Taxes

Self-Directed IRA Prohibited Transaction Tax Consequences How prohibited transactions in self-directed IRAs trigger IRC Section 4975 excise taxes, and how violations can disqualify the entire account, destroying all tax benefits.

Self-Employment Tax Deduction The above-the-line deduction for half of self-employment tax, reducing AGI and the income thresholds for other tax limitations.

Self-Employment Tax on Short-Term Rental Income Short-term rental activity may trigger self-employment tax if it rises to the level of a trade or business, determined by frequency, intent, and profit motive.

Self-Rental Recharacterization How renting property to your own business converts passive rental income into non-passive income, unlocking passive loss deductions.

Seller Financing: Tax Treatment for Real Estate Sellers How installment-sale reporting and imputed interest rules under AFR affect seller financing tax treatment on real estate transactions.

SEP IRA Self-Employed A simplified pension plan for self-employed workers and small business owners allowing large annual tax-deductible contributions.

Series EE Bond Tax Deferral Rules How interest on Series EE bonds is deferred until redemption or maturity, and how to elect accrual reporting to spread tax liability year by year.

Series I Bond Tax Treatment Series I bond interest is reported annually for federal income tax if elected, or deferred until redemption; education exclusion can eliminate tax on qualified education expenses.

Short-term capital gain tax Short-term capital gain tax is the levy on profit from selling an investment held one year or less. These gains are taxed at ordinary income rates, which can reach 37% federally.

Short-Term vs Long-Term Capital Gains on Real Estate Sales Compare short-term vs long-term capital gains on real estate: the 12-month holding threshold, tax rates, and sale timing strategies.

Short-Term vs Long-Term Capital Gains Rate How the one-year holding threshold determines capital gains tax: short-term gains taxed as ordinary income, long-term at preferential rates up to 20%.

Short-Term vs Long-Term Capital Gains: The One-Year Holding Period The exact rules for the one-year holding period that determines whether capital gains are taxed as ordinary income or at preferential long-term rates.

SIMPLE IRA A small-employer retirement plan with annual contributions capped at $16,000, a mandatory employer match or deferral, and a two-year early-withdrawal lock-in.

Solo 401k Mechanics How a solo 401k plan allows self-employed workers to save up to $66,000 annually with employer and employee contributions.

SPAC Tax Treatment for Investors Learn how SPAC shares, warrants, and trust redemptions are taxed from IPO through merger, including the character of gains and losses at each stage.

Special Use Valuation for Farmland and Business Real Estate Section 2032A election to value qualifying real property at its actual use value rather than highest-and-best-use fair market value, preserving family farms and businesses.

Specific identification basis Specific identification is a method of choosing which tax lot to sell when you own multiple lots, allowing you to minimize your capital gain and tax bill by selecting the highest-cost lot.

Specific Identification Cost Basis Method Use the specific identification cost basis method to choose exactly which tax lots to sell and control your capital gains or losses recognized.

Spousal IRA Deductibility Rules Spousal IRA deductibility rules allow a working spouse to contribute to an IRA for a non-earning spouse; deduction limits depend on joint income and coverage status.

Spousal Lifetime Access Trust A revocable trust vehicle that removes assets from an estate using the lifetime exemption while the beneficiary spouse retains indirect access to trust capital through an independent trustee's discretion.

Standard deduction for investors The standard deduction is a fixed annual deduction from income for taxpayers who do not itemize. It reduces taxable income and is adjusted annually for inflation.

Start-Up Costs for a New Rental Property How rental property start-up costs are deducted: which pre-rental expenses are immediately deductible versus capitalized before the property is in service.

State Estate Tax vs Federal Estate Tax How state estate taxes apply at lower thresholds than federal exemptions, creating separate tax liabilities for some estates.

Step-up in basis Step-up in basis is an adjustment of cost basis to the fair market value at the date of death for inherited assets. This eliminates tax on all gains accrued during the deceased's lifetime.

Stepped-Up Basis at Death How a beneficiary's cost basis resets to fair market value on the date of death and the resulting tax savings from inheriting appreciating assets.

Stepped-Up Basis on Inherited Assets Stepped-up basis allows heirs to inherit assets at fair market value on the date of death, eliminating embedded capital gains tax for inherited property.

Stepped-Up Basis on Inherited Real Estate Learn how inherited real estate receives a stepped-up basis at fair market value on the date of death, reducing capital gains tax on a later sale.

Still-Working Exception to RMDs for Current Employees How active employees over age 73 can delay required minimum distributions from their current employer's retirement plan.

Straddle Tax Rules for Options and Futures How IRS straddle rules defer losses on offsetting options and futures positions until the offsetting gain is closed, preventing artificial loss harvesting.

Substantially Equal Periodic Payments (72(t)) Three IRS-approved methods for calculating penalty-free withdrawals from IRAs before age 59½ under IRC Section 72(t).

