Month: July 2026

If you own rental real estate, you may have passive losses that have been suspended for years. Although you cannot currently deduct these losses, they are not lost forever. With proper planning, you may be able to unlock them and use them to reduce your taxes.

One common way to free suspended passive losses is to sell your entire interest in a rental activity. Once released, these losses can offset other income, potentially producing significant tax savings.

But not every sale works. Selling a rental property to a family member or to a corporation controlled by you or your family generally does not release suspended losses. Likewise, giving the property away can permanently reduce the tax benefit of those losses.

Another important planning consideration for 2026 is the excess business loss limitation. Even if you free a large amount of suspended losses through a sale, the law may limit how much you can deduct in the current year, with the remainder carried forward to future years.

Because the tax consequences depend on how your properties are grouped, who buys them, and the timing of the sale, advance planning is essential.

If you want to discuss your suspended losses, please call me directly at 408-778-9651

• By Leon Clinton
• July 21, 2026

If you use a classic or antique car in your business, you may be able to deduct it just as you would a newer business vehicle.

The key requirement is business use. A vehicle must be subject to wear and tear, decline, or exhaustion, and you must use it in your trade or business. Courts have allowed depreciation deductions for valuable antique assets used in business, even when those assets appreciated in value.

This can make using a classic car for business an interesting alternative to using a new vehicle. For example, a 1972 Pontiac GTO used in business may qualify for depreciation just like a 2026 Lexus IS. Current law generally treats new and used vehicles the same for depreciation purposes.

However, passenger automobiles remain subject to the luxury-auto depreciation limits. For vehicles placed in service in 2026 and eligible for bonus depreciation, the first-year deduction is capped, so you generally cannot deduct the full purchase price in Year One.

The potential advantage of a classic car is economic. While repairs and operating costs may be higher, the vehicle may hold or increase its value far better than a new car.

If you want to discuss classic and antique cars, please call me directly at 408-778-9651

• By Leon Clinton
• July 17, 2026

Many business owners assume they cannot claim a home-office deduction because their home is too small. In fact, the tax law says otherwise.

A home office does not have to be an entire room. If you use a clearly defined area of your home exclusively for business, you may qualify for the deduction—even if that space is only a few square feet.

The biggest benefit often isn’t the deduction for home expenses. Instead, a qualifying home office can make your home your principal place of business. That can convert trips between your home office and other work locations from non-deductible commuting into deductible business mileage.

To qualify, you must use the space exclusively and regularly for administrative or management activities such as bookkeeping, billing customers, scheduling appointments, ordering supplies, or preparing reports. You also cannot have another fixed location where you perform substantial administrative work.

This strategy remains available in 2026 for self-employed individuals, partners, and S corporation owners whose corporations properly reimburse business expenses. Unfortunately, W-2 employees generally cannot claim a home-office deduction under current law.

If you operate a business from your home—even occasionally—it may be worthwhile to review whether you qualify for this valuable deduction. A small amount of dedicated space could produce meaningful tax savings.

If you want to discuss the home-office deduction, please call me directly at 408-778-9651

• By Leon Clinton
• July 14, 2026