Using R&D credits to reduce payroll taxes: An overlooked opportunity for startups
This article discusses who qualifies to take the credit, how to make the election, the calculation and allocation of the credit, and how to report it.
Corporations
Capital gains deferral benefits of qualified opportunity zones
The TCJA created an incentive program that allows a taxpayer to elect to exclude from gross income capital gain if it is properly reinvested in a qualified opportunity zone.
IRS clarifies deductibility of business meals
The IRS issued guidance on the deductibility of meal and entertainment expenses after the modification of Sec. 274 by the TCJA.
Question-and-answer guidance issued on paid family and medical leave credit
The IRS released guidance on the new Sec. 45S tax credit for employers that provide paid medical and family leave.
Changing from cash to accrual accounting after revoking an S election under TCJA
A terminated S corporation may remain a cash-basis taxpayer if its average gross receipts for the three previous tax periods are less than $25 million.
Converting from an S corp. to a C corp.
This item discusses the many tax ramifications of converting.
Proposed regs. outline new business interest expense limitation
The IRS issued proposed regulations on the business interest expense limitation in Sec. 163(j), which was amended by the law known as the Tax Cuts and Jobs Act.
Tax pitfalls of owning a marijuana business
Essentially, for federal tax purposes, marijuana businesses pay income taxes on their gross profit instead of their net income because below-the- line deductions are not allowed.
Qualified small business stock gets more attractive
The new lowered corporate tax rate will probably lead to more C corporations and a resulting increase in taxpayers’ interest in the Sec. 1202 100% exclusion on gain from the sale of QSB stock.
IRS defines covered employees and grandfathered employment contracts under Sec. 162(m)
The IRS issued guidance regarding amended Sec. 162(m), which limits the allowable deduction for remuneration paid by any publicly held corporation to a covered employee to $1 million.
Move to territorial system may not discourage profit shifting
The shift to a territorial system was designed to help dissuade U.S. companies from moving profits overseas, but it may make the practice more rewarding instead.
Meals continue to be deductible under new IRS guidance
The IRS issued guidance on the deductibility of meal and entertainment expenses after the modification of Sec. 274 by the TCJA.
Third Circuit relies on Ilfeld doctrine to deny consolidated group deductions for duplicated losses
To satisfy the Ilfeld standard, the court noted that there is a presumption that regulations do not permit double deductions for the same loss.
Revisiting the application of Sec. 280G on partnerships and LLCs
Depending on how a taxpayer’s ownership is structured, the sale of a partnership interest can have a Sec. 280G impact on partners or members that are C corporations.
IRS issues Sec. 965 transition tax regs.
The IRS issued proposed regulations on the Sec. 965 transition tax that requires U.S. shareholders of deferred foreign income corporations to pay tax on post-1986 deferred income.
Reassessing the tax benefits of IC-DISCs
Due to TCJA tax rate differential changes, taxpayers may find that the tax benefits of using an IC-DISC no longer outweigh the compliance and maintenance costs.
An old friend reconsidered: Post-TCJA Sec. 338(g) elections for foreign targets
the TCJA’s implementation of a hybrid territorial international tax regime mitigates the benefit of the election and may induce taxpayers to not make the election to avoid additional tax liability on the eventual sale of foreign target shares.
Different SALT flavors of mandatory deemed repatriation under Sec. 965
This item discusses new trends in states’ conformity with or decoupling from Sec. 965.
Sec. 163(j) places renewed importance on tax shelter status
The exemption to the limitation on business interest under Sec. 163(j) does not apply to a tax shelter prohibited from using the cash-receipts-and-disbursements method of accounting under Sec. 448(a)(3).
Restructuring foreign investment in U.S. real property
The TCJA has given a windfall benefit to foreign investors and developers in U.S. real estate due to the drop in the corporate tax rate from 35% to 21%.
