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Castle Rock Tax Solutions We serve growth-oriented real estate investors who are actively scaling their portfolios and need more than compliance-level tax advice.

A scenario for the online sellers (details changed). A seller doing about $3.2M across Amazon and her own Shopify store ...
10/14/2026

A scenario for the online sellers (details changed).

A seller doing about $3.2M across Amazon and her own Shopify store assumed sales tax was handled everywhere, since Amazon collected on her marketplace sales.

It was handled.

For Amazon.

Her Shopify sales had crossed economic nexus thresholds in several states where she wasn't registered.

The combined sales made it worse.

In some of those states her marketplace sales counted toward the threshold even though Amazon was collecting on them.

We ran a nexus analysis, ranked the states by exposure, and got her registered going forward with tax collection turned on in her store.

For the back periods we looked at each state's options, including voluntary disclosure where it made sense, rather than waiting for a state to find her first.

The big lesson is that "the platform handles it" usually only covers one channel.

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If your business account and your personal account are the same account, you've made an audit much harder than it needs ...
10/14/2026

If your business account and your personal account are the same account, you've made an audit much harder than it needs to be.

Commingling is when business and personal money run through the same accounts or cards.

It's incredibly common in the first few years of a business, and it tends to hang around long after it should.

In an audit it forces you to prove which deposits were business income and which transfers weren't, which expenses were business and which weren't.

The burden is on you.

It causes problems outside of taxes too.

Mixing funds is one of the things courts look at when deciding whether your LLC's liability protection holds up.

The fix is boring and powerful: separate business accounts, business cards, and paying yourself through proper owner draws or payroll.

It won't fix the past on its own, but it stops the problem from getting bigger.

Follow along here.

Hiring your kids is one of the few strategies that saves tax and teaches something at the same time. Here's how it works...
10/13/2026

Hiring your kids is one of the few strategies that saves tax and teaches something at the same time.

Here's how it works when it's done right.

Your business pays your child a reasonable wage for real work.

Social media, filing, photographing products, cleaning a property, admin.

The business deducts the wages.

Your child can earn up to the standard deduction, which is $16,100 for 2026, and owe no federal income tax on it.

If the business is structured correctly, there may be no payroll tax on those wages either.

And the child's earned income can fund a Roth IRA, which is a remarkable head start.

The guardrails matter.

Age-appropriate work, a wage you could defend for that job, timesheets, actual payroll, and money that actually gets paid to the child.

Paying a six-year-old $15,000 to "help with marketing" is not the strategy.

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"I'll put my kids on my S-Corp payroll and skip payroll taxes on their wages." This one comes up constantly, and the pay...
10/13/2026

"I'll put my kids on my S-Corp payroll and skip payroll taxes on their wages."

This one comes up constantly, and the payroll tax part is wrong.

The exemption from Social Security and Medicare tax for kids under 18 only applies when the parent owns the business as a sole proprietorship, or as a partnership owned only by the parents.

Wages paid by an S-Corp or C-Corp are subject to payroll taxes like anyone else's, no matter how old the child is.

That doesn't make hiring your kids through an S-Corp worthless.

The wages are still deductible, and your child's earned income gets taxed at their rate, which is usually zero.

But if the payroll tax savings is the reason you're doing it, structure matters.

Some families use a separate management entity for exactly this reason.

And either way, the work has to be real and the wage has to be reasonable.

Follow along here.

A scenario for the flippers (details changed). An investor here in Florida was doing six to eight flips a year and holdi...
10/12/2026

A scenario for the flippers (details changed).

An investor here in Florida was doing six to eight flips a year and holding three long-term rentals.

All in one LLC, all reported together.

He'd been treating the flip profits as capital gains.

We had to have a hard conversation about dealer status.

The bigger issue was that mixing everything in one entity put his rentals at risk of being treated the same way.

If the IRS viewed the whole operation as a dealer business, his long-term holds could get dragged into ordinary income treatment too.

So we separated the activities.

Flips went into their own entity, where we could also look at whether an S-Corp election made sense for that ordinary income.

The rentals stayed separate, held and documented as long-term investments.

Nothing about that was aggressive.

