Employee Benefits Blog

Archives for 2014

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Tax Court Decision Rocks IRA Rollover World

Earlier this year, the United States Tax Court issued a decision which will create significant new potential traps for individuals who take a distribution from an IRA with the intention of escaping tax by rolling it over to another IRA within 60 days.

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Employer Mandate Under Obamacare Is Delayed (Again)

This week, the Internal Revenue Service issued final regulations under the Patient Protection and Affordable Care Act which, among many other things, provide that employers with 50 to 99 full-time employees will not be subject to the Employer Shared Responsibility provisions (a/k/a the “Employer Mandate”) until 2016.  Therefore, they will not be penalized for failure to provide employer health coverage until 2016.  Employers which have reduced their workforces from 100 or more full-time employees will need to certify that they did so for bona fide business reasons, and not in order to qualify for this transition relief.

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IRS Rules That Failure to Attach 83(b) Election to Form 1040 Did Not Invalidate the Election

In Private Letter Ruling 201405008, the Internal Revenue Service recently ruled that a Section 83(b) election was valid in spite of the fact that it was not attached to the taxpayer’s personal tax return for the year of the election.

In general, under Code Section 83(b), taxpayers can elect to be taxed currently on the excess of the value of property that they receive over the amount that they pay for it, even if their interest in the property has not yet vested.  If the property subsequently increases in value, this election can be very valuable by resulting in appreciation being taxed at capital gains rates that might otherwise be taxed as ordinary income.

Posted Under: section 83(b) elections