Take Advantage of the 199A 20% Deduction

For certain taxpayers, the ability to deduct up to 20% of income from a domestic trade or business operated as a sole proprietorship or through a partnership, S corporation, trust or estate may be limited or eliminated by their taxable income. If the business income is generated from a Specified Services Trade or Business as defined by the Code and Proposed Regulations, no Section 199A deduction is available to taxpayers with income greater than $415,000 for joint filers and $207,500 for single filers. For taxpayers who file jointly, the deduction is fully available if their taxable income is $315,000 or. Read More.

New Casualty Loss Rules Under TCJA

When natural disaster strikes, it is of primary importance you ensure your family and loved ones are safe. As you rebuild and recover afterwards, you might face insurance claims and personal loss deductions for the first time. In the wake of Hurricane Florence and other natural disasters that may come our way, it is important to know the latest tax rules for claiming the loss of personal property. The Tax Cuts and Jobs Act (“TCJA”) changes the way personal casualty and theft loss are handled. Prior to the TCJA, you could claim itemized deductions for personal casualty losses that were. Read More.

IRS Extends Upcoming Filing and Payment Deadlines for Victims of Hurricane Florence

Hurricane Florence victims in certain counties of North Carolina now have until January 31, 2019, to file certain individual and business tax returns and make certain tax payments. This relief applies to various tax filing and payment deadlines that occurred starting on September 7, 2018, as specified below. The extension applies to most federal tax returns, including, among others: partnership, S corporation, corporate, individual, estate and trust income tax returns, employment, and certain excise tax returns, that either have an original or extended due date on or after September 7, 2018, and before January 31, 2019. Additionally, taxpayers having an. Read More.

Opportunity Zones Letter to the IRS

Cherry Bekaert has requested more information from the IRS concerning guidance on the new Opportunity Zones Program. Many of our clients have expressed interest in either sponsoring Qualified Opportunity Fund (“QOF”) or investing in one or more QOFs in the near future. There are many questions that need guidance, including eligibility of ordinary gains for tax incentives under IRC §§1400Z-2(a), (b) and (c), “Special rules for capital gains invested in opportunity zones”; determination of basis in an investment in a QOF organized as a partnership; and proper interpretation of statutory requirements for QOFs under IRC §1400Z-2(d). While there is a. Read More.

Section 199A: Detailed New Proposed Regulations

The Treasury Department and the Internal Revenue Service recently issued proposed regulations on the new Section 199A pass-through deduction created by the Tax Cuts and Jobs Act, available for tax years beginning after December 31, 2017, and before January 1, 2026. Section 199A permits a deduction of up to 20% of qualified business income (“QBI”) from a domestic pass-through business, plus 20% of qualified REIT dividends and 20% of qualified PTP income, if applicable. These highly anticipated and robust proposed regulations define and provide guidance on a number of items identified within Section 199A, including the items noted below. W-2 Wages. Read More.

How Does the Wayfair Decision Impact Private Equity?

Assessing what actions are needed after the US Supreme Court overturns the physical presence nexus standard The US Supreme Court’s decision in South Dakota v. Wayfair, Inc. et al to overturn the physical presence nexus standard will require all taxpayers to determine new filing requirements. The decision has opened the door for states to assert an economic nexus standard that will create additional administrative burdens on many companies as well as additional tax exposure for those that do not properly address the issue. For private equity funds, this means more scrutiny will be required for portfolio companies in both the. Read More.

IRS Released Proposed Regulations for Section 168(k) Bonus Depreciation

On August 8, 2018, the IRS issued proposed regulations  providing guidance on the 100% bonus expensing rules enacted by the Tax Cuts and Jobs Act (“TCJA”) last December. The proposed regulations update the existing regulations in Treas. Reg. § 1.168(k)-1 and add Prop. Treas. Reg. §1.168(k)-2. Proposed Treasury Regulations Synopsis Section 168(k) allows a taxpayer to take an additional first year depreciation deduction in the placed-in-service year of qualified property. In order to be eligible for the extended and modified 100% bonus depreciation, your property must meet four key requirements: The depreciable property must be of a specific type. Your property must have a. Read More.

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