Grace’s Recent Posts

How to Complete a Composite Tax Return

Pass-through entities may file composite tax returns in most states with a state-level individual income tax. The owners that are eligible to be included in a composite are those who are residents of other states. For example, suppose you reside in Michigan but are a partner in a company that owns property in California, New York, Utah, and Florida. In that case, your company may want to file a composite return for the states where you are not a resident.

Feb 17, 2023

Using an LLC for Estate Planning: What You Need to Know

An important part of estate planning is making sure you direct your wealth and assets to heirs and beneficiaries of your choosing. Another important part might also involve reducing the federal estate tax burden on these heirs and beneficiaries. Depending on the size of your estate when you pass, your spouse, children, or grandchildren might owe taxes on your assets when you pass away. 

Feb 14, 2023

What is a Limited Power of Attorney?

Assigning a power of attorney to someone authorizes that person to act on your behalf. In almost every situation, the Power of Attorney is a notarized document that specifies the breadth of the agent’s authority and the duration.

Feb 10, 2023

Can You Use a 1031 Exchange to Build an Investment Property?

1031 exchanges are tools that can enable real estate investors to defer the payment of capital gains taxes when they sell an investment property and reinvest the proceeds. However, if you complete a sale and purchase outside the auspices of a 1031 exchange, you will owe capital gains taxes on the difference between the adjusted basis and the sale price.

Feb 6, 2023

When Do Opportunity Zones Expire?

When Do Opportunity Zones Expire?

When it comes to opportunity zone (OZ) investments, some investment deadlines have already passed, but there is still a basis step-up deadline that hasn’t passed, providing investors with some time to take advantage of this tax benefit.

Feb 3, 2023

What is Real Estate Wholesaling, and How Does it Work?

Real estate wholesaling is not new, but it seems to be increasingly popular. The recent increase in wholesalers may be due to the emergence of some more prominent players in a traditionally fragmented field. Wholesaling involves a person or company acting as a middleman between a seller and a buyer, usually without using their own money. The wholesaler typically starts by identifying a potential seller - often a homeowner that owns a distressed or rundown property. The owner wants to sell but either can't or is reluctant to invest in fixing the property up for the maximum return. In many cases, the owner urgently needs to sell.

Feb 1, 2023

Are Stock Dividends Taxed as Ordinary Income?

For many taxpayers, there is a substantial difference in the tax rate they pay for long-term capital gains versus the rate they pay for ordinary income. The tax rates on ordinary income range from 10 percent to 37 percent. In comparison, the rate applied to long-term capital gains income is between 0 and 20 percent. The income taxed at the “ordinary” rate includes salary and wage income, commission, bonuses, rents, royalties, short-term capital gains, interest, and unqualified dividends.

Jan 28, 2023

Can 1031 Timelines Be Shortened?

The total time frame for a 1031 exchange is 180 days. The clock starts once the relinquished property closes. However, there are cases when the timeframe is compressed and doesn't allow for the full 180 days. Investors who are looking to do a 1031 exchange need to be aware of when they may not have the full exchange period available to them.

Jan 26, 2023

How is Cost Basis Calculated on an Inherited Asset?

If the beneficiary of a trust receives an asset valued at $500,000 but was purchased for only $100,000, does the beneficiary incur a big tax bill? For many, this could be a crippling tax bill. However, the IRS code does provide some relief for beneficiaries of inherited assets. This relief comes in the form of an adjustment to the original cost basis.

Jan 24, 2023

At What Rate is Boot Taxed in a 1031 Exchange?

When an investor earns a profit through selling an asset, the IRS taxes the income as a capital gain. If the owner held the investment for less than a year before selling, the growth is classified as short-term, and the tax rate is the same as that taxpayer’s ordinary income. Depending on the individual’s income level, that tax rate may be as high as 37 percent.

Jan 19, 2023

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