Investments Archives

Oct
17
2018

You might save tax if your vacation home qualifies as a rental property

If you own a vacation home and both rent it out and use it personally, classification as a rental property might save tax. Expenses attributable to a rental property aren’t subject to the TCJA’s tightened limits on itemized deductions for property tax and mortgage interest, and losses may be deductible. A rental property generally is one you use for 14 days or less, or under 10% of the days you rent it out,

May
24
2018

Interests in Foreign Accounts

U.S. citizens with interests in foreign accounts must generally file a Report of Foreign Bank and Financial Accounts (FBAR), or face penalties. One taxpayer failed to file an FBAR or to pay the IRS-imposed penalty of $1.2 million. The IRS filed suit. Both a U.S. District Court and the U.S. 9th Circuit Court of Appeals rejected her claims that the penalty violated the 8th Amendment of the Constitution (Excessive Fines Clause) and violated treaty provisions.

Feb
13
2018

Save more for college through the tax advantages of a 529 savings plan

With kids back in school, it’s a good time for parents (and grandparents) to think about college funding. One option, which can be especially beneficial if the children in question still have many years until they’ll be starting their higher education, is a Section 529 plan.

Tax-deferred compounding

529 plans are generally state-sponsored, and the savings-plan option offers the opportunity to potentially build up a significant college nest egg because of tax-deferred compounding.

Jan
25
2018

Tax Cuts and Jobs Act of 2017: Summary and Analysis

To download a PDF version of the below post, please click here:
2017 TCJA Summary and Analysis

**With the recent changes in tax law, we are posting the below as a summary and analysis that we hope will aid in understanding some of the changes in the new tax law that was passed on December 22, 2017. Please note that while efforts were made to assure the accuracy of the below article,

Aug
28
2017

Yes, you can undo a Roth IRA conversion

Converting a traditional IRA to a Roth IRA can provide tax-free growth and the ability to withdraw funds tax-free in retirement. But what if you convert a traditional IRA — subject to income taxes on all earnings and deductible contributions — and then discover that you would have been better off if you hadn’t converted it? Fortunately, it’s possible to undo a Roth IRA conversion, using a “recharacterization.”

Reasons to recharacterize

There are several possible reasons to undo a Roth IRA conversion.

Jul
21
2017

Nonqualified stock options demand tax planning attention

Your compensation may take several forms, including salary, fringe benefits and bonuses. If you work for a corporation, you might also receive stock-based compensation, such as stock options. These come in two varieties: nonqualified (NQSOs) and incentive (ISOs). With both NQSOs and ISOs, if the stock appreciates beyond your exercise price, you can buy shares at a price below what they’re trading for.

The tax consequences of these types of compensation can be complex.

Jul
17
2017

When does your nonprofit owe UBIT on investment income?

In recent years, the IRS has increased its scrutiny of not-for-profits’ unrelated business income (UBI). Dividends, interest, rents, annuities and other investment income generally are excluded when calculating unrelated business income tax (UBIT). However, there are two exceptions where such income is taxable.

1. Debt-financed property

When your nonprofit incurs debt to acquire an income-producing asset, the portion of the income or gain that’s debt-financed is generally taxable UBI.

Jul
14
2017

Own a vacation home? Adjusting rental vs. personal use might save taxes

Now that we’ve hit midsummer, if you own a vacation home that you both rent out and use personally, it’s a good time to review the potential tax consequences:

If you rent it out for less than 15 days: You don’t have to report the income. But expenses associated with the rental (such as advertising and cleaning) won’t be deductible.

If you rent it out for 15 days or more: You must report the income.

Jul
07
2017

Managing the risks of your nonprofit’s special events with insurance

Not-for-profit special events can be lucrative from a fundraising standpoint, but they also carry significant risks. Proper insurance coverage can help protect your organization.

Special event, special planning

Risks associated with special events run the gamut from accidents and personal injury, to fraud and theft, to cancellation due to inclement weather or nonappearance by a featured performer. However, it’s possible to buy designated “special events insurance.”

These policies provide coverage for lawsuits and claims brought by a third party who suffered a loss connected to the event.

Jun
30
2017

Claiming a federal tax deduction for moving costs

Summer is a popular time to move, whether it’s so the kids don’t have to change schools mid-school-year, to avoid having to move in bad weather or simply because it can be an easier time to sell a home. Unfortunately, moving can be expensive. The good news is that you might be eligible for a federal tax deduction for your moving costs.