Tax Basis Reporting Calculations and Analysis

April 4, 2022

This article originally appeared in the April 2022 TaxStringer, a publication of the New York State Society of Certified Public Accountants. The IRS directed partnerships to report capital accounts on the tax basis starting in 2020. In this article, author Dean L. Surkin, JD, LLM addresses the prior rule, why the IRS wasn’t happy, the change they wanted, how to process the transition, and the need to maintain both the former capital account and the IRS-prescribed method. Overview The partnership agreement determines each partner’s share of partnership items, provided it meets two requirements— the agreement must provide for allocation, and the […]

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Congress Considers Tax Changes: Ways & Means Proposal 2021

October 7, 2021

The political situation is in flux as Congress debates the upcoming federal debt limit authorization. Nevertheless, the tax proposals issued by the House Ways and Means Committee indicate some of the issues at stake. The Ways and Means Committee issued a summary report on September 13th, and we touch on some of the topics that apply to many of our clients. As the legislation moves through Congress, some of the provisions may change.  Corporate Income Tax The 2017 Tax Cuts and Jobs Act changed the long-standing corporate tax rate from four brackets topping out at 35% to a flat rate […]

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Biden Administration Tax Proposals

December 8, 2020

 The incoming administration has floated a number of tax proposals. Any and all proposals are subject to negotiation with Congress. As of this writing, the Democrats control the House, albeit with a smaller majority than in 2018, and the Senate is up for grabs, awaiting the results of the January 5th Georgia runoff elections.  If the Republicans continue to control the Senate, it is unlikely that any of Mr. Biden’s proposals will be enacted. If the Democrats control the Senate, the fact that they would hold a bare majority (50 seats plus Vice-President-Elect Harris as tie-breaker) makes it unlikely that […]

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Looking Forward to 2021: Legislative Outlook

October 5, 2020

In every presidential election year, there is interest in whether the next year will see changes in the tax laws. Predicting tax law changes is speculative, because it depends upon too many variables: who wins the presidency, which party controls the House, which party controls the Senate, whether there is unified or divided control of the government, and whether the economic and political climate after the election favors or disfavors any proposals that may have been floated during the campaign. As with any change in the tax laws over the last several decades, changes offer new opportunities for planning. Regardless […]

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Important Tax Update

March 20, 2020

We want to keep you up to date on developments affecting your tax situation during the ongoing health crisis. Please remember that the situation is fluid and things may change rapidly. Postponement of April 15 filing deadline: IRS announced that the April 15 filing deadline will be pushed back to July 15 for all income tax returns. It is not necessary to file an extension. An additional extension of time to October 15 can be requested by July 15. Postponement of tax payments:  The IRS has provided tax payment relief for any person with a federal income tax payment due […]

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Key Provisions Under the SECURE Act

January 2, 2020

The “Setting Every Community Up for Retirement Enhancement” Act (the SECURE Act), which is part of the Further Consolidated Appropriations Act, 2020 (P.L. 116-94) signed into law by the President on December 20, significantly modifies many requirements for employer-provided retirement plans, individual retirement accounts (IRAs), and other tax-favored savings accounts. Congress recently passed-and the President signed into law-the SECURE Act, landmark legislation that may affect how you plan for your retirement. Many of the provisions go into effect in 2020, which means now is the time to consider how these new rules may affect your tax and retirement-planning situation. Here […]

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Qualified Opportunity Zone Funds

December 4, 2019

The 2017 Tax Cuts and Jobs Act initiated a program designed to spur economic growth and development in distressed communities designated as Qualified Opportunity Zones (QOZ). The program provides substantial tax benefits to taxpayers who invest eligible capital gains into Qualified Opportunity Funds (QOF), which can be organized as partnerships or corporations, as long as all requirements defined in the regulations are satisfied. Below are the major highlights of the program: To qualify for the program, investors must have eligible capital gains, which include short-term capital gains, long-term capital gains, net section 1231 gains, and certain gains under section 1256 […]

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New York State’s Fiscal Year 2019-2020 Budget Bill

May 8, 2019

On April 12, 2019, Governor Cuomo signed the New York State (“NYS”) Fiscal Year 2019-2020 Budget Bill (“Bill”) which extends some previously enacted changes as well as adding new provisions. Discussed below are the major highlights of the Bill. PERSONAL INCOME TAX Extension of the Millionaire’s Tax: The top NYS personal income tax bracket of 8.82% was scheduled to expire after 2019. The Bill extends the “Millionaire’s Tax” for five years, through 2024. Extension of Charitable Contribution Deduction Limitation: Currently, the NYS itemized charitable deduction is limited to 50% of the federal deduction for individuals with adjusted gross income (“AGI”) […]

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Final Regulations Under IRC Sec. 199A

February 12, 2019

Introduction On January 18, 2019, the Treasury Department finalized regulations that were issued in proposed form in August 2018 under Section 199A, which deals with the new 20% deduction for “Qualified Business Income” (QBI). They also issued Notice 2019-7, which contains a proposed revenue procedure providing a safe harbor for treating rental real estate enterprises as qualified businesses and issued new proposed regulations dealing with suspended losses, RICs, and certain trusts. Following is a question-and-answer discussion of the key provisions in the new guidance. 1. Specified Service Trade or Business (SSTB) Unless the taxpayer’s income is under the $157,500/$315,000 threshold, […]

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New York State’s Treatment of Certain Federal Tax Cuts and Jobs Act (TCJA) Provisions

February 4, 2019

The TCJA brought about many federal changes to both personal and business taxes. Many states starting point in determining taxable income is federal income which lead them to decouple from certain changes. New York State (NYS)  is one of them. With respect to personal income tax, the NYS Department of Taxation and Finance has put out guidance highlighting its tax treatment of various federal items of income, deductions and credits. Specifically, it issued TSB-M-18(6). Below are the highlights: Personal Tax Income Alimony or separate maintenance payments NYS opted not to follow changes made by the TCJA to the treatment of […]

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