About: Jeffrey A. Quinn

Recent Posts by Jeffrey A. Quinn

IRA Once-Per-Year Rollover Rule Clarified

IRS announced a change, this week, in the application of the one-per-year rule applicable to IRA rollovers, occasioned by a recent decision of the Tax Court.

Starting January 1, 2015, an individual will be allowed one rollover per year, regardless of how many different IRAs he owns – the limitation will apply by forcing the taxpayer to aggregate all of his IRAs, effectively treating them as if they were one IRA for purposes of applying the limit.  See IR-2014-107 for the details.

New IRS YouTube Video Warns of Scammers

The IRS continues to be worked up over the ongoing problem of aggressive telephone scammers who harass taxpayers.  In a recent release, IRS advises about five things which scammers often do, but which IRS will not do:

  • Telephone a taxpayer to demand immediate payment
  • Demand that a taxpayer pay without offering the opportunity to question or appeal the amount they say you owe
  • Require you to use a specific payment method
  • Ask for credit or debit card account numbers over the phone
  • Threaten arrest by local police or other law enforcement groups when taxes are not paid

Check out http://www.youtube.com/user/irsvideos.

Tax Not Always Discharged in Bankruptcy

In Vaughn (CA 10 8/26/14), the Tenth Circuit tells us that a taxpayer who entered into a tax shelter that created “artificial” losses willfully attempted to evade tax, and thus could not have his tax liability discharged in a Chapter 11 bankruptcy proceeding.

The taxpayer’s 1999 return, in this case, reported a large gain from the sale of his company, as well as a large loss arising from a strategy known as “Bond Linked Issue Premium Structure” (BLIPS), which had hit the IRS’ radar as one of several forms of transaction designed to give taxpayers an artificially high basis in partnership interests, thereby giving rise to deductible losses on disposition of those partnership interests.

Under Chapter 11, the law does not allow for discharge of any debt for a tax with respect to which the debtor made a fraudulent return or willfully attempted in any manner to evade or defeat the tax.

Quid Pro Quo Donations Scrutinized by IRS

The Tax Court recently issued a tough lesson to taxpayers in its Seventeen Seventy Sherman Street, LLC  (TC Memo 2014-124) decision, in ruling that a taxpayer received two items of property in return for its contribution of an easement, but failed to consider the value of all of the property received.  The result?  No deduction whatsoever with respect to the donated easement!  Failure to value all of the consideration received led to the conclusion that failure to prove the fair market value of the easements exceeded the value of the consideration received in return!

Capital Gains Rates

As the 2014 tax planning season comes upon us (just as the last extension date for filing 2013 returns comes and goes), folks should not lose sight of the advantageous way in which long-term capital gains are taxed.

  • 20% rate if the gains would otherwise be taxed at a rate of 39.6% if they were taxed as ordinary income
  • 15% rate if the gains would otherwise be taxed at between 15% and 39.6% if taxed as ordinary income
  • 0% rate if the gains would otherwise be taxed at a rate of 10% or 15%

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