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Overview of Key Tax Provisions of Health Care Reform Acts (HR3590 and HR4872)

The health care reform acts, HR3590 and HR4872, make sweeping changes to key individual and business tax provisions, most of which have delayed effective dates. The Tax Institute has put together a summary of these provisions. Read More Health Care Estimator for Business

"Jobs Bill" – New Form W-11

In News Release IR-2010-43, the IRS announced the release of new Form W-11, Hiring Incentives to Restore Employment (HIRE) Act Employee Affidavit, to confirm that an employee is a qualified employee for the special payroll tax exemption of the employer's share of certain social security taxes on wages under the HIRE Act. Read More

Audit Facts and Tips: Who Gets Audited and What Happens

Tax season is over; your clients have filed their returns and paid the balances or received their refunds. So they are in the clear with no audit worries, right? No, that's not necessarily true. Read More

To Roth or Not to Roth

Planning for retirement is more important and challenging than ever in today's economic climate, so it's not surprising that we've seen a lot of interest in this topic. Beginning in 2010, there are more options than ever before for many clients. Due to the Tax Increase Prevention and Reconciliation Act of 2006 (TIPRA), 2010 is the first year that the $100,000 modified adjusted gross income limit for Roth conversions will no longer apply. Read More

Energy Tax Credits For Homeowners

Now that the winter (and tax season) is over, taxpayers' thoughts may be turning to home improvements. Read More

California: 2009 Tax Changes for Mortgage Debt Cancelation

California has enacted legislation that largely conforms California law to the federal tax provision that allows taxpayers to exclude from tax certain income from mortgage debt that is forgiven through foreclosure or debt restructuring. Read More

Unemployment Insurance in 2010

Due to the current level of extended benefit payments and exhaustion of state unemployment trust funds, ... Read More

State Tax Issues

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Tax Law Changes

For an overview of key tax law changes, The Tax Institute created a couple of quick reference cards. These cards in PDF format detail information such as who's affected, when they're effective and what actions need to be taken. Available quick reference cards:

Impact of Key Tax Law Changes — Calendar Year 2009
Impact of Key Tax Law Changes — Calendar Year 2010

To access in-depth information on specific tax law changes, sign in to the Tax Research Center.

Question of the Week

Q: When a client purchases a principal residence, there may be some delay between closing on the purchase and moving into the residence. For instance, one client's new home was damaged by a flood that occurred right after closing and the client took a couple of weeks to repair the property before moving in. In another instance, the client moved most of her furniture to her new residence right away, but could not actually move into the house for about six weeks because her child was very ill. Do these delays count toward "nonqualified use" under the recent change to the tax law?

A. Congress enacted the nonqualified use provision of the tax law, §121(b)(4), to prevent taxpayers from converting a rental, vacation home, etc. to a principal residence, later selling it, and getting the full tax benefit of the exclusion from taxable gain. The intent of the law is not to punish a taxpayer who purchases a home, but has a brief delay before moving in due to unforeseen circumstances.

In many instances, there may be a delay of a few days, a few weeks, or more before the taxpayer is able to move into the residence because of unforeseen circumstances. Unless it is clear that the taxpayer did not purchase the home as a principal residence to begin with, or the delay between purchasing and occupying the house is not reasonable, then the acquisition date can be treated as the date the home is used as a principal residence.

Facts and circumstances will determine if any delay in occupying the residence is due to unforeseen circumstances. For example, suppose a taxpayer purchases a rental property and rents it out. If the tenant breaks his lease and moves out four weeks later and the taxpayer decides to use the property as her principal residence, the four weeks that the home was rented is a period of nonqualified use. By contrast, the two clients you have mentioned intended for their homes to be their principal residences and the delays they experienced were reasonable delays due to unforeseen circumstances.

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Health Care Estimator - Business

Use this estimator to help business clients understand the potential financial impacts of the health care legislation on their business.

Health Care Estimator
for Business

Quick Links

The Tax Institute has compiled useful tax-related links to assist you.

Experiencia en Español

El Tax Institute emplea a profesionales que son fluidos en Español, aquí usted puede obtener respuestas a sus preguntas impositivas en Español.

Para que podamos servirle mejor, El Tax Institute ha compilado enlaces útiles que tratan de temas impositivos.

TAX in the News

Sign up to receive The Tax Institute newsletter, TAX in the News, e-mailed to you. This weekly newsletter features federal and state tax laws as well as current tax law changes.