From entity formation, income, and inheritance to losses, proceeds, and profits, Toby Mathis and Jeff Webb of Anderson Advisors answer your tax questions. Submit your tax question to taxtuesday@andersonadvisors.
- How does a single, high W-2 earning individual take advantage of passive losses? It’s difficult because passive losses for a high earner are going to be subject to limitations
- How are inherited stock shares treated when sold? If you inherit stocks, they are valued at fair market value now, not when they were bought due to the step-up in basis
- Should an S Corp pay profits as dividends? An S Corp does not pay dividends; it passes on profits and losses to shareholders
- Is it preferable to have a C Corp or an LLC as your holding entity? It’s better to have an LLC as your holding entity; there’s no tax treatment for an LLC
- Are proceeds received from winning a court case ($20 million) taxable? It depends on the source of the claim, as a matter of rule, and attorney fees are no longer deductible
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https://www.irs.gov/pub/irs-utl/33-Real Estate Professionals.pdf