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Capital Gains

Track and report capital gains from investments

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The ISO AMT Trap in 2026: How Tech Employees Get Hit With Six-Figure Tax Bills on Stock They Can't Sell

Exercising and holding ISOs adds the bargain element to AMTI on Form 6251 Line 2i, which can produce a six-figure tax bill before a single share is sold. A 2026 guide to the tightened AMT exemption phase-out ($500K single / $1M MFJ at 50¢ per dollar), the qualifying disposition rules under IRC §422, and the planning moves — AMT crossover exercise, §83(b) early exercise, same-year disqualifying sale, and multi-year laddering — that keep tech employees out of the trap.

mike

taxtax-planningequity-instruments

Section 1061 Carried Interest Three-Year Holding Period: How Hedge, PE, and VC Fund Managers Lose Long-Term Capital Gains Without It

Section 1061 recharacterizes carried interest gains from long-term to short-term unless the underlying asset was held more than three years — a 17-point federal rate swing for hedge, PE, and VC fund managers. A practitioner guide to applicable partnership interests, Worksheet A and B reporting, the capital interest exception, and 2026 planning moves.

mike

taxtax-planningtax-compliance

Section 1245 vs. Section 1250: How Depreciation Recapture Erodes Your Bonus Depreciation Benefits

When you sell depreciated business property, Section 1245 recaptures prior depreciation as ordinary income (up to 37%), while Section 1250 caps the recapture on real estate at 25% — turning a 100% bonus depreciation deduction into a large tax bill at exit unless you plan with cost segregation, 1031 exchanges, and a clean fixed-asset register.

mike

depreciationbonus-depreciationcost-segregation

Section 368 Tax-Free Reorganizations: How Type A Mergers, Type B Stock Swaps, and Type C Asset Deals Defer Tax in Strategic M&A

Section 368 defines seven reorganization types (A through G) that defer corporate and shareholder tax in M&A. This guide covers the 40% Continuity of Interest test, Type A statutory mergers, Type B stock-for-stock swaps with the 80% control requirement, Type C asset deals, and forward/reverse triangular merger structures with their consideration limits.

mike

taxtax-planningmergers-and-acquisitions

Section 754 Election and 743(b) Basis Adjustments: How Partnerships Step Up Inside Basis When a Partner Buys In or Dies

A Section 754 election triggers a 743(b) inside-basis step-up when a partner dies, sells, or is bought in — preventing heirs and incoming partners from paying tax twice on the same appreciation. This guide covers 743(b) and 734(b) mechanics, Section 755 allocation across asset classes, the substantial built-in loss rule, Form 15254 revocation, and when the administrative cost outweighs the benefit.

mike

partnershipstax-planningestate-planning

Earnouts in M&A: Bridging the Valuation Gap Without Walking Into a Lawsuit

About one third of 2024 private-target M&A deals included an earnout, and median earnout potential rose to roughly 43% of the closing payment. This guide explains contingent purchase price structure, Section 453 installment-sale tax mechanics, the compensation-versus-purchase-price trap, and the recurring drafting mistakes behind six of the last seven major Delaware decisions favoring sellers.

mike

mergers-and-acquisitionsbusiness-valuationtax

Section 1045 QSBS Rollover: How Founders Defer Capital Gains by Reinvesting Within 60 Days

Section 1045 lets non-corporate taxpayers defer capital gains from a QSBS sale by reinvesting proceeds into new qualifying small business stock within 60 days. After the 2025 OBBBA expansion (75M gross assets cap, tiered 50/75/100 percent exclusion at 3/4/5 years), the rollover can convert a missed Section 1202 exclusion into a deferred, and potentially excluded, gain.

mike

tax-planningcapital-gainsstartup

Trader Tax Status and the Section 475(f) Mark-to-Market Election: How Active Traders Escape the Wash Sale Rule and the $3,000 Capital Loss Cap

Active traders can convert capital losses into ordinary deductions and eliminate the wash sale rule by filing a Section 475(f) mark-to-market election — but the statement must be attached to the prior year's April 15 return. A working guide to qualifying for trader tax status, the three big benefits of the election, Form 3115 mechanics, and the mistakes that invalidate it.

mike

taxtax-planningtrades
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