CPAs and Advisors with Your Growth in Mind

Planning for the New Business Interest Expense Deduction Limitation

As part of the Tax Cuts and Jobs Act (“TCJA”) signed into law on December 22, 2017, some important changes have been made with respect to the deductibility of business interest expense for tax years beginning after December 31, 2017. Under prior law, business interest expense was generally deductible in the year in which the interest was paid or accrued, except that corporations were subject to certain limitations under IRC Section 163(j) (“the earnings stripping rules”). TCJA created a new limitation, which replaces the “earnings stripping rules” and applies to all businesses, regardless of form, on the deductibility of net. Read More.

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ESOPs Gain in Popularity

By: John Carpenter , Principal Many private company business owners are taking a closer look at Employee Stock Option Plans (“ESOPs”) as a tool for either an exit strategy or a way to “take money off the table” through a sale of a portion of their company stock holdings. ESOPs were a less popular diversification strategy during the 2000s when government spending was on the rise, especially within the Department of Defense (“DoD”) and many companies could sell for attractive multiples with large, upfront cash components. The combination of flat to declining DoD budgets leading to less attractive market multiples, and capital. Read More.

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Bipartisan Legislation Restores Charitable Giving Incentives

President Obama recently signed into law bipartisan legislation that addresses several charitable nonprofit policy issues. Approved by the Senate as the Consolidated Appropriations Act, 2016, the bill permanently restores the following expired charitable giving incentives: The food donation tax deduction. This tax incentive increases the charitable giving limit and permits small businesses that donate wholesome surplus food to a qualified nonprofit organization to receive the same enhanced tax deduction C corporations are allowed to take. In addition, the provision also raises the limit for business donations to 15 percent of adjusted gross income, as well as helps farmers and ranchers via a new. Read More.

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