Tax & Accounting Blog

Medicare Surtax on Net Investment Income Goes into Effect on January 1, 2013

Medicare Surtax on Net Investment Income Goes into Effect on January 1, 2013

Under the 2010 Health Care reform legislation, a Medicare tax will, for the first time, be applied to investment income beginning in 2013. A new 3.8% tax will be imposed on net investment income of single taxpayers with AGI above $200,000 and joint filers over $250,000. Net investment income is interest, dividends, royalties, rents, gross … Read More

Open Transaction Doctrine does not apply in insurance company demutualization case.

Open Transaction Doctrine does not apply in insurance company demutualization case.

On July 9, 2012, a federal district court in Arizona ruled that the taxpayer could not apply the “open transaction” doctrine in a case involving stock received from an insurance company that demutualized. Background. A mutual insurance company has no shareholders.  Instead, the policyholders have an ownership interest in the company, in addition to having … Read More

Final Regs Clarify Economic Effect Requirement for Estate and Trust Donations

Final Regs Clarify Economic Effect Requirement for Estate and Trust Donations

On April 13, 2012, the IRS issued final regs providing guidance under Code Sec. 642(c) with regard to the federal tax consequences of an ordering provision in a trust, will or local law that attempts to determine the tax character of the amounts paid to a charitable beneficiary. Specifically, the regs confirm that a provision in a … Read More

Estates of Some 2011 Decedents Get More Time to Make Portability Election

Estates of Some 2011 Decedents Get More Time to Make Portability Election

The IRS has issued guidance giving certain estates of married individuals who died during the first six months of 2011 an extension of the deadline to make the portability election to pass the decedent’s unused estate and gift tax exclusion amount to the surviving spouse. Estates qualifying for and taking advantage of the extension will have … Read More

New IRS Form to Report Foreign Assets

New IRS Form to Report Foreign Assets

The IRS recently released a draft of new Form 8938 that requires taxpayers to report on certain foreign financial assets for tax year 2011. This reporting is part of FATCA (Foreign Account Tax Compliance Act), which strives to improve compliance of U.S. taxpayers who have offshore assets. This new IRS filing requirement does not replace the taxpayer’s … Read More

Thomson Reuters Poll: 50% Tax Professionals Have Staffing Worries

Thomson Reuters Poll: 50% Tax Professionals Have Staffing Worries

During his interactive opening session at this year’s ONESOURCE User Conference, Joe Harpaz, senior vice president and general manager of Corporate Income Tax, incorporated real time vote-by-text polling that revealed that from the 1500 tax and accounting professionals in attendance, half felt limited staffing was their biggest challenge. “When budgets and personnel are hard to come by, turning to … Read More