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Liability for Prior Real Estate Owner’s Unpaid IRS Taxes You have to be diligent if you buy real estate from someone who owes unpaid taxes to the IRS. There are instances where the IRS can collect the prior owner’s taxes from you as the purchaser of the property. The recent Shirehampton Drive Trust v. JP…Continue…
Category: Tax
The Affirmative Act of Tax Evasion
Taxpayers get behind on their taxes as they do every other type of liability. It happens. But owing the IRS unpaid taxes can be more than a civil problem. Non-payment can lead to criminal tax evasion charges. The United States v. Connerton, No. 3:17-cr-47 (D. Conn. 2019), case provides an opportunity to consider the “affirmative……
The Broad Reach of the Economic Substance Doctrine
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…
Can the IRS Foreclose on an Inheritance that is Jointly Owned?
What happens when someone inherits money from their parents, but they also owe the IRS? Can the IRS collect on the inherited assets? What if the taxpayer only inherited a fractional interest in the property? Can the IRS foreclose on the property to pay the back taxes? The court considered this in United States v.……
Documenting the Sec. 199a Rental Real Estate Safe Harbor
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…
Avoiding Hobby Loss Limits for Long-Term Projects
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…
Taxpayer Not Entitled to In-Person Tax Collection Hearing
Dealing with unpaid taxes and the IRS bureaucracy can be challenging. Sometimes the key is to get in front of the right person at the IRS. But the IRS often refuses in-person meetings. The Roberts v. Commissioner, T.C. Memo. 2019-117, case provides an example of this. It involves the taxpayers request for an in-person collection……
Bad Debt Deduction for Real Estate Lender for Non-Real Estate Loan
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…
Setting Off a Non-Tax Debt Owed by the IRS
If you owe back taxes but the Federal government owes you for some other matter, can the IRS offset the unpaid taxes with the amount the government owes you? The answer is more complex than one would think. The court addresses this in Tartt v. Commissioner, T.C. Memo. 2019-112. Facts & Procedural History The taxpayer……
Court Addresses Tax Losses from Short-Term Rentals
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…