Medicare catastrophic coverage

Article Abstract:

To pay for the extended benefits mandated by the Medicare Catastrophic Coverage Act of 1988, Congress instituted a surtax on those individuals entitled to Medicare Part A benefits, with an an $800 ceiling for individuals and $1600 for married couples filing a joint return. Regardless of who earned the income, if one spouse is eligible for Medicare and files a joint return, one-half of the tax liability is subject to the surtax up to a ceiling of $800, and all of the tax liability is subject to the surtax if both are eligible up to a ceiling of $1600. In order to preclude married couples from avoiding taxes by filing of separate returns, Congress has provided that couples living together filing separate returns incur the maximum surtax, $800 each for a total of $1600 if one spouse is eligible; $1600 each for a total of $3200 if both are eligible.

Insurance, Catastrophic illness, Medicare

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When personal injury damage awards are taxable

Article Abstract:

According to Revenue Ruling 85-143, damages awarded to employees for personal injury or as a result of libel suits are not included in the employee's computation of income for tax purposes, insofar as the awards relate to personal (as opposed to professional) injury. Awards related to professional damages should be reported as taxable income. The details of the Tax Court case from which this ruling was obtained are provided. The case involved an insurance executive who suffered both personal and professional damages as a result of an erroneous credit report, and the failure of the original court ruling to distinguish between personal and professional damages awarded.

Workplace accidents, Employer liability, Libel and slander, Personal injuries, Damages, Damages (Law)

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Tax benefits relating to corporate distributions substantially limited

Article Abstract:

Tax benefit restrictions apply to tax benefits related to company distributions, according the the 1984 Deficit Reduction Act. The law's new provisions affect the distribution of property that has appreciated. Dividend restrictions will receive deductions. Also, the law changes the regulation applying to nonrecognition of gain by stipulating that a company distributing appreciated property to the stockholders after June 14, 1984 has to acknowledge gain for the difference between the adjusted tax and the real market value of the property.

Tax deductions, Tax benefit rule

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