Creating Tax Deductions for Your Smartphone
The IRS allows businesses to provide smartphones and tablets such as iPads as a tax-free fringe benefit, simplifying tax implications and eliminating the need for detailed usage records. Businesses today use mobile devices like smartphones and tablets to improve their operations and productivity. These handy tools help employees stay connected, access important information, and collaborate […]
Entertainment Facility Perks for You, Your Net Worth, & Your Employees
Imagine this: your Schedule C business buys a home at the beach, uses it solely as an entertainment facility for business, pays off the mortgage, and deducts all the expenses. Now say, 10 years later, without any tax consequence to you, you start using the beach home as your own. Is this possible? Yes. Are […]
Your Guide to Real Estate Options
Real estate options and leases with purchase options can enhance your real estate investment profits. Here’s a concise guide to help you navigate the potential pitfalls and maximize your returns. Stand-Alone Purchase Option A stand-alone purchase option can be highly profitable. Here’s how it works: Lease with Option to Buy This approach offers several financial […]
Exceptions to Early IRA Withdrawals Penalty
Early withdrawals from a traditional IRA before age 59 1/2 generally incur a 10 percent penalty tax on the taxable portion of the withdrawal. There are several exceptions to this rule that can help you avoid the penalty under specific circumstances. Below, we have outlined the key exceptions that may apply to your situation. Substantially […]
Tax Deductions for Raw Land Investments
Purchasing raw (unimproved) land can be a great way to get into real estate investing. Raw land is ordinarily cheaper than land with buildings and other improvements. Moreover, you don’t have the expense of handling building maintenance and other upkeep, not to mention the headaches of dealing with tenants if you rent improved property. But […]
“Real Estate Investor” Vs. “Real Estate Dealer”
Great news! You can have both investor and dealer properties in your real estate portfolio. This distinction is significant for tax purposes. Here’s a snapshot of the potential tax differences between real estate investor and dealer properties: Suppose you profit $90,000 from a property sale: That’s a potential savings of $24,597 in taxes for investors! […]
Tax Rules For Free Meals and/or Lodging to Employees
If you’re wondering about tax-free treatment for employer-provided meals and lodging, you may find the following overview helpful. Under Section 119 of the Internal Revenue Code, businesses can offer employees tax-free meals and/or lodging, provided they meet certain conditions. Tax-free means that such benefits are not subject to federal income tax for the employee, nor […]
The Tax Implications of Shutting Down a Sole Proprietorship
As you consider shutting down your sole proprietorship or your single-member LLC treated as a sole proprietorship for tax purposes, it’s crucial to understand the tax implications of this decision. Here’s an overview of key points you need to consider. 1. Asset Sale Tax Implications When you sell a sole proprietorship, you sell its assets, […]
Cost Segregation: What Is It & When Should You Use It?
One significant tax benefit of owning residential rental property or non-residential commercial or investment property is depreciation—a deduction you get without spending any additional money. But regular depreciation for real property is slow. Residential rental property is depreciated over 27.5 years and non-residential property over 39 years, providing a relatively small deduction each year. Fortunately, […]
Section 1031 Exchanges or Qualified Opportunity Zone Funds?
Have you sold, or are you planning to sell commercial or rental property? To avoid immediately paying capital gains tax on your profit, you have options: With a Section 1031 exchange, you sell your property and invest all the proceeds inanother like-kind replacement property of equal or greater value. With a qualified opportunity fund, you […]