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PostHeaderIcon Tax News – August 13, 2013

No silly intros (or is that what this is?).  Let’s get right to the news.

Yesterday I linked to a story about taxpayers who hadn’t filed their taxes in a while.  One of the tips they recommend is you get a copy of your transcripts.  With that, here’s more information on getting a copy of your transcripts.  It looks like it was cut and pasted from the IRS website but I didn’t check to confirm this.

The IRS announced that they are softening the rules for innocent spouse tax relief.  Under the news, taxpayers have up to ten years to apply for the program in order to stop collections.  The old rule used to be two years.

This article talks about how you can defer taxes on your vacation home by using a like kind exchange.  The rules are tricky for like kind exchanges so if you’re thinking about doing this, get all of your ducks in a row now.  You’ll have to also hire a third party intermediary because you can’t take possession of the money without tainting the exchange.  This article gives a good summary of the rules involved in a safe harbor exchange.

Peter Reilly’s latest discusses when you too many rules collide.  In the Elmer Nuss case, we have divorce, tax and military retirement rules all coming into play.  Things got messy when his VA benefits were reduced but the court case is an interesting read.

 

PostHeaderIcon Tax News – August 12, 2013

I let a short vacation derail my daily tax news updates but now I’m back.  Let’s get caught up…..

The title to this article is a little deceiving but small businesses are getting tagged by the newer 1099-K form.  If you do business via credit card or a third party service like paypal, you will receive a 1099-K from your service provider showing how much your sales were with them.  In the IRS’s effort to get everyone else to do their job for them and the income you report doesn’t at least match what’s on your 1099-K, then it’s going to create a notice.  That’s what is meant by “target” in this article.  If you file a Schedule C for your business (for all of you single member LLC business owners out there), there’s even a special line for putting in your 1099-K income.  If you don’t do the form right, you will probably have some explaining to do so be sure to either do it right, or have someone who knows how to do it prepare the return for you.

In some cases, if you receive money from an estate and taxes aren’t paid on it like you should, the beneficiaries might see the IRS come after them.  This article’s title is also deceiving because in this case, the tax should have been paid and someone got a little crazy with what they did with the money (that is, they lost it).  Then the IRS came after some distributions that were made to the beneficiaries.

If you haven’t filed your taxes in a while, this is a good article on how to get caught up.  I didn’t know there was a special number for tax practitioners so I’ll have to look into that.

In the, “I’ll believe it when I see it category,” we have some discussion on how real estate benefits could be cut if tax reform is enacted.  In some ways, this is already the case with the AMT and the itemized deduction phaseout out there but I don’t see the home interest deduction going anywhere.

Do you think the new 3.8% tax on investment income is going to apply to you?  The IRS recently released a draft of the new Form 8960.  There’s also some links to details on the new tax so if your income is in the higher range, there’s plenty of information here.