Tax Allocation - Business Asset Transfer
"And my CPA is saying no way, it will cost me many thousands in taxes   and doesn't make any sense. I'd think so too. It looks like it converts from capitol gains at 14% to something else at about 35% Can be, if your gain under the Sec.1231 rules is classified as depreciation recapture. But, perhaps the buyers will be saving this way? Not your problem even if they were, which they aren't. I would not do something my CPA says ""no-way"" about. I sometimes prefer not doing some things my CPA says ""it may fly"" because I'm defensive when it comes to taxes, but if your CPA is not willing to sign something off - don't do it. Ever."
I fell into a similar situation as you.  I spent a lot of time trying to understand this, and the instructions leave a lot to be desired.  What follows is my ultimate decisions, and my rationale.  My taxes have already been filed, so I will let you know if I get audited! 1.)  So in cases like this I try to understand the intent.  In this case section III is trying to understand if pre-tax money was added to your HSA that you were not entitled too.  As you describe, this does not apply to you.  I would think you should be ok not including section III (I didn't.) HOWEVER, I am not a tax-lawyer or even a lawyer!   2.) I do not believe these are medical distributions From the 8889 doc....   Qualified HSA distribution.   This is a distribution from a health flexible spending arrangement (FSA) or health reimbursement arrangement (HRA) that is contributed by your employer directly to your HSA. This is a one-time distribution from any of these arrangements. The distribution is treated as a rollover contribution to the HSA and is subject to the testing period rules shown below. See Pub. 969 for more information.   So I don't think you have anything to report here.   3.) As you have no excess this line can just be zero.   4.) From the 8889 doc This is a distribution from your traditional IRA or Roth IRA to your HSA in a direct trustee-to-trustee transfer.   Again, I don't think this applies to you so you can enter zero. 5.) This one is the easiest.  You can always get this money tax free if you use it for qualified medical expenses. From the 8889   Distributions from an HSA used exclusively to pay qualified medical expenses of the account beneficiary, spouse, or dependents are excludable from gross income. (See the line 15 instructions for information on medical expenses of dependents not claimed on your return.) You can receive distributions from an HSA even if you are not currently eligible to have contributions made to the HSA. However, any part of a distribution not used to pay qualified medical expenses is includible in gross income and is subject to an additional 20% tax unless an exception applies.   I hope this helps! "As cryptocurrencies are rather new compared to most assets, there hasn't been a lot of specific guidance for a lot of situation, but in 2014 the IRS announced that it published guidance in Notice 2014-21. I'm not aware of further guidance that has been published beyond that, though it wouldn't surprise me if treatments changed over time. In that notice, the answer to the first question describes the general treatment: For federal tax purposes, virtual currency is treated as property. General tax principles applicable to property transactions apply to transactions using virtual currency. Your specific questions (about what constitutes a ""business"", and when you're considered to be ""selling"" the cryptoproperty) are likely to be considered on a case by case basis by the IRS. As the amounts involved here are so small (relatively speaking), my recommendation would be to read through what the IRS has published carefully, make reasonable assumptions about what scenarios that are described are closest to what you're doing, and document doing so clearly as part of your tax preparations. And when in doubt, erring on the side of whichever option incurs more tax is unlikely to be objected to by them. Of course, I'm not a lawyer or tax advisor, I'm a stranger on the Internet, so for ""real"" advice you should contact somebody qualified. I doubt you'd be faulted too much for not doing so given the amounts involved. You could also attempt contacting a local IRS office or calling them with your specific questions, and they may be able to provide more specific guidance tailored to you, though doing so may not save you from an auditor deciding something differently if they were to examine your return later. There are also phone numbers to contact specific people listed at the end of Notice 2014-21; you could try calling them as well." No, it's not all long-term capital gain.  Depending on the facts of your situation, it will be either ordinary income or partially short-term capital gain.  You should consider consulting a tax lawyer if you have this issue. This is sort of a weird little corner of the tax law.  IRC §§1221-1223 don't go into it, nor do the attendant Regs.  It also somewhat stumped the people on TaxAlmanac years ago (they mostly punted and just declared it self-employment income, avoiding the holding period issue).  But I did manage to find it in BNA Portfolio 562, buried in there.  That cited to a court case Comm'r v. Williams, 256 F.2d 152 (5th Cir. 1958) and to Revenue Ruling 75-524 (and to another Rev. Rul.).  Rev Rul 75-524 cites Fred Draper, 32 T.C. 545 (1959) for the proposition that assets are acquired progressively as they are built.  Note also that land and improvements on it are treated as separate assets for purposes of depreciation (Pub 946). So between Williams (which says something similar but about the shipbuilding industry) and 75-524, as well as some related rulings and cases, you may be looking at an analysis of how long your property has been built and how built it was.  You may be able to apportion some of the building as long-term and some as short-term.  Whether the apportionment should be as to cost expended before 1 year or value created before 1 year is explicitly left open in Williams.  It may be simpler to account for costs, since you'll have expenditure records with dates. However, if this is properly ordinary income because this is really business inventory and not merely investment property, then you have fully ordinary income and holding period is irrelevant.  