by: Josie Morris What is Net Investment Income Tax (“NIIT”) under Code Sec. 1411 and how does it apply to rental activities? Proposed Regulations were issued on November 30, 2012 to help clarify how the 3.8 percent surtax on net investment income is calculated. This surtax is new in 2013 and is generally applicable to individuals whose adjusted gross income exceeds $250,000. It is uncertain whether the definition of net investment income includes income from rental property where the tenant is your own company (self-rent) and/or rental property income for real estate professionals. Many tax professionals are trying to determine. Read More.

On January 2, 2013 President Obama signed into law the American Taxpayer Relief Act of 2012 (the “Act”). Among the law changes contained within the Act were various extensions of favorable deprecation provisions affecting commercial real estate. Although these provisions are not new, it is important to acknowledge that they are still available and directly affect the tax treatment of commercial real estate. Bonus Depreciation The Act extends 50 percent bonus depreciation through 2013. Bonus deprecation allows businesses to expense 50 percent of the cost of qualifying property in the year the property is placed in service. Qualifying property is. Read More.

Investing in a facility for manufacture of clean energy or energy efficient property? If your project qualifies for the Advanced Energy Project Credit, you’ll be able to offset your tax bill by 30 percent of the cost of qualified property. This isn’t just a reduction of taxable income – it’s a dollar for dollar offset against the tax you owe. A cost segregation study can help identify and quantify components of building construction, expansion, or renovation costs that qualify for the credit. Projects must be certified in advance by the IRS. Don’t miss these important deadlines – concept papers must be submitted. Read More.

Need assistance calculating tax basis in your LLC interest?  The Tax Court recently ruled that the IRS is available to help . . . or hurt.  The Tax Equality and Fiscal Responsibility Act of 1982 (“TEFRA”) tax legislation was enacted in an effort to streamline IRS partnership auditing procedures. That may sound promising, but in reality TEFRA can be incredibly burdensome, allowing the IRS to adjust partners’ tax returns during an audit of the partnership itself.  In Tigers Eye Trading, LLC v. Commissioner – U.S. Tax Court, the Tax Court has ruled that the IRS has authority to calculate a. Read More.

Green building has established itself not only as a sustainable trend, but a key source for growth in coming years. A recent study by McGraw Hill examines construction firms around the world, asking what role green construction will play in their future. The study found sustained growth in green work, with 51 percent of firms surveyed planning 60 percent or more of projects to be green by 2015. The same amount, 51 percent, expected to shift to be dedicated to green construction along the same timeline.   A major sea change has occurred since McGraw-Hill Construction’s 2008 study of the green building. Read More.