Section 2004 of the “SURFACE TRANSPORTATION ACT OF 2015” implements new reporting or what may otherwise be called “stepped up basis conformity”, for executors to ensure basis of assets inherited by heirs of an estate is in agreement with the value determination for federal estate tax purposes.
Section 6035 of the IRC is the NEW provision that outlines the requirement to provide basis information to persons acquiring property from decedents. Domestic estates filing IRS Form 706 or 706-A, or non-resident estates filing IRS Form 706-NA are affected by the new reporting provisions. Generally filing of these returns is done where taxable estate value exceeds the requirement to file threshold. For domestic estates, the 2015 threshold is $5.43M.
An important tax update was made regarding the rate increase and withholding of tax on U.S. property dispositions. On December 18th, President Obama, signed H.R. 2029, the tax (the “Protecting Americans from Tax Hikes Act of 2015”) and spending bills (Consolidated Appropriations Act, 2016) to fund the government for its 2016 fiscal year.
The December The Act increases the rate of withholding from dispositions of U.S. real property interests under §1445 from 10% to 15%, but remains at 10% for residences sold for less than $1 million.
The withholding exemption where the sale price is under $300,000US and the purchaser will acquire the property as their principal residence is still in effect.
On December 18th of 2015, President Obama 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”) accomplished 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 while extending other tax incentives over either a five year period or a two year period.
In particular, the PATH Act meaningfully enhanced the R&D Tax Credit Program (hereinafter “RTC program”) on a myriad of levels. As an overview, the RTC program was initially added to the U.S. Internal Revenue Code (hereinafter the “Code”) in 1981 through the Economic Recovery Tax Act of 1981 as a temporary provision of the Code. The RTC program had most recently expired on December 31, 2014. A tremendous paradigm shift to the RTC program was made possible through the PATH Act which not only renewed the RTC retroactively for all of calendar year 2015 but most importantly made the RTC program permanent. In addition, the enhanced RTC program has been considerably restructured to: Read More
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