Consider this… Let’s say you sell your business and the sale produces a $5-million capital gain. How much federal tax will you need to pay? The surprising answer is … zero! … not a penny. How can you get this terrific deal? Here’s the answer … operate your business as a tax-code-defined “qualified small business corporation” (QSBC). More good news. The Tax Cuts and Jobs … [Read more...]
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Tax-Saving Double Play: Combine Home Sale with the 1031 Exchange
If you bought your home years ago, it’s very possibly worth a lot more now. But consider this… If you own a highly appreciated home, selling could trigger a huge federal income-tax gain well in excess of what you could shelter with your principal residence gain exclusion ($250,000 or $500,000 for joint filers). And on gains in excess of the above-mentioned exclusions, … [Read more...]
Tax reform creates huge hazards when you loan money to your corporation
Making loans to your corporation became a lot more hazardous back in 1986 thanks to the Tax Reform Act passed that year. But you ain’t seen nothin’ yet… The new Tax Cuts and Jobs Act makes things far worse for tax-years 2018 through 2025! We’ll tell you exactly what lawmakers did when you read my new article titled Tax Tips: TCJA Tax Reform Creates Big Hazard in Loans to … [Read more...]
The IRS issues final Section regulations and defines QBI
Good news! The IRS has finalized its regulations of Section 199A of the tax code. Which means you may be eligible for a tax deduction worth up to 20-percent of your qualified business income (QBI)! With the issuance of this final version of the rules, Uncle Sam has provided a clear definition of your qualified business income so you can now file your tax return standing on … [Read more...]
IRS clarifies net capital gains in final 199A regulations
As you may know by now (and you’ll certainly know if you’re a regular reader of the Tax Reduction Letter), the new tax code Section 199A can give you a fat deduction of up to 20-percent of your taxable income reduced by net capital gains. The problem was, until recently, the IRS never provided a definitive definition of “net capital gains.” Well, the fog has lifted and … [Read more...]