Gambling Losses

Ten Forty + Quality Tax Preparation & Financial Services 281-397-7777 Fax 281-397-7443 Tax Tips Hitting the jackpot on gambling losses Gambling may not be for everyone but many people occasionally place wagers at the track or indulge in games of chance. You may be one of them. If you're lucky enough to hit a jackpot, or even if you have relatively modest winnings, the IRS expects you to report those amounts as taxable income. On the other hand, you can reduce the tax on those winnings with deductible losses from your other gambling activities. Perhaps one of the best benefits of this tax deduction is that it can be claimed without meeting the usual tax law requirements for similar miscellaneous expenses. The winning thresholds that require reporting vary by gambling activity, but generally, if you receive $600 or more from gambling activities during the year, you must report the income on your annual tax return. This includes winnings from trips to the casino and racetrack and even the bingo games at your local house of worship. It doesn't matter if the money goes to a private business or a charity. Fortunately, you can offset the tax by claiming gambling losses, up to the amount of your winnings. But you can't claim any loss for the excess. You are strictly limited by this rule. Now here's the kicker: Normally, you can deduct only miscellaneous expenses above 2 percent of your adjusted gross income (AGI). But this doesn't apply to gambling losses. Therefore, your losses are fully deductible down to the penny! It's important to keep track of your losses through detailed records. For instance, if you bet at the track, log your wagers for each race and supplement it with documentation like losing ticket stubs. Similarly, if you're playing blackjack at a casino, list the amounts won and lost at each table. Bingo players should record the number of games played, the cost of cards, and amounts collected on winning cards. If your activities rise to the level of being a "professional" gambler, you can deduct all of your losses, even if they exceed your winnings. Give our office a call if you have questions about your situation. 2016 Tax Extension Deadlines are approaching. Go to www.tenfortyplus.com and complete your online organizer (under forms and documents). Make your appointment using our online appointment system. Call 281-397-7777 and get a user id with password set up so you can send us all your information through our online secure portal and do your taxes from the comfort of your home or office or come see us at our office. 1040 + Quality Tax Preparation & Financial Services Joseph C Becker EA www.tenfortyplus.com 281-397-7777, Fax 281-397-7443 joeb@tenfortyplus.com Contact Us There are many events that occur during the year that can affect your tax situation. Preparation of your tax return involves summarizing transactions and events that occurred during the prior year. In most situations, treatment is firmly established at the time the transaction occurs. However, negative tax effects can be avoided by proper planning. Please contact us in advance if you have questions about the tax effects of a transaction or event, including the following: • Pension or IRA distributions. • Retirement. • Significant change in income or • Notice from IRS or other deductions. Revenue department. • Job change. • Divorce or separation. • Marriage. • Self-employment. • Attainment of age 59½ or 70½. • Charitable contributions • Sale or purchase of a business property in excess of $5,000. • Sale or purchase of a residence or other real estate.

