WHEN OLD LAW MEETS A NEW HUSTLE: UNUSUAL TAX SITUATIONS FROM 2025

Case 1: Short-Term Rentals and Multi-State Nexus Surprises

A client shifted their rental property from long-term tenants to Airbnb “side hustle,” not realizing New Mexico’s rules differed from neighboring states. Old sales tax rules kicked in, creating unexpected gross receipts obligations. At the same time, new short-term rental registration deadlines meant missing a city notice could cost hundreds in fines. Solution: Research local code, file state and city registrations, and carefully source income for all affected states.

Case 2: The Crypto/Stock Trader Passive Loss Puzzle

A self-employed artist with sporadic crypto sales and Robinhood stock trades tried to offset studio losses using trading losses. The client assumed “old passive loss rules” let them net everything, but the IRS still treats crypto as property (not currency) and applies Section 469. Action: Separately track crypto trades, clarify which activities qualify as “passive,” and ensure proper NOL carryforward treatments on federal and New Mexico returns.

Case 3: Partnership Buyout via Venmo

A partnership buyout was paid entirely by Venmo—not via wire transfer or certified check. The IRS treats Venmo business payments like checks for reporting, but the bank records didn’t clearly match the K-1 schedule. By referencing historic reporting regs and cross-checking Venmo statements, we reconstructed the transaction for basis calculations, keeping the partnership in compliance and up-to-date.

Case 4: NFTs and Charitable Giving

A local artist launched an NFT collection and wanted to donate tokens to a non-profit. Old charitable deduction laws don’t recognize NFTs as “qualified property,” so the donor needed a formal appraisal and careful timing to qualify for a deduction. The solution entailed independent third-party valuation and storing the NFT on the non-profit’s wallet before year-end.

Takeaways

Old laws are still the foundation of US tax compliance, but each year brings new interpretations and wrinkles—especially as clients explore side hustles or digital income streams. For CPAs, staying ahead means blending tax code tradition with a plain-English approach for today’s gigs, hustles, and creative ventures.

Are you facing an unusual tax situation?

Balanced Equity specializes in translating the complex—whether you’re launching a rental, starting a band, or building an online business. Get in touch to lock in next year’s strategies, avoid costly surprises, and turn legal jargon into actionable advice.

Want a custom review? Reach out for a tax strategy session tailored to your goals.

Contact us to build your own tax-smart, future-focused strategy. You need a team who thinks ahead—let’s get started.

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