A Taxpayer’s House of Cards? Second Circuit Finds Restored Historic Mansion Is a Capital Asset

By WealthCounsel Staff on Aug 7, 2020 10:00:00 AM

Real property used in a taxpayer’s trade or business is excluded from the IRS’s definition of a capital asset, enabling taxpayers to take advantage of the generally more beneficial ordinary loss deduction rather than the capital loss deduction upon its sale. As the petitioners discovered in Keefe v. Commissioner, 2020 WL 4032469 (2d Cir. July 17, 2020), however, the treatment of a sale of real estate as a sale of business property rather than a sale of a capital asset needs to be backed up by the facts, and an incorrect characterization on a tax return can be quite expensive.

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The Benefits of Basis Planning

By WealthCounsel Staff on Jul 17, 2020 10:00:00 AM

Before the increase in the federal estate tax exemption amount, brought in by the enactment of the American Taxpayer Relief Act (ATRA) in 2013 and raised by the Tax Cuts and Jobs Act of 2017, estate planning attorneys focused primarily on how to avoid the impact of estate tax.

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