See “A Planning Introduction to the 2017 Tax Act – The Overview” which briefly introduces the new tax law enacted in December. We indicated in that introduction that the new legislation tends to make tax planning more and more mathematical. The remark’s emphasis on alternatives and myriad tax rules is particularly true of planning charitable donations. We’re going to have some emphasis on the new Section 199A that can give owners a 20% of business income deduction. This new provision affects many taxpayers and significantly affects planning for charitable donations whenever the person is active in business, or even a passive investor in an active business. We’ve given a more detailed look at those rules in “A Planning Introduction to the 2017 Tax Act – The 20% of Business Income Deduction.” See generally, Tax Cuts and Jobs Act, Conference Report to Accompany H.R. 1, 115th Cong., 1st Sess., House Report 115-466, December 15, 2017, which includes the text of the Act, the … [Read more...] about A Planning Introduction to the 2017 Tax Act – Charitable Donations and Exempts
Bob’s Blog
A Planning Introduction to the 2017 Tax Act – The 20% of Business Income Deduction
See “A Planning Introduction to the 2017 Tax Act – The Overview” which briefly discusses this topic and helps put it in an overall perspective within many of the major tax changes enacted in December. We indicated in that introduction that the new legislation tends to make tax planning more and more mathematical, and while that remark emphasizes alternatives and myriad tax rules, it is particularly true of the new Section 199A that we discuss here. This new law, this new concept, is effective after 2017. ((The final bill basically followed the Senate approach, with some rather significant modifications. See generally, Tax Cuts and Jobs Act, Conference Report to Accompany H.R. 1, 115th Cong., 1st Sess., House Report 115-466, December 15, 2017, which includes the text of the Act, the legislative histories of the House, Senate and Conference. Hereinafter, the Conf. Rep. For pagination cites see PDF version: … [Read more...] about A Planning Introduction to the 2017 Tax Act – The 20% of Business Income Deduction
A Planning Introduction to the 2017 Tax Act – The Overview
THE NEW TAX PLANNING LANDSCAPE In general, we believe a major aspect of the new Tax Cuts and Jobs Act will be to make tax planning more and more mathematical. By such a statement, we emphasize that the taxpayer’s choices are more likely to involve projections and ranges. The choices also look to be more numerous. ((See generally, Tax Cuts and Jobs Act, Conference Report to Accompany H.R. 1, 115 th Cong., 1 st Sess., House Report 115-466, December 15, 2017, which includes the text of the Act, the legislative histories of the House, Senate and Conference. This is referred to hereinafter as the Conf. Rep. Note that for pagination one has to choose the PDF version at this site: https://www.congress.gov/congressional-report/115th- congress/house-report/466/1?overview=closed.)) Enacted in December, the new law introduced major changes taking effect mostly after 2017, but there are some effects in 2017. Not all the changes are permanent which adds to the complexity.The general context … [Read more...] about A Planning Introduction to the 2017 Tax Act – The Overview
Share! A Guide to 2017 Charitable Donations
2017 is a great time to take advantage of current IRS allowable tax deductions. One my favorites is donating stocks or bonds directly to a worthwhile charity or nonprofit. You can take the deduction for the current value of the stock and pay no taxes on the gain that creates sort of a double deduction. Long-term family goals, needs and your financial situation would of course need consideration. Current tax bill legislation will most likely create less reward for charitable deductions and lower tax liability in 2018. Any deduction you can take in 2017 will create greater tax savings than waiting for a later time. You will save more money and have the satisfaction of your money going farther. We say “incentives” because there are federal and state income tax deductions for charitable donations. As we approach the end of 2017, there are major federal tax changes on the table but there appears to be little prospect that the charitable donation deduction will be reduced … [Read more...] about Share! A Guide to 2017 Charitable Donations
Catastrophic Disasters –The CPA’s Expertise Can Help With Recovery And Planning
Introduction Our goal is to provide useful tax and financial information to those affected by major casualties and disasters, and their advisors. ((See generally these tax rules: Sections 139(c)’ and 165(c)’, 7508A. If you are a tax professional, see “Disaster Relief Resource Center for Tax Professionals,” https://www.irs.gov/tax-professionals/disaster-relief-resource-center-for-tax-professionals.)) We mention the effects of Hurricane Harvey in and around Houston beginning in August, 2017, and Hurricane Irma that hit Florida and its environs soon after, and then the terrible fires in Northern California in October. Catastrophic disasters have been ongoing. Harvey has been described as the worst flood disaster ever in the continental United States. Just in and around Houston, FEMA believes some 68,000 homes were flooded. ((“Spared from Harvey’s worst,” Ralph Vartabedian and Ben Welsh, Los Angeles Times, 11/19/17, p. A17.)) On the heels of Hurricane Harvey, there has been … [Read more...] about Catastrophic Disasters –The CPA’s Expertise Can Help With Recovery And Planning
