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Tenant’s rent – skips landlord – goes directly to IRS

  The U.S. Tax Court settled a case in July between a landlord and a tenant who wasn’t paying rent – and the court came down on the side of the tenant. John E. Burgess owned a piece of land that he rented to Dennis Mineni. The land was used as an overflow parking lot for Mineni’s business, Atwater Flea Market. The two men had a handshake...

Frivolous return nets big fine

  The U.S. Tax Court recently upheld the IRS’s frivolous return position, costing a taxpayer $10,000 in fines. Mark A. Lovely failed to file tax returns for 2005, even though he admitted that he had received compensation from Tradewinds Airline, Inc., and Triad International Maintenance Corp. He claimed the compensation did not constitute...

American Opportunity Tax Credit: What expenses qualify?

  Qualified education expenses under the American Opportunity Tax Credit are basically tuition, fees and course materials. The tuition must be paid to an eligible educational institution. An “eligible educational institution” is generally any accredited public, nonprofit or proprietary (private) college, university, vocational school or...

Qualified dividends taxed at lower capital gains rates

  If you have something called qualified dividend income, it receives special tax treatment. Qualified dividend income is defined as dividends received during the tax year from a domestic corporation or a qualified foreign corporation. It is taxed at the lower preferential capital gains tax rates. A domestic corporation is a...

Business expense deduction goes up in smoke

  Ordinary and necessary business expenses are not deductible when a trade or business consists of trafficking in controlled substances prohibited by federal law, under a recent decision by the 9th U.S. Circuit Court of Appeals. Martin Olive owns a business called the Vapor Room, located in San Francisco, Calif. He appealed the Tax...

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