http://taxmama.com Free Tax Advice where Taxes are Fun Wed, 08 Feb 2012 19:39:02 +0000 en hourly 1 http://wordpress.org/?v=3.3.1 Free Tax Advice where Taxes are Fun TaxMama no Free Tax Advice where Taxes are Fun http://taxmama.com/wp-content/plugins/powerpress/rss_default.jpg http://taxmama.com/category/commercial-property/ http://taxmama.com/tax-quips/selling-building/ http://taxmama.com/tax-quips/selling-building/#comments Tue, 12 Aug 2008 13:04:00 +0000 TaxMama http://www.taxquips.com/index.php?id=938

Today TaxMama hears from Oscar in Michigan who says, “I have a friend who wants to sell a commercial building that has been fully depreciated. She and her husband were co-owners of the building. Her husband died in 2001 when the building was appraised at $400,000.00. She is of the opinion that the appraised value [...]]]> http://taxmama.com/tax-quips/selling-building/feed/ 0 Building,Cost basis,Depreciation,Sales,Taxation in the United States Today TaxMama hears from Oscar in Michigan who says, “I have a friend who wants to sell a commercial building that has been fully depreciated. She and her husband were co-owners of the building. Her husband died in 2001 when the building was appraised ... Today TaxMama hears from Oscar in Michigan who says, “I have a friend who wants to sell a commercial building that has been fully depreciated. She and her husband were co-owners of the building. Her husband died in 2001 when the building was appraised at $400,000.00. She is of the opinion that the appraised value would become the cost basis. But I think that only his share of the building would get the stepped up basis – that her half would still be zero. Am I correct? Or what would the cost basis be if she sold the building.” TaxMama no http://taxmama.com/tax-quips/land-sale/ http://taxmama.com/tax-quips/land-sale/#comments Tue, 09 Oct 2007 12:57:00 +0000 TaxMama http://www.taxquips.com/index.php?id=572

Today we hear from Lea Anne in Kentucky who tells us. “I sold 8 acres of land for $25,000.00 that I bought for $15,000.00 8 years ago. I added at least $10,000.00 worth of improvements to the land, including a building, a road, electric, water, and clearing it. There was once a trailer on [...]]]> http://taxmama.com/tax-quips/land-sale/feed/ 0 Business/Finance,Finance,Kentucky,Lea Anne,Public finance,Real property law,Tax,Taxation Today we hear from Lea Anne in Kentucky who tells us. “I sold 8 acres of land for $25,000.00 that I bought for $15,000.00 8 years ago. I added at least $10,000.00 worth of improvements to the land, including a building, a road, electric, water, Today we hear from Lea Anne in Kentucky who tells us. “I sold 8 acres of land for $25,000.00 that I bought for $15,000.00 8 years ago. I added at least $10,000.00 worth of improvements to the land, including a building, a road, electric, water, and clearing it. There was once a trailer on the property that I lived in for 2 years. But that wasn’t part of the sale. How much tax will I have to pay, if any at all?” TaxMama no http://taxmama.com/tax-quips/flipping-houses/ http://taxmama.com/tax-quips/flipping-houses/#comments Wed, 15 Aug 2007 13:10:00 +0000 TaxMama http://www.taxquips.com/index.php?id=507

Today TaxMama hears from Geri in North Carolina, who asks, “What can you tell me about flipping Houses? Is this a Schedule C Business, or Schedule D? There is a lot of different information out there, about how to handle flipping houses for tax purposes.” ]]> http://taxmama.com/tax-quips/flipping-houses/feed/ 0 Finance,Flipping,Internal Revenue Code section,Internal Revenue Service,North Carolina,Real property law,Tax,Tax forms in the United States,Taxation in the United States Today TaxMama hears from Geri in North Carolina, who asks, “What can you tell me about flipping Houses? Is this a Schedule C Business, or Schedule D? There is a lot of different information out there, about how to handle flipping houses for tax purpos... Today TaxMama hears from Geri in North Carolina, who asks, “What can you tell me about flipping Houses? Is this a Schedule C Business, or Schedule D? There is a lot of different information out there, about how to handle flipping houses for tax purposes.” TaxMama no http://taxmama.com/tax-quips/1031-exchange/ http://taxmama.com/tax-quips/1031-exchange/#comments Thu, 08 Mar 2007 17:21:00 +0000 TaxMama http://www.taxquips.com/index.php?id=358

