News & Articles

Tax Court Settles the Score on Sports Collectibles Activity

Posted on Mon, Nov 17, 2014

Are you a collector of antiques, artifacts or other goods? If your passion evolves into a full-fledged business with a profit motive, you may use a resulting tax loss to offset other income on your return. However, if the IRS classifies the activity as just a hobby -- as it frequently does -- the tax benefits are more limited. In one recent example, the U.S. Tax Court sided with the IRS against a collector of sports memorabilia.

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Tags: Tax, EHTC Article, Tax Court, Hobby vs Business, IRS, Newsletter, Articles, Business Activity Rules, Taxes

Court Decisions Make It Easier to Deduct LLC Losses

Posted on Fri, Oct 31, 2014

What happens if you're the owner of a limited liability company (LLC) that generates tax losses, and you don't spend a lot of time in the activities of the business? The losses might be classified as passive, and your ability to currently deduct them might be severely restricted by the passive activity loss (PAL) rules.

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Tags: Tax, EHTC Article, Business, Tax Court, loss, IRS, Newsletter, Articles, LLC, PAL, passive activity loss, Taxes

Can You Squeeze in a Home Office Deduction?

Posted on Tue, Aug 26, 2014

Normally, a taxpayer may qualify for home office deductions when he or she uses a separate room or clearly divisible space strictly for business purposes.  But what if your place is so small that you can't avoid at least some minimal personal use? That was the situation in a new case decided by the U.S. Tax Court.

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Tags: EHTC Article, Tax Court, Home Office, Newsletter, Articles, Taxes, Home Office Deductions

DOs and DON'Ts for Deducting Meals, Entertainment, and Travel

Posted on Thu, Aug 14, 2014

If you're claiming a deduction for meals, entertainment, auto or travel expenses, expect the IRS to closely review it. Too often, taxpayers have incomplete documentation or try to re-create records months (or years) later. In doing so, they often fail to meet the strict substantiation requirements set forth under tax law and by the IRS. Tax auditors are adept are rooting out inconsistencies, omissions and errors in taxpayers' records, as illustrated by a recent U.S. Tax Court case. (Crawford v. Commissioner, T.C. Memo 2014-156)

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Tags: EHTC Article, Expenses, Business, Tax Court, IRS, Travel, Entertainment, Newsletter, Articles, Taxes, Meals

Can Pension Benefits Be Deducted as Alimony?

Posted on Sun, Jul 13, 2014

When married couples split up, the terms of the divorce or separation agreement can have a major tax impact. For example, any amounts paid for alimony are deductible by the payor and taxable to the recipient.

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Tags: EHTC Article, Tax Court, Alimony, Divorce, Newsletter, Articles, Taxes, Pension Benefits, Child Support

Tax Court Cautionary Tale: Classifying Workers as Contractors

Posted on Mon, Jun 23, 2014

The issue of whether workers should be classified as employees or independent contractors for federal employment tax purposes has been a source of controversy for decades. The saga continues. This article summarizes a recent Tax Court decision on the classification of a manager in the home care industry.

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Tags: EHTC Article, Employers, Tax Court, IRS, Independent Contractor, Articles, Worker Classification, Employee

Tax Court: Contractor Misrepresentations Result in Homeowner Loss

Posted on Mon, Jul 01, 2013

You may assume if you have a valid written contract, the terms will be fulfilled, as long as you keep your end of the bargain. In one recent Tax Court case, a couple deducted a theft loss on their tax return after a home contractor didn't finish a project and left them with costly damage. Read below to see what happened in the case and what you should do to support your case if you find yourself to be the victim of a similar situation.

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Tags: EHTC Services, Contractor Misrepresentations, Contractor Theft, Homeowner Loss, Tax Court, CPA Firm, Echelbarger, Taxpayers Claim a Theft Loss, EHTC