New York Pass-Through Entity Tax Update
On April 9, 2022, New York passed tax legislation (A9009-C S8009-C) that made significant changes to the NYS Pass-Through Entity Tax (“NY PTET”) and established a NYC Pass-Through Entity Tax (“NYC PTET”).
Donating Cryptocurrency to Ukrainian Humanitarian Efforts? Proceed Carefully.
Over the past few years, digital currency has earned the reputation for being the easiest and most efficient way to move money across international borders. Experts say the ability to accelerate the flow of money at a reduced cost, along with the fear of surveillance and the impact of war on the local currency are the primary reasons why Ukrainian government officials recently began requesting donations in cryptocurrency.
IRS Offers Tezos Staker Refund on Rewards Tax in Break From Current Policy
How are your cryptocurrencies being taxed? CoinDesk reports that the IRS currently is taxing cryptocurrencies generated through staking as income.
Preventing Tax-Related Identity Theft with an IP PIN
Tax related identity theft is an issue that began several years ago and has been steadily increasing as each year passes. We see this most often when electronically filed tax returns are rejected by the IRS with the most common reason for the rejections being due to previously filed fraudulent returns. Fraudsters can file tax returns using a taxpayer’s (or dependent’s) social security number in order to generate fraudulent refunds without the taxpayer’s knowledge.
Highlights of the New York State Pass-through Entity Tax
The recently passed Budget Act was designed to benefit owners of eligible pass-through entities. This article highlights the key provisions of the Budget Act, workarounds enacted by other states, and general pass-through legislation considerations.
IRC Section 163(j) Update, Including Highlights of CARES Act Modifications and IRS Final Regulations
This article summarizes the key highlights of the CARES Act modifications and recent IRS regulations associated with the interest expense limitation rules under IRC Section 163(j).
Webinar: Where Are We Now? An Update on COVID-19 Relief, Tax Law Changes, and PPP Loans
Join Prager Metis experts on January 6, 2021, to discuss the latest COVID-19 relief measures, PPP loans, and numerous tax law changes.
Are In-House Research Expenses Paid from Paycheck Protection Program (PPP) Loan Proceeds (That Qualify For Loan Forgiveness) Eligible for the IRC Section 41 Research Tax Credit
Are In-House Research Expenses Paid from Paycheck Protection Program (PPP) Loan Proceeds (That Qualify For Loan Forgiveness) Eligible for the IRC Section 41 Research Tax Credit
Planning for the Negative Tax Impact of the SECURE Act on your IRA and 401(k) Beneficiaries
In this era of Congressional contentiousness, any legislation that comes out of those chambers with bipartisan support deserves note. Such is the case with the SECURE Act, an acronym for “Setting Every Community Up for Retirement Enhancement,” which was passed last July by a near-unanimous vote in the House of Representatives. But the SECURE Act also warrants a note of caution for those heavily invested in IRAs and/or 401(k) plans because it truly is a “game-changer,” and not for the better, when it comes to the distribution and taxation of withdrawals from inherited plans.
Putting AI to Work for Your Nonprofit: It’s Not a Question of ‘If’ but ‘When’
When asked recently if he knew how algorithms worked, a friend replied, “I don’t need to know how something works. I just need to know it works.” Of course, algorithms “work” for us every single day.
The Indian Tax Rate Cuts
India has recently cut its corporate tax rates in a bid to revive its stagnant economy. The move has widely been seen as a positive and much needed one and sees the rates cut as follows: Companies that don’t seek exemptions will see their tax rate cut from 30% to 22% before surcharge and cess.
US State-to-State Business Travel Compliance and Risks
While organisations often overlook tax-compliance requirements related to business travel, the days of simply traveling to and working in a different state or country for business without a thought to tax liabilities are coming to an end. Looking for additional tax revenue, US state taxing authorities are becoming stricter and more vigilant in monitoring business travel. Extensive time spent on business travel in a country outside the US, or even a different state within the US, could create a PE exposure for the employing entity.
How the Change in US Sales Tax Rules has Impacted International Sellers
On 21 June 2018, the US Supreme Court passed a landmark decision that transformed the landscape of sales tax in the US. The South Dakota vs Wayfair decision effectively permitted states to create new rules for sales tax collection requirements based on the dollar or transactions amount of sales - otherwise known as economic nexus. Previously, companies were only required to collect sales tax based on a physical presence test.
