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Tax

Tax strategies, planning, and compliance for individuals and businesses

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May 17, 202612 min read

Form 1099-S Demystified: How the Right Closing-Day Certification Can Spare You a Surprise Tax Bill on Your Home Sale

Form 1099-S reports the gross sale price of a home, not the net, which routinely triggers IRS CP2000 notices for sellers whose gain is fully excluded under Section 121. This guide explains the Rev. Proc. 2007-12 certification that lets qualifying principal-residence sales bypass the form, the $250,000/$500,000 thresholds, the nonqualified use trap added in 2008, and how to defensibly report when the 1099-S cannot be skipped.

Mike Thrift

real-estatetaxtax-compliance

May 17, 202612 min read

Form 3520-A: The March 15 Deadline, Substitute Filings, and the 5% Section 6677 Penalty

Form 3520-A is the annual information return for a foreign trust with a U.S. owner, due March 15. If the foreign trustee does not file, Section 6677 imposes an initial 5% penalty on trust assets plus $10,000 per 30-day continuation period — payable by the U.S. owner. Covers who files, the substitute filing path, the reasonable-cause defense, and how to clean up multi-year non-compliance.

Mike Thrift

taxinternational-taxtax-compliance

May 17, 202612 min read

The 2026 Form W-4 Multiple Jobs Worksheet: How Two-Earner Couples and Side-Hustlers Sidestep an April Tax Surprise

A plain-English walkthrough of Form W-4 Step 2(a), 2(b), and 2(c) for two-earner households and side-hustlers — including the higher-paying-job rule, side-hustle income on Step 4(a), and the 90%/100%/110% safe-harbor numbers that prevent an April tax bill or penalty.

Mike Thrift

taxtax-planningtax-compliance

May 17, 202610 min read

Gain or Loss on Asset Disposal: Recording Sales, Scrapping, and Trade-Ins with Form 4797

A four-step pattern for recording the sale, scrap, or trade-in of business equipment—plus how Section 1245 depreciation recapture flows onto Form 4797 at tax time.

Mike Thrift

depreciationfixed-assetsjournal-entries

May 17, 202611 min read

Gain or Loss on Asset Disposal: How to Record Selling, Scrapping, or Trading In Business Equipment

When a business sells, scraps, or trades in a fixed asset, gain or loss equals proceeds minus book value — both the asset cost and its accumulated depreciation must be cleared, and Section 1245 recapture taxes the gain as ordinary income on Form 4797.

Mike Thrift

accounting-basicsbookkeepingjournal-entries

May 17, 202610 min read

The Interest-Free Loan That Isn't: How Section 7872 Imputes Interest on Family and Shareholder Loans

A below-market loan triggers Section 7872, which treats forgone interest as taxable income to the lender even when no cash changes hands. This guide covers the $10,000 and $100,000 de minimis exceptions, the gift tax connection, and how charging the AFR avoids the whole problem.

Mike Thrift

taxtax-planningloans

May 17, 202610 min read

The IRA Once-Per-Year Rollover Rule: One 60-Day Rollover and the Trustee-to-Trustee Workaround

You get only one IRA-to-IRA 60-day rollover per rolling 12-month period, counting all your IRAs as one account — a limit the 2014 Bobrow Tax Court case made aggregate. Trustee-to-trustee transfers are exempt and unlimited.

Mike Thrift

retirementtaxpersonal-finance

May 17, 202611 min read

Lower of Cost or Net Realizable Value: How to Write Down Obsolete Inventory

LCNRV requires reporting inventory at the lower of its cost or net realizable value (NRV = selling price − completion costs − selling costs). Once written down under U.S. GAAP, inventory cannot be written back up.

Mike Thrift

inventoryaccounting-basicsfinancial-reporting

May 17, 202611 min read

MLP K-1 Tax Issues for Individual Investors: UBTI, Section 751 Recapture, and Multi-State Filings

A Master Limited Partnership pays cash quarterly but issues a Schedule K-1, not a 1099. Most distributions reduce your cost basis instead of being taxed, holding units in an IRA can trigger UBTI and a Form 990-T once income exceeds $1,000, and selling converts depreciation into ordinary income under Section 751 — taxed up to 37%.

Mike Thrift

taxtax-compliancepartnerships

May 17, 202610 min read

MLP K-1 Tax Issues: UBTI, Section 751, and Multi-State Filings for Individual Investors

How individual MLP investors actually owe tax — UBTI on IRA-held units crosses the $1,000 Form 990-T threshold faster than expected, Section 751 reclassifies part of any sale gain as ordinary income, and the K-1's state schedule can force nonresident filings in operating states. Includes practical thresholds and basis-tracking rules.

Mike Thrift

taxpartnershipsira

May 17, 202611 min read

Why Most NIL Collectives Aren't Real Charities (and Your Donation Isn't Deductible)

The IRS memorandum AM 2023-004 concluded that NIL collectives paying 80-100% of donations to athletes confer substantial private benefit and fail the operational test for 501(c)(3) status, so contributions to them are generally not tax-deductible.

Mike Thrift

taxcharitable-givingtax-deductions

May 17, 202612 min read

Car Loan Interest Is Tax-Deductible Again: How the OBBBA $10,000 Above-the-Line Deduction Works for U.S.-Assembled Vehicles From 2025 Through 2028

The OBBBA restores a personal car-loan interest deduction—up to $10,000 per year, above-the-line, for tax years 2025 through 2028—on new U.S.-assembled vehicles financed after December 31, 2024. Mechanics covered include the MAGI phase-out starting at $100K single / $200K joint, Form 1098-VLI reporting beginning in 2026, mandatory VIN entry on Form 1040, and edge cases for refinances, trade-ins, leases, and co-signers.

Mike Thrift

taxtax-deductionstax-planning

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