Business Tax Quarterly Suggested Readings - Winter 2020

February 01, 2020

Hobby vs. Business - Related Content

Factors That Inform Business Classification Rulings The U.S. Tax Court recently ruled in favor of business classification for an activity. Learn the deciding factor that tipped the court’s ruling in favor of this designation.

Profit Intent is Best Defense Against IRS Audits The IRS views as suspect any Schedule C with high losses from an activity that appears to be a hobby. This close surveillance amplifies the importance of documenting a profit motive.

Factors for Determining a Valid Business Deduction The full extent of business expense deductions is among the most deliberated issues before U.S. tax courts. Businesses should therefore revisit what constitutes a legitimate write-off.

Standard Mileage Rate Among Qualifying Deductions Among ordinary and necessary expenses, businesses should not overlook mileage deductions. This includes the new standard mileage rate for business, which takes effect this month.

Selling a Business - Related Content

State Relocation Requires Close Attention in a Business Sale Before relocating to a low-tax state, the move should be carefully executed. Illustrating this importance, a vacation home in New York still meets the state’s residency standards.

Dual Residency Also Poses Tax Challenges Intangible income, which includes proceeds from the sale of a business, also requires close review. In New York, for example, dual residents who pay taxes elsewhere on intangible income get a state tax credit, but only if the money is derived from business activities in the other state.

Assessing ‘Personal Goodwill’ in a C-Corporation Asset Sale To maximize tax savings, the seller may seek to push the price toward capital-based assets such as goodwill, which is taxed at 20%. Learn the main criteria for establishing ‘goodwill.’


Business Tax Quarterly - Winter 2020

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