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In proposed regulations issued Wednesday (REG-106706-18), the IRS addressed issues and made conforming revisions arising from the temporary increase in basic exclusion amount for estate and gift tax enacted by legislation known as the Tax Cuts and Jobs Act (TCJA), P.L. 115-97. For gifts made and estates of decedents dying before Jan. 1, 2018, prior …
Continue reading Estate and gift exclusion clawback addressed in proposed regs.
The more things change the more they stay the same. This is especially true when it comes to reviewing your tax situation. Mark your calendar to review these essential items each year to ensure you are not missing something that could cause tax trouble when you file your tax return: 1. Required minimum distributions If …
The IRS on Thursday issued the 2019 annual inflation adjustments for many tax provisions as well as the 2019 tax rate tables for individuals and estates and trusts (Rev. Proc. 2018-57). These adjusted amounts will be used to prepare tax year 2019 returns in 2020. Many amounts are increasing for inflation in 2019. The standard …
Continue reading Inflation adjustments and tax tables issued for 2019
The Social Security Administration (SSA) announced that the maximum amount of wages subject to the old age, survivors, and disability insurance (OASDI) tax will increase to $132,900 for 2019. The OASDI tax rate is 6.2%, so an employee with wages up to or above the maximum in 2019 would pay $8,239.80 in tax and the …
Consider conducting a final tax planning review now to see if you can still take actions to minimize your taxes this year. Here are some ideas to get you started. Assess your income. Begin by determining how your income this year will compare to last year. Then apply any tax implications this income change may …
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
Fueled by the law known as the Tax Cuts and Jobs Act of 2017 (TCJA), P.L. 115-97, and a market of retiring Baby Boomers looking to divest ownership interests, the marketplace recently experienced a wealth of transactions. Among this crowd are S corporations engaging in shareholder redemptions — with some also contemplating a subsequent conversion …
Continue reading S corporation redemptions: Navigating Secs. 302 and 301
Sec. 280G, relating to "golden parachute payments," and its Sec. 4999 excise tax counterpart are two of the more draconian provisions in the Internal Revenue Code. Sec. 280G disallows a deduction to a corporation for an excess parachute payment made to an individual, and Sec. 4999 imposes a 20% nondeductible excise tax penalty on a …
Continue reading Revisiting the application of Sec. 280G on partnerships and LLCs
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
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