ITxRe

ITXRE in the spotlight! October 24, 2020 will see our founder and managing partner, Seth Peabody, CPA as a guest speaker at the High Speed Alliance Mastermind Conference. Seth will be the subject matter expert and speak on topics relating to 2021 tax planning. He will later join esteemed colleagues on the Tax Summit Panel for Q&A. Join us in congratulating Seth for this honor. ITXRE doing what it does best: Planning For The Future... #taxplanning #business #cpafirm #networking

The more you know, the better. Convertible Virtual Currency Taxed as Ordinary and Self Employment Income: In a recent Chief Counsel Advice (CCA), a taxpayer received virtual currency in exchange for performing a microtask through a crowdsourcing platform. (A microtask is generally a simple activity that requires some degree of human interaction beyond the current ability of artificial intelligence, like downloading apps and leaving positive reviews.) According to the IRS, a ...taxpayer who completes a microtask through a crowdsourcing platform has performed a service for the party that requested the task with the expectation that he or she will receive compensation. If the taxpayer receives convertible virtual currency for performing the task, regardless of the value and the manner in which it is received, he or she has been compensated with property. Therefore, the convertible virtual currency received must be reported on the taxpayer's income tax return as ordinary income and may be subject to self-employment tax. CCA 202035011 . See more

What's New Wednesday: Presidential Memo Deferring Payroll Tax Obligations: In a memo, President Trump has directed the Secretary of the Treasury to use his authority under IRC Sec. 7508A to defer certain payroll tax obligations with respect to certain American workers. The Secretary may defer the withholding, deposit, and payment of the 6.2% Social Security tax imposed under IRC Sec. 3101(a), as well as the 6.2% railroad retirement tax under IRC Sec. 3201 , on wages or compe...nsation paid 9/1/20 through 12/31/20. The deferral shall be made to any employee whose wages or compensation, payable during any biweekly pay period, generally is less than $4,000 (calculated on a pretax basis). Amounts deferred pursuant to the memo shall be deferred without any penalties, interest, additional amount, or addition to the tax. The memo also directs the Secretary to explore avenues, including legislation, to eliminate the obligation to pay the deferred taxes. For more information, see www.whitehouse.gov//memorandum-deferring-payroll-tax-oblig . Copyright 2020 Thomson Reuters/PPC. All rights reserved. See more

SBA Releases New PPP Loan Forgiveness FAQs: In consultation with the Treasury Department, the Small Business Administration (SBA) has released a set of Frequently Asked Questions (FAQs) addressing forgiveness of Paycheck Protection Program (PPP) loans. The FAQs provide guidance on general loan forgiveness, payroll costs, nonpayroll costs, and reductions to a borrower's forgiveness amount. Among other things, the FAQs provide examples on how to calculate the amount of forgiv...able compensation for owners of C corporations, S corporations, self-employed Schedule C (or Schedule F) filers, general partners, and LLC members. In addition, the FAQs clarify that payments of transportation utility fees assessed by state and local governments are eligible for loan forgiveness. According to the SBA, borrowers and lenders may rely on the FAQs. For more information, see www.sba.gov//support-frequently-asked-questions-ppp-loan-f . Copyright 2020 Thomson Reuters/PPC. All rights reserved.

What's New Wednesday: FINALLY! IRS Issues Regulations on Recapture of COVID-19 Employment Tax Credits: The IRS has issued temporary regulations (TD 9904) on reconciling advance payments of refundable employment tax credits under the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security (CARES) Act and recapturing the benefits of those credits when necessary. Specifically, the regulations provide that any credits claimed that ...exceed the amount to which an employer is entitled and that are actually credited or paid by the IRS are considered to be erroneous refunds of the credits. Such refunds are treated as underpayments of the taxes imposed under IRC Sec. 3111(a) or 3221(a) and authorize the IRS to assess any portion of the credits erroneously credited, paid, or refunded in excess of the amount allowed as if those amounts were tax liabilities subject to assessment and administrative collection procedures. The text of the temporary regulations also serves as the text of corresponding proposed regulations (REG-111879-20). News Release IR 2020-169. Copyright 2020 Thomson Reuters/PPC. All rights reserved.

