For many businesses, research and development (R&D) costs are a major expense—and a source of potentially significant tax questions. Two recent developments have complicated these questions. One is a new IRS memo announcing more stringent reporting requirements for some taxpayers claiming tax credits for research expenses; the other is a potential change in the deductibility of research expenses. (more…)
Tax Scams - IRS Issues 2021 “Dirty Dozen” List
The end of the year is a good time to review the annual “Dirty Dozen” list of common tax-related scams published by the IRS. The agency urges taxpayers to be especially alert to these schemes, both during tax filing season and throughout the year.
Instead of the traditional numbered list it published in prior years, this year the agency offers a longer, general discussion of more than a dozen common scams, which it has organized into four broad categories. (more…)
Dinner’s on Me! Big Changes to Meal and Entertainment Expense Deductions
Players in the real estate industry have long incurred meal and entertainment expenses while conducting business. But in recent years, there’s been some confusion about what’s deductible and what’s not, given that the Tax Cuts and Jobs Act (TCJA) placed some new limits on the meal and expense deduction beginning in 2018. Now the deduction for qualifying meals has temporarily increased to 100%, and some IRS guidance has provided more clarity on the TCJA’s limits.
Capital Gains Tax Issues - 1031 Exchange Variations and Alternatives
One widely used tax strategy among real estate investors is the “like-kind” exchange, often called a 1031 exchange after the Internal Revenue Code section that allows this tax treatment. A 1031 exchange enables taxpayers to defer capital gains taxes when they sell investment or business properties. A proposal to limit such deferrals faces an uncertain future in Congress this year, but even if it is not enacted there are other circumstances that can make a 1031 exchange impractical or inappropriate.
Here is a brief overview of alternative strategies for managing the tax consequences of a property sale. (more…)