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How to Determine Basis for Property Received as a Gift
Gifted property basis rules depend on the donor’s adjusted basis and fair market value at gifting. Documenting gift tax paid…
Understanding Basis Adjustments in Involuntary Property Conversions
Involuntary conversions allow deferral of tax gains if replacement property is bought timely and is similar in use. Documentation and…
Understanding Bargain Purchases and Income Recognition Rules
If you acquire property below fair market value, you must report the difference as income. Businesses must follow GAAP and…
Understanding Repairs vs Improvements: Capitalization and Deduction Rules
IRS rules clarify repairs versus improvements for US property taxes. Repairs are immediately deductible; improvements depreciate over years. Small taxpayers…
Criteria for Depreciating Property in Business or Income Activities
Immigrants can reduce taxes by depreciating business property costs over time using IRS MACRS rules. Report annually with Form 4562…
Understanding Adjusted Basis: Increases and Decreases Explained
The adjusted basis calculates property tax gain or loss, including purchase costs, capital improvements, and depreciation. It impacts homeowners, investors,…
Tax Rules for Property Received in Exchange for Services Rendered
When property is received for services, taxpayers must include its fair market value in income. The Section 83(b) election enables…
How to Allocate Cost Basis Between Land and Buildings in Real Property
For immigrants and investors, cost basis includes purchase price, mortgage assumed, and specific fees, divided by fair market value between…