On May 25, 2017, Governor Scott signed HB 7109 into law. The new law will lower the sales tax rate on commercial leases under Florida Statute Section 212.031 from 6% to 5.8%. The new law goes into effect January 1, 2018. It is projected to save Florida commercial tenants $61,000,000 per year. Sales tax brackets and sales tax software programs will need to be updated for the new law change in January. For more info, go to: http://www.flgov.com/gov-scott-announces-100-million-tax-cut-on-business-rents-as-part-of-the-its-your-money-tax-cut-budget-2/
By: Amanda Wilson
As I previously discussed (here), the federal tax due date for partnership and corporate tax returns changed for tax years on or after 2016. This means that the new filing deadlines are now in effect. Partnership and S corporation tax returns are due a month earlier on March 15th, while corporate tax returns are now due a month later on April 15th. In other words, if your business includes a partnership or S corporation, you need to file the tax return, or file for an extension, by this Wednesday, March 15th. Don’t be caught off-guard and miss this important new deadline.
President Abraham Lincoln. Civil rights activist Martin Luther King, Jr. Rock guitarist Jimi Hendrix. Eccentric billionaire Howard Hughes. Singer/songwriter Bob Marley. NFL quarterback Steve McNair. Singer/songwriter Prince.
By Julie Frey
Discounts for gifts of closely held business interests to family members may be significantly restricted soon. On August 2, 2016, the Internal Revenue Service issued new Proposed Regulations under Section 2704 of the Internal Revenue Code that would eliminate discounts if the transferor and/or members of the family control the entity immediately before the transfer. Moreover, any restrictions in the business entity on transferability will be disregarded unless federal or state law requires such restriction. Thus, a buy-sell agreement or restriction in an operating agreement as to liquidation or redemption of an owner’s interest will be disregarded in terms of valuing the interest unless such restriction is mandated by law. In the past, if the entity was properly structured, one could take a discount for lack of control and lack of marketability for a gift of a limited partnership interest. For example, a gift of a limited partnership interest might be discounted from $1,000,000 to $700,000 for gift tax purposes based on such discounts, which in essence meant that you could transfer more value to your family members because of the discounts. Under the proposed regulations, these discounts will not be available and the interest transferred to a family member will likely be valued at full value.
By Jason Palmisano
The IRS has issued a notice of proposed regulations to limit the valuation discounts individuals have been afforded when they engage in certain types of intra-family transfers involving their family owned corporation or family partnership. Under the proposed regulations, the valuation discount — sometimes up to 40% — that is given for the transfer of assets that have limited liquidation rights would not apply for “deathbed” transactions, only to transfers that occur more than three years before the transferor’s death. While the proposed regulations are very specific, the restriction on the valuation approach could apply to the inheritance of most family businesses. You can read more about the proposed rules the IRS wants to implement in the Wall Street Journal.