Tax Considerations: Rapid Fire

What this video covers

• Why a client "in the 32% bracket" does not pay 32% on all income, and how effective rate differs from marginal rate
• How the AMT works: regular tax versus AMT, pay the greater, and why incentive stock option (ISO) exercise spread is the key preference item
• Long-term versus short-term capital gains treatment, the $3,000 annual ordinary-income offset for net capital losses, and indefinite carryforward
• The wash sale rule timeline: 30 days before, day of, and 30 days after the sale, creating a 61-day window of danger
• Why C-corporations face double taxation (flat 21% entity level plus shareholder dividend tax) while S-corporations, partnerships, and default LLCs are passthrough entities with no federal income tax at the entity level
• Why MLP income is taxable to partners even with zero cash distribution (phantom income on Schedule K-1), and how REIT distributions differ as ordinary income reported on Form 1099
• Trust taxation basics: grantor trusts taxed to the grantor, simple trusts required to distribute all income annually, complex trusts allowed to accumulate, and why trustees distribute income given the top 37% rate hits at just over $16,000
• The unified estate-and-gift exemption ($15 million for 2026), annual exclusion ($19,000 per recipient), portability of deceased spouse unused exemption, and why portability requires filing Form 706