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3 episodes with Schedule K
2 episodes with Schedule K
2 episodes with Schedule K
It's tax season crunch time, so we are resharing a timely episode debunking the 1120-S tax return. In this episode, Brian will walk you through the S-Corporation income tax return to help you better understand what you're filing and hopefully catch mistakes before it's too late. He provides a section-by-section analysis of Form 1120-S and highlights key areas that business owners and tax professionals make mistakes. Episode Highlights Part 1: Heading, Income, Deductions, Tax and Payments Most of this information is drawn from your business's Profit and Loss Statement. Here's a breakdown of what's on the first page: Calendar year: The very top of the form asks for the calendar year. If the corporation has a calendar year-end, leave this blank. If a fiscal year or short year put in the appropriate dates. Address: Underneath the calendar year, the form asks for a name and address. Use the name set forth in the charter or other legal documents, such as your Employer Identification Number (EIN) letter. Item A: Located to the left of the address, Item A asks for your S election effective date. You should have a letter from the IRS (CP 261) with your S-Corp starting date. This date should stay the same every year. Item B: Your business activity code. This code shows the IRS exactly what you do. Item C: Item C only applies if you have assets of $10 million or more. Most of the time, Item C will not be checked. Item D: Put your EIN in Item D. Make sure to verify it's correct before you file your form. Item E: Your date of incorporation should match the articles of incorporation. This date may or may not be the same date as your S-election. Like the S-election date, the date of incorporation won't change. Item F: Total assets at the end of the year. Item G: If the corporation is electing to be an S-Corp beginning with the current filing tax year, check the appropriate box. If the S-Corp did not already file the S-Election, attach Form 2553 with the return. Item H: These boxes should be self-explanatory. Check the boxes that apply. Item I: Enter the number of shareholders in the firm (e.g. yourself and your partners). Item J: Most of the time, Item J will not be checked. If you believe that one of the Item J items applies, follow up with your tax accountant. Income: Report gross revenue your business has earned for the year and any additional income or interest income that you may have incurred. Only report trade or business income. Do not list rental income, portfolio income, or tax exempt income (those go on your Schedule K). Expenses: Report all deductions on your Profit and Loss statement. Pay special attention to the following lines: Line 7: Compensation of officers should have something on it. S-Corporations must pay shareholder/employee reasonable compensation for services rendered, and failing to put reasonable compensation could lead to an IRS audit. Also included on this line are fringe benefits, including employer contributions to health plans and group term life insurance, for shareholders/employees owning more than 2% of the corporation stock. If your S-Corp has total receipts of $500,000 or more, you'll need to attach Form 1125-E to explain what was paid to each officer. Line 8: Salary and wages paid to employees (other than officers) of the corporation. Line 17: An S-Corporation can deduct contributions made for its employees under a qualified pension, profit sharing, annuity, SEP plan, Simple plan, or any other retirement deferred compensation plan. This includes shareholders/employees owning more than 2% of the corporation stock. Line 18: Employee fringe benefits provided to officers and employees owning less than 2% go on this line, such as health insurance, disability insurance, and educational assistance. Line 19: Line 19 includes any other deductions. There should be an attached statement, and it should match your profit and loss. The numbers should be close to your Profit and Loss statement. Taxes and payments: In general, an S-Corporation does not pay taxes at the corporate level, so this section will be blank. Signature: It's important to sign the return only after verifying all of the information, including the following sections. Part 2: Schedule B This section is mostly self-explanatory questions. Make sure to read and understand each question. Below are two lines to pay special attention to: Box 1: This easy-to-miss box can change your entire return if you're not careful, since it's where you select whether you're a cash or accrual basis taxpayer. Once you choose an accounting method, you generally cannot change without approval from the IRS. Box 2: Here is where you explain what you do. Part B is an either/or question, so state whether you sell products or services. Also, if you hire contractors, say yes to question 14 -- and hopefully you got out your 1099 forms by January 31. Part 3: Schedules K and K-1 Schedule K reports the pro rata share items in total for the Corporation. Schedule K-1, which you receive in your personal name, reports the percentage of pro rata share items allocable to each shareholder. Lines 1-17 on Schedule K correspond to Boxes 1-17 on Schedule K-1. Most items on Schedules K and K-1 are self-explanatory and come from other parts of the return. Part 4: Schedule L This is where many taxpayers make a mistake. Schedule L matches your business' balance sheet and should agree with your books and records. If it doesn't, find out why before you file. The first two columns match what your accounts were at the beginning of the year and should match what the accounts were at the end of last year. If this is your first year filing an 1120-S return, these two columns should be blank. The second two columns are for what the accounts had on December 31 of the previous year and will carry over to next year's return. Some of the most common assets on Schedule L are: Line 1: Write the amount of cash in your bank account on the last day of the year. Line 7: Loans to shareholders are loans from the corporation to the shareholder. Keep in mind, these loans need to be documented and should have a repayment schedule and interest rate. Line 10a: Buildings and other depreciable assets are fixed assets that the business owns that have been depreciated, such as real estate, furniture, or machinery Some of the most common liabilities on Schedule L are: Line 18: Other current liabilities are expenses incurred at the end of the year but not paid until January of the next year. Current expenses often include wages, state taxes, federal taxes, and payroll taxes payable at the end of the year. Line 19: Loans from shareholders are loans from the shareholder to the corporation. As with the other loans, these loans should be documented and include a repayment schedule and interest rate. Line 22: The par value or stated value of the capital stock issued by the corporation. This amount stays the same each year unless the S-Corporation issues additional stock after incorporation. The corporate charter or minutes should identify the stock. Line 23: Enter the beginning and ending balances of additional paid-in capital. This includes the amount contributed to the S-Corp by shareholders for which the corporation did not issue stock or amounts contributed in excess of the stated or par value. Line 24: This section is especially tricky. You should base the retained earnings on the S-Corporation's books and records. Most of the time, retained earnings should match the Accumulated Adjustments Account (AAA), other adjustments account (OAA), and previously taxed income (PTI) balances on Schedule M-2. Line 27: This line represents the total liability and shareholders equity. This line must match line 15. If you answered “yes” to question 11 on Schedule B that your total receipts were less than $250,000 and total assets were less than $250,000, then you aren't required to file a Schedule L. However, it may be beneficial to file Schedule L anyway because it will be crucial for future balance sheets. Part 5: Schedules M-1 and M-2 Schedule M-1 helps explain discrepancies between the books and your tax return. This section should explain any differences you notice. Some common items reported on Schedule M-2 include: Meal expenses (100% on books, 50% on taxes) Entertainment (100% on books, 0% on taxes) Life insurance premium expense (100% on books, 0% on taxes) Certain fines and penalties (100% on books, 0% on taxes) Political contributions (100% on books, 0% on taxes) Book depreciation expense (100% on books, 0% on taxes) Tax depreciation expense (%0 on books, 100% on taxes) Tax-exempt income (100% on books, %0 on taxes) Schedule M-2 tracks the income and losses and separately states items that the shareholder should report on their tax return. Resources + Links Bank Reconciliation 101 Lessons from the 1099-NEC deadline Follow Brian Thompson Online: Instagram, Facebook, LinkedIn, X, Forbes About Brian and the Mission Driven Business Podcast Brian Thompson, JD/CFP, is a tax attorney and certified financial planner who specializes in providing comprehensive financial planning to LGBTQ+ entrepreneurs who run mission-driven businesses. The Mission Driven Business podcast was born out of his passion for helping social entrepreneurs create businesses with purpose and profit. On the podcast, Brian talks with diverse entrepreneurs and the people who support them. Listeners hear stories of experiences, strength, and hope and get practical advice to help them build businesses that might just change the world, too.
This third lecture expands on prior lessons about Federal Income Tax by delving into more complex issues, the strategic use of tax rules, and practical exam-oriented approaches. It begins by recalling the foundational principles—gross income, deductions, credits, and reporting—then shows how these concepts apply at a deeper level.A key section addresses business entities and how their choice affects federal taxation. Sole proprietorships are reported on an individual's tax return (Schedule C), whereas partnerships and multi-member LLCs pass profits and losses through to partners, who then file informational returns and get Schedule K-1 forms. S corporations, requiring a special election, also pass income through but may help certain owner-employees split compensation between salary (subject to payroll tax) and distributions (not subject to self-employment tax). C corporations are taxed at the corporate level and may trigger “double taxation” when earnings are distributed as dividends.Moving on, the lecture explores tax planning and distinguishes it from illegal tax evasion. Legitimate planning may involve deferring income, characterizing gains as capital instead of ordinary, or selecting an entity structure that reduces the combined tax burden. However, transactions without economic substance or aimed solely at generating artificial losses cross into forbidden territory, raising red flags for the IRS under doctrines like “substance over form” or “economic substance.”The lecture highlights special planning considerations such as the timing of deductions and income, the use of Net Operating Losses (NOLs) to offset future (or past) taxable income, and how estate and gift taxation interplay with income tax (e.g., basis step-ups for inherited property). This discussion emphasizes how tax law's annual accounting framework can be leveraged—through year-end strategies, for example—to manage a taxpayer's marginal rates.A substantial part of the lecture focuses on exam strategy. Students learn to methodically identify the type of income (wages, capital gains, pass-through K-1 amounts) and check for relevant exclusions, permissible deductions, and potential credits. They must verify whether specialized rules (like depreciation recapture or the Alternative Minimum Tax) arise, and see if a business expense is legitimate or a personal cost disguised as a deduction. Clear IRAC-style writing is recommended: state the Issue, the governing Rule (citing relevant Code sections or doctrines), apply the facts carefully, then conclude.An extended hypothetical ties these advanced topics together, showing how owners in a partnership or LLC might claim or lose deductions, track basis, or consider an S corp election. By analyzing such scenarios step by step—determining entity-level vs. individual taxation, differentiating legitimate business expenses from personal ones, and weighing additional complexities like basis or recapture—students refine their abilities to address multi-layered fact patterns.In closing, the lecture underscores that while earlier sessions covered fundamentals (formation, exclusions, deductions, and credits), these advanced concepts highlight the strategic dimension of tax law. By mastering how business entities differ, how lawful planning can reduce taxes, and how to identify unscrupulous maneuvers, students can confidently tackle intricate exam questions. The central theme is to remain systematic and fact-driven, ensuring that each transaction meets the relevant legal requirements.
Schedule K-1 forms are income tax documents associated with "pass-through" businesses. But why are K-1s so complicated? Learn more.
Schedule K-1 forms are income tax documents associated with "pass through" businesses. But why are K-1s so complicated? Learn more. The post What Is A Schedule K-1 Form? appeared first on The College Investor.
IRS memo outlines potential risk if PEO gets behind on its taxes, IRS plans to revise 2023 Form 1065 Schedule K-1 and more.
