4 Key Areas of the Real Estate Industry Impacted by Tax Reform

1. PASS-THROUGH INCOME DEDUCTION 

What is in the bill:  It has been widely publicized that the bill provides a substantial drop in the tax rate imposed on corporations to 21%. In order to establish a more even playing field between corporations and pass-through entities, the bill proposes a deduction of a partner/shareholder’s allocation of pass-through income from a partnership or S-Corporation.  The deduction is set at 20%, but subject to specific limitations.

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The Two Ways to Buy & Sell a Business - Tax Considerations to Keep in Mind

Buying or selling a business is a complicated transaction with many tax, legal and financial variables to consider.  Although the sale or purchase of a business should never be compelled by tax considerations alone, taxes can have a substantial impact.  Questions such as, what are the goals of the buyer and the seller, how should the transaction be structured, what types of entities are involved, should all be well thought out. 

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How the Research & Experimentation Tax Credits May Benefit Your Business

stock vector research magnifying glass over background with different association terms vector illustration 74123767The Credit for Increasing Research Activities, also known as the Research & Experimentation (R&E) tax credit, is one of the most prominent federal tax credits available to businesses.The purpose of the Credit for Increasing Research Activities is to invest in research that leads to new ideas, discoveries, and knowledge that will help to support a growing economy. In particular, the purpose of the R&E tax credit is to increase investment in research and experimentation activities. In my opinion, it is one of the most valuable federal tax credits that can be obtained. It has been claimed by a significant number of companies, ranging from small software startups, to multinational pharmaceutical firms, and many in between.

The R&E credit was initially introduced in 1981, and temporarily extended 16 times before becoming permanent  under the Protecting Americans from Tax Hikes (“PATH”) act of 2015

 

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Business Driving Deductions: A Fork in the Road – Compare Actual Expenses with Flat-Rate Method

Did you use your vehicle for business driving in 2016? Generally, you can deduct expenses on your tax return in one of two ways: the actual expense method or the IRS-approved standard mileage rate. Here is a brief comparison:

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IRS Maps Out New Per Diem Rates - Approved Method for Business Travel

The IRS pays close attention to deductions claimed for business travel expenses. Both employers and employees must meet strict recordkeeping requirements or face the consequences. Fortunately, you can obtain some relief by using IRS-approved per diem allowances in lieu of accounting for every expense. Now the IRS has updated its per diem rates for business travelers in the government’s 2017 fiscal year.

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