Your quick turnaround sale tends to suggest this may have been done as a business, not as an investment. A proper advisor with access to these materials could help you formulate a tax strategy and return position.  This may be complex and law-driven enough that you'd need a tax lawyer rather than a CPA or preparer.  They can sort through the precedent and if you have the money may even provide a formal tax opinion.  Experienced real estate lawyers may be able to help, if you screen them appropriately (i.e. those who help prepare real estate tax returns or otherwise have strong tax crossover knowledge). You are still selling one investment and buying another - the fact that they are managed by the same company should be irrelevant.  So yes, it would get the same tax treatment as if they were managed by different companies. This is great! I'm not a CPA, but work in finance. As such, my course/professional work is focused more on the economic and profitability aspects of transfer pricing. As you might imagine, it tended to analyze corporate strategy decisions under various cost allocation models, which you thoroughly discuss.  I would agree with the statement that it is based on the matching principle but would like to add that transfer pricing is interesting as it falls under several fields: accounting, finance, and economics. Fundamentally it is based on the matching principal, but it's real world applications are based on all three (it's often used to determine divisional and even individual sales peoples profitability; as is the case with bank related funds transfer pricing on stuff like time deposits). In this case, the correct accounting principal allows you to, when done properly, better understand the economics, strategy, and operations of an organization.   In effect, when done correctly, it provides transparency for strategic decision making to executives. As I said, since my coursework tended to focus more on that aspect, I definitely have a natural tendency towards it.  This is an amazing explanation (esp. about interest on M&amp;A bridge loans, I get that) of the more detailed stuff! Truthfully, I'm not as familiar with it and was just trying to show more of the conceptual than nitty-gritty.   Thanks for the reply! "Is this legal? Why not? But you might have trouble deducting losses on your taxes, especially if you sell to someone related to you in some way (which is indeed what you're doing). See the added portion below regarding dealing with ""related person"" (which a sibling is). The state of Maryland has a transfer/recordation tax of 1.5% for each, the buyer and seller. Would this be computed on the appraised or sale value? You should check with the State. In California property taxes are assessed based on sale value, but if the sale value is bogus the assessors have the right to recalculate. Since you're selling to family, the assessors will likely to intervene and set a more close to ""fair market"" value on the transaction, but again - check the local law. Will this pose any problem if the buyer needs financing? Likely, banks will be suspicious.Since you're giving a discount to your sibling, it will likely not cause a problem for financing. If it was an unrelated person getting such a discount, it would likely to have raised some questions. Would I be able to deduct a capital loss on my tax return? As I said - it may be a problem. If the transaction is between related people - likely not. Otherwise - not sure. Check with a professional tax adviser (EA or CPA licensed in Maryland). You mentioned in the comment that the buyer is a sibling. IRS Publication 544 has a list of what is considered ""related person"", and that includes siblings. So the short answer is NO, you will not be able to deduct the loss. The tax treatment is not trivial in this case, and I suggest to have a professional tax adviser guide you on how to proceed. Here's the definition of ""related person"" from the IRS pub. 544: Members of a family, including only brothers, sisters, half-brothers, half-sisters, spouse, ancestors (parents, grandparents,   etc.), and lineal descendants (children, grandchildren, etc.). An individual and a corporation if the individual directly or indirectly owns more than 50% in value of the outstanding stock of the   corporation. Two corporations that are members of the same controlled group as defined in section 267(f) of the Internal Revenue Code. A trust fiduciary and a corporation if the trust or the grantor of the trust directly or indirectly owns more than 50% in value of the   outstanding stock of the corporation. A grantor and fiduciary, and the fiduciary and beneficiary, of any trust. Fiduciaries of two different trusts, and the fiduciary and beneficiary of two different trusts, if the same person is the grantor   of both trusts. A tax-exempt educational or charitable organization and a person who directly or indirectly controls the organization, or a member of   that person's family. A corporation and a partnership if the same persons own more than 50% in value of the outstanding stock of the corporation and more than   50% of the capital interest or profits interest in the partnership. Two S corporations if the same persons own more than 50% in value of the outstanding stock of each corporation. Two corporations, one of which is an S corporation, if the same persons own more than 50% in value of the outstanding stock of each   corporation. An executor and a beneficiary of an estate unless the sale or exchange is in satisfaction of a pecuniary bequest. Two partnerships if the same persons directly or indirectly own more than 50% of the capital interests or profits interests in both   partnerships. A person and a partnership if the person directly or indirectly owns more than 50% of the capital interest or profits interest in the   partnership." Typically tax treaties will cover double taxation (taxes paid in one jurisdiction are deducted in the other jurisdiction so there is no double tax). You'll need an accountant and attorney with experience in international business setups to confirm and determine which jurisdiction gets first priority of tax payment.  