October 24, 2019

• A lucky South Carolina resident won $1.5 billion in a 2018 lottery. But he/she is not the only lucky South Carolinian! SC used some of the tax proceeds to give each SC resident a $50 tax rebate check. Savannah here we come!
• The Tax Court ruled that – no – self-employed people cannot deduct the value of their own labor. I get this question all the time! When you deduct the cost of your labor – you need to “add it back” in another part of your return! So the net effect is $0.
• In the case of Shirehampton Drive Trust one unlucky buyer learned that the IRS can enforce a tax lien against their new property (purchased at a foreclosure), which was meant for the prior owner! Oof – that stings. (https://www.leagle.com/decision/infdco20191008k35)
• A homeowner association’s application for tax exempt status was rejected by the IRS because the HOA operates for the private benefit of its members (not the public). Normally an HOA has no profit – so there is no income to tax at the end of the year even if it does operate as a C or S corp.
• The IRS issued Revenue Ruling 2019-24 on the treatment of bitcoin and other cryptocurrencies. All of these are considered “property” for tax purposes and the 2019 return will include a question asking you to disclosure whether you sold, sent, acquired or exchanged any virtual currencies. Here is a link to the guidance: https://www.irs.gov/pub/irs-drop/rr-19-24.pdf