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Personal Finance

We are dedicated to keeping clients abreast of the latest developments and tax-saving strategies. This section includes a library of hundreds of timely articles about business, taxes, finances, trends and the like. The articles are categorized by subject matter, which can be accessed from the links. Click on your topic of interest and find a wealth of information.

INVESTMENTS & TAXES

The following is a series of articles dealing with the special treatment of investments, income from the investments, and deductions associated with the investments.  Please call our office for more information on any of the topics discussed here.

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Zero Capital Gains Rate Requires Careful Planning
One of the greatest benefits of the tax code is the special tax rates that currently apply to gain recognized from the sale of capital assets held for more than a year (long-term).  The special tax rates apply to virtually all capital assets including land, improved real estate, your home, and business assets in excess of the accumulated depreciation previously deducted.

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Deducting Investment Interest
Generally, the only interest deductible on the Schedule A (where deductions are itemized) is home mortgage interest, with one exception, investment interest. Investment interest can be interest you pay on your brokerage margin account, interest on investment property such as land, etc. However, this interest deduction is limited to "net investment income." In layman's terms, you can only deduct the interest expense to the extent you have investment income.

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Deductions for Investors
The costs associated to your investments are deductible as a miscellaneous itemized deduction, subject to the 2% of gross income (AGI) limitation. Although they may seem trivial, it's still worthwhile to keep track of them as they can add up quickly. Combined with other allowable deductions, they can reduce your taxable income. Keep in mind, however, that investment expenses associated with tax-exempt income are not deductible. If the expenses are associated with both, you will need to prorate the expenses.

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