June 2021

Taking Advantage of Passive Losses

Over the last two weeks we have outlined a strategy to intentionally fail the test for material participation, for purposes of converting non-passive income to passive income. Why might we want to do that? The first and most obvious reason is to save self-employment tax. A second reason you might want to do that is […]

Taking Advantage of Passive Losses Read More »

The Section 1244 Small Business Stock Loophole

This week’s blog focuses on a loophole to the $3,000 deduction on capital loss losses. Businesses don’t always go as people hope they will. Unfortunately, in the last year we’ve seen a lot of struggle. Many businesses in specific industries, including food and entertainment, have had to close their doors. For business owners and entrepreneurs,

The Section 1244 Small Business Stock Loophole Read More »

Defining Material Participation

If you haven’t looked at last week’s blog (“Reclassifying Non-Passive Income”), we suggest you do that first. Last week, we focused on classifying activities as either passive or non-passive. This week, we want to look at the rules of material participation. When intentionally trying to recharacterize income from non-passive to passive, we need to prove

Defining Material Participation Read More »