Meals can be 100% Deductable

Ten Forty + Quality Tax Preparation & Financial Services 281-397-7777 Fax 281-397-7443 Tax Tips Meals 100% Deductible A business deduction for meals and entertainment is generally limited to 50% of the expense [IRC §274(n)]. The 50% limitation applies to meal expenses incurred while trav- eling out-of-town on business, and to local meal expenses incurred while entertaining clients, customers, or employees. One exception to the 50% limitation rule is when the meals qualify as a de minimis fringe benefit [IRC §132(e)]. The taxpayer in this case was the owner of the Boston Bruins, a National Hockey League (NHL) franchise based in Boston, Massachusetts. NHL teams play half of their games in their hometown arena (home games), and the other half at arenas in different cities (away games). The NHL requires teams to arrive in the away city at least six hours before the start of an away game. The union agreement between the NHL, member teams, and the players of member teams, requires that an NHL team travel to an away city the day before game day if the flight to the away city is greater than 2½ hours. The Boston Bruins typically traveled to away games with the players, coaches, medical personnel, athletic trainers, equipment managers, communications personnel, travel lo- gistics managers, public relations and media personnel, and other employees. The team would contract with away city hotels to provide for sleeping accommodations and ban- quet or conference rooms where pregame meals and snacks were served. The hotels would prepare the pregame meals to meet the players’ specific nutritional guidelines to ensure optimal performance for the upcoming game. The food was made available to all traveling employees of the team. On the day before an away game, the traveling employees would take a charter flight to the away city and check into a hotel. There was an 11PM curfew for the players on the night before the game. Depending on how early the team arrived on the day before an away game, the players would use the time before curfew to eat a meal, rest, receive treatments from the training staff, or complete strength and conditioning workouts. On the morning of an evening away game, the players would attend a mandatory breakfast between 8AM and 10AM in the meal room provided by the hotel. The breakfast was also provided to the other traveling employees, but only the players were required to attend. Players could be fined or prevented from participating in games if they were late or ab- sent from this breakfast. During the breakfast, team business was conducted. Players met with coaches, either one- on-one or in small groups, to discuss strategy and review game film. Public relations staff attended the breakfast to meet with players concerning anticipated media inquiries, inter- views, or other public-facing issues.The players also met with staff employees at breakfast to obtain game tickets for family and friends. Coaches, trainers, and management also used the breakfast to meet amongst themselves and make roster adjustments because of illness, injury, strategy, or performance issues. Following breakfast, the players boarded a charter bus and traveled to the arena or practice facility to prepare for the upcoming game. In the afternoon, the players returned to the hotel for lunch between 12:15PM and 2:15PM. Like breakfast, it was made available to all traveling employees of the team, but it was mandatory for the players. Coaches used this lunch period to conduct more small group or one-on-one meetings with players. Public relations staff also used this time to meet with players to discuss media issues. After lunch, the players were given free time, which was usually used to rest before the game. Afternoon snacks were provided by the hotel between 3:15PM and 5:15PM. How- ever, attendance for snacks was not mandatory for the players. The schedule was altered if there was an afternoon away game. Breakfast and lunch was replaced by a brunch that took place between 8AM and 12:30PM, depending on the time of the afternoon game. The pregame brunch was also made available to all traveling em- ployees of the team, but was mandatory for players, and involved similar strategy sessions, film review, etc. In addition to lodging and meals and meetings, the team used the away city hotels for other team-related activities, such as physical therapy, massages, strength and condition- ing training. About 2½ hours before game time, the team boarded a charter bus and traveled to the arena. After the game, the players typically remained at the arena for about one hour to shower, change clothes, and meet with the media. They then traveled to the airport to fly back to Boston, or to the next away city. The taxpayer deducted 100% of the cost for pregame meals provided to the players and all of the traveling employees of the team while at away city hotels. The IRS claimed that the cost of these meals were subject to the 50% limitation. The IRS did not challenge the 100% deduction for meals that were provided by the team to players and staff at their home arena in Boston, Massachusetts. To meet the de minimis fringe benefit exception to the 50% limitation, IRC section 132(e) (2) requires that access to the eating facility is available on substantially the same terms to each member of a group of employees which is defined under a reasonable classifica- tion set up by the employer which does not discriminate in favor of highly-compensated employees. The taxpayer provided pregame meals to all of its traveling employees which included highly-compensated employees as well as nonhighly-compensated employees on substantially the same terms. Therefore, the court said the non-discrimination rules under that code section were satisfied. IRC section 132(e) also states that employee meals constitute a de minimis fringe if: 1) The eating facility is owned or leased by the employer, 2) The facility is operated by the employer, 3) The facility is located on or near the business premises of the employer, 4) The meals furnished at the facility are provided during, or immediately before or after, the employee’s workday, and 5) The annual revenue derived from the facility normally equals or exceeds the direct operating costs of the facility (the revenue/operating cost test). The court examined each of the above tests to see if the taxpayer satisfied all five requirements. Eating facility is owned or leased by employer. The term lease is not defined in the regulations. Although the hotel contracts were not specifically identified as