Self-Employment Tax and Rental Exceptions
The tax treatment, particularly the application of self-employment taxes, of rental income from real estate investment properties can depend on the nature of the property and how it's operated. In most cases, the IRS considers rental income as passive income....
Appellate court expands excludable personal goodwill in divorce cases
A recent Florida appellate court decision will affect how personal goodwill is calculated in a divorce proceeding. Specifically, the case considered if in a marriage dissolution case, must the value of the personal goodwill of all physician-shareholders in a multi-member...
SR Client Question: Does our HOA need to file a tax return?
Yes, Homeowner Associations (“HOAs") must file a tax return every year. To qualify as an HOA, 60% of revenues and 90% of expenses must relate to the management and maintenance of the properties. Any income that is not from members (i.e.,...
Reasonable Compensation for Determinations of Business Valuations
Closely held businesses often require valuations for various purposes such as securing loans, estate planning, business acquisitions, and strategic planning. One critical aspect of valuing these businesses is assessing the adequacy of compensation paid to owners. Normalization Adjustments Valuing a...
IRS offers penalty relief to ERTC claimants
The IRS has recently highlighted penalty relief options for employers related to claims for the Employee Retention Tax Credit (ERTC). A common scenario occurs when additional income tax is owed because the deduction for qualified wages is reduced by a...
Tax consequences of compensation clawbacks for issuers and executives
Corporate executives with lucrative contracts may face "clawbacks," where previously paid compensation is reclaimed due to policy violations, breaches of agreement, or legal infractions. This situation triggers tax considerations both for the company initiating the clawback and the executives affected....
IRS offers ways to determine Reasonable Compensation in Not-for-Profit and For-Profit entities
The IRS routinely encounters contentious issues in business tax audits, particularly regarding the appropriateness of compensation paid to owners/employees. For example: Businesses that compensate employees who are also shareholders may inadvertently classify payments that should be dividends as compensation. This...
Request a copy of filed 1040 or 1040 transcript with these IRS forms
Filers may seek a copy of a previously filed 1040 federal tax return in two ways: Request a copy of the tax return as filed (Form 4506). This request will provide an exact copy of what filed and the return...
SR Client Question: Can adding my child to our Michigan home’s title prevent the property tax value from uncapping when I pass?
If you add your child as a co-owner of real property, he or she won’t get a full step up in basis when it is sold after your passing. Also, there is a risk of re-assessment for real estate taxes...
SR Client Question: Can you collect unemployment pay if you received severance pay?
An individual cannot collect full unemployment benefits if there is severance pay that is allocated, by the employer, to the weeks of unemployment benefits. If there is no specific allocation of the specific weeks of severance pay by the employer,...