How specific tax provisions actually work, who they apply to, what they require, and where they go wrong. Written and cited by a Florida CPA.
Each page explains the mechanism of a specific tax provision: how it works, who it applies to, what it requires, what you would need to document, and the ways it commonly fails. Projected savings and step-by-step instructions are deliberately left out, because both depend on facts I would need to review first.
How Rule 72(t) lets an IRA or plan owner under 59 1/2 avoid the 10% early distribution tax through SEPP, and where these plans break.
How a section 83(b) election taxes restricted stock and early-exercised options at grant, not vesting, and why the 30-day deadline has no exceptions.
How an ABLE account under Section 529A builds tax-free savings that mostly stay disregarded for SSI and Medicaid, and where families get it wrong.
How a written accountable plan lets a business reimburse an S-corp owner's home office, vehicle, and phone costs tax-free under Section 62(c).
How the Section 137 employer adoption assistance exclusion and the Section 23 adoption credit coordinate, who qualifies, and where the S-corp trap bites.
How a bargain sale, a charitable gift annuity, and a pooled income fund work, who qualifies, and where each one goes wrong in practice.
When a filed return needs correcting: Form 1040-X, a superseding return, the partnership AAR rule, or Form 3115, and the refund statute that gates it.
How the per-donee annual gift tax exclusion and the lifetime estate exemption work together, and where the IRS actually challenges a gifting plan.
How Florida homestead, tenancy by the entireties, retirement exemptions, and LLC charging-order law decide what a creditor can reach.
What actually happens in an IRS audit: who carries the burden of proof, what the Cohan rule can estimate, and the deadline that cannot be extended.
How Section 280A(g) lets an owner rent a personal residence to their own business for 14 days or fewer, and what the IRS actually attacks.
How the backdoor Roth IRA works above the income limit, and why the pro-rata rule taxes most of the conversion when other pretax IRAs exist.
A genuine board of directors or advisory board opens deductible director fees, travel, and meeting costs under Section 162, and draws real IRS scrutiny.
How Section 168(k) bonus depreciation works, which property actually qualifies, and where the 2025 to 2026 acquisition-date transition trips people up.
Why a buyer almost always wants an asset purchase over a stock purchase, and the elections that let a stock deal reach the same result.
How Section 162(a)(2) lets a business deduct travel costs, what away from home requires, and the recordkeeping mistakes that lose the deduction.
How the 6,000-pound weight line, Section 179, and bonus depreciation decide what a business vehicle deducts in year one, and where it goes wrong.
How a buy-sell agreement's structure decides who gets a basis step-up, and what Connelly v. United States changed for life-insurance funding in 2024.
Why a C corporation can deduct and exclude long-term care insurance premiums for an owner-employee in full, with no age-based dollar cap.
How Rev. Proc. 2013-30 lets a C corp fix a missed S election retroactively, the consistency gate most likely to defeat a request, and what it requires.
Why a flat 21 percent rate and the QSBS exclusion can beat pass-through taxation, and the double tax, accumulated earnings tax, and PHC tax that erode it.
How the 0% capital gains bracket, the loss-only wash-sale rule, the NIIT floor, and Medicare and ACA cliffs interact when timing a gain.
How section 1061 recharacterizes carried interest gain as short-term within three years, and why rental-property sales usually fall outside it.
How a business-owned phone, a self-employed owner's personal phone, and an S-corp accountable-plan reimbursement are each taxed, and where each one fails.
How bunching several years of charitable giving into a donor-advised fund, layered with appreciated stock or a QCD, clears the standard deduction.
How a charitable lead trust pays a charity first and freezes what passes to my client's children, and where a CLAT's zeroed-out design can fail.
How an irrevocable charitable remainder trust sells an appreciated asset tax-free, pays income for life, and defers gain instead of eliminating it.
How targeted allocations, nonrecourse debt, and the three Section 704(c) methods decide whether a partnership's special allocations actually hold up.
How a cost segregation study reclassifies building components into shorter depreciation lives, and why the passive loss rules decide whether it helps.
How sections 451(f), 451(g), and 1033(e) let a cash-method farm defer or avoid tax on crop insurance proceeds and weather-driven livestock sales.
How the de minimis safe harbor election lets a business expense items costing $2,500 or less each, and the return statement that makes the election.
How a defined benefit or cash balance plan lets an older, high-income owner deduct far more than a 401(k) alone, funded by an actuary each year.
How Rev. Rul. 2004-86 lets a Delaware statutory trust interest qualify as 1031 replacement property, and where DST offerings fail that test.
How the Section 129 Dependent Care FSA and the Section 21 credit compare, who each is open to, and why the two benefits cannot share a dollar of expense.
How real estate depreciation works under MACRS, and why the recapture at sale splits between a maximum 25 percent rate and ordinary income.
How a 2025 law stopped a direct primary care membership from blocking HSA eligibility, and the separate rule for paying its fee tax-free from the HSA.
How the Section 44 credit and Section 190 deduction combine to offset ADA accessibility costs, and why the Tax Court has actually denied these claims.
