Luke Mazey

What is a 351 Transfer? 🏢 💵 - A 351 transfer, also known as a Section 351 transfer, is a provision in the U.S. tax code that allows individuals or entities to transfer property to a corporation without triggering immediate tax consequences. Section 351 transfer is not limited to C corporations. It applies to both C corporations and S corporations. - This tax-deferral mechanism is often used when a person or group of individuals is forming a corporation or contributing additional assets to an existing corporation. - The primary idea behind a 351 transfer is that, when done correctly, the transferors (those providing the assets) do not have to recognize any gain or loss at the time of the transfer. 📖 In our recent blog, we explore what the requirements are, the advantages, and the disadvantages. Click the link below to read and feel free to contact us with any questions! https://lnkd.in/eAcjee7T Asset Strategy #TaxPlanning #351Transfer #TaxStrategy

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Top 10 IRS Audit Triggers 👇 1. High Income Taxpayers earning $500,000 or more are still audited at a higher-than-average rate. High-income earners are under closer watch because larger returns often involve complex deductions, investments, and other details that may raise questions. 2. Excessive Deductions Claiming deductions significantly higher than what’s typical for your income level can attract IRS attention. Lavish vehicles, meals, travel, and similar expenses are ripe for abuse – and the IRS knows it. 3. Unreported or Undisclosed Income If you earn money from side gigs, freelance work, or investments and fail to report it, you’re waving a big red flag. The IRS gets copies of your W-2s, 1099s, and other income forms, so discrepancies stand out. 4. Schedule C Filers Self-employed taxpayers who file Schedule C face heightened scrutiny, especially if they report consistent losses or operate in cash-heavy industries. 5. Claiming a Loss on a Hobby If you’re reporting losses on an activity the IRS deems a hobby rather than a business, you could be flagged for an audit. To qualify as a business, the activity must have a reasonable expectation of profitability. 6. Deducting Business Meals, Travel, and Entertainment To claim it, you’ll need detailed records—not just receipts, but also notes on the business purpose and who attended the meal or event. Remember, expenses reimbursed by an employer aren’t deductible. 7. Claiming 100% Business Use of a Vehicle If you’re claiming a high percentage of business use, detailed mileage logs and records are crucial. Additionally, deducting lavish vehicles that are not “ordinary or necessary” for your business or industry can trigger an audit. 8. Real Estate-Specific Audit Red Flags The real estate professional status (REPS) is one of the most litigated parts of the tax code because it is ripe with abuse. If you have a full-time W-2 job and claim REPS, you might land yourself in an audit. The Short-Term Rental (STR) Loophole is a legitimate strategy (we have successfully defended audits). Still, it can also trigger an audit due to abuse and IRS misunderstanding of this strategy and REPS 9. Significant Changes Year-Over-Year A sudden drop in income or spike in deductions compared to previous years can lead to questions. Consistency is key when it comes to tax filings. 10. Earned Income Tax Credit (EITC) The IRS estimates that one-third of EITC claims are paid in error. As a result, these claims receive extra scrutiny. 👉 It's crucial to have the right tax professional on your team. 💣 Otherwise, you may be at risk. 🔗 Request a consultation to learn how we can help: https://lnkd.in/duCs3E7J

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👉 Extension of tax return for USA A tax return extension allows taxpayers to delay the filing of their federal income tax return by up to six months. Instead of the usual April deadline, an extension pushes the deadline to October 15th. ➡ How to File for an Extension If you need an extension of time to file your individual income tax return, you must file Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. The deadline to file for an extension is the same as the date your tax return is normally due. In most years, that's April 15 or the next weekday if that date falls on a weekend. ➡ Who Should Consider Filing for an Extension? Filing for an extension can be beneficial in several situations: ▪ Incomplete Information: If you haven’t received all your tax documents by the deadline, an extension gives you time to collect everything you need. ▪ Complex Returns: Taxpayers with more complicated financial situations, such as those with multiple sources of income, investments, or self-employment income, might require additional time to ensure their return is accurate. ▪ Unexpected Life Events: Major life events, such as illness, death in the family, or natural disasters, can disrupt your ability to file on time. An extension provides the necessary breathing room. ▪ Tax Planning: In some cases, taxpayers may need extra time to make decisions about certain tax-saving strategies, such as contributions to a retirement account, that could affect their return. ➡ Get an extension when you make a payment When you make a payment towards your estimated income tax due, you can request a tax filing extension by selecting an option that indicates the payment is for an extension. This can be done through various methods, including accessing your IRS Individual Online Account, using Direct Pay, the Electronic Federal Tax Payment System (EFTPS), or paying with a credit or debit card. By choosing the extension option when making your payment, you eliminate the need to file a separate extension form. After completing the payment, you'll receive a confirmation number for your records. This process streamlines the task of obtaining a tax filing extension by combining it with your payment, ensuring that the IRS is aware of your request for additional time to file your return. ➡ Conclusion An extension can offer the necessary flexibility to ensure your tax return is accurate and complete. Just remember, the sooner you file your return, the sooner you can receive any refund you might be owed or get your tax situation settled for the year. #USA #EntensionTaxReturn #IRS #Startup

