This article is a semiannual review of recent developments in individual federal taxation, covering cases, rulings, and guidance on a variety of topics.
Expenses & Deductions
The Eleventh Circuit holds a taxpayer is entitled to a deduction under Sec. 1341 for a payment made to reimburse her ex-spouse for a portion of a settlement in an excess-compensation lawsuit.
Under new Sec. 163(j), business interest expense deductions are limited, and a business interest expense that is disallowed in the current year is carried forward to the succeeding tax year.
Discrepancies between the amount of alimony deducted by payers and reported as income by its recipients increased by 38% in six years, the Treasury Inspector General for Tax Administration reported.
The proposed regulations provided much-anticipated rules for RICs with REIT income for purposes of Sec. 199A.
This item discusses the general factors courts and the IRS have considered in determining whether a taxpayer is engaged in more than one trade or business.
The IRS issued guidance on the tax treatment of state and local refunds now that taxpayers are limited to a $10,000 deduction on their individual tax returns.
Dividends from REITs and income from PTPs generally qualify for the 20% deduction.
This discussion focuses on two notable business provisions in the TCJA affecting sports franchises: new like-kind exchange provisions under Sec. 1031 and the QBI deduction under Sec. 199A.
Computing total W-2 wages under Sec. 199A appears daunting, in part because three possible methods are available to do so.
Aggregation may allow a taxpayer to claim a greater QBI deduction than if the wages and capital limitation was applied separately.
Proper advance planning is imperative to maximize the benefits of the TCJA provisions.
The IRS issued a proposed revenue procedure that would provide a safe harbor for taxpayers under which a rental real estate enterprise will be treated as a trade or business for purposes of the Sec. 199A deduction.
The IRS issued Rev. Proc. 2019-11, which provides guidance on how to calculate W-2 wages for purposes of Sec. 199A.
The IRS released new proposed regulations on the treatment under Sec. 199A of previously suspended losses, “Sec. 199A dividends” paid by a RIC, and the treatment of amounts received from split-interest trusts and CRTs.
The IRS issued final regulations on the QBI deduction under Sec. 199A and an anti-avoidance rule under Sec. 643 that will require multiple trusts to be treated as a single trust in certain cases.
A group of TCJA-related changes requires taxpayers to distinguish separate and specific types of trades or businesses in order to take advantage of certain tax benefits.
This article lists the changes together, along with some unexpected nuances.
This semiannual update on current developments in the area of individual taxation includes a number of cases on material participation, hobby losses, charitable contributions, the Sec. 199A regulations, and several other important areas.
Legal and professional fees incurred in a divorce action were nondeductible personal expenses since the "origin of the claim" in the divorce action was not related to the taxpayer’s trade or business.