How an earnout's contingent-payment tax rules differ from rollover equity's section 721 or 351 deferral, and why a rollover never shelters the cash.
How the American Opportunity Credit, the Lifetime Learning Credit, and 529 plans coordinate without double-dipping, and where each one gets examined.
How the section 45F credit pays employers for child care costs, why the tentative minimum tax shrinks what lands, and what Florida licensing requires.
Business energy tax credits and deductions after the 2025 tax law: which ones already closed, and the one investment credit still open to a new project.
How sole proprietorship, S-corp, and C-corp taxation compare, what each election requires, and the failure modes that erode the benefit of choosing one.
How section 1042 lets a C-corp owner sell stock to an ESOP, defer the capital-gains tax, and make that deferral permanent by holding to death.
How the IRC 6654 estimated tax safe harbor works: the 90 and 110 percent tests, the four due dates, and the mistakes that trigger the penalty.
Section 1301 lets a farmer or commercial fisherman recompute a spike year's tax using three prior years' brackets, without moving any income or cash.
Florida assesses genuinely farmed or ranched land at agricultural use value, not market value, under Fla. Stat. 193.461. Deadlines, and what can cost it.
Schedule F farm taxation: what counts as farming, how self-employment tax works, the section 183 hobby-loss test, and how a farm loss is limited.
How the section 45B credit refunds an employer's own FICA match on tip income, why Florida wages clear the floor, and where the math goes wrong.
How I decide between married filing jointly, married filing separately, and head of household, the tests each one requires, and where they go wrong.
How Sections 127, 79, 132, and 137 let an S-corp stack tax-free fringe benefits, and why family attribution locks some of them away from the owner.
How a sale to an intentionally defective grantor trust freezes appreciation and moves it out of an estate, and where the IRS actually challenges it.
How a GRAT lets my client freeze an appreciating asset's value for family at a near-zero taxable gift, and why dying mid-term can undo the whole benefit.
How putting your spouse on payroll opens Social Security credit, a solo 401(k) slot, an HSA, and a Section 105 plan that deducts family medical costs.
How the Section 47 credit for rehabilitating a certified historic building works, why it is claimed over five years, and who Section 469 lets use it.
How the section 183 hobby-loss rule caps deductions at gross income, who it reaches, and why losing the profit-motive fight costs more than it used to.
How Section 280A gates the home office deduction, why S-corp owners need an accountable plan instead of rent, and where the position fails.
How the HRA, QSEHRA, and ICHRA structures reimburse medical costs tax-free, who actually qualifies for each one, and why a 2%-plus S-corp owner cannot.
How IRC section 223 gives a Health Savings Account its triple tax break, who is eligible, how S-corp ownership changes the mechanics, and where it fails.
How constructive receipt, assignment of income, and economic performance set the real limits on shifting income or deductions across a year-end.
How the installment method under section 453 defers gain on a seller-financed sale, and where the 453A interest charge and related-party rules bite.
How Temp. Reg. 1.163-8T decides whether interest on borrowed money is deductible, based on what the funds paid for, not what secures the loan.
How the Medicare IRMAA surcharge prices income from two years earlier, who it reaches, and where the life-changing-event appeal actually helps.
How an irrevocable trust freezes estate value for good, why grantor and non-grantor trusts are taxed differently, and where retained control undoes it.
How section 1(g) taxes a child's unearned income above an annual floor at the parent's own rate, and why a child's wages sit entirely outside it.
How Rev. Proc. 2013-30 and Section 9100 relief fix a missed tax election, which track applies, and where a discretionary request gets denied.
How an LLC's liability shield and its federal tax classification are separate questions, and how the married-couple default trips Florida owners up.
How an S corporation pays a management company for real services, so the non-corporate entity can employ the owner's kids without withholding FICA.
How Section 274 sorts every business meal into a 50%, 100%, or 0% deduction, and what the 2026 OBBBA rules take away from employer-paid meals.
How the after-tax bucket in a 401(k) fills to the plan's overall Section 415(c) limit and converts to Roth, and why most plan documents cannot do it.
How the section 402(e)(4) election taxes only plan basis on employer stock now and defers the built-in gain to long-term capital gains rates later.
How Section 461(l) caps a business loss each year and how the disallowed amount converts into a Section 172 net operating loss carryforward instead.
How a nonqualified deferred compensation plan under Section 409A defers a key employee's tax, and why it does nothing for an S-corp owner's own pay.
How a Qualified Opportunity Fund defers and excludes capital gain, what changes under the new OZ 2.0 rules, and where the regime-timing trap sits.
How the section 45S credit pays an employer for its own paid leave policy, why Florida keeps the whole benefit, and where the written policy fails.
How Treas. Reg. section 1.168(i)-8 lets a rental owner write off a retired roof or HVAC system as an ordinary loss instead of depreciating a ghost asset.
How a multi-member LLC is taxed as a partnership by default, what it can do that an S corporation cannot, and where self-employment tax stands unsettled.
How Section 469 limits rental and business losses to passive income, and when the $25,000 allowance or a fully taxable sale releases them.
