I sure hope your S corporation is making a nice profit and paying you a high salary. But suppose it isn’t? Suppose your S corporation is showing a net loss for the year? If you assume that a loss means you don’t have to pay yourself anything, you could be in big trouble. You see, if Uncle Sam determines that your S corporation didn’t pay you “reasonable compensation,” … [Read more...]
Buying a business? Make tax-smart price allocations!
When you acquire a business through an “asset purchase,” you win in two ways. You can generally avoid exposure to unknown or undisclosed business liabilities. The tax-basis of the assets can be stepped up (increased) to reflect the purchase price that you pay for the business. The step-up gives you bigger depreciation and amortization deductions. But there’s another … [Read more...]
Five ways to help your adult child buy a home
Homeownership is part of the American dream. Which is why you may want to help your adult child make that important purchase. But before you pick up your checkbook, consider the tax consequences of helping out. You see, homeownership comes with some giant tax savings if you know how to play the game the right way. We’ll show you how when you read my new article titled … [Read more...]
How to avoid fraudulent tax strategies
There are a lot of folks out there peddling tax strategies that promise to help you avoid paying federal income taxes. If you are considering adopting one of these strategies, here’s my advice: Turn around Run as fast as you can You see, if you do what the fraudsters suggest, you could wind up paying massive penalties or even face jail time. Want to learn how to … [Read more...]
New IRS rule increase likelihood of deducting rental losses
You don’t have to sell real estate for a living to deduct your rental losses. But to deduct your rental losses against your business and investment income, you need to become a tax code “qualified person” often called in tax law a “real estate professional.” You want qualified person status. With this status, your rental properties can qualify as tax shelters. Best of all, … [Read more...]