Small Business Tax & Bookkeeping Blog | Zero Fluff Books

An unpaid amount is not automatically deductible. Section 166 generally requires a bona fide debt with tax basis, and business versus nonbusiness classification changes the character, timing, partial-worthlessness rules, and reporting.

Qualified Small Business Stock issued after July 4, 2025 may qualify for tiered exclusions after three, four, or five years, with higher gross-asset and per-issuer limits than earlier stock.

The original Opportunity Zone regime generally requires deferred gain to be recognized no later than December 31, 2026. A revised permanent Opportunity Zone program begins for qualifying investments made under the new rules starting in 2027.

A home office inside the dwelling generally does not require allocating gain away from the Section 121 exclusion, but depreciation allowed or allowable after May 6, 1997 remains taxable. Detached structures and nonqualified use require separate analysis.

When property is rented to a business in which the owner materially participates, net rental income may be recharacterized as nonpassive while a net loss generally remains passive. Grouping and disposition rules require separate analysis.

Section 179 and 100% bonus depreciation can accelerate deductions for food trucks and mobile-vendor equipment, but vehicle classification, business use, income limits, and placed-in-service rules determine what is actually available.

The de minimis safe harbor can let a business expense qualifying small-dollar purchases instead of tracking them on multi-year depreciation schedules—but the accounting procedure and annual election requirements matter.

Cash and accrual methods determine when income and deductions are recognized for federal tax purposes. Once a method is adopted, changing it may require Form 3115 and a Section 481(a) adjustment.