It's tax season crunch time. In this episode, Brian will walk you through the S-Corporation income tax return to help you better understand what you're filing and hopefully catch mistakes before it's too late. He provides a section-by-section analysis of Form 1120-S and highlights key areas that business owners and tax professionals make mistakes. Episode Highlights Part 1: Heading, Income, Deductions, Tax and Payments Most of this information is drawn from your business's Profit and Loss Statement. Here's a breakdown of what's on the first page: Calendar year: The very top of the form asks for the calendar year. If the corporation has a calendar year-end, leave this blank. If a fiscal year or short year put in the appropriate dates. Address: Underneath the calendar year, the form asks for a name and address. Use the name set forth in the charter or other legal documents, such as your Employer Identification Number (EIN) letter. Item A: Located to the left of the address, Item A asks for your S election effective date. You should have a letter from the IRS (CP 261) with your S-Corp starting date. This date should stay the same every year. Item B: Your business activity code. This code shows the IRS exactly what you do. Item C: Item C only applies if you have assets of $10 million or more. Most of the time, Item C will not be checked. Item D: Put your EIN in Item D. Make sure to verify it's correct before you file your form. Item E: Your date of incorporation should match the articles of incorporation. This date may or may not be the same date as your S-election. Like the S-election date, the date of incorporation won't change. Item F: Total assets at the end of the year. Item G: If the corporation is electing to be an S-Corp beginning with the current filing tax year, check the appropriate box. If the S-Corp did not already file the S-Election, attach Form 2553 with the return. Item H: These boxes should be self-explanatory. Check the boxes that apply. Item I: Enter the number of shareholders in the firm (e.g. yourself and your partners). Item J: Most of the time, Item J will not be checked. If you believe that one of the Item J items applies, follow up with your tax accountant. Income: Report gross revenue your business has earned for the year and any additional income or interest income that you may have incurred. Only report trade or business income. Do not list rental income, portfolio income, or tax exempt income (those go on your Schedule K). Expenses: Report all deductions on your Profit and Loss statement. Pay special attention to the following lines: Line 7: Compensation of officers should have something on it. S-Corporations must pay shareholder/employee reasonable compensation for services rendered, and failing to put reasonable compensation could lead to an IRS audit. Also included on this line are fringe benefits, including employer contributions to health plans and group term life insurance, for shareholders/employees owning more than 2% of the corporation stock. If your S-Corp has total receipts of $500,000 or more, you'll need to attach Form 1125-E to explain what was paid to each officer. Line 8: Salary and wages paid to employees (other than officers) of the corporation. Line 17: An S-Corporation can deduct contributions made for its employees under a qualified pension, profit sharing, annuity, SEP plan, Simple plan, or any other retirement deferred compensation plan. This includes shareholders/employees owning more than 2% of the corporation stock. Line 18: Employee fringe benefits provided to officers and employees owning less than 2% go on this line, such as health insurance, disability insurance, and educational assistance. Line 19: Line 19 includes any other deductions. There should be an attached statement, and it should match your profit and loss. The numbers should be close to your Profit and Loss statement. Taxes and payments: In general, an S-Corporation does not pay taxes at the corporate level, so this section will be blank. Signature: It's important to sign the return only after verifying all of the information, including the following sections. Part 2: Schedule B This section is mostly self-explanatory questions. Make sure to read and understand each question. Below are two lines to pay special attention to: Box 1: This easy-to-miss box can change your entire return if you're not careful, since it's where you select whether you're a cash or accrual basis taxpayer. Once you choose an accounting method, you generally cannot change without approval from the IRS. Box 2: Here is where you explain what you do. Part B is an either/or question, so state whether you sell products or services. Also, if you hire contractors, say yes to question 14 -- and hopefully you got out your 1099 forms by January 31. Part 3: Schedules K and K-1 Schedule K reports the pro rata share items in total for the Corporation. Schedule K-1, which you receive in your personal name, reports the percentage of pro rata share items allocable to each shareholder. Lines 1-17 on Schedule K correspond to Boxes 1-17 on Schedule K-1. Most items on Schedules K and K-1 are self-explanatory and come from other parts of the return. Part 4: Schedule L This is where many taxpayers make a mistake. Schedule L matches your business' balance sheet and should agree with your books and records. If it doesn't, find out why before you file. The first two columns match what your accounts were at the beginning of the year and should match what the accounts were at the end of last year. If this is your first year filing an 1120-S return, these two columns should be blank. The second two columns are for what the accounts had on December 31 of the previous year and will carry over to next year's return. Some of the most common assets on Schedule L are: Line 1: Write the amount of cash in your bank account on the last day of the year. Line 7: Loans to shareholders are loans from the corporation to the shareholder. Keep in mind, these loans need to be documented and should have a repayment schedule and interest rate. Line 10a: Buildings and other depreciable assets are fixed assets that the business owns that have been depreciated, such as real estate, furniture, or machinery Some of the most common liabilities on Schedule L are: Line 18: Other current liabilities are expenses incurred at the end of the year but not paid until January of the next year. Current expenses often include wages, state taxes, federal taxes, and payroll taxes payable at the end of the year. Line 19: Loans from shareholders are loans from the shareholder to the corporation. As with the other loans, these loans should be documented and include a repayment schedule and interest rate. Line 22: The par value or stated value of the capital stock issued by the corporation. This amount stays the same each year unless the S-Corporation issues additional stock after incorporation. The corporate charter or minutes should identify the stock. Line 23: Enter the beginning and ending balances of additional paid-in capital. This includes the amount contributed to the S-Corp by shareholders for which the corporation did not issue stock or amounts contributed in excess of the stated or par value. Line 24: This section is especially tricky. You should base the retained earnings on the S-Corporation's books and records. Most of the time, retained earnings should match the Accumulated Adjustments Account (AAA), other adjustments account (OAA), and previously taxed income (PTI) balances on Schedule M-2. Line 27: This line represents the total liability and shareholders equity. This line must match line 15. If you answered “yes” to question 11 on Schedule B that your total receipts were less than $250,000 and total assets were less than $250,000, then you aren't required to file a Schedule L. However, it may be beneficial to file Schedule L anyway because it will be crucial for future balance sheets. Part 5: Schedules M-1 and M-2 Schedule M-1 helps explain discrepancies between the books and your tax return. This section should explain any differences you notice. Some common items reported on Schedule M-2 include: Meal expenses (100% on books, 50% on taxes) Entertainment (100% on books, 0% on taxes) Life insurance premium expense (100% on books, 0% on taxes) Certain fines and penalties (100% on books, 0% on taxes) Political contributions (100% on books, 0% on taxes) Book depreciation expense (100% on books, 0% on taxes) Tax depreciation expense (%0 on books, 100% on taxes) Tax-exempt income (100% on books, %0 on taxes) Schedule M-2 tracks the income and losses and separately states items that the shareholder should report on their tax return. Resources + Links Bank Reconciliation 101 Lessons from the 1099-NEC deadline Brian's Social Media: Twitter, Instagram, Facebook About Brian and the Mission Driven Business Podcast Brian Thompson, JD/CFP, is a tax attorney and certified financial planner who specializes in providing comprehensive financial planning to LGBTQ+ entrepreneurs who run mission-driven businesses. The Mission Driven Business podcast was born out of his passion for helping social entrepreneurs create businesses with purpose and profit. On the podcast, Brian talks with diverse entrepreneurs and the people who support them. Listeners hear stories of experiences, strength, and hope and get practical advice to help them build businesses that might just change the world, too.
In July 2021, the Internal Revenue Service (IRS) formally introduced Schedules K-2 and K-3. These forms bring uniformity and consistency to reporting items of international tax relevance to partners and S corporation shareholders on the foreign activity of a partnership or S corporation. Unfortunately, Schedule K-3 can add up to 20 additional pages to a partner's or shareholder's Schedule K-1. Michael Elliot, Director with the Firm's national tax team, joins this edition of the Tax Beat podcast with Brooks Nelson, Partner and Strategic Tax Leader, and Sarah McGregor, Tax Director, to share his insights on filing Schedule K-2 and K-3 for 2022. More importantly, Mike discusses the exceptions to the required filing of these forms for partnerships and S corporations. The podcast covers: 2021 Pushback on ReliefImportance of Filing Correctly2021 Relief Notice No Longer Effective for 2022Qualifying for the Domestic Filing ExceptionTiered Partnerships and Limited Foreign ActivityOpting in vs. Pursing an Exception to FilingK-3 Filing Difficulties Additional Guidance:Domestic Filing Exception for 2022 Schedules K-2 and K-3
In December 2022, the IRS posted a revised draft version of the 2022 Partnership Instructions for Schedule K-2 and K-3 (Form 1065) and a similar revised version of the 2022 S Corporation Instructions for Schedules K-2 and K-3 (Form 1120-S). They were subsequently finalized. On this Tax Section Odyssey episode, April Walker, CPA, CGMA, Lead Manager — Tax Practice & Ethics, AICPA & CIMA along with Tim Chan, Managing Director, Washington National Tax — Passthroughs — KPMG LLP and David Sites, National Managing Partner, International Tax Services — Grant Thornton LLP, sift through the changes between the draft instructions and dive into the particulars taxpayers need to know. What you'll learn in this episode Who needs to file the Schedules K-2 and K-3 (2.41) Domestic filing exception in the December 2022 draft instructions (5.06) The two-prong test (5.47) What no or limited foreign activity means (6.46) How to report foreign-source income (8.33) Requirement that all direct partners are US citizens/resident aliens (9.26) Partner or shareholder notification (11.20) Requirements for the schedules and the 1-month date (13.14) Form 1116, Foreign Tax Credit (Individual, Estate, or Trust), exception (18.21) Risks and penalties associated with not completing or filing required schedules (22.55) Final thoughts (25.05) Related resources IRS Schedules K-2 and K-3 guidance and resources — Access resources to advise clients on IRS Schedules K-2 and K-3, which are used to report items of international tax relevance from the operations of passthrough entities. Tax potpourri — Form 1099-K, Schedules K-2/K-3 and tax legislation | Tax Section Odyssey — Schedules K-2 and K-3 aim to standardize international tax information reporting to flow-through investors, yet challenges in practical implementation exist. K-2/K-3 — Making sense of new international passthrough reporting | Tax Section Odyssey — Listen to this podcast covering the new schedules and related past and future AICPA efforts. Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices. This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you're not already a member, consider joining this prestigious community of your tax peers. You'll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
https://vimeo.com/785743476 https://www.currentfederaltaxdevelopments.com/podcasts/2023/1/2/2023-01-03-vehicle-credit-guidance-end-of-year-extravaganza This week we look at: IRS to issue regulations for definitions for new clean vehicle credit List published on IRS website to assist in determining if a vehicle could qualify for new clean vehicle credit Incremental cost safe harbors for §45W commercial clean vehicle credit issued by IRS 2023 mileage rates release Final 2022 Schedule K-2 and K-3 Form 1065 instructions released
This week we look at: IRS to issue regulations for definitions for new clean vehicle credit List published on IRS website to assist in determining if a vehicle could qualify for new clean vehicle credit Incremental cost safe harbors for §45W commercial clean vehicle credit issued by IRS 2023 mileage rates release Final 2022 Schedule K-2 and K-3 Form 1065 instructions released
This week we're covering the Schedules K-2 and K-3 domestic partnership exemption, which has been expanded and revised.
https://vimeo.com/767811992 https://www.currentfederaltaxdevelopments.com/podcasts/2022/11/6/2022-11-06-s-corporation-schedule-k-2-and-k-3-draft-instructions-also-released This week we look at: IRS releases Form 1120-S Schedule K-2 and K-3 draft instructions with similar exceptions to Form 1065 version IRS gives some indication on when §174 guidance will come out Tax benefits alone not enough to establish taxpayer had a profit motive in solar lens leasing business IRS grants late rollover relief to victim of fraud
This week we look at: IRS releases Form 1120-S Schedule K-2 and K-3 draft instructions with similar exceptions to Form 1065 version IRS gives some indication on when §174 guidance will come out Tax benefits alone not enough to establish taxpayer had a profit motive in solar lens leasing business IRS grants late rollover relief to victim of fraud Copyright 2022, Kaplan Inc.
IRS releases draft 2022 Form 1120S Schedule K-2 and K-3 instructions, taxpayer discovers tax benefits alone don't equate to a profit motive and more.
https://vimeo.com/765424882 https://www.currentfederaltaxdevelopments.com/podcasts/2022/10/30/2022-10-31-partnership-schedule-k-2-draft-instructions-issued This week we look at: It's PTIN renewal time again and the IRS has released a news release announcing the fact IRS publishes draft 2022 Form 1065 Schedules K-2 and K-3 instructions with revised exceptions to filing Schedules K-2 and K-3
The IRS opens up 2023 PTIN renewals and releases draft partnership K-2 and K-3 instructions with revised exceptions to filing.
This week we look at: It's PTIN renewal time again and the IRS has released a news release announcing the fact IRS publishes draft 2022 Form 1065 Schedules K-2 and K-3 instructions with revised exceptions to filing Schedules K-2 and K-3 Copyright Kaplan, Inc.
