BLOG

Sooner or later, you may decide to sell property you inherited from a parent or other loved one. Whether the property is an investment, an antique, land, or something else, the sale may result in a taxable gain or loss. But how that gain or loss is calculated may surprise you. Your Basis When you sell property you purchased, you generally figure gain or loss by comparing the amount you receive in the sale transaction with your cost basis (as adjusted for certain items, such as depreciation). Inherited prope

Employers may not think of themselves as tax collectors, but essentially that’s the role they play under the federal payroll tax system. The income and FICA taxes employers withhold from employees’ pay are considered to be held in trust for the government and must be deposited with the IRS on a strict schedule. Personal Liability When a business fails to make payroll tax deposits, the IRS may pursue not just the company but also so-called “responsible persons.” Officers, employees, and anyone else who has t

Launching a new business takes hard work — and money. Costs for market surveys, travel to line up potential distributors and suppliers, advertising, hiring employees, training, and other expenses incurred before a business is officially launched can add up to a substantial amount. The tax law places certain limitations on tax deductions for start-up expenses. No deduction is available until the business becomes active. Up to $5,000 of accumulated start-up expenses may be deducted in the tax year in which th

For investors in the higher income-tax brackets, tax-exempt municipal bonds (munis) can represent an attractive investment. Municipal bond interest is generally exempt from federal income tax and often is exempt from state (and possibly local) income tax in the state of issuance. Taxable Equivalent Yield If you are looking at potential bond investments, you’ll want to figure out whether you will do better after taxes with a muni or a taxable security. Calculating the taxable equivalent yield — the interest

Tighter lending standards have made it more difficult to obtain financing to start or expand small businesses and buy homes. If your child or grandchild is having a hard time getting a loan from a commercial lender, you may be willing to help out by lending the money yourself. Have a Written Agreement Start by putting the loan agreement in writing. This may seem like an unnecessary formality, but without a written loan document, the IRS could argue that the transaction was a gift instead of a loan, potentia