Section 529 Prepaid Tuition Plans

One of the many ways to pay for a college education is a Section 529 Prepaid Tuition Plan. This plan allows you to lock in tuition at the current rate. One caveat to this plan is that it is considered a parental asset, causing a dollar-for-dollar reduction in financial aid eligibility. For a detailed comparison of the advantages and disadvantages of a prepaid tuition plan, read this Financial Strategy.

Selling Your Personal Residence

If you’ve been fortunate enough to be able to sell your house, the IRS had some rules that may allow you to exclude up to $250,000 of the gain of your main home from your income. The IRS also has some rules for reporting the sale of your home as well as deducting the remaining points you paid to secure a mortgage. For detailed information on these rules, read this C.P.A. Insight.

Little Known Tax Strategy Could Save Tax Dollars for Millions

If you are retiring and hold a significant amount of your company’s stock in your qualified retirement plan, you can choose to elect a special tax treatment for the distribution called net unrealized appreciation. Before you make this election, you’ll need to compare your tax liability on the distribution to future tax costs. For more information on this strategy, read this Financial Strategy.

Rental of Vacation Home Used as a Residence

If you’re fortunate enough to have a vacation or second home, you should consider some basic tax laws that will allow you to make the best tax use of your vacation home. You may consider taking advantage of tax free rental income, rental income deductions or a tax free sale of the home. For more information on these tax advantages and the rules that apply, read this C.P.A. Insight.

Business and Nonbusiness Bad Debt

Inevitably, you may incur a financial loss in your business or personal life. If this loss is due to a loan that cannot be repaid, it may be considered bad debt. From a tax standpoint, how you handle the bad debt is a complicated situation. For more information on determining if you have a bad debt and how it may offset your income, read this C.P.A. Insight.

The Estate Tax

Everyone knows about death and taxes, and if your estate is large enough, sometimes they go hand in hand. Estate tax is the transfer of property from one individual to another at the time of death. For more information on how estate tax is derived and the deductions and credits available to reduce the gross estate, read this Financial Strategy.