Tax

IRC section 72(t) imposes a 10% penalty on early distributions (before age 59½) from qualified retirement plans. IRA distributions are exempt from this penalty if they are made on account of death or disability or if the payments qualify as substantially equal. However, if substantially equal payments are modified before

Taxpayers with earned income have until April 15, 1999, to open a Roth IRA and have it count as starting on January 1, 1998. Taxpayers who already have a traditional IRA can convert part or all of it to a Roth IRA if their adjusted gross income doesnt exceed $100,000.

At the request of National Taxpayer Advocate W. Val Oveson, the AICPA tax executive committee recently provided a list of the 24 most serious problems encountered by U.S. taxpayers. Complexity of the current tax law topped the list. We dont need a new tax code, said David A. Lifson, chairman

When taxpayers realize losses, they generally prefer to classify them as ordinary business losses rather than capital losses. In the case of the financial misadventures of Richard L. Matz, this was not to be. Matz claimed ordinary business losses and interest deductions totaling over $4 million for failed start-up companies

On October 28, 1998, the National Federation of Independent Business (NFIB) obtained its one millionth signature in a crusade to abolish the Internal Revenue Code. At a rally celebrating the milestone, Jack Faris, president of the NFIB, said it would keep the effort to scrap the code going strong. The

If a corporate taxpayer decides to cancel a leaseeven for a valid business purposeit may be required to pay a cancellation fee. If a fee is paid, may the taxpayer deduct it or must it be capitalized? The Tax Court considered this question in a recent case. U.S. Bancorp leased

Tax Brief INDIVIDUAL Individuals are allowed to give away up to $10,000 in gifts per calendar year tax-free. Under state law, for a gift to be complete there must be (1) a competent donor, (2) a donee capable of receiving and possessing the gifted property, (3) delivery of the property

Tax man Arthur M. Friedman accepts Dixon Award from David A. Lifson. Although Arthur M. Friedman traveled to many interesting places during his 38-year career with Arthur Andersen, he may consider the trip he made to Washington, D.C., the most memorable. It was during that visit last fall that Friedman

LINE ITEMS Under Protest On April 15, 1992, Lawrence McCormick filed and signed his 1991 tax return, but wrote under protest beneath his signature. The IRS did not consider the return to be properly filed and penalized the taxpayer for filing a frivolous return. The district court in New York’s

Tax Case In today’s rapidly changing global economy, most companies find it necessary to expand to stay competitive. This expansion can be accomplished either by acquiring another business or expanding internally. Are the costs of internal expansion deductible for tax purposes? FMR Corp. provides investment management services to mutual funds.

The bill that imposes an eagerly awaited three-year ban on new Internet-access taxes, the Internet Tax Freedom Act, went into effect beginning October 1, 1998. Buried almost halfway through the roughly 4,000 page, 1999 Appropriation Bill signed into law by President Clinton late last year, the Internet tax ban has

Beginning next year, taxpayers will be able to charge their taxes to a major credit card. As part of its plan to increase electronic filing and payment of taxes (the goal is to receive 80% of all returns by 2007), the IRS entered into agreements with private companies to provide

LINE ITEMS What an Improvement! In the past, the IRS allowed real estate developers to allocate the cost of common improvements (for example, recreational facilities) among lots in a residential subdivision to expedite their sale. The Tax Court has now extended this allocation principle to commercial real estate developments as

Comparing the risks of Roth IRAs versus traditional IRAs means weighing a future unknown benefit against a certain one. Traditional IRAs have immediate tax savings. Roth IRAs, on which taxes are prepaid, may have a future benefit that is less than the prepaid tax. Specifically, there are three risk factors