Current developments in individual taxation
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
Taxpayer can deduct settlement payment to ex-husband
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.
Limiting business interest expense
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.
Alimony tax gap swells to $3.2 billion, TIGTA finds
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.
Sec. 199A dividends paid by a RIC with interest in REITs and PTPs
The proposed regulations provided much-anticipated rules for RICs with REIT income for purposes of Sec. 199A.
Determining what is a separate trade or business for Sec. 199A purposes
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.
IRS applies tax benefit rule to state and local tax refunds
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.
REIT dividends and PTP income under Prop. Regs. Sec. 1.199A-3(d)
Dividends from REITs and income from PTPs generally qualify for the 20% deduction.
Key tax reform provisions affecting sports franchises
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 qualified W-2 wages for Sec. 199A purposes
Computing total W-2 wages under Sec. 199A appears daunting, in part because three possible methods are available to do so.
Sec. 199A and the aggregation of trades or businesses
Aggregation may allow a taxpayer to claim a greater QBI deduction than if the wages and capital limitation was applied separately.
Tax consequences for professional athletes in 2018
Proper advance planning is imperative to maximize the benefits of the TCJA provisions.
Sec. 199A rental real estate activity safe harbor proposed
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.
Guidance provided on calculating W-2 wages for Sec. 199A purposes
The IRS issued Rev. Proc. 2019-11, which provides guidance on how to calculate W-2 wages for purposes of Sec. 199A.
New proposed regulations on 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.
Final regulations on Sec. 199A issued
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.
Exploring the undefined: Trade or business
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.
Traps for the unwary: Tax Cuts and Jobs Act changes
This article lists the changes together, along with some unexpected nuances.
Individual tax report
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 in divorce case not deductible as business expenses
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.
