The Tax Professionals Blog

Gambling Winnings May Impact Health Insurance Costs

Posted by Lee Reams Sr. on


Gambling winnings, even if there’s a net loss for the year, and game show winnings can increase the cost of health insurance premiums for low-income individuals or families who obtain their insurance through the Marketplace and, in some cases, those enrolled in Medicare coverage.

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Deducting IRA Losses

Posted by Lee Reams Sr. on

A question that frequently arises is “can IRA losses be deducted?” The answer to that question is yes, but only under certain very limited circumstances.

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There May Be More Equity Debt than Meets the Eye

Posted by Lee Reams Sr. on

For both regular tax and AMT computations, interest paid on a debt to acquire or substantially improve a first or second home is deductible as long as it does not exceed the debt limit (generally $1 million). This is also true of refinanced debt, except that any increase in debt is treated as equity debt. For regular tax purposes, the interest on up to $100,000 of equity debt on the first two homes can also be deducted.

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Dealing With Incentive Stock Option AMT

Posted by Lee Reams Sr. on

There are two types of stock options: qualified and non-qualified. Qualified options are also referred to as incentive stock options (ISOs). For non-qualified options, the difference between the stock’s exercise price and its fair market value (FMV) is treated as ordinary income; for employees, this difference is generally is included as income on their W-2s. No alternative minimum tax (AMT) preference income results from exercising a non-qualified stock option.

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Home Title Change: A Completed Gift?

Posted by Lee Reams Sr. on

Background: A frequently encountered issue is when an elderly parent turns the title of his or her home over to a child or other beneficiary and continues to reside in the home. This situation raises important questions: How is a future sale of the home treated if it is sold before the parent’s death (will Sec 121 apply?), and is a gift tax return required? Or if the parent passes away while still residing in the home, does the beneficiary use a gift basis or the FMV on the date of death? What is the tax result if the parent moves out of the home?

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