Introduction Deferred compensation sounds simple: get paid later, pay taxes later. But under Internal Revenue Code § 409A, the IRS imposes strict rules on when and how compensation can be deferred. If those rules are violated—even accidentally—the tax consequences can be severe and immediate. This issue comes up constantly with: Closely held businesses Startup founders [...]
Introduction For decades, tax accounting and financial accounting operated on parallel—but separate—tracks. That changed significantly with the enactment of Internal Revenue Code § 451(b) under the Tax Cuts and Jobs Act. Today, certain taxpayers must recognize income for tax purposes no later than when it is recognized on their financial statements. This rule quietly accelerates [...]
Introduction If you receive stock, equity, or other property in exchange for services—especially in startups or closely held businesses—you may have heard about the “83(b) election.” This obscure tax filing can dramatically change how and when you are taxed. But here’s the problem:Most taxpayers either miss the deadline or don’t understand the risk. This article [...]
Introduction Legal fees are one of the most misunderstood areas in federal income taxation. Many taxpayers assume that if they pay an attorney, the cost is deductible. That used to be partially true—but after the Tax Cuts and Jobs Act (TCJA), the rules changed dramatically. This article explains when legal fees are deductible, when they [...]
Introduction If you’ve ever received stock, partnership interests, or other property as compensation, you may have unknowingly stepped into one of the most misunderstood areas of tax law: Internal Revenue Code § 83. This provision governs how and when property transferred in connection with services becomes taxable—and it can dramatically affect timing, valuation, and ultimate [...]
Introduction Most business owners understand that dividends are taxable—but many don’t realize the IRS can reclassify certain transactions as “constructive dividends” even when no formal dividend was declared. This issue comes up constantly in closely held corporations, especially S-corps and C-corps where owners blur the line between business and personal spending. If you’re not careful, [...]
Many real estate sales, business purchases, and private transactions occur through seller financing. Instead of paying the full purchase price upfront, the buyer makes payments over time directly to the seller. While this can be a practical way to structure a deal, taxpayers often overlook an important issue: the IRS may treat part of the [...]
In recent years, legalized sports betting, online gambling platforms, and fantasy sports contests have made gambling more accessible than ever. Many taxpayers are surprised to learn that gambling winnings are taxable income under federal law, even when they are small or paid in cash. Understanding how the Internal Revenue Code treats gambling winnings and losses [...]
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