When an IRS penalty can be removed through First-Time Abate or reasonable cause, what each one requires, and the mistakes that get a claim denied.
How IRC section 464 caps a cash-method farmer's prepaid feed, seed, and fertilizer deduction at 50 percent, and when that cap disappears entirely.
How a private foundation's five excise taxes and basis-limited stock deduction compare to a donor-advised fund, and where family control goes wrong.
How a state lets a pass-through entity pay its own income tax, turning a capped, itemized SALT deduction into an uncapped federal one, and where it fails.
How the Section 199A wage limit, the SSTB self-rental taint, and S-corp salary choices interact, and where the planning around them breaks down.
How section 1202 lets a non-corporate shareholder exclude gain on qualifying C-corp stock, and how the 2025 law changed the holding-period tiers and caps.
How a qualified charitable distribution lets an IRA owner 70½ or older send money straight to charity, excluded from income rather than deducted.
How IRC section 469(c)(7) lifts the automatic passive label from rental real estate, the two tests it requires, and how the IRS actually challenges it.
The reasonable-compensation documentation an S-corp owner needs: a method report, a duties and hours record, and minutes dated before the payroll runs.
How a SEP-IRA, Solo 401(k), SIMPLE IRA, and defined-benefit or cash-balance plan compare, and which one fits based on headcount and income.
How the section 45E startup-cost and contribution credits and the section 45T auto-enrollment credit work, and which ones reach a one-participant plan.
How a revocable living trust avoids Florida probate and manages incapacity, why it saves no income or estate tax, and where funding it goes wrong.
How a new C corporation and 401(k) let a founder roll retirement funds into an active business without current tax or an early-withdrawal penalty.
How a Roth conversion moves pretax IRA money into a Roth by paying tax now, and why the pro-rata rule, the five-year clocks, and IRMAA can undo it.
How the S-corp salary decision drives FICA, the Section 199A deduction, and Solo 401(k) room at once, and where raising or lowering it backfires.
How the reasonable-compensation rule forces an S-corp owner to pay W-2 wages before distributions, and what four decided cases say about it.
How a more-than-2% S-corp shareholder gets health premiums onto Schedule 1 through W-2 wages, and where that payroll step goes wrong.
How the split between S-corp W-2 wages and distributions cuts FICA, why Section 199A can flip the incentive, and what the IRS actually attacks.
How a section 1031 exchange defers capital gains and depreciation recapture on real property, and why personal property no longer qualifies.
How a Section 105 plan lets a sole proprietor hire a spouse and deduct the family's medical costs as a business expense, and why it fails inside an S corp.
How Section 1244 turns a loss on qualifying small business stock into an ordinary loss instead of a capital one, and who is permanently locked out.
How the Section 179 election works item by item, why it cannot create a loss, and where it fails: placed-in-service dates, the SUV cap, recapture.
How a self-directed IRA or solo 401(k) holds real estate and private deals, what Section 4975 forbids, and when income inside the account is taxed.
How the self-rental rule turns rent paid between an owner's own entities into non-passive income, while a loss on that same rental stays stuck as passive.
How entity type and asset-versus-stock structure decide the tax on a business sale, from personal goodwill to the built-in-gains trap for S corporations.
How the SEP IRA lets a self-employed owner deduct an effective 20% of net self-employment earnings, who it fits, and where it goes wrong.
An average guest stay of seven days or less means a property is not a rental activity at all. What that changes, what it requires, and where it fails.
How a SIMPLE IRA works under Section 408(p), why the employer contribution is mandatory every year, and how the two-year rule traps an early rollover.
How a spousal lifetime access trust moves assets out of one spouse's estate while the household keeps indirect access through the other spouse.
How the Section 448(c) gross receipts test works, the 2026 threshold, and how passing it exempts a business from accrual, inventory and UNICAP rules.
How Section 86 decides what share of a Social Security benefit is taxed, why the claiming age does not change that, and what the earnings test counts.
How a solo 401(k) lets a business owner contribute as both employee and employer, and why a single hidden hire can quietly disqualify the plan.
How Sections 195, 248 and 709 recover pre-opening costs, why each pool carries its own $5,000 cap, and why the date a business begins decides everything.
How section 1014 resets an inherited asset's basis to its date-of-death value, wiping out capital gains and depreciation recapture built up during life.
How capital losses net under Section 1222, the $3,000 ordinary income cap, indefinite carryforward, and the wash-sale rule that quietly voids it.
How the Trifecta puts a revocable living trust over a separate operating entity and a holding entity, what each leg actually does, and where it fails.
How contributing real estate to a REIT operating partnership under section 721 defers gain, why it is not a 1031 exchange, and what it costs permanently.
How Section 280A(d) counts personal-use days, when a vacation home's deductions cap at rental income, and why the interest allocation is disputed.
Last reviewed: 2026-08-31
Timothy LeGendre CPA LLC | Florida CPA License #AC62625 (firm #AD72267) | Mount Dora, FL | (407) 417-1064 | Contact
Find me on LinkedIn, LinkedIn company page, YouTube, X, Facebook, Google Business, Yelp, and the BBB.