Section 165(a): losses on troubled real estate

Article Abstract:

Recent court cases have treated abandonment of a property differently than property worthlessness for the purpose of IRC section 165(a) losses with significantly different tax consequences. Abandonment is considered a sale or exchange and can result in cancellation of debt income while the property becoming worthless is not considered anything and so has no tax consequences. Worthlessness is an ordinary loss while abandonment is a capital loss. However, worthlessness does not trigger suspended passive losses and is subject to passive loss limitations for passive activity properties.

Analysis, Taxation, Real estate, Real property, Loss deductions, Abandonment of property, Abandonment (Law)

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Maximizing the effectiveness of the annual gift exclusion

Article Abstract:

Estate planners can take steps to maximize the effectiveness of the annual gift exclusion. Tax planners can also enjoy increased flexibility as a result of regulations related to irrevocable inter vivos trusts. The best strategies for taking advantage of the gift exclusion include creating a separate trust for each beneficiary and selecting from several options related to disposition and allowing beneficiaries to withdraw an amount equal to the exclusion.

Management, Generation-skipping transfer tax, Tax exclusion, Gift tax, Living trusts

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Caught red-handed: IRS special assessment power over persons found with large amounts of cash

Article Abstract:

The author evaluates the IRS' assessment power under IRC section 6867 and the rights people have as possessors of large amounts of cash when confronted by the IRS.

United States, Money, Powers and duties, Tax assessment, United States. Internal Revenue Service

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