You Can’t Transfer Tax Attributes – Or Can You?

catchingfireset

Did you pay a lot in state taxes this year? You can potentially save 10% or more. Sounds like one of those too good to be true commercials, doesn’t it?  The majority of my blogs try to dissuade tax myths and educate business owners and individual taxpayers on some of the nuances of tax law, but this unlikely-sounding scenario is no myth. Normally, the income, expenses and credits you earn are yours and can’t be transferred to someone else – not even your children. However, there is one situation where one taxpayer can acquire the tax attributes of another: state tax credits. Georgia has a law that allows certain tax credits earned by one taxpayer (usually a company) to be purchased at a discount and used by another taxpayer (usually an individual). That’s right, you can purchase tax credits. For example, an individual taxpayer can purchase $50,000 of GA Entertainment Tax Credits for $45,000. You write a check for $45,000 but a credit of $50,000 gets reported on your Georgia … [Read more...]