New Opportunity Zone Regulations: What They Are and What They Clarify
In December of 2017, the Tax Cuts and Jobs Act outlined a new program called “Opportunity Zones” (OZs) that offered tax breaks for investing in underdeveloped/distressed communities via Qualified Opportunity Funds (QOFs). In October 2018, substantially more detail on the OZs was provided, and in April 2019, the IRS and Treasury Department issued a 169-page document that detailed regulations governing OZs. According to the IRS, a QOF is set up either as a partnership or corporation (LLCs qualify also) for investing in an eligible property located in one of the OZs.
Selling Across the Pond: What UK Residents Need to Know When Selling US Property
For UK citizens selling a property in the USA, completing the sale is only your first hurdle. Your next challenge is tax - both in the UK and the USA - neither set of rules being straightforward. Taking UK tax first, if you are resident and domiciled in the UK, you will have capital gains tax (CGT) to pay on any gain achieved on the sale of US property.
Fund Support
How can Prager Metis help new managers when they are in the pre-launch stage? We can help in a number of ways. We would work closely with their attorneys to determine what the fund structure should look like.
US Tax Compliance for Foreign Trusts: A Primer
A threshold question in determining how a trust will be taxed in the US is whether the trust is foreign or domestic. The default rule is that a trust is foreign, unless the trust fails both the “Court Test” and the “Control Test.” The Court Test is met if a US court is able to exercise primary supervision over the administration of the trust. The “Control Test” is satisfied if one or more US persons have the authority to control all substantial decisions of the trust.
Tax Planning Under the New US Tax Reform
The US Tax Cuts and Jobs Act, passed on 17 December 2017, has dramatically changed the analysis and available strategies for structuring cross-border operations. Meaning, to realise tax optimisation, business owners must be aware of those changes. For example, in addition to a decreased corporate rate from 35% to 21%, and the full expensing of plant and equipment acquisitions, there is a now a reduced effective rate of 13.125% for domestic companies’ income from selling products or services to foreign customers directly or through related parties.
Practical Considerations Regarding Section 199A of the New US Tax Law
The Tax Cuts and Jobs Act passed by the US Congress on 17 December 2017, includes Section 199A, a provision that can afford pass-through businesses a 20% deduction of:
The Taxation of Income from Cryptocurrencies in Various Jurisdictions — USA
Recently, we have seen a growth in the sale or exchange of cryptocurrency, or the use of cryptocurrency to pay for goods or services. Unfortunately, guidance from the Internal Revenue Service (IRS) pertaining to related US income tax issues has not kept pace with the proliferation of cryptocurrency trading. This article highlights fundamental income US tax compliance issues for investors dealing or transacting in cryptocurrency.
IRS Clarifies 199A Section of Tax Law, Provides Safe Harbor and a 20% Deduction To Rental Real Estate Enterprises
If you own rental real estate, the fact that the IRS just issued Notice 2019-7, which clarifies Section 199A of the Tax Cuts and Jobs Act of 2017 could work to your benefit. The clarification will help in determining whether a rental real estate enterprise is a trade or business for the purposes of section 199A.
Prager Metis Published in the 53rd Volume of Worth Magazine
Read the latest article titled "How Do I Get Control Of My Family In Flux And Protect Its Finances?" by Partners Ladidas Lumpkins, Jay Goldberg, and Gabe Wolosky, published in the 53rd edition of Worth Magazine.
E. Martin Davidoff, National Managing Partner of the Tax Controversy Practice Quoted in Accounting Today
E. Martin Davidoff, National Managing Partner of the Tax Controversy Practice at Prager Metis, was quoted in a recent Accounting Today article titled: “Like ‘1986 on steroids.’” Click here to read the full.
Key Tax Cuts and Acts Affecting Asset Managers
With the K-1 season right around the corner, now is the perfect time to highlight a few key concepts that will directly affect fund managers from the Tax Cuts and Jobs Act (“TCJA") that was enacted on December 22, 2017. Limits on Deductibility of Business Losses TCJA imposes a new limit on the deductibility of business losses incurred by taxpayers other than corporations.
Opportunity Zones: A Win/Win for Communities And Your Capital Gains Tax Bill
The new tax law passed last December certainly has its boosters and its detractors, but it also has written into it something that appears to be a proverbial win/win. While this new provision does offer tax breaks to those among us who receive capital gains, to get those breaks the advantaged must invest those profits in funds that benefit the disadvantaged. The shorthand for all of this comes down two words: Opportunity Zones.
