August 13, 2015
As reported by The Journal of Accountancy on July 31, the short-term highway funding extension passed by the Senate—and signed by President Obama—at the end of July contains several important tax provisions (H.R. 3236). The bill was passed by the House of Representatives, 385–34. The bill modifies the due dates for several common tax returns, overrules the Supreme Court’s Home Concrete decision, requires that additional information be reported on mortgage information statements, and requires consistent basis reporting between estates and beneficiaries. Here is a summary of the changes:
Due date modifications for business and other tax returns
Additional information is now required on returns relating to mortgage interest
The bill also amended Sec. 6050H requiring new information on the mortgage information statements that are required to be sent to individuals who pay more than $600 in mortgage interest in a year. These statements will now be required to report the outstanding principal on the mortgage at the beginning of the calendar year, the address of the property securing the mortgage, and the mortgage origination date. This change applies to returns and statements due after Dec. 31, 2016.
Consistent basis reporting between estate and beneficiaries
The act also amends Sec. 1014 to mandate that anyone inheriting property from a decedent cannot treat the property as having a higher basis than the basis reported by the estate for estate tax purposes. It also creates a new Sec. 6035, which requires executors of estates that are required to file an estate tax return to furnish information returns to the IRS and payee statements to any person acquiring an interest in property from the estate.
These statements will identify the value of each interest in property acquired from the estate as reported on the estate tax return. The new basis reporting provisions apply to property with respect to which an estate tax return is filed after the date of enactment.
Our firm will keep you informed on these and other changes that affect your tax planning and reporting. If you have any questions about the changes outlined here, please contact us.
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For many business owners, September tends to bring a bit of a slowdown. The chaos of getting kids prepared for going back to school has passed, and a focus on saving money tends to kick in as people prepare for the coming holiday spend. Combined, this can often translate into a lull for business owners.
This is a friendly reminder that the Q3 tax estimate payment deadline is coming up fast. Be sure to make your payment by September 15, 2018 to avoid penalties. Currently, penalties for late or no payment average about 4 percent. And wouldn’t you rather keep that money in your pocket?
According to new rules from the Tax Cuts & Jobs Act, meals and entertainment tax-deductible expenses for businesses have undergone considerable reform. Because the explanations of new deduction guidelines can be confusing, we’ve created this brief outline for you. A visit with your accounting professional to ensure your Chart of Accounts is correct may also be beneficial.