Business Entertainment Deductions Reduced – By John R. Bullis

Kim Pilant John's Articles

Effective Jan. 1, 2018, the new Tax Cuts and Jobs Act reduced business expense deductions for many types of business entertainment activities to zero. Now, business meals associated with entertainment with clients or prospects are not deductible. Some of the business meals you used to build your business, get new clients or meet with prospective customers are no longer an …

Big Change on Alimony Beginning in 2019 – John R. Bullis

Kim Pilant John's Articles

The new tax law, 2017 Tax Cuts and Jobs Act, changes tax treatment of Alimony beginning in 2019. For divorce or separation agreements signed AFTER Dec. 31, 2018, the person paying alimony will no longer get an income tax deduction and the person receiving alimony payments will not have taxable income. For divorce or separation agreements that were done before …

Amending Partnership Agreements – By John R. Bullis, CPA

Kim Pilant John's Articles

David Bruner and Eneas Kaner were equal partners in a partnership in Arizona. They had an original partnership agreement that had been amended five times over the years. In 2011 and 2012 the partnership paid large amounts to a defined benefit pension plan with 92% of the 2011 contribution and 100% of the 2012 contribution allocated to Mr. Bruner. IRS …

A Once in a Life-Time Opportunity – By Kelly J. Bullis, CPA

Kim Pilant Kelly's Articles

Having now lived over 60 years on this good earth, aside from college, all of them in Carson City/Douglas County, I have never seen such a perfect storm of broad economic growth for a long period like we are now all facing. The infrastructure challenges, such as roads, highways, water, sewer, broadband, schools, shopping, medical care, etc. alone are daunting. …

Tally Sticks – Early Internal Controls – By John R. Bullis

Kim Pilant John's Articles

Internal Controls are a process to provide reasonable assurance on the efficiency and effectiveness of business operations as well as giving reliability of financial reporting and compliance with various laws. All publicly traded companies have internal control requirements since 2002 when the Sarbanes-Oxley Act was passed by Congress. The beginning of double-entry bookkeeping is thought to originated by Luca Pacioli …

Choose Your Business Entity Carefully – By John R. Bullis

Kim Pilant John's Articles

Paul and Irvin Barnhart (brothers) claimed their “C” corporation (separate entity that pays its own taxes) was only their agent and losses in 2010, 2011 and 2012 were deductible on their individual returns, not the corporation returns. IRS disagreed. IRS disallowed the individual return losses and assessed accuracy-related penalties. The Tax Court held a trial and decided IRS was correct. …

What is “Step up in Tax Basis”? – By John R. Bullis

Kim Pilant John's Articles

A special tax benefit to save future income taxes is known as the “Step Up in Tax Basis”. This happens when someone dies and leaves stocks, bonds, personal property and real estate to the heirs. For example, suppose Joe bought a stock for $ 1,000 years ago and still has it when he dies. If the fair market value of …

Innocent Spouse Relief is not Always Granted – By John R. Bullis

Kim Pilant Uncategorized

Mindy Lessard was married to Mr. Tomko in 2013 and they filed a joint tax return. However, two items of income were not reported on the return. There was $14,936 of cancellation of debt income that was his and $20,502 of distributions to him from his retirement plan. They were divorced in 2014. It seems they did not live in …

IRS Math Error Notices are not Audits – By John R. Bullis

Kim Pilant John's Articles

IRS uses several computer programs to screen all tax returns and check for math or clerical errors. If you receive a notice, respond within 60 days or IRS will assume you agree with the notice. A math error notice is not an audit. The notice does not usually mean you owe more taxes. IRS may need additional information. Perhaps a …

Computing New Tax Law Business Deductions – By Kelly J. Bullis

Kim Pilant Kelly's Articles

The New Tax Law officially known as “Tax Cuts and Jobs Act of 2017” has a section in there for non-C Corporations to deduct up to 20% of their “qualified business income.” In the CPA universe, we are now affectionately referring to that as the “Section 199A deduction.” In my simple world, there would be one tax rate applied to …