Tax

Income Generator or Tax Headache? Now is a good time to look at short-term rentals (STRs), which can offer higher returns than long-term rentals (LTRs). STRs (think Airbnb & VRBO) can lead to great returns, but also may lead to higher taxes. Before (and even after) you start an STR, it’s important to understand some…

CAVEAT EMPTOR OR BUYER BEWARE! IRS tax liens on real estate follow the property when it is sold as one buyer learned the hard way. A recent buyer purchased a home in foreclosure after the IRS had recorded a tax lien on the property two years previously. The courts allowed the IRS to enforce the…

1. You are too flipping fast, or rather you are flipping too fast. If you buy and sell within 365 days your gain will be taxed at between 10 and 37%. If you buy and sell after one year your gain will be taxed at between 0 and 20%. On $100,000 gain the difference is…

The passive loss rules prevent deducting rental real estate losses with two exceptions. Exceptions: 1. The Real Estate Professional Exception. Taxpayers who spend more than 50% of their working hours and over 750 hours each year materially participating in real estate as a developer, broker, landlord, etc. are allowed to take their real estate losses.…

In the old days, you used this strategy with your college student. Today, this strategy does not work with that student because the kiddie tax now applies to students up to age 24. But this strategy is a good one, so ask yourself this question: do I give money to my parents or other loved…

What is Better: Rolling Over Your Real Estate Sale Proceeds with a 1031 Exchange into another Property, or Investing Your Gains into an Opportunity Fund? Have you sold, or are you planning on selling commercial or rental property? To avoid immediately paying capital gains tax on your profit, you have two choices: 1) Deferring the…

The IRS giveth, the IRS taketh away Few taxpayers understand that if they received an Employee Retention Credit, they must reduce their wage related expenses by the amount of the credit. To make matters worse, the IRS has decreed that taxpayers must reduce their wage expenses in the year the wages were incurred that generated…

Marginal tax brackets for 2023 tax year There are many benefits to S corporation status for your small business. However, fringe benefits are severely reduced for owners of S corporations. However, there is one way you can deduct your health insurance premiums. If you will follow the below instructions exactly as stated, you can get…

Marginal tax brackets for 2023 tax year Marginal rate Individual income Married couples filing jointly 10% $11,000 or less $22,000 or less 12% $11,000 to $44,725 $22,001 to $89,450 22% $44,726 to $95,375 $89,451 to $190,750 24% $95,376 to $182,100 190,751 to $364,200 32% $182,101 to $231,250 $364,201 to $462,500 35% $231,251 to $578,125 $462,501…

The Inflation Reduction Act Energy Credit Provisions (Give Credit where Credit is Due) Credit for alternative energy system based on renewable energy source For example, credit for using solar panels as an energy source for your home got extended to 2034. The improved credit is 30% (26% for 2033 and 22% for 2034) of the…