LOOKING FOR LEGAL WAYS
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.
WE PUBLISH TAX STRATEGIES FOR…
FEATURED CONTENT
Should Your Practice Use a Client Portal?
You may know me as the “crypto guy” here at Think Outside the Tax Box. It might seem like that’s all I ever write about. But this time, I’m sneaking an article in while my editor is on vacation. Because I want to talk about using a client portal and why all tax professionals should be using one in their firms. Some firms may have dipped their toe into the digital waters out of necessity as a by-product of the pandemic. Others may have started the process long before Covid existed. According to a completely unscientific poll I ran on Twitter, 70 percent of firms are still processing returns at least partially on paper. This can mean either receiving paper documents from a client or delivering a hard copy of the completed return to the client. As the numbers from a Twitter survey are clearly biased toward firms already comfortable with digital technology, we can safely assume more accurate numbers are significantly higher. Since TOTTB refuses to provide me with a budget to run a full, comprehensive study, we’ll just have to run with my perfunctory data as well as published data from a poll Canopy conducted in 2021. Canopy surveyed more than a thousand small businesses and found that 63 percent admitted that their accountant did not offer any portal. More surprising, depending on whom you ask, is that more than two-thirds of respondents said they would be interested in switching to an accountant that allows them to use photos of their documents for easy sharing. While I’m not here to debate the issues of opening a gajillion .jpg files and how that might negatively affect my practice, the impact of using technology can improve your efficiencies, communications, and improve your workflow. To learn how, continue reading.
Read More
CURRENT EDITION
Lessons Learned from the Tax Court: The Root of the Issue
When is a business really a business? As Supreme Court Justice Potter Stewart said in 1964, “I know it when I see it.” The US Tax Court, however, maintains a slightly less subjective standard. The Roots were pretty sure they were running a bona fide business; the IRS, however, didn’t share the sentiment. And since we’re reading about them in a segment called “Lessons Learned,” one should assume it did not go the way the Roots would have liked.
The Lessons From The Supreme Court Zuch Opinion
There is a great scene in the movie On The Basis Of Sex. The actors portraying Ruth Bader Ginsburg and her husband, Martin Ginsberg, a very high-level tax attorney, early in their careers are reading in separate rooms. He comes in with something he wants her to read and she snaps that she doesn’t read Tax Court cases. In that moment she showed her future as a Supreme Court Justice. Not many Tax Court cases reach the Supreme Court. So when one does it’s exciting. And, as it happens, Commissioner of Internal Revenue v Zuch contains some practical lessons worth considering.
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.
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.