leases, the court said the substance of the contracts between the hockey team and the hotels were in essence a lease. The hockey team contracted with each away city hotel to occupy meal rooms and determined what types of food were to be served, the time, dates, and an- ticipated number of attendees. The team did not provide separate consideration for the rental of the meal rooms, however, the meal rooms were essential to the team’s away city business operations, and the hotels agreed to provide the meal rooms free of charge be- cause the team spent money for lodging and food. The team dictated aspects regarding the setup of the meal rooms, and required the hotel to keep the location of the meal room private from the general public. This indicates that the team contracted with away city hotels for the right to use and occupy meal rooms to conduct team business. Therefore, the agreements were substantively leases. Operated by the employer. The regulations for IRC section 132 state that if an employer contracts with another to operate an eating facility for its employees, the facility is con- sidered to be operated by the employer. The hockey team contracted with each away city hotel regarding the operation of the meal rooms as well as food preparation and service. The court said the arrangement indicated the team contracted with another to operate an eating facility for its employees. Business premises. An employer’s business premises is defined as a place where em- ployees perform a significant portion of duties or where the employer conducts a sig- nificant portion of its business. It is not necessary for an eating facility to be located in an employer’s principal structure for it to be considered on the business premises. Courts have ruled that rented hotel suites used for daily executive lunches constituted part of a company’s business premises. In this case, the court said the away city hotels were part of the hockey team’s business premises because of the significant business duties that were performed there along with the unique nature of professional hockey. The team was required to travel to various cities across the United States and Canada. The team was re- quired to travel to these cities the day before game day. Preparation for an away game was essential for the team’s success in the NHL, and the away city hotels provided necessary space for that preparation. The evidence suggests the away city hotels were essential for the team’s effective preparation, and thus were used by the team to conduct business. The court said it was not possible for the hockey team to conduct all of its necessary functions exclusively in Boston. The IRS argued that activities performed at away city hotels were insignificant because: 1) The activities at away city hotels are qualitatively less important than playing in the actual hockey game, and 2) The hockey team spends quantitatively less time at each away city hotel than they do at the team’s Boston facilities. The court said that although playing in a hockey game is more important to the taxpay- er’s business, the quality of play is directly related to the team’s preparation. Without the preparation performed at away city hotels, the performance of the hockey team would likely be adversely affected. The IRS provided no precedent to support the argument that a business premises must be the location where the most qualitatively significant busi- ness activity occurs, or where the most quantitative time must be spent at. Accordingly, the court said the away city hotels were a part of the hockey team’s business premises. Meals furnished during, before, or after employee’s workday. The IRS conceded that the taxpayer satisfied this requirement. Revenue/operating cost test. This test requires that revenue derived from the employ- er-operated eating facility equal or exceed the direct operating costs of the facility. The regulations state that an employer-operated eating facility satisfies this test if the em- ployer can reasonably determine that the meals are excludable from employee wages under IRC section 119. Meals are excludable from employee wages if: 1) They are furnished for the convenience of the employer, and 2) They are furnished on the business premises of the employer. The court already determined that the away city hotels were a part of the employer’s business premises. So the only remaining question was whether they were furnished for the convenience of the employer. The pregame meals were provided first and foremost for nutritional and performance reasons. The meals were selected to meet the exacting nutritional needs of professional athletes. The meals were also provided to meet the busy schedule of its employees. The meals were also provided during essential team preparation activities. The court was sat- isfied that there was credible evidence establishing the business reasons for furnishing pregame meals to its traveling employees. The court ruled 100% of the cost of pregame meals furnished to the taxpayer’s traveling employees was deductible as a de minimis fringe benefit under IRC section 132(e). Please call us if you have any questions. 2016 Tax Extension Deadlines are approaching. Go to www.tenfortyplus.com and complete your online organizer (under forms and documents). Make your appointment using our online appointment system. Call 281-397-7777 and get a user id with password set up so you can send us all your information through our online secure portal and do your taxes from the comfort of your home or office or come see us at our office. 1040 + Quality Tax Preparation & Financial Services Joseph C Becker EA www.tenfortyplus.com 281-397-7777, Fax 281-397-7443 joeb@tenfortyplus.com Contact Us There are many events that occur during the year that can affect your tax situation. Preparation of your tax return involves summarizing transactions and events that occurred during the prior year. In most situations, treatment is firmly established at the time the transaction occurs. However, negative tax effects can be avoided by proper planning. Please contact us in advance if you have questions about the tax effects of a transaction or event, including the following: • Pension or IRA distributions. • Retirement. • Significant change in income or • Notice from IRS or other deductions. Revenue department. • Job change. • Divorce or separation. • Marriage. • Self-employment. • Attainment of age 59½ or 70½. • Charitable contributions • Sale or purchase of a business property in excess of $5,000. • Sale or purchase of a residence or other real estate.

