Berdon Blogs

TAX TALK: Buy Business Assets before Year-End and Reduce 2018 Tax Liability

Posted by Hal Zemel, CPA, J.D., LL.M. on Nov 19, 2018 9:20:00 AM

The Tax Cuts and Jobs Act (TCJA) has enhanced two depreciation-related breaks that are popular year-end tax planning tools for businesses. To take advantage of these breaks, you must purchase qualifying assets and place them in service by the end of the tax year. That means there’s still time to reduce your 2018 tax liability with these breaks, but you need to act soon.

Section 179 Expensing

Sec. 179 expensing is valuable because it allows businesses to deduct up to 100% of the cost of qualifying assets in Year 1 instead of depreciating the cost over a number of years. Sec. 179 expensing can be used for assets such as equipment, furniture and software. Beginning in 2018, the TCJA expanded the list of qualifying assets to include qualified improvement property, certain property used primarily to furnish lodging and the following improvements to nonresidential real property: roofs, HVAC equipment, fire protection and alarm systems, and security systems.

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Topics: TAX TALK

T&E TALK: Revise Your Estate Plan to Reflect Life Changes During the Past Year

Posted by Scott T. Ditman, CPA/PFS on Nov 19, 2018 7:00:00 AM

Your estate plan shouldn’t be a static document. It needs to change as your life changes. Year end is the perfect time to check whether any life events have taken place in the past 12 months or so that affect your estate plan.

And the plan should be reviewed periodically anyway to ensure that it still meets your main objectives and is up to date.

When Revisions Might be Needed

What life events might require you to update or modify estate planning documents? The following list isn’t all-inclusive by any means, but it can give you a good idea of when revisions may be needed:

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Topics: T&E TALK

SALT TALK:  Florida Dyscalculia Proves No Obstacle to Constitutional Amendments

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on Nov 12, 2018 11:30:00 AM

I was excited to start writing the blog this morning, until doing a little research on the topic has put me into an anxiety-ridden Monday morning state of mind. Late last week, I was scanning the numerous emails I receive regarding the latest happenings in the world of state and local taxes and something caught my eye.

I found it interesting that Florida is struggling to finalize two major elections, yet managed to pass an amendment to the State Constitution requiring judges in state court and hearing officers in administrative hearings to no longer defer to a government agency’s interpretation of a statute or rule. The ballot measure appeared like this:

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TAX TALK: Donating Appreciated Stock Yields Twice the Tax Benefits

Posted by Hal Zemel, CPA, J.D., LL.M. on Nov 12, 2018 9:20:00 AM

A tried-and-true year end tax strategy is to make charitable donations. As long as you itemize and your gift qualifies, you can claim a charitable deduction. But did you know that you can enjoy an additional tax benefit if you donate long-term appreciated stock instead of cash?

2 Benefits from 1 Gift

Appreciated publicly traded stock you’ve held more than one year is long-term capital gains property. If you donate it to a qualified charity, you may be able to enjoy two tax benefits:

  1. If you itemize deductions, you can claim a charitable deduction equal to the stock’s fair market value, and
  2. You can avoid the capital gains tax you’d pay if you sold the stock.

Donating appreciated stock can be especially beneficial to taxpayers facing the 3.8% net investment income tax (NIIT) or the top 20% long-term capital gains rate this year.

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Topics: TAX TALK

T&E TALK: Intellectual Property Requires Careful Estate Planning

Posted by Scott T. Ditman, CPA/PFS on Nov 12, 2018 7:00:00 AM

If your estate includes forms of intellectual property (IP), such as patents and copyrights, it’s important to know how to address them in your estate plan. Although these intangible assets can have great value, in many ways they’re treated differently from other property types.

2 Estate Planning Questions

For estate planning purposes, IP raises two important questions:

  1. What’s it worth? and
  2. How should it be transferred?

Valuing IP is a complex process, so it’s best to obtain an appraisal from an experienced professional.