Today TaxMama hears from Gaetano in the Tax Parlor, who asks “When you do a section 1031 exchange for investment real estate are you “required” to use a qualified intermediary to receive the funds from the sale of the first property or is this just an advisory to make sure you do the exchange within [...]]]> http://taxmama.com/tax-quips/1031-exchange/feed/ 0 Business/Finance,Escrow,Internal Revenue Code section,Internal Revenue Service,investment real estate,Like-kind exchange,Qualified intermediary,Real property law,Tax return,Taxation in the United States,Tenants in common 1031 exchange Today TaxMama hears from Gaetano in the Tax Parlor, who asks “When you do a section 1031 exchange for investment real estate are you “required” to use a qualified intermediary to receive the funds from the sale of the first property or is this just an ... Today TaxMama hears from Gaetano in the Tax Parlor, who asks “When you do a section 1031 exchange for investment real estate are you “required” to use a qualified intermediary to receive the funds from the sale of the first property or is this just an advisory to make sure you do the exchange within the time limits, etc.?” (http://taxmama.com/art/nav/tmreplies.gif) Dear Gaetano, You only need the intermediary if you want a tax-free exchange. Once the taxpayer receives the funds – it’s ALL OVER! You’ve just blown your tax deferral. However, since the property is identified and the purchase escrow will close shortly afterwards, you might be able to have the funds transferred directly to the next escrow, never being soiled by the sellers hot little hands. I believe the escrow company may qualify as an intermediary for this purpose. With this much money at stake, be SURE the seller consults with his/her tax professional for guidance BEFORE either escrow closes. And preferably, get the guidance in writing from the tax professional who will be preparing the tax returns involving these sales/purchases. Read IRC 1031 and all the material IRS provides before issuing a written opinion. This page has a brief explanation and offers links to more resources on the topic of 1031 exchanges (See IRS link below). And remember, you’ll find answers to lots of questions about 1031 Exchanges and other tax information, free. Where? At TaxMama.com [Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips. Please click on the subscribe link and join us.] To make your comments, please visit TaxMama’s Parlor (”http://taxtwist.com/forum.php?varset=s:13-pm:m-se:265-fo:13&SessId=&SessId=7a53d4f7a32f4e9ccce2a34ff87a58e0”) at TaxTwist.com. * Ask TaxMama (http://www.taxmama.com/AskTaxMama) :: Where taxes are fun and answers are free * TaxTwist.com (http://www.taxtwist.com) :: Where TaxQuips will be moving & You can add your comments * IRS Explanations (http://www.irs.gov/businesses/small/industries/article/0,,id=98491,00.html) :: Like-Kind Exchanges - Real Estate Tax Tips File Download (1:46 min / 0.4 MB) (http://taxmama.audioacrobat.com/download/d56342ca-d3b8-4f8d-4244-f8befe91b1a1.mp3) TaxMama no http://taxmama.com/tax-quips/mortgage-for-business/ http://taxmama.com/tax-quips/mortgage-for-business/#comments Tue, 27 Feb 2007 16:55:00 +0000 TaxMama http://www.taxquips.com/index.php?id=352

