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Legal fees related to seeking a refund of individual income taxes normally would be deductible as a miscellaneous itemized deduction subject to the 2%-of-adjusted-gross-income floor. However, this ded...

Gifts of cash and current interest property (not gifts of a future interest) do not have to be reported to the IRS on a gift tax return, Form 709, if the total to any recipient does not exceed the ann...

According to AARP, this is a common scam that has cost grandparents millions of dollars. Unfortunately, the tax rules don’t help in any way. The deduction for a theft loss—assuming such scam is a ...

There are no longer any age limits on making contributions to traditional IRAs. The cap of age 70½ expired after 2019. This means that those of any age who continue to have earned income (or other in...

There are no required minimum distributions for 2020 (the requirement for 2020 was waived by the CARES Act), so the starting age is not significant for this year. After 2020, the starting age for comm...

The cost basis of a home includes only capital improvements. Ordinary expenses, such as utility costs and property taxes, do not increase basis....

The distribution is included in gross income; there is no exclusion in the law for using retirement account funds for this purpose. However, because you are over age 59½, there is no 10% early distri...

The IRS sets an interest rate each quarter that is applicable to underpayments by individuals. The rate for the third and fourth quarters of 2020 is 3%. You can see all interest rates listed by the Na...

For purposes of determining whether an employee fringe benefit is taxable to the employee, the same rules apply whether the employers are tax-exempt organizations or private sector businesses. If the ...

The definition of a disabled person is based the definition used for purposes of Social Security disability benefits. A person is disabled if unable to have substantial gainful employment. For purpose...

If you itemize deductions, likely the convenience fee is tax deductible. The IRS hasn’t said whether this specific convenience fee is deductible as part of your real estate taxes (which has no incom...

There’s no clear answer, and you may have to argue your position for this deduction if your return is questioned. On the one hand, the Tax Court allowed a deduction for the extra cost of organic foo...

If the CD is in a tax-deferred or tax-free account, such as an IRA or Roth IRA, interest on the CD is not currently taxed; the rollover of the CD when it matures is not a taxable event. If the CD is i...

The above-the-line deduction for tuition and fees for higher education can be claimed by a taxpayer only for him/herself, spouse, or dependent. If your grandchild is your dependent, then you qualify f...

While Medicare does not cover the cost of long-term care services, they may qualify as a deductible medical expense. Since your spouse is chronically ill and requires personal care services, the cost ...

Capital losses can be carried forward only to offset capital gains (and up to $3,000 of ordinary income) in future years. The capital losses of a deceased spouse can be used on the final joint return,...

These two tax breaks, along with more than 4 dozen more, expired at the end of 2013. To date, they have not been extended, but later this year or even in 2015 Congress could reinstate them retroactive...

The favorable rule allowing debt forgiveness on a principal residence mortgage up to $2 million expired at the end of 2013. It could be extended, but given the resurgence in the housing market, it may...

First, you must determine whether this was a business or nonbusiness bad debt. A business bad debt is fully deductible as an ordinary loss; a nonbusiness bad debt is treated as a short-term capital lo...

No. An individual’s charitable contributions can be deducted only as an itemized deduction. Even if the rental property is a trade or business, with income and expenses reported on Schedule C rather...

The IRS says: “For the year of the account owner’s death, use the RMD the account owner would have received. For the year following the owner’s death, the RMD will depend on the identity of the ...

The special capital gain rates are supposed to allow taxpayers to pay less tax on these gains than on ordinary income. Thus, the special 28% capital gains rate for collectibles applies for taxpayers i...

Yes. The deductions for mortgage interest and real estate taxes are separate items. Claiming one has no impact on claiming the other. The only limitation on the deduction for property taxes is the app...

No. Gifts are not taxed to the recipient, regardless of amount or whether they are from people in or outside the United States. If you make gifts, you need to check on whether you must pay any gift ta...

Probably not. A revocable trust of which you are a trustee and beneficiary is a grantor trust. You are taxed on the income from this trust to the same extent that you would be if there were no trust. ...

Yes, assuming you each meet the eligibility tests for the home office deduction. Each of you would need to complete a separate Form 8829 and attach it to your separate Schedule Cs if you figure the de...

Tax rates are applied to taxable income, not to adjusted gross income (AGI). Taxable income is arrived at by subtracting your personal exemptions and the standard deduction or itemized deductions from...

Unfortunately, no. The fees were payable by the estate and deductible only by the estate. If there had been a federal estate tax, you would have been entitled to a write-off for the federal estate tax...

If you take a deduction for a bond premium, you must reduce the basis of the bond by this amount. If you sell the bond before maturity, you’ll have a capital gain if the selling price exceeds your b...

While the fundamental rules are the same for estates of those who died in 2012 and those who die this year, some of the important numbers are different. For example, the exemption amount (the value of...