Estate Planning Strategies to Protect Your Assets Now and For Your Family

If you’re trying to plan for the future and protect your assets, estate planning strategies and tips can benefit you and your loved ones. 
Researching estate planning strategies is an excellent idea for anyone worried about the possibility of losing assets. Due to unforeseen issues, even plans made with the best of intentions can fail to leave enough for family members. Properly constructed estate plans
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Categories: TRUSTS, ESTATES & FIDUCIARIES.

“Not-for-Profit” Rentals result in Bad Tax Consequences

Many real estate investors aren’t aware of WHAT allows expenses to be tax deductible. The answer is: a business purpose and profit motive. If you lack one or both, an IRS audit on your rentals will not turn out well, because expenses you thought were deductible are disallowed. The IRS calls these “not-for-profit” activities. Your “rentals” may appear to be “not-for-profit” rentals when you: Charge
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Categories: ASSET PROTECTION and TRUSTS, ESTATES & FIDUCIARIES.

Collecting Fair Market Rent is Vital to Tax Deductions

Beware: If you don’t collect fair market rents (FMR) on your rental properties, your tax deductions may be disallowed by the IRS. The reason is that the Tax Code requires that deductible expenses have a business purpose AND that you have a profit motive in order to take tax deductions. If audited by the IRS, you may have to prove that you’re collecting FMR, which
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Categories: ASSET PROTECTION and TRUSTS, ESTATES & FIDUCIARIES.

Real Estate Sales can be Audited Back Six Years

Ordinarily, the IRS has three years to audit you after you file your tax returns, but some returns can be audited back six years. These audits often involve real estate sales when IRS believes you omitted 25% or more of your gross income. When it comes to real estate sales, IRS argues that taxpayers claimed excess basis for a property when it was sold, resulting
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Categories: ASSET PROTECTION and TRUSTS, ESTATES & FIDUCIARIES.

IRS is Auditing My Rental Losses

Many real estate investors assume that if audited their records and receipts are all they need to win the audit. However, it’s not always having the receipts that allows for the deductions, but what motivates you and your intentions at the time. Real estate investors need to understand exactly WHAT allows for a tax deduction? (It’s more than receipts). The Tax Code requires that you
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Categories: ASSET PROTECTION and TRUSTS, ESTATES & FIDUCIARIES.

IRS Wins by Reclassifying Rental to “Investment Property”

It’s not just the lack of receipts and records that cause most real estate investors to lose when audited by the IRS. Often, it’s their own testimony used against them that allows the IRS to reclassify their activity into something passive for a less favorable outcome. To illustrate a difference in the Tax Code over active v. passive participation, let’s discuss two hypothetical neighbors living
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Categories: ASSET PROTECTION and TRUSTS, ESTATES & FIDUCIARIES.

IRS Audits of Cabin Vacation Rentals

Having receipts and great records doesn’t mean that an IRS audit will go well. IRS auditors are masters of invoking provisions in the Tax Code that often make receipts and records useless. The tax rules are especially complex when renting a property for a few days at a time, such as renting-out a family cabin when you’re not using it. The following is an example
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Categories: ASSET PROTECTION and TRUSTS, ESTATES & FIDUCIARIES.

Sham Trusts

“Sham trusts” are names given to certain trusts that the IRS claims are illegal. They can be either domestic or foreign trusts or both. The promoters of these trusts claim that they reduce or eliminate income taxes, but the IRS and the courts disagree and are aggressively pursuing taxpayers who own them and their promoters. The promoters charge high fees to set them up, but
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Categories: SCAMS & SCHEMES, SMALL BUSINESS ADVISORY, and TRUSTS, ESTATES & FIDUCIARIES.

Estate Planning 101-The Basics

The majority of American’s die today with no will, trust or estate plan whatsoever.  The absence of a valid estate plan means the state will decide how to distribute your estate, and it may not be the desired result that you were intending. An estate plan is essentially a written plan for the disposition of your assets at death.  A well drafted plan can avoid
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Categories: TRUSTS, ESTATES & FIDUCIARIES.