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.
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.
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.
In the last few years, some of entertainment’s most iconic performers have left us. Both Prince and David Bowie passed in 2016, and just this year we lost Aretha Franklin. It seems a lot more recent, but it has been almost ten years since Michael Jackson passed away at age 50.
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.
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.
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: Qualified business income (QBI) from a domestic qualified trade or business (QTOB) operated as a sole proprietorship, partnership, S corporation, trust or estate; Combined qualified real estate investment trust (REIT) dividends and qualified publicly traded partnership (PTP) income.
Summarised below is our understanding of the changes and necessary steps which may be required to be undertaken for UK businesses trading within the EU in the event of a No Deal EU Exit. We have principally focused on the impact on Customs and Excise and VAT. Most of the contents are taken from the published documents by UK government and HMRC.
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. From the outset, Section 199A sought to extend benefits of the Tax Cuts and Jobs Act to small businesses.