, loans to purchase a residence is secured at the closing of escrow. But what happens when a loan is secured later, does it still qualify as acquisition debt. For example, an individual pays cash for a residence and then later finances it.
Viatical Settlements
Posted by Lee Reams Sr., BSME, EA on
Any amounts received under a life insurance contract on the life of a terminally ill individual are excluded from gross income. Amounts received under a life insurance contract by chronically ill individuals are also excluded from gross income if certain requirements are satisfied. Similar exclusions apply when the amounts are received as a result of a sale or assignment of the life insurance contract to a viatical settlement provider.