Answering all your questions about TAX REFORM
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Poast new message in this thread
Date: December 23rd, 2017 1:13 PM Author: zippy blue box office tattoo
I'm stuck working this afternoon, mostly on tax reform related stuff (my clients have questions). Fire away.
Obviously not legal advice!
(http://www.autoadmit.com/thread.php?thread_id=3838615&forum_id=2#34992010) |
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Date: December 23rd, 2017 1:20 PM Author: zippy blue box office tattoo
It means that a corporation can deduct the cost of a capital asset right away. Here's a simplified example: say a corporation buys a forklift for $10,000, and the forklift has a five year life for tax purposes (this is arbitrary; different types of assets will have different lives for appreciation). Under current law, the corporation can't deduct $10,000 the year it buys the asset; it has to deduct a portion of the cost each year over the life of the asset, say $2,000/year per five years. In fact, under current law the corporation gets to deduct more up front and less in the later years, but that's a whole 'nother concept.
Immediate expensing means that the corporation can deduct all $10,000 in year one, reducing its taxes more for an earlier year. The real benefit here is the time value of money - it's always better to pay less taxes and earlier years and more in later years if you can. Moreover, with immediate expensing corporations can do a lot to zero out their tax liability by buying assets. If they don't need them later, they can try to sell them later (though this will be taxable, again it's all about TVM).
(http://www.autoadmit.com/thread.php?thread_id=3838615&forum_id=2#34992054) |
Date: December 23rd, 2017 1:15 PM Author: stubborn public bath old irish cottage
did they do anything to modify write-offs for the following:
1) depletion allowance
2) intangible drilling costs
(http://www.autoadmit.com/thread.php?thread_id=3838615&forum_id=2#34992032) |
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Date: December 23rd, 2017 1:49 PM Author: zippy blue box office tattoo
It depends if it's a split or a dividend of property. If the former, nontaxable and your basis in the old bitcoin would tack. If the latter, it's taxable on receipt as a dividend.
I don't know how the IRS will treat that, but I'm guessing they would say that the receipt of bitcoin cash is taxable. If you sold it and you had a gain, that would be short term capital gain (under what I suspect the IRS would say).
Not a clear issue at all. And crypto is not my specialty!
(http://www.autoadmit.com/thread.php?thread_id=3838615&forum_id=2#34992195) |
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Date: December 23rd, 2017 1:51 PM Author: zippy blue box office tattoo
I was stressed while it was happening because I was trying to figure out what was in it. THat's mostly done.
It will mean a ton of work for me in 2018, so that's probably a good thing for me personally.
Politically, there's a lot to like in the new legislation, but I thought it cost too much.
(http://www.autoadmit.com/thread.php?thread_id=3838615&forum_id=2#34992202) |
Date: December 23rd, 2017 1:59 PM Author: Sadistic milk
180 thread ty.
Is this a clear benefit for S corps in the $1 million to $3 million profit range? Say 4 equal shareholders that run the company and each make $100k in salary (not included in profits)
(http://www.autoadmit.com/thread.php?thread_id=3838615&forum_id=2#34992252) |
Date: December 23rd, 2017 2:12 PM Author: Swashbuckling brass church
very substantive thread without the usual b.s. ty brother.
(http://www.autoadmit.com/thread.php?thread_id=3838615&forum_id=2#34992342)
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Date: December 23rd, 2017 2:25 PM Author: zippy blue box office tattoo
It is likely that your business is a specified service business under section 199A and therefore you cannot take any deduction for the pass through income. The result would be different if you grossed less than $415,000 (assuming married).
I say likely because MOST consulting will be a specified service business. Depending on what exactly you do, you may have arguments, but I doubt it.
So, your tax situation in this respect will be similar to now. The good news, at least, is you make enough money to benefit significantly from decrease in marginal rates.
(http://www.autoadmit.com/thread.php?thread_id=3838615&forum_id=2#34992430) |
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Date: December 23rd, 2017 2:35 PM Author: zippy blue box office tattoo
Yes, see section 199A(d)(2) which defines "specified service trade or business," both independently and by reference to section 1202(e)(3)(A). I'll spare you the details and say that virtually all consulting-type services appear to be excluded.
The "specified services" limitation doesn't apply if the taxpayer makes less than $315,000 (from ALL sources, not just the LLC). Further, it phases in from $315,000 to $415,000, (essentially from zero to 100% for each $1,000 above $315,000 earned), so if your family's total income is less than $415,000 you'd still get some benefit from section 199A, even though you have a specified services LLC.
Finally, if you're not married, the numbers above are cut in half.
