The new tax reform act (H.R. 1), signed into law by President Trump on December 22, 2017, added a new provision to the tax code (i.e., IRC Section 199A), for taxable years beginning after 2017 and before January 1, 2026, which allows taxpayers other than corporations to deduct 20% of their allocable share of qualified business income from pass-through entities (e.g., partnerships, limited liabilities companies and S corporations) or sole proprietorships, subject to certain limitations and exceptions. Qualified business income generally includes net income effectively connected with a U.S ..read more

  The Tax Cuts and Jobs Act (H.R. 1) (the “Act”), signed by President Trump on December 22, 2017, implemented the most comprehensive overhall of the Internal Revenue Code of 1986, as amended (the “Code”) in decades. In particular, the Act overturned a 2017 Tax Court case, Grecian Magnesite Mining, Indus. & Shipping Co. v. Commissioner, 149 T.C. No. 3 (2017), in which the Tax Court generally held that the proceeds received by a foreign corporation upon redemption of its interest in a U.S. partnership with effectively connected U.S. income is properly treated as capital gain (other than to ..read more

      On December 22, 2017, the President signed into law the tax bill, an extremely broad and all-encompassing piece of tax reform legislation. the following is a brief synopsis in tabular format of select key provisions contained in the tax bill which generally go into effect on January 1, 2018:   Tax Reform for Individuals TOPIC THE TAX BILL Individual Income Tax Rates     7 tax brackets: 10%, 12%, 22%, 24%, 32%, 35% and 37%. These tax brackets apply through 2025   Long Term Capital Gains Tax Rates   3 tax brackets: 0%, 15% and 20%. In addition, 3.8% net investment income tax is retain ..read more

The “check-the-box” regulations promulgated years ago by the U.S. Treasury Department allow an eligible business entity such as a limited liability company (“LLC”) to elect its classification for Federal income tax purposes (“Entity Classification Election”). An LLC with a single owner may elect to be taxed either as a corporation or as a disregarded entity in which case its sole owner will be taxable on all income, loss and gains of the LLC.  In the absence of such election, the single-member LLC by default will be treated as a disregarded entity for Federal income tax purposes.  Thus, an E ..read more

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