TAX UPDATES

TO KEEP YOU INFORMED

The IRS has issued a Proposed Revenue procedure that details a safe harbor for determining when a rental real estate enterprise will be treated as a trade or business for the new Section 199A deduction.  This revenue procedure is welcome news indeed for tax practitioners and owners of rental real estate, as this was one of the murkier areas of the new tax law.

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Tax time is just around the corner, and if you are like most taxpayers, you are finding yourself with the ominous chore of pulling together the records for your tax appointment. The difficultly of this task depends upon how well you maintained your tax records throughout the year. No matter how good your record keeping was, arriving at your tax appointment fully prepared will give us more time to:

  • Consider every possible legal deduction;
  • Evaluate which income reporting methods and deductions are best suited to your situation;
  • Explore current law changes that are affecting your tax status; and
  • Talk about tax-planning alternatives that could reduce your future tax liability.
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Welcome to 2019 and a delayed provision of the tax reform, also known as the Tax Cuts and Jobs Act (TCJA). For divorce agreements entered into after December 31, 2018, or pre-existing agreements that are modified after that date to expressly provide that alimony received is not included in the recipient’s income, alimony will no longer be deductible by the payer and won’t be income to the recipient.  This is in stark contrast to the treatment of alimony payments under decrees entered into and finalized before the end of 2018, for which alimony will continue to be deductible by the payer and income to the recipient.

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I often get asked the question “If I roll over my investment, I don’t have to pay tax.  Right?”, and up until now, I’ve had to answer “It just doesn’t work that way”.  It’s never the answer that my clients want to hear.  Now, however, I can say “Well have you heard about the new Opportunity Zone Funds?”.  You can imagine that being able to defer or even permanently exclude some gains from tax is something that many entrepreneurs are really interested in.  So how can you take advantage of this new opportunity?

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Tax Reform, otherwise known as the Tax Cuts and Jobs Act (TCJA) has made significant changes to the way we will all file business tax returns this year.  The changes are extensive, and many of the changes require additional guidance from the IRS before we fully understand how they are to be applied in complex situations.  For that very reason, we recommend that you take action now to understand your specific situation and how you will be impacted by the changes.  Additional discussions on the changes and even updated tax projections are likely necessary to ensure that you make the correct moves this year.

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Tax Reform, otherwise known as the Tax Cuts and Jobs Act (TCJA) has made significant changes to the way we will all file our tax returns this year. Some of the changes will be advantageous and some will not. The changes are extensive, and many of the changes require additional guidance from the IRS before we fully understand how they are to be applied in complex situations. For that very reason, we recommend that you take action now to understand your specific situation and how you will be impacted by the changes. Additional discussions on the changes and even updated tax projections are likely necessary to ensure that you make the correct moves this year.

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