If you own rental property, the rental activity is generally treated by the IRS as a “passive activity.” This is important to understand because if you operated rental property and sustained a loss, the loss can be claimed against active income, such as wages. This loss deduction is limited to $25,000 for the claimed tax year. The $25,000 loss deduction may be further limited by Adjusted Gross Income (AGI). However, if you are a bona fide real estate professional, the rental activity is treated as an “active activity.” Therefore, there is no limit on the amount of losses that can be deducted. Continue reading…
How does a tax resolution company find out about your tax problem?
Taxpayers with IRS problems are being cold-called or are receiving letters from companies urgently seeking contact and promising that your tax problems can be easily resolved. Some companies are being creative, sending out letters to taxpayers that contain personal information which often mimic official IRS letters. Companies gain access to personal information due to a tax lien being filed by the IRS.
Can I really settle my taxes for less than I owe?
The simple answer to this question is maybe. The more accurate answer, it depends on your current financial situation because not all taxpayers qualify. Even if you are qualified by IRS criteria, the resolution process can be lengthy and expensive.
Another nationwide firm bites the dust
JK Harris, a nationally advertised tax resolution firm, recently filed for federal bankruptcy protection and has ceased business operations. JK Harris was forced into bankruptcy due to legal action taken by Attorney Generals from several states. Thousands of taxpayers may be left helpless and without proper representation. JK Harris is the third nationwide firm to have ceased operations due to unfair business practices involving consumers in several states.