Ashley Francis, CPA, Author at Think Outside the Tax Box

AUTHOR SPOTLIGHT

Ashley Francis, CPA

Ashley Francis is a distinguished CPA specializing in ultra high-net worth taxation, trusts, and estates. With an educational foundation from Gonzaga and Golden Gate University, and an extensive background that includes roles at a hedge fund and in the Big 4, Ashley has built a formidable career. Late last year, she ventured into the domain of Generative AI tools like ChatGPT and BingChat and has been sharing her insights ever since. Her ability to simplify complex tax subjects and provide practical applications in AI makes her an invaluable resource. Outside the professional arena, Ashley is dedicated to family and continual learning.

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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!

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“AI Inside” – What Does that Even Mean?

Remember back in the day when having your tax and accounting software in the “Cloud” was the newest, coolest thing? Even if it took us 10 years to realize that the “cloud” just meant someone’s server somewhere else? Similarly, have you noticed that our tax and accounting products have a sprinkling of AI now? And if they don’t, they’re talking about how they’ll be AI-ing soon? (And if they’re not talking about it, do we even want them in our toolbox?) Let’s chat about what it means to have “AI Inside”, especially with the rise of tools like ChatGPT and Bard.

The “AI Inside” label is becoming ubiquitous but can mean many things, so let’s discuss. I’d hate for you to get excited about an AI feature only to discover that you can access it via one of the widely available Generative AI (GenAI) tools (ChatGPT, BingChat, Bard, Claude, etc.). While this new technology has fundamentally shifted everything, what does it mean for us as tax professionals?

On this journey of exploring what “AI Inside” really means, we’re going to discuss what’s going on under the hood. We’ll also dive into why creating a fully functional “TaxGPT” is challenging right now. (Notice I said “right now”). Finally, we can look at what “AI Inside” tools would be handy, even if you CAN get that functionality out of the regular ol’ GenAI applications. In the end, you’ll know whether to be impressed or pass. And, even more importantly, you’ll know whether to spend the extra money on those tools.

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CURRENT EDITION

Avoid IRS Red Flags in Multiple Business Strategies: A Guide for the Wary Tax Business Owner

In the labyrinth of tax planning and business structure, the path to protecting your client’s multiple business strategy from the ever-watchful eye of the IRS can be as intricate as a well-played game of chess. However, while the strategic moves might be complex, the rules of the game are quite clear. Today, let’s dissect these rules with a blend of cautionary tales and cheeky wisdom, ensuring your business maneuvers stay sharp and IRS-compliant.

Ever heard of the tax strategy to just “create a new C corporation” and shift income by paying management fees from your main company? Well, so has the IRS, and they are highly skeptical when they see it in the field. The Aspro, Inc. v. Commissioner case serves as a stark reminder for taxpayers about the importance of meticulous documentation and the strict adherence to IRS guidelines for deducting management fees. Aspro, an Iowa-based C corporation in the asphalt-paving business, faced scrutiny over its practice of paying “management fees” to its shareholders, which the IRS and subsequent court rulings reclassified as non-deductible disguised dividends.

The Role of Webinars in Accountants’ Marketing and Sales Efforts

In modern business, accountants face a dual challenge: They must maintain a firm grasp of financial intricacies and regulatory frameworks and navigate the increasingly competitive marketing and sales landscape. As traditional methods evolve, entrepreneurial accountants must leverage innovative marketing tools to bolster their outreach and attract clientele. Webinars have emerged as a powerful medium among these marketing tools, offering a dynamic platform for education, engagement, and lead generation. Herein, I will explore the fundamental role of webinars in accountants’ marketing and sales efforts, shedding light on their benefits, strategies, and best practices.

Navigating the Plagiarism Minefield: Strategies and Solutions for Certified Tax Planners

In the AI era, especially with tools like GPT, plagiarism isn’t just copying another’s work, but also presenting AI-generated content as one’s unique thought without understanding or modifying its output. It’s about intent and attribution. If someone blindly takes an AI’s output and presents it as their own, especially in professional or academic settings, it can be considered a form of plagiarism. For certified tax planners, understanding and addressing this nuanced form of plagiarism is crucial for maintaining professional integrity and credibility.

