The IRS has just issued cost-of-living adjustments for federal tax purposes. See Rev Proc 2021-45, 2021-48 IRB; IR 2021-219, 11/10/2021.
With regard to section 199A, the rev. proc. provides as follows:
Income-based limitations on Sec. 199A/qualified business income deduction. For 2022, taxpayers with taxable income above $170,050 for single and head of household returns, $340,100 for joint filers, and $170,050 for married filing separate returns are subject to certain limitations on the Code Sec. 199A deduction. The 2021 amounts were $164,900, $329,850, and $164,925.
The post under the link below addresses a significant issue under section 199A concerning the applicability of those discounts to certain types of partnership payments.
Here’s the link: https://www.taxlawforchb.com/2021/01/can-a-partnerships-payment-to-a-partner-for-services-not-be-treated-as-such-for-purposes-of-sec-199a/
Below is a link to my latest article published in the Concord Monitor.
Lou Vlahos is a first-rate tax lawyer with FarrellFritz, a NYC law firm. He publishes a regular and excellent blawg on the taxation of for closely held companies and their owners. His latest post is about Biden’s tax plans. The link is:
The Urban Institute and the Brookings Institute have just published a new 16-page study that addresses the impact of Internal Revenue Code section 199A. The link to the study is https://www.taxpolicycenter.org/sites/default/files/publication/159744/tax-incentives-for-pass-through-income.pdf At some point within the next few days, I will e-mail readers a post summarizing the key points in the study.
Sometimes a profitable business may want to share its profits with its owners; can’t readily do so with payments in the form of cash payments; but can do so by distributing company property to them that will have immediate value to them. The post under the link below provides a brief but excellent discussion of this situation. Briefly: Multi-member LLCs and other entities that are taxable as partnerships can make these payments tax-free; entities taxable as C and S corporations can’t.
Here’s the link: https://frostbrowntodd.com/checklist-for-non-cash-property-distributions-from-a-partnership/#page=1
Under the link below is an article I’ve just published in Tax Notes, a daily federal and state tax information service. The article is entitled “Section 199A Restructuring: The Process and its Risks.”
Here’s the link:
The post under the link below summarizes a statement by the IRS commissioner about IRS plans for extensive additional guidance about the Tax Cuts and Jobs Act of 2017 before the end of this year. Importantly, the commissioner makes no reference to guidance under section 199A, a provision of tremendous important to every LLC owner and lawyer. Maybe this means that, at least for a while, no more section 199A guidance will be forthcoming.
Here is the link: https://www.twrblog.com/2019/11/significant-tcja-guidance-due-before-end-of-year-kautter-says/#page=1
As many of you know, my fields of expertise are (i) complex LLC law and tax; and (ii) section 199A, including, especially, section 199A restructuring. If you have questions in either of these fields, please feel free to give me a call.
The excellent post under the link below addresses an issue that can be important for many start-up LLCs—namely, the issue of when a business ceases to be a business in formation and becomes an active trade or business for start-up deduction purposes. The issue was addressed and resolved in a recent Tax Court decision discussed in the post.
Here’s the link:
The new post under the link below is not about LLC law or tax, but it’s the best short discussion of tax issues in selling S corporations I’ve ever seen. Few LLCs make S elections, but many should.
Here’s the link: https://www.taxlawforchb.com/2019/09/selling-s-corporation-stock-are-you-sure/