TaxConnections

 
 

Access Leading Tax Experts And Technology
In Our Global Digital Marketplace

Please enter your input in search

Archive for Capital Gains

What Taxpayers Need To Know About Dividends, Interest And Capital Gains In The New Tax Landscape

Blake Christian
Key Takeaways
  • Regular dividends are generally not eligible for the lower long-term capital gains tax rates that Qualified Dividends receive unless the recipient holds the underlying shares for a specific period of time.
  • A common misconception is that the underlying shares must be held for longer than one year in order for any related dividends to be taxed as Qualified Dividends.
  • Since Real Estate Investment Trusts (REITs) generally pay no entity-level tax, dividends issued by a REIT are generally not eligible for the reduced rates assigned to Qualified Dividends.
  • Mutual fund distributions will only qualify for the reduced tax rate to the degree that the amount is determined to be a Qualified Dividend that’s received by the mutual fund.

Introduction
With the new 21 percent flat tax rate, along with liberalized asset depreciation and expensing provisions plus a lower tax on repatriated foreign earnings, the landmark Tax Cut and Jobs Act (TCJA) has been a boon to U.S. C corporations since its passage late last year. But, many individual taxpayers and their advisors are still digesting the changes and mulling over their next steps. Below is a primer about the tax treatment of dividends, interest and capital gains in light of the new tax reform landscape.

Read more

Are There Advantages To Owning A Second Home?

Whatever the location, size, or value of a second home, certain tax advantages are built in. However, your opportunity to benefit from them depends on how you use the property.

Personal Use

Both property taxes and mortgage interest are as deductible for a second home as they are for your primary residence — and are subject to the same limitations. If you file a joint return, you cannot deduct interest on more than $1 million of acquisition debt ($500,000 for married persons filing separately) on one or two homes. Read more

Changes To Enterprise Investment Scheme (EIS) And Seed Enterprise Investment Scheme (SEIS) Relief

Enterprise Investment Scheme and Seed Enterprise Investment Scheme relief are being considered by a large number of companies at the moment as a way of raising funds but at the same time enabling investors to obtain attractive income tax and capital gains tax reliefs.

A number of cases have been heard before the First tier and Upper Tribunals that demonstrate how easy it is to fall foul of the complex provisions granting these reliefs. Moreover, there have been a number of changes to the legislation in recent years, and more changes have been announced that will have a significant impact on the operation of the relief.

Risk To Capital Condition Read more

Taxing Capital Gains Of Nonresident Aliens Residing In The US- The 183- Day Rule

Ephraim Moss, Tax Connections

For a unique group of foreign individuals (i.e., non-US citizens referred to in the tax world as “aliens”), living in the U.S. does not trigger “resident” status for tax purposes. These so-called “exempt” individuals include foreign studentsforeign scholars, and alien employees of foreign governments and of international organizations in the United States. U.S. tax law considers this lucky bunch to be exempt from counting days of presence in the United States for the purposes of determining whether they are resident aliens of the United States. Read more

Small Business Inter-Corporate Dividends

Larry Stolberg

Revisions to Section 55 of the Income Tax Act (“ITA”) may prevent the tax-free payment of inter-corporate dividends within a related corporate group.

With the exception of Part IV tax where applicable, the related party exemption per S55(3)(a) will no longer be available to allow cash dividends say paid from Opco to Holdco unless there is safe income in the payor corporation at the time of the dividend payment.

Read more

Non-business Capital Gains and Losses—Government Debt Securities

Harold Goedde

This article discusses debt securities issued by the federal government—treasury securities and savings bonds and non-taxable bonds issued by states and municipalities.

U.S. Treasury Bonds and Notes

Non-inflation adjusted securities. Read more

Non-Business Capital Gains And Losses – Taxable Bonds

Harold Goedde

This article will discuss the meaning of bond quotation prices on the exchange, determining initial basis, amortization of premium and discount, determining the adjusted basis, and the gain or loss on the sale before maturity. It will also discuss convertible, callable, and zero coupon bonds.

Read more

Income Tax Aspects Of Non-Business Capital Gains And Losses Part III

Harold Goedde

This is the final part of a three part series which examines sales of gifts, non-business bad debts, and securities. In the first part, we discussed the general aspects of capital gains and losses, the brokers reporting to investors, how and where they are reported on Form 1040 and supporting schedules. The previous part discussed the tax implications for wash sales stock rights, small business stock, and inheritances.

Read more

Income Tax Aspects Of Non-Business Capital Gains And Losses Part II

Harold Goedde

This article will discuss the tax implications for wash sales stock rights, gifts, small business stock, non-business bad debts, and inheritances. This is a the second article in a series of three focusing on gains and losses. (Read Part I here)

Read more

Income Tax Aspects Of Non-Business Capital Gains And Losses Part I

Harold Goedde

This article will discuss the general aspects of capital gains and losses, the brokers reporting to investors, how and where they are reported on Form 1040 and supporting schedules.

It is advantageous to have investment income in the form of long-term (held longer than one year) capital gains (LTCG) because they are taxed at a lower rate than ordinary income. For 2016, the net LTCG will be taxed at various rates depending on the tax bracket:

Read more

Paying Too Much CGT? Pravin Gordhan’s Tax Rate Reprieve!

Hugo Van Zyl

During February 2016, the beleaguered South African Minister of Finance, Pravin Gordhan made a serious attempt to balance government’s books. Being an election year, the increase in wealth taxes went down well with the grassroots support base of the ruling ANC.

Read more