As many of you may already know, there was a significant increase in the lifetime exclusion for Estate and Gift taxes. Lets break it down.
Both the Tax Cuts and Jobs Act ("TCJA") and Congress’s massive new spending package received widespread media coverage, but a couple of provisions that incentivize investments in low income housing have largely gone under the radar. One provision in the tax law offers significant tax breaks for investors looking to defer or abate capital gains taxes, while the spending bill boosts the Low Income Housing Tax Credit ("LIHTC").
You would normally be right if you thought a dentist could not qualify as a “real estate professional”, allowed to deduct rental real estate losses — after all, the IRS thought the same thing. In this case you would be wrong, though. The U.S. Tax Court found that a dentist who also operated a real estate business qualified for the real estate professional exception, based largely on his extensive documentation of the hours he’d spent.
Do you ever work from home?
If your use of a home office is for your employer’s benefit and it’s the only use of the space, you generally can deduct a portion of your mortgage interest, property taxes, insurance, utilities and certain other expenses. Further, you can take a deduction for the depreciation allocable to the portion of your home used for the office. Note that you will recover the cost when you sell your home, so you should be sure to keep track of any depreciation taken. You can also deduct direct expenses, such as a business-only phone line and office supplies.