Wednesday, September 30, 2020



Trump’s debate performance has once again proven beyond a shadow of doubt that he is a totally worthless piece of trash, completely devoid of humanity, integrity and intelligence.

The term literally is over-used today – but it is very literally impossible for any individual with any degree of intelligence to listen to Trump speak and think he is fit to hold ANY office or position of power anywhere.  

After last night it is more obvious than ever - anyone who continues to support Trump and his Administration and will vote for Trump for President is either a moron, a racist or has absolutely no conscience - or, like Trump himself, all three.


The New York Times has revealed that Trump used excessive business losses to avoid, and evade, federal and state income taxes.

A portion of the losses come from fraudulently claiming personal expenses as business deductions.  Trump has clearly cheated on his tax returns and should be indicted for tax fraud.  But a large percentage of Trump’s losses comes from depreciation of real estate - a perfectly legal but not, in my personal opinion, “legitimate” business tax deduction.

While it is truly a controversial opinion, as I have said often in the past, here and elsewhere, I sincerely believe that we should do away with the business tax deduction for the depreciation of real property - fixed property, principally land and buildings.  The depreciation of real property is a “phantom” expense and distorts the economic reality of the investment activity.  It allows an investor with an actual economic profit to claim a deductible tax loss and avoid, or in my opinion evade, income taxes - at least temporarily (depreciation must be "recaptured", sometimes at a lower tax rate, when the property is sold).

Let me repeat my argument.

According to the IRS, depreciation is “an income tax deduction that allows a taxpayer to recover the cost or other basis of certain property. It is an annual allowance for the wear and tear, deterioration, or obsolescence of the property”.

Let us look at depreciation from the point of view of the Income Statement of a business or rental activity. Basically, if you purchase an asset that will last more than one year you spread the cost of the asset over its “useful life”. You purchase a new computer. You certainly do not purchase a new computer each year – you expect that it will continue to provide service for several years. So, you divide the cost of the computer over a period of years to reflect this fact, and to properly report the “economic reality” of the purchase.

If you deducted the full cost of the computer in the year of purchase this would distort the true cost of doing business. Since you generally purchase a new computer every five years, deducting the cost over a five-year period “more better” represents the cost of operations. But you do not purchase a new office building every 27.5 or 39 years because the old building is obsolete or no longer functions.   

Another way to look at depreciation is from the Balance Sheet perspective. When you purchase an asset that asset has value to you. You trade the asset of cash for the asset of a computer. If you sold your business the value of the computer would be included in the value of the business. As an asset ages its value drops. A two-year old computer does not have the same value in the market as a comparable brand-new computer. Depreciation is used to reflect the drop-in value of the asset.  

A building has a life of much more than the 27.5 or 39 years over which depreciation is currently allowed. The building I lived in several years ago was 100 years old at the time, and is still going strong. And, for the most part, the value of real estate does not drop in value over the years. If properly maintained its value will generally increase. My parents purchased their first home for $13,000 and sold it many years later for $75,000 (and they were robbed). Granted real estate values can go down due to market conditions, but this is the exception and not the rule.  So, for all intents and purposes, the value of real estate does not “depreciate”.     

Real estate is an investment, just like stocks, bonds, mutual funds, etc. You invest in rental real estate because you expect the building to increase in value over time, often more so than stocks and mutual funds, and because it generates “dividends” in the form of net “in pocket” rental income. The deduction for depreciation of real estate is like allowing those who purchase stock to depreciate the purchase price of the stock as a deduction against the dividends paid out.  

Depreciation of real property is a “tax expenditure” – “revenue losses attributable to provisions of the Federal tax laws which allow a special exclusion, exemption, or deduction from gross income or which provide a special credit, a preferential rate of tax, or a deferral of tax liability.’’  This deduction represents federal, and state, revenue losses in the millions, if not billions, each year.

So, what do you think?


Tuesday, September 29, 2020



A day late – but hopefully not a dollar short.


* Obviously, the big tax story is the NY Times article on moron Trump’s taxes.  Kelly Phillips Erb, while not addressing or commenting on the specific details of the article, discuses “a number of issues raised in the piece that can be confusing for ordinary taxpayers like you and me” in “The Ordinary Taxpayer’s Guide To The Extraordinary Story Of Trump’s Tax Returns”.


* It is clearly obvious that Trump cheated on his taxes (he cheats on everything and everyone), wrongly claiming ridiculous amounts of alleged “business deductions” – including $70,000 for maintaining his pathetic comb-over (as I discussed here).  