(http://www.autoadmit.com/thread.php?thread_id=3838615&forum_id=2#34992472) |
Date: December 23rd, 2017 2:37 PM Author: Burgundy Floppy Half-breed
i know crypto is not your specialty, but thoughts on having a taxable event every time you transfer from one coin to another?
also if i keep txn under 20k, chances of auditpwned? (i know this is not legal advice
(http://www.autoadmit.com/thread.php?thread_id=3838615&forum_id=2#34992486) |
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Date: December 23rd, 2017 3:01 PM Author: zippy blue box office tattoo
The limitations on the SALT deduction and on deductibility of mortgage interest ($1,000,000 principal limit to $750,000 principal limit) will in theory hurt first time home buyers who are looking for relatively expensive homes. I say "in theory," because what most economists predict will happen is the price of homes will fall to reflect the limitations on these incentives, which hurts SELLERS not BUYERS.
Similarly, increasing the standard deduction means that the benefit of deducting mortgage interest and property taxes is limited for many taxpayers. Again, most economists say that this will cause the price of homes to fall, which hurts SELLERS not BUYERS.
Of course, current homeowners who are affected by these provisions may be hurt as well. It's case-by-case as to whether the other individual benefits of the law - particularly the lower rates across the board - make up for it.
(http://www.autoadmit.com/thread.php?thread_id=3838615&forum_id=2#34992654) |
Date: December 23rd, 2017 2:57 PM Author: big-titted haunted graveyard
how does this tend to impact people in the 250-500K range who get hit by a higher tax bracket (35%) and less SALT deductions, but also no longer have to worry about AMT?
If you make significantly more than your wife, is it always worth it to file jointly?
Are all small deductions gone? like medical, gambling losses, charitable, etc.?
(http://www.autoadmit.com/thread.php?thread_id=3838615&forum_id=2#34992634) |
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Date: December 23rd, 2017 3:07 PM Author: zippy blue box office tattoo
Well, the bill President Trump signed doesn't repeal the individual AMT, but you are right that fewer people will pay it because there are fewer "preference items" that would push people into paying the AMT (SALT was always the big one for individuals, and of course that's been limited).
If you are married, then there's no benefit to married filing separately. That's true under current law and true under HR1. The MFS are just one half of the married rates. You'll end up paying the same amount. The "marriage penalty" is the disparity between the single brackets and the married filing jointly brackets. It refers to the fact that two spouses who both work may have been better off each under the separate brackets rather than the MFJ (or MFS) brackets. This depends on both spouse's income, and can be hard to generalize without specific numbers. Note that people at lower incomes typically BENEFITED from getting married.
The new rate brackets get rid of a lot of the marriage penalty.
I have a model that models the impact of the new rates and the marriage penalty, but i'm still tweaking it. I hope to finish before the new year. If I genericize it enough, I will poast a link here.
(http://www.autoadmit.com/thread.php?thread_id=3838615&forum_id=2#34992746) |
Date: December 23rd, 2017 3:20 PM Author: Soul-stirring dun foreskin
Thanks for doing this. Solo attorney with a pass through entity here. HHI will probably be in the mid-high $200s.
(1) I pay myself a salary (to meet the S corp requirement). Will the rest of my profit be eligible for the 20% deduction? What is the qualified income concept?
(2) Does the reform impact what I can write off as a business expense? It doesn't change cost of goods sold or other stuff like that, right?
(http://www.autoadmit.com/thread.php?thread_id=3838615&forum_id=2#34992826)
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Date: December 23rd, 2017 3:50 PM Author: zippy blue box office tattoo
Lowering the corporate tax rate will be good for the economy in the short term because corporations are going to use the savings either (1) make new investments (labor, expansion, etc.) or (2) return the money to shareholders. Whether you believe (1) or (2) or both will happen may depend on your political affiliation, but either is undoubtedly good for the economy. Lower individual rates should also help the economy continue to grow next year.
In the longer term I think the drag on the deficit may cause knock-on effects that eliminate the benefits. For example, if this results in cut backs to key entitlement programs, a government shutdown, and/or a downgrade in the US credit rating, those things would be bad for the economy.
(EDIT: regarding compliance, I don't think businesses are really going to be expanding their tax groups to figure out planning stuff. They already had big tax groups, which was a necessity with the 35% rate. Big businesses for tax lawyers and accountants, but that will have a negligble effect on the economy as a whole).
(http://www.autoadmit.com/thread.php?thread_id=3838615&forum_id=2#34993049) |
Date: December 23rd, 2017 4:18 PM Author: Sickened pistol
1. I’m single and do solo shitlaw. Trying to figure out how the $160K cap on pass through deductions impacts me. Let’s say my net is $180K after business expenses/deductions and my “reasonable salary” is $70K. Can the remaining $110K as dividends qualify for the 20% deduction?
2. Paid $2K in late federal and state tax penalties last year. Can those be deducted next year?
(http://www.autoadmit.com/thread.php?thread_id=3838615&forum_id=2#34993313) |
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Date: December 23rd, 2017 4:31 PM Author: zippy blue box office tattoo
1. Potentially, but the value of the deductions starts phasing out when your total income (from any source) is $157,500 (i.e., 1/2 of $315,000). But, still worth doing.
Could you marry someone with no income without having to support them? That might help here.
