Bonus Depreciation Recapture: How Section 1245 Turns Your Equipment Sale Into Ordinary Income
Section 1245 taxes equipment-sale gains as ordinary income up to the depreciation claimed — with 100% bonus, the whole sale can be recapture.
#tax-planning
Tax Planning
Strategic tax planning to minimize liability and maximize savings
FIFO vs. LIFO vs. Weighted Average Cost: How Your Inventory Method Changes COGS, Profit, and Tax
FIFO maximizes reported profit when costs rise, LIFO minimizes tax, average cost splits the difference — choose by cash flow, borrowing plans, and IRS rules.
ISO vs. NSO Tax Treatment for Startup Employees: When Exercising Triggers AMT or Withholding
ISO exercises skip regular tax but can trigger AMT; NSO spreads land on your W-2 — IRS holding periods, withholding gaps, and the $100K limit.
Like-Kind Exchange Boot Explained: How Cash, Debt Relief, and Non-Like-Kind Property Trigger Tax Under Section 1031
Cash, debt relief, or non-like-kind property in a 1031 exchange is taxable boot up to your gain — and cash offsets mortgage boot, never the reverse.
Rental Property Depreciation: 27.5 vs. 39-Year Schedules, Recapture, and When Cost Segregation Pays
Residential rentals depreciate over 27.5 years, commercial over 39 — claim the IRS straight-line deduction yearly, then plan for 25% recapture at sale.
Starting a Business? The Federal Tax Checklist the IRS Actually Recommends
The IRS starting-a-business checklist covers structure, EIN, tax year, recordkeeping, and retirement plans — finish all seven before your first quarter closes.
Active Trader or Long-Term Investor? How the IRS Taxes Each (and Why It Matters Before Your Next Trade)
Investors face the wash sale rule and a $3,000 loss cap; qualifying traders who elect Section 475(f) get ordinary treatment with neither.
Capitalization vs. Expensing: When to Capitalize Software Development, Subscriptions, and Cloud Infrastructure Costs
Capitalize application-development costs under ASC 350-40 and expense SaaS subscriptions; Section 174 tax rules diverge, so track both.
Fixed Asset Useful Life: How to Pick MACRS Recovery Periods and Book Lives Without Overpaying Tax
IRS recovery periods set your tax deduction; book lives track real wear. Keep both schedules, revise prospectively, fix old errors via Form 3115.
Section 199A Meets Depreciation Recapture: The Rental Tax Trade-Off Most Investors Miss
Depreciation shrinks the QBI behind your 20% Section 199A deduction, then returns as up to 25% recapture at sale — time both against your holding period.
Coverdell ESA vs. 529 for Business Owners: Contribution Limits, Phaseouts, and Which Account Fits
Coverdell ESAs cap at $2,000 per child with IRS income phaseouts; 529s have no income limits and far higher caps. Pick by income, K-12 needs, and control.
Section 195 Startup Costs: How to Deduct What You Spent Before Opening Day
Section 195 lets new US businesses deduct $5,000 of startup costs immediately and amortize the rest over 180 months — but only after launch day.