Watch live or the recording afterwards: https://www.youtube.com/watch?v=y0xMwMJdCkk

One of the hardest skills to train is to recognize when things are wrong. We just had a case with a client where a person had a big sale of stock and according to the 1099 the basis was extremely low. Now if you were to look at the actual document, it would just be a straightforward calculation, and there will be a huge Gate and a lot of taxes that are owed. The whole thing made my Spidey senses tingle. The stock has the same name as the company that the client was working for. There are many ways to acquire a company stock. The most common ways are as RSU’s or employee stock purchase plans. Both of those methods have costs associated with them. Some brokerages do a really bad job of tracking RSU stock because when an employee gets the stock awards as part of their payroll compensation, the shares are transferred into the employees brokerage account and not purchased inside the brokerage account. So the broker has no idea what the cost basis for those transactions really are. Some brokers will report a supplemental information page about basis adjustments and so don’t. In this case, the broker reported that there were covered transactions meaning that they are reporting the basis to the IRS, but it still looked really wrong to my eyes. So we reached out to the client to confirm whether or not this was actually correct. As it turns out my Spidey senses were correct and they did have call spaces and they sent over a sheet with all of their purchases and instead of having a $200,000 gain they in fact had a loss. It just makes me wonder in the genic AI age that we are heading into, will these kinds of errors be caught?

I've run into two client situations in the last couple of days that hit Section 461 excess business loss limitations. What this limit does, and which was made permanent by the one big beautiful bill, Act of 2025, is that if you have business losses and non-business income, there is a limit. I'm just going to round $300,000 for single filers and $500,000 for joint filers in terms of losses that you can take against the non-business income. If you have a big income event, let's say your W-2 is $1,000,000 and you have a $500,000 business loss, if you're joint then your net income is going to be the $500,000. You're going to pay taxes based on that. If you are a single filer, you're only going to get $300,000 of deductions. The remaining $200,000 will roll over into the future years as a net operating loss carry forward and you're going to pay taxes on $200,000 that you don't have. The character of income and losses does matter and this is yet another example of that.

https://www.youtube.com/watch?v=ClXdAooQq_Y If anyone wants to hop on: https://riverside.com/studio/neal-mcspaddens-studio?t=cb556e679c1895f4dea4

In what is one of the most important strategies when it comes to tax optimization, I've put together the module on S-Corp optimization. In general the approaches to tax planning go through a couple of different stages: 1. Entity selection. We want to make sure that the right income is in the right types of vehicles in the first place. 2. Deduction maximization. We want to prevent as much net income as possible from occurring in the first place. 3. Optimizing the remainder. That's what this module is about. It's after we're already in an S-Corp, which is going to be the right choice for a lot of people, and after we've applied all of our deduction strategies, like we covered in the Trump accounts, the disaster plans, the accountable plans, and the summit strategy sessions. All those are different deduction strategies and they are there to reduce the net income that is subject to optimization. First and then we get into wages, profits, retirement contributions, and QBI optimizations, and that's what the S-Corp optimization module goes over. Check it out: https://www.skool.com/tax-strategy-network/classroom/a7125fb6?md=fca3ddf161f04745aff90359fc2fe300