Revocable trusts and the grantor’s death: Planning and pitfalls
WEBMar 25, 2021 · Planning with revocable trusts has become increasingly popular in recent years. In many instances, the motives for using a revocable trust are nontax and include avoiding probate, asset protection planning, and managing potential issues relating to the grantor's privacy and incapacity. From a tax perspective, the interplay of the grantor and …
Cost recovery changes in the TCJA - The Tax Adviser
WEBJun 1, 2020 · Under the TCJA, the recovery period for residential rental property under the ADS was reduced from 40 years to 30 years. Some of the changes brought about by the law known as the Tax Cuts and Jobs Act (TCJA) 1 were straightforward, including increasing standard deductions and eliminating personal exemptions. Others, however, …
Sorting the tax consequences of settlements and judgments
WEBJul 1, 2021 · Takeaway. The receipt or payment of amounts as a result of a settlement or judgment has tax consequences. The taxability, deductibility, and character of the payments generally depend on the origin of the claim and the identity of the responsible or harmed party, as reflected in the litigation documents. Certain deduction disallowances may apply.
Capitalized improvements vs. deductible repairs - The Tax Adviser
WEBOctober 1, 2021. Taxpayers generally must capitalize amounts paid to improve a unit of property. A unit of property is improved if the cost is made for (1) a betterment to the unit of property; (2) a restoration of the unit of property; or (3) an adaptation of the unit of property to a new or different use (Regs. Sec. 1.263 (a)- 3 (d)).
Understanding the new Sec. 199A business income deduction
WEBApr 1, 2018 · With the enactment of legislation known as the Tax Cuts and Jobs Act (the Act) 1 on Dec. 22, 2017, a new provision of the Internal Revenue Code was born: Sec. 199A, which permits owners of sole proprietorships, S corporations, or partnerships to deduct up to 20% of the income earned by the business. The motivation for the new …
Summary of tax rules for liquidating corporations - The Tax Adviser
WEBOct 1, 2020 · Editor: Mark Heroux, J.D. Domestic corporations, either S corporations or C corporations, are liquidated by applying Secs. 331-346. This discussion provides a review of the rules that apply to liquidating corporations, but it does not address the exceptions set forth in Sec. 361 via a reorganization plan or the exceptions arising from having foreign …
Service businesses that qualify for the 20% QBI deduction
WEBDec 1, 2018 · One major provision of the law known as the Tax Cuts and Jobs Act (TCJA), P.L. 115-97, is a new tax deduction for passthrough entities (S corporations, partnerships, and sole proprietorships) under Sec. 199A.The deduction generally provides owners, shareholders, or partners a 20% deduction on their personal tax returns on their …
New limitation on excess business losses - The Tax Adviser
WEBMay 1, 2019 · Editor: Kevin D. Anderson, CPA, J.D. Many questions have been raised by the law known as the Tax Cuts and Jobs Act (TCJA), P.L. 115-97, which was signed into law on Dec. 22, 2017, by President Donald Trump.The new limitation on excess business losses provision is effective for noncorporate taxpayers for tax years beginning after …
Maximizing the investment interest deduction - The Tax Adviser
WEBMar 1, 2022 · If no election is made, L will pay $4,760 tax on his interest and capital gain in 20X1. If the election is made, the tax is shifted to 20X2 but amounts to $8,000. If the $8,000 tax for 20X2 is discounted back to 20X1 using a 6% discount factor, the result is $7,547.
Application of the Tax Basis and At-Risk Loss ... - The Tax Adviser
WEBThe loss limitations, in the order in which they are applied, include: (1) the Sec. 704 (d) basis limitation, (2) the at-risk limitation of Sec. 465, and (3) the passive loss limitation of Sec. 469 (Temp. Regs. Sec. 1.469-2T (d) (6) (i)). This item focuses on the application of the Sec. 704 (d) basis limitation and the at-risk limitation for ...