What You Need to Know About Tax Basis

If you own a business, your assets may include office equipment, real estate, inventory, stocks and bonds, and intellectual property like copyrights and patents. Over time, their value can go up or down. When you sell any of them (or even your entire business), you want to know what their tax basis is, as that amount can determine whether you owe taxes on the sale or realize a loss you can use to offset other Read More

IRS Utilizing New Technology to Detect Under-Reporting in S Corps

The IRS has shown heightened fervor in detecting and combating under-reporting and compliance issues over the past few years. As such it has taken significant steps to increase the efficacy of its efforts. By taking advantage of new machine learning and big data technology, the IRS has become notably more efficient in detecting and auditing S Corporations that report lower than expected compensation for its officers. Read More

Options for Your Leftover 529 Funds

529 plans, or college savings plans, are a great way to save for a loved one's future education, while also providing the benefits of a tax-advantaged savings plan. Too often, however, those who utilize 529 plans have leftover funds when their student graduates from college. Whether it be due to scholarships or early graduation, when left with funds in a 529 account, many 529 account holders feel that their only Read More

An Overview of the Inflation Reduction Act and Its Changes to the IRS

The Inflation Reduction Act, passed in August of 2022, brought some major changes to how the IRS will operate moving forward. This new law has the potential to make a big impact on business owners, via the addition of both corporate and individual taxes, as well as an increase in IRS funding aimed at shoring up its enforcement efforts. To start, the IRS received several billions of dollars in funding, including Read More

The Real Impact of “Knowledge” in a Purchase Agreement

When two parties enter into a stock or asset purchase agreement, clearly outlining their understanding of the transaction is essential in order to make the deal work. Properly defining “knowledge” in a purchase agreement is one way to accomplish this. By defining terms and providing an understanding of the subject matter of the contract, the parties can garner a better understanding of what to expect in their Read More

Using a Spigot Charitable Remainder Trust to Reduce Income Taxes

If you are interested in controlling when you pay capital gains tax on your assets, a charitable remainder unitrust (CRUT) may be a good option for you. A CRUT allows you to donate assets and receive income from the donated assets for life or a set number of years. After the end of your life or the specified term (up to 20 years), the assets are transferred to a charity of your choice. CRUTs also allow for a "net Read More

Should I Use a Charitable Lead Trust or a Charitable Remainder Trust?

When it comes to estate planning, most people think about trusts first and foremost. A trust is a great way to protect your assets, save on taxes, and avoid probate, but there are several different types to choose from. Two of the most useful charitable trusts are the charitable lead trust (CLT) and the charitable remainder trust (CRT). In this article, we’ll take a look at the differences between a CLT and a CRT to Read More

Can I Use an International Will in California?

For those who own property in multiple countries, an international will can be a great solution to handling your estate planning needs across borders. An international will, however, isn’t a standardized practice between countries - as such, you’ll need to be careful in how your will is created in order to ensure its efficacy in both California and a foreign country. Over the years, there have been a number of Read More

How You Can Use an LLC to Avoid Paying Capital Gains Tax on the Sale of Your Personal Residence

Many people are not aware of the benefits that an LLC can bring to reduce their taxable income on their personal residence that you intend to turn into a rental property. While this method can bring you some great capital gains tax savings, there are a few things to keep in mind before making the decision. First, you’ll need to sell your primary residence to an LLC that you own on an installment note. This will Read More

Using a Heggstad Petition to Avoid Probate

A Heggstad petition can be a very helpful tool for a trustee or beneficiary. When used in conjunction with a General Transfer Document and Pour-Over Will, these documents can provide a safe method to prevent a loved one’s estate from entering probate due to assets that are not funded (transferred to) their trust upon death. The Heggstad petition allows a trustee to transfer assets that are not in a trust upon Read More