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Intermediate0.5 hours10 terms

IRS Form 843: Real Estate Tax Terms

This curated collection highlights key terms that might be helpful when exploring IRS Form 843 in real estate. It serves as a quick reference for understanding concepts related to tax refunds, abatements, and property assessment adjustments. Focus on these selected terms to navigate common terminology you may encounter.

Term Collection

1

Reasonable Cause (Tax Penalty Abatement)

Reasonable cause is a valid justification recognized by the IRS for failing to meet tax obligations, such as filing or paying on time, which can lead to the abatement of associated penalties.

Intermediate5 min
2

Capital Gains Tax

Capital Gains Tax is a tax on the profit realized from the sale of a non-inventory asset, such as real estate, calculated as the difference between the selling price and the adjusted cost basis.

Intermediate13-14 min
3

Adjusted Basis

The adjusted basis is the original cost of an asset, such as real estate, plus the cost of any capital improvements, minus any depreciation deductions and certain other adjustments. It's crucial for calculating taxable gains or losses upon sale.

Intermediate13-14 min
4

Tax Refund

A tax refund is a reimbursement to taxpayers of excess tax paid to the government. For real estate investors, it represents a potential source of capital for new investments or property improvements.

Beginner3 min
5

Interest Abatement

Interest abatement is a reduction or elimination of interest payments on a loan, often granted by a lender or government entity as an incentive for specific real estate development or economic activities.

Intermediate5 min
6

IRS Form 843

IRS Form 843, officially titled 'Claim for Refund and Request for Abatement,' is used by taxpayers to request a refund of overpaid taxes, interest, penalties, or additions to tax, or to request the abatement of an unpaid assessment.

Intermediate12-15 min
7

Tax Overpayment

A tax overpayment occurs when an individual or business pays more tax to the government than they legally owe, typically resulting in a tax refund.

Beginner2-3 min
8

Tax Abatement

A tax abatement is a temporary reduction or elimination of property taxes granted by a government entity to encourage economic development, revitalization, or specific types of construction within a designated area.

Intermediate5 min
9

Statute of Limitations

A Statute of Limitations is a law that sets the maximum time after an event within which legal proceedings may be initiated, effectively limiting the period during which a party can sue another party.

Intermediate7-9 min
10

Penalty Abatement

Penalty abatement is the process by which the Internal Revenue Service (IRS) or state tax authorities remove or reduce a tax penalty, typically due to reasonable cause, administrative error, or a first-time penalty waiver. It allows real estate investors to avoid financial penalties for certain tax compliance issues.

Intermediate5 min

Common Questions