Budget & Tax Reform

Tax Bill-Estate and Gift Tax Changes

Taxpayers will have an $11,200,000 each for estate, gift tax, and generation-skipping tax exemption beginning January 1, 2018, which will rise with the Consumer Price Index each year thereafter. There were no other
significant changes made to the estate and gift tax rules.  Continue reading

Tax Bill – More on the New 20% Pass-Through Deduction

As I noted in a prior blog post, the new tax bill (TCJA) creates new Code Section 199A that provides for a 20% deduction for the non-wage portion of pass-through income. NOTE: The deduction is limited to 50% of an entity’s W-2 wages for married joint filers with income over $315,000 and single filers with income over $157,500. This deduction sunsets after 2025. Continue reading

Tax Bill – More Individual Planning

The tax bill (TCJA) repeals the deduction for personal exemptions. It increases the standard deductions for single filers to $12,000 and for married joint filers to $24,000. These changes sunset after 2025 (i.e., personal exemptions would be restored).  The deductions for state and local income, sales and property taxes (SALT) are capped at $10,000 in total. The deduction for mortgage interest is limited to be allowable only on up to $750,000 of acquisition indebtedness. Mortgages incurred on or before December 15, 2017 are grandfathered under the $1 million limit of acquisition indebtedness. The home equity interest deduction is repealed.  There is also a temporary change to the medical expense deduction, allowing clients to deduct medical expenses that exceed 7.5% of adjusted gross income (instead of 10%) in 2017 and 2018. TCJA increases the charitable contribution limit to 60% of adjusted gross income for cash contributions (also sunsets after 2025). NOTE: Contributions of appreciated property are still subject to a 30% of adjusted gross income limitation. The five-year carryover for unused charitable deductions remains. Given these changes, what should I do now?

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Tax Bill Passes Senate; Great News for Real Estate Developers

By a slim margin of 51-48, the Senate passed the tax reform bill on December 19th. Included among the provisions is a hidden benefit for real estate developers. The bill contains a 20% deduction for qualified business income (QBI) from pass-through entities under new Code §199A. QBI generally is defined… Continue reading

House Passes Tax Bill!

The U.S. House of Representatives on Tuesday approved a nearly $1.5 trillion bill that would deliver deep and permanent tax cuts for corporations and lower rates for most American households until 2025. The Senate is expected to pass the bill this evening. More to come!

Senate Finance Committee Passes Tax Reform

On November 16, the Senate Finance Committee approved its version of tax reform. While more changes to the Senate version are expected, there are several key differences between the Finance Committee’s tax bill and the House’s. here are some highlights: Continue reading

Treasury Withdraws Valuation Discount Regs!

On October 2nd, the Treasury Department announced that it is withdrawing the proposed regulations under Code Section 2704 (introduced in August 2016) that would have adversely affected taxpayers’ ability to use valuation discounts in transferring closely held business interests to family members and trusts for their benefit.

As stated in… Continue reading

Legislation Introduced to Prevent Enactment of Valuation Rules

Sen. Marco Rubio (R-Fla.) and Rep. Warren Davidson (R-Ohio) reintroduced legislation to prevent the IRS from enacting its highly controversial estate valuation discount proposed regulations introduced in August 2016. The proposed regulations were purportedly designed to stop abusive practices where valuation discounts were being used solely as an estate tax… Continue reading

Will the Estate Tax be Repealed in 2017?

Sen. John Thune (R-SD) announced that he and other Republicans will push for repeal of the federal estate tax in 2017 as part of more comprehensive tax reform, in lieu of trying to get Congress to prevent the finalization of the 2704 valuation discount regulations in 2016. For more on… Continue reading

Another Summary of Trump and Republican Tax Proposals

Now that the election is over, tax reform is high on the agenda of the President-Elect and the Republican controlled Congress. For an excellent summary of the Trump and Republican Blueprint Tax Proposals by Andersen Tax, please click here.