00:00 Intro 01:47 Caveats 04:00 The IRS comments on the passage of funding under the Inflation Reduction Act 11:11 A Reminder about Unclaimed Property Report and the new tax return questions about them 12:11 AICPA issues a letter to the IRS asking for help on new forms K-1 & K-2….road map for auditors. 14:52 Be Very Careful having your tax return done by a VITA volunteer. Long history of errors. 19:32 Ed Zollars CPA very detailed analysis of the Inflation Reduction Act 20:19 Cars must have 80% US assembly to qualify for EV credit. Links: IRS Commissioner Charles P. Rettig: https://www.irs.gov/newsroom/irs-statement-by-irs-commissioner-chuck-rettig-on-the-inflation-reduction-act Escheatment: https://sco.ca.gov/upd_msg.html AICPA Urges IRS to Provide Additional Guidance on Schedule K-2 and K-3 Reporting: https://www.taxpayeradvocate.irs.gov/news/successstories-tas-assists-victims-of-vita-site-preparer-fraud/ Ed Zollars Podcast on the Inflation Reduction Act: https://podcasts.apple.com/us/podcast/2022-08-14-highlights-of-the-inflation-reduction-act-of-2022/id1114311870?i=1000576058930 EV Vehicle Credits: https://techcrunch.com/2022/09/02/a-complete-guide-to-the-new-ev-tax-credit/ About The Show: Hello and welcome. This is Ron Cohen. I'm a tax partner with the firm of Greenstein, Rogoff, Olsen & Co., LLP and we're located in beautiful downtown Fremont, California. I appreciate you signing in to listen to my self-indulgent, and sometimes narcissistic comments about the tax system. No Reliance: Take no reliance on anything you hear on this podcast. This is mostly for entertainment and education. In order to get an opinion from me or my firm you have to sign an engagement letter and give us all of the facts. After we do some research about your situation we'll come back and formally give you an opinion. And only then can you use that advice for purposes of entering into any transaction or filing a tax return. Plagiarism is Okay! Everything in the tax rules is from the Internal Revenue Code, its regulations, court cases, and various internal memorandums by the Internal Revenue Service. Lots of lawyers and CPAs write very good articles that we will often attach in the show notes. They are trying to show how smart they are to the public so everyone copies from everyone else, and I certainly want to give them credit. We're not writing any novels, nor creating deep or original thoughts here. No Politics We try to stay out of general politics, however tax law is developed through legislation in Congress and anything that's legislative has its own political ups and downs. And I feel free to comment on that. How I Help: Our firm does around 1400 tax returns for various people. The demographics range from little grandmothers all the way up to high tech executives and multinational corporations. We also specialize in family office services for wealthy groups with far flung entities and we also help those groups with things such as bill paying and taking care of their day-to-day financial operations No Cheerleader for the Tax System: Our tax system is intrusive, an invasion of privacy and it's tedious. You need to look at a 12 step flowchart to figure out in some cases whether you can take your mortgage interest deduction. It is part of the technocratic Administrative State that has built up in this country since World War Two, and I don't like it. Other countries have simplified the tax system in many ways, despite this we always try to get an A+ (not an A-, or a B, or a C) in our work and make sure it is accurate. Well prepared tax returns rarely get audited, and the best tax audit, is the one that never comes! Please let us know if there are specific topics you'd like to hear about in future episodes. Ron Cohen, CPA Partner at Greenstein, Rogoff, Olsen & Co., LLP Email: rcohen@groco.com 510.797.8661
To boost competition, the plan would require trading firms to directly compete when executing trades from retail investors. Today's Stocks & Topics: Cash, TGT - Target Corp., PYPL - PayPal Holdings Inc., Dividends & Taxes, Schedule K-1, DOW - Dow Inc., Consumer Price Index (CPI), Oil Prices, Shanghai Lockdown, XOM - Exxon Mobil Corp., DAC - Danaos Corp.Plus: Key Benchmark Numbers and Market Comments for: Treasury Yields, Gold, Oil and Gasoline.Advertising Inquiries: https://redcircle.com/brandsPrivacy & Opt-Out: https://redcircle.com/privacy
In this episode of Get The Money Right, Todd will be interviewing his CPA, Maureen O'Rourke, about various business entities and their respective advantages/limitations.Glossary:Sole-Proprietor: A sole proprietor is someone who owns an unincorporated business by himself or herself.LLC: A Limited Liability Company (LLC) is a business structure allowed by state statute.Corporation (C-Corp/S-Corp): In forming a corporation, prospective shareholders exchange money, property, or both, for the corporation's capital stock. A corporation generally takes the same deductions as a sole proprietorship to figure its taxable income.Schedule C: Use Schedule C (Form 1040) to report income or loss from a business you operated or a profession you practiced as a sole proprietor.Schedule K-1: Schedule K-1 is a federal tax document used to report the income, losses, and dividends of a business' or financial entity's partners or an S corporation's shareholders. The Schedule K-1 document is prepared for each individual partner and is included with the partner's personal tax return.1099 Form: The IRS 1099 Form is a collection of tax forms documenting different types of payments made by an individual or a business that typically isn't your employer.All descriptions/definitions taken from irs.govSubscribe to stay tuned for more real-time financial strategies that will improve your real estate business!If you are a real estate agent that is getting their money right and would like to be featured on the show, please email getthemoneyright.podcast@gmail.comShow Links:Get The Money Right WebsiteLinkedInInstagramCredits:Hosted by: Todd ButzerSpecial Guest: Maureen O'RourkeProduced by: Joe RodriguezDisclaimer:All opinions of the writers and speakers are their own and do not constitute financial advice in any way whatsoever. Nothing published by Get The Money Right constitutes an investment recommendation or financial advice, nor should any data or content published by Get The Money Right be relied upon for any investment or financial planning activities. Get The Money Right strongly recommends that you perform your own independent research and/or speak with a qualified professional/advisor before making any financial decisions.
IRA Financial's Adam Bergman Esq. discusses how to complete the IRS Form, Schedule K-1 when you have a Self-Directed IRA LLC.
“If anybody wants to accomplish anything, at some point, they have to believe it's possible.” Those are the words of this episode's guest, mental performance coach Chris Palmer. He discusses why belief is important, how it can be confused at times with arrogance, and why growing a sense of belief in ourselves can be done. Also, get an update on several IRS-related issues, including an update to Schedule K-2 and Schedule K-3 FAQs and news of a Government Accountability Office report on the 2021 tax filing season.
The appeal of an adjustable-rate mortgage can be the lower initial interest rate compared with a traditional 30-year fixed-rate mortgage-- however, that ARM rate can change down the road. Today's Stocks & Topics: EVA - Enviva Inc., Schedule K-1, Consumer Price Index, Producer Tax Index, Earnings Season, Oil Finds, T - AT&T Inc., WBD - Warner Bros. Discovery Inc. Series A, AMZN - Amazon.com Inc., COIN - Coinbase Global Inc., PTSI - P.A.M. Transportation Services Inc., The Waste Industry.TRIVIA QUESTION: "Can you name the top 5 states reporting the highest percentage of fraud reports including a monetary loss?"Advertising Inquiries: https://redcircle.com/brandsPrivacy & Opt-Out: https://redcircle.com/privacy
K-2 — isn't that a mountain? K2 is, but to tax professionals and with the hyphen, it's Partners' Distributive Share Items — International (and, for S corporations, a similar form), the new schedule filed with the returns of passthrough entities with “items of international tax relevance” and partners in foreign partnerships. Along with its “twin peak” of Schedule K-3, Partner's [or Shareholder's] Share of Income, Deductions, Credits, etc. — International, these formidable forms have been much discussed by CPAs and other tax practitioners lately. Here to help us better understand them is John Samtoy, CPA, who has written about Schedules K-2 and K-3 for the Tax Insider newsletter recently.
The new Schedules K-2 and K-3 aim to improve reporting by standardizing international tax information to partners and flow-through investors, making it easier for them to report these items on their individual tax returns. However, implementing the required changes continues to cause transitional challenges for the tax community. Although the IRS has released IR-2022-38 and a series of frequently asked questions (FAQs), more guidance is needed. On this episode of the Tax Section Odyssey, April Walker, CPA, CGMA, Lead Manager — AICPA Tax Section, talks with guest Stephanie L. Chapman, CPA, Director, International Services — Belfint, Lyons, Shuman, CPAs, about where we are with Schedules K-2 and K-3 reporting and discusses procedural tips for preparation. What you'll learn in this episode Timeline of Schedules K-2 and K-3 information releases and AICPA resources and comment letters (0.47) The potential for a full delay in implementation (2.28) Who must file the new schedules (4.58) Filing requirement exceptions (8.12) What taxpayers can do in tax software if country codes are unknown (11.02) Woes with PDF attachments when forms aren't available in software (13.08) Client management guidance, billing practices and engagement letters (15.23) AICPA resources IRS Schedules K-2 and K-3 guidance and resources — Access resources to advise clients on IRS Schedules K-2 and K-3, such as a client information letter and an earlier podcast episode from November 2021, which are used to report items of international tax relevance from the operations of pass-through entities. AICPA additional comments regarding Schedules K-2 and K-3 reporting – The AICPA submitted comments on Feb. 18, 2022, requesting a delay in the implementation of Schedules K-2 and K-3 to 2023 and recommending the IRS provide additional guidance. AICPA comments on proposed international changes to Form 1065, Schedule K-2, and Schedule K-3 — The AICPA submitted comments in 2020 on the proposed international changes to Form 1065, Schedule K-2, and Schedule K-3, including the recommend transmittal of Schedule K-3 in portions and minimizing overreporting by allowing partnerships the ability to determine the reporting needs of its partners. Other resources Schedules K-2 and K-3 Frequently Asked Questions (Forms 1065, 1120S, and 8865) — A set of FAQs released by the IRS on the new schedules and their reporting requirements. News Release IR-2022-38 — The IRS announced further details on additional relief for certain partnerships preparing Schedules K-2 and K-3 for 2021 on Feb. 16, 2022. Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices. This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you're not already a member, consider joining this prestigious community of your tax peers. You'll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.
https://vimeo.com/679703525 https://www.currentfederaltaxdevelopments.com/podcasts/2022/2/20/2022-02-21-irs-issues-additional-k-2-and-k-3-filing-relief-how-much-does-it-help This week we look at: This week we look at the IRS's newly issued 2021 Schedule K-2 and K-3 filing relief. How much does the option added in Question 15 of the newly released FAQ on K-2 and K-3 issues really help partnerships and S corporations? Who does and doesn't qualify for this relief? And what about 2022 and future years?
This week we look at the IRS's newly issued 2021 Schedule K-2 and K-3 filing relief. How much does the option added in Question 15 of the newly released FAQ on K-2 and K-3 issues really help partnerships and S corporations? Who does and doesn't qualify for this relief? And what about 2022 and future years? Copyright 2022, Kaplan, Inc.
https://vimeo.com/671552738 https://www.currentfederaltaxdevelopments.com/podcasts/2022/1/29/2022-01-31-there-are-k-2s-and-k-3s-in-your-future This week we look at: IRS revises instructions for Schedule K-2 and K-3 and points taxpayers to fact more may need to file this than might have thought they would IRS stops issuing one (and just one) automated notice, complains about issues blocking doing more AICPA issues statement critical of IRS statement on giving relief, wants all Tax Professionals United for Taxpayer Relief Coalition recommendations adopted
This week we look at: IRS revises instructions for Schedule K-2 and K-3 and points taxpayers to fact more may need to file this than might have thought they would IRS stops issuing one (and just one) automated notice, complains about issues blocking doing more AICPA issues statement critical of IRS statement on giving relief, wants all Tax Professionals United for Taxpayer Relief Coalition recommendations adopted Copyright 2022, Kaplan, Inc.
In June 2021, the IRS released final versions of two new international-related schedules that are being added to passthrough entity returns: Schedule K-2, Partners' Distributive Share Items — International Schedule K-3, Partner's Share of Income, Deductions, Credits, etc. — International The new international-related schedules will be required for 2021 partnership and S corporation returns and 2021 Schedules K-1, Partner's Share of Income, Deductions, Credits, etc. In this Tax Section Odyssey episode, April Walker, CPA, CGMA, from the AICPA Tax Section, welcomes Amy Miller, JD, CPA, from the AICPA Tax Policy and Advocacy team, David Sites, CPA, Managing Partner of International Tax Services — Grant Thornton, Kyle Dawley, JD, CPA, Principal — Clifton Larson Allen, and Tim Chan, CPA, Managing Director — KPMG, to discuss the new schedules and related past and future AICPA efforts. What you'll learn in this episode Background of the AICPA Foreign Passthrough Reporting Task Force and its past activities (1.19) Summary of the September 2020 AICPA comment letter (2.08) AICPA recommendations that were adopted by the U.S. Treasury and IRS (3.24) What the IRS is trying to achieve with the new schedules (4.20) Timing of schedule furnishment to partners (6.29) Thoughts on potential postponement of the Schedules K-2 and K-3 (8.06) Status of form instructions and major issues that practitioners and clients need to be aware of (10.37) Parts II and III reporting for those with 100% U.S. source activity (14.37) Country-by-country reporting requirement (16.49) Interaction between international forms (e.g., Forms 8858 and 5471) and new reporting requirements (18.00) Filing requirements for entities that are not required to file Forms 1065 or 8865 (20.37) What an upper-tier partnership should do if a lower-tier partnership does not provide any or all of Schedule K-3 information (21.30) Next steps for the AICPA Foreign Passthrough Reporting Task Force (23.00) AICPA resources Comments on Proposed International Changes to Form 1065, Schedule K-2, and Schedule K-3 — The AICPA submitted comments on the proposed international changes to Form 1065, Schedule K-2 and Schedule K-3. The AICPA recommended transmittal of Schedule K-3 in portions and minimizing overreporting by allowing partnerships the ability to determine the reporting needs of its partners. Other resources Notice 2021-39 — The IRS announced draft 2021 instructions for Schedules K-2 and K-3 for partnership and S corporation Forms 1065, 1120-S and 8865 as well as transition relief from penalties for any incorrect or incomplete reporting on the schedules. About Form 1065 and About Form 1120-S — The recent developments section provides updates as Schedules K-2 and K-2 are finalized for the 2021 tax year. Note: If your podcast app does not hyperlink to resources, visit https://taxodyssey.libsyn.com to access show notes with direct links. This episode is brought to you by the AICPA's Tax Section, your home base to maintain your professional edge. To learn more about the Tax Section, check out aicpa.org/tax or sign up for a free web tour.
