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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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Choice of Entity – Part I

April 5, 2017

An LLC is the Best Thing Since Sliced Bread….or Is It? Background Limited liability companies (“LLCs”) have been around for quite a while.[1] They have become the most popular form of doing business,[2] and for good reason. LLCs provide its owners (technically called “members”) with the same protection from legal liabilities as do corporations.[3] Most domestic LLCs with two or more members are, in most cases, treated as partnerships for income tax purposes. LLCs with only one member are almost always treated as disregarded entities for income tax purposes. Every LLC has the right to make a “Check the Box” […]

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My Partnership Can Be On The Cash Method….Right?

June 15, 2016

This certainly sounds like a fairly simple, straightforward question. But, unfortunately, like most tax questions nowadays, the answer is not as simple as you would think. Background The Cash Method of Accounting – Under the cash method, all items that are gross income, whether in the form of cash, property or services, are included for the tax year in which actually or constructively received. Expenditures are deducted for the tax year in which actually made. Constructive receipt occurs in the year in which the taxpayer has unfettered access to income. For example, if an employer has a year-end bonus check prepared and ready […]

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The New & Great Frontier – The New Tangible Property Regulations

August 25, 2015

After nearly a decade in the works, the final tangible property regulations have arrived. These regulations will affect every taxpayer that owns, leases and/or uses tangible real or personal property in its business. The regulations are all-encompassing and complex. The new rules may, for many taxpayers, result in increased deductions than did the pre-existing rules. However, the regulations are extremely subjective in nature inasmuch as the question of whether expenditures are deductible or must be capitalized is inherently based on the specific facts and circumstances surrounding the expenditure. While this change in rules allows for more leeway in arriving at […]

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