Your Guide to State, Local, Federal, Estate + International Taxation

Can an S Corp lose its S Corp status?

If you’re an S Corp shareholder, how many times has your CPA advised you to make sure that all distributions to shareholders of your S Corp are proportionate to each shareholder’s ownership percentage? This advice is based on the rule that S Corporations can only have one class of stock, and that disproportionate shareholder distributions …

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QBI deduction limitation: reputation and skill

If you are an owner in an S Corporation or a Partnership, you have probably heard about a new deduction with the recent tax law changes. Without getting too involved in the rules, and possibly making you fall asleep, the 50,000-foot view is that basically the deduction could end up being 20% of a company’s …

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2019 Tax season concerns, tax reform impact

In case you haven’t heard it enough, there have been a ton of changes in the tax world recently. With the Tax Cuts and Jobs Act (TCJA) of 2018 being the first major tax reform in over 30 years, there is an estimate of about 450 forms, publications and instructions that need to be revised …

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Business meals deduction clarified by IRS

Until recently, a particular paragraph contained within the Tax Cuts and Jobs Act was causing significant heartburn (from a potentially non-deductible meal) for tax preparers, business owners and those within the restaurant industry. Now, the IRS has provided clarification for the business meals deduction. As part of the tax reform bill, entertainment expenses formerly subject …

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Retirement contribution limits increasing in 2019

The IRS recently issued technical guidance relating to changes for pension plans and retirement accounts for tax year 2019. The biggest changes relate to the amounts employees can contribute to various types of retirement plans. The good news for you is that retirement contribution limits are going up. Retirement contribution limits The contribution limit for …

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Social Security benefits increasing in 2019

Social Security benefits are increasing. Social Security and Supplemental Security Income (SSI) recipients are getting a 2.8% payment boost in the coming months, and for the first time ever, you’ll be able to see your new benefit amounts online. Adjustments The cost-of-living-adjustment (COLA) will begin for SSI beneficiaries on December 31, 2018. The COLA for …

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Trade or business of being an employee

Around the middle of August, I headed out of town for a week-long vacation. I had everything wrapped up here in the office and right before I left, the IRS released the much-anticipated proposed regulations on the IRC Section 199A deduction. I know this is not as exciting as reading up on who is going …

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Section 199A: unadjusted basis of qualified property

With the recent changes in tax law through the Tax Cuts and Jobs Act, there have been many questions regarding how these changes will affect taxpayers and businesses. The intent of this blog is to shed some light on the Section 199A deduction, which has confused a fair number of people. Specifically, this blog will …

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Tax reform for business real estate: self rentals

Under the new tax reform passed in late 2017, Internal Revenue Code Section 199A offers a 20% tax deduction to certain businesses that have qualified business income (QBI). Section 199A was enacted to provide a deduction for pass-through entities such as sole proprietors, trusts, estates, partnerships and S Corporations. Proposed regulations have now been released …

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Section 1231 gains and losses and Section 199A

There are many complex and confusing aspects to the rules regarding the new 199A deduction, and the treatment of 1231 gains and losses are no exception. Before we dive into these transactions as related to 199A, let’s begin at the beginning – what’s a 1231 gain or loss, anyway? In general, a Section 1231 asset …

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