Ten Forty Plus...Small Business Experts

Ten Forty + Quality Tax Preparation & Financial Services 281-397-7777 Fax 281-397-7443 BOOKKEEPING At Ten Forty Plus Quality Tax Preparation & Financial Services, we are the Small Business Experts. Quick Books, Peach Tree, and other small business bookkeeping software is our Forte. Discounted Nationwide Online Professional Bookkeeping Services Bookkeeping We offer discounted online bookkeeping service whereby each month our clients scan in all their documents and email the source data or upload the source data to our website. Source data includes bank statements, check stubs, credit card statements, cash receipts, copies of any money you borrowed or lines of credits you opened (notes payable), and or copies of large asset purchases including financing information. After we receive the source documentation we will compile your data. After review, if we have any questions we will call and ask you. Then we will prepare a general ledger (Detailed listing of your monthly transactions), a profit & loss statement, and a balance sheet. We will email to you to review and then have a meeting via Skype or telephone to discuss any questions. Three times a year we will meet (via Skype or phone) to discuss your financials and give you advice. Each month we will charge your credit card on file our monthly fees. Our Houston Certified QuickBooks ProAdvisrorbookkeeper does it right! How will you keep track of your bookkeeping? What type of organization should you be? What is the difference between an employee and a contractor? Do you need to do payroll? How will you make good business decisions? Do you need to make estimated payments? Do you need a low-cost solution? Monthly fees are based upon transaction. A transaction is a check, charge, cash paid out, deposit, or any transaction you have within your company. Our normal pricing per transaction is $3 each. However, our Online discounted price is: < 30 transactions $75 per month < 101 Transactions $125 per month <201 Transactions $200 Per month Each Transaction above 200 $1 each. Our Services You have the option of doing all your financial services from the comfort of your home, office, or in our offices! Bookkeeping Financial Statement Review Quick Books Services Payroll Services Tax Preparation Services Why Choose Us? Over 40 Years Experience Flexible hours Competitive Rates Dedicated Client Satisfaction Free Proposals and Estimates State of the Art Technology Evening Appointments Weekend Appointments Flexible Payment Terms Free Consultation Certified Quick Books Pro Advisor since 1997 Continuing Education for Our Employees Se Habla Espanol Quick Response Are you having trouble keeping tabs on your finances? Are you tired of having to spend your time sorting through receipts and bank statements? Rather than struggle to crunch those numbers, turn to 1040+ Quality Tax Preparation & Financial Services. As certified bookkeeper in Houston, TX, 1040+ Quality Tax Preparation & Financial Services has the tools and knowledge to help get your finances on track in the comfort of your home or office. Save Yourself Time and Money Even if you're an organized person by nature, you can still benefit from hiring a bookkeeper like 1040+ Quality Tax Preparation & Financial Services to help you manage your finances. When you hire a bookkeeper, you'll get to free up much of your own time while a professional efficiently works to keep track of your funds. In some cases 1040+ Quality Tax Preparation & Financial Services may be able to recommend tools and tactics to help you save money and reduce your tax burden. To learn more about the benefits of hiring a bookkeeper or to set up an appointment, call 281-397-7777 today. Are you having trouble keeping tabs on your finances? Are you tired of having to spend your time sorting through receipts and bank statements? Rather than struggle to crunch those numbers, turn to 1040+ Quality Tax Preparation & Financial Services. As certified bookkeeper in Houston, Texas, 1040+ Quality Tax Preparation & Financial Services has the tools and knowledge to help get your finances on track in the comfort of your home or office. Please call us if you have any questions. 2016 Tax Extension Deadlines are approaching. Go to www.tenfortyplus.com and complete your online organizer (under forms and documents). Make your appointment using our online appointment system. Call 281-397-7777 and get a user id with password set up so you can send us all your information through our online secure portal and do your taxes from the comfort of your home or office or come see us at our office. 1040 + Quality Tax Preparation & Financial Services Joseph C Becker EA www.tenfortyplus.com 281-397-7777, Fax 281-397-7443 joeb@tenfortyplus.com Contact Us There are many events that occur during the year that can affect your tax situation. Preparation of your tax return involves summarizing transactions and events that occurred during the prior year. In most situations, treatment is firmly established at the time the transaction occurs. However, negative tax effects can be avoided by proper planning. Please contact us in advance if you have questions about the tax effects of a transaction or event, including the following: • Pension or IRA distributions. • Retirement. • Significant change in income or • Notice from IRS or other deductions. Revenue department. • Job change. • Divorce or separation. • Marriage. • Self-employment. • Attainment of age 59½ or 70½. • Charitable contributions • Sale or purchase of a business property in excess of $5,000. • Sale or purchase of a residence or other real estate. 1040+ Quality Tax & Financial Services 1040+ Quality Tax & Financial Services tenfortyplus.com no plus ones no comments no shares Shared publicly

