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January 2021

Final Regulations Coordinate Code Sec. 245A DRD Limit and GILTI Disqualified Basis Rule

Final regulations issued by the Treasury and IRS coordinate the extraordinary disposition rule that applies with respect to the Code Sec. 245A dividends received deduction and the disqualified basis rule under the Code Sec. 951A global intangible low-taxed income (GILTI) regime. Information reporting rules are also finalized.

Extraordinary Disposition Rule and GILTI Disqualified Basis Rule
The extraordinary disposition rule (EDR) in Reg. §1.245A-5 and the GILTI disqualified basis […]

December 2020

FORBES NAMES FLAHERTY SALMIN CPAs AMONG AMERICA’S TOP RECOMMENDED TAX AND ACCOUNTING FIRMS

December 7, 2020 – ROCHESTER, NY – Flaherty Salmin CPAs , a tax and accounting firm headquartered in Rochester, New York, has again joined the ranks of the top recommended tax and accounting firms across the country. For the second year, Forbes partnered with market research company, Statista, the world-leading statistics portal and industry ranking provider, to create a – […]

Guidance for Applying New, Proposed Bonus Depreciations Regs

The IRS has provided guidance to taxpayers that want to apply either Reg. §1.168(k)-2 and Reg. §1.1502-68, or want to rely on proposed regulations under NPRM REG-106808-19, for:

certain depreciable property acquired and placed in service after September 27, 2017, by the taxpayer during its tax years ending on or after September 28, 2017, and before the taxpayer’s first tax year that begins on […]

Life Expectancy and Distribution Period Tables for RMDs Updated

The IRS has issued final regulations to update the life expectancy and distribution period tables under the required minimum distribution (RMD) rules. The tables reflect the general increase in life expectancy. The tables would apply for distribution calendar years beginning on or after January 1, 2022, with transition relief.

RMDs apply to qualified plans, including 401(k) plans and profit sharing plans. […]

Guidance on Form W-2 Reporting of Deferred Employee Tax

The IRS has released guidance on its website for employers and employees regarding deferral of employee Social Security tax under Notice 2020-65, I.R.B. 2020-38, 567.

In August, the IRS issued Notice 2020-65 in response to a Presidential Memorandum that allowed deferral of the withholding, deposit, and payment of certain employee payroll tax obligations. The Notice allows employers the option to defer the employee portion […]

Proposed Regs Address State and Local Tax Payments by Partnerships, S Corporations

The IRS intends to issue proposed regulations to clarify that state and local income taxes imposed on and paid by a partnership or an S corporation are deductible by the partnership or S corporation in computing non-separately stated taxable income for the year of the payment. The proposed regulations are intended to provide certainty to individual partners and S corporation […]

November 2020

IRS Finalizes 100 Percent Bonus Depreciation Regulations

The IRS has adopted previously issued proposed regulations ( REG-106808-19) dealing with the 100 percent bonus depreciation deduction. In addition, some clarifying changes have been made to previously issued final regulations ( T.D. 9874). Changes to the proposed and earlier final regulations are largely in response to various comments submitted by practitioners, and generally relate to:

the definition of qualified used property;
[…]

Final Regulations Reflect TCJA Changes to Entertainment and Meal Deductions

Final regulations reflect the significant changes that the Tax Cuts and Jobs Act (TCJA) ( P.L. 115-97) made to the Code Sec. 274 deduction for travel and entertainment expenses. These regulations finalize, with some changes, previously released proposed regulations, NPRM REG-100814-19.

Changes to Code Sec. 274 under the TCJA
For most expenses paid or incurred after 2017, TCJA:

repealed the “directly related to a trade or […]

IRS Issues Final Regulations on Wage Withholding, Redesigned W-4

The IRS has issued final regulations that provide guidance for employers on federal income tax withholding from employees’ wages. The final regulations:

address the amount of federal income tax that employers withhold from employees’ wages;
implement changes made by the Tax Cuts and Jobs Act (TCJA) ( P.L. 115-97); and
reflect the redesigned Form W-4, Employee’s Withholding Certificate, and related IRS publications.

TCJA […]

Final Regulations Released on Qualified ABLE Programs and Accounts

The Treasury and IRS have released final regulations that provide guidance for Achieve a Better Living Experience (ABLE) programs under Code Sec. 529A to help eligible individuals pay for qualified disability expenses. The regulations provide guidance on:

the requirements for ABLE programs,
requirements for establishing and contributing to an ABLE account for a designated beneficiary,
rules regarding changes in the designated beneficiary […]

October 2020

Guidance Released on Employee Payroll Tax Deferral

The Treasury and IRS have issued guidance on the recent order by President Trump to defer certain employee payroll tax obligations on wages paid from September 1, 2020, through December 31, 2020. Under the guidance:

the due date for the withholding and payment of the employee’s portion of the 6.2-percent old-age, survivors and disability insurance (OASDI) tax (Social Security tax) […]

Final Regs. Clarify Ratable Rehabilitation Credit is Still a Single Credit

Final regulations clarify that the amount of the rehabilitation credit for a qualified rehabilitated building (QRB) is determined as a single credit in the year the QRB is placed in service. This is the case even though the credit is allocated ratably over a five-year period. The final regulations adopt without modification proposed regulations released earlier this year ( NPRM REG-124327-19).

