Archive for Blake Christian

Five Myths About The Opportunity Zone Program

Blake Christian Opportunity Zone Program

Due to the newness and uniqueness of the Opportunity Zone (OZ) Program and the voluminous OZ regulations, there is a fair amount of inaccurate information floating around in the business community.  Following is a non-exhaustive list of some of the more common misconceptions about this powerful federal tax program.  More details on the program can be found at https://www.hcvt.com/services-Federal-Qualified-Opportunity-Zone.html.

1) Only taxpayers with long-term capital gains can participate in the OZ Program.

False: Short-term capital gains and net §1231 (trade or business asset) gains, §1250 building depreciation recapture, capital gain dividend distributions, and a portion of certain “straddle” transactions can also qualify for Opportunity Zone (OZ) reinvestment. Unlike Internal Revenue Code (IRC) §1031 transactions, the OZ program can be used for real estate, tangible personal assets, bitcoin, art, collector cars, business sales, intangibles, and stocks.

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Is Your Business Still the Right Entity Under the New Tax Rule? Part 2

Blake Christian 2

More tips about determining the right corporate, partnership or other structure that’s best for your business—and where you are in life. Key Takeaways:

  • The legal structure of your business operations can have a significant impact on your annual income tax and estate planning.
  • When you and/or your heirs expect to be at or near the maximum income tax rates, you will generally want to leave appreciated and appreciating assets in the taxable estate, rather than transfer them prior to death.
  • In general, assets with the potential to appreciate in value should not be placed into an S or C Corporation.

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Written by | Posted in Blake Christian • Business Entity Selection

Is Your Business Still the Right Entity Under the New Tax Rule? Part 1

Blake Christian

What you need to know about corporations, partnerships and other structures under which you do business

Key Takeaways:

  • There are six widely used business operating structures. Each has pros and cons depending on the owner’s income and estate planning options.
  • Choosing the right legal form for your business is critical for both legal and tax purposes
  • The Tax Cuts and Jobs Act of 2017 (2017 Tax Act) made significant changes that should be factored into your entity choice.

As many of you know, The 2017 Tax Act made significant changes to the tax code. Most significantly individual tax rates have dropped and now cap out at 37 percent (vs. prior 39.6 percent). Here are some of the other highlights:

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Request These Informative Articles From A Leading Tax Expert On The Federal Opportunity Zone Program

CIRCLE IRS OPPORTUNITY ZONES

TaxConnections is fortunate to have tax expert Blake Christian as a member of our platform. Given my expertise searching for tax experts for corporations worldwide, I can assure you Blake Christian is a leading tax expert on the new Opportunity Zone Program. He advises multinational corporations and he is sought out frequently by tax firms all over the country who consult with him.

Take this opportunity to receive a copy of all of his educational articles on the topic of the Federal Opportunity Zone Program. Whether you are a tax executive with a multinational corporation, a Tax Partner with a firm, or a CFO, you will learn how to utilize these extraordinary tax incentives to save your organization significant tax dollars.

Register Here To Receive Valuable Information On

The Federal Opportunity Zone Program

  1. Which Gains Are Eligible?
  2. Qualified Opportunity Fund Requirement
  3. Tax Basis Adjustments/Gain Reporting Exemptions
  4. Legal Form Of Qualified Zone Fund
  5. Percentage of Qualified Property Test/Penalty
  6. Ineligible Business Types
  7. State Tax Complexities
  8. Real Estate “Original Use” Rehab Requirements
  9. Who Should And Should Not Invest In A QOF?
  10. Hiring Tax Credits – 8500 Tax Incentive Zones
  11. 5 Myths About The Opportunity Zone Program
  12. 5 Ways To Leverage The Opportunity Zone Program
  13. Opportunity Zone Participation Window
  14. Open Issues On Opportunity Zones
  15. Investment Diversification And Tax Savings

 

Written by | Posted in Blake Christian • Opportunity Zone Program

Opportunity Zone Participation Window Expires June 28, 2019 For Those Who Want To Participate For 2018 Capital Gains

Blake Christian On Opportunity Zones

Taxpayers wishing to participate for any calendar 2018 capital gains must act quickly.

