Did You Know? Commonly Asked Tax Questions

Answers to commonly asked tax questions.

• Did you know you can buy tax insurance for transactions?
• Did you know under the “self-rental” rule, income from rental activity is deemed active income and losses are deemed passive?
• Did you know you can avoid UBIT on self-directed IRA investments by investing through a blocker?
• Did you know you may be able to reduce self-employment tax on short-term rental income?
• Did you know a recent Supreme Court ruling dramatically reduced penalties for non-willful failures to report foreign bank accounts?
• Did you know a charity that receives a donation of a conservation easement could be liable for prohibited tax shelter penalties under recently proposed regulations?
• Did you know you can avoid converting capital gain to interest income on a stock earn out?
• Did you know you may be entitled to a tax credit if you continued to pay employees while your business was either shut down or suffered a significant decline in gross receipts due to COVID-19?
• Did you know in order to change your tax residency from Minnesota you need to stop someplace else for a while?
• Did you know investing in real estate through your self-directed IRA could result in taxable income?
• Did you know if you sell a capital asset to a related company you might accidentally trigger ordinary income?
• Did you know you can’t count travel time toward material participation?
• Did you know you may be able to deduct losses from your short-term rental property against your W-2 income?
• Did you know you may be able to take a bad debt deduction even before canceling or settling a bad loan?
• Did you know federal individual income taxes may be decreasing in 2023?
• Did you know you can take a current deduction for ‘catch-up depreciation’ on under-depreciated assets?
• Did you know you can defer taxes on real estate gains using the ‘lazy man’s 1031’?
• Did you know you can use 'tracking interests' to create different profit and loss sharing ratios in different lines of a company’s businesses?
• Did you know that charitable gifts of S Corp stock have many traps for the unwary?
• Did you know that you can base partnership tax distributions on cumulative rather than annual income? 
• Did you know that purchasers of electric vehicles (EVs) may have an extremely short window to lock-in prior tax credit benefits? 
• Did you know that if a borrower issues a warrant to a lender that it will create additional interest on the loan?
• Did you know that you should include a "push out election" when you buy a LLC?
• Did you know that you can make up for profits interest that you intended (but forgot) to issue in a prior year? 
• Did you know that your client can get insurance policies to cover the tax risks that arise in your deals – even when there are no representations and warranties?
• Did you know that you can make a like-kind exchange into an interest in a Delaware Statutory Trust?
• Did you know that a nonprofit organization is not the same as a tax-exempt organization?
• Did you know an S corp election by an LLC may NOT be effective if the LLC agreement contains the standard partnership tax provisions?