Start mulling over your annual giving plans. There are moves you can make to reduce your tax bill when giving to family members or donating to charity. Some save income tax and others pay off in savings for estate and gift tax. So don’t wait till the last minute.
The Service continues to eye returns that report large real estate losses… Especially those taken by taxpayers claiming to be real estate professionals. Real estate pros have to satisfy two time tests to deduct their rental losses in full: They must spend over half of their working hours and more than 750 hours per year […]
Be aware of tax consequences when trading one annuity for another. To avoid income tax, it must be a direct exchange. Cashing out a policy triggers tax, even if the funds are later used to buy an annuity from another issuer. One taxpayer learned this the hard way. After he inherited an annuity from his […]
Watch out if you plan to “borrow” from your IRA for short-term cash needs. Your IRA can’t actually lend you money, but you can get around this rule by withdrawing the funds and quickly restoring the identical amount to the account. The money must be returned within 60 days or the distribution is taxed, and […]