Overview Many taxpayers assume they can lock in gains without triggering tax by hedging or offsetting positions. However, the Internal Revenue Code prevents this through the constructive sale rule under IRC § 1259, which can trigger immediate taxation—even if you never actually sell the asset. This rule is increasingly relevant in an era of: Options [...]
If you’ve ever thought about “getting creative” with compensation—like having your business loan you money at little or no interest—you’re not alone. It sounds harmless. It feels like a workaround. But the IRS has already thought of it—and shut it down. Welcome to the surprisingly aggressive world of below-market loans under Internal Revenue Code § [...]
Introduction Most taxpayers assume that if an expense is “ordinary and necessary,” it is deductible. While that is generally true under IRC § 162, there is a much harsher rule lurking beneath the surface—one that overrides common sense and even credible testimony. That rule is IRC § 274(d), commonly referred to as the strict substantiation [...]
Introduction As cannabis legalization expands across the United States, many business owners are shocked to discover that federal tax law treats their industry very differently from nearly every other legitimate business. The culprit is Internal Revenue Code § 280E, a provision that can result in effective tax rates exceeding 70%. This article breaks down the [...]
Introduction One of the most misunderstood timing rules in federal income taxation involves advance payments—money received before goods or services are delivered. For cash-strapped businesses, the ability to defer recognition of income can provide meaningful tax relief and better align taxable income with actual performance. Congress addressed this issue directly in the Tax Cuts and [...]
Why Real Estate Professional Status Matters in 2026 For many taxpayers, rental real estate losses are trapped by the passive activity loss rules under Internal Revenue Code § 469. But there’s a powerful exception that can transform those losses into fully deductible ordinary losses: qualifying as a Real Estate Professional. This is one of the [...]
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