The Tax Professionals Blog
Home Office Income Limitations
Posted by Lee Reams Sr. on
The home office deduction is limited to the business activity’s gross income, but many people mistakenly believe that the limitation is the activity’s net income. The gross income limitation is actually the gross sales less the cost of goods sold, the business portion of the home’s mortgage interest and taxes, and the otherwise deductible business expenses that are not related to the home’s business use. (Publication 587 includes a worksheet on this calculation.)
Individual Retirement Account (IRA) & Unrelated Business Income
Posted by Lee Reams Sr. on
Generally, an IRA is exempt from tax except for unrelated business income (UBI).What is the depreciable life of a rented trailer?
Posted by Lee Reams Sr. on
A trailer that includes kitchen, bathroom and sleeping facilities is rented long term to an unrelated party for use as their primary residence. What is the depreciable life of that trailer? Is it 5 years or 27.5 years?
Equitable Ownership and Mortgage Deductions
Posted by Lee Reams Sr. on
You may sometimes encounter a taxpayer who is making mortgage payments on a residence even though he or she is not liable on the loan and therefore is generally unable to deduct the interest. 1099 Reporting & Rentals
Posted by Lee Reams Sr. on
Two questions to be answered on Schedule E, Part I (rental real estate and royalties section) are (A) “Did you make any payments in [tax year] that would require you to file Form(s) 1099?” and (B) “If Yes, did you or will you file all required Forms 1099?”