iTxRe SPOTLIGHT: Our founder, Seth Peabody, is an invited speaker on today’s highly regarded virtual panel regarding Advanced Tax Investment Strategies & Structures, hosted by Family Offices. Family Offices are private wealth management advisory firms that serve ultra-high-net-worth (UHNW) investors. They are different from traditional wealth management shops in that they offer a total outsourced solution to managing the financial and investment side of an affluent individua...l or family. Congratulations, Seth!

What’s New Wednesday: CARES Act favorable retirement plan distribution rules. In response to the COVID-19 pandemic, the CARES Act provides for special tax treatment for a "coronavirus-related distribution" from a retirement plan. It provides an exception to the 10% additional tax under for early distributions from qualified retirement plans made to qualified individuals; allows the early distribution to be included in income ratably over 3 years; and provides that the distribution is treated as though it were paid in a direct rollover to an eligible retirement plan if the distribution is eligible for tax-free rollover treatment and is recontributed to an eligible retirement plan within the 3-year period beginning on the day after the date on which the distribution was received.

Here are a few updates for your Thursday: 1. President Trump Signs Paycheck Protection Program Flexibility Act: On 6/5/20, President Trump signed the Paycheck Protection Program Flexibility Act (PPPFA) of 2020 (H.R. 7010), which modifies provisions related to the forgiveness of loans made to small businesses under the PPP. The PPPFA (1) eliminates a CARES Act provision that prevented certain PPP participants from deferring the payment of payroll taxes; (2) requires borrowers... to use at least 60% (rather than the original 75%) of PPP funds on payroll costs; (3) gives borrowers 24 weeks (rather than the original eight weeks) to spend PPP funds; (4) pushes back the original 6/30/20 deadline to rehire workers to 12/31/20; (5) provides additional exceptions if a borrower is unable to rehire the required number of employees; and (6) extends the minimum maturity date of the loan (for proceeds that are not forgiven) to five years. The full legislative text of the bill is available at www.congress.gov/bill/116th-congress/house-bill/7010/text . 2. IRS Proposes Two Methods to Report Partner Tax Basis Capital: The IRS is seeking public comments on a proposed requirement for partnerships to use only one of two alternative methods to report partner tax basis capital accounts for partnership tax years ending on or after 12/31/20. The first method, known as the modified outside basis method , requires a partnership to report each partner's basis in his or her partnership interest, reduced by the partner's allocable share of partnership liabilities (as determined under IRC Sec. 752). The second method, known as the modified previously taxed capital method , requires a partnership to report each partner's share of previously taxed capital, as calculated under a modified version of Reg. 1.743-1(d) . Partner capital accounts would not be permitted to be reported using any other method, including IRC Sec. 704(b) , GAAP, or a transactional approach. Written or electronic comments on the proposed methods must be received by 8/4/20. Notice 2020-43. Copyright 2020 Thomson Reuters/PPC. All rights reserved.

Following the May 15, 2020 updated guidance on the PPP Loan Forgiveness, our team wanted to share a few good articles: 1. Helpful Article To Read https://www.hklaw.com//sba-paycheck-protection-program-loa 2. PPP Loan Forgiveness Application Process https://home.treasury.gov//3245-0407-SBA-Form-3508-PPP-For

We know that you have many questions pertaining to your business, and there are critical decisions to be made. Please know we are here to help and to be a key resource to you! At this time, these are our top recommendations:...Continue reading

Wishing everyone a safe and Merry Christmas!

We just helped a business out of Charlotte, NC defer 4.1 million in taxes. We help clients all over the United States devise tax strategies. Let’s see if we can help you, too.

Income Tax Filing, Planning, & Consulting. Simplified.