But one item in the NY Times reporting that was quoted in the USA TODAY article “Top seven revelations from New York Times report on Trump income taxes” caught my attention –


"Mr. Trump paid alternative minimum tax in seven years between 2000 and 2017 – a total of $24.3 million, excluding refunds he received after filing. For 2015, he paid $641,931, his first payment of any federal income tax since 2010.”


The dreaded Alternative Minimum Tax (AMT) is actually federal income tax. 


It is implied, and I assume, that at least part of the AMT paid referenced above is included in the $$72.9 million refund that is still being contested by the IRS – so he very likely did not actually “pay” the tax.


It is important to state that I have not seen the tax returns referenced in the article.


* Kay Bell warns us about "A dozen disaster scam warnings" –


Here are 12 scam avoidance tips, six for catastrophe victims and six for those who want to help.”


* And KB reports “Alabama counties blasted by Hurricane Sally get tax relief, deadlines extended until Jan. 15, 2021”.


* A reminder – questions about the 2020 IRS Economic Stimulus Payment can be answered at the Services’ “Economic Impact Payment Information Center“.


* If you were unable to transmit 2019 Form 1040s electronically via CCH software on September 15th here is an FYI from CURRENT FEDERAL TAX DEVELOPMENTS – “IRS Will Treat Returns Impacted by CCH Outage Electronically Filed by September 17 as Filed on September 15”.




How far the once “Grand Old Party” has fallen in my lifetime.


The Republican Party in 1956 (from the official Party platform) –


We believe that basic to governmental integrity are unimpeachable ethical standards and irreproachable personal conduct by all people in government. We shall continue our insistence on honesty as an indispensable requirement of public service. We shall continue to root out corruption whenever and wherever it appears.”


The Republican Party in 2020 –


“We don’t care one ounce about integrity, honesty, honor, ethical standards or irreproachable conduct by elected or appointed government officials.  These things are not important.  The only thing that is important is maintaining the power, feeding the ego and lining the pockets of Trump and pandering to ignorant racists, bigots and white supremacists so they will vote for Republican candidates.”


Every Republican in Congress running for re-election must be defeated in November – especially McConnell and Graham.



Monday, September 28, 2020



The following email was in my “in-box” when I rose this morning –

How come you never told me haircuts were deductible on my tax returns?

I never told him that his haircuts were deductible on his tax return because his hair cuts are not, and were not, deductible on his tax returns.

The reason for this email was obviously the news yesterday from the New York Times about moron Trump’s taxes.  In a summary of the main article titled “18 Revelations From a Trove of Trump Tax Records” we are told –

Mr. Trump classifies much of the spending on his personal lifestyle as the cost of business” and “Haircuts — including more than $70,000 to style his hair during “The Apprentice” — have fallen into the same category.”

My answer to the client’s question -

In general, the IRS views haircuts as a non-deductible personal expense.

However, you can deduct as a business expense costs that are “ordinary and necessary” for your business. An “ordinary” expense is one that is common and accepted in your specific trade or profession and a “necessary” expense is one that is helpful and appropriate.  In addition, the cost must not be lavish or extravagant under the circumstances.

For example, professional actors can deduct make-up and hair care only when incurred directly in connection with a specific job.

Cameron McCool provides a good example in How to Deduct Personal Appearance Expenses” at the BENCH website (highlights are mine) -

Hair care expenses only qualify as a tax deduction when they are specifically for work-related photo shoots or shows.

If you order your products from a professional supplier and only use them for performances or shoot, then you can claim the deduction. However, a haircut wouldn’t be deductible because you’ll take the new 'do’ with you outside of work.”

We all know that any make-up and hair care needed for the filming of “The Apprentice” would have been provided on set, and paid for, by the production company.

Hey, who could have guessed that it cost so much money to maintain such a pathetic comb-over?

It is clear that the Times story is true.  Trump has called it “fake news” and we all know from the past that whatever Trump calls “fake news” is absolutely true.

To be fair, I have not personally reviewed the Idiot-in-Chief’s actual tax returns.  I am in the process of reviewing the Times reporting and will no doubt have more to say about Tiny Mushroom’s taxes in future posts 


Monday, September 21, 2020


A “meatier” BUZZ this week.

* A new blog list from Kay Bell, the yellow rose of taxes, at DON’T MESS WITH TAXES – “10 tax considerations and tips for newlyweds”.


* In another post Kay discusses “When tax troubles qualify for IRS penalty relief”.