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Topics: T&E TALK

T&E TALK: Be Cautious when including Employees in your Estate Plan

Posted by Scott T. Ditman, CPA/PFS on Nov 5, 2018 12:09:23 PM

If you’re the owner of a small business, you may think of your tight-knit group of employees as a family. If you wish to include them as beneficiaries in your estate plan, it’s critical to be aware of possible unintended tax consequences.

Unraveling the (tax) Code

Generally, money or other property received by gift or inheritance is excluded from the recipient’s income for federal tax purposes. But there’s an exception for gifts or bequests to employees: Under Internal Revenue Code Section 102(c), the exclusion doesn’t apply to “any amount transferred by or for an employer to, or for the benefit of, an employee.”

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Topics: T&E TALK

SALT TALK: All Politics Is (State and) Local – Get Out and Vote

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on Nov 5, 2018 11:30:00 AM

The catchphrase “all politics is local,” most closely associated with former Speaker of the House, Tip O’Neill, can be and most certainly is interpreted many different ways by many different people. Regardless of the various interpretations, in my opinion the phrase can only have one meaning the day before possibly the most significant election since I have walked the face of this earth; get out and vote.

The phrases’ core meaning was and still means that a politician’s constituents are most likely to vote based on concerns that affect their day-to-day personal lives. While the core still rings true, in many ways the dawn of social media has made it more difficult than ever for us to determine what our elective representatives have done, will do, and plan on doing.

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TAX TALK: Bunching Medical Expenses into 2018 May Save You Tax

Posted by Hal Zemel, CPA, J.D., LL.M. on Oct 29, 2018 9:20:00 AM

Some of your medical expenses may be tax deductible, but only if you itemize deductions and have enough expenses to exceed the applicable floor for deductibility. With proper planning, you may be able to time controllable medical expenses to your tax advantage. The Tax Cuts and Jobs Act (TCJA) could make bunching such expenses into 2018 beneficial for some taxpayers. At the same time, certain taxpayers who’ve benefited from the deduction in previous years might no longer benefit because of the TCJA’s increase to the standard deduction.

The Changes

Various limits apply to most tax deductions, and one type of limit is a “floor,” which means expenses are deductible only to the extent that they exceed that floor (typically a specific percentage of your income). One example is the medical expense deduction.

Because it can be difficult to exceed the floor, a common strategy is to “bunch” deductible medical expenses into a particular year where possible. The TCJA reduced the floor for the medical expense deduction for 2017 and 2018 from 10% to 7.5%. So, it might be beneficial to bunch deductible medical expenses into 2018.

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Topics: TAX TALK

T&E TALK: Tenancy-in-Common - A Valuable Tool for Real Estate Investments

Posted by Scott T. Ditman, CPA/PFS on Oct 29, 2018 7:00:00 AM

If you hold significant real estate investments, tenancy-in-common (TIC) ownership can be a powerful and versatile estate planning tool. A TIC interest is an undivided fractional interest in property. The property isn’t split into separate parcels. Rather, each TIC owner has the right to use and enjoy the entire property.

TIC in Action

An individual TIC can’t sell or lease the underlying property, or take other actions with respect to the property as a whole, without the other owners’ consent. But each owner has the right to sell, mortgage, or transfer the TIC interest. This includes the right to transfer the interest, either directly or in trust, to heirs or other beneficiaries.

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Topics: T&E TALK

SALT TALK:  Plan on Winning the $1.6 Billion Mega Millions Jackpot? Better Read this First

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on Oct 22, 2018 11:30:00 AM

Fortunately, there were no winners in Saturday’s Mega Millions drawing. Why is this good news, you ask? It means that we all have a chance at Tuesday’s potential prize of $1.6 billion. It also means that we have an extra day to do some state tax planning before tomorrow’s drawing.

State tax planning and the lottery; what does that have to do with me? I buy a ticket, I win, I pay my federal and resident state tax, and I still walk away with a large sum of money, right? Well, yes, but if some states have their way, maybe a little less.

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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.

TAX TALK: Get an all-inclusive perspective on regulatory changes, industry issues, and trends from our team of multidisciplinary tax professionals – many of whom also hold J.D. and LL.M degrees.

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