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TO REDUCE TAX?
New tax reduction strategies carefully explained and exhaustively researched every two weeks. Receive breaking news updates on tax law changes. Members only monthly AMA with TOTTB.tax.
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FEATURED CONTENT
Thinking About Selling Body Parts as a Side Hustle? Review the Tax Consequences First!
Sometimes my mind is not the safest place to be. I mean face it, a few issues ago I wrote on best practices for doing Al Capone’s tax returns. But how did I even get started thinking about the taxability of a business dealing in black market organs? Well, it started when someone on social media (perhaps looking to supplement the income from their tax practice) asked if the gain on selling a kidney was taxable and, if so, what would be the seller’s basis in the organ? Then there was that time I was having dinner and adult beverages with some tax colleagues in Las Vegas, and we started talking about that old urban legend about waking up in a bathtub full of ice missing a kidney. It was a fun night, and we all woke up with all of our kidneys and other organs in place. Nevertheless, I found myself wondering (and continuing to wonder) about the tax consequences of transacting in human body parts—one’s own or those illegally harvested from others. Turns out, there have been some court cases on the topic which means that the discussion is more than merely theoretical.
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CURRENT EDITION
Tackling Taxes On an Inherited HSA
The Health Savings Account (HSA) is a first line of defense tax strategy. Contributions are deductible and earnings are tax-free if used for qualified medical expenses. There are numerous features to the HSA that secure maximum tax benefits. Structured properly, an HSA can provide serious tax-free money to beneficiaries as well as the account holder. Before we review the implications of inheriting an HSA, let’s review some of the powerful features an HSA has that increases the value of the account.
Kadau v. Commissioner and the Line Between Effective and Broken Captives
Captive insurance remains one of the most closely examined tax planning strategies in use today, not because it is inherently flawed, but because small missteps can carry outsized consequences. Many taxpayers assume that careful formation and proper documentation are enough to protect the intended tax outcome. A recent Tax Court decision, Kadau v. Commissioner, serves as a reminder that those assumptions deserve closer scrutiny. The court’s analysis did not hinge on whether captive insurance can work, but on how a specific arrangement actually functioned in practice. For tax professionals advising clients who rely on micro-captives, the case raises important questions about where structures tend to break down, why some arrangements attract IRS attention while others do not, and what really separates a defensible captive from one that invites challenge.
Not Every Client Is a Keeper: When Saying Goodbye Protects Your Practice
Bad chemistry with one client can disrupt the flow with everyone. That one client who doesn’t follow your processes and messes up the workflow during tax season. The client who never turns things in on time but then wants results from you immediately when they do. These things affect how you interact and work with your other clients as well. As the firm owner we should do whatever we can to protect good chemistry within our business. As a tax advisor the people we work with become our family. We help them make decisions that impact them and their families. That is why firing clients can be a delicate matter when you are doing the firing.
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.
