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New Bonus Depreciation Regs Bring Clarity, Anti-Abuse Provisions, But No Fixes
Posted by Tony Pisani on Thu, Sep 13, 2018 @ 04:09 PM

The IRS took a step toward clarifying an issue in the new tax reform law, but it did not answer one of the biggest provisions surrounding bonus depreciation.

On Aug. 3, 2018, the IRS and Treasury Department released the first proposed regulations on the expanded bonus depreciation provisions enacted by the 2017 tax reform act (the Act). These regulations provide clarification on which types of property qualify, when a taxpayer will not be considered to have previously used property, when property is acquired and placed in service and the effect of certain partnership elections. The new anti-abuse provisions focus on ensuring that the deduction is not claimed by multiple entities in the same controlled group and that the original use requirement is not circumvented.

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Topics: IRS, Bonus Depreciation, Partnerships, Tax Reform Act, Tony Pisani

Planning for Compensatory Grants of Partnership and LLC Interests
Posted by Robert Kerr on Wed, Mar 15, 2017 @ 03:06 PM

Partnerships and LLCs have the opportunity to make grants of ownership interests tax-efficient with Internal Revenue Code (IRC) Section 83(b) ("Section 83(b) election").  

Business entities operating as partnerships for federal tax purposes, including LLCs often consider the grant of an ownership interest in the business as additional incentive compensation for valued employees or contractors. Partnerships may offer ownership interests in the form of a profits interest or a capital interest. On the surface, this appears to be an easy and flexible way of providing a benefit to personnel without affecting current cash flow. There are traps for the unwary, however. Proper structuring of these transactions is critical to ensure optimal tax consequences for both the partnership and the recipients of these awards.

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Topics: Robert Kerr, IRS, Partnerships, LLC, Section 83(b), Rob Kerr

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