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Tax Strategy for the Week (November 8th, 2013)

Fun Asia Program Recording from Rauf Bajaria
Deducting an Improvement as a Repair
Tax Issue

Is it a repair or is it an improvement? Costs paid or incurred to repair property are currently deductible while costs to improve property are depreciated over the life of the property. With increased Section 179 deduction limits and bonus depreciation, businesses may not pay as much attention to what constitutes a repair versus an improvement. However, the increased depreciation expensing provisions were intended to be temporary.  As the provisions expire, determining what constitutes a repair, in order to maximize current business deductions, takes on added significance.

Applicable […]

Tax Strategy for the Week (September 13th,2013)

Nonqualified Annuities – Tax Benefits
Tax Issue

Nonqualified annuities offer tax-deffered earnings. However, upon distribution, nonqualified annuity earnings are taxed as ordinary income. Nonqualified annuity withdrawals are treated an income-first, meaning that the earnings are withdrawn before removing the principal. In addition, if the taxpayer is younger than 59 ½, withdrawals of earnings are generally subject to an additional 10% tax.


Other investment income, such as stock or mutual fund dividends, is often taxed as qualified dividends at a lower rate than ordinary income. In addition, equity investments help for greater than one year are generally taxed at a lower capital gains […]

Tax Strategy for the Week (August 2nd, 2013)

Equipment Leasing Programs
Tax Issue

Taxpayers often have the desire to have investments earn high current income while paying little or no income tax on that income. This is especially true for taxpayers with higher income. These investors are also looking to diversify assets to reduce risk.


Applicable Tax Law

Equipment leasing programs are usually set up as limited partnerships. Investors have limited liability and the general partner manages the investment.
As a limited partnership, income and losses flow through to the individual investor. Because the investor does not materially participate in the partnership, the deductions of losses of the partnership are limited to […]