In this Tax Tuesday episode, Anderson Business Advisors’ Barley Bowler and Eliot Thomas, Esq., tackle complex listener questions covering bonus depreciation regulations, short-term to long-term rental property transitions, and the intricate tax ordering rules for combining stock losses with real estate gains. They explore nonprofit structures for foster care services, explain 1031 exchange debt requirements for orthodontic practice sales, and provide guidance on entity selection between partnerships and S-corporations for different business types. You’ll hear how and when to handle Ponzi scheme theft loss deductions, corporate trading structures for stock income reduction, and the critical tax implications of providing company cars to family employees for personal use. Tune in for expert insights on these advanced tax strategies and planning considerations!
Submit your tax question to taxtuesday@andersonadvisors.com
Highlights/Topics:
"Regarding section 168 bonus depreciation, it says to qualify for 100% the property must have been purchased after January 20th, 2025. Does that mean property purchased in 24 but not put into use till 2025 would not qualify?" –This is proposed legislation, not current law yet.
"What are the tax implications of shifting properties from short-term rental to long-term rental after leveraging cost segregation reports to accelerate depreciation to offset some W2 income?" – Cannot do both in same year; changes passive loss treatment.
"Can you use short-term stock loss carryover to offset real estate depreciation recapture and capital gains?" – Yes, but only after specific tax code ordering rules.
"In the state of Florida, could parent fostering be conducted as a nonprofit business entity?" – Cannot earmark nonprofit funds for specific individuals or children.
"My husband's selling his orthodontic practice using a 1031 option. Can he pay off the existing loan before reinvesting the profit?" – Yes, QI will pay off debt; need equal/greater replacement debt.
"My S corporation business doesn't have cash flow to reimburse me for all benefits. Can I add unpaid reimbursements to my balance sheet like an owner loan?" – Need specific analysis of cash flow and reimbursement timing.
"My wife and I have a holding company LLC and multiple subsidiary LLCs currently taxed as partnerships. Should they be changed to S-corp?" – Real estate stays partnership; operating businesses - consider S-corp election.
"In a Ponzi scheme, does the discovery year have to be the year charges are filed?" – Discovery year when you become aware through government notification.
"Would establishing an LLC help me reduce tax on income from stock trading?" – Consider corporate trading partner structure for meaningful capital gains.
"Our C corp employs our son part-time. What are the tax implications of buying him a car for personal use only?" – Buy in his name, increase salary; avoid corporate ownership.
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