Buy 25% of an LLC for $1,000,000 and your K-1 can still depreciate the seller's 2004 basis. A section 754 election creates an $800,000 basis adjustment that belongs to you alone, and it has to ride on the LLC's return for the year you closed.
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A high-income parent gets no marketplace subsidy. The 23-year-old on the same policy, earning $24,000, can claim a premium tax credit computed on 99% of the family's benchmark premium. In 2026 that is $26,285, refundable.
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A self-directed IRA can borrow to buy a rental, and the loan is what makes the deal partly taxable. On a 2026 sale with $219,000 still owed against a $316,400 average basis, 69.2% of a $273,800 gain is taxable to the IRA and costs $40,880.
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A 30% member sells for $1,500,000 expecting $1,200,000 of capital gain. Section 751 hands him $420,000 of ordinary income instead, sized off the LLC's balance sheet rather than the purchase agreement. In 2026 that carve-out costs $71,400.
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A fake trading platform and a fake ransom take the same $330,000. One loss comes off the return in full, the other comes off nothing. The difference is §165(c)(2), and in 2026 it is worth $65,068.
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Two traders run the same S&P 500 strategy. One trades the index, one trades the ETF, and the federal rate on identical profit is 26.8% against 37%. On $200,000 of gain that difference is $20,400.
Read postThe §475(f) election for 2026 died on April 15, and §9100 relief almost never revives it. A new trading entity formed now gets its own 2 months and 15 days, which on a $154,000 fourth-quarter loss is worth $39,076.
Read postAn F reorganization is tax-free when it happens, and then it turns your stock sale into an asset sale. On a $12,000,000 exit with $1,400,000 of fully expensed equipment, that character change costs the seller $238,000.
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Rev. Proc. 2008-16 keeps the IRS from challenging a vacation home exchange if you owned the place 24 months, rented it at a fair rental for 14 days in each of the two years before closing, and held personal use to 10% of the rental days. On an $819,000 gain, missing it costs $199,372.
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Under IRC §1014(b)(6) both halves of community property reset to fair market value at the first death, not just the decedent's half. On a rental that went from a $100,000 adjusted basis to $1,300,000, holding it in joint tenancy instead costs the surviving spouse $147,800.
Read postThe installment method spreads the gain on a business sale, but if the notes you take back in one year add up to more than $5,000,000, §453A charges you interest on the tax you deferred. On an $8,000,000 seller note that runs about $100,800 over five years.
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Blow the 60-day window on an IRA or 401(k) rollover and the entire distribution becomes ordinary income, plus 10% if you are under 59½. Rev. Proc. 2016-47 lets you fix it with a letter to your custodian, no IRS filing fee and no ruling to wait for.
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