Selling a home: Will you owe tax on the profit?

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Selling a home: Will you owe tax on the profit?

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September 14, 2021 , ,

tax on sold home

Many homeowners across the country have seen their home values increase recently. According to the National Association of Realtors, the median price of homes sold in July of 2021 rose 17.8% over July of 2020. The median home price was $411,200 in the Northeast, $275,300 in the Midwest, $305,200 in the South and $508,300 in the West.

Be aware of the tax implications if you’re selling your home or you sold one in 2021. You may owe capital gains tax and net investment income tax (NIIT).

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Planning for year-end gifts with the gift tax annual exclusion

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September 7, 2021 , ,

annual gift tax

As we approach the holidays and the end of the year, many people may want to make gifts of cash or stock to their loved ones. By properly using the annual gift tax exclusion, gifts to family members and loved ones can reduce the size of your taxable estate, within generous limits, without triggering any estate or gift tax. The exclusion amount for 2021 is $15,000.

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You can only claim a casualty loss tax deduction in certain situations

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August 31, 2021 , , ,

casualty loss tax deduction

In recent weeks, some Americans have been victimized by hurricanes, severe storms, flooding, wildfires and other disasters. No matter where you live, unexpected disasters may cause damage to your home or personal property. Before the Tax Cuts and Jobs Act (TCJA), eligible casualty loss victims could claim a deduction on their tax returns. But there are now restrictions that make these deductions harder to take.

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Does your employer provide life insurance? Here are the tax consequences

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August 24, 2021 , ,

employer-provided life insurance

Employer-provided life insurance is a coveted fringe benefit. However, if group term life insurance is part of your benefit package, and the coverage is higher than $50,000, there may be undesirable income tax implications.

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Scholarships are usually tax free but they may result in taxable income

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August 10, 2021 ,

scholarship tax

If your child is fortunate enough to be awarded a scholarship, you may wonder about the tax implications. Fortunately, scholarships (and fellowships) are generally tax free for students at elementary, middle and high schools, as well as those attending college, graduate school or accredited vocational schools. It doesn’t matter if the scholarship makes a direct payment to the individual or reduces tuition.

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You may have loads of student debt, but it may be hard to deduct the interest

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July 27, 2021

student loan interest

More than 43 million student borrowers are in debt with an average of $39,351 each, according to the research group EducationData.org. If you have student loan debt, you may wonder if you can deduct the interest you pay. The answer is yes, subject to certain limits. However, the deduction is phased out if your adjusted gross income exceeds certain levels — and they aren’t as high as the income levels for many other deductions.

Continue Reading: You may have loads of student debt, but it may be hard to deduct the interest

A summer job may enable your teen to contribute to a Roth IRA.

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July 25, 2021

teen Roth IRA

There’s currently a “stepped-up basis” if you inherit property — but will it last?

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July 20, 2021 , , ,

inherited property

If you’re planning your estate, or you’ve recently inherited assets, you may be unsure of the “cost” (or “basis”) for tax purposes.

Continue Reading: There’s currently a “stepped-up basis” if you inherit property — but will it last?

Can taxpayers who manage their own investment portfolios deduct related expenses? It depends.

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July 13, 2021

investment-related expenses

Do you have significant investment-related expenses, including the cost of subscriptions to financial services, home office expenses and clerical costs? Under current tax law, these expenses aren’t deductible through 2025 if they’re considered investment expenses for the production of income. But they’re deductible if they’re considered trade or business expenses.

Continue Reading: Can taxpayers who manage their own investment portfolios deduct related expenses? It depends.