Are You a Regular Investor or a Tax-Favored Securities Trader?

As we navigate the recent volatility in the stock market, you may want to think about the possible favorable federal income tax treatment the tax code gives to a securities trader.  Securities Trader Suppose you can qualify as a securities trader for federal income...

When Cancellation of Debt (COD) Income Can Be Tax-Free

Sometimes debts can pile up beyond a borrower’s ability to repay, especially if we are heading into a recession. But lenders are sometimes willing to cancel (forgive) debts that are owed by financially challenged borrowers. While a debt cancellation can help a...

Is Airbnb Rental Income Subject to Self-Employment Tax?

Do you owe self-employment tax on Airbnb rental income? That’s a good question. In Chief Counsel Advice (CCA) 202151005, the IRS opined on this issue. But before we get to what the IRS said, understand that the CCA’s conclusions cannot be cited as precedent or...

Say Goodbye to 100 Percent Bonus Depreciation

All good things must come to an end. On December 31, 2022, one of the best tax deductions ever for businesses will begin to phase out: 100 percent bonus depreciation.  Since late 2017, businesses have used bonus depreciation to deduct 100 percent of the cost of most...

Self-Employment Taxes for Partners and LLC Members

Limited liability companies (LLCs) are a popular choice of entity for small businesses and investment activities. LLC owners are called members. Here’s a question: Does a member of a limited liability company (LLC) or a partner in a partnership have to pay...