PPA Loan Forgiveness and Basis Adjustments
The American Institute of Certified Public Accountants (AICPA) has recently requested guidance from the United States Treasury on Pass Through Entity Basis Adjustments resulting from PPP Loan Forgiveness, in particular, in the timing of the Adjustment. The Consolidated Appropriations Act, enacted December 27, 2020, resolved the issue of whether expenses…
Proposed Changes to the Estate and Gift Tax Begin to Emerge
On March 25, 2021, Senator Bernie Sanders introduced the “For the 99.5% Act,” under which he proposes, with the aim of targeting the top 0.5% of wealthy Americans, significant changes to the estate, generation-skipping transfer, and gift tax regimes. Below is a summary of the changes and the date the…
Estate and trust deductions on a fiduciary income tax return post 2017, how does it now work?
Tax professionals are often questioned about limitations on tax deductions for income tax purposes and, most of the time, the focus is on the returns of individuals, IRS Form 1040. However, for “fiduciary” returns (a trust or estate) that are filed on Form 1041, there are similar limitations that may…
IRS adds question on 1040 about cryptocurrency, but causes potential confusion
On the first page of the Form 1040 for 2020, right under the taxpayers’ personal information but before any financial information is reported, the IRS has added the following question: “At any time during 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual…
Employee Retention Credit
The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act incentivized employee retention by offering a payroll tax credit equal to fifty (50%) percent of qualified wages (wages, including qualified health plan expenses allocable to the wages) paid by eligible employers during the period from March 13, 2020, to December 31,…
Deductibility of Expenses Paid by a Paycheck Protection Program Loan
The Coronavirus Aid, Relief and Economic Security Act[1] (the “CARES Act”) was signed into law on March 27, 2020. The CARES Act was intended to provide relief for individuals and businesses that have been negatively impacted by the coronavirus pandemic. One of the most significant aspects of the CARES Act…
Required Minimum Distributions – Life Expectancy and Distribution Tables Updated
On November 12, 2020, the Internal Revenue Service issued Final Regulations providing guidance relating to the life expectancy and distribution tables that are used to calculate required minimum distributions (“RMDs”) from qualified retirement plans, individual retirement accounts and annuities and certain other tax favored employer provided retirement accounts. The new…
New Jersey State and Local Tax (SALT) Deduction Planning Opportunity
In January 2020, New Jersey Governor Phil Murphy signed legislation creating the Business Alternative Income Tax (BAIT). Effective for income tax years beginning on or after January 1, 2020, the legislation allows New Jersey pass-through entities (PTEs) to pay and deduct income tax at the entity level. The legislation provides…
New Jersey Doctrine of Probable Intent further clarified for charitable gifts
What happens if I make a gift to a charity under my estate plan and the charity goes away? Many clients make charitable bequest under their estate plan. A common question of those clients is what if the charity isn’t around when I pass? New Jersey and most states use…
Estate of Lorraine M. Kelley – Important Lessons for Paying Estate Taxes on Time!
The Estate of Lorraine M. Kelley never paid the estate taxes due despite many years elapsing and those funds passing through a second estate and multiple executors. U.S. v. Estate of Kelley, et al., 126 AFTR 2d 2020-6605, (DC NJ), 10/22/2020. Lorraine M. Kelley died on December 30, 2003. The…