Archive for the ‘USTaxAid Blog’ Category

Biggest Red Flag for a Real Estate Investor

When it comes to taxes, there are a lot of things to watch for real estate investors. Probably more than any other group, a real estate investor needs an experienced tax preparer who not only has general tax and accounting knowledge, but also understands the specialized field of tax. Some of things we watch at ...

Biggest Red Flag for a C Corporation

The IRS is adding to their list of red flags. There aren’t a lot of them when it comes to C Corporations, though. The biggest red flag for a C Corporation is something called “unreasonable compensation.” The C Corporation pays tax on its own income. If you have income over $250,000, it’s usually a good ...

Biggest Red Flag for an S Corporation

There are actually three big red flags for an S Corporation that you need to watch out for when it comes to the IRS: (1) Not taking a salary from a profitable S Corporation (2) Not properly reporting medical insurance premiums (3) Not tracking your basis for losses Let’s start with #1: If you have ...

Biggest Red Flag for a Retail Store

If you have a retail store, the IRS wants to see that you report an inventory. Before you quickly say, “That doesn’t apply to me”, take a minute and think about it. If you report that you sell retail goods, even if it’s digital download products, the IRS will consider that you’re a retail store. ...

Biggest Red Flag for a Sole Proprietorship

The IRS audit force is growing and they’re getting more sophisticated in finding people to audit. They are especially targeting Sole Proprietorships for audit. You can figure there is a 1 in 3 chance that your Sole Proprietorship (Schedule C) has a chance of being audited. If you’re running a loss in your business, the ...

Facts & Circumstances Test for Real Estate Professionals

If you haven’t been following the real estate professional posts over the past few days, please go back and catch up. Today is the 4th one in the series. We’ve been talking about the 2nd step to prove the real estate professional deduction – Material Participation. There are 7 different ways to prove it, 3 ...

Some Problems with the Material Participation Test

The day before yesterday, we went over the seven different ways you can qualify for the material participation part of the Real Estate Professional status. Take a look at those first to refresh your memory. Now, here are the ones that give me problems: #4 Significant Participation: This is a harder one to pass because ...

Qualifying for Material Participation

Yesterday we talked about the three tests you must pass in order to be considered a Real Estate Professional (REP). We’ve got clearer definition now on how to pass these. If you want to know more about the updates for REP status, please sign up at http://www.DianesSeminars.com for Saturday February 9th’s free webinar. (1)              500 ...

Three Steps to Real Estate Professional Status

These are the basic three steps you must follow. #1:  You must have 750 hours or more in real estate activities and you must spend more time in that activity than any other. #2:  You have to materially participate in the activity. #3:  And each property must individually qualify. Okay, now let’s go through this ...

Yeah, There is More Than One Fiscal Cliff to Watch Out For

Finally, the media is talking about the looming tax changes for 1/1/13. There are two major bills expiring (the so-called Bush Tax Cuts), earned income credit will be decimated, unemployment extensions will vanish, the Medicare ‘doc fix’ reimbursement rate for doctors goes away, dividends will be taxed at ordinary tax rates, capital gains rate is ...