Win this $100 Raffle and You Could Owe $150K in Income Taxes

The Herald-Mail newspaper had a story about a house being raffled off for charity purposes. The house was appraised for $390,000. The newspaper asked a CPA to figure out what taxes the winner would owe. In this case, a $100 purchase would net you a tax bill of $150K.

Even General Partnerships Subject to Franchise Tax in Texas

Wait a minute! I thought general partnerships were not subject to the new franchise tax? 

I guess in Texas, you're presumed taxable until proven nontaxable. Even though general partnerships made up of only natural persons as general partners are not subject to the revised Texas franchise tax, to preserve that non-taxable status, the comptroller requires the partnership to report certain information. Last June the comptroller published a form for such partnerships to file to preserve their non-taxable status, stating: "If the form is not returned, the partnership will be presumed to be subject to the revised franchise tax and will have an annual report due on May 15, 2008."

Again I ask this question: Why are Texas legislators trying to turn Texas into California?

Another State with a Surplus -- Credit the Income Tax

Here's the headline and story from the Missouri newspaper the Columbia Tribune:

State tax income higher than expected

Published Thursday, December 6, 2007

JEFFERSON CITY (AP) - Missouri's tax revenue is coming in ahead of what was budgeted.
The state Office of Administration says November's net general revenue was up more than 6 percent compared to November 2006.

Does Derek Jeter Live in NYC or Florida?

According to this article in the New York Times, he says he lives in FL, but the evidence may indicate he lives in NY.

"New York State tax officials say that the Yankee star Derek Jeter claimed he lived in Florida to avoid paying city and state income taxes for several years, when he was actually living in New York, according to documents filed last week with an administrative law judge.

It's Better When the Legislature is Out of Session

The Maryland Chamber of Commerce had an eye-catching headline on its website:

"Special Session Results in $800 Million in New Business Taxes"

When you hear your governor call for a "Special Session", grab your wallet! Here is the Chamber's summary of what the legisalture did to Maryland businesses and citizens.

Michigan Backs Down on Service Tax -- Increases Income Tax Instead

According to CCH, the surcharge is to be based on a percentage of the taxpayer's liability before credits. For all taxpayers, other than financial institutions, the surcharge would be:

-- 32.9% for tax years ending after 2007 and before 2009; and
-- 27.3% for tax years ending after 2008.

You Own a Farm/Ranch and Want to Deduct the Losses?

The question of "hobby-losses" come up frequently in income tax. So this issue is always an interesting one to watch. In this case, a couple in Alabama won their case at the administrative level against the AL DoR. Even though both of them had full-time jobs off the farm, they were able to show they were operating it for a profit. Here is the analysis performed by the ALJ considered in ruling for the taxpayer: