Rental property can result in unexpected tax liabilities as well as significant benefits

Article Abstract:

Rental income from real estate, vehicles and equipment has been considered a good source of wealth. Since the passage of the Deficit Reduction Act of 1984, there is a difference in the taxation of such income. Personal holding company status is to be avoided because there is a 50 percent tax on undistributed income. Landlords may not be able to deduct all the interest paid on the mortgage of such property. The rules concerning accelerated depreciation have also changed and need to be carefully examined. Energy tax credits have been allowed for personal residences but are not allowed for investment real estate. These are only some of the changes, and a thorough reading of the law is recommended.

Economic aspects, Holding companies, Landlord and tenant, Landlord-tenant relations, Rental housing, Depreciation, Economic rent

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Most transfers of partnership interests are required to be reported to the Service

Article Abstract:

The sale or exchange of a partnership interest does not have to be reported to the IRS by the partnership if the transaction will be reported by a broker. A partnership must file an information return when an exchange of partnership interest involves unrealized receivables or appreciated inventory. In the case of a publicly traded partnership, a partnership does not have to make a statement or a return until it has notice of the exchange of partnership interest. Any person who holds a partnership interest as a nominee for another person must give the partnership the name and address of the other person.

Partnership, Partnerships, Tax returns

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Estimated tax requirements made easier as a result of recent changes

Article Abstract:

The Deficit Reduction Act of 1984 has made it easier to determine who must make estimated quarterly tax payments. The new rules also have reduced penalties for failures to make estimated quarterly payments. The statutory disregard of Rev. Rul. 83-111 will provide additional aid in preventing penalties for the failure to pay the estimated tax.

Finance, taxation, & monetary policy, Income tax, Withholding tax

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