If you are considering buying real estate in New York City, be prepared to pay additional taxes. The Big Apple altered New York State’s ‘mansion tax’ by enacting a scale of graduated rates on homes with a purchase price of $1M or more. The rate starts at 1% and goes as high as 4.15% for homes in excess of $25M.Read More
Tax Warrior Chronicles
Converting a primary residence into a rental property is a common occurrence. With the real estate market on a slight decline, more taxpayers may decide to rent rather than sell their homes to wait out the market. If you’re in this situation, read on so you’re aware of the tax implications of converting your home into a rental property.Read More
As promised last week, we're back at it analyzing the Business Interest Limitation in Section 163(j) of the Tax Cuts and Jobs Act ("TCJA"). In Part I, we learned the general rules, what companies it applies to, and who may elect out. Today, we're going to look at how the section affects real estate and pass-through entities.Read More
By: Matthew Walker, CPA
Have you wondered when is the best time to refinance your home? There’s no simple answer to this question. Generally, if the prevailing rate is 1% better than your current rate, it’s worth it to refinance. But, of course, other factors must be considered. Today, we will look at some of the basic questions you should ask yourself and the lender before you refinance your mortgage.Read More
By: Jane Scaccetti, CPA, MT, PFS
A few years ago, a long-time valued client met me for lunch to discuss various business and tax issues. As we concluded lunch, this 65-year-old man asked, ‘Scaccetti, if I die, promise me you are on the first train to NYC and you will run my business until my son can decide to run it or sell it.” Trained to be a ‘trusted advisor,’ I immediately said, ‘Of course.’ But, prudence soon kicked in.Read More
By: Tim Carroll, CPA, MT
The City of Brotherly Love, home to The Tax Warriors, is high on most lists as a suitable place to live and work. Whether you are a new graduate, in the middle of your career, or a recent retiree, Philadelphia is an attractive choice for a new home. On the other hand, any of the charming surrounding suburban towns could be the ideal place for you. Today, we will examine a few considerations when deciding whether to live in Philadelphia or one of the surrounding suburbs...and, yes, taxes are one.Read More
By: Sean P. Kelly and Chris Catarino, CPA
If you are renovating an older property or looking for a tax-efficient real estate development project, the Rehabilitation Tax Credit may be a lucrative opportunity. Qualifying rehabilitation projects receive a credit for 20% of rehabilitation costs for certified historical structures or 10% of rehabilitation costs for buildings placed in service before 1936.This dollar-for-dollar tax credit can reduce out-of-pocket renovation costs and significantly improve return on investment. Questions abound, and The Tax Warriors® have the answers.Read More
The Court of Appeals for the Third Circuit has held that an over $800,000 bonus payment taxpayers received under an oil and gas agreement was taxable as ordinary income and not as capital gain as the recipients had reported. The receipt of a bonus payment by a lessor, pursuant to an oil and gas lease, is taxable as ordinary income, not as gain from the sale of capital assets. When an owner of the land retains an economic interest in the deposits, the transaction is regarded as a lease.
The Tax Court recently held that a taxpayer that stepped in during the 2008 financial crisis to rescue several related family businesses in which he held interests did so as a material participant, not as an investor. On the facts, the passive activity loss rules of Internal Revenue Code (IRC) Section 469 didn't apply, and he could carry back a large loss to 2006 and generate a refund of over $5 million.
Julie A. Oderio, TC Memo 2014-39