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Recent Deduction questions

I work from home, I deduct expenses using Home Use expenses

I work from home , I deduct expenses using Home Use expensesusing a certian % use of homeI just had to invest in a new A/C for my houseof about $7,500 got a loan for for 36 months to pay for ithow can I deduct the proportinal % of this investment ?or do I need to depreciate this in 5 year or 7 years or how many years?

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Mark Taylor

Certified Public Accountant

Masters

1,262 satisfied customers
Is the health insurance premium paid by an S Corp for a 2%

Is the health insurance premium paid by an S Corp for a 2% shareholder a reduction to his stock basis? The shareholder did all the necessary things. He got a W-2 for the amount of the premium so that his income was increased on line 7 of the form 1040 by the amount of the premium. And he got the deduction for SE health insurance on line 29 of the 1040. The K-1 form for the S corp shows the deduction for SE health insurance in box 12 of the K-1 form. I have looked at the instructions for the 1120S K-1 form and the form 1040. But I cannot figure if the stock basis is reduced by the health insurance premium

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Mark Taylor

Certified Public Accountant

Masters

1,262 satisfied customers
I have a question regarding mileage deduction for Schedule

I have a question regarding mileage deduction for Schedule CJA: The Accountant will know how to help. Please tell me more, so we can help you best.Customer: I am self-employed and I file a Schedule C with itemized deductions, one of which is the business mileage deduction. My question is, if I leave from my home, drive to the post office or office supply store for a business-only errand, and then drive from that location to my permanent office, can I deduct the mileage traveled from my home to the errand?JA: Is there anything else the Accountant should be aware of?Customer: I would also like to know if this deduction applies in reverse, as in I drive from my office to the business errand and then from the errand home.

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Mark Taylor

Certified Public Accountant

Masters

1,262 satisfied customers
I volunteer 4 -6 hours a month as a sponsor to a non profit

I volunteer 4 -6 hours a month as a sponsor to a non profit and the earned revenue goes to a registered 501 3c. I get paid $25 per hour for being a sponsor. Can I claim a contribution deduction on my personal income tax?JA: The Accountant will know how to help. Is there anything else important you think the Accountant should know?Customer: no

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Robin D.

Vocational, Technical or Trade School

21,216 satisfied customers
A 94 year old female has medical expenses over 300,000. And

A 94 year old female has medical expenses over 300,000. And an income of around 200,000. An ira distribution of 45,000 and is being advised to send the whole amount to a charitable originization to avoid paying taxes. Is a this right≥. She is on medicare

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Mark Taylor

Certified Public Accountant

Masters

1,262 satisfied customers
If a friend or family member loans someone money, does the

If a friend or family member loans someone money, does the person lending the money have to charge interest?And is there a minimum of interest they must charge?Thank you,Fred

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emc011075

Tax advisor and Enrolled Agent

Bachelor's Degree

4,222 satisfied customers
Question on tax treatment of capital gains in the final year

Question on tax treatment of capital gains in the final year of a trust.A marital deduction trust was created in 1998 upon the decease of a husband. The trust invested in a diversified stock portfolio and has remitted all dividend income generated over the years to the income beneficiary, the surviving widow. Per the trust document, capital gains and/or principal may be remitted as well if needed by the widow , but over the life of the trust this was never necessary or done.Each year, capital gains and losses from transactions in the trust were offset, or loss carryforwards used, to zero out the trust's capital gains and losses on the trust's tax return. Income was reported on K1 to the income beneficiary who paid income taxes on it.The income beneficiary passed away this year (2016), the stock portfolio was entirely liquidated, generating net capital gains, and the trust assets (all cash now) will be distributed to the designated heirs/beneficiaries. (There are two children and four grandchildren.)Questions:1. Must the trust itself pay the taxes on the final-year capital gains generated?2. I believe it is not permitted to remit net capital gains to the beneficiaries in this case. True?3. Instead may we remit gross gains and losses to the beneficiaries, some of whom have a lower tax rate? (I believe so)4. Do we have discretion on which approach to use? If both ways are permitted, does the IRS look on the latter approach, with its lower tax result, as particularly aggressive, a red audit flag, etc.?Background:I'm no expert but the online commentary on the Regs do suggest that the trust may remit the gross capital gains, reporting on a K1, pro rata to the remainder beneficiaries, and also remit the gross losses in the form of loss carryforwards that each beneficiary can apply against their share of gains, all of this on their personal tax returns in the same year, 2016. I get this from online commentaries on §1.643(a)-3(b) and §1.642(h)-1.(It is assumed that the ordinary income (dividends) generated by the trust after the widow's death will be distributed to the remainder beneficiaries, who will pay income tax on it.)

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Stephen G.

Sr Financial & Tax Consultant

Bachelor's Degree

9,022 satisfied customers
Taxpayer owns multiple family S Corporations and

Taxpayer owns multiple family S Corporations and partnerships which feed into his form 1040. Taxpayer receives a W-2 fromonly one of the entities which shows a significant profit after the W-2 deduction. A couple of the entities reflect SE income and the others do not. Need some guidance on what entities are exempt from NIIT.

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Lane

JD, MBA, CFP, CRPS

Doctoral Degree

17,750 satisfied customers
I am about to set up a C-Corporation and a business bank

I am about to set up a C-Corporation and a business bank account for the company once it is registered. I want to check if any expenses I have paid for relating to the business prior to the incorporation date can be used as part of expenses to offset against future profits (eg accountancy consultation fees paid before the business is trading) ?If this can be done, in terms of time, how far back can the expenses be claimed prior to the incorporation date?

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PDtax

Owner

Master's Degree

6,994 satisfied customers
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