Time. We can’t stop it, but we can use it. We can use it to take advantage of compounding to grow our savings. We can use it to pay down debt to increase equity. And we can use it for tax planning. Time is one aspect of tax planning. It can help taxpayers avoid just……
Tag: Tax
Income Shifting to Reduce Tax for Real Estate Sale
Income shifting is a fundamental income tax planning concept. It involves strategically allocating income among related taxpayers to minimize the overall tax liability. This may be intended to use up tax attributes of one taxpayer (such as deductions or tax credits), take advantage of tax deferral options to delay paying taxes, or take advantage of……
Can a Co-Inheritor Do a 1031 Exchange?
Those who create wealth often accumulate assets to store the value of wealth they create. This includes assets that store value and produce additional income, such as real estate. In many cases, the wealth creator has put considerable time and effort into building their portfolio of investments. But when they die, those who inherit are……
The “Effective Date” for Tax Rules
At the end of every tax statute, there is language that specifies when the new tax rule is effective. Given the frequency with which Congress enacts new tax laws, often several times every year, one might think that there is no dispute as to the “effective date” language that it uses. One might think that……
The Stock Sale as a Sham Transaction
Taxpayers are continually seeking ways to avoid or minimize their tax liabilities. And rightfully so, as taxes take a significant amount of profit or gain from any deal or effort. Take the case of a lawsuit award. You sue someone and settle or win the case. There are nuances, but generally, you are usually taxed……
Family Court Orders are No Excuse for Unpaid Taxes
Financial ups and downs are a normal part of life, and many of us will face a time when our finances take a hit. This can be challenging, especially when we have to juggle different financial needs and demands. Divorce and marital problems often lead to major financial troubles. During a divorce, it’s common for……
Limited Partners May be Subject to Self-Employment Tax
When we think of taxes, we often think of income taxes. But for business owners, they also have to contend with payroll and/or self-employment taxes. These other taxes can be substantial for businesses and their owners. This is why Congres and taxpayers have devised several ways to avoid these taxes. The rules are nuanced enough……
The Limited Augusta Rule for Self-Rentals
While many taxpayers want to pay less in tax and there are legitimate ways to do so, some of the tax planning concepts that are frequently discussed miss the mark. The so-called Augusta rule is often one of them. Tax planners often cite this rule and provide tax savings estimates based on unreasonable assumptions. This……
What is a Partnership: State Law vs. Federal Tax Law
One of the nuances that come up in tax planning involves the interplay of state law and federal tax law. This brings in all of the nuances and challenges under state law to federal tax law. For example, one common nuance in business transactions arises when the parties to a business arrangement do not document……