Arguably one of the best tax breaks available has to do with home sales. The tax break we are referring to is the ability to avoid tax when selling a principal residence — up to $500,000 of gain is potentially tax-free
for married couples filing jointly ($250,000 for single filers).
In order to qualify though, you must own and use the home for two out of the five years before the sale date. Now you are probably wondering “What if I’m forced to move before that time?” Well, you could still be able to exclude the home sale profit by claiming a partial gain exclusion. Find out more details here.
Did your lender cancel or forgive your mortgage debt? If so, you generally have to pay tax on that amount. There are exceptions to this rule for some homeowners who had mortgage debt forgiven in 2012. Click here to learn 10 must-know facts.
The December 2012 issue of AICPA’s national magazine, The Tax Advisor, is now available online. Inside this issue, the “Tax Clinic” section features two articles authored by Michael D. Koppel, CPA and a partner of Gray, Gray & Gray. Michael shares why “Nonrefundable Milestone Fees Do Not Qualify as Success-Based” and demystifies the question of “Is the Sale of Real Property Ordinary Income or Capital Gain?”
Please click the links below to read the full articles:
An “estate of homestead” is an interest in a principal residence that can help safeguard the owner (or the owner’s surviving spouse and dependent children) against the claims of creditors by protecting the property from execution and forced sale.
In Massachusetts, homeowners can obtain a Declaration of Homestead by filing a homestead declaration at the appropriate registry of deeds. All homesteads must be filed in the county in which the residence is located. Continue reading →
By now many of you have heard that the IRS issued lengthy and complex rules last December regarding whether an expenditure for tangible property, including real estate, is deductible as a repair or must be capitalized. The new rules will affect many businesses including many of our clients. We at Gray, Gray & Gray are fully conversant with these new rules. The IRS recently held public meetings regarding the rules at which many issues and suggestions were made. We do not know the results of these meetings. Businesses have until December 31, 2013 to make the changes required by the new rules. Continue reading →
An increasing number of people are using a revocable living trust instead of a will to transfer their assets to their heirs. The primary reasons are to avoid the expense and delay of probate, and to keep the contents of the estate from becoming public knowledge.
Many people mistakenly believe that if they have a will, they can avoid probate. This is not true as a will, to have any legal effect, must be probated. This adds time and cost to the settlement of the estate, and also exposes the contents of the estate through public records. Continue reading →
As a tax accountant my job is to make sure my clients meet their legal obligations to the Internal Revenue Service, while helping them to retain as much of their assets as possible. It is a delicate balance that may soon be tipped further in favor of the tax collector. This is especially true for successful business owners who have managed to accumulate significant savings. Continue reading →
“In this world nothing can be said to be certain, except death and taxes.”
In the years since Mr. Franklin penned this notable adage, the question has ironically become, “How can we best avoid the taxes caused by death?”
Gift and estate taxes have been part of the American tax scene for many years. Currently, with proper planning, a couple can pass approximately $10,000,000 of assets to their heirs without incurring additional taxes. This amount can be significantly higher depending on the type of assets and discounts that may be applied. It is also important to remember that, for a number of years prior to 2011, the gift exemption was significantly less than the estate tax exemption. Continue reading →