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EXECUTIVE SUMMARY Individual taxpayers are subject to different rules for deducting different types of interest expense. The five primary types of interest for individual taxpayers are student loan interest, qualified residence indebtedness interest, investment interest, business interest, and personal interest. The law known as the Tax Cuts and Jobs Act temporarily introduced new rules for …
Continue reading Five types of interest expense, three sets of new rules
EXECUTIVESUMMARY Under Sec. 1202, gain on the sale of qualified small business (QSB) stock held for five years is partially or entirely excluded from income. Since Sec. 1202 was enacted, the maximum exclusion has ranged from 50% to the current 100% of gain on qualifying stock sales. For stock to be QSB stock, the corporation …
Continue reading Qualified small business stock gets more attractive
Married couples that jointly own a business often by default choose to treat the business as a partnership, which requires the business to file a partnership return. However, in many cases, treating the business as a partnership and filing partnership returns is optional. A recent Tax Court case highlights how a married couple's choice to …
Continue reading Filing ‘optional’ partnership return costly
Professional gamblers' decadelong streak of being able to deduct a net loss from gambling as a trade or business was ended this year by P.L. 115-97, known as the Tax Cuts and Jobs Act of 2017 (TCJA). Although a relatively minor facet of the wide-ranging tax reform package, the TCJA's amendment to Sec. 165 overturning …
Continue reading Tax reform law deals pro gamblers a losing hand
The IRS on Monday issued 34 questions and answers on new Sec. 45S, which was added by the law known as the Tax Cuts and Jobs Act, P.L. 115-97, to provide a general business credit for employers who provide paid family and medical leave to their employees (Notice 2018-71). The credit equals a percentage of …
Continue reading Rules issued on paid family and medical leave credit
The IRS issued proposed regulations on Aug. 1 (REG-104226-18) on the Sec. 965 transition tax, which was added to the Code by P.L. 115-97, the law known as the Tax Cuts and Jobs Act. Sec. 965 applies to the last tax year of a deferred foreign income corporation (DFIC) that begins before Jan. 1, 2018. …
The IRS on Wednesday issued guidance clarifying that taxpayers may generally continue to deduct 50% of the food and beverage expenses associated with operating their trade or business, despite changes to the meal and entertainment expense deduction under Sec. 274 made by the tax law known as the Tax Cuts and Jobs Act (TCJA), P.L. …
Continue reading Meals continue to be deductible under new IRS guidance
Business travelers who incur expenses while traveling away from home have new per-diem rates to use in substantiating certain of those expenses (Notice 2018-77). The new rates are in effect from Oct. 1, 2018, to Sept. 30, 2019. The IRS on Wednesday provided the 2018–2019 special per-diem rates, including the transportation industry meal and incidental …
The revised limitation on interest expense brought about by the law known as the Tax Cuts and Jobs Act (TCJA), P.L. 115-97, may affect a broader base of businesses than originally anticipated by many. The newly minted Sec. 163(j) limits the deduction for business interest to the sum of business interest income and 30% of …
Continue reading Sec. 163(j) places renewed importance on tax shelter status
The IRS proposed new rules under the global intangible low-taxed income (GILTI) provision (Sec. 951A) added by P.L. 115-97, the law known as the Tax Cuts and Jobs Act (REG-104390-18). Sec. 951A requires U.S. shareholders of controlled foreign corporations (CFCs) to include in their gross income their GILTI income for that tax year (the inclusion …
Continue reading IRS issues proposed regs. for GILTI inclusions
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