Archive for Peter J. Scalise

A Legislative Tax Update From Capitol Hill

Tax Advisor - Peter Scalise

On December 18th of 2015, President Obama discussed a Legislative Tax Update on Capitol Hill. He signed into law a sweeping $1.14 trillion dollar funding bill that will keep the federal government operating through September 30th of 2016. In connection to the tax aspects of this comprehensive and pivotal legislation, the Protecting Americans from Tax Hikes Act of 2015 (hereinafter the “PATH Act”) does considerably more than the typical tax-extenders legislation passed in previous years and truly signifies a dynamic paradigm shift as the PATH Act makes permanent over twenty leading tax incentives, including the Research & Development Tax Credit Program, the American Opportunity Tax Credit Program and the enhanced I.R.C. § 179 Expensing Program. The PATH Act further extends other key tax incentives, including the Bonus Depreciation Program and the New Markets Tax Credit Program for five years while reinstating other significant tax incentives for two years. The PATH Act also imposes a two-year suspension on the ACA Medical Device Excise Tax.

The subsequent synopsis will serve as a practical overview of just some of the many far-reaching changes enacted by the PATH Act affecting both business entities and individuals including, but certainly not limited to: Read More

Written by | Posted in Tax Legislation • Tax Policy • Tax Updates

Washington National Tax Alert

TaxConnections Member Peter Scalise

On December 15th of 2015, House Speaker Paul Ryan, R-Wis., announced to the Republican lawmakers during a conference meeting that negotiators have reached an agreement in principle on a tax-extenders package worth approximately $800 billion. In addition, an agreement was also reached that would fund the federal government through September 30th of 2016. The bills are expected to arrive on the House floor as early as December 17th with the Senate consideration expected before Congress adjourns for recess.

As a synopsis, the proposed tax-extenders package called for making permanent a number of tax extenders equally split 50-50 between business entities and individuals. Under the proposal, the tax-extenders package would make permanent the Research and Development Tax Credit Program; I.R.C. § 179 Read More

Written by | Posted in R&D Credit Services • Tax Provision/Tax Reporting

The Service Issues New Administrative Authority Governing TPR De Minimis Safe Harbor Limits for Small Businesses

On November 24th of 2015, the Internal Revenue Service (hereinafter the “Service”) streamlined the compliance for the Tangible Property Regulations (hereinafter “TPR”) for small businesses by increasing the safe harbor threshold for deducting certain capital items from $ 500 to $ 2,500 under IRS Notice 2015-82. The scope affects businesses that do not maintain an Applicable Financial Statement (hereinafter “AFS”) such as an audited financial statement. It applies to amounts spent to acquire, produce or improve tangible property that would normally qualify as a capital item.

The new $2,500 threshold applies to any such item that is substantiated by an invoice. As a result, small businesses will be able to immediately deduct expenditures that would otherwise need to be spread over a period of years through annual depreciation deductions. The new $2,500 threshold takes effect starting with tax year 2016. Read More

Written by | Posted in IRS • Tax Deductions • TPR Compliance • Treasury Regulations

The Service Issues New Administrative Authority Governing Tangible Property Regulations Compliance

On November 20, 2015, the Internal Revenue Service (hereinafter the “Service”) issued new administrative authority governing the Tangible Property Regulations (hereinafter “TPR”) in connection to the safe harbor rules for the retail and restaurant industries. More specifically, the newly released Revenue Procedure 2015-56 (hereinafter “Rev. Proc. 2015-56) provides a safe harbor method of accounting for taxpayers engaged in the trade or business of operating either a retail establishment or a restaurant for purposes of determining whether expenditures paid or incurred to remodel or refresh a qualified building are:

• Deductible pursuant to I.R.C. § 162(a);

• Requires capitalization treatment as an improvement pursuant to I.R.C. § 263(a); or Read More

Written by | Posted in IRS

A Spotlight on Movie Production Tax Incentives

Introduction

Whether you’re a publicly held movie studio conglomerate producing and distributing substantial numbers of films annually commanding significant shares of box office revenues worldwide or an independent filmmaker, movie production tax incentives should certainly be considered and incorporated into the tax planning process to properly tax effect the cost of filmmaking.

Synopsis of Movie Production Tax Incentives

Movie Production Tax Incentives (hereinafter “MPIs”) are tax benefits offered on a state-by-state basis throughout the United States to entice, as applicable, in-state qualified phases of Read More

Written by | Posted in Specialty Tax Incentives

Optimizing Energy Tax Incentives To Properly Tax Effect Building Owners Expenditures For Renovations

Whether a commercial building owner is undergoing new construction or remodeling, energy tax incentives should certainly be utilized to essentially tax effect the commercial building owner’s expenditures for undergoing the energy efficient renovation project.

As enacted in The Energy Policy Act of 2005 (hereinafter “EPAct”), the I.R.C. § 179D Energy Tax Deduction for building envelope efficiency encourages building owners to “Build Green” to not only save money by reducing their utility bills on a carry-forward basis, but to also reduce their tax liability on their tax returns as well.

