Tax Guy A refresher on the home-sale gain exclusion tax break For all the obvious reasons, many suburban real estate markets are red hot. In these seller’s markets, big home-sale gains are likely. Great, if you’re a seller. But what about taxes? If you sell your main home for a healthy profit, the federal income tax home-sale gain exclusion can be one of the most valuable breaks on the books. You can potentially exclude (pay no federal income tax on) up to $250,000 of home-sale profit or up...

The Achieving a Better Life Experience Act of 2014 (ABLE Act) allows states to set up ABLE account programs. In turn, you can establish a tax-favored ABLE account to cover qualified disability expenses of a family member or loved one named as the designated account beneficiary. Here’s what you need to know about how ABLE accounts work and the tax advantages they offer. The basic concept An ABLE account must be set up under a qualified ABLE program that’s established and maintained by a state...

Tax Guy The IRS recently issued new regulations affecting this tax break, and the Nov. 3 election could determine its future as well. If you’re a serious real estate investor, you probably know all about tax-deferred Section 1031 like-kind exchanges. A properly structured Section 1031 exchange allows you to swap one piece of real estate property for another without paying any federal income tax — even if the property you’re unloading is greatly appreciated. This longstanding tax break has...

Tax Guy Claiming big first-year depreciation write-offs isn’t a no-brainer Under today’s federal income tax rules, your business may be able to claim big first-year depreciation write-offs for eligible assets that are placed in service in the current tax year. But is that a no-brainer? Answer: It depends. I will explain, after first covering some necessary background information. Here goes. Generous first-year depreciation breaks in a nutshell The Tax Cuts and Jobs Act (TCJA) installed...

Tax Guy The tax impact can be costly or benign, depending In this COVID-19 ravaged economy, debts can pile up beyond a borrower’s ability to repay. However, lenders are sometimes willing to forgive (cancel) debts that are owed by especially beleaguered borrowers. While forgiveness can help you survive financially, it can trigger negative tax consequences. Or maybe not. This column summarizes the most important things borrowers need to know about the federal income tax implications of forgiven...