Charitable Deductions

How much of a deduction can I take for my donated goods?

Asked Thursday, February 23, 2012 by an anonymous user

CPA Answer:

There are valuation guides available to the public to calculate an amount for noncash contributions.
You can go to the Salvation Army website to view their Donated Goods Valuation Guide at www.salvationarmyusa.org
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Charitable Deductions

How much am I allowed to claim as a charitible cash deduction?

Asked Thursday, February 23, 2012 by an anonymous user

CPA Answer:

The answer is, how much did you contribute and how much can you substantiate.
For contributions of $250 or less, a cancelled check or credit card statement is sufficient.
A written acknowledgement from the charity documenting the contribution's amount and date is also acceptable
For contributions of $250 or more, you must have written substantiation from the organization. A cancelled check is not sufficient.
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Accounting Terminology

If I get work done on my house, can I use it as a tax deduction?

Asked Thursday, February 23, 2012 by an anonymous user

CPA Answer:

Improvements to your Residence are not deductible.
The costs are added to your initial cost basis to calculate your increased adjusted cost basis.
Your increased cost basis will be used in the year of sale of your residence to determine the gain on sale.
Improvements to your Rental property are deductible as a repair or a depreciable capital improvement.
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Can I Deduct?

Can I deduct the student loan interest reported in my child's name and S.S. number?

Asked Thursday, February 23, 2012 by an anonymous user

CPA Answer:

No. If the parents are not legally obligated to repay the loan they cannot deduct any interest the dependent pays.
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IRAs - Traditional

How do I calculate the IRS's Mandatory Required Distribution

Asked Thursday, February 23, 2012 by an anonymous user

CPA Answer:

Minimum distributions must be made by April 1 the year after the year you turn 70 and a half.
After the first distribution, minimum distributions must be made by December 31 each year.
Step 1 is to Access the proper life expectancy table. Life expectancy tables are in Appendix C of IRS PUBLICATION 590. Table 1 is for use by one beneficiary. Table 2 is for IRA owners whose spouse is more than 10 years younger than the owner and the spouse is the sole beneficiary. Table 3 is for anyone else.
Step 2 is to Find the appropriate life expectancy amount to determine distribution period.
Step 3 is to Divide the IRA account balance from December 31 of the prior year by the distribution period to calculate the minimum distribution for the period.
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Educational Tax Benefits

Fellowship payments - IRS Publications

Asked Thursday, February 23, 2012 by an anonymous user

CPA Answer:

If you are a U. S. citizen or resident for tax purposes, who received fellowship amounts for studying, teaching or researching in the U. S., then see IRS Publication 970, Tax Benefits for Education, which is available at http://www.irs.gov/publications/p970/index.html
If you are a U. S. citizen or resident alien for tax purposes, who received fellowship amounts for studying, teaching or researching outside the U. S., then see Publication 54, Tax Guide for U. S. Citizens and Resident Aliens Abroad, which is available at http://www.irs.gov/pub/irs-pdf/p54.pdf.
If you are a nonresident alien for U. S. tax purposes, who received fellowship amounts for studying, teaching or researching in the U. S., then see Publication 519, U. S. Tax Guide for Aliens, which is available at http://www.irs.gov/pub/irs-pdf/p519.pdf.
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Dividends

How are liquidating dividends reported and taxed?

Asked Thursday, February 23, 2012 by an anonymous user

CPA Answer:

Liquidating distributions, sometimes called liquidating dividends, are distributions you receive during a partial or complete liquidation of a corporation.
These distributions are, at least in part, one form of a return of capital.
They may be paid in one or more installments.
You will receive Form 1099-DIV from the corporation showing you the amount of the liquidating distribution in box 8 or 9
When a liquidating dividend occurs, it is considered to be a return of capital and not profit.
If the distribution is more than your basis, you would have to report the difference as a capital gain. If the distribution is less than your basis, you may be able to claim a capital loss.
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Educational Tax Benefits

Are Fellowship payments taxable?

Asked Thursday, February 23, 2012 by an anonymous user

CPA Answer:

Fellowship amounts are nontaxable where:
The recipient is an individual, who is a candidate for a degree at an educational organization (i.e., undergraduates or graduate students, but not post graduate); and
The fellowship amount is used for "qualified tuition and related expenses."
Qualified tuition and related expenses include tuition and fees required for the enrollment or attendance of a student at an educational institution, This would include fees, books, supplies and equipment required for courses of instruction at such an educational organization.
Fellowship amounts are taxable where:
Amounts are used for room, board, travel, clerical help, equipment, incidental living expenses and other expenses not required for enrollment in or attendance at the University.
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Where/How Do I File?

Do I have to report income I did not get a 1099-Misc for?

Asked Thursday, February 23, 2012 by an anonymous user

CPA Answer:

Yes. All income recived by you must be reported on your tax return regardless if you did not receive a 1099-Misc.
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Can I Deduct?

Deduction for the time spent on a job that I did not get paid for

Asked Thursday, February 23, 2012 by an anonymous user

CPA Answer:

You cannot claim a tax deduction for time spent on a job where you did not get paid. All materials used and payroll paid to employees’ on the job will be expensed.
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