Section 199A Deduction
The Tax Cuts and Jobs Act enacted on December 22, 2017, introduced Internal Revenue Code Section 199A. This new code section grants a deduction of up to 20% of qualified business income (“QBI”). It replaces Section 199 which was the Domestic Production Activities Deduction, beginning in 2018.
Inherited Individual Retirement Accounts: What Every Heir to an IRA Needs to Know
Article by: Ladidas Lumpkins and Roman Katz Ben Franklin once said that nothing is certain except death and taxes. The traditional Individual Retirement Account, also known as the IRA, was invented in 1974 and brings to bear both of those certainties.
South Dakota v. Wayfair: Some Tips on Making the Daunting Doable
On June 21 of this year, the Supreme Court’s ruling in South Dakota v. Wayfair basically upended the way state sales tax has been collected and remitted for the past 26 years. Much has been written about this ruling, and as might be expected, you, our clients, have a lot of questions about how to navigate this new sales tax labyrinth.
Blockchain in the Fashion Industry
Blockchain in the Fashion Industry More often than not, the term that we associate with the word “blockchain” is “Bitcoin.” And while it’s true that blockchain technology was initially created to account for cryptocurrency transactions, it can be applied in so many other settings. A blockchain is a digital ledger that records transactions in ordered records called “blocks.” Each new piece of information is added to the record chain chronologically so that the blockchain reports the entire history from start to finish.
Tax Aspects of the Bipartisan Budget Act of 2018
Peter J. Scalise's article entitled "Tax Aspects of the Bipartisan Budget Act of 2018" was featured in the CPA Magazine's February 2018 Issue. Read the full article here.
The Tax Cuts and Jobs Act of 2017 and Its Impact on the Entertainment Industry
The Tax Cuts and Jobs Act of 2017 (“TCJA”) was signed into law by President Trump on December 22, 2017. It has been hailed as the largest overhaul of the US federal income tax since 1986. While many diverse industries will realize significant changes, tax-wise, as a result of the passage of the TCJA, there are provisions that have a significant impact upon the media and entertainment industries.
Family Office Services for High Net Worth Clients
It’s no surprise that booming domestic and global equity markets, strong corporate profits and the prospect of a major reduction in U. S. business and personal tax rates are all contributing to a rise in personal wealth. In fact, the global total of high net worth individuals (defined as those with investable assets of $1 million or more) grew 7.5 percent last year, and New York City remained the top location for those achieving ultra-high net worth status (defined as those with investable assets of $30 million or more).
Year-End Overview of How Tax Reform Affects Business Taxes
Overview of Key Changes to Business Taxation Under the Tax Cuts and Jobs Act Two of the most visible features of the Tax Cuts and Jobs Act, now passed by Congress and expected to be quickly signed into law by President Donald Trump, are the large reduction in the statutory corporate rate (from 35 to 21 percent), and the elimination of the corporate Alternative Minimum Tax. Both of those changes become effective on January 1, 2018.
Overview of Domestic and Offshore Asset Protection Trusts
Having worked hard to secure a sound financial future for themselves and their loved ones, many individuals are motivated to protect their hard-earned assets from creditors. That’s especially true for high-income professionals and high-net-worth families, who are often targets of so-called “deep pockets” litigation, where the monetary motivations for plaintiffs are routinely stronger than their legal claims. To safeguard assets for themselves and their intended beneficiaries, these individuals can take advantage of domestic or offshore asset protection trusts, which can shield assets from the reach of future creditors and predatory claims.
Indian Bank Interest, When is this Truly Tax Free?
A friend of mine who is of Indian origin, was recently discussing with me how he had found a way to earn an eye-watering 9% interest on cash deposits. He explained that deposits held in an Indian bank account typically earn interest of 7-9% and that he is earning a small fortune on his deposits. Not meaning to bring my friend down to earth, I felt it necessary to make him aware of a few issues.
STAR Program Can Reduce Your NY State Property Taxes
If you own and live in your primary residence in New York State and you and your spouse have an annual income lower than $500,000, you are eligible for a partial property tax exemption under the New York State School Tax Relief Program. This is known as Basic STAR, and is based on the first $65,500 of the full value of the home. The STAR program gets even better for senior citizens age 65 or older.
