State and Local Tax Briefing: 2020 California State-Assessed Property Tax Assessment Appeals

Posted in California, California Property Tax Deadlines and Planning Considerations, California Taxation of Asset Management Fees, Property Tax, State Tax

The California State Board of Equalization (BOE) is responsible for assessing property tax on certain public utilities and other specified companies, including telephone companies and companies selling or transmitting gas or electricity, enabling counties to use those assessed values to collect local property taxes. These companies are commonly referred to as “state assessees” and their taxable property is referred to as “state-assessed property.”

Read the full GT Alert, “State and Local Tax Briefing: 2020 California State-Assessed Property Tax Assessment Appeals.”

Section 501(c)(3) Organization Prohibited Political Activities

Posted in Government, IRS, Tax Planning, tax withholding, tax-exempt organizations, Taxpayers

Political activities of charities and other types of exempt organizations frequently rise in prominence in presidential election years.  Not only is the IRS sensitive to political activities in a presidential election year, private organizations frequently monitor election activities of charities and may report to the IRS violations of the political activity prohibition.  Consequently, it is important for leaders of charities, and particularly religious organizations, to be familiar with the rules for participation in elections by exempt organizations.

Read the full GT Alert, “Section 501(c)(3) Organization Prohibited Political Activities.”

Uncertainty, COVID-19, and Estate Planning: A Unique Opportunity to Plan

Posted in coronavirus, COVID-19, Estate, Estate Planning, Real Estate

The Coronavirus Disease 2019 (COVID-19) pandemic has created personal uncertainty for many due to living in quarantine and apart from extended family members, and financial stress due to market volatility and the unclear future for some businesses. Yet, it may be a sensible time to engage in estate planning, not only because the pandemic has shown the importance of personal planning, but also because reduced asset values and historically low interest rates enhance the ability to engage in cost-effective wealth transfers.

This GT Alert provides a brief overview of estate planning measures that may be considered in the current environment.

Read the full GT Alert: “Uncertainty COVID-19 and Estate Planning A Unique Opportunity to Plan.”

Now That I Have My Paycheck Protection Program Money, What Can I Do with It?

Posted in coronavirus, COVID, COVID-19, Labor & Employment, Tax Planning

Q. Assuming I properly received PPP funds, what can I spend it on?

 A. The allowable uses of PPP loan funds are as follows:

  • 75% of the PPP loan funds must be used for payroll costs for U.S. resident employees (salaries are capped at $100,000 per employee),
  • The remaining 25% may be spent on:
    • Costs related to the continuation of group health care benefits during periods of paid sick, medical or family leave (other than qualified family or sick leave wages for which a credit is allowed under Sections 7001 or 7003 of the Families First Coronavirus Response Act), and insurance premiums
    • Payment of interest on any mortgage obligation (but not on any prepayment of principal)
    • Rent
    • Utilities
    • Interest on any other debt incurred before Feb. 15, 2020

Read the full GT Alert: “Now That I Have My Paycheck Protection Program Money, What Can I Do with It?

IRS Provides Procedural Relief to Real Estate Businesses with Respect to Their Interest Deduction Limitation

Posted in coronavirus, COVID, IRS, Tax Cuts and Jobs Act, Taxpayers

Under the Tax Cuts and Jobs Act of 2017, the new Section 163(j) generally limits a taxpayer’s deduction of any business interest expense to 30% of the taxpayer’s adjusted taxable income (ATI) plus the taxpayer’s business interest income. However, certain real estate and farming businesses are permitted to make an irrevocable election to avoid the application of the Section 163(j) limitation. The trade-off is that if a taxpayer makes an election, the taxpayer is required to use the Alternative Depreciation System (ADS) cost-recovery lives for non-residential real property, residential rental property, and qualified improvement property. In addition to the longer cost-recovery lives, a taxpayer cannot claim bonus depreciation on any assets depreciated under the ADS method.

Read the full GT Alert here: “IRS Provides Procedural Relief to Real Estate Businesses with Respect to Their Interest Deduction Limitation.”

