Five Tips to Avoiding the Tax Hazards of Renting to Relatives

If a taxpayer has more than one home, renting one to a relative may appear at first glance to be a win/win. The son, daughter, cousin or old mother would take good care of the property, and the taxpayer could help their relative by giving them a break on their rent. But the taxpayer may not be aware that the tax consequences of renting to related parties are different from renting to others and may easily trigger a trap that reclassifies rental property into a personal residence. When that … [Read more...]

How 1400z Opportunity Zone Investment Drastically Reduces Capital Gains

To taxpayers facing large capital gains, very few strategies exist to defer or eliminate the tax altogether. That all changed with tax reform.  The Tax Cuts and Jobs Act passed at the end of December 2017 created major changes in the tax structure, and not the least of these may be found in IRC Sections 1400Z-1 and 1400Z-2, the code sections that govern Opportunity Zones. These changes enable investors to take advantage of heretofore unavailable tax breaks that can save huge amounts of money … [Read more...]

Good News for the Rich: No Clawback on the Recent Doubled Tax Exemption for Estates and Gifts

The federal government taxes large estates, but under the recent Tax Cuts and Jobs Act, (TCJA), P.L. 115-97, which went into effect January 1, 2018, the exemption for estate and gift taxes doubled – temporarily. The double exemption disappears after 2025 unless Congress extends it.  There has been concern that when the exemption goes back to normal, those who took advantage of the boon might under some circumstances have to pay the piper for those taxes. This is often referred to as a … [Read more...]

Why and How to Revoke an S Corporation: What You Need to Know

Many small businesses operate as S corporations to avoid the complexities of C corporations and to avoid double taxation. C corporations are taxed before money is distributed to their shareholders who are taxed yet again. On the other hand, the income of S corporations flows directly to shareholders who pay for taxes on their personal returns.  There sometimes a day, however, when an organization outgrows its S corp status, and the company would like to revoke it in favor of operating as a C … [Read more...]

Breaking Down the New Mortgage Deduction Rules

Homebuying and homebuilding are good for the economy. That fact, and not lawmakers’ desire to give working families a break, is what makes the mortgage interest deduction a sacred cow. The government sees the deduction as something of a reverse stimulus. By encouraging people to buy houses, and therefore encourage builders to construct houses, the economy prospers. Not all nations see it that way. Some industrialized countries, most recently Japan, have either tinkered with the MID or done … [Read more...]

Dealing With The New Alimony Deduction Rules

For about a generation, spousal support payments have been tax-deductible for obligors and alimony receipts have been tax-reportable for obliges. Effective January 2019, the times they are a-changin’. Payments will no longer be tax deductible and receipts will no longer be tax-reportable. According to some, the change is just a ripple in the ocean. According to others, it’s the biggest change to family law since California began the no-fault divorce revolution in 1969. From an income tax … [Read more...]

Should We Tax The Robots?

In 1900, at the dawn of the Industrial Revolution, life for everyday Americans was not much different than it was in 1700. Then, gasoline-powered automobiles replaced horse-drawn carriages, and everything changed. Fast forward a little over a century. In 2030, when driverless cars arrive, the revolution may be even bigger. The same technology that replaces automobile drivers may also replace truck drivers, waitresses, fast food cooks, and a host of other workers, at least according to … [Read more...]

Quill Overturned! – How Does This Effect Retailers?

Have you heard? The Supreme Court ruled on South Dakota v. Wayfair and Quill v. North Dakota has been overturned. What does this mean? Online retailers are going to face new challenges in the months to come and will need to decide whether to start collecting tax, what software they may need, and how to report the tax. Since 1967, if you have a link or connection to a state, called nexus, you’ve always been required as a seller to collect sales tax. One of the most defining court decisions … [Read more...]

The ROI of Business Networking

ROI

Meeting people who eventually become clients is the goal of any successful business. Networking is one way to do this but it also costs money. Is it worth the investment? What’s the ROI? There will always be a return on investment as long as you are able to convert prospects into paying clients. That goes for everything you do. Sales is a number’s game. The more people you meet, the more relationships you build and the higher your conversion ratio. Can we agree you’re not going to meet … [Read more...]

Just Get Me the Bleeping Stuff – How to Get Clients to Give You What You Need

Handwritten Notes

We’ve all been there.  You’re in the middle of preparing a tax return for a client, you’re missing a document or the answer to a question. You’ve asked them for it 3 times in 3 days and…crickets.  They don’t send what you’re asking for or even respond to your multiple inquiries. And you are stuck, you cannot move forward without their input.  Not only is it frustrating and inconvenient, but it also eats into your profits because you are spending time on asking them to respond once again instead … [Read more...]