Applicable Financial Statement Conformity Rule Doesn’t Apply to Market Discount
Posted by Kim Chen on December 22nd, 2018
Thanks to the Tax Cuts and Jobs Act (TCJA), accrual method taxpayers are subject to the Applicable Financial Statement (AFS) conformity rule for tax years beginning after 2017. This rule states that the all events test for recognizing income is met no later than when the income is recognized on the taxpayer’s AFS or other […]
Does prepaying property taxes make sense anymore?
Posted by Kim Chen on December 21st, 2018
Prepaying property taxes has been a popular year-end tax-planning strategy. But does it still make sense? For many, particularly those in high-tax states, it doesn’t. The TCJA made two changes that affect this strategy: 1) nearly doubling the standard deduction, so fewer taxpayers will itemize, and 2) putting a $10,000 cap on state and local […]
The TCJA prohibits undoing 2018 Roth IRA conversions, but 2017 conversions are still eligible
Posted by Kim Chen on December 21st, 2018
Converting a traditional IRA to a Roth IRA can provide tax-free growth and tax-free withdrawals in retirement. But what if you convert your traditional IRA — subject to income taxes on all earnings and deductible contributions — and then discover you would have been better off if you hadn’t converted it? Before the Tax Cuts […]
IRS TO ISSUE REGS ON ACCRUED MARKET DISCOUNT AND “ALL EVENTS TEST”
Posted by Kim Chen on December 20th, 2018
Notice 2018-80, 2018-42 IRB In a Notice, IRS has announced that it intends to issue proposed regs providing that market discount is not includible in income under Code Sec. 451(b), as amended by the Tax Cuts and Jobs Act (TCJA; P.L. 115-97, 12/22/2017).Code Sec. 451(b) provides that the all events test is met with respect […]
HIGHLIGHTS OF TCJA CHANGES
Posted by Kim Chen on December 17th, 2018
The Draft Instructions alerted taxpayers to some of the major changes under the TCJA affecting returns filed for 2018. Change in tax rates. For 2018, most tax rates have been reduced. The 2018 tax rates are 10%, 12%, 22%, 24%, 32%, 35%, and 37%. Standard deduction amount. For 2018, the standard deduction amount has been […]
