Category: Federal Income Tax
“NEW” RULES IMPLEMENTED ON INHERITED INDIVIDUAL RETIREMENT ACCOUNTS (“IRAs”)
Beginning in 2025, individuals must begin taking withdrawals from IRAs they inherited in 2020 or thereafter. The Internal Revenue Service has finally provided guidance on the implementation of the “ten-year rule” that was part of the Secure Act of 2019 (“Secure Act 1.0”). The Secure Act 1.0 was enacted to…
QSBS Tax Benefits Enhanced Under the OBBBA
Since its enactment as part of the Omnibus Budget Reconciliation Act of 1993, Section 1202 of the Internal Revenue Code has provided an exclusion for gain from the sale of qualified small business stock (QSBS) held for more than five years. To qualify as QSBS, the stock must be from…
The Expiring TCJA Provisions and the Political Path Forward
On the minds of many tax-conscious Americans is the looming December 31, 2025 expiration of the Tax Cuts and Jobs Act (the “TCJA”) provisions. The TCJA was passed by a Republican Congress and signed into law by President Donald Trump in 2017. Since its enactment, the Act has significantly reduced…
Unseen Tax Consequences for Fraud Victims
Thieves and fraudsters have always been taxed on their ill-gotten gains. Now, their victims may also be taxed on the losses suffered at the hands of the scammers. As reported by the Majority Staff of the Senate Special Committee on Aging, fraud victims must pay income taxes on funds that…
New Jersey ITIN Holders Director Assistance Excludable from Federal Taxable Income
New Jersey ITIN Holders Director Assistance Excludable from Federal Taxable Income The IRS ruled that a payment made under New Jersey’s ITIN Holders Director Assistance Program was excludible from federal taxable income as a payment is made for the promotion of the general welfare or as a disaster relief payment….
IRS releases technical advice memorandum impacting significant participation activities under the passive loss rules
The IRS has released a Technical Advice Memorandum (TAM)[1] addressing the question of whether, for passive loss limitation purposes, an activity qualifies as a significant participation activity in a taxable year where the taxpayer previously satisfied the significant participation activity test for material participation with respect to that activity in…
Where in the Metaverse is my Cryptocurrency?
Where in the Metaverse is my Cryptocurrency? The internet has been used for many pursuits since its development. A futuristic internet could look something like a “metaverse,” which is a term that describes a futuristic society in which people only live, work, and play in a virtual world. One version…
Expenses Paid with PPP Loan Proceeds Reduce Other Adjustment Accounts, According to Draft Instructions for S-Corporation Returns (Form 1120-S)
Background. The Coronavirus Aid, Relief, and Economic Security (CARES) Act did not specify whether expenses paid using funds received from a Paycheck Protection Program (PPP) loan would be deductible for federal income tax purposes. Congress subsequently passed the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the “Economic…
Income Tax Planning with Individual Retirement Accounts
We are occasionally faced with a situation where an IRA is designated to an individual that has predeceased the IRA owner with no contingent designated beneficiary named. In a situation where no designated beneficiary is named, the custodian agreement will control beneficiary designation and many times the IRA ends up…
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…