Posted in Uncategorized on May 11, 2012 | Leave a Comment »
Before Rocky and Apollo formally tie the knot, they might want to consider the tax implications.
President Obama released his “to do” list for Congress. Narrowly missing the cut? Keeping the damn leaves out of the Senate hot tub.
It’s easy to forget that if you don’t cross your T’s and dot your I’s, officer’s life insurance proceeds can be taxable to the employer.
For the price of a cup of coffee a day, please sponsor a little foreign kid so they’ll stop stealing our Child Tax Credits.
Posted in Uncategorized, tagged gay marriage, Rush Limbaugh, tax, tax benefits, taxpayer on May 11, 2012 | 4 Comments »
President Obama made a splash this week when he threw his support behind gay marriage, leading professional blowhard Rush Limbaugh to pronounce that the President had “declared war on traditional marriage,” a war Limbaugh — he of three previous divorces — should know plenty about.
But whatever your thoughts on Ace and Gary being able to make it formal, this much is certain: in the tax Code, sometimes it’s to your benefit to NOT be married to a loved one. Peter Reilly — tax blogger at Forbes and friend of Double Taxation — has the details:
I thought that it might be timely, though, to once again review some of the tax advantages of not being married.
The deferred salary – If Robin owns a C corporation (call it Robco), Robco can employ Terry. Robco should pay Terry once a year. If Robco is an accrual basis corporation it can accrue the salary due to Terry and pay it to Terry, a cash basis taxpayer in the subsequent year.
The free basis step-up – If Robin owns a rental property, Terry can buy it by giving Robin a long-term installment note. Robin will recognize no income until the principal is paid. Terry will have a stepped up basis for purposes of depreciation or even sale. (Thus it would even be worth doing with a vacation property, if it is likely to be sold.)
The basis swap – If Robin owns a high basis property and Terry owns a low basis property and they wish to sell the latter, they can do a like-kind exchange prior to the sale, thereby reducing the gain.
The wash sale – If Robin wants to maintain a securities position but harvest capital losses, Terry can purchase the identical security on the same day that Robin sells.
