Lucien P. Gauthier, Esq., LL.M., CPA, Author at Think Outside the Tax Box

AUTHOR SPOTLIGHT

Lucien P. Gauthier, Esq., LL.M., CPA

Lucien P. Gauthier, Esq., LL.M., CPA provides tax consulting services to CPAs, other tax professionals, and their clients in areas such as applying for PPP loan forgiveness, maximizing the employee retention credit, Section 199A, S corporations including converting from C to S, reasonable compensation, the accumulated earnings tax, purchases and sales of businesses, complete liquidations, the cash method of accounting and the expensing of inventory, the 3.8% tax on net investment income, passive activity losses, grouping, real estate professionals, valuation matters, abatement of penalties, and representation of clients on audit and at Appeals. Lucien has represented hundreds of clients at the examination and Appeals levels since beginning his tax practice in 1961 and has qualified as an expert witness on federal income tax matters in state court litigation on three occasions.

EDUCATION
Boston University College of Business Administration. B.S. in B.A. (1965), cum laude. Accounting major. Class standing: 6/268.
Boston University School of Law. Juris Doctor (1968), cum laude. Class standing: 21/266.
Boston University School of Law, Graduate Tax Program. Master of Laws in Taxation (1969). First in graduating class.
George Washington University National Law Center. Master of Laws (1973). Concentration in Federal Tax Law and Government Contract Law.

EMPLOYMENT EXPERIENCE
1968-1970 Tax Supervisor, Coopers & Lybrand, Boston
1970-1973 Captain, U.S. Army, Judge Advocate General’s Corps
1973-1976 Tax Manager, Arthur Young & Company, Boston
1976-1979 Tax Manager, Coopers & Lybrand, Boston
1979-1981 Tax Attorney, Hutchins & Wheeler, Boston
1981-2020 Tax Attorney in Private Practice

FACULTY APPOINTMENTS & TEACHING EXPERIENCE
Faculty Appointments
1974-1986 Adjunct Assistant Professor, Bentley College Graduate Tax Program

Teaching Experience
Boston University Institutes on Federal Taxation
Bentley College Institutes on Federal Taxation
Greater Boston Association of Financial Planners
Various Professional and Business Groups
Boston Tax Institute, Ltd.

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2023 Summer Education Series Event Calendar

We are so excited to announce the 2023 Summer Education Series! All summer long we will be bringing our loyal subscribers monthly webinars featuring some of the brightest minds in tax! Each webinar will feature our usual blend of high-quality education and entertainment and include continuing education credits for those who qualify. All of this is included in your regular subscription! Continue reading to see what we have in store…

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CURRENT EDITION

An Overview of Health Reimbursement Arrangements

Life is the best teacher, especially in the tax industry. You can take all the continuing education that your heart desires, but sometimes the information doesn’t seem to really click until you have hands-on experience. That’s how it was for me when it came to Health Reimbursement Arrangements (HRAs). I learned about them in school. I even remember learning about them at the first accounting firm I worked at. But it wasn’t until I was working with a small business owner with his own “insurance” that I got it.

Revolutionizing Client Engagement: The Shift from EPTI to PAVER in Tax Reporting with Generative AI

Are you seeking innovative strategies to elevate your client reporting processes? Wondering how to transition from traditional methods to more engaging and personalized interactions? The emergence of generative AI has instigated a profound transformation in the domain of client communication for tax planners, shifting from the conventional Email, PDF, Telephone, In-person (EPTI) reporting techniques to a more advanced PAVER framework. Read on to find out more!

Hobby Loss Developments in 2023

The laws of tax planning that I developed over my writing career that will be expounded in the upcoming Reilly’s Laws of Tax Planning, published by Think Outside the Tax Box, lean a little on the conservative side, as tax planners use the term – conservative versus aggressive, not conservative versus liberal. This results, in large part, from their primary source being court decisions.
The 18th law stands out from the others in this regard. “Honest objective trumps realistic expectation” encourages practitioners to be somewhat more aggressive in claiming losses from activities that seem a little dubious . I still hold that view, even though there have been no encouraging developments in 2023. Here is a roundup on the action last year through December 2, 2023.

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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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