Loopholes

Way Out of State Tax on Student Debt Forgiveness

There was some rain on the parade of celebration of the student loan debt forgiveness. The Tax Foundation, perhaps with a touch of schadenfreude, announced that the forgiveness, not federally taxable due to recent legislation, might be taxable in as many as thirteen states. They have taken a closer look and backpedaled quite a bit. It is now down to four states Minnesota, Mississippi, North Carolina and Wisconsin and those are not for sure. But, there is likely another way out for many of the recipients of this boon. Keep reading to learn more!

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CURRENT EDITION

2025 Spring Fling Webinar Event

Dominique Molina, CPA MST CTS

As we prepared our 4th Annual Summer Education Series, our friends at Sandy Bay challenged us to go bigger and do even more live events than we originally planned. So, we did! We are proud to present Think Outside the Tax Box’s first ever “Spring Fling” live webinar event. As a monthly or annual subscriber, this webinar is 100% exclusive, and free to you! Every webinar comes with free continuing education credits for those who qualify! Keep reading for more details…

Just How “Hot” Should IRC Section 751 Be?

Annette Nellen, CPA, CGMA, Esq.

Tax rules are generally designed with a purpose in mind. Most rules serve to define the tax base and tax rates. Many others serve a behavioral purpose to encourage or discourage certain activities. The focus of this article stems from tax rules that are a combination of favoring certain activity such as generation of capital gains, and a limitation on such gains for certain taxpayers, such as the so-called “hot assets” rule for partners under IRC Section 751, Unrealized Receivables and Inventory Items. While Section 751 has been in the tax law for decades, a new application of it was raised by both the IRS and California FTB. This article summarizes Rawat, TC Memo 2023-14, rev’d, No. 23-1142 (DC Cir., 2024), and FTB Legal Ruling 2022-02, and offers observations on their relevance to tax research and practice.

1099 K(ickstarter): Crowdfunding and Taxes

Jeff Stimpson

Astronomical expenses crop up more than ever in our economy. From medical bills, business startups, a long-cherished artistic project, it feels like things are harder to afford now than ever. But the internet has also helped create a revolutionary way to raise large amounts of money for some of these causes: crowdfunding. But what does that mean for when the Tax Man comes calling?