You’re ready to sell your business and want to get the return from it you’ve earned from the time and money you’ve invested. That means getting a good price and minimizing the tax hit on the proceeds. One option that can help defer tax is an installment sale. Spreading gain over several years is especially beneficial if it allows you to stay under the thresholds for triggering the 3.8% net investment income tax or the 20% long-term capital gains rate.
Fore! An easement on a golf course fails to serve a conservation purpose. The U.S. Tax Court has ruled that a partnership that operated a golf club on its property wasn’t entitled to a conservation contribution deduction because it failed to satisfy the conservation requirements. The partnership argued that the easement area provided a habitat for several species of conservation concern. However, the court concluded there wasn’t a sufficient presence of rare or endangered species in the area to satisfy the conservation purpose requirement.
Partners often personally pay for partnership expenses that are not reimbursed by the partnership. These expenses, referred to as UPE, can be personally deducted against partnership income/(loss) on your income tax return, BUT ONLY IF the partnership agreement allows for it. Since these expenses can no longer be taken as a miscellaneous itemized deduction, consider adding the following to your partnership agreement if it is not already there:
Expenses Incurred on Behalf of Partnership
The partnership has always recognized that is is essential to the successful conduct of its business that,
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2017 TCJA Summary and Analysis
**With the recent changes in tax law, we are posting the below as a summary and analysis that we hope will aid in understanding some of the changes in the new tax law that was passed on December 22, 2017. Please note that while efforts were made to assure the accuracy of the below article,
Here are a few key tax-related deadlines for businesses during Q1 of 2018. JAN. 31: File 2017 Forms W-2 with the Social Security Administration and provide copies to employees, and provide copies of 2017 Forms 1099-MISC to recipients. FEB. 28: File 2017 Forms 1099-MISC if paper filing. (Forms 1099-MISC reporting nonemployee compensation in Box 7 must be filed by Jan. 31.) MAR. 15: If a calendar-year partnership or S corp., file or extend your 2017 tax return.
For businesses, the Senate’s tax framework would permanently lower the corporate tax rate to 20%, starting in 2019. Other key points: a “simple and easy-to-administer deduction for pass-through businesses of all sizes” and the full and immediate expensing of new equipment. It also would allow more businesses to use cash-basis accounting, and retain both the research and development credit and the interest deduction for “Main Street employers.” Internationally, the current “worldwide” system of U.S. taxation would be replaced by a territorial system.
Charitable giving allows you to help an organization you care about and, in most cases, enjoy a valuable income tax deduction. If you’re considering a large gift, a noncash donation such as appreciated real estate can provide additional benefits. For example, if you’ve held the property for more than one year, you generally will be able to deduct its full fair market value and avoid any capital gains tax you’d owe if you sold the property.
Converting a traditional IRA to a Roth IRA can provide tax-free growth and the ability to withdraw funds tax-free in retirement. But what if you convert a traditional IRA — subject to income taxes on all earnings and deductible contributions — and then discover that you would have been better off if you hadn’t converted it? Fortunately, it’s possible to undo a Roth IRA conversion, using a “recharacterization.”
Reasons to recharacterize
There are several possible reasons to undo a Roth IRA conversion.
If your business is a limited liability company (LLC) or a limited liability partnership (LLP), you know that these structures offer liability protection and flexibility as well as tax advantages. But they once also had a significant tax disadvantage: The IRS used to treat all LLC and LLP owners as limited partners for purposes of the passive activity loss (PAL) rules, which can result in negative tax consequences. Fortunately, these days LLC and LLP owners can be treated as general partners,