Briefing Notes – Charitable Giving the New Rules
There are many wonderful individuals in the UK who give generously to charities. Usually, individuals make a very simple calculation about their income, ‘how much do I need to retain to meet my own needs and how much can I afford to give to charity.’ This simple calculation has just become a lot more difficult for some people especially where a substantial amount of their income derives from dividends. The new tax regime for dividends can have a negative impact on individuals.
Peter J. Scalise Article Featured in CPA Magazine-Nov 2016
Peter J. Scalise, Director of Federal Tax Credits & Incentives Practice Leader was featured in CPA Magazine article entitled, "Lights, Camera, Action and Tax Cut! | A Spotlight on the Expansion of the NYS Film Tax Credit Program". To read the full article please click here.
Peter J. Scalise Article Featured in Accounting Today Oct. 21, 2016
Peter J. Scalise, Director of Federal Tax Credits & Incentives Practice Leader was featured in Accounting Today. His article is entitled, "IRS Offers Guide to Tangible Property Regulation Compliance".
Attention Internal Use Software R&D Tax Creadit ClaimFilers – Final Treasury Regulations Issued
On October 3rd of 2016, the Internal Revenue Service (hereinafter “the Service”) issued Final Treasury Regulations setting forth guidance on research and development efforts in connection to Internal Use Software (hereinafter “IUS”) for purposes of claiming the Research & Development Tax Credit (hereinafter “RTC”) under I. R. C. § 41.
Peter J. Scalise Article Featured in CPA Magazine-Aug/Sept 2016
Peter J. Scalise, Director of Federal Tax Credits & Incentives Practice Leader was featured in CPA Magazine article entitled, "The Service Issues New Administrative Authority Governing TPR Compliance". To read the full article please click here.
The CEO Forum Highlights Prager Metis
The CEO Forum magazine highlights Prager Metis in an article "How Enterprises Can Become Agile", written by Glenn Friedman with a sidebar including sections on Intellectual Property written by Chris Hull, family office services written by Jay Goldberg, and enterprise business services written by Chris Vignone. Click here to read.
Social Security Retirement Benefits
Social Security was created in 1935 to help Americans supplement their retirement income. The idea of Social Security is universal for Americans, but it is a complex system and can often cause confusion. Full retirement age is the age at which you can begin to collect full Social Security retirement benefits without any reductions.
Last Time to Save
Rising Interest Rates effecting your Mortgage Since 2008, the Federal Reserve has kept its interest rate at net-zero, but it looks like that is about to change. America has not seen a spike in interest rates since 2006, but with the jobless rate at 5.1% in September it is safe to assume, financially speaking, that the country is on the rise.
Cyber Crime
Identity Fraud is on the Rise In the technological age, we do everything online, from buying groceries to doing our taxes. Although the internet makes our lives easier, and no one can argue the fact that doing your taxes from the comfort of your bed is more relaxing than going to your accountants’ office, the problem is you are opening yourself up to allowing a stranger to obtain your well-earned cash, and you might not even know it’s happening.
The Research and Development Tax Credit
The Research and Development Tax Credit By Ryan Immitt, Tax Manager The Incremental Research Expense Credit (more commonly known as The Research and Development Tax Credit) has been around quite a while now, but many small businesses do not claim it.
Vacation Expenses as Tax Deductions
Often, clients ask us about the right (and legal) way to write off vacation expenses as tax deductions. We’ve compiled a few tips to make sure you are complying with the IRS: Establish business appointments with business colleagues prior to your trip.
Peter Scalise in the News
Peter Scalise Featured in CPA Magazine article entitled " Tax Aspects of the 2017 Tax Reform for Economic Growth and American Jobs" Peter Scalise featured in CPA Magazine article entitled "IRS Issues New Administrative Authority Governing R&D Tax Credit Claim Filers" Peter Scalise blog entitled "Tax Research Methodology" - TaxConnections.com
Small Business Fraud Misconceptions
A government report in November recently stated that the IRS issued $4 billion in fraudulent tax refunds over the previous criminals who were using other people’s personal information. The IRS reported it opened almost 1,500 criminal investigations related to identity theft in 2013 and that those fraud schemes have grown more sophisticated and complicated. Aside from individual fraud, there are also many fraud misconceptions that small businesses face.