Toby Mathis and Jeff Webb of Anderson Advisors answer your tax questions related to retirement plans, partnerships, real estate, wills, and trusts. Submit your tax question to taxtuesday@andersonadvisors. Highlights/Topics: Are there any restrictions on being a real estate professional (REP) during retirement? No, if you are retired, not working anywhere else, and spending a substantial amount of time working on rentals; depending on amount of losses, you may not have to be a REP Why would someone invest in a Publicly Traded Partnership (PTP)? How are they taxed? Is PTP a good option to invest in for diversity? Be careful, some PTPs are complex, but as far as traxation, there's nothing special about PTPs - look at them from an investment, not a tax perspective I have converted my primary home to a short-term rental (STR) this year.If I complete 100+ hours of material participation and more than anyone else, can I deduct the losses from my W-2 wages (active income)? Yes, but if it's rental income and you accelerate depreciation, you could lose your REP status I plan to donate my timeshare. Does that relieve me of my maintenance fee yearly? There are two types of timeshares - right to use and for deed; the nonprofit may use them personally, within the entity, or sell it to a third-party - know who is taking over the liability/responsibility of the asset For all questions/answers discussed, sign up to be a Platinum member to view the replay! Go to iTunes to leave a review of the Tax Tuesday podcast. Resources: Free Tax and Asset Protection Workshop - Aug. 28 https://aba.link/AP Infinity Investing: How The Rich Get Richer And How You Can Do The Same by Toby Mathis http://aba.link/infinitybook Wills and Trusts https://andersonadvisors.com/living_trusts/ Entity Formation https://andersonadvisors.com/entity_formation/ Retirement Plans https://andersonadvisors.com/retirement_plan/ Real Estate Professional Requirements https://www.irs.gov/pub/irs-utl/33-Real Estate Professionals.pdf Airbnb https://www.airbnb.com/ Bonus Depreciation https://www.irs.gov/newsroom/new-rules-and-limitations-for-depreciation-and-expensing-under-the-tax-cuts-and-jobs-act Depreciation Recapture https://www.investopedia.com/terms/d/depreciationrecapture.asp Capital Gains and Losses https://www.irs.gov/newsroom/capital-gains-and-losses-10-helpful-facts-to-know-0 Section 121 - Capital Gains Exclusion https://www.irs.gov/taxtopics/tc701 Secure Act https://www.congress.gov/bill/116th-congress/house-bill/1994/text Tax Cuts and Jobs Act (TCJA) https://www.irs.gov/tax-reform Charitable Organizations https://www.irs.gov/charities-non-profits/charitable-organizations Coronavirus Aid, Relief, and Economic Security (CARES) Act https://www.congress.gov/116/bills/hr748/BILLS-116hr748enr.pdf Step-Up in Basis https://www.investopedia.com/terms/s/stepupinbasis.asp#:~:text=A%20step%2Dup%20in%20basis%20is%20the%20readjustment%20of%20the,for%20tax%20purposes%20upon%20inheritance.&text=The%20asset%20receives%20a%20step,of%20property%20transferred%20at%20death. Schedule K-1 https://www.irs.gov/forms-pubs/about-schedule-k-1-form-1065 1031 Exchange https://www.irs.gov/pub/irs-news/fs-08-18.pdf Self-Employment Tax https://www.irs.gov/businesses/small-businesses-self-employed/self-employment-tax-social-security-and-medicare-taxes Old Age, Survivors, and Disability Insurance (OASDI) https://www.ssa.gov/policy/docs/progdesc/sspus/oasdi.pdf Cost Segregation Authority https://costsegauthority.com/ Form 3115 https://www.irs.gov/forms-pubs/about-form-3115 Form 8949 https://www.irs.gov/forms-pubs/about-form-8949 IRC 469(c)7 https://www.law.cornell.edu/uscode/text/26/469 Schedule A https://www.irs.gov/forms-pubs/about-schedule-a-form-1040 Schedule D https://www.irs.gov/forms-pubs/about-schedule-d-form-1040 Toby Mathis http://tobymathis.com/about-toby-mathis/ Anderson Advisors https://andersonadvisors.com/ Anderson Advisors Events https://andersonadvisors.com/all-events/ Events@andersonadvisors.com Anderson Advisors Tax and Asset Protection Workshop https://andersonadvisors.com/asset-protection/ Anderson Advisors Tax-Wise Workshop https://andersonadvisors.com/tax-wise-workshop-for-businesses-investors/ Anderson Advisors Infinity Investing Workshop https://andersonadvisors.com/investing-workshop-passive-income-generating-machine/ Anderson Advisors on YouTube https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ Anderson Advisors on Facebook https://www.facebook.com/AndersonBusinessAdvisors/ Anderson Advisors Podcast https://andersonadvisors.com/podcast/
Did you miss the April 15 tax deadline? Are you safe from significant penalties? What’s the best way to legally, morally, and ethically not pay taxes? It depends. Jeff Webb, Tax Director, and Eliot Thomas, Senior Tax Advisor, of Anderson Advisors answer your tax questions. Submit your tax question to taxtuesday@andersonadvisors. Highlights/Topics: If you experience a one-time large capital gain from exercising stock options, is it absolutely imperative that you figure out quarterly payments to avoid penalty, and if so, what if you missed April? There’s a safe harbor for calculating tax estimates and it requires paying in 90% of the current year tax or 110% of the prior year tax; and estimated tax penalties are typical not significant, but handle missed payment soon What is the best way to take advantage of Section 179 for new vehicles over 6,000 pounds? Typically, most people do not use Section 179 because of bonus depreciation, restrictions, and limitations How are crypto currencies taxed, and what’s the best way to legally, morally, and ethically not pay taxes? Depends on how you are getting the crypto currency; if you are buying and selling, it is treated as a security and other rules apply; if you are mining crypto currency, find out the value of that crypto bitcoin the day it is created What will happen if you open an LLC with Corp status but you missed the deadline? What should you do? If you missed the tax deadline and have a loss on your Corp, it typically doesn’t affect you; if you have a lot of startup costs, you need to file your initial tax return on time Does tax on depreciation recapture, like capital gains, go away when property is inherited? When you inherit property, everything resets and goes away, like capital gains Do I have to report a home I lived in and sold even though I purchased a new home? Previous Section 121 states as long as you buy a more expensive home than the one you sold, you can defer any gain until the age of 55; Section 121 now states if you lived in the home for two of last five years, you can defer a large part or all the gain For all questions/answers discussed, sign up to be a Platinum member to view the replay! Go to iTunes to leave a review of the Tax Tuesday podcast. Resources: Infinity Investing Workshop on June 5 http://aba.link/iiw Infinity Investing: How The Rich Get Richer And How You Can Do The Same by Toby Mathis http://aba.link/infinitybook Capital Gains and Losses https://www.irs.gov/newsroom/capital-gains-and-losses-10-helpful-facts-to-know-0 Section 179 Tax Deduction https://www.section179.org/section_179_deduction/ Bitcoin https://bitcoin.org/ Nexo - Banking on Crypto https://nexo.io/ Entity Formation https://andersonadvisors.com/entity_formation/ Retirement Plans https://andersonadvisors.com/retirement_plan/ Real Estate Professional Requirements https://www.irs.gov/pub/irs-utl/33-Real Estate Professionals.pdf Wills and Trusts https://andersonadvisors.com/living_trusts/ Section 121 - Capital Gains Exclusion https://www.irs.gov/taxtopics/tc701 Bonus Depreciation https://www.irs.gov/newsroom/new-rules-and-limitations-for-depreciation-and-expensing-under-the-tax-cuts-and-jobs-act Depreciation Recapture https://www.investopedia.com/terms/d/depreciationrecapture.asp Schedule C https://www.irs.gov/forms-pubs/about-schedule-c-form-1040 Form 1040 https://www.irs.gov/forms-pubs/about-form-1040 Zcash https://z.cash/ Self-Employment Tax https://www.irs.gov/businesses/small-businesses-self-employed/self-employment-tax-social-security-and-medicare-taxes Employee Retirement Income Security Act (ERISA) https://www.dol.gov/general/topic/retirement/erisa U.S. Department of Labor (DOL) https://www.dol.gov/ Schedule K-1, Form 1065 https://www.irs.gov/forms-pubs/about-schedule-k-1-form-1065 Cost Segregation Authority https://costsegauthority.com/ Step-Up in Basis https://www.investopedia.com/terms/s/stepupinbasis.asp#:~:text=A%20step%2Dup%20in%20basis%20is%20the%20readjustment%20of%20the,for%20tax%20purposes%20upon%20inheritance.&text=The%20asset%20receives%20a%20step,of%20property%20transferred%20at%20death. 1031 Exchange https://www.irs.gov/pub/irs-news/fs-08-18.pdf Toby Mathis https://tobymathis.com/ Abatement Letter https://www.irs.gov/businesses/small-businesses-self-employed/penalty-relief-due-to-first-time-penalty-abatement-or-other-administrative-waiver Anderson Advisors https://andersonadvisors.com/ Anderson Advisors Events https://andersonadvisors.com/all-events/ Events@andersonadvisors.com Anderson Advisors Tax and Asset Protection Workshop https://andersonadvisors.com/asset-protection/ Anderson Advisors Tax-Wise Workshop https://andersonadvisors.com/tax-wise-workshop-for-businesses-investors/ Anderson Advisors Infinity Investing Workshop https://andersonadvisors.com/investing-workshop-passive-income-generating-machine/ Anderson Advisors on YouTube https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ Anderson Advisors on Facebook https://www.facebook.com/AndersonBusinessAdvisors/ Anderson Advisors Podcast https://andersonadvisors.com/podcast/
Don’t be embarrassed or feel like an idiot when it comes to taxes. You’re not alone. A little knowledge goes a long way. Toby Mathis and Jeff Webb of Anderson Advisors answer your tax questions. Submit your tax question to taxtuesday@andersonadvisors. Highlights/Topics: What are the requirements for being a real estate professional, and what are the benefits? Either you or your spouse must have 750 hours and greater than 50 percent of personal services in real estate, and both spouses must materially participate per property unless the aggregation election is selected; and the benefits are that you get to write off losses that you typically wouldn’t be able to write off as a landlord I have a fully depreciated rental in a high-tax state. Can I do a 1031 exchange and buy some farmland in a different state and not pay taxes to the high-tax state? Yes, temporarily, unless or until you sell the farmland property I have an S-Corp business. I hired my 12-year-old son to work and he gets a W-2 with an annual income of about $1,400. Does he need to file a tax return? If he does not file a tax return, will that increase my chances of getting an audit for my business? If your son makes less than the standard deduction, he does not need to file a tax return, and your business is unlikely to be audited Can I write off my monthly car payment if it’s financed and in my corporation’s name? Write off the expenses and interest, but depreciate the car if in the corporation's name; you may have more income from that vehicle than the vehicle is worth–track and reimburse your mileage I have a rental property that is owned by a self-directed IRA. Does it need to be in an entity or is it safe in the IRA? Having the property in an LLC within the IRA is preferred, especially if there are other assets in the IRA On a “subject to” deal, who pays capital gains and who pays depreciation recapture when the owner grants the deed to the “subject to” buyer? Seller takes care of their own capital gains and depreciation recapture; buyer resets basis and starts depreciation For all questions/answers discussed, sign up to be a Platinum member to view the replay! Go to iTunes to leave a review of the Tax Tuesday podcast. Resources: Infinity Investing Workshop (Free 1-day virtual event on March 13) https://andersonadvisors.com/ Tax Toolbox https://andersonadvisors.com/taxtoolbox/ Capital Gains and Losses https://www.irs.gov/newsroom/capital-gains-and-losses-10-helpful-facts-to-know-0 Entity Formation https://andersonadvisors.com/entity_formation/ Real Estate Professional Requirements https://www.irs.gov/pub/irs-utl/33-Real Estate Professionals.pdf 26 U.S. Code 469(c)(7) https://www.law.cornell.edu/uscode/text/26/469 1031 Exchange https://www.irs.gov/pub/irs-news/fs-08-18.pdf Bonus Depreciation https://www.irs.gov/newsroom/new-rules-and-limitations-for-depreciation-and-expensing-under-the-tax-cuts-and-jobs-act Depreciation Recapture https://www.investopedia.com/terms/d/depreciationrecapture.asp MileIQ https://www.mileiq.com/ Retirement Plans https://andersonadvisors.com/retirement_plan/ Self-Directed IRA (SDIRA) https://www.investopedia.com/terms/s/self-directed-ira.asp Opportunity Zones https://www.irs.gov/credits-deductions/opportunity-zones-frequently-asked-questions Step-Up in Basis https://www.investopedia.com/terms/s/stepupinbasis.asp#:~:text=A%20step%2Dup%20in%20basis%20is%20the%20readjustment%20of%20the,for%20tax%20purposes%20upon%20inheritance.&text=The%20asset%20receives%20a%20step,of%20property%20transferred%20at%20death. Charitable Organizations https://www.irs.gov/charities-non-profits/charitable-organizations Form 1120 https://www.irs.gov/forms-pubs/about-form-1120 Cost Segregation https://andersonadvisors.com/using-cost-segregation-residential-real-estate/ Schedule K-1 Form 1065 https://www.irs.gov/forms-pubs/about-schedule-k-1-form-1065 FHA Loan Requirements https://www.fha.com/fha_loan_requirements Wills and Trusts https://andersonadvisors.com/living_trusts/ Toby Mathis http://tobymathis.com/about-toby-mathis/ Anderson Advisors https://andersonadvisors.com/ Anderson Advisors Events https://andersonadvisors.com/all-events/ Events@andersonadvisors.com Anderson Advisors Tax and Asset Protection Workshop https://andersonadvisors.com/asset-protection/ Anderson Advisors Tax-Wise Workshop https://andersonadvisors.com/tax-wise-workshop-for-businesses-investors/ Anderson Advisors Infinity Investing Workshop https://andersonadvisors.com/investing-workshop-passive-income-generating-machine/ Anderson Advisors on YouTube https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ Anderson Advisors on Facebook https://www.facebook.com/AndersonBusinessAdvisors/ Anderson Advisors Podcast https://andersonadvisors.com/podcast/
