Proseer

09/25/2026

Here's a detail that trips up a lot of real estate owners who set up an S-Corp without fully thinking it through: shareholders only get tax basis for capital they personally put in or loans they personally make. The company's own mortgage debt doesn't count.

In a partnership structure, it's the opposite. Each partner gets basis for their share of the entity's debt, even debt they haven't personally guaranteed. That basis is often what lets an owner actually use the depreciation losses real estate generates, which is the whole tax benefit people go into these deals expecting.

The general framework that tends to hold up:

One property, one owner: single-member LLC.
One property, multiple owners: LLC taxed as a partnership.
Active real estate operations like management or development: a separate operating entity, sometimes an S-Corp, layered next to the property-owning LLC.

Worth getting right at formation rather than restructuring later.

Full article on the blog:

Generic entity advice doesn't apply to real estate. Why LLCs and partnerships almost always win, and why S-Corps create tax problems that often can't be undone.

09/23/2026

S-Corp elections get pitched constantly as a self-employment tax saver. That pitch makes sense for a lot of businesses. It does not make sense for real estate ownership, and here's why.

Rental income generally isn't subject to self-employment tax in the first place, so the usual S-Corp advantage doesn't even apply. Meanwhile you pick up real problems: no basis for the property's mortgage debt, which limits your ability to deduct depreciation losses. Distributions of appreciated property trigger taxable gain, unlike in a partnership where the same move is generally tax-free. And converting back out of an S-Corp later is hard, often triggering the exact gain you were trying to avoid.

There is one place S-Corps fit well in a real estate business: the operating side, like a property management or construction company sitting next to the LLC that owns the real estate. Just not the ownership entity itself.

Full explanation here:

Generic entity advice doesn't apply to real estate. Why LLCs and partnerships almost always win, and why S-Corps create tax problems that often can't be undone.

09/21/2026

A lot of real estate investors get entity advice that's really written for operating businesses, and it doesn't hold up.

Two structures actually work for owning real estate: a single-member LLC if you're the only owner, or a multi-member LLC taxed as a partnership if you've got multiple investors. Both preserve the things that matter most in real estate: depreciation, debt basis, and flexibility in how cash and losses get allocated.

S-Corps and C-Corps create the opposite. No basis for the entity's mortgage debt, no step-up in basis at death on the underlying property, and no special allocations for things like waterfalls or preferred returns. Once real estate is inside one of those structures, getting it back out is often a taxable event, not a simple fix.

If you're setting up a new deal or you inherited a structure you're not sure about, it's worth checking before it becomes expensive to unwind.

Read the full breakdown on the blog:

Generic entity advice doesn't apply to real estate. Why LLCs and partnerships almost always win, and why S-Corps create tax problems that often can't be undone.

09/19/2026

Employees usually see FSAs and HSAs as their tax break. They're the employer's too — and most owners are leaving money on the table by not thinking about it that way.

Salary reductions into a Health FSA or Dependent Care FSA are excluded from wages for F**A and FUTA. That means you're not paying the employer's share of payroll tax on those dollars either.

Rough example: 15 employees, $2,000 average Health FSA election. That's $30,000 that never becomes taxable wages — and roughly $2,295 of employer payroll tax you don't owe. Add dependent care elections and it adds up fast.

There's a similar decision buried in how you fund HSAs for employees. Contribute outside the cafeteria plan, and you're bound by strict comparability rules — get it wrong and the penalty is 35% of your total HSA contributions. Run it through the cafeteria plan instead, and you're under much more flexible nondiscrimination rules, plus you get the F**A savings.

It's a documentation choice that costs nothing and can save a lot. Most owners just don't know to make it.

Read More at our blog:

Health FSAs, HSAs, and dependent care FSAs save employer payroll tax — but only C corp owners can participate in the FSAs. The HSA is the one every owner can use. 2026 limits and new rules inside.

