By Eric P. Rothenberg, Esq. – The difficulty for a partner to deduct their own out-of-pocket expenses, not paid for by their partnership, was recently outlined well by the Fifth Circuit Court of Appeals in McLauchlan v. Commissioner of Internal Revenue [citation omitted and decided March 6, 2014].  These situations come up often with RE brokers, attorneys, CPAs, and other professional partnerships. Many partnership agreements are quite specific about what expenses the partner may seek to have the partnership reimburse them.  These include common costs we expect such as use of car, cell phone, meals, entertainment and continuing education. These can add up to a lot of money. But there are often even less common expenses such as contract labor [commercial RE brokers often hire financial consultants to provide reports to the buyers and can be paid a percentage of the fee, hourly, or even a flat fee and these

By Eric Rothenberg – With the Supreme Court’s ruling on June 26th, 2013, that the Defense of Marriage Act (“DOMA”) is unconstitutional, there will be major tax implications to the lesbian, gay, bi-sexual and transgender (“LGBT”) community. So a couple that previously were forced to file as “SINGLE” when they were legally married under a state that sanctions such marriage, can now file as “JOINT” filing status. They can also go back to 2009 or earlier and file amended returns. If such amended return would result in a refund, then that means they can amend the two single returns and now file a joint return and get a refund from the IRS. However, there is a three year statute of limitations on claiming a refund. The three year period starts when the return was last due so if you did not file an extension of time to file the return,

By Eric Rothenberg – When your mortgage company lowers the principal amount you owe, or they forgive some or all of the principal amount you owe, you will receive Form 1099-COD for cancellation of debt or indebtedness and they will report it to the IRS. The instructions on the form  tells you that you must report such amount as income on your tax return. But they don’t tell you that it may not be income to you at all! And you can save a lot in income taxes if you have a tax return preparer that knows the rules. This is not something you should do yourself as the rules are complex and require special reporting. Interest on the debt forgiven may or may not be considered as well. We start with the notion that Forgiven Debt is income under IRC Section 61(a)(12). There are several exceptions to that rule.