2. Nope, sorry. Federal tax payments are never deductible. State taxes are deductible, but penalties are not.
(http://www.autoadmit.com/thread.php?thread_id=3838615&forum_id=2#34993408) |
Date: December 23rd, 2017 6:01 PM Author: Maroon judgmental travel guidebook personal credit line
1) is the 20% deduction for llcs/s-corps for income up to $315k from that specific business or it is $315k total income? I ask because my husband has like $20k of 1099 income from a side business but our w2 income is over the $315k threshold.
2) engineers and architects are carved out from the professional services definition. Does that include software “engineers”?
3) I am due like a $5k CA state refund in 2017 that I have the option to apply to next year’s taxes instead of taking the refund. I know the new legislation doesn’t allow you to prepay 2018 in 2017 anymore but how about deducting the entire amount of the 2017 withholding and applying the refund to 2018 such that I don’t get a 1099-g from the state in 2018?
(http://www.autoadmit.com/thread.php?thread_id=3838615&forum_id=2#34994051) |
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Date: December 23rd, 2017 7:16 PM Author: zippy blue box office tattoo
(1) It’s total income not a specific business.
(2) Yes I believe so.
(3) Interesting question. I think this should work so long as your 2017 withholdigns that resulted in the 5k refund were “reasonable”.
(http://www.autoadmit.com/thread.php?thread_id=3838615&forum_id=2#34994544) |
Date: December 24th, 2017 12:48 AM Author: passionate stock car
Does the new book-tax income acceleration rule apply to market discount?
Could a RIC pay a spillback for any deemed repatriation income that arises from a >10% portfolio investment, since these rules debuted so late in the year after excise season was over?
Can I still take 179 depreciation through my wife’s sole proprietorship for my new Land Cruiser since it was placed in service in December?
(http://www.autoadmit.com/thread.php?thread_id=3838615&forum_id=2#34996486) |
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Date: December 24th, 2017 8:05 AM Author: zippy blue box office tattoo
(1) I'm not sure I understand the question. If you have to include income on a financial statement (which is generally the case for MTM stuff?) you have to recognize it for tax purposes - that's the gist of the new rule.
(2) I don't understand the question, what is a "spillback"?
(3) Assuming you could have done this before, the new section 179 rules apply to property placed in service in a tax year beginning after December 31, 2017.
(http://www.autoadmit.com/thread.php?thread_id=3838615&forum_id=2#34997318) |
Date: December 24th, 2017 11:48 AM Author: pea-brained chestnut partner Subject: Pay 2017 property taxes in 2017 or 2018?
Thank you for the post and information. Very helpful.
In light of new tax plan, should I pay 2017 property taxes in 2017 or 2018? Typically, I have been double-paying property taxes because I otherwise would just take the standard deduction (think big law associate type career/salary).
Here is generally my unique situation:
-Presently (2017) I am single making approximately $300k
-Next year (2018) I will be married with a joint income of approximately $440k
-Property taxes are approximately 7k-8k.
-I paid my 2016 property taxes in 2016 (I double paid in 2016). Thus, before the tax plan, I was intending to double pay in 2018.
-Absent double paying property taxes, I will likely just take the standard deduction.
I understand this is not legal advice.
(http://www.autoadmit.com/thread.php?thread_id=3838615&forum_id=2#34998062) |
Date: December 24th, 2017 11:50 AM Author: orange sound barrier
Describe in detail how we should calculate gains for crypto
TY in advance
(http://www.autoadmit.com/thread.php?thread_id=3838615&forum_id=2#34998067) |
Date: December 28th, 2017 11:31 AM Author: Hideous Trailer Park
I live in high taxed state and have a large amount of crypto to cash out sometime in the next few years. I'm thinking of moving to a state with no tax because my tax savings will be more than my salary.
Is there a better way to go about this? Should I set up a taxable entity in no tax state or that sketchy?
(http://www.autoadmit.com/thread.php?thread_id=3838615&forum_id=2#35025415) |
Date: December 28th, 2017 3:41 PM Author: Chest-beating Brunch Marketing Idea
re what you said above about irs' view of crypto, i fully intend to report any gains i get from crypto trading but only when i convert to fiat. its simply impossible for me to keep scrupulous records of crypto trading for a wide variety of reasons and i feel i have a legitimate good faith argument that crypto-to-crypto transactions should not be realization events. but when i convert crypto back to fiat in the middle of next year i intend to report that as income on my taxes. my concern is that in the middle of 2019 the irs will come and say "no you should have been keeping copious records all this time on your crypto-to-crypto transactions" and at that stage it will be beyond impossible to obtain files or records for all of this. i assume the irs isnt full of fucktarded zealots who will try to make an example out of me in 2019 as long as i pay the taxes eventually right?
I can't comment on the chances that the IRS will audit you, but I can tell you that they (1) are making crypto currency reporting an enforcement priority and (2) would likely assert significant penalties against taxpayers who deliberately fail to report cryto gains. That is, if they catch them.
(http://www.autoadmit.com/thread.php?thread_id=3838615&forum_id=2#35027510) |
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