ABLE Act of 2014

Near the end of 2014, Congress passed the Achieving a Better Life Experience Act of 2014 (ABLE).  This act was created to encourage and assist with saving private funds for individuals with disabilities.  It also provides secure funding for disability-related expenses of individuals with disabilities to supplement benefits provided through private insurance, Supplemental Security Income (SSI), Medicaid, the individual’s employment, and other sources.
 

A Shareholder’s Guarantee of a Loan to a Closely-held Corporation

Before making any guarantees on loans to your closely-held corporation, you should be aware of the possible tax consequences if your corporation defaults on the loan and you are on the hook to pay it off.  Generally, you can take a bad debt deduction if you are obligated to personally pay the debt.  The deduction may be either a business bad debt deduction or a nonbusiness bad debt deduction.

How to Take a Loan from Your Corporation and Avoid Dividend Treatment

If you need to withdraw funds from your controlled corporation, you can structure the withdrawal so that it is not subject to tax as a dividend.  While dividends are generally taxed to non-corporate shareholders at capital gains rates, a loan from a corporation to its shareholder is not subject to tax.  However, even though no dividend has been declared, the IRS can treat shareholder withdrawals of cash from a corporation as dividends, if they aren't structured properly.

Reduced Gain Exclusion on the Sale of Your Home

Sometimes life throws things at us that we don’t anticipate or cannot control.  Once in a while these events may cause you to have to move from your current home.  Typically, you are able to exclude up to $250,000 ($500,000 for married filing jointly) of the gain recognized on the sale of your principal residence.  This exclusion is allowed if you have owned and used the home as your principal residence for at least two years out of the last five years prior to the sale date.  But what happens to your exclusion amount if you sell your home before meeting the two-year test?
 

Tax Breaks for Charitable Volunteer Work

Do you ever do volunteer work for a charitable organization?  Even though you cannot deduct the value of your time or the services you perform for the organization you may still qualify for some tax breaks.
 
Deductions are permitted for out-of-pocket expenses incurred while performing services for the charitable organization (subject to the deduction limit generally applied to charitable contributions).  These deductions include:
 

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