This semiannual update of recent developments in the area of individual taxation includes cases on hobby losses, innocent-spouse relief, material participation in a business, discharge of indebtedness, and self-employment tax, as well as IRS guidance on charitable deductions, cryptocurrency, and other topics.
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TOPICS / INDIVIDUALS
Deductions
Private foundations and donor-advised funds: A new CPA best practice
An ‘outstanding practice’ combines personal financial planning with tax compliance to help clients maximize charitable deductions, provide solutions for difficult financial situations, avoid
capital gains tax, and create a family legacy.
Proposed regs. issued on meal and entertainment expense deductions
The IRS issued proposed rules clarifying that taxpayers may generally continue to deduct 50% of the food and beverage expenses associated with operating their trade or business, despite changes to the meal and entertainment expense deduction under Sec. 274.
IRS clarifies per-diem rules after TCJA changes
The IRS issued updated rules for substantiating the amount of ordinary and necessary business expenses paid or incurred while traveling using the per-diem rates.
IRS explains TCJA’s effect on standard mileage rate rules
The IRS updated rules concerning the use of standard mileage rates and to reflect the current suspension of miscellaneous itemized deductions and moving expense deductions.
IRS issues 2020 standard mileage rates
On the last day of 2019, the IRS issued the standard mileage rates for 2020 for business, charitable, medical, or moving expense purposes, as well as other deduction amounts.
The business meal expense deduction after the TCJA
This article explores the competing perspectives and discusses the IRS’s interim guidance on the deductibility of business meals.
Final regulations permit casualty loss deductions in prior years
The IRS finalized regulations permitting taxpayers to deduct disaster losses in the prior tax year and removed the related temporary regulations that were issued in 2016.
Guidance issued on payments to charitable organizations
The IRS issued additional rules on the treatment of deductions for charitable contributions in lieu of state and local taxes, an area in which it has already issued final regulations and other guidance.
Sec. 199A update: Tax planning and issues to consider
This article discusses some specific issues to consider for tax year 2019.
Rental real estate businesses can qualify for QBI deduction
The IRS issued a revenue procedure describing the requirements taxpayers have to meet to be a rental real estate business that qualifies for the safe harbor to be treated as a trade or business in order to qualify for the Sec. 199A qualified business income deduction.
Per-diem method clarified in light of TCJA changes
The IRS issued updated rules for substantiating the amount of ordinary and necessary business expenses paid or incurred while traveling away from home using the per-diem rates.
Use of standard mileage rate, other rules are updated for TCJA
The IRS updated its rules concerning the use of standard mileage rates and to reflect the current suspension of miscellaneous itemized deductions and moving expense deductions.
TIGTA reports large increase in alimony tax gap
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.
Maximizing the QBI deduction with UBIA property
This article examines the calculation of the UBIA of qualified property; offers guidance on special situations such as like-kind exchanges and the Sec. 754 election; and presents planning opportunities to maximize the UBIA of qualified property.
Taxpayers may deduct casualty losses in prior years
The IRS finalized regulations permitting taxpayers to deduct disaster losses in the prior tax year and removed the related temporary regulations that were issued in 2016.
Pitfalls and treasures of the QBI deduction
The QBI deduction raises new considerations for retirement contributions and accounting method changes for small businesses.
Safe harbor allows QBI deduction for rental real estate businesses
The IRS issued a revenue procedure describing the requirements taxpayers have to meet to be a rental real estate business that qualifies for the safe harbor to be treated as a trade or business in order to qualify for the Sec. 199A qualified business income deduction.
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.
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