The Big Beautiful Bill is out - and while it still needs to be worked on before moving for a vote, here are some key provisions: QBI from 20% to 23%

This is a big move for small business as this was set to expire

It equates to a ~9-10% impact on taxes due on pass-through businesses

Reading a General Ledger is a super power.

It's a peek under the hood of all the accounting activity in a business. Is the business writing off accounts receivable regularly?

You'll see journal entries hitting the AR account.

The Small Business Administration is responsible for $450 billion in outstanding loans to small businesses.

Elon recently called it the "Shady Business Administration"

So I downloaded 20 years of SBA data and went looking 👇 First - how much is outstanding currently?

The House just released a list of options they may use to pay for the next big tax bill to extend current tax cuts.

Some expected, some zingers: 10% Tariff

Would increase revenue by $1.9 trillion

Applied to all imports

Every business has a fraud story - some just don't know it yet.

In my time auditing small businesses, here are some of the best ideas to prevent and discover it: 1. Bank Reconciliations

This makes sure every bank transaction is coded.

An owner or supervisor should review it - looking for odd items like unrecognized vendors, deposits "in transit" that are older than a week

This is the deepest technical thread I've done on partnership loss allocations.

But I shared the decision tree flowchart and y'all asked for it.

You've only yourself to blame. Buckle up 💺 First - why are loss allocations so painful?

The IRS got burned for 50 years with tax shelters so they built all kinds of rules to prevent that again.

By tax shelters, we mean taking "passive" losses against active income with no real economic substance to the loss.

A 🧵 of tax maxims: Things you don't need to start making money:
• LLC
• Logo
• Website

The IRS has 3 years to challenge a partnership allocation of income.

LPs, however, have no statute of limitations to dig into the K1s and start asking questions.

Here's the first part of a monster thread on partnership allocations: We'll start with income.

It's easier to understand because there are less rules around it.

Here's the top of the flowchart if you want to follow along:

The Qualified Business Income (QBI) Deduction has saved my SMB clients millions of dollars in tax.

But to maximize it you have to know how to play the game.

A thread to 🔖 for year-end QBI planning: Start with the basics.

If you earn income from K1s or a sole prop. (Schedule C), you can get this deduction.

It’s 20% off of the business income before paying taxes on it.

2026 is a big year for taxes.

It's when the built-in "sunset" of 𝘴𝘰𝘮𝘦 of the 2017 tax reform items hit.

Here's a cheat sheet of some of the bigger items and more on what it may mean to you: Many of the individual tax changes sunset.

Tax brackets will increase (up to 39.6%)

And your standard deduction will get cut in half (currently $27,700 for married)

The first question my trust and estate expert would always ask when reviewing returns for recently deceased rich people was:

Did they make the portability election? Currently, the lifetime gift exemption is $13.61 million per giver. Anything that your heirs inherit over that is taxed at 40%.

For married couples, that totals $27.22 million tax free to give to the next generation.

Tax strategy has evolved significantly in the last 40 years - especially in the use case of C-Corps.

Some of the biggest tax blunders I've seen involved misplaced C-Corps 👇 Case 1 - One of the largest privately-held real estate owners in Houston

Has owned most of their buildings for generations.

But their tax strategy has also been passed down - all their assets are held in C-Corps.

Every business has a fraud story, some just don't know it yet.

Here are a few of my favorite actual client stories from my time as an auditor: Case 1 - small home construction company.

Older parent working alongside middle age child.

Both cheap and financially illiterate.

The Tax Code rewards risk.

Want to deduct more losses against your income? Take more risk.

Want proof? There's an entire partnership tax section devoted to determine "at-risk" basis.

👇 Most investors take for granted that when they become an LP they'll be able to use the projected losses to offset their income.

But there are actually FOUR hoops to jump through to use that loss.

Beneficial Ownership Information reporting - the new tax filing that can turn your $300 LLC into a $10,000 fine or jail.

Which of your businesses or side hustles does it apply to and how do you stay legal?

A plain-English 🧵 with links and pictures FinCEN - the gov't agency responsible for this, monitors business activity for financial crimes.

And this is a classic case of 90% of the rules being made for 10% of the people - as a lot of innocent businesses will waste time and money on this.

But let's cover the basics.

You’re an LP in a real estate deal and you were just told your equity is gone and the bank is taking the property.

As bad as it is, the K1 you get next year could make it worse.

Being an LP protects you from creditors, but not from phantom income.

More: When banks take distressed properties over from default:

Cancelled non-guaranteed debt is the “sales price” which will result in a capital gain / loss.

Cancelled guaranteed debt in excess of FMV = “ordinary“ income & property is disposed of = capital loss.

Using a partnership to hold real estate is a lot like role play.

Feels like cheating but it’s all within the rules.

Here’s 5 things you can only do in a partnership with real property: 1) Step-up Basis -

Allow new partners or buy-out other partners units? If the asset has appreciated you can take additional depreciation (bonus eligible!).

Lot of nuance here but it’s a huge tax saving opportunity.

🚨Real Estate Tax Nerd Alert🚨

How a developer can use tax structuring to convert ORDINARY INCOME to Opportunity Zone (OZ) eligible CAPITAL GAINS👇

Buckle up - this will be a fun one 😬 The structuring hack? A Bramblett Transaction.

It takes some foresight in entity set-up, but can save and, with OZs, defer millions of dollars of gains.

Here's the key parts to a Bramblett set-up:

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If I ever wanted to commit fraud, here's a useful thread on how I'd do it, how I could get caught, and how it could be prevented.

Caveat - not financial advice 😶

👇 Where did I learn this?

The first ten years or so of my career, I spent auditing financial statements of private small to medium size businesses in various industries.

A part of this audit process is assessing internal controls - which we did for hundreds of businesses.

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You'll never read your Operating Agreement as closely as US Tax Court will.

They only care about a handful of sections, but they can make or break your case:

1) Income allocation language
2) Deficit restoration obligation
3) Debt allocation and minimum gain
4) Disributions 1) Income allocation language

Does the allocation language comply with either the safe harbor provisions or have substantial economic effect?

Everyone knows real estate comes with huge tax advantages.

But the tax edge goes far beyond bonus depreciation and tax losses. A lot of startups can generate losses quickly too!

So what does make real estate unique from a tax perspective? 👇

7 of the biggest real estate… twitter.com/i/web/status/1… 1) 1031s used-to-could be for non-real property.

Vehicles, equipment, intangibles were all fair game for like kind exchanges until 2017.

Now, the 1031 exchange is reserved for real estate assets only.