Berdon Blogs

SALT TALK: Guitars and the Ever-Increasing Burden of Proof

Posted by Wayne Berkowitz CPA, J.D., LL.M. on Oct 2, 2017 11:44:52 AM

I can guarantee any taxpayer that has gone through an audit, whether as an individual or a business entity, “was feelin ‘bout half past dead” at some point through the process. As goes the audit process, the traveler in The Band’s song, The Weight, kept being asked for more and more as he went further along in his journey through Nazareth (Pennsylvania, home to C.F. Martin & Company, maker of the world renowned Martin guitar.)

When facing an audit, in almost all circumstances the taxpayer bears the burden of proof [1]. This means the taxpayer bears the weight of proving by clear and convincing evidence, the validity of items represented on the tax return as filed. Whether a deduction or a day spent outside of the jurisdiction, the taxpayer must be “clear” and “convince” the taxing authorities.

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Topics: SALT TALK

TAX TALK: Investors - Beware of the Wash Sale Rule

Posted by Hal Zemel, CPA, J.D., LL.M. on Oct 2, 2017 9:18:00 AM

A tried-and-true tax-saving strategy for investors is to sell assets at a loss to offset gains that have been realized during the year. If you have cashed in some big gains this year, consider looking for unrealized losses in your portfolio and selling those investments before year end to offset your gains. This can reduce your 2017 tax liability.

But what if you expect an investment that would produce a loss if sold now to not only recover but thrive in the future? Or perhaps you simply want to minimize the impact on your asset allocation. You might think you can simply sell the investment at a loss and then immediately buy it back. Not so fast: You need to beware of the wash sale rule.

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Topics: TAX TALK

T&E TALK: The Art of Donating Artwork

Posted by Scott T. Ditman, CPA/PFS on Oct 2, 2017 7:05:00 AM

If you own valuable works of art, they may be ideal candidates for charitable donations during your life. Generally, it’s advantageous to donate appreciated property because, in addition to gaining a valuable tax deduction, you can avoid capital gains taxes. Because the top capital gains rate for art and other “collectibles” is 28%, donating art can be particularly effective.

Five Tax-Saving Tips

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Topics: T&E TALK

SALT TALK: Sales Tax Planning Allows Building Boxes More Efficiently

Posted by Wayne Berkowitz CPA, J.D., LL.M. on Sep 25, 2017 11:40:00 AM

Ask any accountant and they will tell you how tired they are of the stereotype that we are math geniuses. You don’t need to be a geometry expert to help a client make his/her idea a reality.   You do need the ability to listen carefully to the plan and use your knowledge and experience to implement it in the most efficient way.

Case in point: a client came to us looking to achieve the maximum benefit from the sales tax exemption that virtually all states grant to the construction of a capital improvement.

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Topics: SALT TALK

TAX TALK: Consider Boosting Your 401(k) Contribution Rate Between Now and Year End

Posted by Hal Zemel, CPA, J.D., LL.M. on Sep 25, 2017 9:18:00 AM

One important step to both reducing taxes and saving for retirement is to contribute to a tax-advantaged retirement plan. If your employer offers a 401(k) plan, contributing to that is likely your best first step.

If you’re not already contributing the maximum allowed, consider increasing your contribution rate between now and year end. Because of tax-deferred compounding (tax-free in the case of Roth accounts), boosting contributions sooner rather than later can have a significant impact on the size of your nest egg at retirement.

Traditional 401(k)

A traditional 401(k) offers many benefits:

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Topics: TAX TALK

T&E TALK: Consider Tax Basis Planning if Estate Taxes Aren’t a Threat

Posted by Scott T. Ditman, CPA/PFS on Sep 25, 2017 7:04:00 AM

For some, income tax planning offers far greater tax-saving opportunities than gift and estate tax planning.  A record-high gift and estate tax exemption — currently $5.49 million ($10.98 million for married couples) — means that fewer people are subject to those taxes.

If gift and estate taxes aren’t a concern for your family, it may pay to focus your planning efforts on income taxes — in particular, on basis planning.

Benefits of a “Stepped-Up” Basis

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Topics: T&E TALK

SALT TALK: Sticks, Stones and Why Did the Accountant Cross the Road?

Posted by Wayne Berkowitz CPA, J.D., LL.M. on Sep 18, 2017 11:40:00 AM

Because that's what she did last year. Yes lawyers, accountants get insulted too, and the worst insult that can ever be hurled at us is to be called a business historian. Or at least that's what I used to think. Cutting edge ideas are great. But who is going to help you decide when you've gone over the edge? That's right, it's us.

Based on my historical observations, tax cases often end up in court for one of two reasons: Either someone had a cutting edge idea the taxing authorities didn't like, or someone took a bleeding edge position (knowingly or not) and is now backed into a corner. Sometimes the taxpayer is lucky enough to get out of the corner, but as most lawyers know (I'm one as well so I get twice the insults), bad facts make bad law, sometimes overturned on appeal, but always making headlines (not of the NY Times variety but more along the lines of State Tax Notes).

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Topics: SALT TALK

TAX TALK: Key 4th Quarter Tax Deadlines for Businesses and Other Employers

Posted by Hal Zemel, CPA, J.D., LL.M. on Sep 18, 2017 10:20:00 AM

Here are some of the key tax-related deadlines affecting businesses and other employers during the fourth quarter of 2017. This list isn’t all-inclusive, so there may be additional deadlines that apply to you. Contact us to learn if you’re meeting all applicable deadlines and for more details about the filing requirements.

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Topics: TAX TALK

T&E TALK: Deferral - Estate Tax Relief for Family Businesses

Posted by Scott T. Ditman, CPA/PFS on Sep 18, 2017 9:38:07 AM

If a substantial portion of your wealth is tied up in a family or closely held business, you may be concerned that your estate will lack sufficient liquid assets to pay federal estate taxes. In these circumstances, your heirs may be forced to borrow funds or, in a worst-case scenario, sell the business in order to pay the tax.

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Topics: T&E TALK

SALT TALK: Online Marketplace Seller Voluntary Disclosure Initiative – Here Today, Gone Tomorrow

Posted by Wayne Berkowitz CPA, J.D., LL.M. on Sep 11, 2017 11:40:00 AM

In my August 28, 2017 blog, I discuss the Online Marketplace Seller Voluntary Disclosure Initiative (“Initiative”) and explain how the Multistate Tax Commission Initiative (“MTC”) is unique in that not only will penalties be waived, but in many cases so will any back tax liability. The program is extremely generous and an excellent opportunity for the right business. However, who is the right business?  That is a difficult decision requiring careful analysis.

The initiative is available only through October 17, 2017.  In the words of the MTC:

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Topics: SALT TALK

About Berdon Blogs

Our experts examine the latest trends, economics, business conditions and industry issues to provide timely information you need to maximize your tax advantages and meet your financial goals.

SALT TALK: Hear an insider’s perspective on the business issues, legislative updates in state and local tax, and tax aspects behind today’s headlines.

T&E TALK: Gain insights into how changes in tax laws, shifts in the financial markets, and regulatory concerns will impact assets and affect preserving and transferring wealth.

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