#entrepreneurship
Entrepreneurship
Financial guidance and accounting tips for entrepreneurs and startups
Writing Down Obsolete and Slow-Moving Inventory: Lower of Cost or Net Realizable Value Explained
Don't carry dead stock at full cost — GAAP's lower of cost or NRV rule requires writing obsolete and slow-moving inventory down to what you can actually realize, with a repeatable month-end workflow.
Lease vs. Buy Equipment in 2026: Section 179, Total Cost of Ownership, and the Real Tax Math
Don't compare monthly payments — compare after-tax lifetime cost. How Section 179, 40% bonus depreciation, and ASC 842 change the lease vs. buy math in 2026.
Section 1202 QSBS Exclusion: A Founder's Guide to $15 Million in Tax-Free Gains
Section 1202 lets founders, early employees, and angel investors exclude up to $15 million of capital gains from federal tax. This guide covers the OBBBA changes, the five eligibility gates, the new 3/4/5-year tiered holding period, Section 1045 rollovers, and stacking strategies that multiply the per-issuer cap across family members and non-grantor trusts.
Section 1235 Capital Gains Treatment for Patent Sales: How Inventors Convert Royalty Income Into Long-Term Capital Gain
Section 1235 lets individual inventors and qualifying early investors treat a patent sale as long-term capital gain — even without a one-year holding period — if they transfer all substantial rights. This guide explains who qualifies as a holder, why the rule survived the TCJA carve-out for self-created intangibles, and how to draft the transfer so the IRS sees a sale rather than a royalty license.
Bookkeeping for Food Truck Owners: Cash Sales, COGS, and Sales Tax
A step-by-step bookkeeping system for food trucks — separating business money, building a truck-specific chart of accounts, running a daily cash close, tracking food cost at 25–30% of revenue, and treating collected sales tax as a liability rather than income.
Quality of Earnings Reports: How Sellers Protect Their Price in a Business Sale
A Quality of Earnings report normalizes a company's earnings, reconciles them to cash, and tests every add-back. Sellers who commission their own QoE averaged a 7.4x EBITDA multiple versus 7.0x for those who did not.
Section 195 and Section 248: The First $5,000 Every Founder Can Deduct
Section 195 and Section 248 let founders deduct the first $5,000 of startup costs and the first $5,000 of organizational costs in year one, with the remainder amortized over 180 months. A guide to the $50,000 phase-out, the deemed election, and the mistakes that forfeit the deduction for LLCs, partnerships, and corporations.
Section 7701(b) Substantial Presence Test for Foreign Entrepreneurs: The 183-Day Formula, Closer Connection, and Treaty Tie-Breakers
A practical walkthrough of IRC Section 7701(b) for globally mobile founders — the 31-day floor, the weighted three-year 183-day formula, exempt-individual rules, the closer connection exception (Form 8840), and treaty tie-breakers (Form 8833) — with a worked example showing how 130 U.S. days in 2026 can trigger worldwide taxation.
Crowdfunding and Taxes in 2026: When Kickstarter, GoFundMe, and Indiegogo Money Is Taxable Income
Kickstarter and Indiegogo proceeds are business income reported on Schedule C, while GoFundMe donations may be tax-free gifts only if they pass the IRS detached and disinterested generosity test. The OBBBA reset the Form 1099-K threshold to $20,000 and 200 transactions for tax year 2026, but the reporting rule does not change what counts as taxable income.
Section 351 Tax-Free Incorporation: The 80% Control Test, Boot Traps, and QSBS for Founders
Section 351 lets founders incorporate without immediate tax only if the transferor group owns 80% of voting power and every non-voting class right after the exchange. Miss the control test, contribute services instead of property, or assume liabilities greater than basis, and the gain surfaces anyway. A practical playbook covering boot, the Section 357(c) trap, basis carryover under Sections 358 and 362, and how to preserve QSBS eligibility under Section 1202.
The 90-Day Letter: How Small Businesses Challenge IRS Audit Findings Without Paying First
A Statutory Notice of Deficiency gives a small business 90 days to petition the U.S. Tax Court before the IRS assesses additional tax. This guide explains the CP3219A deadline, Form 5564 waiver, S-case election, and the four realistic responses every owner should weigh.
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.