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Overlooked Tax Breaks: Tax Saving Elections, Deductions, and Benefits

Investment Interest Election, Section 266, Bad Debt, MFS, Tax-Benefit Rule

Note: CLE credit is not offered on this program

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Thursday, June 27, 2024

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This webinar will analyze many opportunities to lower federal income tax that are often overlooked and misunderstood but that taxpayers and tax professionals should routinely consider. Our panel of federal tax veterans will provide explanations and examples for elections, deductions, and other tax positions that could generate significant tax savings for individual income taxpayers.

Description

Tax filers and preparers can inadvertently miss numerous elections, deductions, and tax benefits. When properly applied, these items can save taxpayers significant tax dollars. The investment interest expense election allows individuals to utilize investment interest expense that otherwise would carry forward. The trade-off is the taxpayer elects to have investment income that is subject to preferential rates (15 percent) taxed as ordinary income. Determining when an immediate and often substantial tax savings outweighs a potentially more generous tax break is complicated.

The Section 266 election postpones the deduction for interest, taxes, and carrying costs and can preserve a deduction that would otherwise be lost. The $10,000 SALT cap and the high standard deduction mean that taxpayers often lose the benefit of these deductions. Making this election allows taxpayers to capitalize certain investment costs by increasing the basis of the property by these amounts.

Listen as our panel of individual income tax experts explains the application of tax breaks that can substantially reduce a taxpayer's federal tax liability.

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Outline

  1. Introduction
  2. Qualified charitable distributions
  3. Married filing separately
  4. Investment interest
  5. De Minimus Safe Harbor
  6. Itemized deductions
  7. Section 179 and bonus depreciation
  8. Section 266
  9. Alternative Minimum Tax

Benefits

The panel will cover these and other critical issues:

  • When the benefits of making the investment interest expense election outweigh the caveats
  • When the election to capitalize interest, taxes, and carrying costs under Section 266 should be considered
  • Applying the tax benefit rules in specific situations
  • Situations where filing separately can be beneficial

Faculty

Kucera, S. Kathryn
S. Kathryn Kucera
Owner
S Kathryn Kucera, CPA

Ms. Kucera focuses on individual income tax returns that are complex and data-intensive. She prepares most types of tax...  |  Read More

Pon, Lawrence
Lawrence K.Y. Pon, CPA/PFS, CFP, EA, USTCP, AEP
Tax Attorney
Pon & Associates

Mr. Pon has been in practice since 1986 providing comprehensive tax and financial planning, tax preparation and...  |  Read More

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