Question: David Diehl is a 90% shareholder in GDS, Inc., a closely held C corporation. The corporation received a bona fide shareholder loan from David and is repaying him with interest. In a difficult economic time, the C-corp became unable to pay David the interest. It plans to start paying interest in two years. Can GDS accrue the interest for the two-year period and deduct it as an expense before actually paying David? Answer: No. Under the general rule of §267(a)(2), a shareholder and a corporation are considered related parties when the shareholder owns more than 50% in value of the corp ..read more

The consent and disclosure statements for the use of taxpayer information used by tax software providers do not fully comply with regulations governing the disclosure of taxpayer information, according to a recent report by the Treasury Inspector General for Tax Administration (TIGTA). The agency reviewed the disclosure statements used by four tax software providers and found they did not explain the reasons taxpayer information would be provided to third parties or the identity of the parties receiving the information collected. TIGTA did not name the software providers using the disclosure s ..read more

Question: Robert and Suzanne were married. Robert is aged 71 and Suzanne was 74 when she died in 2023 following a long-term illness. They each had their own traditional individual retirement arrangements (IRAs), and Robert inherited Suzanne’s IRA as the sole designated beneficiary. Prior to her death, Suzanne started taking her required minimum distributions (RMDs) from her IRA account. How should Robert treat this inherited account? Answer: Robert may treat Suzanne’s IRA account in one of two ways: (1) withdraw funds as if it was his own (2) withdraw funds as a beneficiary based on either of ..read more

Question: Tom, age 36, has a health savings account (HSA) qualified high deductible health plan that just covers him. He wishes to contribute the individual maximum for 2024, $4,150, to the account. Tom’s wife Alice, who is also age 36, has her own HSA qualified high deductible health plan, which covers her and the couple’s two children, Billy and Bobbie, but not Tom. She plans to contribute the family maximum of $8,300 to her HSA for 2024. If the couple files jointly, are they entitled to a total 2024 HSA deduction of $12,450 ($4,150 + $8,300) for 2024? Answer: No. If either an individual or ..read more

Preparing taxes for farmers involves its own set of challenges because they face tax rules that are different from most other businesses. You need to consider an array of unique tax issues related to farming, such as: government payment programs, farm property depreciation, crop insurance, prepaid farm expenses, commodity wages and farm income averaging. Below, you’ll find a few of the top questions from a recent webinar on the topic and their accompanying answers. If you choose to attend the on-demand version of this webinar, you can access the full recording and the entire list of Q&As ..read more

Barring a federal court intervention, the filing deadline for all businesses created prior to 2024 that are required to file a beneficial ownership information (BOI) report with the Financial Crimes Enforcement Network (FinCEN) is Jan. 1, 2025. While an Arkansas federal judge has found the Corporate Transparency Act (CTA) to be unconstitutional and barred the enforcement of provisions requiring the filing of BOI reports, that decision only bars enforcement against members of the National Small Business Association, which filed the lawsuit. The Arkansas decision has been appealed to the U.S. Co ..read more

Most individuals who get involved with publicly traded partnerships (PTPs) do so because the investment was recommended by a broker. You, as the tax pro, need to know how to correctly report this information. Below, you’ll find a few of the top questions from a recent webinar on the topic and their accompanying answers. If you choose to attend the on-demand version of this webinar, you can access the full recording and the entire list of Q&As.    Q: Should a person keep their Schedule K-1 each year to track adjustments? A: There is no mandatory requirement, but yes, it’s a good way to trac ..read more

There is no hiding; we are in an election season. Social media, cable news outlets and print news mediums are abuzz with a continuous stream of 2024 presidential election content on an array of topics (some trivial and others particularly important). However, one such area that is highly relevant to selecting a U.S. president is the area of tax policy. With this in mind, now is the time to best understand the tax policy positions of each candidate. In the upcoming live (free!) webinar Tax Policies of the Presidential Candidates, an expert panel of Wolters Kluwer tax experts will speak on this ..read more

Are you a tax professional eager to share your expertise? Writing for NATP’s TAXPRO magazine is a great way to contribute to the tax community. TAXPRO is a respected publication that provides tax professionals with essential insights and updates on industry trends, helping them stay informed and ahead of the curve. Why write for TAXPRO? Contributing to TAXPRO allows you to position yourself as a thought leader and enhance your reputation within the tax industry. By sharing your knowledge, you can help other tax professionals tackle current challenges, understand complex tax laws and improve th ..read more

In today’s digital landscape, the protection of client data has become more critical than ever, particularly for tax professionals who handle sensitive financial information. The growing need for robust security measures has led to an industry-wide requirement for multi-factor authentication (MFA). What is multi-factor authentication? MFA is a security system that requires multiple forms of verification before granting access to a system or data. This process involves more than just a password; it includes a combination of factors such as something you know (a password), something you have (a ..read more