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Tax Reform Timeline

Everyone is wondering how Tax Reform will be on President Trump’s desk before Christmas. Here is an estimated timeline as of 11/16/2017 according to the goals of Congress and the White House.   Sprint to Tax Reform 11/2/2017                House Bill revealed 11/9/2017                Senate…

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Tax Reform Loophole

Potential Pass-Through Entity Loophole in Tax Reform

● The Tax Cut and Jobs Act proposes setting a maximum tax rate of 25% on pass-through business income. While lawmakers intend to benefit small business owners with the new, lower tax rate, many are concerned that certain individuals will abuse the provision by re-categorizing wage income taxed at a maximum 39.6% rate as pass-through…

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Partnership Taxes

Partnership Targeted Capital Accounts: Part II

Partnership Targeted Capital Accounts: Part II Introduction Part I explained the basic concept behind the targeted capital account approach to allocating partnership taxable income and loss. The example used in Part I assumed a simple factual pattern where the partnership admitted a partner on 12/30/2017 in exchange for a $200,000 capital contribution. The example explained…

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Partnership Targeted Capital Accounts: Part 1

Introduction Traditionally partnership agreements allocate income, gain, and loss by formula and provide for liquidating distributions based on the partners’ respective positive capital account balances. Such arrangements help ensure that the allocations comply with the “safe harbor” provisions set forth in the Treasury regulations under Internal Revenue Code (“IRC”) §704(b). Increasingly, however, partnership agreements provide…

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Presidential Tax Reform Framework

New Presidential Tax Reform Framework

Tax Reform Framework Released by Trump Administration and its Congressional Allies On September 27th, the Trump administration, the House Committee on Ways and Means, and the Senate Finance Committee released a unified framework with the stated intent to achieve “pro-American, fiscally-responsible tax reform.” The framework expounds upon the four principles of tax reform released by…

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IRS Tax Regulations

Transfer of Intangibles to Foreign Corporations IRS Regulations

Final IRS Regulations on Transfers of Intangibles to Foreign Corporations On December 16, 2016, the Internal Revenue Service (IRS) published final regulations regarding transfers of intangible assets, including goodwill and going concern value, by U.S. persons to foreign corporations. These new regulations modify regulations under Internal Revenue Code (IRC) §§367(a) and (d) to ensure that…

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IRS Relief For Hurricane Harvey Victims

IRS to Provide Relief for Those Affected by Hurricane Harvey Due to Pres. Trump’s major disaster declaration for the state of Texas in response to Hurricane Harvey, the Internal Revenue Service (IRS) has announced that tax relief will be made available to those affected by the storm. Specifically, the IRS will be postponing certain deadlines…

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Executive Order Endangers Eight Significant IRS Regulations

Executive Order Endangers Eight Significant IRS Regulations On April 21, 2017, Pres. Donald Trump issued Executive Order 13789 on Identifying and Reducing Tax Regulatory Burdens. The order directed the Secretary of the Treasury to review all “significant” tax regulations issued by the Treasury Department on or after January 1, 2016. This review will culminate with…

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Court Decision Affects Real Estate Purchase Price And Depreciation

Recent Tax Court Decision Rebuffs Allocation of Purchase Price to Depreciable and Non-depreciable Real Estate by Taxpayer In a recent Tax Court decision, Nielsen v. Commissioner, T.C. Summ. Op. 2017-31 (May 8, 2017), the court found that the taxpayer’s allocation of the purchase price of rental real estate between land and buildings was unreasonable. Instead,…

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Research Tax Credit

Documentation Requirements By Functional Areas For Research Credit

Substantiating Research Credit Expenditures by Functional Area Two of our recent articles have focused on different aspects of the research credit under Internal Revenue Code (IRC) §41 which rewards taxpayers for engaging in qualified research activities by providing a tax credit equal to a percentage of certain eligible expenses. The first article focused on the…

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