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𝘾𝙞𝙩𝙜𝙤 𝘼𝙪𝙘𝙩𝙞𝙤𝙣 𝙃𝙚𝙖𝙩𝙨 𝙐𝙥: 𝘾𝙧𝙚𝙙𝙞𝙩𝙤𝙧𝙨 𝙋𝙪𝙨𝙝 𝘽𝙖𝙘𝙠 𝙤𝙣 𝙀𝙡𝙡𝙞𝙤𝙩𝙩'𝙨 $7.3𝘽 𝘽𝙞𝙙 The fight for CITGO's future is escalating. Elliott Management's $7.3 billion bid is under fire from creditors, who argue it undervalues the company and excludes better alternatives. With a critical court hearing set for December 13, new players like Gold Reserve Inc. and Venezuelan representatives are ready to jump in if Amber Energy's exclusive rights are revoked. This isn’t just about numbers—it's a pivotal moment for U.S. energy security and the broader refining industry. The outcome could impact market stability, creditor recoveries, and Venezuela's financial strategy. #CitgoAuction #ElliottVsCreditors #EnergyMarket #CorporateBidding #LegalShowdown #RefiningIndustry #FinancialBattle #USCourts #Venezuela https://lnkd.in/gHVDjiQr

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Big news from the IRS: The days of “universal wallet” accounting are numbered —and if your company manages digital assets, this could be a significant shake-up. 🚨 What's happening? Starting January 1, 2025, the IRS will require account-specific cost-basis tracking for digital assets (so long, “universal wallet” accounting). That means no more combining assets across wallets or exchanges. Every wallet’s activity must be tracked individually. Preparing early will be the key to avoid scrambling before the deadline. How Bitwave makes this transition to account-level tracking simple: ✔ Effortless Automation: Forget manual tracking—Bitwave automates everything. ✔ Audit-Ready Confidence: Whether you’re dealing with DeFi or NFTs, we help you stay audit-ready – with SOC 1 (Type 2) and SOC 2 (type 2) confidence. ✔ Future-Proof Solutions: We’re built to adapt as regulations evolve. "We've built tools that make wallet-level inventory simple and give businesses the confidence they need to stay compliant." - Bitwave CEO & Co-Founder Patrick White Curious how this affects your business? Let’s chat—we’re here to help prepare. #IRS #DigitalAssets #CryptoFinance #Fintech #TaxCompliance #Accounting #DeFi #Blockchain

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CustomsPost 2024 May is Published! Topic of Month: Resource Utilization Support Fund (RUSF) in Royalty and Witholding Tax Payments

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--- 100-Year History --- #1031exchanges have been a part of the tax code since 1921. More than 100 years ago, Congress enacted Section 1031 of the Internal Revenue Code. Originally used for direct swaps of farmland, Section 1031 now applies to many types of exchange transactions for any type of real property used for trade or business-use, or held for investment.

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Crypto's new 1099-DA form explained in a single (made-up) conversation between the IRS and a small DeFi protocol: IRS: “Who’s in charge here?” DeFi Protocol: *in unison* “GM. We all are.” IRS: “Ok, whatever. You need to fill out this tax form every time someone uses your platform.” DeFi Protocol: “Woah, slow down there, partner. So, you want like names, addresses, all that?” IRS: “Yes.” DeFi Protocol: “Uh, we don’t have any of that info, bro. We’re just a website and a few pieces of code.” IRS: “Well then, figure out how to get it.” DeFi Protocol: “Wait, you want like the wallet address and transaction ID for transfers into our platform, too? Why don’t you just look at a block explorer? It’s all on-chain, fren.” IRS: “Because the data is hard to read and that’s your job, not ours.” DeFi Protocol: “Okay well, what you’re asking would literally cost us at least 200 ETH to figure out. And even if we could, our users wouldn’t give KYC info. This would bankrupt us.” IRS: That’s the point. DeFi Protocol: *Promptly relocates to the Cayman Islands* #crypto #web3 #cryptotax

