| Rental Income and Expenses |
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| A taxpayer who rents out property is required to report rental income to the extent of the cash or the fair market value of any property received. Most individuals report their operations to the Internal Revenue Service using the cash basis method of accounting. Therefore, they must include rental income when it is actually received. An amount paid by a tenant to cancel a lease is rental income that is taxable in the year received. More... |
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| Identity Theft Scheme Involving E-mails |
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| You get an email from the Internal Revenue Service informing you that you are under investigation for tax fraud and are subject to criminal prosecution. Once you have started breathing again, you read further and get to the good news. According to the e-mail, there is an IRS website that can help your investigation if you provide certain personal and financial information. You go the website, which is certainly official looking, and think about entering the requested data, including your social security and drivers license numbers, and bank and credit card information. But then you see a grammatical error in the website text, and a bell goes off in your head. Fortunately, you contact your local IRS office before doing anything else. More... |
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| Due Process in IRS Collection Actions |
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| The Internal Revenue Service is now required to give taxpayers whose property might be levied upon pre-notification of the levy and an opportunity for a formal hearing and judicial review. More... |
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| Deduction for Investment Interest |
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| Taxpayers often borrow money in order to buy property held for investment. The deductibility of this interest is not permitted if the property yields tax-exempt income. Even if the income from the investment is taxable, the amount of any interest deduction is limited by to the taxpayer's net investment income, which is defined by tax laws as the excess of investment income over investment expenses. More... |
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| Small Tax Cases |
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| If you have filed a petition in Tax Court to contest a deficiency of $50,000 or less, including additions to tax and penalties, or you claim an overpayment of that amount or less, you have the option of having your case heard under expedited and simplified procedures. These relatively informal procedures may also be used for innocent spouse determinations involving $50,000 or less or disputes continuing from pre-levy administrative due process hearings where the unpaid tax is $50,000 or less. More... |
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