How to Pay Zero Taxes 2003

Copyright......Page 5
Contents......Page 9
Preface......Page 17
CHAPTER 1 Is It Legal?......Page 29
CHAPTER 2 How Our Tax System Works......Page 39
CHAPTER 3 Exclusions—Tax-Free Money......Page 45
1 Hospitalization Premiums (Sec. 106)......Page 47
2 Group Life Insurance Premiums (Sec. 79)......Page 48
4 Accident and Health Plans (Sec. 105)......Page 51
6 Merchandise Distributed to Employees on Holidays......Page 52
8 Meals and Lodgings (Sec. 119)......Page 53
10 Workers’ Compensation (Sec. 104)......Page 55
12 Dependent Care Assistance Program (Sec. 129)......Page 56
14 Employee Awards (Sec. 274)......Page 58
16 Miscellaneous Fringe Benefits......Page 61
17 Gifts, Bequests, and Inheritances (Sec. 102)......Page 62
18 Scholarships and Fellowships (Sec. 117)......Page 63
19 Prizes and Awards (Sec. 74)......Page 66
20 Interest on State and Municipal Obligations (Sec. 103)......Page 67
22 Social Security and Other Retirement Benefits......Page 68
23 Annuities (Sec. 72)......Page 71
24 Sale of Your Home (Sec. 121)......Page 74
25 Buying Your Own Home—Twice!—The Schnepper Bootstrap......Page 77
27 Damages (Sec. 104)......Page 78
28 Divorce and Separation Arrangements (Sec. 71)......Page 81
29 Life Insurance (Sec. 101)......Page 84
30 Qualified State Tuition (§529) Programs......Page 86
F Schedule of Excludable Items......Page 96
CHAPTER 4 Credits—Dollar-for-Dollar Tax Reductions......Page 99
A Estimated Tax and Withholding Exemptions......Page 100
31 The Earned Income Credit (Sec. 32)......Page 104
33 The Child and Dependent Care Credit......Page 107
34 Child Care Credits for Children of Divorced or Separated Parents......Page 109
35 Credit for the Elderly or Permanently and Totally Disabled......Page 114
36 Credit for Interest Paid on Mortgage Credit Certificates......Page 116
37 Work Opportunity Credit (Formerly Targeted Jobs Tax Credit) (Sec. 51)......Page 117
39 Research Tax Credit (Sec. 41)......Page 118
41 Adoption Assistance......Page 119
44 Child Tax Credit......Page 121
45 District of Columbia—First Time Homebuyer......Page 122
47 Health Insurance Credit......Page 123
48 Saver’s Credit......Page 124
49 Small Employer Credit......Page 125
CHAPTER 5 “Above the Line” Deductions......Page 127
50 Trade and Business Deductions......Page 131
52 Employee Business Expenses......Page 132
53 Alimony......Page 133
54 Interest on Qualified Education Loans......Page 141
55 Retirement Plan Payments......Page 142
61 Health Insurance Deduction for Self-Employeds......Page 185
62 Moving Expenses......Page 186
64 Deduction for Qualified Higher Education Expenses......Page 194
CHAPTER 6 “Below the Line” Deductions......Page 195
A The Importance of Filing Status......Page 196
65 Medical Expenses......Page 201
66 Income Taxes......Page 218
67 Real Property Taxes......Page 219
69 Interest......Page 221
70 Charitable Contributions......Page 245
71 Casualty Losses......Page 267
72 Theft Losses......Page 272
74 Travel Expenses......Page 280
75 Transportation Expenses......Page 286
76 Meals and Entertainment Expenses......Page 290
77 Gifts......Page 291
78 Reimbursable Employee Business Expenses......Page 293
80 Limit on Itemized Deductions......Page 294
81 Medical Deductions......Page 295
82 Deductible Taxes......Page 296
83 Charitable Deductions......Page 297
84 Casualty and Theft Loss Deductions......Page 298
86 Employee Miscellaneous Deductions......Page 299
87 Investor Deductions......Page 300
CHAPTER 7 Traditional Tax Shelters......Page 303
88 Real Estate......Page 320
90 Oil and Gas......Page 333
91 Equipment Leasing......Page 343
92 Single-Premium Life Insurance......Page 347
93 Cattle Feeding Programs......Page 351
94 Cattle Breeding Programs......Page 353
95 Tax Straddles......Page 355
96 Art Reproduction......Page 357
97 Noncash Gift Shelters......Page 358
98 Municipal Bond Swaps......Page 359
B How to Analyze a Tax Shelter......Page 360
99 Getting Out of the Tax Shelter......Page 362
100 Master Limited Partnerships......Page 363
