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FEATURED CONTENT
Trump Indictment: An Accountant’s Perspective
IRC § 1031 exchanges have the ability to confer substantial financial benefits to taxpayers. Although taxpayers may use § 1031 to place themselves in a superior economic position, taxpayers may not exploit this section in an abusive manner. Taxpayers can use exchanges to give themselves different types of benefits, but one of the primary benefits is the deferral of federal income tax. When conducted correctly, 1031 exchanges are regarded as a form of legitimate tax avoidance. One of the main issues involved with these transactions is determining the boundaries between abusive tax avoidance and non-abusive tax avoidance. In the context of “related party exchanges” – i.e. those transactions which involve subsection 1031(f) – this issue shows up in a relatively complex fashion, because the related party rules are not well understood by most practitioners. Furthermore, determining abusive tax avoidance with related party exchanges is difficult because of the scarcity of case law. Based on the case law which we have, and on the other authoritative references, we can put together a reasonable overview of the risks of related party exchanges. This overview should prove useful when providing expert counsel to taxpayers seeking to conduct this type of transaction. For direct exchanges, the 2-year ownership rule found in 1031(f)(1)(C) should be used as the dominant source of guidance. For “indirect exchanges,” taxpayers must be aware of the higher levels of risk involved, as there is a greater possibility of abusive tax avoidance. To read more click here!
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CURRENT EDITION
2025 Tax Surprises You Shouldn’t Overlook
There are a few tax rules new for 2025 that may catch some individuals and their tax advisers by surprise. These changes have not received lots of attention either because they are overshadowed by related changes that are more significant, or they were enacted a few years back with a future effective date that arrives in 2025. This article covers changes for 2025 that you will want to be sure to share with clients to avoid surprises at a later date.
Leaving the United States, Part I: Expats
When Americans speak of leaving America, they generally are expressing a desire to live elsewhere in the world for cultural reasons or due to cost of living. These people are called expatriates, aka expats. For clarity, a mere visit to another country does not make you an expat. To be an expat, the move needs to be long-term and often includes working or retiring in the new country. Expats live somewhere outside the U.S., but still have a tax obligation to the U.S. and possibly the country they move to. That will be the focus of this article.
Tax Preparer Hit with Stiff Sentence
John Anthony Castro is a colorful character. He entered several Republican primaries seeking the Presidential slot after failing to win the primary for a Senate seat representing Texas. He sued to have our once and future President Donald Trump be removed from the ballot on Fourteenth Amendment Section 3 grounds. As we can easily infer, those suits went nowhere. But more than anything, John Anthony Castro was a tax guy with a virtual practice with locations in four cities. Not anymore. Now he is resident in a Bureau of Prisons facility – the Federal Medical Center Fort Worth. On October 30, 2024, Judge Terry Means sentenced Castro to 188 months in prison, followed by one year of supervised release and restitution of $277,243, following his conviction on 33 counts of “Aiding and Assisting in the Preparation and Presentation of a False and Fraudulent Return.” Does the sad story of John Anthony Castro hold any lessons for us? Perhaps.
SIMPLIFIED TAX STRATEGIES &
PRACTICAL IMPLEMENTATION
Think Outside the Tax Box provides tax reduction strategies along with practical
implementation advice in order to reduce your clients’ federal tax bill with ease.
