Category Archives: Investments

Establishing and Opening your myRA

You may establish a myRA if you receive Compensation and your AGI is not in excess of the amounts described below and have either a Social Security Number or Individual Tax Identification Number. To establish a myRA, you must complete and sign all applicable documents. An MyRA can be a great tool to save for… Read More »

Split-dollar life insurance arrangements

Split-dollar life insurance has become a common executive benefit. Beginning in 2001, in a series of notices and regs, IRS significantly changed its position on how split-dollar life insurance should be taxed. The tax advantages of so-called “equity” arrangements have been significantly curtailed. The impact of these rules is less significant if you have a… Read More »

Buying and selling mutual fund shares tax consequences

Mutual funds can end up being tax inefficient investments for many reasons. Investors may be making taxable transactions when they do not know it.   Writing check against mutual fund investments. One way this could happen is if your mutual fund allows you to write checks against your investment in the fund. Every time you… Read More »

Accruing Interest on U.S. Savings Bonds

Series E and EE U.S. savings bonds are zero coupon investments issued at a discount. The interest is paid at maturity when the coupons are redeemed for their full face value. For each year prior to maturity, the bond’s redemption value increases. This annual increase in value represents the interest accrual for each year. Series… Read More »

Taxation of traders and how do day traders pay tax

Unlike investors, securities traders are deemed to be conducting a trade or business, so their trading expenses are deductible as ordinary and necessary business expenses under IRC Sec.î 162. Thus, the difference brings along many differences of how a day trader will pay tax on their trading gains and be able to deduct trading losses.… Read More »

IRS Taxation of Nonqualified Stock Options (NQSOs)

What are Nonqualified Stock Options (NQSOs)? A Nonqualified Stock Option “NQSO” is any option that is not a qualified stock option. Unlike Incentive Stock Options (ISO) holders who meet the required holding period, the recipient of an NQSO is not allowed either to defer income recognition on the bargain element until the stock is sold or to… Read More »

What is IRS Passive Income?

Two sources of income fall into the “passive” category. The first is income received from rental activities and the second is income originating from a business in which you have ownership but do not “materially” participate. Regardless of whether income is deemed to be passive or non-passive, it must always be reported somewhere on the return,… Read More »

IRS Final Regulations on Employee Stock Options

The IRS has finalized, with modifications, proposed regulations providing guidance on stock options granted under an employee stock purchase plan. The IRS has also issued final regulations relating to corporate employers’ return and notification requirements for employee stock options.   ISO Final Regulations Under final regulations, an ISO plan must meet certain requirements to qualify… Read More »