In order for an institution to have a smooth CECL implementation, it is important that they are either in the “Scenarios & Modeling” phase (or beyond) or are taking the proper steps to soon be in this phase.
On July 13, 2018, the IRS announced in Notice 2018-61 that the Service will issue regulations confirming that estates and non-grantor trusts will continue to be allowed to deduct expenses that are unique to the administration of an estate or non-grantor trust. The Tax Cuts and Jobs Act (TCJA) of 2017 had created confusion over whether such expenses would be deductible given the changes the Act made to the deductibility of certain expenses by individuals.
When a taxpayer generates a loss, it generally either offsets other sources of income and therefore reduces the amount of tax that otherwise would be paid, or may even produce a net loss that in some instances can generate a refund of taxes previously collected.
On June 21, 2018, the Supreme Court of the United States handed down a historic decision in the sales and use tax nexus case South Dakota v. Wayfair, Inc. The ruling overturns historical requirements upheld in previous cases that called for the existence of a true “physical presence” before a state could impose sales and use tax collection obligations on a taxpayer.
One of the features in December’s Tax Cuts and Jobs Act (“TCJA”) that gathered the most attention and disagreement was a section that capped the deductibility of state and local taxes at $10,000. Almost immediately, some new state and local tax arrangements began cropping up that seemed designed to offer taxpayers the ability to circumvent this new TCJA limitation.
While most of the provisions in the Tax Cuts and Jobs Act of 2017 (the Act) passed by Congress in December of 2017 focus on for-profit entities and individuals, there were a handful of provisions that will directly impact tax-exempt organizations. As with many of the aspects of the Act that pertain to for-profit entities and individuals, tax-exempt organizations were not short on questions after reading through the Act.
One of the most wide-reaching features of December’s Tax Cuts and Jobs Act is the entirely new deduction under Internal Revenue Code Sec. 199A that provides a deduction equal to 20% of certain “pass-through” business income. However, as welcome as the new rule was, Congress rolled out ill-defined terminology and computational ambiguities that left even the most experienced practitioners with numerous questions. This was especially frustrating, because the concept itself of this new deduction is straightforward.