Tax

In the past, if a taxpayer took a distribution from a traditional IRA account before he or she reached age 59 1/2, the withdrawal was generally subject to a 10% penalty. Under IRC section 72(t)(2)(A)(iv), however, IRA account owners who retire early can avoid this penalty by electing to receive

A veteran tax practitioner, Leonard Podolin, was the latest recipient of the AICPA tax division’s Arthur J. Dixon Memorial Award. David A. Lifson, chairman of the tax executive committee, gave the award to Podolin at the National Conference on Federal Taxes in Washington, D.C. The tax division presents the award

Although the AICPA is prepared to help the government curb abusive tax shelters, it also wants to ensure that taxpayers can legally minimize their tax liabilities. That was the message David A. Lifson, chairman of the AICPA tax executive committee, brought to the House Ways and Means Committee during recent

Individuals who own vacation homes or condominiums frequently rent them out to others. These short-term rentals often last seven days or less. Owners typically hire a property management company to oversee rental reservations, promotions, housekeeping, maintenance and general accounting functions. The owners make incidental repairs, meet with management and perform

Taxpayers frequently incur expenditures on behalf of clients that the client later reimburses. Is the taxpayer entitled to deduct these expenditures, or are they considered nondeductible advances? What is the effect of changing the accounting for these expenditures? Pelton & Gunther (P&G) is a professional legal corporation that specializes in

Retired Lawyer Deducts Malpractice Policy At the time of his retirement, Merlin A. Steger purchased an insurance policy for nonpracticing lawyers. It provided professional liability coverage for any acts, errors or omissions he had committed before he retired. Steger deducted the entire cost of the malpractice policy on schedule C

Kenneth S. Apfel, commissioner of Social Security, announced a 2.4% cost-of-living adjustment in benefits (COLA) for the year 2000. The average monthly benefit for retired workers will rise to $804 from $785, and the maximum monthly Supplemental Security Income payment will rise to $512 from $500. He also announced that,

In a letter ruling late last year, the IRS said that one spouse could have a community property interest in the other’s IRA and that the reclassification of an IRA as marital property was not a taxable distribution. The IRS also said, however, that if a spouse transferred his or

Under a 1995 divorce judgment, Richard Czepiel was ordered to pay, “as a further division of the marital property,” $29,000 to his ex-wife Kathleen. Czepiel’s only assets at the time were $33,000, which he had on deposit in two separate IRAs. In order to satisfy the terms of the judgment,

Tax Pros Get New IDs All tax returns must include a number by which the return preparer can be identified. Currently, individual preparers must use their social security numbers. New regulations, effective for returns filed after December 31, 1999, allow preparers to elect an alternative number. The IRS is developing

The earned income credit (EIC) is designed to encourage low-income individuals to become gainfully employed. It is a refundable credit—one that the taxpayer may receive even when no tax is due. In essence, it’s a negative income tax. In many situations, more than one member of the same family may

Defining an Affiliated Group A n affiliated group of corporations can elect to file a consolidated tax return. One of the advantages of doing so is the ability to net a loss from one corporation against the profits of another. To be a member of an affiliated group, the group