U.S. Federal Tax Changes in Response to Coronavirus Disease 2019

Posted in coronavirus, COVID-19, IRS, tax audits

As part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) that was passed on March 27, 2020, important tax-related provisions were enacted into law relating to individuals, corporations, businesses, retirement plans, and nonprofits. In addition, the Internal Revenue Service (IRS) has issued relief measures regarding filing tax returns, payment of federal taxes, and IRS tax enforcement.

This GT alert summarizes the principal provisions and relief measures:

  • Income and Payroll Tax Changes for Businesses
  • Tax Changes for Individuals, Employee Benefits and Qualified Retirement Funds
  • Postponement of Tax Return Filings and Tax Payments Due Dates
  • IRS Tax Audit and Collections Relief
  • Relevant Tax Provisions from the Nonprofit Perspective

Read the full GT Alert, ” U.S. Federal Tax Changes in Response to Coronavirus Disease 2019.”

Employee Retention Tax Credit for Employers under the CARES Act

Posted in coronavirus, COVID, COVID-19, GT Alert, IRS, Labor & Employment, Tax Planning, Taxpayers

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which was signed into law on March 27, 2020, contains a tax credit to encourage companies to continue paying employees if the business has been closed, or there has been a significant decline in sales due to Coronavirus Disease 2019 (COVID-19). This tax credit is available to a business of any size, although the rules for a business with no more than 100 employees are more flexible. Importantly, the credit is refundable and can be monetized quickly after the payroll is paid.

This provision allows a 50% refundable tax credit for wages paid to employees of businesses that have been closed due to governmental order or that have encountered a significant decline in gross receipts. The tax credit is capped at $5,000 for each employee, so there would be no credit allowed after the first $10,000 in wages eligible for the credit have been paid. The eligibility rules vary depending on the number of workers. The credit may be applied to a company that conducts a trade or business for wages paid after March 12, 2020, and before Jan. 1, 2021, if the requirements are satisfied.

Read the full GT Alert, “Employee Retention Tax Credit for Employers under the CARES Act.”

Tax Credit for Emergency Sick Leave and Family Leave Paid by Employers Under the Families First Coronavirus Response Act

Posted in coronavirus, COVID-19, Labor & Employment, Tax Planning

The Families First Coronavirus Response Act (FFCRA), which has been signed into law, requires companies that employ less than 500 employees to pay 80 hours of sick leave and up to 12 weeks of family leave for employees who are required to stay home because of six specific Coronavirus Disease 2019 (COVID-19)-related reasons. This March 20 GT Alert details a company’s requirements to pay the emergency sick leave and family leave to employees. The FFCRA also provides a 100% tax credit to a company for these sick and family leave payments to employees, so that there should be no net cost in making these payments.

Read the full GT Alert: “Tax Credit for Emergency Sick Leave and Family Leave Paid by Employers Under the Families First Coronavirus Response Act.”

GT ALERT – States Revise 2019 Tax Filing Deadlines

Posted in coronavirus, COVID, COVID-19, States Revise 2019 Tax Filing Deadlines, Taxpayers

The Internal Revenue Service (IRS) has extended the filing date for 2019 tax returns from April 15 to July 15.  Several states also have extended filing deadlines and payment due dates for 2019 tax returns because of the Coronavirus Disease 2019 (COVID-19) pandemic.

To read the full alert, click here.

GT ALERT – COVID-19’s Impact on California Property Tax Deadlines and Planning Considerations

Posted in California, California Property Tax Deadlines and Planning Considerations, COVID, COVID-19, Property Tax

The Coronavirus Disease 2019 (COVID-19) crisis has raised questions and concerns about upcoming property tax payment and reporting deadlines in California and whether taxpayers may be entitled to any relief due to a decline in property values. The discussion below addresses these issues.

April 10 Property Tax Payment Deadline

California state legislators, the state controller, the California Association of County Treasurers and Tax Collectors, and various county tax collectors have recently issued statements regarding the impact of the COVID-19 crisis on the April 10 property tax payment deadline.

To read the full alert, click here.

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