IRS Tax Experts Blog

Investment income and capital gains are increasingly becoming a source of individual wealth in North America and Western Europe. Though these sources of income may help improve trade long run financial positions, they also come with complexities of tax that have been understated. The following are some of the questions that demonstrate how the amount of income that is associated with investment may raise tax exposure in the event that it is not addressed properly. Why are capital gains taxed differently from regular income? Taxation of capital gains depends on the duration in which the asset is held before it is sold. Ordinary income tax rates usually apply to short-term gains, and reduced rates are usually available on long-term gains. Poor interpretation of holding periods or characterization of gains merely leaves underpaid taxes and draws the attention of tax agencies. Experienced IRS tax experts (former IRS tax agents, former auditors , and experienced tax attorneys in Sa...

  Crypto used to feel like the quiet corner of finance. That time is over. The IRS has sharpened its focus on digital assets, and audits involving cryptocurrency are no longer rare or experimental. They are deliberate, data-driven, and often detailed. For investors, this shift creates pressure—but it also creates an opportunity to get organized before problems start. This article explains why crypto audits are rising, what the IRS usually looks for, and how investors can defend themselves without panic or shortcuts. Why the IRS Is Paying Closer Attention to Crypto? The IRS is not guessing anymore. It uses exchange data, blockchain analytics, and third-party reporting to match transactions with tax returns. If numbers do not line up, the system flags it. The growth of centralized exchanges played a role. So did court orders requiring platforms to share user data. Add new funding and enforcement mandates, and you get a tax authority that is both better equipped and more confi...

  individual to do the job, despite their whereabouts. However, in the case of businesses that are not situated in California, a distant worker residing in the Golden State may be one of the untold taxes. How a single member of the team can form a nexus, and make your business file and pay taxes to the California Franchise Tax Board (FTB). This rule is important to understand so as not to be caught in unwanted liabilities, fines, and complicated administrative overhead. To learn about the sales tax audit process , find a tax professional who can help you. What are the Triggers for Tax Obligations? A sufficient connection between a state and a business is termed as nexus, whereby the business is required to collect and remit taxes in such a state. In the past, this has been founded on a physical presence, i.e., an office, a warehouse, or a storefront. The rules in the current digital world are extended to a huge extent. Understand the Remote Work Nexus Neither of the two...

One of the most effective tools that real estate investors have is a 1031 exchange that enables you to avoid the capital gains taxes on your hands by investing the proceeds of a sale into a similar-purpose property. Although it is a federal provision, it is a race against time that has no room for error, and the deadlines are strict. Any wrong move will potentially trigger a huge tax bill, transforming a brilliant investment plan into a nightmare. Always prefer contacting tax professionals for sales tax audit representation and similar work. Dates You Shouldn’t Forget There are two strict time limits stipulated by the IRS that are never compromised. Cold feet, cold markets, and colds do not have extensions. a)      The 45-Day Identification Period You must actually designate the potential replacement property or properties in writing within 45 calendar days beginning on the day you close the sale of your original property (the "relinquished property): Wee...

Business partnerships start with high hopes, shared risks, and often real friendship. Yet reality hits hard. Around 70% of them fail eventually, according to multiple studies and expert analyses tracked over the years. That number stings because it means most owners face the same tough question : fight through the mess or call it quits? The answer changes everything—money, time, even personal health hang in the balance. Some fights pay off. Others drain the tank for nothing. Spotting the difference early saves ailing partnerships from becoming salvageable ones, matters more than most admit.   What Usually Breaks Them in the First Place? Partnerships crack for predictable reasons. Misaligned visions top the list. One partner eyes slow local growth while the other dreams of national scale. Small gaps grow into canyons fast. Uneven effort follows close. When one carries the load—nights, weekends, decisions—the resentment builds quiet but steady. Money fights fuel the fire, too...

  Income tax and sales tax are the first two things that come to your mind when you consider California taxes. However, to business proprietors, investors, and even wealthy, multi-layered holders lurks a more hidden and more influential system underneath: the unitary tax principle and its counterpart, the mandatory apportionment. This complicated structure has the potential to change the tax amount of a company by a very significant margin in a wholly unexpected way. In its essence, the unitary tax principle does not take note of the legal core of corporations. California not only taxes a company based on the income earned by the company, but it also considers the whole unitary business as one. This is to the extent that you have a controlling interest in more than one related business that are functionally-integrated (i. e. they are controlled by one management, operate together, or share resources ). California can include its income on a single report. Find a professional ta...