The Opportunity Zone (OZ) Program, ushered in as part of the 2017 Federal Tax Cut & Jobs Act, includes one of the most powerful and flexible tax planning provisions in decades.  The Program allows taxpayers who are generating capital gains from real estate sales, stock sales, artwork, Bitcoin, vehicles, intangibles and most other assets to roll over all or a portion of the gain into a Qualified Opportunity Fund (QOF) and achieve the following benefits:

  • Defer reporting the initial tax gain until December 2026.
  • Earn a 10% tax basis increase in their QOF investment in Year Five and another 5% increase in Year Seven – resulting in a permanent tax reduction.
  • Most importantly, gains accruing after the investment into the QOF will be 100% tax-free upon sale if the investment is held for at least 10 years.

The challenge for many is to roll those gains within 180 days from when the tax gain is reportable. As a result, action must be taken no later than June 28th, 2019 to participate in the OZ Program for any eligible calendar 2018 tax gains.

 Two important ways to participate while window of Opportunity is still open

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Written by | Posted in Opportunity Zone Tax Incentive

5 Ways To Leverage The Opportunity Zone Program – What You Will Be Happy To Learn About The OZ Program

Blake Christian On OZ Program

The Opportunity Zone (OZ) Program has been around for almost 18 months now but as a result of complexities and open issues on exactly how taxpayers would participate and benefit, the program is now getting national traction and investment dollars. The OZ Program is the most powerful investment and diversification and economic development tool I have seen in four decades of tax consulting.

The OZ Program borrows elements from other long-standing tax provisions –

-Internal Revenue Code Section(IRC) 1031(Like Kind Exchange) which allows taxpayers to defer taxes on properly structured real estate swaps,

-Roth 401K’s/IRAs which allow taxpayers to build-up tax-exempt income after holding the Roth Account for at least five years, and

-The Federal New Market Tax Credit Program

In summary, the OZ Program allows taxpayers to rol over all or a portion of capital gains (long or short-term) income into a Qualified Opportunity Fund (QOF). The invested funds can then be deployed into real estate or an active business located in one of the 8,700 qualifying census tracts throughout the U.S. and U.S. territories. Following these steps allows the taxpayer to defer the tax on their original capital gain until December 2026. Depending on when the taxpayer rolls their gain, they may also be eligible for a reduction in their reportable gain of 10% to 15%.

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Five Myths About The Opportunity Zone Program

Blake Christian Opportunity Zones

Due to the newness and uniqueness of the Opportunity Zone (OZ) Program and the voluminous OZ regulations, there is a fair amount of inaccurate information floating around in the business community.  Following is a non-exhaustive list of some of the more common misconceptions about this powerful federal tax program.  Note that June 28th is the deadline for setting up a Qualified Opportunity Fund (QOF) and investing cash or property from most calendar 2018 capital gains.  More details on the program can be found at:

https://www.hcvt.com/services-Federal-Qualified-Opportunity-Zone.html

  1. Only taxpayers with long-term capital gains can participate in the OZ Program.
  • False: Short-term capital gains and net §1231 (trade or business asset) gains, § 1250 building depreciation recapture, capital gain dividend distributions, and a portion of certain “straddle” transactions can also qualify for Opportunity Zone (OZ) reinvestment. Unlike Internal Revenue Code (IRC) §1031 transactions, the OZ program can be used for real estate, tangible personal assets, bitcoin, art, collector cars, business sales, intangibles and stocks.

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Written by | Posted in Opportunity Zone

Over 8500 Tax Incentive Zones Throughout The U.S. Allow Employers To Claim Percentage Of Credits For Wages

Blake Christian - Tax Credits And Incentives
Hiring Tax Credits

An abundance of Federal and California hiring tax credits can offset your tax liability on a dollar-for-dollar basis.

Is your business potentially missing out on significant tax refunds which can offer you enhanced cash flow and a competitive advantage? Numerous federal and state tax hiring tax credits and incentives can offset your tax liability on a dollar-for-dollar basis. Any missed credits for past years can be secured via amended returns for at least the past three years, and to the extent the credits cannot be used in the prior or current year, liberal carryover rules generally apply. Federal and California hiring tax credits are abundant and should never be overlooked by those who have the potential to take advantage of them.

The significance of hiring tax credits is especially true for businesses when hiring employees. There are over 8,500 tax incentive zones throughout the country which generally allow employers to claim credits for a percentage of wages paid to employees meeting certain criteria at the time of hire. Which hiring tax credit and other incentive programs you qualify for.

Hiring Tax Credits Available to You

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Written by | Posted in Federal Work Opportunity Tax Credit • Tax Incentive Zones

Federal And California Hiring Tax Credits Offsets Tax Liability

Blake Christian - Federal And State Tax Credits

An abundance of Federal and California hiring tax credits can offset your tax liability on a dollar-for-dollar basis.

