Popular SECURE Act Signals Significant Shift to Retirement Plans

SECURE Act Most Important Update to Retirement in Over a Decade

 

In terms of retirement planning, Americans share at least one dilemma. From the worker to the employer to the policymaker, everyone is living longer. On May 23, 2019, the House passed the Setting Every Community Up for Retirement Enhancement (SECURE) Act. This legislation, receiving almost unanimous bipartisan support, provides the most important change to retirement plans and opportunities since the Pension Protection Act of 2006. The bill contains over 25 amendments and provisions expressly aimed at promoting savings in retirement among all employees. This bill addresses the apparent need for a worker’s wealth to run (and finish) the race with them. This document may face modification before being signed into law, but one thing is clear: change is coming. Below we have prepared a synopsis of the changes that present the most opportunity. 

IRS Issues Further Opportunity Zone Regulations Guidance

 

 

 

 

 

 

 

IRS Issues Further Opportunity Zone Regulations Guidance

The Qualified Opportunity Zone Program will work only if investors can follow the breadcrumbs to their prize with confidence. Many investors have been paralyzed by regulatory confusion in uncertainty. In the following update, we provide an overview of the highly sought-after guidance released on April 17 by the Internal Revenue Service (IRS) and the US Treasury Department.

Opportunity Zone Program Primer

 

  • The IRS states that all types of capital gains are eligible for the Opportunity Zones tax incentives through the use of Opportunity Funds, which invests at least ninety percent of its assets in Qualified Opportunity Zone (QOZ) Property.
  • Qualified Opportunity Zone Funds (QOZF) are subject to specific regulations as set forth by the IRS, namely the types of gains that may be deferred, the timeline by which the amounts by invested, and how investors may elect to defer specified gains.
  • The IRS defines eligible opportunity zone property as QOZF stock, QOZF partnership interest, or QOZF business property. Qualified opportunity property must exist and operate in a QOZ, be new to the entity, and abide by specific requirements.

Issues

The original Opportunity Zone legislation left eager investors with more questions then answers. Below are some of the issues that the guidance addresses.

  • The vague term, “substantially all,” used in various places of section 1400Z-2
  • Rules surrounding transactions that trigger the inclusion of gain that a taxpayer elected to defer under section 1400Z-2
  • Unclear definitions of timing and amount of the deferred gain that is included in the package
  • The approved treatment of leased property used by a QOZ business and use of QOZ business property in the QOZ
  • Sourcing of gross income to the QOZ business
  • Another vague term, “reasonable period,” for a QOF to reinvest proceeds from the sale of qualifying assets without paying a penalty

Further Guidance

Below are a few of the key clarifications giving investors the green light to move forward:

  • For use of the property, at least 70 percent of the property must be used in a QOZ.
  • For the holding period of the property, tangible property must be QOZ business property for at least 90 percent of the QOF’s or QOZ business’s holding period.
  • The partnership or corporation must be a QOZ business for at least 90 percent of the QOF’s holding period.
  • Eligible business criteria expand from revenue generation to service transactions and employee location.

In addition, the IRS noted a few situations where deferred gains may become taxable. If an investor transfers their interest in a QOF, e.g., if the transfer is done by gift, the deferred gain may become taxable. However, inheritance by a surviving spouse is not a taxable transfer, nor is a transfer, upon death, of an ownership interest in a QOF to an estate or a revocable trust that becomes irrevocable upon death.

We encourage you to read the update as a whole as it includes additional guidance on the term “original use” and addresses all of the above-mentioned issues. If you are still unsure of moving forward with this investment opportunity, our office professionals will stand by to answer your specific questions and address your concerns.

Navigating the New Qualified Business Income Deduction

Navigating the New Qualified Business Income Deduction

The tax reform legislation that Congress signed into law on December 22, 2017, was the largest change to the tax system in over 3 decades. The new tax code contains many provisions that will affect individual, estate, and corporate taxpayers. One of those changes includes the Qualified Business Income Deduction, a new tax benefit allowing entrepreneurs, self-employed individuals and investors to deduct 20 percent of their business income. It is an important factor to consider when deciding whether the structure of your business will be a pass-through entity or a C Corporation.

In this article, we will explain how the deduction works, examine the fine print and discuss how healthcare practices and physician owners can take advantage.

6 Tax Planning Strategies for Doctors to Consider

The Tax Cuts and Jobs Act (TCJA) was the largest change to the tax system in over 3 decades. The new tax code contains many provisions that will affect individual, estate, and corporate taxpayers, including hard-working physicians like yourself. Although the new tax law closes many loopholes, there are still tax breaks and strategies that offer ways for physicians to reduce their taxable income. Below we have highlighted 6 tax strategies physicians should consider for 2018.

  1. Bunching Charitable Donations

While the new tax reform does not eliminate charitable deductions, it does

Changes to Fringe Benefits, Entertainment Expenses

Changes to Fringe Benefits, Entertainment Expenses

The tax reform legislation that Congress signed into law on December 22, 2017, was the largest change to the tax system in over 3 decades. The new tax code contains many provisions that will affect individual, estate, and corporate taxpayers. One of those changes, the elimination of a business-related deduction used for entertainment, amusement or recreation expenses, will make it costlier for business owners to entertain clients.

Navigating the New Qualified Business Income Deduction

Navigating the New Qualified Business Income Deduction

The tax reform legislation that Congress signed into law on December 22, 2017, was the largest change to the tax system in over 3 decades. The new tax code contains many provisions that will affect individual, estate, and corporate taxpayers. One of those changes includes the Qualified Business Income Deduction, a new tax benefit allowing entrepreneurs, self-employed individuals and investors to deduct 20 percent of their business income. It is an important factor to consider when deciding whether the structure of your business will be a pass-through entity or a C Corporation.

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