Income Tax | TaxConnections

16 Feb 2017

More Than One Way To Tax Consumption

In the U.S., the consumption taxes we are most familiar with are the sales tax and some excise taxes, such as on gasoline, alcohol and tobacco. We typically think of these taxes as having to be imposed at the point of purchase. There is an advantage to this because you’ll know at that time if you can afford to pay the tax. Disadvantages to this approach include that the vendor has additional compliance to collect and remit the tax (and penalties if done wrong) and the rate can’t be adjusted for the income level of the buyer (although I understand many might not view this as a disadvantage).

Written by Annette Nellen | Posted in Income Tax

13 Dec 2016

Portland, Oregon Enacts New Surtax For High Executive Pay

This week, the City Council in Portland, Oregon modified the business license tax for publicly traded companies subject to SEC reporting. Basically, before the change, this tax is 2.2% of adjusted net income (City Code 7.02.500). The new language increasing this for either a 10% or 24% surtax, follows:

Written by Annette Nellen | Posted in Corporate • Income Tax • United States

26 Oct 2016

Tax Challenges For Divorced Parents – Why?

We get used to certain rules in the tax system and then think they HAVE to be there. But, often, that is not the case. I think the rules related to divorce are good examples.

Alimony is deductible by the payer and taxable to the recipient. This violates the “fruit of the tree” doctrine from the famous 1930 US Supreme Court case, Lucas v Earl.

Written by Annette Nellen | Posted in Family Tax • Income Tax • Tax Law

19 Sep 2016

Small Business Inter-Corporate Dividends

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.

Written by Larry Stolberg, CPA, CA | Posted in Canada • Capital Gains • Income Tax

19 Sep 2016

Does Small Revenue Loss Justify Bad Tax Law? No

More on legislative efforts to give a tax break to winning Olympians(!) …

See my post, “Olympic Medal Taxation Craziness“, for background. This post got a lot of comments both here and on Tax Connections.

Written by Annette Nellen | Posted in Income Tax • Individual • United States

01 Sep 2016

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

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)

Written by Harold Goedde | Posted in Capital Gains • Income Tax

30 Aug 2016

How Many Times To Tax Business Income?

A recent post (8/26/16) on the Tax Justice website was titled – Why We Must Close The Pass-Through Loophole? That caught my attention as I was trying to think what the “loophole” might be? A loophole is a provision that can be used beyond its intended purpose because the rule is not written specifically enough. When a rule is being used as intended, it is not a loophole. For example, sometimes the mortgage interest deduction is called a loophole, but it is not. People deducting interest on the mortgages on their primary and vacation homes is using the rule as intended.

Written by Annette Nellen | Posted in Corporate • Income Tax

30 Aug 2016

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

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:

Written by Harold Goedde | Posted in Capital Gains • Form 1040 • Income Tax

19 Aug 2016

Olympic Medal Taxation Craziness

Every four years we usually see at least one bill introduced in Congress to make Olympic medals and related prize winnings (such as cash) non-taxable to the athletes. Why? There is no good reason for excluding this prize income. All prizes are taxable because they are an accession to wealth which is what our income tax system is based upon. If you win a raffle or win on Jeopardy!, the prizes are taxable.

Why should an Olympic medal be different?

Written by Annette Nellen | Posted in Income Tax • United States

17 Aug 2016

Building Value Is The Win-Win Of Exit Planning

In all likelihood, you are absolutely critical to the success of your business. Without you, there is no business.

We want to fix that.

With a little luck and a lot of hard work, we can help you become an Inconsequential Owner. Having said that, perhaps a bit of explanation is in order.

Written by Ronald Oddo | Posted in Income Tax • Small Business

10 Aug 2016

Sending Non-Canadian Resident Employees To Canada

Regulation 102 of the Income Tax Act (ITA) requires payroll withholding on income derived by virtue of employment. This applies to, say, a U.S. employer sending its employee to Canada to work on an assignment. Withholding would include income tax and contributions to the Canada Pension Plan (CPP) and Employment Insurance (EI).

Written by Larry Stolberg, CPA, CA | Posted in Canada • Income Tax • Tax Law

09 Aug 2016

Start-up And Organization Costs

When starting a business, the owners are likely to incur two classes of costs that are not normally encountered in the ongoing operations of the business and should not be included as operating expenses. These are start-up expenditures and organization costs. Each of these are specifically defined and receive special tax treatment.

Written by John Stancil | Posted in Corporate • Income Tax