Is your business potentially missing out on significant tax refunds which can offer you enhanced cash flow and a competitive advantage? Numerous federal and state tax hiring tax credits and incentives can offset your tax liability on a dollar-for-dollar basis. Any missed credits for past years can be secured via amended returns for at least the past three years, and to the extent the credits cannot be used in the prior or current year, liberal carryover rules generally apply. Federal and California hiring tax credits are abundant and should never be overlooked by those who have the potential to take advantage of them.

Contact The Tax Credit Specialist to claim your savings.

The significance of hiring tax credits is especially true for businesses when hiring employees. There are over 8,500 tax incentive zones throughout the country which generally allow employers to claim credits for a percentage of wages paid to employees meeting certain criteria at the time of hire. Blake Christian, CPA is a nationally recognized expert in the field of specialized tax incentives and can help you understand which hiring tax credit and other incentive programs you qualify for.

Hiring Tax Credits Available to You

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Written by | Posted in Federal And State Tax Credits

Opportunity Zone Executive Summary: Investment Diversification And Tax Savings Tool

Blake Christian Executive Summary On Opportunity Zones

The Tax Cut and Jobs Act created the federal Qualified Opportunity Zone (QOZ) program that became effective in 2018 and will be operative for up to the next three decades.  Effective January 1, 2018, through December 31, 2026, individuals, C and S Corporations, REIT’s, partnerships and other pass-through entities can sell their appreciated capital assets and elect to reinvest the resulting capital gain income into a Qualified Opportunity Funds (QOF), in order to defer the tax on those gains for up to eight years and permanently exempt up to 15% of the original federal gain and 100% of the post-reinvestment gain.  California has indicated they will not be conforming to the federal rules, while Utah likely will, and investors must carefully evaluate the state impact of any reinvestment.

The QOZ program offers flexible tax savings and diversification tool for taxpayers generating larger gains. To participate in the QOZ program, the taxpayer must roll all or a portion of their short-term or long-term capital gain into a QOF within 180 days of the recognition date of the gain. The QOF must then timely invest the deferred gains into undeveloped or developed real estate, a new or existing QOZ-based business, or other qualified QOZ property.

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Opportunity Zone Program – Federal Qualified Opportunity Zones

A Tax Deferral Tool

The 2017 Tax Cuts and Jobs Act (P.L. 115-97) introduced the Qualified Opportunity Zone (“QOZ”) program under I.R.C. Section 1400Z-1 and 1400Z-2. The QOZ program is an economic development platform intended to encourage private investment into low-income communities throughout the United States and U.S. territories and is generally effective January 1, 2018, through December 31, 2026.

Federal Tax Deferral

The QOZ gives taxpayers a federal tax deferral (as well as a potential partial permanent tax savings) of realized capital gains on the sale of appreciated assets. The taxpayer will still need to recognize the ordinary gain portion on the initial sale, but can effectively defer the portion of the gain subject to 20% or 23.8% capital gains tax, depending on the taxpayer’s specific facts and circumstance. For example, taxpayers will experience different marginal rates depending if the original investment was active, passive, or investment portfolio activity. Note that further guidance from the Internal Revenue Service (“IRS”) is required in this area.

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Top 10 Things You Need To Know About The Federal Opportunity Zone Program

Blake Christian - Top Ten Things You Need To Know

This post discusses the top ten things you need to know about the Federal Opportunity Zone Program.

1. Which Gains Are Eligible? – The Deferred Tax Gain can be related to a wide variety of capital assets sold by the investor, ranging from: the sale or disposition of land, developed real estate, stock or bond portfolios, artwork, collectibles, Bitcoin or other cryptocurrencies, as well as other tangible and intangible assets.  The Deferred Tax Gain must be reinvested into a Qualified Opportunity Zone Fund (QOF) within 180 days of recognizing the tax gain on sale (note there are beneficial timing rules for gains reportable from a partnership). Timely reinvestment will generally allow deferred gain reporting until the earlier of December 31, 2026, or the date the QOF is sold.

2. Qualified Opportunity Fund Requirement -Taxpayers wishing to participate in the QOZ program must do so through a QOF.  The statute provides a fairly straightforward process to meet the QOF requirements.  The entity must be either: i) a C Corporation, ii) an S Corporation or iii) a Partnership (including an LLC electing to be taxed as a partnership).  A QOF can represent a single investor or multiple investors.
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Written by | Posted in Federal Opportunity Zone Program
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