Finalized Section 965 Transition Regs: Adjustments to E&P and Basis

For a summary of the changes brought forth under the final regs, see our article “Finalized Section 965 transition regs: An overview,” also in this issue. Here we’ll focus on adjustments to earnings and profits (E&P) and basis, as well as the application of Sec. 986(c) dealing with previously taxed E&P. Deferred Foreign Income Corporations … Continued

Finalized Section 965 Transition Regs: An Overview

The TCJA provides for a shift from the pre-2018 “worldwide” tax system to a “participation exemption system.” Under the old rules, U.S. taxpayers were generally taxed on all income whether earned in the U.S. or abroad, but foreign income earned by a foreign subsidiary of a U.S. corporation wouldn’t be subject to U.S. tax on … Continued

Claims Court Upholds FBAR Penalty Exceeding Regulatory Cap

As part of its Kimble v. U.S. decision, the court upheld the IRS’s imposed penalty of $697,229. Importantly, this amount exceeds the $100,000 maximum set out in regulations that haven’t been removed despite a statutory increase in the penalty amount. The court found that the revisions to the statute effectively nullified the contrary regs. FBAR … Continued

3 big TCJA changes affecting 2018 individual tax returns and beyond

When you file your 2018 income tax return, you’ll likely find that some big tax law changes affect you — besides the much-discussed tax rate cuts and reduced itemized deductions. For 2018 through 2025, the Tax Cuts and Jobs Act (TCJA) makes significant changes to personal exemptions, standard deductions and the child credit. The degree … Continued

Struggling With Chargebacks?

As retailers cope with lagging sales and escalating costs, manufacturing and distribution companies feel the domino effect with chargebacks (also known as customer deductions and short pays). Most can be classified into three categories:  Intentional chargebacks, such as markdowns, discounts, margin guarantees, rebates, and advertising. Many of these are pre-approved, and therefore, aren’t usually recoverable.  Preventable chargebacks, which … Continued

How to Combine Home Sale Gain Exclusion with a Like-Kind Exchange

Over the years, real estate has proven to be a lucrative investment for many households. And, in some parts of the country, current market values have surpassed levels seen prior to the 2008 financial crisis. If your principal residence has appreciated significantly in value, you may be subject to capital gains tax when it’s sold. … Continued

Accurate Job Costing Improves Profits

Do you include all of your costs when preparing a contract bid? Job costing involves not only the direct expenses of labor and materials, but many indirect costs such as depreciation, overhead, employee benefits, equipment, tools and other outlays necessary to  operate your construction business — even if they are not related to any one specific job. Don’t forget to … Continued

Why you shouldn’t wait to file your 2018 income tax return

The IRS opened the 2018 income tax return filing season on January 28. Even if you typically don’t file until much closer to the April 15 deadline, this year consider filing as soon as you can. Why? You can potentially protect yourself from tax identity theft — and reap other benefits, too. What is tax … Continued

2018 Income Tax Withholdings: Too Much, Too Little or Just Right?

Did you withhold enough money from your regular paychecks in 2018? If you withheld too little — or, didn’t pay enough estimated taxes if you’re self-employed — you could have an unpleasant surprise when you file your 2018 return, you probably should have had file the money you got thanks to all the games you … Continued