Fast Tax Action for disaster area losses

Ten Forty + Quality Tax Preparation & Financial Services 281-397-7777 Fax 281-397-7443 Tax Tips Fast tax action for disaster area losses With hurricane Harvey looming in on us they are certain things you should know. August is the middle of hurricane season for the eastern and southern coasts. Other regions of the U.S. experience tornados, floods, and wildfires. If you're victimized by a natural disaster this summer, you could experience dramatic financial and emotional loss. While it's devastating to face this kind of catastrophe, it's helpful to know you may be able to claim a casualty loss deduction on your tax return, even though the requirements are strict. If you live in an area that is deemed a federal disaster area, you may find faster tax relief. For starters, you may deduct a casualty loss for damage caused by an event that is "sudden, unexpected, or unusual." This includes destruction of property from natural disasters like hurricanes and even dented fenders or broken windshields from vehicle collisions. But you can't deduct casualty losses caused by gradual decay or deterioration, like damage from a summer drought. After you reduce your personal loss by any insurance reimbursements, the deductible amount is subject to two limits. 1. You can only deduct the excess above 10 percent of your adjusted gross income (AGI); and 2. You must reduce a loss by $100 for each event. For example, if your AGI is $100,000 and you suffer a $25,000 loss to your home after insurance reimbursements, your deductible loss is $14,900. Normally, you're required to deduct casualty losses in the year the event occurs. However, for a loss suffered in an area that's declared a federal disaster area, you can elect to deduct the loss on the tax return for the year immediately preceding the disaster. Therefore, homeowners with a loss due to a hurricane in 2017 might amend their 2016 return to obtain faster tax relief. The IRS requires you to submit detailed information with this special election. If you are faced with casualty loss from a disaster, call so we can go over the details. Please call us if you have any questions. 2016 Tax Extension Deadlines are approaching. Go to www.tenfortyplus.com and complete your online organizer (under forms and documents). Make your appointment using our online appointment system. Call 281-397-7777 and get a user id with password set up so you can send us all your information through our online secure portal and do your taxes from the comfort of your home or office or come see us at our office. 1040 + Quality Tax Preparation & Financial Services Joseph C Becker EA www.tenfortyplus.com 281-397-7777, Fax 281-397-7443 joeb@tenfortyplus.com Contact Us There are many events that occur during the year that can affect your tax situation. Preparation of your tax return involves summarizing transactions and events that occurred during the prior year. In most situations, treatment is firmly established at the time the transaction occurs. However, negative tax effects can be avoided by proper planning. Please contact us in advance if you have questions about the tax effects of a transaction or event, including the following: • Pension or IRA distributions. • Retirement. • Significant change in income or • Notice from IRS or other deductions. Revenue department. • Job change. • Divorce or separation. • Marriage. • Self-employment. • Attainment of age 59½ or 70½. • Charitable contributions • Sale or purchase of a business property in excess of $5,000. • Sale or purchase of a residence or other real estate.

