Month of July, 2008

It used to be that a state line was a state line. But where taxes are concerned, state lines are getting more and more blurred.

In this new Online Workshop, I’m talking about nexus and state income tax. States are getting even more far-reaching in their attempt to rope your income into their coffers. Learn the basic rules of nexus and the questions an auditor would ask.

There has been a lot of talk about what changes we can expect as tax provisions expire over the next few years and a new administration takes the White House.

It looks like there is one consensus: raise individual income tax rates and cut corporate tax rates.

The IRS just released the results of its study on the consequences of the 2004 American Jobs Creation Act. For one year, American corporations had one year to bring back overseas income at a very low 5.25%. Normally the rate would have been 35%.

For the past 6 months or so, we’ve been reporting on the increase in IRS audits of Real Estate Professionals. And at the same, I offered a free review of tax returns to see how much my full-service tax firm, Diane Kennedy’s Tax Services, could save them.

Not surprisingly, we’ve been flooded with tax returns. I know Richard (my husband) had 90 phone calls to return yesterday. (He didn’t make it, but he’s going to keep working to get all caught up through the weekend.)

A year ago, I would have told you that you needed to avoid real estate dealer status and that you should always take advantage of the capital gains exclusion for primary residences.

Boy, things have changed. And as commonly happens when law and policy changes rapidly, not all of the loopholes are thought through. In fact, there are a couple of loopholes right now that I’m not sure Congress and the IRS intended. But, nevertheless - there they are.

The past two weeks have been strange ones for my tax firm. The phone has been ringing non-stop. If you tried to call and had to leave a message, it’s because all the lines have been busy most of the day.

Do you have an account with UBS? The IRS might be taking a closer look at it, if you do.

Just one day after the Justice Department asked a federal court to allow the IRS to serve “John Doe” summonses on UBS AG (based in Switzerland), one of the world’s largest banks, the court approved the request. UBS is under investigation for allegedly helping Americans to hide as much as $20 billion in assets using fraudulent tax schemes, over a 7-year period from 2000 to 2007.

There will be a lot of changes coming over the next 4 years to our tax laws. There are more provisions expiring over this time period then ever before in the history of our country.

So, we’ve been spending more time than normal looking at these provisions and the tax proposals from Congress, Senate and the Presidential candidates. One thing it looks like everybody agrees on: the C Corporation tax rate must be cut.

You might have seen the “no money down” real estate deals. But, what if your issue is “no time”? Learn how investing in a Real Estate Investment Trust can be a simple way to real estate wealth.

We recently did a strategy involving someone who worked in more than one state. Typically most states have some kind of rule that allows you to make isolated work forays into that state without incurring a personal income tax obligation. But the rules are muddy, and constantly in flux, as states try to find income wherever they can.

There’s a bill floating around Washington that may hopefully clarify and standardize the procedure, assuming it can get enough support to move forward.

If you’ve ever been in a situation where you’re asked for a “second opinion” on someone else’s business or tax strategy, you know how uncomfortable it can be - especially if you think the advice they’ve been given was incorrect. Finding a way to present an alternative with courtesy can be a delicate task!