Tax and Business Alert - February 2014



Welcome to this month's edition of the Tax and Business Alert. Our goal is to provide you with current articles on various tax and business topics. The articles are intended to keep you up to date on trends and issues that may impact your business and personal financial affairs. Please contact us if you have questions about any of the issues discussed.

CONVERTING A RESIDENCE TO RENTAL PROPERTY
Recovering real estate values may cause some homeowners to consider converting their personal residence to rental property for investment purposes. But this decision is complex, and its ramifications are far-reaching. This article examines the economic factors that need to be considered. Read more...

RETIREMENT PLAN REVIEW
Retirement plan savings (e.g., qualified plans and IRAs) are important to one's financial well-being for many reasons. They allow one to accumulate income without currently paying tax, and the power of compounding pretax dollars makes a retirement plan one of the most powerful investment vehicles available. Therefore, it is important to do everything possible to get the most out of one of the best investment opportunities available. This article lists information to consider when conducting a review of retirement plans. Read more...

COVERDELL EDUCATION SAVINGS ACCOUNTS
The Coverdell Education Savings Account (ESA) was created as an incentive to help parents and students save for education expenses. This article looks at its benefits and limitations. Read more...

MAKING YOUR HOBBY A BUSINESS
Taxpayers often invest a great deal of time and money in their hobby, and some eventually make it a full- or part-time business activity. It's not a problem as long as the new business turns a profit. And it may be fine as well if the business produces a loss and the taxpayer enjoys the activity - even better if the loss can offset other income. However, if the business consistently generates losses, the IRS could determine that these losses are actually nondeductible hobby losses. This article discusses two ways to avoid the hobby loss rules. Read more...

SOCIAL SECURITY UPDATE
This article provides the 2014 inflation adjustments that have been announced for the various Social Security amounts and thresholds. Read more...

TAXPAYER PENALIZED FOR WASTING COURT'S TIME
This brief article describes how a taxpayer who claimed he had no taxable income was not only disputed by the Tax Court, but was assessed fines for wasting its time. Read more...

This publication is distributed with the understanding that the author, publisher and distributor are not rendering legal, accounting or other professional advice or opinions on specific facts or matters, and, accordingly, assume no liability whatsoever in connection with its use. The information contained in this newsletter was not intended or written to be used and cannot be used for the purpose of (1) avoiding tax-related penalties prescribed by the Internal Revenue Code or (2) promoting or marketing any tax-related matter addressed herein. © 2014