Gambling Losses

Ten Forty + Quality Tax Preparation & Financial Services 281-397-7777 Fax 281-397-7443 Tax Tips Hitting the jackpot on gambling losses Gambling may not be for everyone but many people occasionally place wagers at the track or indulge in games of chance. You may be one of them. If you're lucky enough to hit a jackpot, or even if you have relatively modest winnings, the IRS expects you to report those amounts as taxable income. On the other hand, you can reduce the tax on those winnings with deductible losses from your other gambling activities. Perhaps one of the best benefits of this tax deduction is that it can be claimed without meeting the usual tax law requirements for similar miscellaneous expenses. The winning thresholds that require reporting vary by gambling activity, but generally, if you receive $600 or more from gambling activities during the year, you must report the income on your annual tax return. This includes winnings from trips to the casino and racetrack and even the bingo games at your local house of worship. It doesn't matter if the money goes to a private business or a charity. Fortunately, you can offset the tax by claiming gambling losses, up to the amount of your winnings. But you can't claim any loss for the excess. You are strictly limited by this rule. Now here's the kicker: Normally, you can deduct only miscellaneous expenses above 2 percent of your adjusted gross income (AGI). But this doesn't apply to gambling losses. Therefore, yourlosses are fully deductible down to the penny! It's important to keep track of your losses through detailed records. For instance, if you bet at the track, log your wagers for each race and supplement it with documentation like losing ticket stubs. Similarly, if you're playing blackjack at a casino, list the amounts won and lost at each table. Bingo players should record the number of games played, the cost of cards, and amounts collected on winning cards. If your activities rise to the level of being a "professional" gambler, you can deduct all of your losses, even if they exceed your winnings. Please call us if you have any questions. 2016 Tax Extension Deadlines are approaching. Go to www.tenfortyplus.com and complete your online organizer (under forms and documents). Make your appointment using our online appointment system. Call 281-397-7777 and get a user id with password set up so you can send us all your information through our online secure portal and do your taxes from the comfort of your home or office or come see us at our office. 1040 + Quality Tax Preparation & Financial Services Joseph C Becker EA www.tenfortyplus.com 281-397-7777, Fax 281-397-7443 joeb@tenfortyplus.com Contact Us There are many events that occur during the year that can affect your tax situation. Preparation of your tax return involves summarizing transactions and events that occurred during the prior year. In most situations, treatment is firmly established at the time the transaction occurs. However, negative tax effects can be avoided by proper planning. Please contact us in advance if you have questions about the tax effects of a transaction or event, including the following: • Pension or IRA distributions. • Retirement. • Significant change in income or • Notice from IRS or other deductions. Revenue department. • Job change. • Divorce or separation. • Marriage. • Self-employment. • Attainment of age 59½ or 70½. • Charitable contributions • Sale or purchase of a business property in excess of $5,000. • Sale or purchase of a residence or other real estate.

Meet the New and Improved Research Credit

Ten Forty + Quality Tax Preparation & Financial Services 281-397-7777 Fax 281-397-7443 Tax Tips Meet the "new and improved" research credit After years of uncertainty, the Protecting Americans from Tax Hikes (PATH) Act of 2015 permanently extended a tax credit for research expenses for qualified small businesses. Generally speaking, the basic research credit is equal to 20 percent of the cost of qualified in-house expenses over a base amount and 20 percent of certain outside expenses, such as the university basic research credit. Alternatively, a business may claim a 14 percent simplified credit for the three preceding tax years. What types of expenses qualify for the credit? They must be expenses that would otherwise be deductible as research expenses under the tax code and involve research undertaken to discover technological information to be used in developing a new or improved component for the business. The credit had expired and been reinstated more than a dozen times since its inception in the 1980s before the PATH Act preserved it permanently. The latest version includes two key changes for small businesses. 1. AMT liability: Normally, credits like the research credit may only offset regular income tax liability. Now an eligible small business may claim the research credit against alternative minimum tax (AMT) liability. For this purpose, the business must have $50 million or less in gross receipts. 2. Payroll tax liability: Similarly, a qualified small business may elect to claim the research credit against up to $250,000 in payroll taxes annually for up to five years. In this case, the company must have less than $5 million in gross receipts. These changes are effective for 2016 and thereafter. Earlier this year, the IRS issued some guidelines on the enhanced credit on an amended 2016 return. In addition, certain additional technical requirements must be met to qualify for the credit. While this credit has been simplified, the calculations are best left to the experts. If you think you may qualify or have any questions, please don't hesitate to call. 2016 Tax Extension Deadlines are approaching. Go to www.tenfortyplus.com and complete your online organizer (under forms and documents). Make your appointment using our online appointment system. Call 281-397-7777 and get a user id with password set up so you can send us all your information through our online secure portal and do your taxes from the comfort of your home or office or come see us at our office. 1040 + Quality Tax Preparation & Financial Services Joseph C Becker EA www.tenfortyplus.com 281-397-7777, Fax 281-397-7443 joeb@tenfortyplus.com Contact Us There are many events that occur during the year that can affect your tax situation. Preparation of your tax return involves summarizing transactions and events that occurred during the prior year. In most situations, treatment is firmly established at the time the transaction occurs. However, negative tax effects can be avoided by proper planning. Please contact us in advance if you have questions about the tax effects of a transaction or event, including the following: • Pension or IRA distributions. • Retirement. • Significant change in income or • Notice from IRS or other deductions. Revenue department. • Job change. • Divorce or separation. • Marriage. • Self-employment. • Attainment of age 59½ or 70½. • Charitable contributions • Sale or purchase of a business property in excess of $5,000. • Sale or purchase of a residence or other real estate.

