When you sell an asset its tax treatment is determined on whether or not the asset is considered a “personal asset”. If it is, then you are taxed on the profit but cannot deduct a loss. If it’s not a personal asset then you are taxed on the profit but can also deduct a loss if you have one.
Last week, the National Bureau of Economic Research announced that the recession ended in June 2009. According to the announcement, the economic downturn reached a plateau that month and hasn’t decreased since then. In other words, we are now on the painfully slow journey to recovery. The end of a recession doesn’t mean that economic […]
A few days ago, I discovered a big fat envelope from the Internal Revenue Service in my mailbox. “Well, this can’t be good,” I thought. Inside was an IRS CP 2000 Letter. It had a friendly-enough-sounding title “We are proposing changes to your tax return.” But I knew the truth. A CP 2000 notice is […]
When you get paid small amounts of cash every day it’s easy to think you can just pretend they never happened. But tips are income and the IRS is well aware that servers are notorious under reporters of income. But reporting your tips isn’t just the right thing to do, it can also help you show more income which will go a long way with creditors.
Want to save thousands on your taxes? Consider buying a home. Without a doubt, the home mortgage interest deduction is a major perk of home ownership: the mortgage interest you pay on your home reduces your taxable income. The first-year interest payments on a $180,000 30-year fixed rate home loan at 5.01 percent add up […]
The alternative minimum tax, or AMT, is designed to keep wealthy tax payers from taking so many deductions that they end up not paying taxes. If you end up qualifying for the AMT then quite a few of your deductions no longer count. So just when you thought you had it all figured out they change the rules.