Under the “partial disposition rule,” if you replace a roof (or other structural component in a building such as an elevator), you can claim a tax deduction equal to the remaining tax basis (undepreciated cost) of that roof you replaced. You then capitalize the cost of the replacement roof, elevator or other component and begin
The gain on sale of land that is held primarily for sale to customers in the ordinary course of business is taxable at ordinary income rates (and not at the more favorable capital gains rates). In addition, those gains may be subject to self-employment tax. The prospective increase in sale value from subdivision can suddenly
Content by Jim Duffy and Michelle DiVita
Minnesota (and other states) generally impose income tax on companies engaged in multi-state business on that portion of a company‘s income that is attributable to Minnesota. Minnesota makes this determination based on the percentage of sales a company makes within the state of Minnesota. Under Minnesota law, receipts
As discussed in prior installments of Did You Know, Section 1202 of the tax code makes the gain on the sale of certain corporate stock nontaxable. This is not a deferral. It will never be taxed in the future. One of the many requirements for stock to qualify for this treatment is that it
Content by Jim Duffy
The key advantage lies in the ability to avoid paying capital gains taxes on appreciated assets, such as real estate, stocks, or other investments. A donor can generally claim a charitable deduction for the full fair market value of the property. By contrast, if a donor sells these assets and contributes
Content by Jim Duffy
Generally, the tax consequences to a debtor of debt cancellation depend in large part upon whether the debt is recourse or non-recourse debt. Non-recourse debt is debt where the lender has no recourse against the borrower, but its remedy for nonpayment is limited to property that has been pledged or mortgaged
In a prior installment of Did You Know, I described the benefits of Section 1202 stock. That section of the Internal Revenue Code allows taxpayers to exclude gain on the sale of qualifying stock from their taxable income in an amount equal to the greater of $10 million or 10 times their tax basis in
Content by Jim Duffy
As you may be aware, when a corporation files an election to be taxed as an S corporation, all of the shareholders must consent to that election. If you live in a community property state, your spouse may be an owner in the corporation, even if he or she does not
Content by Dave Bartoletti, Jim Duffy and Nathan Hagerman
As you may be aware, the Supreme Court decision in South Dakota v. Wayfair in 2018 substantially expanded the ability of states to require out-of-state sellers to collect and remit sales tax on sales into that state. Many companies that make sales into multiple states have
You can if it’s qualified small business stock (a.k.a. “1202 stock“) that you have held for at least six months. Section 1202 stock is stock in a qualified small business corporation (“QSBC”) that is acquired at original issuance. A QSBC is a C corporation that conducts a “qualified business” (e.g., no legal or medical services