In short, this is the wrong place to get a good answer. Talk to (and pay for) professionals to get you properly set up. You're last paragraph sums up what I mean exactly. Businesses will continue to make investments that try think make sense. Taxes have an pact on what makes sense. This combo is what we should be discussing. Thanks for adding to the conversation. Ok, so here's the strategy I decided to go with in the meantime: Allocate E1 to A_corp and E3 to A_ira. Here are my considerations which I assume at this stage to be right: "Offset against taxable gains means that the amount - $25 million in this case - can be used to reduce another sum that the company would otherwise have to pay tax on. Suppose the company had made a profit of $100 million on some other investments. At some point, they are likely to have to pay corporation tax on that amount before being able to distribute it as a cash dividend to shareholders. However if they can offset the $25 million, then they will only have to pay tax on $75 million. This is quite normal as you usually only pay tax on the aggregate of your gains and losses. If corporation tax is about 32% that would explain the claimed saving of approximately $8 million. It sounds like the Plaintiffs want the stock to be sold on the market to get that tax saving. Presumably they believe that distributing it directly would not have the same effect because of the way the tax rules work. I don't know if the Plaintiffs are right or not, but if they are the difference would probably come about due to the stock being treated as a ""realized loss"" in the case where they sell it but not in the case where they distribute it. It's also possible - though this is all very speculative - that if the loss isn't realised when they distribute it directly, then the ""cost basis"" of the shareholders would be the price the company originally paid for the stock, rather than the value at the time they receive it. That in turn could mean a tax advantage for the shareholders." Regarding the tax implications half of your question ... There seem to be a lot of articles that say there's not yet any established law concerning the tax treatment of crowdsourced funds. Since your objective is gift-giving rather than business purposes, it would seem that the gift tax rules would apply, and gift taxes are charged to the donor not the donee.  (But I am not a tax attorney.) "You uncle is liable to pay ""Capital-Gains"" tax. Essentially the sale price less of cost would be treated as gains. The gains are taxed at 10% without indexation and 20% with Indexation.  The capital gains tax can be avoided if your uncle invests the gains into specified ""Infrastructure bonds"" or buys another property within a period of 3 years. The funds need to be kept in a separate ""Capital Gains"" account and not a regular savings account till you buy another property within 3 years." Everything here is yours and can be rolled into your new plan or IRA. You can generally move your 403(b) assets into your traditional IRA or into your new employer's plans, assuming your new employer's plan allowing incoming roll overs.  You can probably roll your pension out as well. Actually, the right person to ask about this is the company with whom you have your IRA.  The easiest and best way to get assets from one tax-sheltered account to another is by contacting the company you want to roll INTO and having them take care of everything for you. "Disclaimer: I am neither a lawyer nor a tax-expert This page on the HMRC site lists several pages that appear to be relevant, starting with CG78401 - Foreign currency: delayed remittances and on to CG78408 - Foreign currency: example which seems pertinent to your case [paraphrased]: A property bought in 1983 is sold for a [taxable] gain in one tax-year (1986/87) but the proceeds cannot be released/remitted to the UK until later (1991/92), by which time currency fluctuations have created a second [taxable] gain. The size of the first gain (selling the property) is determined by the exchange rate in effect at the time of the sale but because of local restrictions, this can be deferred.  The size of the second gain (currency movement) is determined by the change in exchange-rate between the time of the sale and the time of conversion. In your case, the first ""gain"" was actually a loss, so I believe you should be able to use this to offset any tax due second gain.  This page states that losses can be claimed up to four years after the end of the tax-year in which they were incurred, so you are probably still OK. (The example makes application under TCGA92/S279 to defer the gain made on the original sale [because of the inability to transfer funds], but as I understand it, this is primarily to avoid a tax liability in that year.  Since you made a loss on the sale, there wouldn't have been a tax liability, so there would be no need to defer it)." By the time you've earned the income, it is basically too late to decide who it belongs to[*].  If the assets belong to one person, income from those assets must be declared by that person.  If you earn interest on a shared account, you must declare 50% of it each.  And so on.  (If you're tempted to fudge it bear in mind that banks report to the ATO about interest paid and account ownership.) I don't think Family Tax Benefits are taxable income, but I don't get them myself so I don't know. What you can do is think about how you want things arranged going forward.  That means making a prediction about who will have the higher income; it sounds like that's going to be you, and she will be working at most part time. Therefore she should hold anything that generates taxable income (bank accounts etc) and you should hold anything that generates losses (negatively-geared investments, charitable deductions, etc).  You could look into making a voluntary super contribution into her account which (imbw) will be deductible for you and get it into a lower-tax area. If you're earning on the order of $30k per annum in interest you're looking at paying $11500 tax on it if it's in your name vs $5k if it's in hers, so it's not a moot point. $420k in cash is arguably quite a lot, and perhaps you want to look at putting some of it into a low-cost balanced managed fund, such as those from Vanguard.  That will be somewhat more tax effective, though less stable.  If you're looking to buy a new house within a few years perhaps cash is the best place for it. [*] One kind-of exception is that if you have a family trust, the trust can decide at the end of the year to whom it will distribute its income.  However, you still have to decide to establish a trust in advance.