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April 2011 - President Signs Repeal of Expanded 1099 Requirements - Reprinted from the Journal of Accountancy
On Thursday, April 14, President Barak Obama signed into law the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011 (HR 4; 1099 Act) which repeals both the expanded Form 1099 information reporting requirements mandated by last year's health care legislation and also the 1099 reporting requirements imposed on taxpayers who receive rental income enacted as part of last year's Small Business Jobs Act (PL 111-240). The 1099 Act did not repeal the increase in the information reporting penalties that were mandated by the Small Business Jobs Act.
As a result of the repeal, the 1099 reporting rules remain the same. If you have any questions about 1099 filing requirements or this legislation, feel free to contact us.
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Work-related education — When can you deduct your expenses?
 Those heading back to the classroom to improve their marketability may, depending on their income level and other factors, qualify for education tax credits (such as the Hope credit or Lifetime Learning credit) or the tuition and fees deduction. But this article focuses on deducting the cost of education as a business expense. It explains what is and is not deductible, and one instance in which an unemployed person might be able to deduct expenses. A sidebar addresses the issue of whether the cost of obtaining an MBA is deductible.
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The icing on the cake — A QPRT allows you to save estate taxes on your home while still living in it
 Now may be a good time to consider a qualified personal residence trust (QPRT), which allows a person to transfer their home to their children or other family members at a deeply discounted gift tax value. By doing so, they can remove the home’s value and any future appreciation from their taxable estate. And they can continue to live in the home indefinitely, which can be an excellent strategy if the property’s value is depressed and is expected to increase. But, as this article explains, it’s important to be aware of the requirements of a QPRT, along with capital gains tax ramifications.
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How to maximize deductions for LLC and LLP losses
 Limited liability companies (LLCs) and limited liability partnerships (LLPs) are popular business structures because they combine the tax advantages and flexibility of a partnership with the liability protection of a corporation. But until recently, the IRS treated owners as limited partners for purposes of the passive activity loss (PAL) rules. But federal courts have ruled that LLC and LLP owners should be treated as general partners, making it easier for them to deduct losses. However, the owners must establish that they “materially participated” in the business. This article lists seven tests, any one of which can establish material participation.
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Tax Tips
 This issue’s “Tax Tips” discusses why it’s important that S corporations establish and document reasonable salaries for shareholder-employees; why it may be best to make large gifts now to take advantage of the current high tax exemption; and why those 70½ or older should consider a charitable IRA rollover.
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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. ©2011 TXImj11
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