Individual Tax Update

by Karl L. Fava, CPA; Edward A. Gershman, CPA; Janet C. Hagy, CPA; Jonathan Horn, CPA; Daniel T. Moore, CPA; Annette Nellen, J.D., CPA; Dennis Newman, CPA; Teri E. Newman, CPA; Kenneth L. Rubin, CPA; and Amy M. Vega, CPA   

Published December 1, 2012                                                                        

                                                                                      EXECUTIVE   SUMMARY

  • The Tax Court held that for purposes of calculating the qualified residence interest limitations under Sec. 163(h)(3), the limitations apply on a per residence, not a per taxpayer, basis.
  • Until it issues up-to-date regulations under Sec. 163, the IRS announced that taxpayers may use any reasonable method to allocate excess mortgage debt.
  • The Seventh Circuit disallowed a couple’s charitable contribution for donating their house to a fire department because the fair market value of the house did not exceed the value of the benefits they received in having the house demolished.
  • A taxpayer whose bar was condemned while he was in prison was permitted to establish the basis of the building using his testimony and the testimony of bar employees and neighbors.  Continue reading article……..