* FORBES.COM’s TaxGirl Kelly Phillips Erb tells us “There’s A New Tax Form - With Some Changes - For Freelancers & Gig Workers” -


Form 1099-NEC is intended to replace the nonemployee compensation part of a form many of us have come to know and love: Form 1099-MISC, Miscellaneous Income.”


* And KPE reminds us “October 15 Is The Deadline For Filing Your 2019 Tax Return On Extension”.


So, don’t put it off any longer – get those GDEs done!


* Staying with FORBES.COM, Tony Nitti makes it clear that “No, Joe Biden Will Not Double Your Tax Bill” -


For the 97% of Americans who earn less than $400,000 annually, Biden will preserve the status quo, while proposing new or improved credits that for some, will actually lower, rather than increase, tax liability.”


I do not agree with Democratic Party tax policy – but removing ignorant, incompetent and truly dangerous demagogue Trump from the White House is more important than any other issue, including tax policy.


Trump lies to everyone about everything every day.  I do not believe a word he says about anything.  Since the Republican Party has abandoned all integrity and credibility by embracing Trump, becoming the Trump Party, I do not believe a word that the current Republican Party says about anything.  My advice to you – do not believe a single word in any Trump or Republican campaign ad or statement.


* Another blog list – “8 Things You Need To Know About Your Inherited IRA”.  This one from Sarah Brenner at THE SLOTT REPORT.


* And one more list, on basically the same topic, from Robert Klein at THE STREET - “5 Retirement Plan Beneficiary Mistakes to Avoid”.


All are important to avoid, especially Mistake #5 – “Failure to Revise Beneficiaries for Life Changes”.


* Some good news for my cousins – “IRS announces tax relief for Oregon wildfires and straight-line winds victims”.



The 2 reasons no intelligent person could support or vote for Trump –

1. He is the most utterly stupid and totally clueless national politician in US history.

2. He is totally self-absorbed and doesn't care about anyone or anything but himself.

What more do need?

Frankly, the extent of Trump’s stupidity continues to amaze even me.


Saturday, September 19, 2020

Friday, September 18, 2020

Wednesday, September 16, 2020


While you were “stuck” at home did you decide to clean out your closets?  Since yard sales are no longer an option in many areas you can still make some money from your unwanted “stuff” by donating it to a qualifying church or charity. 

Obviously, you will only receive a tax benefit from donating your “unwantables” if you are able to itemize.

Here are the rules for donating used items to charity,

You can claim a deduction for the “fair market value” of used appliances, books, clothing, computer hardware and software, electronics, furniture, household items, toys, videos, etc., etc. donated to a qualifying church or charity.  According to the IRS, fair market value is the price a “willing, knowledgeable buyer would pay a willing, knowledgeable seller when neither has to buy or sell.”  

You are responsible for determining the fair market value of the items you are donating.  The charity to which you make the donation is not required to provide you with a value.

The same rule as discussed above for cash donations applies if the total value of “non-cash” items donated to a charity in a single day is more than $250.00.

You must complete and attach to your Form 1040 IRS Form 8283 if you are deducting “non-cash” contributions totaling more than $500.00.  The following information will be needed –

  the name and address of the charity(ies) to whom you made the donation(s),

  the date of the contribution(s),

  the fair market value of the items donated, and

  how you determined the value – i.e. “Salvation Army valuation guide”

If any one individual item has a value of more than $500.00 you must also list -

  the date you acquired the property

  how you acquired the property – i.e. purchase, gift, inheritance, exchange

  the cost or adjusted basis of the property

If any one individual item has a value of more than $5,000.00 you must provide a written appraisal of the item and complete Section B of IRS Form 8283.  The appraisal must be made by a “qualified” appraiser who has earned an appraisal designation from a recognized professional organization, or has otherwise met minimum education and experience requirements prescribed by IRS regulations, regularly performs appraisals for compensation, demonstrates verifiable education and experience in valuing the type of property being appraised, and has not been prohibited from practicing before the IRS at any time during the 3-year period prior to the date of the appraisal.  To find a qualified appraiser go to, the website of the American Society of Appraisers.  The cost of the appraisal is not included in the amount of the charitable donation.   

Whenever you contribute used items you should always make and keep a detailed listing of what you have donated with the condition and value of each set of items (i.e. 6 pairs of men’s pants, good condition, $60.00, 5 pairs of men’s shoes, good condition, $75.00).  You may want to attach a copy of the listing to Form 8283 when filing your Form 1040.  

You cannot deduct the contribution of a used item of clothing or household item unless the item is in at least "good" condition.  Donations of clothing and household items with a minimal monetary value, such as used socks or underwear, are also not deductible.

