Category: Houston

The “leveraged partnership distribution” or “disguised sale” is a common tax savings technique used by real estate owners. Taxpayers pushed the envelope with these transactions by using “bottom dollar guarantees.” This led to guidance from the government making it more… Read More The post Final Regulations Issued: Leveraged Partnership Distributions Still Viable appeared first on Houston…

Congress provides tax incentives to change taxpayer behavior. If a taxpayer changes their behavior to take advantage of the incentive, they have to do so carefully. The IRS and the courts can apply the economic substance doctrine to take away… Read More The post The Broad Reach of the Economic Substance Doctrine appeared first on Houston…

We have previously considered the “trade or business” requirement for the Section 199a deduction. The government recently issued guidance to clarify when rental real estate activities can qualify for the deduction. While the guidance is needed, it adopts a record… Read More The post Documenting the Sec. 199a Rental Real Estate Safe Harbor appeared first on…

Long-term projects often lose money. They often do so for several years. This is the result of a project that needs capital to build infrastructure or to develop a new market or to capture market share. Taxpayers may be disappointed… Read More The post Avoiding Hobby Loss Limits for Long-Term Projects appeared first on Houston Tax…

If a taxpayer regularly makes real estate loans from their personal accounts, they would be entitled to a bad debt deduction for loans that are not repaid. But what if they venture beyond real estate loans and make a single… Read More The post Bad Debt Deduction for Real Estate Lender for Non-Real Estate Loan appeared…

Short-term rental properties are more popular than ever. Online services like Airbnb have made this possible. But how are tax losses from short-term rentals handled? Can the taxpayer use the rental losses to offset their non-rental income for tax purposes?… Read More The post Court Addresses Tax Losses from Short-Term Rentals appeared first on Houston Tax…

It is important to keep accurate books and records. Accurate books and records can result in significant tax savings. This is particularly true for entrepreneurs who own more than one business. When one or more of these businesses are taxed… Read More The post The Importance of Accounting for C Corporation Expenses appeared first on Houston…

When a C corporation pays expenses for its shareholder, the payment can be subject to income tax for the shareholder as a constructive dividend. One defense is that the expenses for the C corporation were legitimate. Does the taxpayer have… Read More The post Does the IRS Have the Burden to Prove Constructive Dividends? appeared first…

Can the IRS fail to audit a taxpayer for several years and then, once it actually opens the audit, drag its feet for years and then charge the taxpayer interest retroactively back to the date the tax return was filed?… Read More The post Is a Taxpayer Liable for Interest if the IRS Delays an Audit?…

If you hire a competent tax advisor and end up having a late filed return, you may be able to avoid penalties for the late filing. But this is a defense. It is something that you, the taxpayer, have to… Read More The post Reasonable Cause: Proving Reliance on a Tax Advisor appeared first on Houston…