Tax Warrior Chronicles

Estate Planning During the COVID-19 Pandemic

Posted on Thu, Jun 04, 2020

Although it may seem counterintuitive, the current economic conditions brought on by the COVID-19 global pandemic, including down markets and reduced interest rates, provide estate planning opportunities many individuals may want to consider as part of their overall estate plan.

 

Last September we discussed the advantages of certain estate planning strategies in low-interest rate environments. Fast forward to today, the Applicable Federal Rates ("AFR") have fallen again for June (between .18% to 1.31% depending on the loan term), so such strategies may be even more advantageous in the current environment.

 

Besides the current low-interest rate environment, the Tax Cuts and Jobs Act

Read More

Form BE-10: Foreign Real Estate and Business Activity

Posted on Thu, May 28, 2020

The Bureau of Economic Analysis’ (BEA) Form BE-10 Benchmark Survey of U.S. Direct Investment Abroad is a comprehensive survey conducted every five years and is administered by BEA of the U.S. Department of Commerce to collect statistics on U.S. direct investment abroad. Its deadline is near. Are you required to file?  Here’s what you need to know.

 

Who Must File?

Any U.S. person (individual, entity, estate, or trust) with a direct or indirect ownership or control of at least ten percent of the voting interests of a foreign business enterprise in 2019 must file. If the U.S. person had any foreign affiliate at the end of its 2019 fiscal year, it must file Form BE-10. Ownership of non-U.S.

Read More

PPP Update #10 - Potential Changes & Forgiveness Regulations

Posted on Tue, May 26, 2020

As guidance in this area is being released regularly, we recommend you read all of our blogs on this subject.  All the blogs in the Paycheck Protection Program series are here: Updates #1, #2#3#4#5#6#7, #8, #9, #10

 

Treasury kicked off the holiday weekend on Friday, May 22, by releasing its 14th Interim Final Rule (IFR) addressing loan forgiveness for the Paycheck Protection Program (PPP) loans.  This new IFR clarified certain issues while leaving others outstanding.  Today’s blog will focus on the clarifications so borrowers, many nearing the end of their 8-week Covered Period, can make decisions around what is known.  Additionally, we will discuss the Paycheck Protection

Read More

PPP Update #9 – Loan Forgiveness Application Released by SBA

Posted on Mon, May 18, 2020

As guidance in this area is being released regularly, we recommend you read all of our blogs on this subject.  All the blogs in the Paycheck Protection Program series are here: Updates #1, #2#3#4#5#6#7, #8, #9, #10

 

Many hoped the delay in guidance regarding Payroll Protection Program (PPP) loan forgiveness meant SBA and Treasury were taking their time coordinating an application and associated guidance to provide borrower’s clarity. Regrettably, on Friday evening, May 15, the SBA released the PPP Forgiveness Application with no additional guidance issued by the Treasury.  While we had a passing thought that maybe the application was so clear no further guidance was needed; we

Read More

529 Plans & COVID-19 Tuition Refunds - 60 Days to Act

Posted on Fri, May 15, 2020

There have been many adjustments to society due to the coronavirus; the largest, of course, being the extended stay-at-home order. With fears of the virus spreading, schools have quickly switched to online learning and closed campus dorms. Many students who paid for room and board have or will receive partial refunds from their learning institutions, possibly leading to an unexpected tax bill.  If a student, or their parents, used a 529 plan withdrawal to pay for qualified education costs and then received a refund from the educational institution it is important to take action within 60 days of receiving the refund. Here’s why…

 

What should account owners do?  

Option One

To avoid an

Read More

PPP Update #8 – What if I Can’t Rehire My Employees? Should I Keep My PPP Money? Can I Get More PPP Money?

Posted on Thu, May 14, 2020

As guidance in this area is being released regularly, we recommend you read all of our blogs on this subject.  All the blogs in the Paycheck Protection Program series are here: Updates #1, #2#3#4#5#6#7#8#9#10

 

What if I Can’t Hire My Employees Back?

Given the generous unemployment provisions of the CARES Act, many businesses that obtained PPP loans are having difficulty rehiring employees that may now be collecting more on unemployment than their normal wages.  This puts PPP loan recipients in a precarious position, as a business must maintain its workforce through the eight-week, post-loan period to receive full PPP forgiveness.

 

Fortunately, FAQ #40 issued by Treasury

Read More

IRS Allowing Mid-year Changes to Health and Dependent Care Plan Elections

Posted on Wed, May 13, 2020

COVID-19 has led to changes in many employees’ circumstances, from changes in a spouse’s employment and benefits eligibility to significant changes in medical or dependent care expenses. These changes in circumstances mean that many employees may need additional flexibility in their Section 125 Cafeteria Plans.  Various employers have indicated a willingness to offer employees such flexibility and the IRS has responded favorably by recently issuing Notice 2020-29.

 

Below are the highlights of Notice 2020-29

 

Employer Sponsored Health Coverage

  • Section 125 Plans may now allow for the following mid-year changes to employer sponsored health coverage:
    • Make a new election on a prospective
Read More

PPP Update #7 – What’s New? – Clarity on Deductibility of Expenses & Other Items

Posted on Fri, May 01, 2020

As guidance in this area is being released regularly, we recommend you read all of our blogs on this subject.  All the blogs in the Paycheck Protection Program series are here: Updates #1, #2#3#4#5#6#7, #8, #9, #10

 

 

While many await formal guidance about the Paycheck Protection Program (PPP) loan forgiveness, the SBA and Treasury were busy issuing various other guidance this week.  Today, we outline and provide our thoughts about this week’s guidance, including deductibility of expenses paid with PPP funds and PPP eligibility standards.

 

IRS Issues Guidance on Deductibility of Expenses Paid with PPP Funds

On April 30th, the IRS issued Notice 2020-32.  The Notice addresses

Read More

PPP Update #6 - Additional Funding Signed into Law & Eligibility Guidance Updated

Posted on Fri, Apr 24, 2020

As guidance in this area is being released regularly, we recommend you read all of our blogs on this subject.  All the blogs in the Paycheck Protection Program series are here: Updates #1, #2#3#4#5#6#7#8#9#10

 

Our last Paycheck Protection Program (PPP) blog on Thursday, April 16, covered long-awaited guidance for self-employed individuals and partnerships. However, that same day, the SBA announced the PPP ran out of money.  Today, we bring you good news about additional funding and an update on eligibility guidance.

 

Additional PPP Funding

This afternoon, April 24, the President signed into law the Paycheck Protection Program and Health Care Enhancement Act.  The Act

Read More

Opportunities to Increase Cash Flow from 2018–2020 Business Losses

Posted on Wed, Apr 22, 2020

The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) provides relief to taxpayers with net operating losses (“NOLs”) and excess business losses (“EBLs”) arising in taxable years 2018 to 2020.  The IRS recently issued guidance related to the new NOLs rules under the CARES Act, which are favorable to taxpayers seeking such relief.

 

Background – Net Operating Losses

Generally, NOLs for businesses and individuals can offset income in future or prior tax years when the company or individuals have income.  The 2017 Tax Cuts and Jobs Act (“TCJA”) changed the NOL carryback and carryforward rules by disallowing all carrybacks NOLs arising in taxable years beginning after December

Read More