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A creditor that agrees to charge-off a debt may help a debtor overcome a financial hardship. However, if a lender forgives a debt, it must report the amount written off as income to the debtor. The debtor will receive a 1099-C statement from the lender that must be reported as income on his or her tax return. Limited exceptions to the Cancellation of Debt: The debtor files for bankruptcy relief The debtor is insolvent Home mortgage debt (excludes credit lines except under certain … [Read more...]

It is still unclear from a recent bankruptcy case decision if marijuana dispensaries will find protection under the US Bankruptcy Code. Mother Earth lost the court battle to stay eviction proceedings. The bankruptcy judge lifted the automatic stay to allow the landlord to proceed with an eviction. The ultimate question to be determined: Will companies, such as medical marijuana dispensaries, operating legally under state law be afforded the same protections as other companies under federal … [Read more...]

According to the IRS, "Legal source tax crimes are crimes involving legal industries, legal occupations, and legally earned income associated with the violation of Title 26 and Title 18 of the U.S. Code. And includes cases that which threaten the tax system…  Illegal source financial crimes are crimes involving proceeds derived from illegal sources other than narcotics… Narcotics related financial crimes are significant narcotics-related tax and money-laundering crimes." In 2011 there were … [Read more...]

A new bill has been introduced in the Senate in an attempt to exempt U.S. Olympic medal winners from paying federal taxes on their Olympic winnings.  At this time U.S. Olympic winners are required to include the value of their medals and prize money in their taxable income, and are taxed at 35%. This means that a gold medal winner taxable income would increase by $236 for their medal and another $8,750 for their prize money.  If this bill is passed it would amend the Internal Revenue Code of … [Read more...]

A decision made by the Department of Taxation and Finance last year has been reversed in New York regarding sales tax at yoga studios. After last years decision yoga organizations were able to get a reversal and reclassify their studios.  Sales taxes will still apply to yoga classes' taught at gyms and other businesses, but not to yoga studios.  The state feels that yoga studios provide health benefits, using a spiritual balance and should not be required to charge a 4.5 percent sales tax. Read … [Read more...]

Our new Consumer Financial Protection Bureau, has ordered Capital One Bank to pay $210 million in refunds and regulatory fines back to credit card customers whom they allegedly tricked into purchasing additional services. Additional services include payment protection and credit monitoring services. Although Capital ne des doesn't admit nor deny these accusations they will be paying up to $150 million to 2.5 million customers, $25 million to the CFPB and $35 million to the Office of the … [Read more...]

Amazon will now begin charging sales tax to customers in other states. It already collects sales tax from six states and will begin charging in eight more states beginning with California and Pennsylvania soon.  The National Conference of State Legislatures estimates that states lose around $23 billion in annual sales taxes, and around $11.5 billion of that is from online purchases. While many online retailers oppose charging an online sales tax, Amazon supports a federal solution and the … [Read more...]

During a recent bankruptcy case heard by the Third Circuit Court of Appeals, a decision was made regarding sales tax collected by businesses. The court ruled the same as three other federal appellate courts but approached their ruling differently. It was acknowledged that "while the Bankruptcy Code was intended to provide debtors with a fresh start and to place creditors on an equal footing, treating sales taxes collected from customers as a dischargeable debt would create perverse incentives … [Read more...]

Frustrated by the intricacies of real estate red tape? Thomas W. Lynch & Associates’ real estate attorneys can help you to sort through sales, purchases, closings, and development projects, and the potential problems that may accompany this substantial transaction. Click here to watch the video.   … [Read more...]