There is a wealth of business wisdom in a fairly unlikely area. All the businesses involved lost money, sometimes enormous sums. The source is the litigation and regulation around Code Section 183 of the Internal Revenue Code – Activities not engaged in for profit. In order to deduct those losses against other income, taxpayers need to convince the IRS or the court that they had an honest objective of making a profit. The determination of whether an activity is carried on for profit is made by reference to objective standards. Is it possible that following those standards might contribute to you being profitable? It’s worth thinking about.
Contracts, Signing Bonuses, and the Substantial Presence Test
Amber Gray-Fenner, EA NTPI Fellow USTCP
In tighter job markets, recruits are often offered signing bonuses (and sometimes moving expenses) to join a firm. Sometimes construction workers temporarily relocate to jobs in other states while they are employed by the company that hired them in their home state. This article reviews some of the foundational tax concepts to consider when evaluating sourcing of income for state tax purposes.
