Blog Archives: 2018

What the QBID and Tax Reform Mean for Pass-Through Entities

One of the most highly touted aspects of tax reform is the cutting of the corporate tax rate from a maximum rate of 35% to a flat rate of 21%.  Many corporations showed their gratitude for the tax cut by paying out bonuses to their employees or promising to boost the economy in other ways.

But what about businesses that aren’t organized as corporations?  For many years, taxpayers had been incentivized to set up businesses as “pass-through” entities, such as sole proprietorships, partnerships and subchapter S corporations (small corporations that meet certain requirements). Why? Because this pass-through income is not taxed at the entity level.

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Tax Scam Alert: Fake Refunds

It’s that time of year again, where unscrupulous “entrepreneurs” (i.e., scammers) are extremely active trying to defraud the U.S. government and its taxpayers out of billions of dollars of tax money. From phone calls to phishing, scammers will go to any lengths to get at your money.

And now, with the massive Experian data breach, scammers have so much more information to work with.  One of the new scams involves the filing of a false return and having the money actually deposited into the taxpayer’s bank account.  Because they have the information necessary to track the refund on the IRS Where’s My Refund website,

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Kiddie Tax: How Best to Report Your Child’s Unearned Taxable Income

Note: This post, originally published on March 15, 2017, has been updated to include changes brought by the 2018 Tax Cuts and Jobs Act. These changes are indicated in blue italics.

Our high net worth clients often want to get their children interested in finance and investing at a young age. Along with this desire comes setting up brokerage accounts, which may produce taxable income to the child. There are two different ways to report your child’s unearned taxable income: the parents can report it on their tax return by attaching Form 8814 to their Form 1040, or the child can report in on their tax return by attaching Form 8615 to their Form 1040.

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Tax Reform and the Real Estate Industry: Will It Impact Business Interest?

Among the many questions around tax reform, one question those in real estate might be asking is whether or not all business interest will be deductible. The answer to this question is likely, “yes.” However, under tax reform, starting in 2018, your interest expense may be limited to 30% of adjusted taxable income.

Through December 31, 2021, adjusted taxable income is basically earnings before interest, depreciation and amortization (EBIDA). Starting in 2022, adjusted taxable income is earnings before interest, but you do not get to add back depreciation and amortization.

Putting it into Practice

Let’s assume you put a building into service in 2018.

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New Use Tax Reporting Obligations for Remote Sellers

Retailers making sales in other states (aka, remote sellers) have new use tax reporting obligations in some states where they are not obligated to collect sales taxes.

Several states have new rules impacting remote sellers, including requirements that remote sellers must report to customers when use tax is due on a sale.  Remote sellers are required to report the same information to state revenue authorities in most cases.

Since Colorado successfully issued and defended its use tax reporting rules in 2016, other states are embracing similar use tax reporting regimes. In addition to the states in the table below, at least four other states proposed use tax reporting rules in 2017 but have not implemented them yet.

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