Tax

Selling Residences: Income Tax Treatment

Generally, under the Internal Revenue Code, you will be forced to pay taxes on any transaction that involves real estate and produces a gain at the time of the sale. However, if you sell your house, the Internal Revenue Code gives taxpayers a special tax treatment.

Tax Treatment of Like Kind (§1031) Exchanges

What is Like Kind Exchange? "Like kind exchanges" are exchanges of property for the same kind of property. This is the most common kind of exchange that is nontaxable under the Internal Revenue Code. Like kind exchanges are not just for the wealthy taxpayers. Many taxpayers find themselves running into, or at least facing, the concept of like kind exchanges.

Tax Treatment of Rental Income

What is Rental Income? Payments received from a person or entity that is using property owned by you are typically considered rental income. You must report in your gross income all income received as rent.

What is a Capital Gain?

The concept of capital gains is a specification in the Internal Revenue Code that gives preferential treatment to the sales of certain specified assets. Why is this important? Because, if you buy a specified item and hold it for the specified period of time, the proceeds on the sale of the item are taxed at a rate that is preferable to the rate of many of the tax rates in effect at the time.

What are Dividends?

Payments received from a corporation are typically considered dividends. These are taxed at ordinary income rates. The Internal Revenue Service reasons that since they are paid from the earnings and profits of a corporation, they are ordinary income to you, the recipient.

Tax Return Considerations - Home Office Deductions

Each year, the Internal Revenue Service faces pressures from those taxpayers who legitimately utilize a portion of their home as an office. In the past, claiming a "home office" deduction, or the deductions for some of the expenses related to otherwise normal home ownership, triggered a "red flag" that would inevitably increase one's chances of audit.

Important Facts about Tax Audits

"An IRS Audit." Those words can often strike fear into the minds of normal law-abiding citizens. Knowing some of the basic IRS principles can help to take the fear out of an audit and even make you feel as if you are comfortably ready to go through with the process.