Newsletters

The 1031 Exchange: A Powerful Tool for Deferring Taxes

Sec. 1031 exchange activity has picked up considerably in recent years, as real estate sellers facing significant capital gains look for opportunities to soften the tax blow. By exchanging real property for other real property of “like kind,” owners can defer capital gains taxes until the replacement property is sold. The benefits of an exchange are substantial, because an outright sale of appreciated property can potentially trigger four levels of taxation: Federal income tax of 15% or 20%, depending on one’s tax bracket 25% tax on “recapture” of previous depreciation…

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Disaster Victims Qualify for Tax Relief

IRS has announced on its website that victims of severe storms and flooding in counties designated as federal disaster areas qualifying for individual assistance have more time to make tax payments and file returns. Certain other time-sensitive acts also are postponed. This article summarizes the relief that’s available and disaster area designations and extended filing and deposit dates. Who gets relief?  Only taxpayers considered to be affected taxpayers are eligible for the postponement of time to file returns, pay taxes and perform other time-sensitive acts. Affected taxpayers include: Any individual…

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Improving Real Property? Don’t Miss Out on Partial Disposition Benefits

If you’re investing capital in the improvement of a building or other real estate, there’s a good chance that the project will involve demolishing and/or removing some of the property. If that’s the case, it’s important to make a “partial disposition election” early in the project to preserve valuable tax benefits. This election is easily overlooked, especially when demolition or removal occurs at or near the beginning of a multi-month or multi-year project. But failure to make the election on a timely basis can lead to the loss of these…

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Tax Filing Reminders

September 16th 2019 calendar-year corporations third installment of estimated income tax 2019 individual and trust third installment of estimated income tax 2018 calendar-year S corporation income tax return (Form 1120S) on extension 2018 calendar-year partnership income tax return (Form 1065) on extension October 1st 2018 estate and trust income tax return (Form 1041) on extension October 15th 2018 calendar-year C corporation income tax return (Form 1120) on extension 2018 individual income tax return (Form 1040) on extension 2018 gift tax return (Form 709) on extension

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IC-DISC: Reevaluating The Benefits After Tax Reform

The interest charge domestic international sales corporation (IC-DISC) is one of the few remaining tax incentives for U.S. exporters. It allows eligible businesses to convert a portion of their export income into lower-taxed dividends and to defer tax on this income until it’s distributed. But while the IC-DISC remains a viable option after the Tax Cuts and Jobs Act of 2017 (TCJA), the act may diminish its benefits. If you have an IC-DISC or are considering one, it’s important to assess whether the potential tax savings justify the cost. The…

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IRS Releases Further Clarification on Opportunity Zones

The 2017 Tax Cuts and Jobs Act included a variety of tax code updates and additional provisions. Among these was the creation of a new type of community development program, dubbed “Opportunity Zones.” The IRS defines these areas as “economically-distressed [communities] where new investments, under certain conditions, may be eligible for preferential tax treatments.” IRS Releases Additional Guidance on Opportunity Zones  On April 17, 2019, the IRS released a second round of guidance on Opportunity Zones. This was a welcome occurrence, since the original Opportunity Zone legislation was quite vague,…

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Oklahoma Pass-Through Entity Tax Equity Act of 2019

For all of you who saw their 2018 itemized deductions reduced because of the $10,000 cap on state and local taxes, there may be some relief beginning in 2019 if you are a member of a pass through entity (PTE). A pass-through entity is a general partnership, a limited partnership, a limited liability partnership, a limited liability limited partnership, a limited liability company, or an S corporation. Oklahoma passed a new law on April 29, 2019 that allows a PTE to file an election to pay Oklahoma income tax at…

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Tax Filing Reminders

May 15th  2018 calendar-year exempt organizations (Form 990 and 990-T) June 15th  2019 calendar-year corporations second installment of estimated income tax 2019 individual and trust second installment of estimated income tax September 16th 2019 calendar-year corporations third installment of estimated income tax 2019 individual and trust third installment of estimated income tax 2018 calendar-year S corporation income tax return (Form 1120S) on extension 2018 calendar-year partnership income tax return (Form 1065) on extension October 1st 2018 estate and trust income tax return (Form 1041) on extension October 15th 2018 calendar-year…

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Qualified Business Income Deduction in Oklahoma

Our newsletters have previously discussed Section 199A – the new 20% qualified business income (QBI) deduction allowed by the Tax and Jobs Cuts Act (TJCA) – as it relates to the Federal deduction on an individual tax return.  There has been recent conversation regarding the application of Section 199A on Oklahoma tax returns. Q & A published by the Oklahoma Tax Commission (OTC) has clearly stated that the deduction does NOT qualify as an Oklahoma deduction because Oklahoma starts with Federal Adjusted Gross Income (AGI) which is before the Federal…

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Deduction of Oklahoma Gambling Losses

Oklahoma HB 2667 was passed in the House on March 7 by a vote of 83-16 and is currently in the Senate awaiting action. If passed, gambling losses would be exempt from the Oklahoma itemized deduction limitation ($17,000) in the same manner as medical expenses and charitable contributions. Essentially, gambling losses would return to being deductible to the extent of winnings. The current language of the bill would apply the rule retroactively to tax year 2018. We will continue to watch the progress on this bill.  If you have already…

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