DAMAGE TO LAND AS A DISASTER DEDUCTION / THE CALIFORNIA VINEYARD FIRES
DAMAGE TO LAND AS A DISASTER DEDUCTION / THE CALIFORNIA VINEYARD FIRES by Robert L. Rojas, M.S. – Taxation, Rojas & Associates, CPAs, J. Michael Pusey, National Tax Director rojaspa.com Los Angeles, Woodland Hills, Sacramento, Orange County Our focus will be disaster/casualty loss deductions for taxpayers in the vineyard/winery business in Northern California in the context of the devastating fires of October, 2017. ((Section 165.)) The principles we discuss may have much wider application than just vineyards; e.g., whether the casualty/disaster loss deductions have failed to consider land generally, whether it is under residential, commercial, or agricultural property, or raw land. The two activities, growing grapes and producing wine, are often combined directly or through ownership of related entities. The fires were declared a national disaster. ((“California fires coverage: Crews gain upper hand on deadliest blazes as search and recovery efforts continue,” Los Angeles … [Read more...] about DAMAGE TO LAND AS A DISASTER DEDUCTION / THE CALIFORNIA VINEYARD FIRES
Depreciation, Repairs, and Deducting Capital Expenditures
We focus on the most important concepts governing what distinguishes a fixed asset from an expense, tax depreciation rules and certain current incentives for writing off capital expenditures. Our focus is the big picture and major planning points when it comes to capital or near-capital expenditures and related expenses. We’ll begin with an emphasis on current deductions – business expenses and the election to expense capital expenditures provided by Section 179. The Relatively New Repair and Maintenance Regulations One doesn’t reach the depreciation details if an item qualifies as an ordinary and necessary business expense under Section 162. Is it an asset or business expense? The tax discussions following this question often focus on supplies, or repairs and maintenance. Generally, taxpayers need to capitalize (call an asset) payments to acquire, produce or improve tangible property but they have an immediate deduction for supplies or repairs and maintenance. There … [Read more...] about Depreciation, Repairs, and Deducting Capital Expenditures
Beginning Your 2017 Year-End Tax Planning
Significant Tax Changes Are Expected As we are in the last five months of the year, it is time to begin updating the books, making projections and identifying possible tax strategies during these closing months of 2017. Year-end income tax planning is also often a good season for looking at the bigger picture – 3-5 year projections, successor planning for the business, estate planning essentials, etc. We should soon know whether to expect possible tax legislation by year end. It is quite possible we will have a new tax bill. There is the prospect of significant changes. Planning When Details Are Uncertain President Trump wants significant rate reductions while doing away with many deductions and possibly limiting others. There’s a dearth of new tax incentives, which is something of a change in the pattern of modern times. The general context is reducing the number of specialized, targeted tax incentives while also eliminating some big revenue raisers for the … [Read more...] about Beginning Your 2017 Year-End Tax Planning
The Private Foundation as a Charitable Lifestyle
You’re a busy business owner, investor or executive and would like your success to translate into significant charitable achievements. You would like your success to pour over and help others. You may be looking at retirement and considering a more hands-on approach to helping others, more of an active charitable lifestyle but perhaps not operating a charity. We trust this article will help you decide whether the private foundation is a vehicle suited to your philanthropic, business, tax and estate planning goals. We address the philanthropist, or potential philanthropist, but include their advisors. We will compare the private foundation with other approaches to charitable accomplishment. The rules are complex but a public charity generally receives at least one third of its support from the general public, whereas a private foundation’s support base is normally a limited number of donors. Its funding is usually provided by a donor or a family. ((Instructions to Form … [Read more...] about The Private Foundation as a Charitable Lifestyle
Net Operating Loss Carryback Repeal Isn’t Getting the Attention It Deserves
The changes being discussed are of such a magnitude that many taxpayers are filing extensions while their advisers ponder how 2016 tax elections may affect 2017. We focus here on one major provision that seems to be getting only a minor amount of attention. An important revenue raiser for the government in House Speaker Paul Ryan’s 2016 proposals is repeal of the net operating loss carryback. There is even some enhancement of the net operating loss as a carryforward – the ability to carry losses forward indefinitely with an increase in the actual loss for an interest factor. There is a new restriction on the net operating loss as a carryforward in that such loss couldn’t decrease income by more than 90%. While net operating losses could be carried forward, they couldn’t be carried back. The unfairness of eliminating the net operating loss carryback isn’t getting enough discussion. Current rules generally allow an NOL to carry back two years, three years in the … [Read more...] about Net Operating Loss Carryback Repeal Isn’t Getting the Attention It Deserves
