Income Tax

Gift Tax Exemption: Plan Today for Upcoming Changes

 

Please click the link below to see important information on gift and estate tax law changes.

https://www.pagnatokarp.com/irs-announces-no-clawback-of-gift-tax-exemption/

Tax Act Changes Affecting Real Estate

By now, you have been bombarded with summaries and articles on the 507-page tax bill, formerly known as the “Tax Cuts and Jobs Act” of 2017, and signed into law by President Trump on Dec. 22, 2017 (the Act). Of all the massive changes included in the Act, those affecting… Continue reading

Tax Bill – More Observations on Individual Changes

In the few days remaining to manipulate your 2017 income tax liability, keep in mind the following additional points raised in the tax bill that was just signed by the President (please review my blogs over the past five days to refresh your memory on the other changes): 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 The home equity interest deduction is repealed.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?

Continue reading

Tax Bill-Individual Rates and Planning

The current seven individual tax rate brackets are modified under the new Tax Bill to be 10%, 12%, 22%, 24%, 32%, 35%, and 37% effective January 1, 2018. This provision is set to “sunset” after 2025.

The top 37% rate applies to single filers with over $500,000 of taxable income and married joint filers with over $600,000 of taxable income. What should you do now? Continue reading

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

House Passes H.R. 1 – Tax Reform Bill

The House of Representatives today passed its tax bill (H.R. 1) by a 227-203 vote. The bill sets a permanent 20 percent corporate tax rate, doubles the estate and generation skipping tax exemption (leading to repeal in 6 years), institutes a new system for calculating taxation of pass-through… Continue reading