It was just making the structure match what was actually happening.

When your activities are different, your structure usually should be too.

Follow along for more.

The deduction that loses in an audit usually isn't the fake one. It's the real one with no proof behind it.For most busi...
10/12/2026

The deduction that loses in an audit usually isn't the fake one.

It's the real one with no proof behind it.

For most business expenses you need records showing the amount, the date, and the business purpose.

For some categories the rules are stricter. Vehicle use, travel, gifts.

You need specific documentation, like a mileage log kept at or near the time of the trip.

Estimates after the fact generally don't hold up.

I've watched business owners with completely legitimate expenses lose them because the only evidence was a credit card statement and their memory.

The good news is most of this is fixable going forward with simple habits.

A mileage app.

Receipts attached in your bookkeeping software.

A quick note on the purpose of each meal or trip.

The best audit defense gets built the day you spend the money, not the day the letter shows up.

Follow along here.

A Sunday concept every real estate investor needs to understand before selling: depreciation recapture.Depreciation lowe...
10/11/2026

A Sunday concept every real estate investor needs to understand before selling: depreciation recapture.

Depreciation lowers your taxable income every year you own a property.

It also lowers your basis.

When you sell, the IRS wants a piece of that benefit back.

On the building itself, the portion of your gain that came from depreciation is generally taxed at up to 25%, not the lower long-term capital gains rate.

If you did a cost segregation study, the shorter-life components can be recaptured as ordinary income, at your full rate.

And the part people miss: recapture applies to depreciation you were allowed to take, even if you never took it.

Skipping depreciation doesn't get you out of it.

None of this makes depreciation bad.

It means your exit plan matters as much as your purchase plan.

Follow along for more.

Saturday myth: "Section 179 and bonus depreciation are basically the same thing."They both let you write off equipment o...
10/10/2026

Saturday myth: "Section 179 and bonus depreciation are basically the same thing."

They both let you write off equipment or property faster.

That's about where the similarity ends.

Section 179 is limited by your business income.

It generally can't create a loss, and whatever you can't use carries forward.

Bonus depreciation has no such limit and can create or deepen a loss.

Section 179 lets you pick asset by asset.

Bonus is generally all or nothing within a class of property unless you elect out.

Both got stronger under last year's tax law.

Bonus depreciation is back to 100% permanently for property acquired after January 19, 2025, and the Section 179 limit jumped to $2.5 million, indexed going forward.

Then there are states.

Plenty of them don't follow federal bonus depreciation, so you can have a big federal deduction and a state add-back on the same purchase.

Which tool to use, and whether to accelerate at all, depends on your income this year versus next.

Follow along here.

A short-term rental scenario (details changed). A couple came to us this year: she runs a marketing agency, he manages t...
10/10/2026

A short-term rental scenario (details changed).

A couple came to us this year: she runs a marketing agency, he manages two beach properties they bought in the spring.

They'd heard about the STR exception on a podcast.

They'd already assumed they qualified.

Short stays, yes.

But when we dug in, he was using a co-host company that was probably logging more hours on the properties than he was.

That's a problem for material participation.

So we changed the setup.

He took over guest communication, cleaner scheduling, and maintenance coordination, and started tracking his hours in a simple log from that week forward.

We also confirmed the average stay from their booking data instead of from memory.

With the facts documented, the losses from the properties were positioned to offset their other income.

Without the log, the same losses could easily have been challenged.

Every situation is different, but in this strategy the documentation IS the strategy.

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How long can the IRS come back and question a return? It depends on what's in it. For some people the answer is forever....
10/09/2026

How long can the IRS come back and question a return?

It depends on what's in it.

For some people the answer is forever.

The general rule is three years from the date you filed.

After that, the window to assess more tax usually closes.

But if you left out more than 25% of the gross income you should have reported, it stretches to six years.

And if a return was never filed, or was filed fraudulently, there's no statute of limitations at all.

That year stays open indefinitely.

That's why unfiled returns are such a big deal.

The clock you're hoping runs out never actually started.

If you have a year or two that never got filed, filing them is what starts the clock.

It's the first step toward closing the door.

Follow along here.

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