Rules for residential interest changed
Article Abstract:
Provisions of the Revenue Act of 1987 change rules concerning taxpayer interest on debt for principal and secondary residences. Taxpayers will be unaffected, however, if they did not take on additional or new debt on such residences as of Jan 1, 1988, and interest payment deductibility for them will be governed by the Tax Reform Act of 1986 instead. The Revenue Act of 1987 provides two types of qualified residential interest for activity beginning in 1988: acquisition indebtedness and home equity indebtedness. Refinanced acquisition debt is seen as acquisition debt only when the amount financed does not exceed what is left of the acquisition debt immediately before the refinancing. Home equity indebtedness is any debt other than acquisition indebtedness that is secured by the taxpayer's main or second residence, so long as it does not exceed the property's fair market value.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1988
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New rules for S corporations
Article Abstract:
The Tax Reform Act of 1986 has changed taxation rules for Subchapter S corporation stockholders. The new rules include: placing of all Subchapter S firms on a calendar year (with few exceptions); allowing Subchapter S stockholders to apply losses distributed to them only to offset other forms of passive investments (again, with few exceptions); defining Subchapter S corporations as passive investments; repealing the General Utilities doctrine, thus forcing Subchapter S corporations to recognize gains or losses related to liquidating distributions; and requiring Subchapter S stockholders to report both fiscal year Subchapter S activities and calendar year 'short-period' activities on their 1987 returns, although the income realized may be spread over a four-year period ending in 1990.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1987
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New automobile substantiation rules
Article Abstract:
The Deficit Reduction Act of 1984 requires taxpayers to maintain daily records to support the business use of their automobiles. The substantiation regulations were eased by the Congress during 1985, but they must still be followed. The Internal Revenue Service has since announced new Temporary Regulations for the recordkeeping regulations covering the business-use of automobiles. These new regulations become effective in 1986. Taxpayers who take deductions for their car expenses must be able to prove and show on their tax returns: the quantity of miles driven during the year; the amount of miles for daily commuting to and from work; and whether there is an additional vehicle in use.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1986
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