Today TaxMama hears from Maggie in North Carolina who says, “I am new to this site courtesy of Wayne Davies. http://hop.clickbank.net/?taxmama/taxguide I have a small pottery business of over 30 yrs. Last year we took up our first ever mortgage to buy property for a gallery. Our home…where we work, was mortgaged to pay for [...]]]> http://taxmama.com/tax-quips/mortgage-for-business/feed/ 0 Business/Finance,Commercial Property,Gallery,Mortgage,North Carolina,Wayne Davies Today TaxMama hears from Maggie in North Carolina who says, “I am new to this site courtesy of Wayne Davies. http://hop.clickbank.net/?taxmama/taxguide I have a small pottery business of over 30 yrs. Last year we took up our first ever mortgage to buy ... Today TaxMama hears from Maggie in North Carolina who says, “I am new to this site courtesy of Wayne Davies. http://hop.clickbank.net/?taxmama/taxguide I have a small pottery business of over 30 yrs. Last year we took up our first ever mortgage to buy property for a gallery. Our home…where we work, was mortgaged to pay for the new place. I now have 2 places of business. Can I deduct the mortgage payments as a business expense?” ~~~~ Hi Maggie Congratulations on your new gallery! It’s obviously thriving enough for you to buy a place. I always think that’s a great idea for a business. So, how do you treat this mortgage? Well, if you drew the money to use for the business, have the business pay the mortgage AND take the deduction. If your business is not incorporated or using any formal structure, then, everything is happening in your own Schedule C. There’s a line there for Mortgage Interest. Use that instead of your Schedule A. And if you’re still actively using your home as your business office, you may take an office in home deduction and depreciate your home, and deduct the utilities and all that. You’ll find some information about that here: Office in Home (”http://www.taxmama.com/Articles-cur/homeofc.html”) And more in my book, (”http://www.taxmama.com/AskTaxMama/book/”) if you need it. If you haven’t made the decision about incorporating or setting up an LLC yet, please do read Wayne’s books (”http://hop.clickbank.net/?taxmama/taxguide”) on incorporating. It will open your eyes! Once you do form an entity, you’ll want to write a formal lease agreement between yourself and the company. Then come talk to Wayne, and he’ll guide you on the next step. You see, his book comes with a couple of hours of consultation time with him. And remember, you’ll find answers to lots of questions about business deductions and other tax information, free. Where? At TaxMama.com [Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips. Please click on the subscribe link and join us.] To make your comments, please visit TaxMama’s Parlor (”http://taxtwist.com/forum.php?varset=s:13-pm:m-se:265-fo:13&SessId=&SessId=7a53d4f7a32f4e9ccce2a34ff87a58e0”) at TaxTwist.com. * Ask TaxMama (http://www.taxmama.com/AskTaxMama) :: Where taxes are fun and answers are free * TaxTwist.com (http://www.taxtwist.com) :: Where TaxQuips will be moving & You can add your comments * TaxMama's Articles (http://www.taxmama.com/Articles-cur/homeofc.html) :: Office in Home Information * Wayne M. Davies' books (http://hop.clickbank.net/?taxmama/taxguide) :: How to Incorporate and Cut Your Taxes Dramatically * TaxMama's Book (http://www.taxmama.com/AskTaxMama/book/) :: Small Business Taxes Made Easy File Download (1:50 min / 0.4 MB) (http://taxmama.audioacrobat.com/download/8143ca40-68b4-c2ea-0b52-412bd6aea324.mp3) TaxMama no http://taxmama.com/tax-quips/standing-timber/ http://taxmama.com/tax-quips/standing-timber/#comments Mon, 18 Dec 2006 16:58:00 +0000 TaxMama http://www.taxquips.com/index.php?id=319

Today TaxMama hears from Anita in Fair Oaks, CA who tells us: “We own a few acres of land full of trees. We did timber harvesting. Can we adjust the tax basis of the land as, probably, the land value has decreased due to the harvesting of timber? Do we get depletion allowance?” ~~~~ Dear [...]]]> http://taxmama.com/tax-quips/standing-timber/feed/ 0 Depletion,HArvesting,Land,Timber Today TaxMama hears from Anita in Fair Oaks, CA who tells us: “We own a few acres of land full of trees. We did timber harvesting. Can we adjust the tax basis of the land as, probably, the land value has decreased due to the harvesting of timber? Today TaxMama hears from Anita in Fair Oaks, CA who tells us: “We own a few acres of land full of trees. We did timber harvesting. Can we adjust the tax basis of the land as, probably, the land value has decreased due to the harvesting of timber? Do we get depletion allowance?” ~~~~ Dear Anita, Good questions. But, you don’t get to adjust the basis of the land when you sell trees. The money from the sale of the trees is taxable income. Do you get a depletion allowance. Hmmmm….I’d never thought about that. But I can’t think why. The land is still there. You haven’t removed any land, as you do in strip mining. You should not have simply removed the trees, if you have any sense. Most people today who harvest trees on their land also replant replacements. Hopefully, you insisted that the folks doing your harvesting engage in reforestation, as well. But, I did come across this citation from IRS Publication 535 that refers to a depletion allowance for standing timber. http://www.mobdn.net/irs/taxmap/pubs/p535-051.htm Here’s an article on how to handle the depletion allowance. It’s a 2005 article by Karen Potter-Witter, Professor, Department of Forestry: http://forestry.msu.edu/extension/extdocs/facts1.pdf I hope this helps. Clearly , handled property, that stand of timber will last you forever. And remember, you’ll find answers to lots of questions about depletion and other tax information, free. Where? At TaxMama.com [Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips. Please click on the subscribe link and join us.] To make your comments, please visit TaxMama’s Parlor (”http://taxtwist.com/forum.php?varset=s:13-pm:m-se:265-fo:13&SessId=&SessId=7a53d4f7a32f4e9ccce2a34ff87a58e0”) at TaxTwist.com. * Ask TaxMama (http://www.taxmama.com/AskTaxMama) :: Where taxes are fun and answers are free * TaxTwist.com (http://www.taxtwist.com) :: Where TaxQuips will be moving & You can add your comments * IRS Publication 535 (http://www.mobdn.net/irs/taxmap/pubs/p535-051.htm) :: Regarding Standing Timber Depletion * Standing Timber Depletion (http://forestry.msu.edu/extension/extdocs/facts1.pdf) :: Karen Potter-Witter, Professor, Department of Forestry: File Download (1:26 min / 0.3 MB) (http://taxmama.audioacrobat.com/download/211b8c39-c81e-8940-a643-16780c114d1d.mp3) TaxMama no http://taxmama.com/tax-quips/house-to-c-corp/ http://taxmama.com/tax-quips/house-to-c-corp/#comments Thu, 14 Dec 2006 17:32:00 +0000 TaxMama http://www.taxquips.com/index.php?id=317

