Commercial Property Should Be Taxed As Commercial Property, Rules the Montana Tax Appeal Board. Taxpayer loses $300 in Property Value

Commercial v. Residential Property. When should property that is limited by restrictive real estate covenants to commercial use and barred from residential use and is located in a commercial development not be taxed as commercial property? When the taxpayer lives at the property in apparent violation of the rules. At least, that was the taxpayer’s…

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One Month in Federal Prison for Each $100k of Unpaid Payroll Tax

Here is a word of caution to all business owners: pay your payroll taxes. If not, beware of one month in federal prison per $100k of unpaid taxes. The United State Department of Justice recently announced the sentencing of a Montana business owner to 15 months in prison for failure to pay employment taxes withheld…

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Montana Pharmacy Paid Too Much Rent Says US Tax Court

Plentywood, MT has a pharmacy. The US Tax Court recently heard a case where a Montana pharmacy located in Plentywood, Montana, population 1,700, paid rent for a building owned by the same people that owned the pharmacy. While rent is typically a deductible expenses, that is not necessarily the case when the parties are closely…

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Defending IRS Audits on Bad Debt Deductions – Part 1 of 4: Overview

An area I have seen the IRS audit multiple times recently are bad debt deductions claimed on federal income tax returns under IRC § 166. This section provides a deduction for “any debt which becomes worthless within the taxable year.”[1] How a bad debt may arise. A typical example of a bad debt deduction is…

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Montana Local Trade Board Denied Property Tax Exemption

The Montana Tax Appeal Board (“MTAB”) recently ruled against a local board of realtors in finding that the board of realtor’s building used for board of realtor events was not exempt from Montana property taxation.[1] The case is instructive of the burden of proof the property taxpayer faces and how tax statutes for exemptions are…

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