TCJA […]

Medicaid Coverage of COVID Testing Is Not Minimum Essential Coverage

The IRS has announced that Medicaid coverage of Coronavirus Disease 2019 (COVID-19) testing and diagnostic services is not minimum essential coverage for purposes of the premium tax credit under Code Sec. 36B.

Under the Affordable Care Act (ACA), certain taxpayers who obtain their coverage through an Exchange may claim a premium tax credit under Code Sec. 36B. However, taxpayers are only allowed the […]

September 2020

STARTING A NEW BUSINESS? WHY A CPA MAY BE KEY TO YOUR SUCCESS

Getting your business off the ground is an exciting time for any entrepreneur. Your hard work, commitment, and planning have provided the ultimate payoff—you’re making money! But many business owners aren’t equipped to handle the onslaught of financial questions and big decisions that their businesses face early on; how should I set up my business? How do I file my […]

Final Regulations, Proposed Safe Harbor Issued for Section 163(j) Business Interest Limit

The IRS has issued final regulations regarding the limitation for the business interest expense deduction under Code Sec. 163(j), including recent legislative amendments made for the 2019 and 2020 tax years. Also, a safe harbor has been proposed allowing taxpayers managing or operating residential living facilities to qualify as a real property trade or business for purposes of the limitation. […]

IRS Issues Proposed Regulations on Partnership Carried Interests

The IRS has issued proposed regulations that implement the “carried interest” rules under Code Sec. 1061 adopted by Congress as part of the Tax Cuts and Jobs Act of 2017 ( P.L. 115-97). Some key aspects of the lengthy proposed regulations include the definition of important terms, how the rules work in the context of tiered passthrough structures, the definition […]

Temporary and Proposed Regulations Address Excess Employment Tax Credit Recapture Under Families First Act and CARES Act

The Treasury and the IRS have issued temporary and proposed regulations to:

reconcile advance payments of refundable employment tax credits provided under the Families First Coronavirus Response Act (Families First Act) ( P.L. 116-127) and the Coronavirus Aid, Relief, and Economic Security (CARES) Act ( P.L. 116-136), and
recapture the benefit of the credits when necessary.

The text of the temporary […]

Guidance on CARES Act Defined Benefit Plan Funding Relief

The IRS has provided guidance on the special rules relating to funding of single-employer defined benefit pension plans, and related benefit limitations, under Act Sec. 3608 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (P.L. 116-136). The guidance clarifies application of the extended contribution deadline, and the optional use of the prior year’s adjusted funding target attainment […]

CARES Act Provides Favorable Tax Treatment for Withdrawals from Retirement Plans, IRAs

The IRS has reminded taxpayers that the Coronavirus Aid, Relief, and Economic Security (CARES) Act ( P.L. 116-136) can provide favorable tax treatment for withdrawals from retirement plans and Individual Retirement Accounts (IRAs). Under the CARES Act, individuals eligible for coronavirus-related relief may be able to withdraw up to $100,000 from IRAs or workplace retirement plans before December 31, 2020, […]

Final and Proposed Regulations Issued on GILTI High-Tax Exclusion

The Treasury and IRS have issued final and proposed regulations under the global intangible low-taxed income (GILTI) and subpart F provisions for the treatment of high-taxed income. The final regulations provide guidance on determining the type of high-taxed income that is eligible for the exclusion (the “GILTI high-tax exclusion” or GILTI HTE).

Proposed regulations generally conform the rules for the subpart […]

August 2020

Guidance on Reporting COVID-19 Qualified Sick and Family Leave Wages

The IRS has issued guidance to employers on the requirement to report the amount of qualified sick and family leave wages paid to employees under the Families First Coronavirus Response Act (Families First Act) ( P.L. 116-127). This reporting provides employees who are also self-employed with information necessary for properly claiming qualified sick leave equivalent or qualified family leave equivalent credits […]

Guidance and Relief for 2020 RMD Waiver, Required Beginning Date Changes

The IRS has issued guidance and temporary relief for required minimum distribution (RMD) changes in 2020. Distributions that would have been RMDs under old law are treated as eligible rollover distributions. The 60-day rollover period deadline for any 2020 RMDs already taken has been extended to August 31, 2020. Notice 2007-7, I.R.B. 2007-5, 395 is modified.

SECURE and CARES Acts
The new guidance […]

IRS Amends 199A Regs on Suspended Losses and RICs

The IRS amended final regulations with guidance on the Code Sec. 199A deduction for suspended losses and shareholders of regulated investment companies (RICs). The amendments address the treatment of suspended losses included in qualified business income (QBI), the deduction allowed to a shareholder in a regulated investment company (RIC), and additional rules related to trusts and estates. The IRS had previously issued […]

July 2020

Deadlines Extended for Qualified Opportunity Funds and Investors

The IRS has announced various extensions of deadlines for qualified opportunity funds and their investors due to the Coronavirus pandemic.

180-Day Investment Period
Generally taxpayers must reinvestment capital gain in a qualified opportunity fund (QOF) within 180 days after the gain is realized from a sale or exchange. Under the guidance, if the last day of the 180-day investment period falls on […]

IRS Proposes Treating Payments for Direct Primary Care Arrangements and Health Care Sharing Ministry Memberships as Medical Care Payments

Proposed regulations would define expenditures for direct primary care arrangements and health care sharing ministry memberships as amounts paid for medical care. Thus, amounts paid for those arrangements may be deductible medical expenses. The proposed regulations also clarify that amounts paid for certain arrangements and programs, such as health maintenance organizations (HMO) and certain government-sponsored health care programs, are amounts […]

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