Today TaxMama hears from Ronald in Tucson, AZ who asks: “Is it legal to sell my residence to my C corp and be exempt from capital gains tax?” OK, my friends, this is one of those questions we tax professionals look at, and cringe! Let me try to answer this one, briefly. OK? Well Ronald, [...]]]> http://taxmama.com/tax-quips/house-to-c-corp/feed/ 0 Business/Finance,C corporation,Home,Negation,Real estate,Sale,Tucson Today TaxMama hears from Ronald in Tucson, AZ who asks: “Is it legal to sell my residence to my C corp and be exempt from capital gains tax?” - OK, my friends, this is one of those questions we tax professionals look at, and cringe! Today TaxMama hears from Ronald in Tucson, AZ who asks: “Is it legal to sell my residence to my C corp and be exempt from capital gains tax?” OK, my friends, this is one of those questions we tax professionals look at, and cringe! Let me try to answer this one, briefly. OK? Well Ronald, Yes, it’s legal. No, it won’t make the sale exempt from taxes. In fact, it’s going to cost you SOOOOOO much more than you can ever expect. I can’t even tell you all the issues something like this touches on, but briefly, related party transactions and double taxation come to mind. Generally, corporations are the last place you want to hold real estate. So, don’t do that. Please. Get help to do some planning if you want to mess around with clever ideas. And remember, you’ll find answers to lots of questions about off the wall ideas and other tax information, free. Where? At TaxMama.com [Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips. Please click on the subscribe link and join us.] To make your comments, please visit TaxMama’s Parlor (”http://taxtwist.com/forum.php?varset=s:13-pm:m-se:265-fo:13&SessId=&SessId=7a53d4f7a32f4e9ccce2a34ff87a58e0”) at TaxTwist.com. * Ask TaxMama (http://www.taxmama.com/AskTaxMama) :: Where taxes are fun and answers are free * TaxTwist.com (http://www.taxtwist.com) :: Where TaxQuips will be moving & You can add your comments File Download (1:06 min / 0.3 MB) (http://taxmama.audioacrobat.com/download/c867deac-eaf1-c690-86e2-2f411632dfab.mp3) TaxMama no http://taxmama.com/tax-quips/eminent-domain/ http://taxmama.com/tax-quips/eminent-domain/#comments Wed, 12 Jul 2006 15:41:00 +0000 TaxMama http://www.taxquips.com/index.php?id=240

Today TaxMama hears from Penny in Kansas who asks. “If a gas station owner is forced by the government to sell part of his property so a street can be widened, is that considered involuntary conversion? Eminent domain? Do you know how this situation should be treated tax-wise?” ]]> http://taxmama.com/tax-quips/eminent-domain/feed/ 0 Eminent domain,eminent domain law,Internal Revenue Service,Property,Property law,Real property law,Supreme Court,Washington Post Today TaxMama hears from Penny in Kansas who asks. “If a gas station owner is forced by the government to sell part of his property so a street can be widened, is that considered involuntary conversion? Eminent domain? Today TaxMama hears from Penny in Kansas who asks. “If a gas station owner is forced by the government to sell part of his property so a street can be widened, is that considered involuntary conversion? Eminent domain? Do you know how this situation should be treated tax-wise?” (http://taxmama.com/art/nav/tmreplies.gif) TaxMama no