Category Archives: Announcements

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INTENT DICTATES CHARACTER OF REAL ESTATE GAIN

Check out the decision in Fargo and King (TC Memo 2015-96) for a refresher on the rules regarding whether real estate gains are capital versus ordinary, depending on whether the property was “held” for development, as opposed to an investment purpose.

The courts typically analyze various factors when this issue arises, in evaluating whether a taxpayer “held” property primarily for sale to customers in the ordinary course of business, including:

~The purpose for which the property was originally acquired
~The purpose for which the property was subsequently held
~The extent to which improvements, if any, were made to
the property by the taxpayer
~The frequency, number and continuity of sales
~The extent and nature of the transactions involved
~The ordinary business of the taxpayer
~The extent of advertising, promotion, or other active
efforts used in soliciting buyers for the sale of the
property
~The listing of property with brokers
~The purpose for which the property was held at the
time of sale

DON’T FORGET THE TAXPAYER ADVOCATE

The Taxpayer Advocate Service is an independent organization within IRS, whose role is to protect taxpayers’ rights and ensure that all taxpayers are treated fairly.

Among other things, the Advocate:

~Helps individuals, businesses and exempt organizations in a myriad of ways

~Helps in cases where the taxpayer’s IRS problem is causing a financial difficulty or, most commonly, in cases where IRS procedure has simply bogged down and the taxpayer is trapped in a morass of red tape with no resolution of the problem in sight.

If this is you, check out www.taxpayeradvocate.irs.gov.

USEFUL IRS INFO FOR THOSE IN THE MILITARY

In recognition of National Military Appreciation Month, IRS has recently updated its “Armed Forces Tax Guide” (Publication 3) which contains good information and important reminders of some tax benefits unique to members of the military, including:

~Combat pay – partly or totally tax free
~Moving expenses – deduction available for eligible items
~Tax return due date – service members stationed abroad
have until June 15 to file, and those in a combat zone
have even longer – typically up to 180 days after they
leave the combat zone

Check out Publication 3 for more.

IRS WARNING ABOUT FAKE CHARITIES

Included on IRS’ famous annual “Dirty Dozen” tax scams list for 2015 is a warning about groups masquerading as charitable organizations to attract donations from unsuspecting contributors.

IRS goes on to advise potential charitable donors to:

~Be wary of charities with names that are similar to familiar or nationally known organizations. Check the IRS list (www.irs.gov) for inclusion in the listing of legitimate charities.

~Not reveal personal financial information, such as your Social Security number to a charitable solicitor.

~Not to give or send cash. For security and tax record-keeping purposes, contribute by check or credit card or another way that provides documentation of the gift.

DEADLINE LOOMS FOR SMALL RETIREMENT PLANS

Don’t forget that certain small businesses which failed to timely file required retirement plan returns in recent years have only until June 2, 2015 to take advantage of special penalty relief offered last year via Revenue Procedure 2014-32.

The relief offered under this Revenue Procedure is only available to the plan administrator or plan sponsor of (1) certain small business (owner-spouse) plans, and plans of business partnerships, and (2) certain foreign plans.