| Tax Relief for Victims of Terrorist Attacks |
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| After the September 11th attack on the United States, Congress acted to provide tax relief for those injured or killed as the result of terrorist attacks along with certain survivors of those killed. Some sections of the Victims of Terrorism Tax Relief Act of 2001 apply specifically to victims of the Oklahoma City attack, the September 11th attack, and the terrorist attacks involving anthrax occurring during the months following September 11th, while other provisions apply more generally to any terrorist attacks that might occur in the future. More... |
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| Reparation Payments |
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| Congress has specifically excluded from gross income payments received after January 1, 2000, by individuals who suffered Nazi persecution during World War II or by their heirs or estates. These excludable payments are also not included in any tax provision that takes into account excluded income in computing modified adjusted gross income, including the taxation of social security benefits. More... |
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| Deductibility of Legal and Litigation-related Expenses for a Business |
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| If a taxpayer incurs legal expenses in connection with a business transaction or primarily to preserve an existing business, its reputation, or its goodwill, then the legal expenses are generally deductible. The Internal Revenue Service will use the same tests for deductibility as for other business deductions, which precludes a current deduction for a legal expense incurred in the acquisition of goodwill or any other capital asset. In order for legal fees to be deductible, there does not have to be litigation, and the success of the taxpayer does not affect the deductibility of legal expenses. More... |
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| Taxation of Legal Damages |
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| When a taxpayer receives an award as the result of a settlement or judgment resulting from a legal action, the question arises as to whether any or all of the award is subject to taxation. The answer depends on what type of damages or losses the award is supposed to replace. More... |
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| Stock Redemptions |
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| A stock redemption is the reacquisition of stock by a corporation in exchange for property, which includes money, securities, and indebtedness to the corporation. After a redemption, the stock may be canceled, retired, or held by the corporation as treasury stock. If the corporation redeems its stock in a manner that makes the distribution "equivalent" to a dividend distribution, then the amount received by the stockholder is a taxable dividend to the extent that it is paid out of earnings and profits. More... |
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