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  • Avoiding Passive Loss Limitations Through Short-term and Alternative Rentals

    Short-term rentals like AirBnb are becoming increasingly popular with taxpayers who invest in real estate. For many taxpayers, the appeal of these properties is the flexibility and cash flow potential. However, there may be an overlooked third tax benefit. In many situations these short-term rentals may not qualify as a rental activity to the IRS, and that may offer a big tax break. While many rental activities generate losses, this can leave taxpayers facing the frustrations of not always getting to deduct those losses right away due to the passive activity limitations.

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    How Business Owners Can Boost Income by Avoiding the $10,000 SALT Cap

    Taxpayers have been whipsawed by confusing rules for the $10,000 limit on deducting state and local taxes (SALT), the most politically charged piece of the Tax Cuts and Jobs Act (TCJA) of 2017. The cap has caused nearly 11 million individuals to lose an annual deduction worth $323 billion. But many owners of private businesses known as passthroughs can avert that financial pain. If you own your company and thus report your business income on your personal federal income tax return, here’s what you need to know.

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    GOFUNDME & KICKSTARTER: TAXABLE? DEDUCTIBLE?

    Millions of taxpayers in the United States are using crowdfunding websites like GoFundMe and Kickstarter to raise money for important needs, such as paying medical bills, paying legal fees, or funding a new business venture. Both the IRS and the courts have been surprisingly silent on the tax consequences of crowdfunding platforms. The good news is that established tax law provides a clear road map for answering most tax questions created by raising money from a crowdfunding website. By knowing these rules, taxpayers can use crowdfunding to raise cash and minimize their overall tax exposure.

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    My Client Stuck with a Mistaken C Corporation Election?

    My client formed three limited liability companies (LLCs) to hold his rental properties. Without consulting me, he filed Form 8832, Entity Classification Election, to elect C corporation treatment, effective January 1, 2020, for these LLCs. I want the LLCs to be disregarded entities, which is the most tax-efficient structure for his situation. What is the best way to undo these elections?

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    Quick Guide to Claiming Work-From-Home COVID-19 Expenses to Reduce Your Tax Bill

    This information is particularly important if you are the owner/shareholder of your own corporation – C or S corp. You can set up payroll and designate tax-free reimbursements for you to be working at home – as well other tax-free money for you and for your employees. (We will discuss employees momentarily. Yes, it’s essential.) If being an employee is your main source of income – watch out! The short answer to employees claiming an office in home deduction this year is... There is no deduction!

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    Five Tax Reduction Strategies for the Casual Cryptocurrency Owner

    With so many people looking for more ways to make money outside their 9 to 5 jobs, many are turning to money making methods using technology including trading in cryptocurrency. For tax purposes, the IRS considers cryptocurrencies property, not as currency. Just like other property types, stocks, investments, or real estate, when you sell, swap, or otherwise dispose of your cryptocurrency for more or less than you acquired it for, you incur a tax reporting obligation. As an example, there would be a $1,000 capital gain if 0.1 bitcoin is bought for $2,000 in June of 2020 and then sold for $3,000 two months later. This profit must be reported on the tax return and a certain amount of tax is due on the gain, depending on the tax bracket of the taxpayer. In this example, the gain would be short term requiring the profit to be taxed at the filer’s ordinary tax rate. These rates range anywhere from 0-37%.

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    Extra Taxes on S Corporation Distribution?

    My client plans to take about $15,000 in distributions in excess of his basis from his S corporation construction business. I know this generates tax for him. He’s in the 32 percent tax bracket and single. Does he also have to pay the 3.8 percent net investment income tax and the 0.9 percent additional Medicare tax on this amount? Is there a way for him to avoid taxes on this amount?

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    Reduce Taxable Income Up to $25,000 with Passive Rental Losses

    You have likely heard that owning rental real estate provides great tax benefits. This is true for a multitude of reasons, but there’s one benefit that is arguably the best of the bunch: The Small Taxpayer Allowance for Deducting Passive Rental Losses. Based on average household income levels, more than three-quarters of taxpayers can potentially qualify for this fantastic tax benefit that offers taxable income reduction of up to $25,000.

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