As a synopsis of I.R.C. § 179D, commercial building owners can take a federal-level tax deduction of up to $1.80 per square foot of the building’s envelope if they install property Read More

Written by | Posted in Specialty Tax Incentives

Optimizing Preservation Tax Incentives to Properly Tax Effect Building Owners Expenditures for Renovations

The Historic Preservation Tax Incentives Program, jointly administered by the National Park Service and the State Historic Preservation Offices, is the nation’s most effective Federal-level program to promote both urban and rural revitalization and to encourage private investment in rehabilitating historic buildings. These preservation tax incentives apply explicitly to preserving income-producing historic property and have generated billions of dollars in historic and rehabilitation preservation activity since the program’s commencement in 1976.

There are two categories of preservation tax credits as outlined below:

• Pursuant to I.R.C. § 47(a)(1), the Rehabilitation Tax Credit offers a 10% tax credit Read More

Written by | Posted in Specialty Tax Incentives

Construction Tax Planning: A Proactive Approach to Accelerated Depreciation Planning

A properly designed and implemented Construction Tax Planning engagement will proactively identify additional tax savings related to new and / or planned construction projects. It should be duly noted that a Construction Tax Planning engagement should not be confused with a Cost Segregation engagement. As a reminder, there are several noteworthy differences between a Cost Segregation Engagement and a Construction Tax Planning Engagement.

A Cost Segregation Engagement will methodically review property, plant and equipment and properly reclassify real property (e.g., property that is generally depreciated for tax return purposes over a period of either 27.5 or 39 years) into personal property (e.g., property that is generally depreciated for tax return purposes over a period of either 3, 5, 7 Read More

Written by | Posted in Tax Planning

New Legislative Proposal Introduces Comprehensive Energy Reform

On September 22 of 2015, Senate Democrats introduced a comprehensive energy reform bill entitled “The American Energy Innovation Act” that would reform current energy policy and enhance over forty tax incentives subsidizing energy production.

The legislation addresses the need for the creation of new energy based jobs in connection to both infrastructure advancements and technological innovation. As a synopsis, the bill includes programs essential to renewed economic growth in the energy sector that empower consumers; modernize infrastructure; cut carbon pollution and waste; invest in clean energy; and support research and development initiatives.

The tax aspects of the legislation would modify several energy tax incentives already in Read More

Written by | Posted in R&D Credit Services • Specialty Tax Incentives • Tax Credit

The Broad Tax Extenders Coalition Urges Congress to Take Immediate Action on Tax Extenders Legislation

The Broad Tax Extenders Coalition (hereinafter “the Coalition”) are recommending to lawmakers on Capitol Hill to take immediate action on over fifty tax provisions that previously expired on December 31st of 2014. In a recent letter dated September 10th of 2015, the Coalition comprised of over two thousand organizations informed members of Congress that failure to timely extend the tax provisions will result in a significant increase in tax liabilities on both business entities as well as individuals.

As a background it should be duly recalled that previously on July 21st of 2015th, the Senate Finance Committee overwhelmingly passed a tax extenders bill with a bipartisan vote of 23 to 3 that planned to extend over fifty previously expired tax provisions for a two year period (e.g., retroactively to cover all of calendar year 2015 and prospectively to cover Read More

Written by | Posted in R&D Credit Services • Tax Provision/Tax Reporting

Tax Compliance Alert

On July 31, 2015, President Obama signed into law H.R. 3236 entitled The Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 (hereinafter the “Act”), that is anticipated to be partially paid for by a number of new tax compliance requirements.

The Act amended a number of provisions within the Internal Revenue Code and modified a number of tax return filing due dates for tax years beginning after December 31, 2015 (i.e., the scope and application of the Act will apply to 2016 tax returns) with the intention to create a more logical flow of information and tax reporting. For example, under the Act, the tax return filing due date for Partnerships to file Form 1065 will move up from April 15th to March 15th (i.e., two and a half months after the close of its tax year). This will now mirror Read More

Written by | Posted in Tax Act

Lights, Camera, Action And Tax Cut! A Practical Guide To Movie Production Tax Incentives

As a synopsis, Movie Production Tax Incentives (hereinafter “MPIs”) are tax benefits offered on a state-by-state basis throughout the United States to entice, as applicable, in-state qualified phases of filmmaking production such as the “Qualified Pre-Production Phase”; the “Qualified Production Phase” and the “Qualified Post-Production Phase”. The state-by-state legislative histories and policies driving MPIs are clearly aimed at increasing economic growth at the state and local levels through filmmaking and television production throughout the United States while curtailing the departure of movie production to other countries.

While the applicable Qualifying Production Activities (hereinafter “QPAs”) vary significantly from state-to-state many common QPAs include, but are not limited to, feature films; Read More

Written by | Posted in Specialty Tax Incentives
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