09/17/2026

A few real updates for anyone thinking about benefits for 2027:

→ The Dependent Care FSA limit jumped to $7,500 in 2026 — the first increase since 1986, and it came from legislation, not an inflation adjustment. That means it won't rise again automatically. If your plan document still says $5,000, it needs a formal amendment by December 31, 2026 to reflect the new limit.

→ Three HSA eligibility changes now in effect: direct primary care memberships no longer disqualify you (as long as fees stay under set monthly caps), bronze and catastrophic marketplace plans now count as HDHPs, and pre-deductible telehealth coverage is permanent rather than a recurring temporary extension.

→ The IRS just proposed the first comprehensive regulations on Dependent Care FSA nondiscrimination testing in 45 years. If finalized, they could make it meaningfully easier for small, closely held businesses to pass testing that currently trips up owners with daycare-age kids.

None of this is set-it-and-forget-it. Worth a real conversation before your next enrollment cycle.

09/15/2026

Most business owners think a Section 125 cafeteria plan is a benefit they get to use too. For a lot of S corp owners, partners, and sole proprietors, it isn't.

Here's the rule that catches people off guard: if you own more than 2% of an S corp, the tax code treats you like a partner, not an employee — which means you're excluded from participating in your own Health FSA or Dependent Care FSA. Same goes for partners and sole proprietors. And the attribution rules go further: if your spouse, kids, or parents own stock too, their ownership can count toward your threshold — even if they're on payroll.

The one account every owner can use, regardless of entity type? The HSA. It's not run through a cafeteria plan the same way, so there's no employee-only restriction.

Bottom line for most of our clients: the FSAs are things you offer your team. The HSA is the thing you actually use yourself.

If you're not sure where you stand, it's worth checking before open enrollment.

08/07/2026

A healthy bank balance doesn't always tell the full story of a business's financial health.

The source of your cash matters just as much as the amount. Operating cash generated from day-to-day business activities has a very different impact than borrowed funds, investor capital, or one-time financing.

Looking beyond your bank account and understanding both your balance sheet and cash flow statement provides a more accurate picture of financial stability. Knowing where your cash comes from helps business owners make better decisions, manage risk, and plan for sustainable growth.

Watch Video Here:

This video explains law firm valuation and offers actionable steps ...

08/06/2026

The value of a law firm extends far beyond annual revenue. A firm's long-term worth is shaped by the strength of its operations, client relationships, financial performance, and the systems that allow it to thrive beyond any one attorney.

Understanding how law firms are valued is an important part of strategic planning. Key factors such as recurring revenue, profitability, operational efficiency, and the distinction between personal goodwill and practice goodwill all influence whether a firm's value can be transferred in a sale or succession.

Whether you're planning for future growth, bringing on partners, or preparing for an eventual transition, knowing the drivers behind law firm valuation can help you make stronger business decisions today.

This video explains law firm valuation and offers actionable steps ...

08/06/2026

Hiring a CFO is a major investment, but it's not always the right next step for a growing business.

As companies scale, their financial needs evolve. In many cases, a controller or VP of Finance can provide the reporting, financial oversight, and operational support a business needs before it reaches the stage where a CFO delivers the greatest value.

Understanding the difference between these roles can help business owners build a finance team that matches their current needs, avoids unnecessary overhead, and supports sustainable growth. The right hire isn't always the most senior one. It's the one that fits the complexity and goals of the business today.

08/06/2026

Cost segregation is a tax strategy that allows certain components of a commercial or residential investment property to be depreciated over shorter time periods than the building itself.

Instead of treating the entire property as a single asset, a cost segregation study identifies items such as flooring, lighting, landscaping, and other qualifying improvements that can be depreciated more quickly. This accelerates depreciation deductions and can improve cash flow during the early years of ownership.

For many real estate investors, understanding how cost segregation works is an important part of tax planning. When appropriate, it can increase available deductions, especially when combined with current bonus depreciation rules. Like any tax strategy, it should be evaluated based on your specific property, investment goals, and tax situation.