Don’t Fudge The Numbers
If you have been accused of concealment of income or making false or misleading statements on your tax return, you can face dire criminal and civil consequences and must get in touch with an experienced taxpayer attorney as soon as practicable.
If you file a fraudulent tax return, it is considered misreporting and concealment of income by the IRS; concealment of income could result in both civil and criminal penalties under the law. That being said, civil penalties are usually more common; this is because the government needs to dedicate fewer resources to the investigation as it has to meet a relatively lower burden of proof.
In real estate, it is common to change the use of property from income producing to some other purpose such as personal use and vice versa. When a change of use does occur, the property may be deemed disposed of at fair market value. There are different types of changes in use that will be discussed further and their respective tax consequences.
In a partial change in use, a taxpayer is deemed to dispose only a portion of the property. For example, if a property is used 60% for business and 40% for personal and now the property will be used 100% for business, then there will be a capital gain or loss on only 40% of the property at the fair market value. This is under the assumption that the property is personally held. If the corporation owned 100% of the property, then there may not be a capital gain on this partial change of use. However, the individual may have to pay rent at fair market value for their personal use portion.