New York State recently issued N-19-1, Notice Regarding Sales Tax Registration Requirements for Businesses with No Physical Presence in New York State, in which it reminded businesses that, due to the Supreme Court’s June 2018 decision in the South Dakota v. Wayfair case, certain existing provisions in the New York State Tax Law that define a sales tax vendor immediately became effective. A ...
As discussed in our seminars, the provision that allows 100% bonus depreciation contains a technical glitch related to computing depreciation on bonus-eligible vehicles that weigh 6,000 pounds or less. The glitch affects the allowable depreciation after the first year of the vehicles’ recovery period. Due to the way the bonus provision was drafted and the way that it interacts with other p...
The instructions for the 2018 version of Form 1065, U.S. Return of Partnership Income, contain a new requirement that has not been widely publicized. The change appears on page 30 of the instructions and relates to the capital account analysis (item L) on Schedule K-1. According to the instructions, if a partnership reports the capital account analysis using any basis other than the tax basi...
Tax preparation software for entity tax returns must compute qualified business income for the purpose of the §199A deduction to be included in the other information box of Schedules K-1. (If an entity prepares Schedules K-1 without including §199A details in the other information box, the recipient of the K-1 is precluded from taking the §199A deduction on the recipient’s Form 1040.) M...
As we discussed in our seminars, when a taxpayer receives a Schedule K-1 from a fiscal-year entity with a year that began prior to January 1, 2018 and ended during 2018, the income (or loss) on the Schedule K-1 is used to compute the taxpayer’s 2018 qualified business income, to the extent that it is otherwise eligible for the qualified business income deduction. However, if the entity that ...
With the prevalence of identity theft, it is vital that practitioners protect sensitive client data. Client data is especially vulnerable during tax season, since many clients send data to practitioners using unsecure means. An email attachment that is not encrypted with a password is extremely vulnerable to interception by identity thieves. Since many clients do not think about the need f...
During our seminars, we discussed that income from real estate investment trusts (REITs) and publicly-traded partnerships is generally eligible for the new qualified business income deduction under §199A. During this upcoming tax season, practitioners should be on the alert for such income being reported to clients. Dividends from REITs are generally reported on Forms 1099-DIV. Box 5 of t...
As discussed in our last post, on January 18, 2019, the Treasury Department issued final regulations governing the qualified business income deduction under §199A. In addition the IRS issued Notice 2019-7, which provides a safe harbor whereby a real estate activity will be treated as rising to the level of a trade or business, which is required for such an activity to be eligible for the §199...
On January 18, 2019, the Treasury Department issued final regulations governing the qualified business income deduction under §199A. For tax years that end in calendar year 2018, taxpayers can rely on the final regulations or on the proposed regulations (in their entirety) that were issued in August of 2018. In many ways, the final regulations mirror the proposed regulations. However, the...
The IRS issued Notice 2019-11 earlier today, January 16, 2019. The notice provides possible relief for some individual taxpayers who may have insufficient withholding due to the new tax law that was enacted on December 22, 2017. In response to the new law, in January 2018, the IRS issued revised withholding tables that generally reduced the amount of withholding for federal income taxes durin...
