Business Strategies

The Trouble with Management Companies

Management companies exist in a variety of fields for sound reasons. Real estate owners, for example, will hire a management company to collect the rent and deal with maintenance of their properties. Professional practices may use management companies to allow non-professional owners a stake in the practice. Sometimes, though, management companies are not for a real business purpose but rather as a device to shift income. It often does not end well as we will see.

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CURRENT EDITION

IRC Section 121 Exclusion: Nuances That Make a Big Difference

Joshua Youngblood

With the sale of a client’s primary residence, many tax professionals are familiar with the Section 121 exclusion, which allows taxpayers to exclude up to $500,000 ($250,000 for single – $500,000 for married filing jointly) on capital gains for the sale. Often, the only criteria mentioned is that the taxpayer must have owned and occupied the home for two of the most recent five years. However, this barely scratches the surface of Section 121; there’s much more money-saving potential in this portion of the tax code.

Exploring the Final 1099-DA (Digital Asset) Regulations

Matt Metras, EA

One of the IRS’ favorite ways to entertain itself is to release new and important guidance at 5 pm on a Friday. They self-award bonus points if it is the Friday before a holiday. They hit “publish” and immediately shut down the office before anyone can react. When it comes to digital asset guidance, I speculate they also have access to my vacation calendar to release it at the most inconvenient time possible. Last summer, they released the temporary regulations on 1099 crypto reporting while I was on vacation in South Africa. This year, at 4:45 pm on the Friday before the 4th of July, they released the final regulations. I then had to spend the rest of the summer dodging my editors at TOTTB because this article was really harshing on my vacation plans.

Advising Clients About Prenups

Jeff Stimpson

To have and to hold and happily ever after is a nice dream, but into every married life a little reality about money must fall. Enter the prenuptial agreement, aka the prenup. This contract between prospective spouses clarifies the rights and obligations of the parties during their marriage – and during the sometimes-ugly aftermath should they separate, divorce, annul the marriage, or die. Prenups can help couples set financial expectations for the marriage, including whether they’ll have a joint bank account and file taxes together, among many other matters.
Given the sensitive nature of these conversations, it’s important to know how to advise on such an important document. What do your clients need to know?