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Archives for August 2018

Tax Planning For Cryptocurrency and Wash Sales – How Can You Minimize Taxes

Here at Camuso CPA, we offer a wide array of tax services for investors including tax preparation and tax planning. Financial service and technology companies are transitioning from employee driven revenue models to information driven revenue models. Camuso CPA strives to deliver useful insights and offer relevant explanations about the latest tax and financial topics.

In our Experienced CryptoCPA Tax Topics & Guides segment, we are taking a more in depth approach in covering all things cryptocurrency, tax, real estate and finance.

Since cryptocurrencies are generally classified as property, wash sale regulations should not currently be a concern for investors. This means investors can sell an investment to realize a tax loss, only to buy it back immediately thereafter at a bargain. Today, wash sales only apply to stocks and securities, so traders are operating in a gray area for now until further IRS clarification is issued.

 

 

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If you searching for CPA firms to assist you with reporting cryptocurrency income and capital gains, contact Camuso CPA. Whether you need tax preparation services, assistance with properly reporting gains and income from virtual currencies on your taxes, cryptocurrency portfolio analysis, or any other service provided by a certified accountant, Camuso CPA can help.

 

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How 2018 Tax Law Changes Affects Real Estate Investors

Here at Camuso CPA, we offer a wide array of tax services for investors including tax preparation and tax planning. Financial service companies are transitioning from employee driven revenue models to information driven revenue models. Camuso CPA strives to deliver useful insights and offer relevant explanations about the latest tax and financial topics.

In our Tax Topics & Guides segment, we are taking a more in depth approach in covering all things tax, real estate and finance.

While the full implications of the Tax Cuts and Jobs Act are still unraveling, a number of tax-planning opportunities have presented themselves. Here we will outline how performing cost segregation studies can lead to permanent tax savings. On 22 December 2017, the President signed tax reform legislation known as the Tax Cuts and Jobs Act (TCJA). This is primarily known for reducing corporate tax rates to 21%, but the new Section 199A provides non-corporate taxpayers with a potential 20% deduction against taxable income, which, when applicable, effectively discounts the maximum 37% non-corporate rate to 29.6%.

   

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If you searching for CPA firms to assist you with reporting cryptocurrency income and capital gains, contact Camuso CPA. Whether you need tax preparation services, assistance with properly reporting gains and income from virtual currencies on your taxes, cryptocurrency portfolio analysis, or any other service provided by a certified accountant, Camuso CPA can help.

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Spending Cryptocurrency Can Be a Huge Tax Trap, Learn How

With an exponential gain in value and thousands of businesses now accepting it as a form of payment, Bitcoin has quickly become one of the trending topics throughout the country. While there are various types of cryptocurrency out there, Bitcoin is currently the most popular form of digital currency (also known as virtual or cryptocurrency) throughout the world and is able to be exchanged for U.S dollars, Euros, and other real currency. In addition, Bitcoin can be traded for other virtual currencies, such as Ripple or Ethereum currency.

Whether people use cryptocurrencies to pay for products and services or strictly for investment purposes, they may not be aware that they have a possible taxable impact.

If a taxpayer purchases s virtual currency and uses it to purchase something (trades the cryptocurrecy for a good or service), the IRS requires him to calculate a capital gain or loss on each transaction. Capital gains on personal-use property are reportable and subject to tax.

The AICPA recently asked the IRS for some equitable relief by adopting a “de minimus election,” which provides a $200 threshold for excluding capital gains income on personal transactions. This is not yet in effect and as a result, taxpayers are on the hook for tax liability with all cryptocurrency transactions.

If you searching for CPA firms to assist you with reporting cryptocurrency income and capital gains, contact Camuso CPA. Whether you need tax preparation services, assistance with properly reporting gains and income from virtual currencies on your taxes, cryptocurrency portfolio analysis, or any other service provided by a certified accountant, Camuso CPA can help.

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How Real Estate Investing Impacts Investors Tax Rate

Investors focus on real estate for a variety of reasons. There are great tax benefits for real estate investors and most investors agree that, while supplemental, they invest to reduce their tax burden.

After consulting and strategizing with hundreds of investors, I’ve come to realize that most don’t actually know how real estate investing impacts tax rates. Here at Camuso CPA, we offer a wide array of tax services for real estate investors including tax preparation and tax planning.

Effective Tax Rate – What Is it?

The effective tax rate is defined at the tax liability divided by total net income. Your federal tax liability is found on Line 63 of Form 1040. However, if you hold a W-2 job, you also need to factor in your share of FICA taxes (7.65% of your gross wages). Lastly, you should also factor in your state tax liability. The combination of these three taxes will yield your total tax. You will then divide your total tax by gross wages plus net income from trades, businesses, and investments. Note that net income does not equal net taxable income. The result will be your effective tax rate.

Real Estate Benefits

The largest benefit for real estate investors results in additional non-cash deductions that they can take against their rental income such as depreciation and amortization. These benefits can be furthered increased through cost segregation studies.

Many real estate investors may see an increase in total tax and think that real estate is not offering its promised tax benefits. But that’s clearly not the case. Thanks to the real estate generating income that was not taxed, our effective tax rate drops meaning you are paying less in tax per dollar earned.

Here at Camuso CPA, we do have the ability to offer tax preparation and planning services to our real estate clients. If you are interested into how this might benefit your business or portfolio, please don’t hesitate to give us a call today. One of our friendly and knowledgeable representatives will be happy to answers any questions you have.

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How Tax Reform Impacts Real Estate Investors Tax Rates

Here at Camuso CPA, we offer a wide array of tax services for real estate investors including tax preparation and tax planning.

While the full implications of the Tax Cuts and Jobs Act are still unraveling, a number of tax-planning opportunities have presented themselves. Here we will outline how performing cost segregation studies can lead to permanent tax savings.

On 22 December 2017, the President signed tax reform legislation known as the Tax Cuts and Jobs Act (TCJA). This is primarily known for reducing corporate tax rates to 21%, but the new Section 199A provides non-corporate taxpayers with a potential 20% deduction against taxable income, which, when applicable, effectively discounts the maximum 37% non-corporate rate to 29.6%.

How Does It Work

The 20% discount requires a complicated formulaic deduction equal to: (1) 20% of newly defined qualified business income plus (2) 20% of the sum of (a) REIT dividends and (b) publicly traded partnership income. For taxpayers with income over certain minimal thresholds, the 20% of qualified business income deduction is limited to the greater of: (a) 50% of the W-2 wages paid by the qualified business, or (b) 25% of the W-2 wages paid by the qualified business, plus 2.5% of the unadjusted basis of depreciable property held by the business.

These limitations are calculated at the individual level and the statutory language indicates that the limitation is to be applied separately for each qualified trade or business that the taxpayer is engaged in.

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Here at Camuso CPA, we do have the ability to offer tax preparation and planning services to our real estate clients. If you are interested into how this might benefit your business or portfolio, please don’t hesitate to give us a call today. One of our friendly and knowledgeable representatives will be happy to answers any questions you have.

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