Blog Archives: 2017

Year-End Tax Planning: The Devil is in the Details

Beginning in 2018, the total amount of state tax deductions allowed as an itemized deduction will be limited to $10,000. This includes both income and real estate taxes.

Sometimes, state taxes can be deducted when prepaid. Several articles have been written that suggest prepaying your 2018 real estate tax bill prior to December 31, 2017. This will allow you to get the tax deduction on your 2017 tax return before the $10,000 limit comes into play.

But this is only a good idea if it works! One crucial detail must be in place for this planning idea to work: For real estate taxes to be prepaid,

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Partnership Changes Needed Now: IRS Issues Regulations Altering Partnership Audit Rules

The IRS issued Regulations significantly altering partnership audit rules for partnership tax years beginning after December 31, 2017. These new rules are called the Consolidated Partnership Audit Regime (CPAR). They are intended to allow the IRS to efficiently audit, assess, and collect taxes at the partnership level.

Partnership agreements may need amendments to address several critical elements to changes in the law and associated regulations to avoid negative consequences.

When the IRS audits a partnership under CPAR, the IRS may assess a partnership level “imputed underpayment,” at the top available tax rate (individual or corporate) in effect at the time of the net audit adjustments.

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Treasury Finally Floats Trial Balloon on Donor-Advised Fund Rules

On December 4, 2017, the Department of Treasury issued Notice 2017-73, indicating Treasury’s thinking of what the Proposed Regulations on Donor Advised Funds (DAFs) might be. The Notice asks for input by March 5, 2018, on areas Treasury is considering issuing Regulations. A Notice is a way to request informal feedback prior to issuing Proposed Regulations.

The Notice requests input in four areas:

  1. Two examples where distributions from DAFs may provide more than “incidental” benefit to a donor, donor advisor or related person;
  2. Circumstances under which a distribution may be made from a DAF without consideration of whether there was a personal pledge outstanding to the grantee from the donor,

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COSO Internal Control Integrated Framework: Helping Your Organization Meet Its Objectives

COSO Series Article Part 1 of 6: The following article is the first part of a six-part series to explore the high-level basics of the COSO1 Integrated Internal Control Integrated Framework (the Framework). The following provides an overview of the Framework itself.

Identifying and Setting Objectives

If you are a manager, director, or business owner, you know the importance of a solid mission statement. You also know the importance of maintaining a clear view of the objectives and goals of the organization.

Your specific objectives may be financially focused, customer-service focused, philanthropically focused, or any unique combination. They could also be other goals set out by your organization.

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First Cut at GOP Tax Reform & Charitable Organizations

On Thursday, November 2, the House Ways and Means Committee released H.R. 1, the Tax Cuts and Jobs Act. This is just the beginning of the sausage-making process. Most of the legislation is focused on individuals and businesses. However, there are some special treats for the tax-exempt sector and there is much to be commented on. The following is a first take on the highlights and lowlights, through the charitable sector lenses.

Individual Tax Provisions That May Affect Charitable Contributions
Itemized Deductions vs. Standard Deduction and the Personal Exemption

  • Keeps the charitable contribution deduction intact for individual taxpayers as an itemized deduction and increases the limit on cash contributions from 50% to 60% of adjusted gross income (AGI).

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