Archive for March, 2018


March 20th, 2018 No comments


Many persons complain about the very low interest that money market accounts pay. While that is of concern, how many persons hold U.S. treasury bonds that have matured? Do they realize that these bonds, once they have matured, pay zero interest?

In addition to checking your own portfolio, be sure to check with your parents and other elderly family members who may be on a fixed income to make sure that they are not holding bonds that are not throwing off any income.

The U.S. Treasury has a Savings Bond Calculator on its website that calculates the final maturity date, reflects current interest rate being earned, the next accrual date for payment of interest, and year-to-date interest earned.

To learn more about U.S. Treasury Bond Planning, we suggest Read more…


Why Holding Real Estate in a C Corporation Is a (VERY) Bad Idea

March 13th, 2018 No comments

Classic Example of Double-Taxation with C Corps


Holding real estate in a C Corporation (or an LLC taxed as a C Corporation) is generally a very bad idea from a tax perspective.

Let’s assume the following facts:

  • C Corp purchases real estate for $100,000 or owner/shareholder contributes $100,000 of real estate to a C Corp
  • No capital improvements are made
  • Real estate appreciates to $1,250,000
  • The C Corp. has a taxable gain of $1,150,000 (sales proceeds of $1,250,000 less tax basis of $100,000)
  • The Corp has a tax liability of $241,500 (21% of taxable gain).
  • The Corp has slightly over a $1 million in its bank account that the shareholder wishes to invest in the stock market. The Corp distributes $1 million to the shareholder.
  • The shareholder has received a taxable dividend distribution from the C Corp. The owner reports the $1,000,000 of dividend income and let’s assume that s/he files as married filing jointly. This income, subject to tax at the capital gains rate (20%) as well as being subject to the net investment income tax of 3.8%, would result in an additional tax liability of $238,000.

Read more…


New Partnership Audit Rules

March 6th, 2018 No comments

New Partnership Audit Rules

New Rules Became Effective January 1, 2018

If you are a partner in a partnership or in an LLC taxed as a partnership, you need to know that there are new IRS audit rules that became effective January 1, 2018.

The new rules require that any tax due on partnership adjustments made by the IRS must be paid by Read more…

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