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Capital Gains

Track and report capital gains from investments

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Your QSBS Win Is Federal-Only in California: What Founders Owe the State on a 'Tax-Free' Exit

California does not conform to Section 1202, so a QSBS gain that is 100% excluded federally is taxed in full at state rates up to 13.3% — a $4 million exit can leave a founder owing roughly $350,000–$450,000 to Sacramento. This guide covers the 2025 QSBS expansion's new three- and four-year tiers, why California repealed its own exclusion, the real math on graduated brackets and the 1% surcharge, and what an FTB residency audit demands from founders who move before selling.

mike

tax-planningcapital-gainscalifornia

Donor-Advised Funds for Small Business Owners: Timing Charitable Giving Under the 2026 Rules

Starting in 2026, itemized charitable deductions only count above a 0.5%-of-AGI floor, while the new non-itemizer deduction excludes donor-advised funds. This guide shows small business owners how to respond — bunching several years of giving into one high-income year, donating appreciated stock to avoid capital gains, and using the 60%/30% AGI limits and five-year carryforward around a business sale.

mike

charitable-givingtax-planningtax-deductions

1031 Like-Kind Exchanges: How Small-Business Owners Defer Capital Gains on Real Estate

A Section 1031 like-kind exchange lets you defer capital gains tax when selling business or investment real estate — but only real property qualifies since 2018, a qualified intermediary must hold the proceeds, and two hard deadlines (45 days to identify, 180 days to close) allow no extensions. Here's how the rules, boot traps, and 2025 bonus depreciation interplay actually work.

mike

taxtax-planningreal-estate

Flipping Houses in 2026: Why the IRS Taxes Your Profit as Ordinary Income, Not Capital Gains

House flippers are almost always IRS "dealers," not investors — flip profits are ordinary income on Schedule C plus 15.3% self-employment tax, often a combined rate over 40% versus the 15–20% capital gains rate flippers expect. How the Winthrop factors decide dealer status, why rehab costs must be capitalized into COGS, and four strategies (including an S corp election) that reduce the hit.

mike

real-estatetaxtax-planning

Community Property Trusts: How Business Owners in Any State Can Get a Full Basis Step-Up

Alaska, Tennessee, Kentucky, Florida, and South Dakota let married couples in any state opt into community property treatment through a trust, so the entire asset — not just half — gets an IRC Section 1014(b)(6) basis step-up at the first spouse's death. What business owners should know about Section 754 elections, the one-year gift trap under Section 1014(e), and the unresolved IRS guidance.

mike

estate-planningtax-planningcapital-gains

Depreciation Recapture Explained: The Tax Bill Waiting When You Sell Depreciated Equipment or Real Estate

Depreciation recapture taxes the deductions you already took when you sell a business asset at a gain — Section 1245 equipment gains are recaptured as ordinary income at rates up to 37%, while Section 1250 real estate depreciation is capped at 25%. With 100% bonus depreciation restored and the Section 179 limit at $2,560,000 for 2026, a fully expensed asset has a $0 basis from day one, so nearly the entire sale price becomes taxable. Here's how the rules split, a worked example, and five strategies owners use to manage the bill.

mike

depreciationfixed-assetstax-planning
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