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When a borrower’s debt is canceled, it generally results in a Cancellation of Debt (COD) income, which is taxable under federal law. However, several essential exceptions allow this income to be excluded from taxes, depending on the circumstances. Here’s an overview of when and how COD income can be tax-free: General Rule: COD Income Is […]

A key question for many Airbnb hosts and vacation property owners is whether they owe self-employment tax on the income they earn from renting out their properties. The IRS addressed this issue in **Chief Counsel Advice (CCA) 202151005**, which provides insights into the treatment of rental income for self-employment tax purposes. However, it’s important to […]

Choosing Between IRS Mileage Rates and Actual Expenses for Business Vehicle Deductions In 2022, if you purchased a $50,000 SUV for business use and drove it 15,000 miles (87% business-related), you would have to decide whether to use the IRS standard mileage rates or the actual expense method to deduct vehicle-related costs. The IRS mileage […]

The U.S. Supreme Court’s recent decision in the Connelly case significantly impacts businesses that utilize buy-sell agreements funded by life insurance for shareholder succession. This ruling may affect estate tax liabilities and the valuation of company shares when a shareholder dies, prompting companies to reconsider their agreements. Background on Buy-Sell Agreements Buy-sell agreements are essential […]

The U.S. Department of Labor (DOL) is tightening regulations around the classification of workers, making it more challenging for businesses to classify workers as independent contractors instead of employees. This shift is primarily aimed at ensuring more workers receive protections under the Fair Labor Standards Act (FLSA), which mandates minimum wage and overtime pay. FLSA […]