Ham Langston & Brezina LLP

C corporation shareholders usually owe tax on gains from selling stock. But qualified small business (QSB) stock sales may qualify for a special gain exclusion. To be eligible for this break, certain requirements must be met.

QSB stock acquired after Sept. 27, 2010, may be eligible for a 100% gain exclusion if it’s held for at least five years. Under recent tax law changes, QSB stock acquired after July 4, 2025, may be eligible for a partial gain exclusion if it’s held for at least three years.

Contact us to learn whether this tax-saving strategy is right for your business. We can help structure your business to unlock the potential tax savings and navigate the complex rules.

Donor-advised funds (DAFs) have become increasingly popular among those who want to simplify their charitable giving while maximizing tax efficiency. A DAF is a charitable investment account typically managed by a financial institution or an independent sponsoring organization. Contributions are generally deductible in the year they’re made, even if the funds are distributed to charities in future years. Assets you contribute to a DAF are removed from your taxable estate. Plus, in your estate plan, you can designate your DAF as a beneficiary to receive assets upon your death, ensuring continued charitable giving in your name. Contact us to discuss how a DAF might fit into your estate plan.

Intellectual property (IP) is foundational to the value of most businesses. To help ensure you actually own your company’s patents, trademarks, copyrights, trade secrets and other IP, work with an attorney to draft a standard invention assignment agreement. Employees and independent contractors should sign it when they’re hired and provide you with a list of excluded inventions (developed on their own or for previous employers). Legal advice is critical, but contact us as well. We can help you address IP ownership issues before you sell your business or before workers leave your employment. We can also help identify financial and tax considerations of IP.

When you change jobs, what should you do with the money in your employer-sponsored retirement plan? You could roll over the balance to a new employer’s plan, but rolling it into an IRA may give you broader investment flexibility. Neither type of rollover is taxable, and both options allow you to continue benefiting from tax-deferred earnings until you take withdrawals. But there’s an often-overlooked situation when a taxable lump-sum distribution may make sense: If the account holds appreciated stock of your former employer, you may achieve better long-term tax results by distributing the company stock to a taxable brokerage account instead of rolling it over. Contact us to learn more.

Today we honor and remember those who have died while serving in the United States Armed Forces.

LLC and LLP owners: Can you deduct your business losses this year? The answer may depend on whether your activity is considered passive according to the IRS’s passive activity loss rules.

Under these rules, you generally can use passive losses only to offset income from other passive activities. If you meet certain “material participation” criteria, however, you may be able to offset LLC or LLP losses against nonpassive income, such as wages, interest, dividends and capital gains — but the rules can be complex, especially for limited partners.

Contact us for guidance on tracking your participation hours, applying the material participation test and maximizing business loss deductions.

In today’s digital world, estate planning goes beyond physical property and financial accounts — it must also address your digital assets. From online financial accounts to social media profiles, cloud storage and cryptocurrency, these assets can hold both financial and sentimental value. Without proper planning, your loved ones may face significant legal and logistical challenges in managing them. One option is to designate a trusted family member or friend as a “digital executor.” His or her role is to carry out your instructions, access accounts and ensure that digital property is handled appropriately. Contact us to learn more about how to address your digital assets in your estate plan.

If you’ve decided to start a business, congratulations! Your first task will be to raise start-up funds if you can’t fund the business yourself. A thoughtful, detailed business plan can help attract lenders and equity investors. Next, separate your personal and business finances and choose an accounting system to record transactions and generate financial statements. Start tax planning early. The same goes for factoring your new business into your estate plan. Finally, consider offering early employees equity rather than big salaries. We can help you make critical financial decisions and support your operations as your business grows.

The U.S. Dept. of the Treasury announced that the IRS plans to modernize Form 990, Return of Organization Exempt from Income Tax. The information form is generally filed by nonprofits. The revised form would require tax-exempt organizations to provide clearer reporting on certain activities. The planned changes are intended to improve transparency to help detect misconduct and hold wrongdoers accountable. The Treasury and the IRS expect to publish proposed regulations and solicit public comment before finalizing any reporting changes. The agencies will consider administrative feasibility and reporting burden as the proposal is developed.

Internal and external audits share the common goals of promoting financial reporting transparency and helping prevent errors and fraud. However, they differ in several important ways, including purpose, scope, process and deliverables. When used together, internal and external audits provide a more complete picture of your organization’s risks, controls and financial results. As your business evolves, so should your audit approach. Periodically reassessing your needs can help ensure you’re getting the right balance of insight, assurance and strategic value. Contact us to learn more.

Growing small businesses may trigger the ACA’s play-or-pay provisions. These rules apply to applicable large employers (ALEs), which are those with 50 or more full-time employees, including full-time equivalents (FTEs).

ALEs must offer full-time employees and their dependents minimum essential coverage that’s affordable and provides certain minimum value. For 2026, the penalties for noncompliance generally are 1) $3,340 per full-time employee, excluding the first 30, for not offering coverage, and 2) $5,010 per full-time employee who receives a premium tax credit, for offering coverage that doesn’t meet the affordability and minimum value requirements.

Contact us to discuss your obligations.