2014 Tax News

You are now getting to that point where your 2014 tax return issues need to be addressed, the following are some of the things that you should be thinking about:

-Gathering and accounting for all sources of income: It is important for you to understand that the general rule is that everything received is counted as income unless the law provides for a specific exemption, exception, or exclusion.

-A “gift” from someone, then that is not includible in your gross income.

-If you borrowed money from someone that isn’t considered income. However, if you don’t pay the borrowed money back and the lender “forgives” that debt, then the “forgiveness of debt” is includible in your gross income. This becomes particularly important where the money exchanging hands is between related parties such as parents and children and sibling to sibling. In many situations the lending of money may start out as a loan but as time progresses the intent changes and the lender does not hold the borrower liable anymore and decides to just make the transfer a “gift”. However in other cases the transferor might decide to “write off” the loan and “forgive” the borrower which then causes the inclusion of income.

To read the entire NSTB (National Society of Tax Professionals) newsletter, click here.

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