A taxpayer may, subject to limitations, elect under Code Sec. 179 to deduct (or “expense”) the cost of qualifying property, rather than to recover such costs through depreciation deductions. Under pre-Act law, the maximum amount a taxpayer could expense was $500,000 of the cost of qualifying property placed in service for the tax year.
January 26, 2018 12:00 pmA deduction is allowed for the expenses paid during the tax year for the medical care of the taxpayer, the taxpayer's spouse, and the taxpayer's dependents to the extent the expenses exceed a threshold amount. To be deductible, the expenses may not be reimbursed by insurance or otherwise. If the medical expenses are reimbursed, then they must be reduced by the reimbursement before the threshold is applied.
January 26, 2018 12:00 pmUnder pre-Act law, funds in a Code Sec. 529 college savings account could only be used for qualified higher education expenses. If funds were withdrawn from the account for other purposes, each withdrawal was treated as containing a pro-rata portion of earnings and principal.
January 26, 2018 12:00 pmUnder pre-Act law, the like-kind exchange rule provided that no gain or loss was recognized to the extent that property—which included a wide range of property from real estate to tangible personal property—held for productive use in the taxpayer's trade or business, or property held for investment purposes, is exchanged for property of a like-kind that also is held for productive use in a trade or business or for investment.New law. Generally effective for transfers after Dec. 3...
January 26, 2018 12:00 pmCode 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 pmIn general, taxpayers can claim a deduction for wagering losses to the extent of wagering winnings. (Code Sec. 165(d)) However, under pre-Act law, other deductions connected to wagering (e.g., transportation, admission fees) could be claimed regardless of wagering winnings.New law.
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, 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 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, 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 pm
