Tax & Accounting Blog

Medicare Surtax on Net Investment Income Goes into Effect on January 1, 2013

Medicare Surtax on Net Investment Income Goes into Effect on January 1, 2013

Under the 2010 Health Care reform legislation, a Medicare tax will, for the first time, be applied to investment income beginning in 2013. A new 3.8% tax will be imposed on net investment income of single taxpayers with AGI above $200,000 and joint filers over $250,000. Net investment income is interest, dividends, royalties, rents, gross … Read More

Open Transaction Doctrine does not apply in insurance company demutualization case.

Open Transaction Doctrine does not apply in insurance company demutualization case.

On July 9, 2012, a federal district court in Arizona ruled that the taxpayer could not apply the “open transaction” doctrine in a case involving stock received from an insurance company that demutualized. Background. A mutual insurance company has no shareholders.  Instead, the policyholders have an ownership interest in the company, in addition to having … Read More

Final Regs Clarify Economic Effect Requirement for Estate and Trust Donations

Final Regs Clarify Economic Effect Requirement for Estate and Trust Donations

On April 13, 2012, the IRS issued final regs providing guidance under Code Sec. 642(c) with regard to the federal tax consequences of an ordering provision in a trust, will or local law that attempts to determine the tax character of the amounts paid to a charitable beneficiary. Specifically, the regs confirm that a provision in a … Read More

Estates of Some 2011 Decedents Get More Time to Make Portability Election

Estates of Some 2011 Decedents Get More Time to Make Portability Election

The IRS has issued guidance giving certain estates of married individuals who died during the first six months of 2011 an extension of the deadline to make the portability election to pass the decedent’s unused estate and gift tax exclusion amount to the surviving spouse. Estates qualifying for and taking advantage of the extension will have … Read More

onesource

Per Diem Expense Rates for Travel Reimbursement Now Published Only Online, IRS Publication 1542 Eliminated

The official source for the federal government per diem rates allowable for expense reimbursement in business travel away from home within the continental United States (CONUS) is the online information on the U.S. General Services Administration webpage  http://www.gsa.gov/portal/category/21287. On this webpage, you can also find links to the Department of Defense per diem rates … Read More

Form 8938 Guidance Issued

Form 8938 Guidance Issued

In December 2011, the IRS released the new Form 8938 used to report specified foreign financial assets. The form was released in response to the temporary regulations issued for IRC 6038D, as part of the larger crackdown on taxpayers with under reported foreign assets. The new form is filed with the taxpayer’s individual return if their specified … Read More