If you contribute new food, toys, clothing, or other items you can deduct the actual cost of the items donated.  The same reporting and documentation requirements discussed above for used items will apply.  You should make a separate purchase of the items you will donate – don’t group together with the purchase of personal use items – and save the store receipt. 

Here are links to sites that provide suggestions for valuing donated items –





Monday, September 14, 2020


Another lean BUZZ.

* Jason Dinesen talks about “Retirement Withdrawals, Home Purchases and the 10% Early Withdrawal Penalty” at DINESEN TAX TIMES.

JD correctly point out (highlight is mine) -


If you take money out of a retirement account to buy a house (for example to make a down payment), you can avoid the 10% early withdrawal penalty … but only on IRA withdrawals.”


I had a client years ago who took the down payment for a qualifying new home from his 401(k) – and got hit with the 10% penalty.  If he had instead rolled over the amount needed, or at least the $10,000 maximum allowance, to an IRA account first and then taken the distribution from the IRA he would have avoided the penalty.


* A reminder from the TURBO TAX BLOG – “Self-Employed? Don’t Forget About the Estimated Tax Deadline”.

Not just the self-employed.


* Robert W Wood of FORBES.COM explains “Opportunity Zone Investing Can Cut Your Tax Bill”.  



While on my too long overdue post-tax season trip to the Jersey shore I read the political thriller “The President is Missing” by James Patterson and Bill Clinton (yes, that Bill Clinton).

An interesting statement, presumably written by Bill, was made in the book in the voice of the character of the President of the United States -

There is nothing I value more in subordinates than their willingness to tell me I’m wrong, to challenge me, to sharpen my decision making.  Surrounding yourself with sycophants and bootlickers is the surest route to failure.”

A big difference between President Clinton and current president Trump – for whom boot and ass licking is a requirement.

Perhaps the biggest difference between Clinton and Trump is that at meetings and briefings Clinton was usually the smartest person in the room – while at any meeting with anyone, except when speaking to his core cult of ignorant racists at a rally, Trump is ALWAYS the dumbest person in the room.


Friday, September 11, 2020



Police Officer Maurice Barry - PATH Emergency Service Unit - P.O. Shield #1038

A Port Authority officer for 16 years, Maurice "Moe" Barry, 48, was assigned to the PATH commuter train system. The resident of Rutherford, NJ, upon hearing the reports of the terrorist attacks, was one of the first on scene when he rushed from Jersey City to Lower Manhattan and then into the North Tower to help in the rescue efforts. As thousands fled the searing flames and smoke of the Towers, Officer Barry was attempting to reach trapped and frightened workers on the upper floors. The last time he was seen, he was on his way to the higher floors to get people out.
Moe had a history of heroism - he was involved in rescue efforts during an airplane crash at La Guardia airport; he once climbed a bridge to retrieve the body of a person electrocuted there; he was involved in the rescue effort during the 1993 bombing of the World Trade Center; and he rescued a woman from her home, by boat, during Hurricane Floyd. Moe was also a volunteer for the Rutherford Ambulance Corps.

Monday, September 7, 2020


As I have often said here in the past - some BUZZ is better than no BUZZ.

* Jason Dinesen is at it again with another “writing spree” of good observations and points on the state of the tax preparation industry in “Tilting at Windmills Again, Or, Don’t Clients Have a ResponsibilityToo?at DINESEN TAX TIMES.

* Jeff Stimpson of ACCOUNTING TODAY tells us of some new initials in “New certification available for tax resolution” -


Tax Rep LLC, which offers education and tools to professional tax professions, has a new certification program built around tax resolution.


The Certified Tax Representation Consultant designation requires applicants be a CPA, Enrolled Agent or attorney in good standing with the state board, IRS or state bar. Applicants must also successfully complete all five sections of the Certified Tax Representation Consultant Course.”


I am not interested.  I don’t do representation, other then for a client’s return I have prepared, and besides, I am neither a CPA, EA or JD.


* BTW, I just ordered my “Form 1040 Tax Person Mask”.   


* The TURBOTAX BLOG reports “IRS Announces Tax Relief for Victims of Hurricane Laura”.




If there is one clearly obvious proven fact, that is proven again and again every day, it is that Trump truly does not care about anyone or anything but himself.


NOTHING he does has ANYTHING to do with what is best, or even good, for America and the American people.


EVERYTHING he does is ONLY about maintaining and expanding his power as President.


Trump has no morals.


Trump has no ethics.


Trump has no compassion.


Trump has no humanity.


Trump has no intelligence.


Who in their right mind would ever want such a despicable person to be President?