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Transfer of Property between Spouses

In general, if you transfer property to or receive property from your spouse, no gain or loss is recognized. This rule applies even if the transfer is made to a trust for the benefit of your spouse or to a former spouse if it was incident to a divorce. The Internal Revenue Code defines a transfer as "incident to a divorce" if the transfer occurs within one year after the date on which the marriage ends, or if the transfer is related to the ending of the marriage.

Interest Received

The general rule is that any interest a taxpayer receives or that is credited to his or her account is taxable income. Some of the most common examples of fully taxable interest are interest on bank accounts, money market certificates, bonds, loans, deposited insurance dividends, and tax refunds. Even usurious or unreasonably large payments of interest that violate state law are taxable unless a state statute automatically converts those interest amounts into payments of principal.

Business Income

The definition of taxable business income is a broad one. To paraphrase the Internal Revenue Code, it includes all income from whatever source it is derived. In general, anything of value received by a business is considered income unless it is specifically excluded by the tax laws.

Tax Issues of Limited Liability Companies

Compared to the other forms of business organization, a limited liability company (LLC) is a fairly new statutory creation in most states. An LLC is usually formed under the law of a state when its owners (called members) file articles of incorporation as an LLC. When a business is structured as an LLC, the members have limited personal liability for the debts and actions of the company similar to the situation found in a corporation. Unlike a partnership, the members are not personally liable for the debts of the business.

Cancellation of Certain Student Loans

The general rule is that if you are responsible for making loan payments and the loan is forgiven, you are required to include the amount of the cancelled loan in your gross income for federal income tax purposes. However, under certain circumstances, a forgiven student loan may be entitled to tax-free treatment.