U.S. taxpayers who control foreign businesses must remain vigilant with regard to many responsibilities, including the often-overlooked duty to file informational returns. Four different kinds of taxpayers must inform the IRS of their income and expenses from their ownership of foreign businesses by filing Form 5471 with their annual 1040s. The price tag for failing ... [Read more]
As an entrepreneur looking to invest capital in a startup, it is important to decide whether such contributions will be loans or if they are actually purchases of ownership interests in the company. A decision to lend must be contemporaneously documented. The lender should act as a lender from then onward. For instance, he or ... [Read more]
Foreign corporations with U.S.-sourced income are subject to U.S. taxes on gain earned in the ordinary course of their U.S. operations and when a U.S. office location is a material factor in the production of that gain. In what circumstances will the Tax Court find this has occurred, and does it apply equally to all ... [Read more]
If you attempt to make a charitable contribution of a used motor vehicle, boat, or airplane, can you offset the contribution in your tax return? In 2017, the U.S. Tax Court addressed an important question for taxpayers looking to deduct the value of used vehicle contributions to charity in Izen v. CIR, 148 T.C. No. ... [Read more]
The 2017 Tax Cuts and Jobs Act added a provision for the Qualified Business Income deduction under Section 199A of the Code. The language of the statute itself can be unpacked a bit. The very first subsection (a) of the law sets out the general formula: “(a) IN GENERAL.—In the case of a taxpayer other ... [Read more]