Suspended Passive Losses Released on Rental Property Sale When a rental property is sold in a taxable transaction, suspended passive losses are fully deductible in the year of sale, potentially offsetting significant capital gains.

Taking RMDs from Multiple Retirement Accounts RMD aggregation rules differ by account type: traditional IRAs can be combined, but 403(b), 457(b), and inherited accounts require separate withdrawals.

Tax bracket for investors A tax bracket is a range of income taxed at a single federal rate. There are seven federal brackets ranging from 10% to 37%. Investors must know their bracket to calculate tax on short-term gains.

Tax Consequences of Foreclosure on Real Estate Foreclosure triggers cancellation-of-debt income unless excluded, plus capital gain or loss on the deemed sale of the property.

Tax Cost of a Partial IRA-to-Roth Conversion How to calculate the tax on a partial traditional IRA to Roth conversion, using the pro-rata rule and worked examples.

Tax lot A tax lot is an individual purchase of a security at a specific price on a specific date. When you own multiple lots of the same stock, you choose which lot to sell to control your capital gain.

Tax Reporting for Tenancy-in-Common Rental Property How co-owners report proportional rental income, expenses, and depreciation on Schedule E when holding title as tenants in common.

Tax Treatment of Bond Premium Amortization When investors buy taxable bonds above par, they can elect to amortize the premium, reducing taxable interest income and adjusting cost basis annually.

Tax-Exempt Bond Fund How mutual funds holding municipal bonds distribute tax-free interest income while managing the alternative minimum tax consequences for high-income investors.

Tax-Loss Harvesting Strategy How to systematically realize losses to offset capital gains and reduce tax liability, with the wash-sale constraint and carry-forward rules.

Tax-Loss Harvesting: How It Works Sell losing positions to offset realized gains and reduce tax liability, then reinvest—avoiding wash-sale violations and managing annual carryforwards.

Taxable Brokerage Account vs Roth IRA: Tax Comparison How taxation differs between taxable brokerage accounts and Roth IRAs on dividends, capital gains, and withdrawals.

Tenancy-in-Common and 1031 Exchange Rules How IRS revenue procedures distinguish qualifying tenancy-in-common from partnerships, enabling separate 1031 exchanges for TIC co-owners.

Tenancy-in-Common Exchange Using undivided TIC interests as replacement property in a like-kind exchange for fractional real estate ownership.

Tentative Minimum Tax The Alternative Minimum Tax liability computed before offsetting against regular income tax, determining whether a taxpayer owes AMT.

The 0% Capital Gains Rate: Income Limits and How to Qualify 0 percent capital gains rate income limit: long-term gains are tax-free below specific AGI thresholds; strategies include gain harvesting.

The 14-Day Rental Rule for Vacation Homes The 14-day vacation home rental rule determines whether expenses are deductible: rent it 14+ days to claim losses.

The Pro-Rata Rule for IRA Conversions The pro-rata rule for IRA conversions aggregates all your traditional and SEP IRAs to calculate what portion of a conversion or withdrawal is taxable.

Tracking After-Tax IRA Basis with Form 8606 Why Form 8606 is essential for reporting nondeductible IRA contributions and preventing double taxation on future withdrawals.

Tracking Roth IRA Basis After a Conversion How converted and contributed amounts create separate basis layers in a Roth IRA and why accurate tracking matters for tax-free withdrawals.

Traditional IRA Deduction Phase-Out Ranges How workplace pension participation and MAGI income limits reduce or eliminate your traditional IRA deduction on tax filing.

Travel Expense Deductions for Rental Property Owners Rental property travel expense deduction rules: trips to manage, maintain, or repair property are deductible; includes mileage, lodging, and meals.

Unit Investment Trust Tax Treatment How unit investment trusts generate pass-through income and capital gains; grantor-trust structure and basis tracking for UIT units.

Unrecaptured Section 1250 Gain The 25% tax rate applied to long-term capital gains on real estate to the extent of prior depreciation deductions.

Unrecaptured Section 1250 Gain The 25% preferential tax rate applied to prior straight-line depreciation deductions when investment real estate is sold at a gain.

Using the AMT Credit to Offset Future Regular Tax How prior-year AMT liability becomes a credit usable against regular tax in lower-income future years to prevent double taxation.

UTMA Accounts and Gift Tax Treatment How Uniform Transfers to Minors Act custodial accounts qualify for annual gift tax exclusion and when the minor's control triggers gift completion.

Vacation Home Tax Rules How the 14-day and 10-percent personal-use tests determine whether a vacation property is taxed as rental income or personal use.

Variable Annuity Tax Treatment How tax-deferred growth inside a variable annuity contract becomes ordinary income upon withdrawal, creating a less efficient tax wrapper than direct stock ownership.

Variable Life Insurance Policy Loan Tax Treatment How policy loans on variable life insurance are tax-free, what happens at lapse, and how modified endowment contracts change the rules for variable life insurance policy loan tax treatment.