John G. Hodnette

The Statute of Collections

Section 6501 provides the statute of limitations for the IRS to assess additional tax. Equally important is Section 6502, which provides the statute of…

How Do 529 Plans Work?

Section 529 provides for the creation of qualified tuition programs, better known as 529 Plans. These programs are tax-advantaged investment vehicles through…

Taxation of Options to Purchase Property

A payment for an option to purchase property is not a taxable event to either party upon the grant of the option. See Virginia Iron Coal & Coke Co. v.…

Requests for Tax-Exempt Organization Annual Returns

Section 6104(d)(1)(B) provides a right to taxpayers to request the application for tax exemption and annual informational returns for the last three years of…

Section 1377(a)(2) Elections for S Corporations

Section 1377(a)(1) generally provides each shareholder of an S corporation is allocated income or loss of the corporation by (a) assigning an equal portion of…

Qualified Charitable Distributions from IRAs

Section 401(a)(9) requires annual minimum distributions from traditional IRAs beginning in the year the owner of the account attains age 72 or, if later, the…

New North Carolina PTE Tax Can Reduce Federal Income Taxes

The Tax Cuts and Jobs Act of 2017 capped the deduction available to individual taxpayers under Section 164 to $10,000 for 2017 through 2025. That deduction…

Transferee Liability Under Section 6901

In general, operating a business through an entity can provide limited liability in the event the entity is insolvent or goes out of business. Limited…

Taxation of Noncompete Agreements

Purchasers of a successful business have the reasonable concern that the prior owners will use their expertise to open a new business across the street that…

You Cannot be Both an Employee and a Partner of a Partnership

A person who is both an employee and a partner in a partnership is not treated as an employee for tax purposes. Rev. Rul. 69-184 states “bona fide members…