Category Archives: Year-End Tax Planning

BY Jessica M. Blanchette
Commercial tenants: Remember that extensive and wholly uninteresting document entitled “lease agreement” that you scanned, signed, then shoved into a file folder and never thought of again?
Well, it’s making a comeback.
If you are one of the many businesses struggling to pay your rent due to the economic effects of the COVID-19 pandemic, your lease agreement should be one of the first resources to which you turn for guidance.
Like all contracts, commercial leases typically include the standard who, what, where, when, and why provisions of an agreement between a landlord and tenant. But they generally go beyond that as well and many leases, especially long-term ones, also contain lengthy provisions outlining the rights, obligations, and, perhaps most importantly, protections for both landlords and tenants.

By John Flory III
It is time for businesses to play offense against cyber criminals: For the last 200 days the business world has faced unimaginable challenges. These challenges have forced us to stray from our comfort zone, modify our existing tried and true policies as we fought to survive. Going forward we have to anticipate the unexpected and be prepared for anything.
The strength of the American Economy comes from the resilient nature of its’ businesses. Solving for these challenges just makes them stronger.
The speed at which a “work from home” adaptation occurred and the laxing of policies to account for the transition, while closing the doors, has opened an enormous number of windows. While we have been learning how to be “operable”, cyber criminals have been ramping up their capabilities to exploit this new opportunity exposed to them. Where email phishing is still the primary way criminals are stealing from us, their tactics are changing, and we need to take an offensive approach to defending our livelihoods and our homes.

By Scott D. Shimick

As part of the 2017 Tax Cuts and Jobs Act, Congress added Sections 1400Z-1 and 1400Z-2 to the Internal Revenue Code, creating the Qualified Opportunity Zone tax benefits. Owing in part to confusion over the provisions, the Qualified Opportunity Zone tax benefits have not been as widely publicized and discussed as most of the other provisions of the TCJA. 

However, the IRS has recently issued proposed regulations and a Revenue Ruling that have brought clarity and interest to the Qualified Opportunity Zones.

Qualified opportunity zone benefits.

Congress’s purpose in creating the Qualified Opportunity Zone tax incentives was to promote private sector investment in economically distressed communities. Investors in the opportunity zones are eligible for the deferral of capital gains and possible reductions in total tax liability.

Investors in a Qualified Opportunity Zone Fund (QOZ Fund) can defer an unlimited amount of their capital gains. This deferral allows the investor to push back the recognition of capital gains to the earlier of (1) Dec. 31, 2026 and (2) the sale or exchange of the QOZ Fund investment.

By Jill Nagy

Sit still. Hold tight. Don’t panic. That sums up the advice of some financial advisors to investors feeling a bit seasick in a volatile market. 

From 1980 to the late October 2018 market drop, there have been 36 corrections in which the market fell 10 percent or more, said Jeff Vahanian of Vahanian & Associates in Saratoga Springs. In each case, the market recovered and continued moving upward.

The worst thing an investor can do is to sell when the market drops and then miss the upswing that is likely to follow, he said. 

Tim Pehl of Luther Forest Wealth Advisors agreed. 

“We try to keep our clients on the straight and narrow,” Pehl said. His advice to nervous clients: “Stick to your plan.”

 “People with good rules, good discipline, and good habits do well,” noted Vahanian.

By Stephen Kyne

The end of another year is rapidly approaching, and just as you cross items off your checklist and prepare your home for the winter, it’s also important to complete maintenance items to prepare your finances to close-out 2018.

An often-overlooked task is to review your beneficiary declarations each year. Families grow, as new members are added, and shrink with death and divorce, which means that beneficiary and transfer-on-death declarations can easily become outdated and no longer reflect your true wishes. 

Since these declarations are a matter of contract, they will overrule what your will may say. So, even if you’ve updated your will to exclude an ex-spouse, but you left them as beneficiary on your IRA, your new spouse won’t be able to inherit those assets, but the ex will, and it can’t be challenged in probate. 

Another piece of financial housekeeping is to begin to gather documents you’ll be needing just after the new year to prepare your taxes. Compile receipts for medical bills, tuition payments, child care and charitable contributions, among others.

Frank C. Mayer

On Dec. 22, 2017, President Trump signed into law the Tax Cuts and Jobs Act. The Act has effectively reduced the acquisition cost of certain capital assets by making significant changes to the rules for bonus depreciation and capital expenditures, commonly known as Internal Revenue Code Section 179 Expensing and certain other depreciation.

Prior to the Act, taxpayers were allowed to deduct 50 percent of the cost of most new tangible personal property and most new computer software in the year that an asset was placed in service. Because of the bonus depreciation deduction allowed in the year an asset was placed in service, there was a corresponding reduction in the amount of regular depreciation allowed in that year and later years.

For qualifying property placed in service after Sept. 27, 2017, and before Jan. 1, 2023, the Act raised the 50 percent bonus depreciation deduction rate to 100 percent.