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IRS Audit Campaign Targets Nonresident Alien U.S. Real Estate Activities

On September 14, 2020 and October 5, 2020 the IRS announced the launch of two campaigns that would target the real estate investment activities of non US persons in the United States. The October 5, 2020  campaign focuses on NRAs receiving rental income from U.S. property and the requirement to comply with the Internal Revenue Code’s reporting and filing requirements. The IRS September NRA U.S. real estate campaign targeted compliance with the withholding and reporting obligations of the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA).

Why These Two Campaigns?

The purchase of U.S. real estate by foreign nationals is a major source of investment in the United [Read More]

November 3rd, 2020|Articles|

New Form 1099-NEC

(Non-employee Compensation)

The 1099-NEC is used strictly for reporting independent contractor payments of $600 or more in the course of your trade or business. You will still be required to use the 1099-MISC for such items as royalties, rent, and healthcare payments.

If you’re accustomed to filing Form 1099-MISC to report nonemployee compensation, the IRS has made things more difficult as usualThe government is now bringing back Form 1099-NEC for that purpose, a form that was last used in 1982.

The 1099-NEC is being reintroduced to address confusion created by the PATH (Protecting Americans from Tax Hikes) Act of 2015. That Act established different due dates for the various types of income reported on the 1099-MISC, leading to undeserved penalty notices for filers. The renewed 1099-NEC form separates out [Read More]

October 1st, 2020|Articles|

Deducting Mortgage Interest

It pays to take mortgage interest deductions

If you itemize, you can usually deduct the interest you pay on a mortgage for your main home or a second home, but there are some restrictions.

What counts as mortgage interest?

Deductible mortgage interest is any interest you pay on a loan secured by a main home or second home that was used to buy, build, or substantially improve your home. For tax years prior to 2018, the maximum amount of debt eligible for the deduction was $1 million. Beginning in 2018, the maximum amount of debt is limited to $750,000. Mortgages that existed as of December 14, 2017 will continue to receive the same tax treatment as under the old rules. Additionally, for tax years prior to 2018, the interest paid on up to $100,000 [Read More]

February 13th, 2020|Articles|