1. Tech Stock & Equity Compensation FAQs
Why does E*TRADE, Schwab, or Fidelity report a $0 cost basis on my 1099-B?
IRS regulations prohibit brokerages from automatically including W-2 compensation income in the cost basis reported on Form 1099-B Box 1e. To prevent double taxation on money already taxed on your W-2, we apply precise adjustments on Form 8949 through our specialized Tech Equity & Stock Compensation Services using your brokerage’s supplementary tax statements.
Why do I owe a huge tax bill when my RSUs vest if tax was already withheld?
Brokerages withhold federal tax on vested RSUs at a flat statutory rate of 22%. However, high-earning tech employees in Silicon Valley fall into the 35% to 37% federal brackets and 12.3%+ California brackets, creating an annual tax deficit of 13%+ on every vesting event unless quarterly estimated tax payments or W-4 adjustments are made.
What is the ISO AMT crossover point and how does it save me money?
Exercising Incentive Stock Options (ISOs) creates “phantom income” subject to the Alternative Minimum Tax (AMT). Your safe AMT crossover point is the exact dollar amount of ISO spread you can exercise each tax year where your Tentative Minimum Tax equals your regular tax, allowing you to acquire shares with $0 out-of-pocket cash AMT tax bills. For a detailed walkthrough on Incentive Stock Options and Form 6251 calculations, view our ISO AMT Tax Planning guide.
2. Rental Real Estate & Property Investor FAQs
How does a 1031 exchange defer taxes on rental property sales?
Under IRC Section 1031, real estate investors can sell an appreciated rental or commercial property and reinvest 100% of the net proceeds into a new “like-kind” investment property. Through our dedicated Real Estate Tax & 1031 Exchange Planning, we help clients defer 100% of federal capital gains tax, Net Investment Income Tax (NIIT), depreciation recapture, and California state income tax.
What are the strict timeline rules for executing a 1031 exchange?
You have exactly 45 calendar days from the sale closing date of your original property to formally identify potential replacement properties in writing. You must close title on the new replacement property within 180 calendar days. Additionally, proceeds must be held by a Qualified Intermediary (QI)—touching funds directly invalidates the tax deferral.
What expenses can I deduct on Schedule E for my rental properties?
Deductible Schedule E rental expenses include property management fees, mortgage interest, property taxes, maintenance, repairs, HOA dues, landlord insurance, and accelerated depreciation. We also evaluate cost segregation studies to front-load depreciation write-offs and offset high W-2 or business income.
3. Small Business & S-Corporation FAQs
How does California Assembly Bill 150 (PTE Tax) save my business money?
AB 150 allows qualifying S-Corporations, Partnerships, and LLCs to pay a 9.3% elective state tax directly at the entity level. As part of our core Small Business Tax & S-Corp Services, this strategy converts non-deductible personal state tax into a fully deductible federal business expense, bypassing the federal $10,000 personal SALT cap.
How do I determine a “Reasonable Salary” for my S-Corporation?
The IRS requires S-Corp shareholder-employees to draw a defensible W-2 salary before taking tax-exempt distributions. We calculate a defensible salary split using Bureau of Labor Statistics (BLS) data, industry standards, and business profitability to minimize FICA payroll taxes while protecting you from FTB and IRS audits.
When should my LLC convert to an S-Corporation?
Converting an LLC to an S-Corp generally makes financial sense when your annual net business profit exceeds $80,000 to $100,000 per owner. At this profit threshold, the self-employment tax savings on shareholder distributions easily outweigh the administrative costs of running quarterly W-2 payroll and state filings.
4. Working With Moontree Tax Service
How do I submit my tax documents to Moontree Tax Service?
We provide a 100% secure, encrypted digital client portal. You can upload W-2s, 1099-Bs, real estate closing disclosures, Schedule K-1s, and QuickBooks reports directly from your phone or desktop, track tax filing milestones, and electronically sign returns remotely.
Do you handle personal, real estate, and business tax returns together?
Yes. We specialize in integrated wealth returns. We coordinate pass-through business returns (Form 1120-S / Form 1065) and Schedule E rental property portfolios directly alongside your personal individual return (Form 1040 & California Form 540) to ensure zero missed deductions across your entire financial profile.
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