How are you doing, really? Just don’t watch or listen to the news because it’s tough living in paradise—whether it’s California, Hawaii, or Iceland. However, Toby Mathis and Jeff Webb of Anderson Advisors are still here to offer answers to your tax questions with a side of awesome sauce. Do you have a tax question? Submit it to taxtuesday@andersonadvisors. Highlights/Topics: How much can you give to charity and receive a full credit, even if filing a standard deduction? Choose between taking a standard deduction or an itemized deduction on Schedule A to give a cash donation to charity and write-off 100 percent of it against your adjusted gross income (AGI) What is Section 1202? Can a corporation managing real estate qualify for 26 U.S. Code Section 1202? Section 1202 refers to partial exclusion(s) for gain from certain small business stock and designed to get people to invest in manufacturing-type companies The recently passed California Proposition 19 will allow California to reassess any non-primary residence properties transferred to heirs at market rate? Yes, starting Feb. 16, 2021; for more information, visit the state’s Board of Equalization I’m trying to meet my goal of $50K for Infinity investing. I have about $30K that I could use to buy stocks, ETF, etc. Could I use all $30K to purchase stocks without violating the annual $6,000 contribution limit? Learn how to be a stock market landlord, buy assets, settle liabilities, and systematically make passive income to not work again For all questions/answers discussed, sign up to be a Platinum member to view the replay! Go to iTunes to leave a review of the Tax Tuesday podcast. Resources: Tax Toolbox http://aba.link/taxtoolbox Real Estate Professional Requirements https://www.irs.gov/pub/irs-utl/33-Real%20Estate%20Professionals.pdf Capital Gains and Losses https://www.irs.gov/newsroom/capital-gains-and-losses-10-helpful-facts-to-know-0 Charitable Organizations https://www.irs.gov/charities-non-profits/charitable-organizations Form 1023 - Application for Recognition of Exemption https://www.irs.gov/forms-pubs/about-form-1023 Form 1024 - Application for Recognition of Exemption https://www.irs.gov/forms-pubs/about-form-1024 Schedule A https://www.irs.gov/forms-pubs/about-schedule-a-form-1040 Schedule C https://www.irs.gov/forms-pubs/about-schedule-c-form-1040 Schedule D https://www.irs.gov/pub/irs-pdf/f1040sd.pdf Schedule E https://www.irs.gov/forms-pubs/about-schedule-e-form-1040 Internal Revenue Code Section 1202 https://www.irs.gov/pub/irs-regs/ia2694.txt California State Board of Equalization - Proposition 19 https://www.boe.ca.gov/prop19/ California Proposition 13 https://www.californiataxdata.com/pdf/Prop13.pdf Wills and Trusts https://andersonadvisors.com/living_trusts/ Lifetime Gifts - Form 709 https://www.irs.gov/forms-pubs/about-form-709 Medicare https://www.medicare.gov/ Social Security Administration https://www.ssa.gov/ Individual Retirement Arrangements (IRAs) https://www.irs.gov/retirement-plans/individual-retirement-arrangements-iras Traditional and Roth IRAs https://www.irs.gov/retirement-plans/traditional-and-roth-iras Self-Employment Tax https://www.irs.gov/taxtopics/tc554 Community Property with Right of Survivorship https://lslcpas.com/real-estate-ownership-community-property-right-survivorship-better-joint-tenancy/ 1031 Exchange https://www.irs.gov/pub/irs-news/fs-08-18.pdf Bonus Depreciation https://www.irs.gov/newsroom/new-rules-and-limitations-for-depreciation-and-expensing-under-the-tax-cuts-and-jobs-act Opportunity Zones https://www.irs.gov/credits-deductions/opportunity-zones-frequently-asked-questions HUD https://www.hud.gov/ Kiddie Tax https://www.irs.gov/taxtopics/tc553 State and Local Tax (SALT) https://taxfoundation.org/tax-basics/salt-deduction/ Schedule K-1 (Form 1065) https://www.irs.gov/forms-pubs/about-schedule-k-1-form-1065 Form 5498 https://www.irs.gov/forms-pubs/about-form-5498 Conservation Easements https://www.conservationeasement.us/what-is-a-conservation-easement/ Alternative/Renewable Energy Tax Credits https://www.americanprogress.org/issues/green/reports/2020/05/28/485411/renewable-energy-tax-credits-case-refundability/ Unrelated Debt-Financed Income (UDFI) https://www.irs.gov/pub/irs-tege/eotopicn86.pdf CARES Act https://www.congress.gov/116/bills/hr748/BILLS-116hr748enr.pdf Tax Cuts and Jobs Act (TCJA) https://www.irs.gov/tax-reform Erik Dodds https://afsplan.com/erik-dodds-2/ Tax-Wise Business Ownership by Toby Mathis https://andersonadvisors.com/shop/ Toby Mathis http://tobymathis.com/about-toby-mathis/ Anderson Advisors https://andersonadvisors.com/ Anderson Advisors Events https://andersonadvisors.com/all-events/ Events@andersonadvisors.com Anderson Advisors Tax and Asset Protection Workshop https://andersonadvisors.com/asset-protection/ Anderson Advisors Tax-Wise Workshop https://andersonadvisors.com/tax-wise-workshop-for-businesses-investors/ Anderson Advisors Infinity Investing Workshop https://andersonadvisors.com/investing-workshop-passive-income-generating-machine/ Anderson Advisors on YouTube https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ Anderson Advisors on Facebook https://www.facebook.com/AndersonBusinessAdvisors/ Anderson Advisors Podcast https://andersonadvisors.com/podcast/
Besides guidance from the Internal Revenue Service (IRS) regarding U.S. President Donald Trump’s executive order to allow deferral of the employee portion of Social Security payroll tax, Toby Mathis and Jeff Webb of Anderson Advisors provide further clarification. Do you have a tax question? Submit it to taxtuesday@andersonadvisors. Highlights/Topics: If I sell a piece of land and keep the primary house, what is the 1031 valued at? Is it a $0 or 150k purchase price in 2012? Get each parcel of land appraised to identify value for the basis Can I write off an RV, if I use it for business travel? It is possible to write off the RV by using it 100% for business, not personal use as a second home How does a trust work in relationship to LLC in real estate? Provides anonymity for beneficiary and LLC Can you take depreciation on a rental condo? What do you use for the basis? Yes, you can take depreciation on a rental condo, if you own the condo, not as a renter Is there an option to give employees a bonus without being charged a luxury tax? You can give employees bonuses, but bonuses are subject to regular payroll taxes For all questions/answers discussed, sign up to be a Platinum member to view the replay! Go to iTunes to leave a review of the Tax Tuesday podcast. Resources: The Tax Toolbox (only $495; regularly $1,500) http://aba.link/ttb920 Memorandum on Deferring Payroll Tax Obligations in Light of the Ongoing COVID-19 Disaster https://www.whitehouse.gov/presidential-actions/memorandum-deferring-payroll-tax-obligations-light-ongoing-covid-19-disaster/ Internal Revenue Service (IRS) https://www.irs.gov/ IRS: Notice 2020-65 https://www.irs.gov/pub/irs-drop/n-20-65.pdf 1031 Exchange https://www.irs.gov/pub/irs-news/fs-08-18.pdf Wills and Trusts https://andersonadvisors.com/living_trusts/ Self-Employment Tax https://www.irs.gov/taxtopics/tc554 Airbnb https://www.airbnb.com/ Real Estate Professional Requirements https://www.irs.gov/pub/irs-utl/33-Real%20Estate%20Professionals.pdf Form W-2 https://www.irs.gov/forms-pubs/about-form-w-2 Form 1065: Schedule K-1 https://www.irs.gov/pub/irs-pdf/f1065sk1.pdf Bonus Depreciation https://www.irs.gov/newsroom/new-rules-and-limitations-for-depreciation-and-expensing-under-the-tax-cuts-and-jobs-act Depreciation Recapture https://www.investopedia.com/terms/d/depreciationrecapture.asp CARES Act https://www.sbc.senate.gov/public/index.cfm/guide-to-the-cares-act Small Business Administration (SBA) https://www.sba.gov/ Cost Segregation https://www.irs.gov/businesses/cost-segregation-audit-techniques-guide-chapter-1-introduction Tax Cuts and Jobs Act (TCJA) https://www.irs.gov/tax-reform Healthcare Reform (Affordable Care Act) https://www.healthcare.gov/ Individual Retirement Arrangements (IRAs) https://www.irs.gov/retirement-plans/individual-retirement-arrangements-iras Traditional and Roth IRAs https://www.irs.gov/retirement-plans/traditional-and-roth-iras Capital Gains Exclusion/Section 121 https://www.irs.gov/taxtopics/tc701 Schedule A https://www.irs.gov/forms-pubs/about-schedule-a-form-1040 Schedule C https://www.irs.gov/forms-pubs/about-schedule-c-form-1040 Schedule E https://www.irs.gov/forms-pubs/about-schedule-e-form-1040 Hobby Loss/Safe Harbor Provision https://www.irs.gov/pub/irs-utl/irc183activitiesnotengagedinforprofit.pdf Earned Income Tax Credit https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit MileIQ https://www.mileiq.com/ Charitable Organizations https://www.irs.gov/charities-non-profits/charitable-organizations 26 U.S. Code Section 280A https://www.law.cornell.edu/uscode/text/26/280A California Assembly Bill 5 (AB5) https://www.investopedia.com/california-assembly-bill-5-ab5-4773201 Franchise Tax Board (FTB) https://www.ftb.ca.gov/ QuickBooks https://quickbooks.intuit.com/ ADP https://www.adp.com/ Unrelated Business Income Tax (UBIT) https://www.irs.gov/charities-non-profits/unrelated-business-income-tax Unrelated Debt-Financed Income (UDFI) https://www.irs.gov/pub/irs-tege/eotopicn86.pdf Toby Mathis http://tobymathis.com/about-toby-mathis/ Anderson Advisors https://andersonadvisors.com/ Anderson Advisors Events https://andersonadvisors.com/all-events/ Events@andersonadvisors.com Events@andersonadvisors.com Anderson Advisors Tax and Asset Protection Event https://andersonadvisors.com/asset-protection/ Tax-Wise Workshop https://andersonadvisors.com/tax-wise-workshop/ Anderson Advisors on YouTube https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ Anderson Advisors on Facebook https://www.facebook.com/AndersonBusinessAdvisors/ Anderson Advisors Podcast https://andersonadvisors.com/podcast/
As COVID-19 and tax-related relief questions continue, Toni Covey and Jeff Webb of Anderson Advisors answer your tax questions. Do you have a tax question? Submit it to taxtuesday@andersonadvisors. Highlights/Topics: Due to the AB5 Law, my clients can no longer hire me as an independent contractor. Instead, they are hiring out-of-state contractors. Do I need to switch to an S Corp or move my company out of California? It depends and offers various options, such as a worker must be customarily engaged in an independently established trade occupation For a preschool that received Coronavirus relief, will the PPP loan forgiveness amount, the grants, and the EIDL advance be taxable as income? PPP loan and grants are not considered taxable income, however, an EIDL of $10,000 will not be forgiven or tax-deductible from PPP I have solely owned a second home long-term in New York. Do I need to file taxes separately from my wage-earning wife to minimize my capital gains tax considering my present income is limited to Social Security? No, but it primarily depends on how much the wife is earning My wife and I own several rental properties and manage/maintain them mostly ourselves with no other employees. Does setting up a corporation to manage the rental properties (each on their own LLC) make sense from a tax standpoint? Consider a corporation to manage the rental properties or manage the LLCs that hold the rental properties For all questions/answers discussed, sign up to be a Platinum member to view the replay! Go to iTunes to leave a review of the Tax Tuesday podcast. Resources: Uniform Transfers to Minors Act (UTMA) https://www.investopedia.com/terms/u/utma.asp Economic Injury Disaster Loan (EIDL) https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/economic-injury-disaster-loan-emergency-advance Paycheck Protection Program (PPP) https://home.treasury.gov/system/files/136/PPP--Fact-Sheet.pdf Paycheck Protection Program (PPP) Flexibility Act https://www.investopedia.com/paycheck-protection-program-flexibility-act-of-2020-an-overview-4846944 Small Business Administration (SBA) https://www.sba.gov/ Internal Revenue Service (IRS) https://www.irs.gov/ Wills and Trusts https://andersonadvisors.com/living_trusts/ Individual Retirement Arrangements (IRAs) https://www.irs.gov/retirement-plans/individual-retirement-arrangements-iras Traditional and Roth IRAs https://www.irs.gov/retirement-plans/traditional-and-roth-iras Self-Employment Tax https://www.irs.gov/taxtopics/tc554 Unrelated Business Income Tax (UBIT) https://www.irs.gov/charities-non-profits/unrelated-business-income-tax Unrelated Debt-Financed Income (UDFI) https://www.irs.gov/pub/irs-tege/eotopicn86.pdf California Assembly Bill 5 (AB5) https://www.investopedia.com/california-assembly-bill-5-ab5-4773201 Franchise Tax Board (FTB) https://www.ftb.ca.gov/ Capital Gains Exclusion/Section 121 https://www.irs.gov/taxtopics/tc701 Charitable Organizations https://www.irs.gov/charities-non-profits/charitable-organizations Real Estate Professional Requirements https://www.irs.gov/pub/irs-utl/33-Real%20Estate%20Professionals.pdf Form 1065: Schedule K-1 https://www.irs.gov/pub/irs-pdf/f1065sk1.pdf Form 8805 https://www.irs.gov/forms-pubs/about-form-8805 1040NR https://www.irs.gov/forms-pubs/about-form-1040-nr Passive Activity Losses (PALs) https://www.investopedia.com/terms/p/passive-activity-loss-rules.asp Schedule A https://www.irs.gov/forms-pubs/about-schedule-a-form-1040 Schedule C https://www.irs.gov/forms-pubs/about-schedule-c-form-1040 Section 105 https://www.irs.gov/pub/irs-drop/rr-03-102.pdf Tax Cuts and Jobs Act (TCJA) https://www.irs.gov/tax-reform 26 U.S. Code Section 280A https://www.law.cornell.edu/uscode/text/26/280A Bonus Depreciation https://www.irs.gov/newsroom/new-rules-and-limitations-for-depreciation-and-expensing-under-the-tax-cuts-and-jobs-act Depreciation Recapture https://www.investopedia.com/terms/d/depreciationrecapture.asp Healthcare Reform (Affordable Care Act) https://www.healthcare.gov/ Credits and Deductions https://www.irs.gov/credits-deductions-for-individuals Anderson Advisors https://andersonadvisors.com/ Anderson Advisors Events https://andersonadvisors.com/all-events/ Events@andersonadvisors.com Anderson Advisors Tax and Asset Protection Event https://andersonadvisors.com/asset-protection/ Tax-Wise Workshop https://andersonadvisors.com/tax-wise-workshop/ Anderson Advisors on YouTube https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ Anderson Advisors on Facebook https://www.facebook.com/AndersonBusinessAdvisors/ Anderson Advisors Podcast https://andersonadvisors.com/podcast/
