IRS Field Attorney Advice 20061701F, (April 28, 2006), which may not be used or cited as precedent, considered whether accrual basis taxpayers can deduct
employment taxes on vacation/bonus pay accrued at year-end, but not paid until the next year.
On his return, J deducts
his attorneys' fees under Sec.
If a taxpayer uses a timeshare unit and it is not rented out (or held out for rent), he or she could deduct
property taxes on Schedule A, under Sec.
According to revenue procedure 94-27, effective for taxable years beginning after December 31, 1990, home buyers may deduct
mortgage points currently even if the points are paid by the seller of the property--as long as they reduce the property's cost basis by the amount of the seller-paid points.
Instead, it incurs and deducts
the actual expenses for the flight service when actually performed and the related revenue is earned and recognized.
39 TC 333 (1962), the test for determining whether a taxpayer deducts
maintenance costs properly depends on its meeting the three basic criteria:
The total cost allocable to these flights is about $340x a year, which Z fully deducts
Letter Ruling 9625012(43) held that if an employee's required contribution is deducted
from his after-tax salary on his paycheck, the employee's contribution is taxable; but if the employer "grosses up" the employee's salary for the required contribution and then deducts
the identical amount from his after-tax salary, the deducted
amount is an employer contribution excludible from gross income under Sec.
Since a partner in a trading partnership deducts
these expenses as trade or business expenses when computing AGI, they are allowed in full against the AMT.
39) A lessee on the accrual method normally deducts
advance rent either ratably over the lease period or as paid if the rent is based on usage of or income from the property, under Regs.
It somewhat dismissed the long-standing basic principle that an accrual-method taxpayer properly deducts
a liability in the year in which the liability is incurred, regardless of when it is paid.
If a buyer deducts
seller-paid points, the cost basis of the home must be reduced by the same amount.