Ten Forty Plus Quality Tax Preparation

Donating art to Charity

Ten Forty + Quality Tax Preparation & Financial Services 281-397-7777 Fax 281-397-7443 Tax Tips Donating art to charity — it can be a beautiful thing Do you own a prized piece of art that you'd like to donate to charity? If you meet the requirements for gifts of property, you may qualify for an enhanced tax deduction. But be aware of potential pitfalls along the way. Normally, your deduction for donated appreciated property is based on the cost when you acquired it. For example, if you paid $7,500 for a sculpture and it's now worth $10,000, your deduction is limited to $7,500. However, if the property would have produced a long-term capital gain had you sold instead of donating it (i.e., you've owned it for more than a year), you can deduct the full fair market value (FMV). In other words, you're then entitled to deduct a higher amount, even though you never paid tax on the appreciation in value. In our example, after one year you could deduct $10,000, the sculpture's FMV on the donation date. The tax law generally limits your annual deduction for charitable gifts of property to 30 percent of adjusted gross income (AGI). If you can't squeeze under the AGI threshold in a given year, the excess is carried forward for up to five years. Yet there's still another tax hurdle to overcome. If you donate property like artwork, the gift must be used to further the charity's tax-exempt function. Otherwise, the deduction is limited to the property's cost. For example, if you donate a family heirloom to a museum, you can claim the higher deduction based on FMV if it is prominently displayed. However, if it's relegated to a dusty storeroom, your deduction is limited to the lower amount. In the event that the value of artwork has declined since you acquired it, your deduction is limited to the FMV, regardless of how long you've owned it. Finally, the tax law imposes strict recordkeeping requirements on such charitable gifts, including independent appraisals for donations exceeding $5,000. If you have questions about your donation, give our office a call. 2016 Tax Extension Deadlines are approaching. Go to www.tenfortyplus.com and complete your online organizer (under forms and documents). Make your appointment using our online appointment system. Call 281-397-7777 and get a user id with password set up so you can send us all your information through our online secure portal and do your taxes from the comfort of your home or office or come see us at our office. 1040 + Quality Tax Preparation & Financial Services Joseph C Becker EA www.tenfortyplus.com 281-397-7777, Fax 281-397-7443 joeb@tenfortyplus.com Contact Us There are many events that occur during the year that can affect your tax situation. Preparation of your tax return involves summarizing transactions and events that occurred during the prior year. In most situations, treatment is firmly established at the time the transaction occurs. However, negative tax effects can be avoided by proper planning. Please contact us in advance if you have questions about the tax effects of a transaction or event, including the following: • Pension or IRA distributions. • Retirement. • Significant change in income or • Notice from IRS or other deductions. Revenue department. • Job change. • Divorce or separation. • Marriage. • Self-employment. • Attainment of age 59½ or 70½. • Charitable contributions • Sale or purchase of a business property in excess of $5,000. • Sale or purchase of a residence or other real estate.