CHAPTER 8 Super Tax Shelters......Page 367
A Family Shifts......Page 368
101 Unearned Income of Minor Children......Page 371
102 Outright Gifts......Page 375
103 Clifford Trusts......Page 379
105 The Schnepper Shelter: Gift Leasebacks......Page 380
106 The Schnepper Deep Shelter......Page 386
108 Family Trusts......Page 387
109 Employing Members of the Family......Page 388
110 Author’s Delight......Page 390
B Running Your Own Business......Page 391
111 Your Home......Page 394
112 Your Car......Page 406
113 Meals and Entertainment......Page 409
114 Travel and Vacation......Page 413
115 Gifts......Page 419
118 Creative Deductions—Busting the IRS......Page 420
120 Borrowing from Your Company......Page 421
121 Lending to Your Company......Page 424
122 Miscellaneous Corporate Advantages......Page 425
CHAPTER 9 Investment Planning to Save Taxes......Page 429
123 Short Sales......Page 434
125 Wash Sales......Page 435
128 Original Issue Discount (OID)—Tax-Exempt Bonds......Page 436
130 Municipal Bond Swaps......Page 437
131 Employee Options—Non-Qualified......Page 438
132 Incentive Stock Options (Sec. 422A)......Page 439
134 Fund Strategies......Page 444
135 Tax-Exempt Income......Page 445
136 Special Report......Page 447
138 Alternative Minimum Tax for Individuals......Page 448
139 U.S. Savings Bond Exclusion (Sec. 135)......Page 460
CHAPTER 10 Last-Minute Tax Planning......Page 465
140 Defer Taxes......Page 466
141 Accelerate Expenses......Page 468
143 Dependents and Personal Exemptions......Page 469
145 Timing Strategies......Page 473
147 Individual Retirement Plans (IRAs)......Page 474
148 H.R. 10 or Keogh Plans......Page 475
149 Marital Status......Page 476
150 The Goldinger Deferral......Page 477
CHAPTER 11 The Attorneys’ and Accountants’ Relief Act of 1993......Page 479
151 Training and Investment Provisions......Page 481
152 Investment Incentives......Page 482
154 Real Estate Provisions......Page 483
155 Miscellaneous Provisions......Page 485
156 Revenue-Raising Provisions......Page 486
157 Business Provisions......Page 492
CHAPTER 12 Stealth Tax Reform......Page 495
158 The New Taxpayer Bill of Rights......Page 496
159 Personal Responsibility and Work Opportunity Reconciliation Act of 1996, HR 3734......Page 500
160 The Health Insurance Portability and Accountability Act of 1996, HR 3103......Page 501
161 The Small Business Job Protection Act of 1996, HR 3448......Page 505
162 Tax Relief for Bosnian Effort......Page 517
CHAPTER 13 Tax Reform—Again!......Page 519
163 The Mind-Numbing Complexity of the Tax Reconciliation Act of 1997, Also Known as the Taxpayer Relief Act of 1997......Page 520
CHAPTER 14 The Internal Revenue Service Restructuring and Reform Act of 1998......Page 531
165 IRS Governance and Oversight Changes......Page 532
166 Extension of Attorney-Client Privilege to Tax Advice......Page 534
168 Taxpayer Rights......Page 535
170 Capital Gains......Page 537
172 Home Sales Clarification......Page 538
173 Conclusion......Page 539
CHAPTER 15 The Economic Growth and Tax Relief Reconciliation Act of 2001......Page 541
174 Marginal Rate Reductions......Page 542
175 Tax Benefits Relating to Children......Page 547
176 Marriage Penalty Relief Provisions......Page 548
177 Education Incentives......Page 551
178 Pension and Individual Retirement Arrangement Provisions......Page 555
181 Income Tax Treatment of Certain Restitution Payments to Holocaust Victims......Page 563
182 Estate, Gift, and Generation-Skipping Transfer Tax Provisions......Page 564
183 Sunset......Page 569
CHAPTER 16 The Job Creation and Worker Assistance Act of 2002......Page 573
187 Electric Vehicle Credit......Page 574
191 Liberty Zone Benefits......Page 575
CHAPTER 17 How to Avoid/Survive an IRS Audit......Page 577
Appendix A Cost Recovery/Depreciation......Page 677
Appendix B Law Prior to the Tax Reform Act of 1986......Page 691
Appendix C Law After March 14, 1984 (Real Estate)......Page 695
Appendix D Business Use of  “Listed Property”......Page 707
Appendix E Auto Leases......Page 715
Index......Page 765