Your employer withholds a flat 22% on severance because the payroll regulation says to, not because that is your bracket. On $120,000 paid to someone already at $220,000 of wages, the real federal cost is 33.7%, and the gap is $14,030.
Read postThe Journal
Notes on tax strategy.
Weekly writing on the planning conversations that move the needle: S-Corp elections, equity compensation, real estate, and the IRS rules behind them.
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IRS CP2000 Notice: What to Do With the 30 Days You Have.
A CP2000 is a proposal, not a bill and not an audit. The matching computer that printed it never saw what you paid for the stock you sold, which is why a $92,000 sale can show up as $13,800 of tax you do not owe.
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1031 Exchange With a Related Party and the Two-Year Clawback.
The IRS knows which side of a related-party exchange to look at, and it is the one holding cash. Buying replacement property from a relative who cashes out fails under Rev. Rul. 2002-83, and even a clean swap unwinds if either side sells inside two years.
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Earnout Tax Treatment When Selling a Business and the Stranded Basis Trap.
An earnout that never pays still spends your basis. IRC §453 allocates it across the maximum price, so a $3,000,000 earnout that comes in at zero reports $600,000 of gain you never had, and the offsetting loss takes 200 years to deduct.
Read postQualified Production Property 100% Depreciation and the 95% Floor Plan Rule.
A new plant is 39-year property, so a $10,000,000 building opened in July 2026 buys a $117,700 deduction. IRC §168(n) turns the production floor into a year-one write-off, and the office wing is what you have to carve out.
Read postPersonal Goodwill in a C Corporation Sale and the 16 Points It Saves.
Goodwill that belongs to you personally is taxed once, at up to 23.8%. Goodwill your corporation owns is taxed at 21% and again on the way out, and the difference on a $4,000,000 allocation is $640,080.
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Puerto Rico Act 60 Capital Gains Tax on Stock You Already Own.
Act 60 exempts the appreciation that happens after you become a bona fide resident of Puerto Rico. The gain you carried in with you stays US-source for 10 years, and nothing about the move changes the federal rate on it.
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Buy-Sell Agreement Life Insurance Estate Tax: The Connelly Rule.
A company-owned policy that funds a buy-sell agreement is a corporate asset on the date of death, and the obligation to redeem the shares does not offset it. The Supreme Court settled that in 2024, and most shareholder agreements still have not caught up.
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Roth Conversion Ladder 5-Year Rule: Every Rung Starts Its Own Clock.
A Roth conversion ladder is not one five-year wait. Every rung starts its own clock on January 1 of the year you convert, and spending a rung early costs 10% of whatever was taxable when you made it.
Read postIntangible Drilling Costs Deduction Against W-2 Income: What the AMT Takes Back.
A working interest in a drilling program deducts 60% to 80% of what you put in against your salary the same year, with no material participation test to pass. The alternative minimum tax claws part of it back, and §57(a)(2)(E) is why the write-off can never cut your AMTI below 60% of your pre-deduction income.
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Charitable Remainder Trust to Avoid Capital Gains: The Tax Is Deferred, Not Erased.
A charitable remainder trust sells your appreciated asset with no tax at the sale, then pays you back over as long as 20 years while you pay the tax as the money arrives. The catch is that at least 10% of the value has to leave for good, and S corporation stock cannot go in at all.
Read postMoved From Washington to Utah With RSUs: The Vest That Was Free Until You Got Here.
Washington taxes an RSU vest at nothing, because it has no income tax. Utah taxes every tranche that vests after you arrive at 4.45%, on all of it, with no credit to claim because Washington never charged you anything to credit.
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Moved to Utah but Your Employer Is in New York: Why the Paycheck Is Still Taxed There.
New York's convenience-of-the-employer rule treats the days you work from your house in Utah as days worked in Manhattan. Utah taxes the same wages as resident income, and the credit that is supposed to fix that stops at 4.45%.
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