Tax

LINE ITEMS Sale and Repurchase of Capital Assets Under the Taxpayer Relief Act of 1997, new maximum capital gain rates went into effect January 1, 2001: the 20% capital gain rate was lowered to 18%, provided a property is held for more than five years and the holding period began

Back Wages and Payment of FICA and FUTA Wage earners generally are required to pay FICA taxes in the year they receive their wages, computed at the applicable rates for that year. Likewise, employers are required to pay both FICA (IRC section 3111) and FUTA (IRC section 3301) in the

Accrual-Method Requirement Dropped for Some Service Providers In Chief Counsel Notice CC-2001-010, the IRS announced a change in its litigation position that certain taxpayers must use the accrual method of accounting. The IRS previously had told many cash-basis taxpayers, such as physicians and contractors, who provide services, that their use

TAX BRIEF When a Gift Is Not a Gift The Second Circuit Court of Appeals recently held that a person could not reduce her estate by writing checks to family and friends before her death. Because the checks were paid after she died, the gifts were not completed. Furthermore, the

Shopaholic Wife, Clueless Husband A husband and wife were married for more than 20 years. The wife paid the bills, handled the banking and controlled the family’s finances. The husband rarely wrote a check. Early in their marriage, the wife was convicted of a felony after embezzling from her employer.

With the increased number of LLCs operating today, the Treasury Department and the courts frequently are called upon to determine the correct taxation of these entities when they elect partnership treatment. A district court, in a case of first impression, considered how the passive loss rules applied to an LLC.