November 1st, 2023
Today we reviewed a tax plan submitted by Raymond Sawyer. Raymond has a client who is recently divorced and has had conservation easement in the past. Raymond is looking to replace the conservation easement strategy with something different. The Client currently has an Accountable Plan and Retirement Strategies already incorporated into his tax plan. So the group looks at other areas to consider for tax savings. First, we discuss paying the children. Next, we look at charitable planning. Lastly, we take a deep dive into the QBI Deduction. This is where we spend the majority of the discussion time. We look at various considerations surrounding the QBI Deduction qualifications, and how to best implement. It was a great lab!
November 8th, 2023
We had an excellent tax lab today! We reviewed a tax plan submitted by Denise Nieves. Denise has 2 clients who are both shareholders of roofing company. In addition, they also have a few rental properties. Both of these individuals are divorced, head of household, with children. Due to the almost identical nature of their financial situations, the group decided the best course of action is to develop out a tax plan for one of the clients, then copy that plan and tweak it for the second client. The group considered the following strategies for implementation into the tax plan: paying the kids, retirement strategies, Accountable Plan, Pass Through Entity, Augusta Rule, Section 1202 Sale. The group spent the majority of the discussion time analyzing the possibilities of retirement strategies. What would it look like to offer retirement for their employees? It was a really great discussion centering around the pros and cons of such strategies.
November 15th, 2023
In today's tax lab meeting with a smaller group, we focused on addressing specific participant queries. Denise Nieves shared her concerns about employing children in her clients' businesses—a roofing and a real estate company—given the complexities of child labor laws. The group consensus was to assign safer, administrative tasks to the children, with Veronica suggesting a division of labor between both companies. We also delved into setting appropriate fees for such tax plans.
Candice Tyson brought up an interesting point about applying the Accountable Plan to a client's vacant property used for storing construction equipment. This sparked a discussion on maximizing business benefits and proper structuring. Lastly, we used the QBI Entity Selection Calculator for insights on the best business entity type. Overall, the session was a collaborative problem-solving and practical tax strategy exploration!
November 22, 2023
NO TAX LAB TODAY
November 29th, 2023
In our latest tax lab meeting, we took a look at a tax plan prepared by Angelica Roxas. Angelica has a client who, in addition to a day job, launched a successful consulting business, boosting his income to an amount anticipated to be greater than $600,000 this year. The discussion centered around Qualified Business Income (QBI) calculation, exploring the benefits of a pass-through entity for State and Local Tax (SALT) deductions, and the advantages of hiring family members. Angelica also mentioned her goal of converting the business into an S Corporation and setting up a Solo 401k for the client’s spouse.
Additionally, Karey Rebello raised an intriguing scenario involving royalties from software development, specifically video games, and the possibility of leveraging a substantial real estate loss against a $2 million income, highlighting the Research and Development (R&D) tax credit as a viable avenue. This session is a must-watch for anyone looking to navigate similar situations!