Knowledge is power when talking about taxes. The more you know, the more tools you have to be successful. While Toby Mathis is taking some much needed rest and relaxation after Tax Day on July 15, Michael Bowman and Jeff Webb of Anderson Advisors answer your tax questions. Do you have a tax question? Submit it to taxtuesday@andersonadvisors. Highlights/Topics: Does it make sense to use an LLC as the property manager for self-managed rentals? Separate and isolate rentals to protect assets; consider Inc. instead of LLC If I put my property in a land trust, will it be difficult to sell? Land trust is basically a revocable trust with a grantor; land trust should sell the property but not via turn of title What is the best entity to do wholesaling? Disregarded LLC down to a corporation Property Aggregation: What is it and what are the reasons to do it or not? Primarily used with real estate professionals for material participation to combine multiple properties What’s the difference between a tax deduction and a tax credit? Tax deduction reduces your taxable income; tax credit reduces your actual tax For all questions/answers discussed, sign up to be a Platinum member to view the replay! Go to iTunes to leave a review of the Tax Tuesday podcast. Resources: Anderson Advisors Tax and Asset Protection 1-day Event http://aba.link/TAP88 Healthcare Reform (Affordable Care Act) https://www.healthcare.gov/ Wills and Trusts https://andersonadvisors.com/living_trusts/ TurboTax https://turbotax.intuit.com/ Individual Retirement Arrangements (IRAs) https://www.irs.gov/retirement-plans/individual-retirement-arrangements-iras Traditional and Roth IRAs https://www.irs.gov/retirement-plans/traditional-and-roth-iras Self-Employment Tax https://www.irs.gov/taxtopics/tc554 Capital Gains Exclusion/Section 121 https://www.irs.gov/taxtopics/tc701 Bonus Depreciation https://www.irs.gov/newsroom/new-rules-and-limitations-for-depreciation-and-expensing-under-the-tax-cuts-and-jobs-act Depreciation Recapture https://www.investopedia.com/terms/d/depreciationrecapture.asp 529 Plans https://www.sec.gov/reportspubs/investor-publications/investorpubsintro529htm.html Internal Revenue Service (IRS) https://www.irs.gov/ Schedule C https://www.irs.gov/forms-pubs/about-schedule-c-form-1040 Publication 520 https://www.irs.gov/pub/irs-prior/p520--1995.pdf 1031 Exchange https://www.irs.gov/businesses/small-businesses-self-employed/like-kind-exchanges-real-estate-tax-tips Real Estate Professional Requirements https://www.irs.gov/pub/irs-utl/33-Real%20Estate%20Professionals.pdf Cost Segregation https://andersonadvisors.com/podcast/cost-segregation-with-brett-hansen-replay/ Form 5500 https://www.dol.gov/agencies/ebsa/employers-and-advisers/plan-administration-and-compliance/reporting-and-filing/form-5500 Form 1065: Schedule K-1 https://www.irs.gov/pub/irs-pdf/f1065sk1.pdf Franchise and Excise Tax https://revenue.support.tn.gov/hc/en-us/sections/200549025-Franchise-Excise-Tax Credits and Deductions https://www.irs.gov/credits-deductions-for-individuals Section 105(b) Deduction https://www.irs.gov/pub/irs-drop/rr-03-102.pdf Charitable Organizations https://www.irs.gov/charities-non-profits/charitable-organizations Michael Bowman https://andersonadvisors.com/michael-bowman Toby Mathis http://tobymathis.com/ Anderson Advisors https://andersonadvisors.com/ Anderson Advisors Events https://andersonadvisors.com/all-events/ Events@andersonadvisors.com Events@andersonadvisors.com Anderson Advisors Tax and Asset Protection Event https://andersonadvisors.com/asset-protection/ Tax-Wise Workshop https://andersonadvisors.com/tax-wise-workshop/ Anderson Advisors on YouTube https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ Anderson Advisors on Facebook https://www.facebook.com/AndersonBusinessAdvisors/ Anderson Advisors Podcast https://andersonadvisors.com/podcast/
Are you smarter than your accountant, especially when they tell you there’s nothing they can do? Toby Mathis and Toni Covey of Anderson Advisors answer your tax questions to provide clarity and understanding. Do you have a tax question? Submit it to taxtuesday@andersonadvisors. Highlights/Topics: I have an empty plot of land. If I sell it and have a loss, am I able to write-off the loss on my taxes? If treated as a capital loss because it’s a capital asset, the loss is deductible against any other capital gains or up to $3,000 of ordinary income Can you set up a hedge fund or other entity where you can trade your stocks, so you’re not taxed as long as the proceeds stay in the fund you created until they are reinvested? Hedge funds are usually operating in an LLC taxed to a partnership or limited partnership, which flows through owner’s tax return Are there any strategies to reduce paying taxes on benefit or pension income and Social Security benefits? Distributions from a retirement plan are taxable income most of the time; Social Security benefits may/may not be taxable, depending on other income What are the tax benefits of setting up a charity? Charity doesn’t pay any tax and you can give it assets Can I use my self-directed IRA as a hard money lender? Yes, but you’re personally responsible for excess liabilities with an IRA I was a passive real estate investor and I have passive activity losses (PALs). Now, I’m a real estate professional. Can I use those PALs against my ordinary income, if I’m a real estate professional? No, they’re suspended until you substantially dispose all the activity I’ve noticed that taxes on new construction properties are generally lower for a year or two before increasing. Why? Property taxes are based on assessed value of the home What are the limits for bonus depreciation? There are none; you can create $1 million worth of loss and not pay tax for a long time Does getting a disaster loan and PPP affect taxes? No For all questions/answers discussed, sign up to be a Platinum member to view the replay! Go to iTunes to leave a review of the Tax Tuesday podcast. Resources: New Opportunities in Real Estate Accounting with Aaron Adams https://andersonadvisors.com/new-opportunities-real-estate-accounting Tax-Wise Business Ownership by Toby Mathis https://andersonadvisors.com/shop/ Infinity Investing Workshop http://aba.link/iiw 1-day Online Tax-Wise Class https://andersonadvisors.com/tax-wise-workshop/ Individual Retirement Arrangements (IRAs) https://www.irs.gov/retirement-plans/individual-retirement-arrangements-iras Traditional and Roth IRAs https://www.irs.gov/retirement-plans/traditional-and-roth-iras 1031 Exchange https://www.irs.gov/businesses/small-businesses-self-employed/like-kind-exchanges-real-estate-tax-tips CARES Act https://home.treasury.gov/policy-issues/top-priorities/cares-act Economic Injury Disaster Loan (EIDL) https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/economic-injury-disaster-loan-emergency-advance Paycheck Protection Program (PPP) https://home.treasury.gov/system/files/136/PPP--Fact-Sheet.pdf Paycheck Protection Program (PPP) Flexibility Act https://www.investopedia.com/paycheck-protection-program-flexibility-act-of-2020-an-overview-4846944 Small Business Administration (SBA) https://www.sba.gov/ 457 Plan https://www.investopedia.com/terms/1/457plan.asp Cost Segregation https://andersonadvisors.com/podcast/cost-segregation-with-brett-hansen-replay/ Real Estate Professional Requirements https://www.irs.gov/pub/irs-utl/33-Real%20Estate%20Professionals.pdf 469(c)(7) https://www.law.cornell.edu/uscode/text/26/469 Self-Employment Tax https://www.irs.gov/taxtopics/tc554 Form 1065: Schedule K-1 https://www.irs.gov/pub/irs-pdf/f1065sk1.pdf Capital Gains Exclusion/Section 121 https://www.irs.gov/taxtopics/tc701 403(b) Plan https://www.investopedia.com/terms/1/403bplan.asp Charitable Organizations https://www.irs.gov/charities-non-profits/charitable-organizations Bonus Depreciation https://www.irs.gov/newsroom/new-rules-and-limitations-for-depreciation-and-expensing-under-the-tax-cuts-and-jobs-act Depreciation Recapture https://www.investopedia.com/terms/d/depreciationrecapture.asp Camp YouCan https://www.midwestyoucan.org/camp-youcan Internal Revenue Service (IRS) https://www.irs.gov/ Schedule C https://www.irs.gov/forms-pubs/about-schedule-c-form-1040 Schedule D https://www.irs.gov/forms-pubs/about-schedule-d-form-1040 Schedule E https://www.irs.gov/forms-pubs/about-schedule-e-form-1040 Form 3115 https://www.irs.gov/forms-pubs/about-form-3115 Statute 12B-4.014 https://www.flrules.org/gateway/RuleNo.asp?id=12B-4.014 UCC-1 Statement https://www.investopedia.com/terms/u/ucc-1-statement.asp Wills and Trusts https://andersonadvisors.com/living_trusts/ Rollover as a Business Start-up (ROBS) https://www.irs.gov/retirement-plans/rollovers-as-business-start-ups-compliance-project Form 941 https://www.irs.gov/pub/irs-pdf/f941.pdf Form 1040-EZ https://www.irs.gov/forms-pubs/about-form-1040-ez Traders in Securities https://www.irs.gov/taxtopics/tc429 Section 199A Deduction https://www.irs.gov/newsroom/qualified-business-income-deduction Toby Mathis http://tobymathis.com/ Anderson Advisors https://andersonadvisors.com/ Anderson Advisors Events https://andersonadvisors.com/all-events/ Events@andersonadvisors.com Events@andersonadvisors.com Anderson Advisors Tax and Asset Protection Event https://andersonadvisors.com/asset-protection/ Tax-Wise Workshop https://andersonadvisors.com/tax-wise-workshop/ Anderson Advisors on YouTube https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ Anderson Advisors on Facebook https://www.facebook.com/AndersonBusinessAdvisors/ Anderson Advisors Podcast https://andersonadvisors.com/podcast/
A review of the week's major US international tax-related news. In this edition: IRS releases new draft partnership forms for 2021, Schedule K-2 and K-3 (Form 1065) – Treasury delivers two international tax-related regulatory projects to OMB’s OIRA for review – USTR announces action on France’s Digital Services Tax – OECD expects blueprint proposals for BEPS 2.0 Pillar 1 and 2 by October 2020 – OECD releases new corporate tax statistics, including aggregated CbCR data.
In today's episode, Theo Hicks will be talking about the schedule K-1 tax report. It is a statement that is given to each of the limited partners also known as passive investors. He will be sharing how your passive investor can interpret the K-1. . for more info on groundbreaker.co To listen to other Syndication School series about the “How To’s” of apartment syndications and to download your FREE document, visit SyndicationSchool.com. Thank you for listening and I will talk to you tomorrow.
Tony & Dwight 01-22-20 Hour 1
Tony & Dwight 01-22-20 Hour 1
Tony & Dwight 01-22-20 Hour 1
https://vimeo.com/user37230624/download/367612111/a6b2c7a75a https://www.currentfederaltaxdevelopments.com/podcasts/2019/10/20/2019-10-21-its-all-in-the-forms-and-instructions This week we look at: Agents directed to grant relief in certain WOTC situations Form 1120-S instructions disclose 3 new statements to be required on K-1s for 2019 Social security inflation adjusted 2019 numbers officially released Second draft of Form 1065 Schedule K-1 asks for additional information about disregarded entity partners TAS’s request for a delay while taxpayers facing loss of passport seek assistance denied by IRS
Current Federal Tax Developments for the week of October 21, 2019: The Details are in Forms (and Instructions) Agents directed to grant relief in certain WOTC situations Form 1120-S instructions disclose 3 new statements to be required on K-1s for 2019 Social security inflation adjusted 2019 numbers officially released Second draft of Form 1065 Schedule K-1 asks for additional information about disregarded entity partners TAS’s request for a delay while taxpayers facing loss of passport seek assistance denied by IRS Copyright 2019, Kaplan, Inc.
