The Tax Professionals Blog
IRD Income and the Frequently Overlooked Estate Tax Deduction
Posted by Lee Reams Sr. on
When a client comes in with a 1099R or Schedule K-1 with income from an inherited individual retirement account (IRA), ask two very important questionsForcing Itemized Deductions Can Reduce the Alternative Minimum Tax
Posted by Lee Reams Sr. on
For Alternative Minimum Tax (AMT) purposes, only medical costs (net after the AGI reduction), acquisition debt interest, investment interest, charitable deductions, personal casualty losses, and tier-1 miscellaneous deductions are deductible. In addition, for AMT purposes, the standard deduction is not allowed.Tax Treatment of Mortgage Assistance Payments
Posted by Lee Reams Sr. on
We have received numerous questions related to the tax treatment of the mortgage assistance payments reported on Form 1098-MA, specifically about the taxability of these payments and the amount that is deductible as home mortgage interest.Form 1098 for 2016 Will Be a Game Changer
Posted by Lee Reams Sr. on
Form 1098, the Mortgage Interest Statement, is used to report to borrowers and the IRS any mortgage interest paid on home and other real property mortgages. This reporting is required of payment recipients (i.e., lenders) who receive mortgage interest payments of $600 or more during the year in the course of their trades or businesses. The form doesn’t need to be filed for interest received from a corporation, partnership, trust, estate or association.Medicaid Waiver Payments: A Double-Edged Sword
Posted by Lee Reams Sr. on
Background: As a means of reducing the government’s cost of caring for individuals who otherwise would be institutionalized (because they require the type of care normally provided in a hospital, nursing facility, or intermediate care facility), Medicaid will pay wages to care providers to care for these ill individuals in the care provider’s home. Until the release of Notice 2014-7, the IRS had taken the position that these payments, which are reported on a W-2, were taxable for the caregiver.