Tax


  You likely have heard conflicting information on the deductibility of business meals with clients and prospects. I have spent time researching this issue, and my conclusion is that tax reform eliminated tax deductions for business meals with clients and prospects.   Before the 2017 The Tax Reform Act there were two conditions to client and prospect meals:   Required you to establish that the meal was directly related...

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  The IRS has provided two general purpose safe harbors for claiming a casualty loss related to a personal residence and its contents (in Revenue Procedure 2018-8), as well as one tailored for the hurricanes that took place in 2017(Revenue Procedure 2018-9). In a Revenue Procedure, IRS has provided a safe harbor method under which individuals may use one or more cost indexes to determine the amount of loss to their homes as a...

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  Lending corporate cash to shareholders can be an effective way to give the shareholders use of the funds without the tax consequences of dividends. However, an advance or loan to a shareholder must be a bona fide loan to avoid being classified as a constructive dividend. Further, the loan must have an adequate interest rate to avoid being classified as dividends under the below-market loan rules of Sec. 7872.   What is...

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As Hurricane Irma weakened into a tropical depression, the IRS said it is providing tax relief to people affected by the massive storm in parts of Florida, Puerto Rico, and the Virgin Islands (IR-2017-150). The relief applies to any area designated by the Federal Emergency Management Agency (“FEMA”) as qualifying. The IRS disaster relief page currently lists the islands of St. John and St. Thomas in the U.S. Virgin...

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  This is another story from the war zone. This is not a new subject, it has been covered many times by myself and many other tax professionals; the importance of good record keeping. However, it seems not to be at the top of the priority list of business owners until the IRS comes knocking at their doors for an audit. Trying to recreate what happened two or three years ago it almost impossible, maybe that is part of the IRS...

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