Lynn Nichols Federal Tax Update Podcast August, 01 2019, Episode 43 Listen as Lynn Nichols provides commentary on 8 Items pertaining to current developments in U.S. tax law. IRS Makes Few Changes in Final Rule on 501(c)(4) Notifications Final regulations explaining how organizations should notify the IRS of their intent to operate as section 501(c)(4) social welfare entities are almost unchanged from the temporary and proposed regs and generally reject recommendations from the public. [Tax Notes Today, 7/22/2019, Article by Fred Stokeld] Deemed Distribution Requires Downward Basis Adjustment In partially redacted technical advice, the IRS concluded that a deemed distribution of a partnership interest in an assets-over merger of two partnerships is considered an exchange that requires a mandatory downward basis adjustment under section 743(b) when the resulting partnership has a substantial built-in loss. [TAM 201929019, 4/30/2019, rel., 7/19/2019] LB&I Division Announces 6 New Compliance Campaigns The IRS Large Business and International Division has approved six new compliance initiatives that were identified through LB&I data analysis and suggestions from IRS employees. [LB&I Div. Announcement on July 19,2019] IRS Working on Guidance for Applying SALT Cap to Passthroughs Treasury and the IRS are developing proposed rules on the application of the $10,000 cap on the state and local tax deduction to passthroughs, and practitioners fear the guidance will seek to invalidate an emerging SALT cap workaround. [Tax Notes Today, 7/23/2019, Article by Amy Hamilton] 110,000 Entities Participate in Connecticut SALT Cap Workaround About 110,000 passthroughs are participating in Connecticut’s workaround to the $10,000 cap on the state and local tax deduction featuring an entity-level tax and offsetting state credit for members, according to Revenue Commissioner Scott Jackson. [Tax Notes Today, 7/26/2019, Article by Amy Hamilton] IRS Reminds Tax Pros of Data Security Plan Requirement The IRS has reminded (IR-2019-131) professional tax return preparers that federal law requires them to create a written information security plan to protect their clients’ data. This release is one in a series of the "Tax Security 2.0 -- Taxes-Security Together" campaign. [IR-2019-131, 7/23/2019] Practitioners in Tight Spot on Self-Charged Interest The government punted on the treatment of self-charged interest in the proposed business interest limitation regulations, forcing practitioners to take a best guess on its treatment without authority to rely on. [Tax Notes Today, 7/26/2019, Article by Eric Yauch] IRS Gives Eligible Partnerships Extension to File Return The IRS has issued guidance (Rev. Proc. 2019-32) granting an extension to eligible partnerships to file a superseding Form 1065, “U.S. Return of Partnership Income,” and furnish a corresponding Schedule K-1 (Form 1065), “Partner’s Share of Income, Deductions, Credits, etc.,” to each of its partners. [Rev. Proc. 2019-32; 2019-33 IRB 1, 7/25/2019] Worker Wins Damages After Employer Sends False Information to IRS A U.S. district court, in a broader breach of contract case, awarded damages under section 7434 to an employee who claimed her employer submitted false information to the IRS by classifying her as an independent contractor rather than as an employee. [Valerie Vanderbilt v. Boat Bottom LLC, et al.; USDC S FL Key West Div., No. 4:18-cv-10261]
Learn about how partnerships and S-Corps report income to their owners through a Schedule K-1 and how you can interpret a Schedule K-1 if you own a publicly traded partnership. --- This episode is sponsored by · Anchor: The easiest way to make a podcast. https://anchor.fm/app
Deciding between working in tax in public accounting versus private industry can be challenging! Guest Amie Kuntz joins host Damien Martin on the podcast to help cut through the static of this often-difficult decision, offer perspectives on finding your why and share ways to better serve your top clients and customers. Here's a look at what's inside this episode: Amie's path [3:02] Finding the intersection of your strengths and passions [4:20] Navigating the public accounting vs. industry decision [8:42] Pros and cons of working in public accounting [11:17] Damien's perspective on working in public accounting [14:49] Pros and cons of working in the industry [17:13] Tips for public accounting firms and professionals working in public accounting [22:36] Finding your why as an organization [26:50] Amie's advice for where you should work [29:47] Overcoming your fear of presenting, sharing your thought leadership and seizing opportunities for growth [32:31] BIO FOR GUEST Amie Kuntz is a self-described “normalish 30-something girl” from Des Moines, Iowa, who spends a good portion of her free time voluntarily thinking about tax. While some may tell her to “get a life,” Amie has made tax part of her life by blogging about her experiences and sharing her knowledge of business, insights on tax and updates on the tax law on her blog Living the Tax Life. She's dabbled in most areas of the tax code during her 12-year career in tax, working in both public accounting and private company roles. Follow Amie on Twitter Connect with Amie on LinkedIn ADDITIONAL RESOURCES MENTIONED IN THE EPISODE Amie's blog: Living the Tax Life Amie's recent article in The Tax Adviser: “2018 partnership Schedule K-1 Changes” GET MORE “SIMPLY TAX” We're excited to now also provide video content to strengthen your tax mind! Check it out on our new YouTube channel. A complete archive of our episodes is available on our website and YouTube playlist. We'd love to hear from you! Email feedback and questions to SimplyTax@bkd.com. Connect with Damien on social media! LinkedIn | Twitter | Instagram | YouTube
Deciding between working in tax in public accounting versus private industry can be challenging! Guest Amie Kuntz joins host Damien Martin on the podcast to help cut through the static of this often-difficult decision, offer perspectives on finding your why and share ways to better serve your top clients and customers. Here’s a look at what’s inside this episode: Amie’s path [3:02] Finding the intersection of your strengths and passions [4:20] Navigating the public accounting vs. industry decision [8:42] Pros and cons of working in public accounting [11:17] Damien’s perspective on working in public accounting [14:49] Pros and cons of working in the industry [17:13] Tips for public accounting firms and professionals working in public accounting [22:36] Finding your why as an organization [26:50] Amie’s advice for where you should work [29:47] Overcoming your fear of presenting, sharing your thought leadership and seizing opportunities for growth [32:31] BIO FOR GUEST Amie Kuntz is a self-described “normalish 30-something girl” from Des Moines, Iowa, who spends a good portion of her free time voluntarily thinking about tax. While some may tell her to “get a life,” Amie has made tax part of her life by blogging about her experiences and sharing her knowledge of business, insights on tax and updates on the tax law on her blog Living the Tax Life. She’s dabbled in most areas of the tax code during her 12-year career in tax, working in both public accounting and private company roles. Follow Amie on Twitter Connect with Amie on LinkedIn ADDITIONAL RESOURCES MENTIONED IN THE EPISODE Amie's blog: Living the Tax Life Amie’s recent article in The Tax Adviser: “2018 partnership Schedule K-1 Changes” GET MORE “SIMPLY TAX” We’re excited to now also provide video content to strengthen your tax mind! Check it out on our new YouTube channel. A complete archive of our episodes is available on our website and YouTube playlist. We’d love to hear from you! Email feedback and questions to SimplyTax@bkd.com. Connect with Damien on social media! LinkedIn | Twitter | Instagram | YouTube
Tax Day on April 15 has come and gone. Were you hit hard this year? Don’t give up or lose hope. According to Toby Mathis and Jeff Webb of Anderson Advisors, there’s still time, and things, you can do to recover. Do you have a tax question? Submit it to taxtuesday@andersonadvisors. Highlights/Topics: I am an S Corp and ordained minister. Can I take housing allowance? Minister's housing/parsonage is excludable from gross income, but not self-employment taxes Do you have to pay back home office depreciation when you sell the house? Yes, unless accountable plan is in place for reimbursement To report installment income on Form 6252, do you also need to submit Form 4797? Yes, along with Schedule D Are there any advantages to moving software business into designated opportunity zone? Not really, if you have an existing business Did Tax Cutting Jobs Act (TCJA) help big businesses more than small businesses? Yes, it cut corporate taxes almost in half, but only gave small businesses a 20% deduction What’s the difference between big and small business? Big business does at least $100 million in revenue and has multiple owners Should I use my tax refund toward paying estimated quarterly taxes for 2019? If I overpay the estimate, will I have to pay taxes on future refunds? Never hurts to overpay estimates; include first-quarter payment when making extension payment What’s the Rollover for Business Startups (ROBS) structure for investment property construction? Partnering with your own retirement plan has to be a C Corp; don’t use with investment property Can you defer taxes on capital gains on the sale of property, if you put it toward an existing residential mortgage? No; only way to defer capital gains is via 1031 exchange When I record an expense, maybe an office desk for S Corp, do I need to record the sales tax? If you buy a desk for your business, you're paying sales tax on it Can you depreciate a property used for short-term rentals, like AirBNB? No, if average rental is seven days or less; yes, if more than seven days Can LLC owned by spouses be a disregarded entity? Yes, if in a community property state; both spouses can be owners, and it’s treated as a disregarded entity Can we take unreimbursed accountable plan expenses, office space against W2 income? No, TCJA removed unreimbursed business expenses on Schedule A For all questions/answers discussed, sign up to be a Platinum member to view the replay! Go to iTunes to leave a review of the Tax Tuesday podcast. Resources Ministers' Compensation & Housing Allowance Form 3115 Form 6252 Form 4797 199A Deduction Schedule D Tax Cutting Jobs Act (TCJA) Opportunity Zones FAQ Opportunity Zone Heat Map Cost Segregation: Increased Tax Deductions for Commercial Property Bonus Depreciation Home Office Deduction Net Investment Income Tax (NIIT) Partner's Instructions for Schedule K-1 (Form 1065) Rollover Business Startup (ROBS) 1031 Exchange QuickBooks Toby Mathis Anderson Advisors Anderson Advisors Tax and Asset Protection Event Tax-Wise Workshop Anderson Advisors on YouTube
Following a second fatal crash of its 737 Max aircraft, Boeing has grounded the planes worldwide. Motley Fool Contributor Jason Hall and IF Host Nick Sciple break down what we know so far and how investors should be reacting and dive into the listener mailbag to give investors a primer on Schedule K-1 taxes and an overview of their favorite Renewable Energy Yieldcos. Stocks Mentioned: BA, LUV, EADSY, BEP, TERP, PEGI, NEP, CWEN, PCG Check out more of our content here: TMF's podcast portal YouTube Twitter Join Our Motley Fool Podcast Facebook Group LinkedIn StockUp, The Motley Fool's weekly email newsletter
CPA Reviewed #73: Monday January 23, 2017 Like the Podcast? Please Subscribe and Review! [Listen on iTunes] [Listen on Stitcher] [Listen on Tunein] Want to be on the Podcast? Ask Jeff Facebook Live 1. Tracy - Congrats on the new baby!! Your wife is a trooper! I am taking REG again for the 5th time in February...got a 69 in July and 70 in December. On the Ninja Notes, in the partnership section it says the below: Items not deductible on Schedule K Instead these flow through the Partners' K-1: Investment interest Foreign taxes paid Charitable contributions 179 expense But on an actual Schedule K those items are deducted. What am I missing? Gross Sales (Except for partners) (Accrual basis only) (payments to partners are OK) (except 179) = Ordinary Business Income ITEMS NOT DEDUCTIBLE ON SCHEDULE K Instead, these flow to Partners' K-1 o Investment Interest Expense o Foreign Tax Paid o Charitable Contributions o 179 Expense Mnemonic: IFC179 Instructions for Form 1065 Do not include any section 179 expense deduction on this line. This amount isn't deducted by the partnership. Instead, it is passed through to the partners in box 12 of Schedule K-1. Items the partnership must state separately that require separate computations by the partners. Examples include expenses incurred for the production of income instead of in a trade or business, charitable contributions, foreign taxes paid or accrued, intangible drilling and development costs, soil and water conservation expenditures, amortizable basis of reforestation expenditures, and exploration expenditures. The distributive shares of these expenses are reported separately to each partner on Schedule K-1. 2.Jared - I purchased Ninja MCQ for BEC and I have been doing the adaptive learning session. After 400+ questions, I have been seeing repeated questions, even repeated questions that I have answered right before. Should I just go to Custom MCQ and just select Questions that I have not yet seen? I don't want to stray away from what is recommended. 3. Rachel - Hi Jeff, I purchased the NINJA FAR book in Oct/Nov of 2016. ( i missed it by 4 points). Can I use this for the new CPA style or will you be updating you materials? Thanks 4. Shalini - I have only recently decided to pass the CPA exams. A friend lent me books from 2013. How redundant or useful are they? Some subjects more than others? 5. Juan - I will be taking the Regulation exam in 2 weeks and I am considering purchasing the ninja MCQ. However, I was wondering if I can still access the 2016 REG questions since my exam will consist of that material, or are only the 2017 questions provided? See Also: How to Pass a Section of the CPA Exam in 20 Days 6. Andrea - I failed one of the other sections of the CPA exam and I have to push Regulations back from March 10th to the first week of April. However when I’m on Prometric all the days in April, May and June are in light gray- so it won’t let me reschedule my exam. Then I saw an email from NASBA that said if you want to take BEC or REG on or after April 1, 2017 the earliest you can schedule is March 11, 2017. However if I’m scheduled to take Regs on March 10th and the earliest time we can schedule for Regs is March 11th, how can I reschedule it? If I select cancel exam on the Prometric website, will I have to pay for the exam all over again? 7. David - Hi for the ninja Notes, If i buy a 2017 version of the notes for FAR, lets say I take FAR again in 2018, will I get a free copy of the NINJA notes for FAR 2018? 8. Neil - I purchased the Ninja notes for BEC. I now want to buy the Ten Point Combo. Will you offer a credit for the notes towards purchase of the combo? I plan to use Ninja for my remaining three sections. 9. Earla - Thanks for the email. Congratulations on your new baby boy!
