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Category Archives: Tax

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Corporation vs. LLC: Which Should You Choose?

Posted in Business Formation, Buying, Owning and Selling a Business, Operating a Business, Tax

If you’ve decided to create a startup business, one of the many decisions you face is the choice of what type of limited liability entity to form. In Wisconsin, the most typical choices are either the Limited Liability Company (“LLC”) or corporation. I frequently have people ask me whether I can help them set up an LLC for their… Continue Reading

Fifth Circuit Rules that a C-Corporation’s S-Corp Affiliate’s Rents Cannot be Classified as Passive Income (Section 469)

Posted in Business Formation, News and Recent Decisions, Operating a Business, Real Estate, Tax

A Federal Appeals Court ruled earlier this month that an S-Corporation’s rental income from a lease agreement with a C-Corporation with entirely common ownership with the S-Corp, could not be classified as passive activity income, and therefore could not offset the individual’s passive activity losses. Internal Revenue Code section 469 was passed in the 1980s… Continue Reading

Easier Tax-Exempt Status: New IRS Form 1023-EZ

Posted in Business Formation, Operating a Business, Other Legal Issues, Tax

Good news for those of you starting new exempt organizations: the IRS just released a new form, called the 1023-EZ, which will make applying for tax-exempt status for some smaller organizations much easier.  The new form is only three pages long, compared to the lengthy 26 page standard 1023 form.  The simplified form will substantially… Continue Reading

Obamacare’s New 3.8% Sales Tax on Real Estate

Posted in Buying, Owning and Selling a Business, Other Legal Issues, Real Estate, Tax

Starting in 2013, a new 3.8% federal tax, known as the “Medicare Tax,” may apply to some gains on the sale of real estate, including even sales of personal residences. However, this is not a general tax and there are some exceptions. It is best to know the rules and seek competent tax advice. The tax… Continue Reading

Thoughts on Final IRS Regs Re: Capitalization vs. Write-off

Posted in Operating a Business, Tax

One of my favorite legal publishers, Thomson-Reuters, to whom I subscribe to their newsletter, “Checkpoint,” recently released an extensive report entitled, “NAVIGATING THE FINAL REGS ON DEDUCTION VS. CAPITALIZATION OF TANGIBLE PROPERTY COSTS.” In it, they say: The IRS recently issued long-awaited final regs providing guidance on the application of Code Sec. 162(a) and Code Sec…. Continue Reading