Work-related education — When can you deduct your expenses?

Those heading back to the classroom to improve their marketability may, depending on their income level and other factors, qualify for education tax credits (such as the Hope credit or Lifetime Learning credit) or the tuition and fees deduction. But this article focuses on deducting the cost of education as a business expense. It explains what is and is not deductible, and one instance in which an unemployed person might be able to deduct expenses. A sidebar addresses the issue of whether the cost of obtaining an MBA is deductible.
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The icing on the cake — A QPRT allows you to save estate taxes on your home while still living in it

Now may be a good time to consider a qualified personal residence trust (QPRT), which allows a person to transfer their home to their children or other family members at a deeply discounted gift tax value. By doing so, they can remove the home’s value and any future appreciation from their taxable estate. And they can continue to live in the home indefinitely, which can be an excellent strategy if the property’s value is depressed and is expected to increase. But, as this article explains, it’s important to be aware of the requirements of a QPRT, along with capital gains tax ramifications.
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How to maximize deductions for LLC and LLP losses

Limited liability companies (LLCs) and limited liability partnerships (LLPs) are popular business structures because they combine the tax advantages and flexibility of a partnership with the liability protection of a corporation. But until recently, the IRS treated owners as limited partners for purposes of the passive activity loss (PAL) rules. But federal courts have ruled that LLC and LLP owners should be treated as general partners, making it easier for them to deduct losses. However, the owners must establish that they “materially participated” in the business. This article lists seven tests, any one of which can establish material participation.
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Tax Tips

This issue’s “Tax Tips” discusses why it’s important that S corporations establish and document reasonable salaries for shareholder-employees; why it may be best to make large gifts now to take advantage of the current high tax exemption; and why those 70½ or older should consider a charitable IRA rollover.
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