Tax benefits of trader status may be available in part for an investor

Article Abstract:

An overview of tax regulations related to the investment interest deduction reveals that there are considerable tax differences between being a trader, an investor, or a dealer in securities. The distinctions between the three positions are often vague. Dealers regularly purchase stocks from one party and sell them to another at a profit, while traders are characterized by frequent buying and selling of stocks to take advantage of short-term market trends. Investors purchase stocks for their capital appreciation and long-term value. There are benefits relating to trader status which focus on profit making strategy. Additionally, the benefits are transferable to investors in some situations. The overview of the regulations also covers the tax treatment of: start-up expenses; investment interest; and bifurcating activities.

Stockbrokers, Investors

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Transfers of a family business must consider both income tax and estate tax effects

Article Abstract:

Section 2036 has restricted the transfer of businesses to family members by providing for estate and gift taxes on interest transferred to decedents' gross estates. Section 302(b) provides exclusive tests for determining if redemptions can be treated as exchanges instead of dividends. The exchange tests include: termination of interest rule; creditors' interests rule; constructive stock ownership test; and the ten-year rule. The Technical and Miscellaneous revenue Act of 1988 (TAMRA) provides for some exceptions to the transfer of interest rules including: qualified debt; qualified startup debt; clean money supplied by family; arm's-length sales or leases; and retention of buy and sell rights.

Accounting and auditing, Transfer taxes, Family-owned businesses, Family corporations

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Tax strategies to avoid the limitations imposed on charitable contributions

Article Abstract:

People making charitable contributions should be aware of the various tax laws regulating deductible charities. A contribution is deductible if it is: paid within the taxable year; does not exceed 50% of a taxpayer's adjusted gross income; and passes the necessary substantiation requirements. Other important tax considerations include: the treatment of depreciated property; appreciated property; and personal services.

Charitable bequests

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