By John G. Hodnette One of the most appealing benefits of working for a university is an educational assistance program. Free or discounted college education is extremely valuable given tuition continues to increase at an average of 8% per year. Whether these benefits are taxed as compensation or excluded from income is vitally important to […]
By John G. Hodnette The maxim “don’t let the tax tail wag the business dog” is often bandied about in the business world. Tax attorneys know, however, there are times, such as in Section 1060 allocations in asset acquisitions, when tax issues are an important part of the business negotiation. Section 1060 applies when a […]
By John G. Hodnette The net operating loss (“NOL”) rules in Section 172 are complex. A revisit every few years is beneficial, particularly given the 2017 Tax Act modified these rules to disallow NOL carrybacks and allow NOL carryforwards indefinitely, with a new limit of 80% of taxable income. While the rules seem simple at […]
By John G. Hodnette The Tax Cuts and Jobs Act of 2017 doubled the unified exemption for the estate, gift, and GST taxes from about $5.6 million to about $11.2 million (adjusted yearly for inflation). This dramatic change means for years after 2017, a married couple can gift during life or pass by their death […]
By John G. Hodnette Amending returns can cause clients and practitioners needless anxiety if they do not fully understand the applicable rules. This short article describes those rules regardless of whether the amended return provides an addition to tax or requests a refund. The first concern is the statute of limitations. Section 6501(a) generally provides […]
By John G. Hodnette “I Love Lucy,” running originally from 1957 to 1960, exists in the collective memory of multiple generations of Americans as one of our most iconic television programs. In fact, in 2012 (52 years after its end-date) it was voted as the “Best TV Show of All Time” in a survey conducted […]
By John G. Hodnette The IRS has a resounding reputation as the tax collecting body to be feared in the United States. It is the North Carolina Department of Revenue (“NCDOR”), however, that should properly be placed on the section of the map marked “Here Be Dragons.” One of the NCDOR’s most effective powers is […]
By Keith A. Wood This is the second of two installments of this article. Read the first installment here. I. Charitable Deduction Fails Where Tax Basis Not Shown on Form 8283. Belair Woods, LLC v. Comm., TC Memo 2018-159, involved a taxpayer who tried to claim a conservation easement deduction under Section 170. Originally, Belair […]
By John G. Hodnette The 2017 Tax Act includes a new deduction for qualifying pass-through entities codified as Section 199A. Taxpayers other than corporations operating a business are generally allowed the deduction, subject to complex limitations, which require thoughtful planning to ensure taxpayers fully benefit. Certain classes of businesses deemed a “specified service trade or […]
By Herman Spence III The IRS recently issued Notice 2019-9 to provide interim guidance on the excise tax on certain executive compensation paid by applicable tax-exempt organizations (“ATEOs”). Under Section 4960 of the new tax law, an ATEO is generally subject to a 21% tax for compensation paid to a covered employee in excess of […]