Ranch operations often start with genuine business intentions. A successful business owner buys land. They get into cattle grazing areas or orchards. The owner hires experienced ranch hands and invests in equipment and facilities. The ranch may make money from livestock sales, hay production, or crop harvesting. The ranch would likely report losses for the……
Tag: Tax
What is a Statutory Employee and Who Qualifies?
Our tax laws usually look to various foundational definitions, such as units of property, activities, or even roles. When it comes to workers who receive compensation for their work, it is often the role that matters the most. We see this in disputes over whether a contractor is really an employee for payroll tax purposes.……
Business Owner Liable for Tax Incurred by a Buyer After the Sale of the Business?
If you own a business and you sell it to a third party, should you be liable to the IRS for taxes triggered by the buyer after the business you sold? What if the tax was triggered by the buyer’s wrongdoing? What if there was no evidence that you even knew that the buyer would……
Do You Report Stock an Employer Mistakenly Gave You to the IRS?
When your employer deposits 100,000 shares of stock into your brokerage account after you’ve left the company, and you believe it was done in error, do you have taxable income? And what do you do in this case? If the amount is taxable to you as compensation, then when do you report it? Should you……
What Makes a Partnership Transaction a Disguised Sale?
You own a depreciated asset or an asset that has gone down in value. It happens. But say you cannot take advantage of the tax loss for some reason. Maybe it is because you don’t have other Income triggering a tax that year or maybe there is a limitation on the use of the loss……
When Are Attorney’s Fees From a Settlement Deductible?
The employer-employee relationship can often lead to disputes. These disputes are often settled out of court. Whether it’s a wrongful termination claim, a defamation lawsuit, or other employment-related litigation, these settlements often involve significant attorney’s fees. The taxpayer receives a settlement check, but a substantial portion goes directly to their legal counsel under a contingency……
Does IRS Guidance Have an Expiration Date?
Food goes bad. Medications, skincare products, and batteries all expire. But what about IRS’s written guidance? Can IRS guidance go bad? What if it is guidance for a particular taxpayer and about a specific transaction or seires of transactions? What happens when tax laws change after the IRS has issued its determination? Can businesses continue……
Captive Insurance Tax Deductions Denied, No Risk Distribution
Insurance premiums go up and then they go up some more. The amounts can be substantial. This is particularly true for businesses that offer insurance to employees or that insure more types of risks. And many business owners note that while they pay substantial insurance premiums, the insurance companies often do not have high payouts.……
Split-Dollar Insurance Failure: Income and No Tax Deduction
Business owners frequently seek ways to maximize tax deductions while providing benefits to key employees. Life insurance arrangements can play a part of this strategy. Life-insurance related strategies can be particularly useful if they come with significant tax advantages and help the parties meet their financial goals. However, the line between legitimate business expenses and……