Eye On Housing
Each year, the IRS releases tax return statistics for returns filed for the prior tax year. Data is released throughout the year as more returns are processed and represent tax return information that has been gathered through late-May, mid-July, and mid-November. Although these numbers are not as thorough as the Statistics on Income tables, unlike those tables, filing season data… Read More ›
The Internal Revenue Service recently released revenue ruling 2020-4 which instructs taxpayers how to calculate Low-Income Housing Tax Credit (LIHTC) income limits should they choose to use the income averaging minimum set-aside test to meet LIHTC eligibility and compliance requirements. This test was created by the Consolidated Appropriations Act of 2018 (the 2018 Act) to complement the existing tests established… Read More ›
The Tax Cuts and Jobs Act (TCJA), signed into law in late 2017, created a new section of the tax code—199A. Section 199A provides a 20% deduction for “qualified business income” generated by pass-thru entities such as LLCs, partnerships, and S-corporations. The law went a long way to help small business owners compete, but left a bevy of unanswered questions…. Read More ›
As tax reform negotiations pressed forward last year, there were high hopes that the dreaded individual alternative minimum tax (AMT) would be repealed. While the corporate AMT was abolished permanently, unfortunately, the individual AMT still exists under the Tax Cuts and Jobs Act (TCJA). However, the AMT rules are now more taxpayer-friendly, and other changes to the tax code reduce… Read More ›
The Tax Cuts and Jobs Act (TCJA) added numerous temporary provisions to the tax code. Temporary tax law can be difficult to track and compliance can be expensive. Earlier this year, the Joint Committee on Taxation released a guide to expiring tax provisions, sorted by year of expiration. The table below shows how many items in the tax code will… Read More ›
Before the Tax Cuts and Jobs Act (TCJA) went into effect, a business’s net operating losses (NOLs) could generally be carried back two years and carried forward 20 years to offset taxable income. Tax reform, however, repealed the two-year carryback allowance and other special carryback provisions for losses arising in tax years beginning after Dec. 31, 2017. The TCJA also… Read More ›
Ever since the inception of the U.S. income tax in 1913, home owners have been able to deduct interest paid on home equity loans (HELOCs). The Omnibus Budget Reconciliation Act of 1987 limited the mortgage interest and HELOC deductions to interest paid on $1,000,000 and $100,000 of debt, respectively. Then came the Tax Cuts and Jobs Act of 2017 (TCJA)…. Read More ›
The business interest deduction has been a staple of the tax code for over a century. Deducting interest is important in home building, as debt is a critical financing tool and access to equity markets is challenging for the majority of home builders. The new tax law alters the business interest deduction (BID) by placing a cap on the amount… Read More ›
The prior two Tax Reform Toolkit posts have explained the new 20 percent pass-thru deduction (i.e. 199A) as it applies to pass-thru owners with: Less than $315,000 (married filer) or $157,500 (single) of taxable income, or More than $415,000 (married) or $207,500 (single) of taxable income. In the case of (1), the pass-thru deduction (A) is generally equal to 20… Read More ›
Eye on Housing’s first Tax Reform Toolkit post explained the basics of the new 20% deduction for pass-thru income (i.e. the 199A deduction). That article focused on how the deduction works for a taxpayer who has less than $315,000 of taxable income if married and filing jointly ($157,500 if single). In general, these taxpayers may deduct 20 percent of their… Read More ›