TAX TIME! Joe shares the Schedule K-1 that he uses with his partners on his apartment syndications, in fact a copy is available below in the notes! Depreciation, write offs, and other tax advantages have benefited the investors involved in Joe's deals, hear how! Best Ever Tweet: Because of depreciation on paper, you're showing a loss...in which taxes are deferred. in iTunes. - the K1 Joe references in the call: - Subscribe to Joe's YouTube Channel here to learn multifamily and raising money tips: Listen to all episodes and get a FREE crash course on real estate investing at: Are you committed to transforming your life through Real Estate this year? If so, then go to and claim your FREE Coaching Session. Trevor is my personal real estate coach and I’ve been working with him for years. Spots are limited, so be sure to do it now before all the spots are gone. Have you tried REFM’s Valuate software yet? It makes investment analyses a breeze, and makes you look like you spent all week on them. Go to to sign up today. Subscribe in and so you don’t miss an episode!
This episode is a re-release of the AICPA Tax Briefing for State Society Leaders conference call that took place January 12 - 13, 2009. Below, please find a summary of the major points covered in the call. FIN 48—There are two important FASB requirements for accounting for uncertain tax positions of non-public companies that your firm needs to do right now, and as the tax person in your firm or business, you’ll undoubtedly be involved. On October 15, 2008, FASB deferred the effective date of FIN 48 (Financial Interpretation No. 48, Accounting for Uncertainty in Income Taxes) for all non-public companies for one year, until 2009 for calendar-year companies. However, that means that in January of 2009, calendar-year private companies should complete a FIN 48 analysis of their year-beginning tax positions so that they can record the effect of the change in accounting method at the end of 2009. This analysis could be “backed into” later in the year, but as time passes it will be more difficult to recall all tax positions (not just those that are unlikely) for all types of taxes for all open years in all jurisdictions and what the level of certainty and values were under the law at the beginning of the year. So if a company has not already done this analysis and if it wants to report in accordance with GAAP, the earlier it starts now, the better. Another new FASB requirement relates to 2008 financials and any interim 2009 financial statements. A FASB Staff Position (FSP) was issued on December 30 that added reporting requirements for private companies that elect to defer the effective date for the adoption of FIN 48. Specifically, they must explicitly disclose that they are electing to defer the effective date and also disclose the company’s accounting policy for evaluating uncertain tax positions. This applies to 2008 financials and interim 2009 financials, until FIN 48 is adopted. The FSP doesn’t discuss specifics, but unless a company has something unusual, we hope that some standard language will suffice, such as “Management has elected to defer the application of FAS FIN 48, Accounting for Uncertain Tax Positions in accordance with FSP FIN 48-3. The Company will continue to follow FAS 5, Accounting for Contingencies, until it adopts FIN 48.” Additional information on FIN 48 for private companies is included in the February issue of The Tax Adviser magazine that most Tax Section members receive. Tax Practice Guides and Checklists—Tax section members receive an annual package of over 600 pages of engagement letters, organizers, checklists, and other practice guides, and they’re now posted online . These include return-specific checklists for preparing and reviewing tax returns. Some forms checklists come in simple and complex versions so that, for instance, you don’t have to use a complex individual return checklist for a child’s return. These practice guides are carefully prepared and reviewed by fellow practitioners for your use. They are up-to-date through the Emergency Economic Stabilization Act of 2008, and subsequent developments will be reported in your Tax Section E-Alerts. In prior years, we sent a CD-ROM version of the checklists, but to avoid delays in scribing and mailing the CDs and with most members now having broadband internet, this year we’re only distributing the checklists. You’ll have to log on and be recognized as a tax section member to access this premium web content, and if you’re not a member, you can join online at aicpa.org/tax or on the phone at 800/513-3037. Each document may be downloaded to your computer directly allowing you to use any or all of the Practice Guides and checklists at your convenience and without requiring you to be logged on to the AICPA web site. A “one click” option allows you to download the entire package in a few moments directly to your computer. Audio E-Alerts—Tax Section member receive bi-weekly emailed e-alerts that report current developments in tax law and practice. This emailed alert is necessarily brief and to the point, and we’re beginning expanded version in bi-weekly audio e-alerts that can be uploaded to your MP3 player or listened to online. Each alert will be approximately 15-20 minutes in length and can be accessed online. These audio alerts are available to AICPA members without charge, but they do not contain the links to the source documents that are included in the emailed version that goes to Tax Section members. These audio alerts may be of particular interest to younger staff and will help them become more knowledgeable about current tax developments. SSTS Exposure Draft—The AICPA Tax Division recently issued an Exposure Draft of revisions to the Statements on Standards for Tax Services (SSTSs). The draft addresses changes in federal and state tax laws affecting the provisions in SSTS No. 1, Tax Return Positions, and No. 8, Form and Content of Advice to Taxpayers, and also members’ requests for clarification. Corresponding revisions to the current SSTS Interpretations will be made at a later date. Revisions to SSTS No. 1 are proposed to clarify the need to satisfy both the AICPA standards and the standards of the applicable taxing authority. Revisions to SSTS No. 8 are proposed to address new requirements that apply when providing certain types of tax advice. In addition, the original SSTS Nos. 6 and 7 have been combined into the revised SSTS No. 6. The original SSTS No. 8 has been renumbered SSTS No. 7. Various revisions also have been made to the language of the original SSTSs. AICPA members are welcome to comment on the exposure draft, with comments due by May 15, 2009. Please send your comments to sstscomments@aicpa.org or to SSTS Comments, AICPA, 1455 Pennsylvania Avenue NW, Washington, DC 20004-1081. Section 6694 Penalties—The Emergency Economic Stabilization Act of 2008 lowered the reporting standard under section 6694 to “substantial authority” from “more likely than not” for undisclosed, non-tax shelter positions. This is the same standard that applies to taxpayers. The change is retroactive to the date when the higher standard was enacted, May 25, 2007. This is a great victory for CPAs that the AICPA had been fighting for since Congress raised the standard for preparers to a level higher than for taxpayers, creating potential conflicts of interest between CPAs and their clients. Section 7216 Final Regs—IRS regulations on the unauthorized disclosure of tax return information went into effect on January 1. Absent a specific, exception, Treas. Reg. section 301.7216 generally prohibits the disclosure or use of tax return information without the client’s explicit, written consent. Under section 7216, a tax return preparer is subject to a criminal penalty for “knowingly or recklessly” disclosing or using tax return information. Each violation of section 7216 could result in a fine of up to $1,000 or one year imprisonment, or both. AICPA members who are engaged in tax return preparation and tax planning services need to become familiar with Treas. Reg. section 301.7216 and Revenue Procedure 2008-35, the authoritative guidance with respect to a preparer’s disclosure or use of tax return information. In a practice guide for members, the Tax Section is providing several examples of consent forms which have been developed by CPA members for their discussions or consultations with individual clients. 1099B Forms Coming Two Weeks Later—The Emergency Economic Stabilization Act of 2008 extended the date by which brokers must furnish information forms to customers. This includes stock broker 1099-B forms and also other forms from brokers, including realtors. Beginning with statements furnished in 2009, brokers will avoid penalties if they furnish these forms on or before February 15 – as opposed to the old due date of January 31. This could further compress the return preparation season for practitioners. Form 1065 Extended Due Date—Last year, the Tax Division held discussions with IRS concerning the dilemma of the late receipt of Forms 1065, Schedule K-1 that has perplexed the clients of CPAs who prepare the Form 1040, 1065, 1120 and 1120S tax returns which include such K-1 information. On January 24, 2008, we recommended, as a short-term solution, that the Service open a regulation project to: (1) address the difficulties taxpayers face when receiving delayed Schedules K-1 and (2) move the extended due date for partnership returns from October 15 to September 15, thus providing a maximum extension of five months. On July 1, 2008, the IRS released proposed regulations which would, in fact, limit certain flow-through entities to a maximum 5-month extension. The Service has indicated that the proposed regulations won’t be finalized until they have had an opportunity to analyze any comments submitted. On September 24, 2008, the Tax Division submitted comments with regard to the impact on trusts. The AICPA generally supports limiting the extension of the due date for partnership returns to five months. However, our prior letter and comments did not consider the issue of the proper extended due date for fiduciary returns because we were primarily focusing on the filing problems created for individuals who are partners in partnerships. We believe that the extension period for fiduciary returns (i.e., Form 1041 for trusts and estates) should remain at six months, rather than being reduced to five months as set forth in the temporary regulations applicable to all returns which are due after January 1, 2009. The Division will be testifying at the IRS hearing on the proposed regulations on January 13, 2009. In addition, the Division is also considering suggesting possible legislative changes in this area taking into account our members’ attitudes as solicited in a survey earlier this year. Also, on October 29, 2008 representatives of the Partnership TRP met with the Joint Committee on Taxation a possible change to due dates and/or extended due dates of Forms 1065, 1040, 1120S and 1041 to relieve workload compression and to better manage the workflow of these returns. State Taxation of Nonresidents—The ACIPA has been closely monitoring a Congressional initiative that would affect the ability of states to tax nonresidents temporarily working within their jurisdiction. Currently the states that have an individual income tax have a wide variety of tipping points. Some do not impose taxes on nonresidents until they have worked as many as 30 days within the state; others seem to require only a day or two. This has resulted in much confusion and probably significant non compliance for businesses, such as many accounting firms that frequently have employees working in states where the employer does not have an office. A bi-partisan bill was introduced in the last congress that would have required all states to conform to a 60-day rule such that the non resident employee would not be subject to tax within the state until the employee completed more than 60 days of service within the state in a calendar year. Included in the bill was what we refer to as the “snap back” rule whereby, once the 60 days was exceed, the employer was responsible for withholding the non resident state taxes for all the days worked with the state, including the first 60 days. In response to pressure from state taxing authorities, in the final days of the 110th Congress the 60 day rule was lowered to 30 days while still preserving the Snap back” provision. We believe there is a strong possibility that the 111th Congress take up where they left off last session and pass the 30 day with snap back version. Although we would have preferred the 60 day rule or even the 30 day rule without the snap back, this measure would add a much needed level of certainty in the area of state taxation of non residents. Pension Legislation Changes—At the end of the year, Congress passed the “Worker, Retiree and Employer Recovery Act of 2008)” which liberalized the funding rules for single and multi-employer qualified retirement plans and the minimum required distribution rules (MRDs) for retirees who have reached age 70 ½. The bill also makes technical corrections to the “Pension Protection Act of 2006” (PPA ’06) Specifically, the bill would • Allow pension plans to smooth out unexpected asset losses over two years; • Provide a transition to the new funding rules; • Allow multiemployer plans to freeze their status based on the previous year’s funding level; • Allow pension plans that are less than 60 percent funded at the beginning of 2009 to look back to the previous plan year to ascertain their funding status; and • Suspend mandatory withdrawals from retirement plans or IRAs for individuals age 70 ½ or older during 2009. The Treasury Department and IRS plan to issue MRD relief for 2008 very soon. The changes were needed because of the confluence of PPA ’06 mandated minimum contribution increases with the current economic crisis. We are also considering advocating additional changes; we will survey members in business and industry to try to determine if they anticipate continuing funding difficulties. Obama Tax Agenda Although this is necessarily speculative, we tried to pull together some of the common denominators of what President Obama spoke about in his campaign and his economic advisors have been saying since the election. Following are our predications at this moment: • Estate tax – freeze 2009 – i.e. $3.5 mil exclusion and 45% marginal rate. AICPA is fighting for: o “portability” loosely defined as permitting a surviving spouse to “inherit” whatever portion of the exclusion was not consumed by the deceased spouse o “conformity” so that the same exclusion would apply for purposes of the gift tax and the generation skipping transfer tax • Marginal rates for individuals – no increase in 2009 and perhaps not for 2010 unless there is a significant recovery in the economy before then. o Some reduction in payroll taxes for lower and middle income individuals to be effective in 2009 as a stimulus to the economy o Once the economy has “sufficiently” recovered we are expecting the Administration to proposed increasing the rates on upper income individuals to those in place before the reductions of 2001 raising the top rate back to 39.6% • We expect a proposal to increase the rates for qualified dividends and long term capital gains to 20%. But this, too, may not be proposed until it appears we’re on the way to an economic recovery. • Individuals with IRAs may be able to avoid penalties if they withdraw, before age 59 ½ , some level of funds ($10,000 has been talked about) to tie them over the economic slump. • For businesses, the new president has supported a continuation of the bonus deprecation rules and the ability to currently expense as much as $250,000 of asset purchased and placed in service in 2009
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