Investors who are thinking of paying cash for residential real estate in New York City should know that the federal government may be looking closely at their transaction. The Department of the Treasury's Financial Crimes Enforcement Network (FINCEN) announced recently that it renewed an order requiring title companies in certain areas of the United States to reveal the names of individuals paying cash for "high-end" residential real estate. The compliance with the order requires completion of IRS Form 8300 and a review of the subject transaction.
With the recent release of President Trump's 2005 tax return, many millions of Americans were introduced to the Alternative Minimum Tax (AMT). In fact, of the $38.4 million Trump paid in taxes in 2005, $31 million came from the AMT. With the AMT in the news, this is a good time to look at why the AMT exists, as well as potential pitfalls associated with the law.
The number of IRS audits has decreased in each of the last five years. In 2016, only one in 143 individual taxpayers was audited. While audits are a necessary aspect of our tax system, it is safe to say most taxpayers will not lose sleep about the decreased likelihood of an audit.