Edition 64 Archives - Think Outside the Tax Box

Edition 64

By Ashley Francis, CPA

Not Another ChatGPT Article…

Yes, another ChatGPT article. Or GenAI, really. Okay, I saw you roll your eyes. Well, not "saw" per se, but I felt it allllll the way from over here.

But honestly, this is for your benefit, not mine! I've already figured out a ton of ways to use it to make my life easier. Yes, that's right, it's made my LIFE easier, not just work. I'm happy to share a little bit about it if you're interested.

Also, before you say (again), "ChatGPT can't do tax returns or tax research. It's a useless piece of technology," - I get it! So much of what we focus on in our practice is the actual work parts. But we are far more than just tax compliance. Or at least we want to be.
Okay, think about it this way - why did you become a tax practitioner? Was it because you wanted to help people? Or was it because you thought, "Oh boy, I sure love to just crank out tax returns for 80 hours a week, three months a year!" I'm guessing it was the former! And I don't know about YOUR tax practice, but mine has gotten far more complicated in the last... 20 years?

Let's think about all of the changes that have happened in just the last five years? (Okay, yes, that's cheating, but I'm going to do it anyway). We've had TCJA, SECURE, CARES, SECURE 2.0, and probably half a dozen more, in addition to new regulations, case law, IRS pronouncements, state tax law changes, etc. And that's JUST with the tax law.

In your practice, consider all of the things that have changed and gotten more complicated. Hybrid and remote work, finding employees, ever-expanding technology stack, one of those fancy new espresso machines with too many buttons, going paperless but still having at least five clients that mail you their documents, trying to determine a niche to offset the additional complexity, figuring out how to market to that niche...

And on and on and on. So, my question would be - why WOULDN'T you want to use tools like ChatGPT to offload some of the work? GenAI came along just in time to address a lot of these issues. And I get it, it's hard to see that the pot is boiling when you're the frog in the soup, but let me tell you - the pot is boiling. Let's get you out of there!


Pizza Party in the Metaverse

I love pizza. No, like I really love pizza. I have a pizza tattoo. I’m a member of the Rare Pizzas DAO. It is my go-to meal whenever the question “What’s for dinner?” gets asked. There really isn’t a better combination of cheese and deliciousness in the world. At least not in the flesh and blood “real” world. Loving pizza that much can clearly get oneself into trouble. I just never expected it to be tax trouble. Enter the “metaverse,” although I’m not sure if that is metaphorically or digitally. The metaverse is a term used to describe many digital environments that contain aspects of online gaming, virtual reality, social networking, and cryptocurrency. Generally, a metaverse is a fully immersive digital universe which combines elements of augmented reality, virtual reality, and the internet to create a seamless and interconnected space where users can explore, create, and engage with others in a virtual world. In the metaverse, users control an avatar, which represents the user in the digital universe and functions similar to a video game character. Avatars can be customized and accessorized with clothing and other items represented in the metaverse through NFTs. The metaverse holds the potential for new forms of entertainment, communication, commerce, and social interaction on a global scale. The metaverse economy is based on digital assets, making it possible for taxpayers to engage in a substantial number of taxable transactions without realizing it. And herein lies the crux of our problem.

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Client Alert

Tax Court Roundup – August 2023

The dog days, the doldrums, the get-out-of-town days...they're here. The United States Tax Court is not immune, as the blockbuster cases and newsletter headliners have largely vanished. Still, there are report-worthy stories, despite the call of seashore and mountain meadow.

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Tax Breaks for Farmers: Sowing Seeds of Savings!

Ahoy, land-lovers and cultivators of the earth! If you're a farmer, you're not just a master of the soil, but also a potential wizard of tax savings. Let's embark on a journey to understand how you can reduce that pesky tax bill and keep more of your hard-earned green (and we're not just talking about lettuce)! Farms may be considered a business. You are considered a farm if you cultivate, operate, or manage a farm for profit, either as owner or tenant. A farm includes livestock, dairy, poultry, fish, fruit, and truck farms. Farmers under the Internal Revenue Code qualify for special tax benefits, yet not all agricultural producers meet the requirements. In addition to what you are growing, producing, raising, selling or extracting, it is also necessary to examine the facts and circumstances of the applicable tax issue to fully determine whether each tax benefit applies to each situation. For example a business could be split into a farm (reported on Schedule F) and a non-farm (reported on Schedule C unless incorporated). Take the example of a vineyard and a winery. The production of the grapes is a farm and reported on Schedule F. But lo and behold! When the grapes transform into something else, the sale of wine, juice or preserves would be considered non-farm and reported on Schedule C. There are many special tax benefits allowed for those who meet the definition of a farmer. It may be advantageous to consider adding a farm as part of a larger tax strategy; however, just like any business, the hobby loss rules apply. Someone not classified as a farmer may still be engaged in farming activities and have farm income. Some of the best benefits include deferred timing of recognizing farm income, not being required to maintain inventory and not being required to make quarterly estimated tax payments. To learn about these and other tax breaks for farmers, click here to continue reading.

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