April highlights from The MWE Advisor newsletter include: the ins and outs of deducting legal expenses, what changes to expect in the IRS’s revised Employer’s Tax Guide to Fringe Benefits, and identifying what type of real estate investor you are for tax purposes.
The Ins and Outs of Deducting Legal Expenses
Many individuals are surprised to discover that legal expenses usually aren’t currently deductible under the federal income tax rules. Here are some exceptions to this general rule, including two recent real-life examples that highlight when legal expenses may, at least partially, be deductible.
IRS Updates and Expands Fringe Benefit Tax Guide
The IRS recently published a revised Employer’s Tax Guide to Fringe Benefits for use in 2017. The new version has some notable clarifications and additions, including benefits that can’t be excluded from the employee’s W-2 as nontaxable de minimis fringes and a new, extended section on product testing benefits. This articles explains the changes and takes a brief look at special rules that apply to the tax exclusion for “achievement awards” given to employees for length of service or safety.
Tax Court Interprets Exceptions to the PAL Rules for Rental Properties
Do you own rental real estate properties? If so, it’s important, for tax purposes, to determine whether you’re a passive investor or whether you materially participate in renting the property. Here are several U.S. Tax Court decisions that clarify whether certain taxpayers qualify for special exceptions to the passive activity loss (PAL) rules for rental properties.