Code Sec. 83 governs the amount and timing of income inclusion for property, including employer stock, transferred to an employee in connection with the performance of services. Under Code Sec.
January 26, 2018 12:00 pmUnder pre-Act law, under the “kiddie tax” provisions, the net unearned income of a child was taxed at the parents' tax rates if the parents' tax rates was higher than the tax rates of the child. The remainder of a child's taxable income (i.e., earned income, plus unearned income up to $2,100 (for 2018), less the child's standard deduction) was taxed at the child's rates. The kiddie tax applied to a child if: (1) the child had not reached the age of 19 by the close...
January 26, 2018 12:00 pmUnder pre-Act law, interest paid or accrued by a business generally is deductible in the computation of taxable income subject to a number of limitations. For a taxpayer other than a corporation, the deduction for interest on indebtedness that is allocable to property held for investment (investment interest) is limited to the taxpayer's net investment income for the tax year.Code Sec. 163(j) may disallow a deduction for disqualified interest paid or accrued by a corporation in a tax year if: (1...
January 26, 2018 12:00 pmUnder pre-Act law, taxpayers were allowed to deduct certain miscellaneous itemized deductions to the extent they exceeded, in the aggregate, 2% of the taxpayer's adjusted gross income.New law. For tax years beginning after Dec. 31, 2017 and before Jan.
January 26, 2018 12:00 pmCode Sec. 280F limits the Code Sec. 179 expensing and cost recovery deduction with respect to certain passenger autos (the luxury auto depreciation limit).
January 26, 2018 12:00 pmUnder pre-Act law, a taxpayer could deduct as an itemized deduction qualified residence interest, which included interest paid on a mortgage secured by a principal residence or a second residence. The underlying mortgage loans could represent acquisition indebtedness of up to $1 million ($500,000 in the case of a married individual filing a separate return), plus home equity indebtedness of up to $100,000.New law. For tax years beginning after Dec.
January 26, 2018 12:00 pmOne of the most powerful college savings vehicles is the 529 college savings plan. Your money grows tax-free in those programs as long as you follow all of the relevant tax laws, and they allow you to make significant contributions. There is no maximum annual 529 contribution limit, but there are other factors to keep in mind as you decide how much to save in a 529.The IRS does not set limits on how much you can contribute to a 529 plan.
January 26, 2018 12:00 pmUnder pre-Act law, a net operating loss (NOL) may generally be carried back two years and carried over 20 years to offset taxable income in such years. However, different carryback periods apply with respect to NOLs arising in different circumstances. For example, extended carryback periods are allowed for NOLs attributable to specified liability losses and certain casualty and disaster losses.New law. For NOLs arising in tax years ending after Dec.
January 26, 2018 12:00 pmMoving Expenses Deduction SuspendedUnder pre-Act law, taxpayers could claim a deduction under Code Sec. 217 for moving expenses incurred in connection with starting a new job if the new workplace was at least 50 miles farther from a taxpayer's former residence than the former place of work.New law. For tax years beginning after Dec.
January 26, 2018 12:00 pmStarting in 2018, qualified educational expenses for 529 plans will include up to $10,000 a year in tuition and expenses for primary and secondary school expenses (public, private, or religious). Previously, you could only use it towards qualified college expenses. There were also some related changes to ABLE accounts for individuals with special needs.Put simply, you can now pay for up to $10k a year of private K-12 school through a 529 plan.
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