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Related Party Rules and USCS 26 Section 1031
Do you know what June 29, 2019 is? Of course you do. It’s a Saturday. It’s also the 180 th day of the period that began on January 1, 2019. Need another hint? It is the final day by which a taxpayer who was an owner in a calendar-year pass-through entity – a partnership or S corporation –may elect to defer their share of any capital gain recognized by the pass-through entity during 2018 by contributing an amount equal to the amount of such gain to a qualified opportunity fund in exchange for an equity interest in the fund. What’s more, it is the 74 th day of the period that began on April 17, 2019 – the day on which the IRS issued its eagerly-awaited second set of proposed regulations related to the qualified opportunity zone (“QOZ”) rules. Among the issues that were addressed in this second installment of guidance under Sec. 1400Z-2 of the Code was the ability of a taxpayer who already owns real property located in a QOZ to lease such property to a related person – s...
Code Section 162(a) Rental Expense allowed for personal residence.
Due to the pandemic, millions of taxpayers are now working from home. Although the IRS has not yet issued any guidance on whether they would receive special deductions, a current case was decided for the taxpayer. A taxpayer in a new case, Benton TC Summary Opinion 2020-12, 3/11/20 , worked out of a house in the suburbs and deducted the rent his business paid to use the place as an ordinary and necessary business expense. Generally, you can deduct rent paid by your business for use of a building, such as office building or warehouse, where you conduct business activities. But it’s not as clear-cut if you operate the business in a house normally intended to be used as a personal residence. The Taxpayer in this case relied on Code Section 162(a) , that allows Ordinary and Necessary business expenses Including rent. Code Section 162(a) states that " In general There shall be allowed as a deduction all the ordinary and necessary expenses paid or incurred during ...
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