The problem is that GAAP and the income tax basis of accounting have a lot of differences.

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Their central estimate is that the taxable income elasticity for this group is 0.46, which implies a revenue-maximizing tax rate on earned income of 56%.29 This in turn (accounting for NICs and indirect taxes) corresponds to an income tax rate of 40%.

FORBES: There Really is a Laffer Curve

Those returns between the bottom 50 percent and the top 25 percent pay an average effective tax rate of only 5.6 percent, accounting for only 11.8 percent of all federal income tax revenue.

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Understand a few rules about the taxation of rental income and you could cut your accounting bills or your tax bills or maybe both.

FORBES: Vacation Shelters

The New Jersey Income Tax Act requires taxpayers to claim losses in accordance with their Federal method of accounting, including federal basis rules.

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