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What Sources of Income are Subject to Double Taxation for Businesses?
Forming a business is usually a simple process that can be completed in a few minutes through your state’s Secretary of State website.
What Triggers Depreciation Recapture?
Investment property owners are likely quite familiar with depreciation, since it allows them to deduct certain costs associated with acquiring and improving income-producing real estate, which can lead to lower annual taxable income.
How Do You Calculate Gross Profit Using Installment Sales?
In previous blogs, we’ve discussed ways to defer capital gains taxes. A couple of examples are using the 1031 exchange or tax-loss harvesting.
What is Cap Rate Compression?
Real estate investors seeking potential places to park their investment capital often examine cap rates to determine the viability of investment opportunities.
What is Constructive Receipt?
Constructive Receipts are cash transactions and can have negative IRS consequences if not processed correctly. By cash transactions, we mainly mean physical checks. When a company receives a check, there is a delay until the money appears in the company’s bank account. This process is where constructive receipts come in.
How to Use the Tax Code to Keep Your Real Estate Wealth Stable During Retirement
Realized CEO and co-founder David Wieland discusses in CPA Practice Advisor how investors can utilize a 100-year-old tax shelter to exit actively managed properties and reinvest the proceeds into passive real estate investments such as DSTs.
What is Tax Alpha?
When someone invests in a stock, their goal is to see a positive return on the investment. Investing in an S&P 500 fund means market returns. In other words, this fund should return the same as the S&P 500 index, the fund’s benchmark.
Is Installment Sale Income Subject to Net Investment Income Tax?
Higher earners, who meet certain thresholds, may be subject to the net investment income tax (NIIT). Those who have to pay the NIIT are slapped with a 3.8% tax on their net investment income or on the amount of modified adjusted gross income (MAGI) that exceeds the statutory threshold amount for your filing status. Basically, whichever of the two (investment income or MAGI) is the least amount will be subject to NIIT.
How to Calculate Deferred Tax Liability
A deferred tax liability can occur when there is a timing difference between two different depreciation schedules. A business may choose straight-line depreciation (for asset book value) each year but bases its tax depreciation on the accelerated method. This will create a difference each year between the two schedules.
How is a Taxable Gain on an Installment Sale Taxed?
Installment sales have favorable tax treatment, making them attractive for certain sellers. Rather than receiving proceeds from the sale of an investment property at once, the seller receives payments over time. For those who value tax benefits over the immediate need for cash, an installment sale can work in their favor.
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