Ep. 115 | Top 5 Gifts From The IRS
Download MP3In this festive edition of the Teaching Tax Flow podcast, episode 115 brings listeners intriguing insights into what can be considered 'gifts' from the IRS. Chris Picciurro and John Tripolsky delve into the intricacies of tax benefits that many taxpayers may overlook. These gifts, appropriate for taxpayers from various income brackets, serve as a crucial reminder of the opportunities within tax law to ease financial burdens, especially during the holiday season.
Throughout the episode, Chris highlights five significant tax code sections, including the 1031 Exchange, Health Savings Accounts, and the Augusta Rule, among others. Each section promises a myriad of advantages, urging the audience to capitalize on these provisions to manage capital gains, medical costs, and even property sales more effectively. With an engaging and informative tone, this episode is a treasure trove for anyone looking to deepen their understanding of beneficial yet lesser-known elements of the tax code.
Key Takeaways:
- 1031 Exchange: Enables taxpayers to defer capital gains taxes on real estate by reinvesting the proceeds into "like-kind" property, thereby enhancing investment potential.
- Health Savings Accounts (HSA): This triple tax-advantage tool offers deductions, tax-free growth, and tax-free withdrawals for qualified medical expenses.
- Section 121 Exclusion: Allows homeowners to exclude up to $500,000 in capital gains from the sale of a primary residence if specific criteria are met.
- Augusta Rule: Homeowners can rent their primary residence for up to 14 days tax-free, opening opportunities for additional income during high-demand events.
- Step-Up in Basis: Offers substantial tax savings by resetting the cost basis of an inherited asset to its fair market value at the time of the original owner’s death.
Notable Quotes:
- “You get a deduction for putting the money in. The money grows tax-deferred, and it gets taken out in a qualified distribution, tax-free.” – Chris Picciurro
- “The IRS doesn’t give us too many gifts, but I wanted to identify my five favorite gifts that the IRS gives us.” – Chris Picciurro
- “This could be a great opportunity for you if you're in a situation where you're selling property and you don't need the cash.” – Chris Picciurro
- “Remember, you’ve got to identify the replacement property within 45 days, and you’ve got to close within 180.” – Chris Picciurro
- “If you inherit an asset, your cost basis in that asset is the fair market value of the asset the day you inherited it.” – Chris Picciurro
Ep. 73 | Understanding 'Step-Up in Basis' for Minimizing Taxes
https://share.transistor.fm/s/d62de4b2
Ep. 85 | 1031 Exchange Update
https://share.transistor.fm/s/4dcdb380
Episode Sponsor:
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- (00:00) - Top Five IRS Gifts You Can Benefit From
- (04:39) - Understanding 1031 Exchanges and Health Savings Accounts
- (10:16) - Understanding the Section 121 Exclusion for Capital Gains
- (17:16) - Understanding the Augusta Rule for Tax-Free Rental Income
- (22:22) - Understanding Step-Up in Basis and Inherited Assets
- (27:19) - Tax Tips and Podcast Highlights from Teaching Tax Law
