What Is a “Stock Option”?
06/01/2026
What Is a Stock Option? A stock option is a contract that gives you the right to buy shares of a company’s stock at a set price, called the “strike price,” within a specific period. In the world of taxes, these are most commonly given to employees as a form of compensation, allowing them to
What Is “Startup cost amortization”?
06/01/2026
What Is Startup Cost Amortization? Startup cost amortization is the tax process of deducting the expenses you incurred while preparing to open a new business. Instead of writing off these costs all at once, the IRS generally requires you to spread the deduction over a set period of 180 months (15 years) after your business
What Is “Special depreciation allowance”?
06/01/2026
What Is Special Depreciation Allowance? The special depreciation allowance, commonly known as bonus depreciation, is a tax incentive that allows businesses to immediately deduct a large percentage of the purchase price of eligible assets. Instead of spreading the cost of an item over several years, this rule lets you take a significant tax break in
What Is “Short-term rental”?
06/01/2026
A short-term rental (STR) is a property—such as a house, condo, or even a spare room—that is rented out to guests for brief periods, typically through platforms like Airbnb or Vrbo. For tax purposes, the IRS often classifies a rental as “short-term” if the average stay of a guest is seven days or less. Meaning
What Is “Section 1033 Exchange”?
06/01/2026
What Is a Section 1033 Exchange? A Section 1033 exchange is a tax provision that allows you to defer paying capital gains taxes when your property is “involuntarily converted.” This typically happens when property is destroyed in a natural disaster, stolen, or seized by the government through eminent domain. Instead of paying tax on the
What Is “Section 1031 Exchange”?
06/01/2026
What Is a Section 1031 Exchange? A Section 1031 exchange, named after its spot in the Internal Revenue Code, is a strategy that allows you to swap one investment property for another without paying capital gains taxes at the time of the sale. It essentially allows you to “roll” the profit from a sale into
What Is “Section 475 Election”?
06/01/2026
What Is a Section 475 Election? A Section 475 election is a special tax choice made by active traders to use the “mark-to-market” method of accounting for their securities or commodities. By making this election, traders treat their gains and losses as ordinary income rather than capital gains, which removes the standard $3,000 annual limit
What Is “Section 179 Deduction”?
06/01/2026
What Is Section 179 Deduction? The Section 179 deduction is a tax rule that allows businesses to deduct the full purchase price of qualifying equipment, vehicles, and software purchased or financed during the tax year. Instead of writing off the cost slowly over several years through traditional depreciation, Section 179 lets you take the entire
What Is “Section 197 intangible”?
06/01/2026
What Is a Section 197 Intangible? A Section 197 intangible is a type of non-physical business asset, such as a trademark, patent, or customer list, that you acquire when buying an existing business. Under IRS rules, these “invisible” assets cannot be deducted all at once; instead, their cost must be spread out and deducted over
What Is “Section 83(b) Election”?
06/01/2026
What Is a Section 83(b) Election? A Section 83(b) election is a letter you send to the IRS within 30 days of receiving restricted stock or equity that hasn’t vested yet. It tells the IRS you want to pay all your ordinary income taxes on the shares right now based on their current value, instead