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FEATURED CONTENT
Fractional Art Investing Is Real — How To Advise Your Clients On The Tax Consequences
In mid-November a portrait of a young Vietnamese woman by the artist Gustav Klimt, which was part of the estate of the late Leonard Lauder (the cosmetics billionaire), was sold at a Sotheby’s auction for $236.4 million. It set the record for the most expensive work of modern art ever sold at auction according to Bloomberg. That’s probably out of reach for most of our clients. But what if they could join together to buy an interest in the painting with an entity holding the asset? That’s the idea behind the burgeoning fractional art market. While, in general, the art market has been struggling for a few years, the fractional art market has been expanding. According to the website Digital Original, “Fractional art ownership is no longer a niche concept – it’s a growing investment trend that’s accessible, flexible, and supported by cutting-edge technology.” What, you may be asking, does this have to do with taxes? It may be more than you think for your high-net-worth clients. As a trusted advisor it’s important that you are aware of both the types of investment opportunities your clients may be buying into and the tax consequences.
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CURRENT EDITION
Lessons Learned from the Tax Court: An Olive Branch in Tax Court
“Everything is deductible until the audit” is an adage frequently repeated in the tax preparation industry. Generally, it’s mentioned tongue-in-cheek, but today’s taxpayer (and her tax pro boyfriend) may have taken it a bit too literally. Additionally, cutting corners may seem like a time-saving strategy in the moment, but the potential to backfire can’t be ignored. In this case, the taxpayer is about to learn things the hard way.
Two Tax Systems: The Fundamental Divide That Shapes Every Client Strategy
As tax professionals, we must recognize a profound truth that most Americans never fully grasp: The United States doesn’t have a single tax system, it has two fundamentally different systems operating in parallel. Understanding this dichotomy is perhaps the most important insight you can share with your clients, as it forms the foundation for virtually every advanced tax strategy.
When Your Client’s Business Fails: Easing the Tax Pain
The Internal Revenue Code provides several meaningful tools to ease the tax pain when a business fails. The problem is that many of these provisions require advance planning, timely action, or both. If you’re not looking for them, you’ll miss them, and your client will pay for it. In this article, we’ll look at net operating losses, Section 1244, worthless stock and bad debts, the hobby loss rules, cancellation of debt, and key opportunities to look back at prior years.
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.
