When should taxpayers agree to extend the time that the Service has to examine a return?

Article Abstract:

Because of the growing case load of the IRS, the Service is more frequently asking for extensions of the limitation period on assessments. The advantages and disadvantages of agreeing to a request for more time are discussed. In certain cases, consenting to an extension may work to the taxpayer's advantage; consent extends the period allowed the taxpayer to claim a refund, and failure to give consent may result in the IRS pursuing a frivolous litigation penalty. In many cases, agreeing to an extension only serves to increase the interest on the taxes owed. The best solution is for both the taxpayer and the Service to work together to achieve an early disposition of the tax matter in question.

Taxation, Laws, regulations and rules, Tax assessment, Limitation of actions, Statute of limitations, United States. Internal Revenue Service

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Treatment of commercial and residential real estate costs depends on many variables

Article Abstract:

The type of real estate investment and the form of ownership are two variables that affect the tax treatment of real estate investment as well as the costs of the investment. Tax treatment of acquisition and construction costs, construction period interest, start-up expenses, operating expenses, and carrying charges are discussed. Depreciation rules for real estate property under the Tax Reform Act of 1986 are described. The impact of the new law on limited real estate partnerships is also discussed.

Accounting and auditing, Real property tax, Real property taxes, Depreciation, Real estate limited partnerships

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