Form 8308 and Section 751 Hot Assets: How a Partnership Sale Turns Capital Gain Into Ordinary Income
When a partner sells an LLC or partnership interest, Section 751 can recharacterize a large share of the gain as ordinary income taxed up to 37 percent. Form 8308 is the partnership's required disclosure of that hot-asset gain on Form 1065, with a January 31 furnishing leg and a return-due-date filing leg in 2026.
Form 8308 and Section 751 Hot Assets: Why Selling Your Partnership Interest Often Costs More Than You Think
Selling a partnership interest can convert expected capital gain into ordinary income under Section 751, raising the federal tax bill on the recharacterized slice from 23.8 percent to 37 percent. This guide explains Form 8308, hot-asset categories, the January 31 partner statement deadline, and what sellers, buyers, and partnership administrators need to do for 2025 and 2026 transfers.
The U.S. Exit Tax in 2026: How Form 8854 and Section 877A Tax You on the Way Out
Section 877A treats covered expatriates as if they sold every asset the day before leaving the United States. For 2026 the net-tax threshold is $211,000, the net-worth test sits at $2 million, and the gain exclusion is $910,000 — here is how Form 8854 decides whether you pay.
Personal Goodwill in C-Corp Asset Sales: Martin Ice Cream, Norwalk, Bross Trucking, and Howard
Personal goodwill carve-outs let C-corporation shareholders pay 23.8% capital gains instead of 40%+ combined tax on a portion of an asset sale. Martin Ice Cream, Norwalk, and Bross Trucking show when the allocation survives; Howard shows when an employment-and-noncompete agreement quietly destroys it.
Personal Goodwill in M&A Asset Sales: How Martin Ice Cream and Norwalk Help Owners Avoid Double Taxation
Personal goodwill, anchored in the Martin Ice Cream and Norwalk Tax Court decisions, lets closely held C corporation owners shift a portion of an asset-sale price out of the corporate tax layer and onto the shareholder as long-term capital gain. This guide explains the doctrine, when it works, the documentation that survives an IRS audit, and the mistakes that have sunk allocations.
The $2 Million Mistake: Why Gifting Appreciated Stock to Your Kids Can Be Worse Than Doing Nothing
A practical guide to Section 1015 carryover basis versus Section 1014 stepped-up basis, the dual basis trap for depreciated assets, and the 2026 decision framework for whether to gift appreciated property now or hold until death under the permanent $15 million exemption.
Section 1256 Contracts and the 60/40 Tax Rule: A Trader's Guide to Form 6781
Section 1256 splits gains on futures, broad-based index options, and qualifying forex 60% long-term and 40% short-term, capping the top federal rate near 26.8% versus 37% on equity options. A 2026 guide to Form 6781, the mark-to-market rule, and the three-year loss carryback.
Form 1041 Decoded: Why Trusts Hit 37% at $15,200 and How DNI Saves Beneficiaries
Trusts hit the top 37% federal bracket at just $15,200 of taxable income, while a single individual does not until $609,350. This guide walks fiduciaries through Form 1041, distributable net income (DNI), Schedule K-1 allocations, the separate share rule, and the 65-day election used to shift income to beneficiaries at lower rates.
The ISO AMT Trap in 2026: How Tech Employees Get Hit With Six-Figure Tax Bills on Stock They Can't Sell
Exercising and holding ISOs adds the bargain element to AMTI on Form 6251 Line 2i, which can produce a six-figure tax bill before a single share is sold. A 2026 guide to the tightened AMT exemption phase-out ($500K single / $1M MFJ at 50¢ per dollar), the qualifying disposition rules under IRC §422, and the planning moves — AMT crossover exercise, §83(b) early exercise, same-year disqualifying sale, and multi-year laddering — that keep tech employees out of the trap.
Section 1061 Carried Interest Three-Year Holding Period: How Hedge, PE, and VC Fund Managers Lose Long-Term Capital Gains Without It
Section 1061 recharacterizes carried interest gains from long-term to short-term unless the underlying asset was held more than three years — a 17-point federal rate swing for hedge, PE, and VC fund managers. A practitioner guide to applicable partnership interests, Worksheet A and B reporting, the capital interest exception, and 2026 planning moves.
Section 1212 Capital Loss Carryover: The $3,000 Annual Cap, Indefinite Carryforward, and Why Character Survives Across Tax Years
A practical guide to IRS Section 1212 for individual investors: the $3,000 annual ordinary-income cap, indefinite carryforward, short-term vs. long-term character preservation, the Schedule D ordering rules, and how wash sales interact with carryovers.
Section 1245 vs. Section 1250: How Depreciation Recapture Erodes Your Bonus Depreciation Benefits
When you sell depreciated business property, Section 1245 recaptures prior depreciation as ordinary income (up to 37%), while Section 1250 caps the recapture on real estate at 25% — turning a 100% bonus depreciation deduction into a large tax bill at exit unless you plan with cost segregation, 1031 exchanges, and a clean fixed-asset register.