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🚀 Robinhood acquires Bitstamp 🚀 Robinhood is making bold moves in cryptocurrency with its recent agreement to acquire Bitstamp for $200 million! 🤑 This deal is set to close in the first half of 2025, marking Robinhood’s first foray into institutional business and a significant step in its global expansion strategy. 🌍 This acquisition will see Robinhood tapping into Bitstamp’s extensive customer base across the EU, UK, USA, and Asia. With over 50 licenses and registrations worldwide, Bitstamp brings a wealth of regulatory compliance and trust to the table. 🏛️ Key Highlights: 🥇Integration of Bitstamp’s Core Spot Exchange: Over 85 tradable assets will bolster Robinhood’s crypto offerings. 🥈Institutional Offerings: Robinhood will leverage Bitstamp’s white label solution, institutional lending, and staking capabilities. 🥉Global Team Collaboration: Offices in the UK, Luxembourg, Slovenia, Singapore, and the USA will merge, fostering innovation and knowledge sharing. Johann Kerbrat, GM of Robinhood Crypto, emphasizes that this acquisition is a "major step in growing our crypto business." Robinhood’s visionary leaders, led by CEO Vlad Tenev, are clearly committed to revolutionizing the crypto trading landscape. On the other side, Bitstamp, under the leadership of CEO JB Graftieaux, has built a reputation for reliable trade execution and industry-leading API connectivity, trusted by institutional clients worldwide. This merger promises to create unparalleled synergies and opportunities for both entities. 733Park sees this as a testament to the evolving landscape of fintech and cryptocurrency. The future is bright, and we are excited to witness the innovation and growth that will stem from this powerful union. #Crypto #Fintech #MergersAndAcquisitions #Robinhood #Bitstamp #GlobalExpansion #Innovation #733Park #Payments #SaaS #DigitalTransformation

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ASK MICKEY, CPA, CVA QUESTION: I know tax fraud is everywhere, what are the worst offensives? ANSWER: Tax fraud is a deliberate act of falsifying information on a tax return to avoid paying the correct amount of taxes owed. It encompasses a variety of illegal activities, including: Underreporting Income: Not declaring all income received during the year. Inflating Deductions or Expenses: Claiming more deductions or business expenses than incurred. Falsifying Documents: Creating or altering documents to mislead tax authorities. Hiding Assets: Concealing assets or income, often in offshore accounts, to evade taxes. Claiming False Dependents: Listing people who are not legitimate dependents to receive tax benefits. Failure to File Returns: Not filing tax returns when legally obligated to do so. Tax fraud is a serious offense and can lead to significant penalties, including fines, interest on unpaid taxes, and imprisonment. It undermines the integrity of the tax system and places a greater burden on honest taxpayers. Tax authorities, like the IRS in the United States, have various tools and methods to detect and investigate tax fraud, including audits, informant tips, and data analytics. #taxes #tax #taxes2024 #taxfraud #taxreturns #filetaxes #cpa #cpas #cpafirm #taxprepayer #taxaccountant Thomas M. "Mickey" O'Neal, CPA Natalie O'Neal Donn DeGeorge Maninder Kaur

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Generally, business taxpayers can deduct a net operating loss (NOL) from income when filing a tax return, but they bear the burden of showing an NOL is valid. Tax law defines an NOL as the excess of deductions over gross income. One couple was denied an NOL deduction on their joint return. Reasons for the denial included that the NOL was based partly on business expenses that the taxpayers weren’t personally liable for and pension liabilities that the couple hadn’t paid. The husband’s law degree caused the court to find that he should have known the regulations. The couple was assessed tax and an accuracy-related penalty due to negligence or disregard of the rules. (TC Memo 2024-64). Contact us for help: https://bit.ly/3jcyo8o #tax #taxes #taxpayer #business #businesstaxpayer #taxreturn #netoperatingloss #NOL #incometax #taxdeduction #taxlaw #cg #cgtaxauditadvisory

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Generally, business taxpayers can deduct a net operating loss (NOL) from income when filing a tax return, but they bear the burden of showing an NOL is valid. Tax law defines an NOL as the excess of deductions over gross income. One couple was denied an NOL deduction on their joint return. Reasons for the denial included that the NOL was based partly on business expenses that the taxpayers weren’t personally liable for and pension liabilities that the couple hadn’t paid. The husband’s law degree caused the court to find that he should have known the regulations. The couple was assessed tax and an accuracy-related penalty due to negligence or disregard of the rules. (TC Memo 2024-64) #TaxLaw #NOL #BusinessDeductions #NetOperatingLoss #TaxCourt

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Generally, business taxpayers can deduct a net operating loss (NOL) from income when filing a tax return, but they bear the burden of showing an NOL is valid. Tax law defines an NOL as the excess of deductions over gross income. One couple was denied an NOL deduction on their joint return. Reasons for the denial included that the NOL was based partly on business expenses that the taxpayers weren’t personally liable for and pension liabilities that the couple hadn’t paid. The husband’s law degree caused the court to find that he should have known the regulations. The couple was assessed tax and an accuracy-related penalty due to negligence or disregard of the rules. (TC Memo 2024-64) #businessowner #taxpolicy #entrepreneur

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