US Taxes News: October 2018

Wednesday, October 31, 2018

Tax Reform Tax Tip 2018-169: Here’s how tax reform affects farmers and ranchers

IRS Tax Tips

October 31, 2018

Issue Number: Tax Reform Tax Tip 2018-169

Here's how tax reform affects farmers and ranchers

Many farmers and ranchers will benefit from tax law changes brought about by last year's Tax Cuts and Jobs Act. Here are some of those changes along with details about how they will affect farmers and their bottom line:

Net Operating Losses:

These can now be carried forward indefinitely. Under prior law, they could only be carried forward 20 years.
NOL deductions are limited to 80 percent of taxable income.
They can be carried back for two years for farm and ranch businesses. Under prior law, NOLs could be carried back five years.

Qualified Business Income Deduction:

For tax years beginning after Dec. 31, 2017, taxpayers other than corporations may be entitled to a deduction of up to 20 percent of their qualified business income from a qualified trade or business, including income from a passthrough entity, but not from a C corporation, plus 20 percent of qualified real estate investment trust dividends and qualified publicly traded partnership income.
The deduction is subject to multiple limitations such as the type of trade or business, the taxpayer's taxable income, the amount of W-2 wages paid with respect to the trade or business, and the unadjusted basis immediately after acquisition of qualified property held by the trade or business.
The deduction can be taken in addition to the standard or itemized deductions. In some cases, patrons of horticultural or agricultural cooperatives may be required to reduce their deduction. The IRS will be issuing separate guidance for co-ops.

Accounting method changes:

Under the new law, more farm corporations and partnerships can now use the cash basis of accounting for tax purposes. This includes small business taxpayers, such as:

o Farmers and ranchers with average annual gross
receipts of $25 million or less in the prior three-year
period.
Farmers can refer to IRS guidance for more information about the process that eligible small business taxpayers may use to change accounting methods.

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Cómo la reforma tributaria afecta a los agricultores y ganaderos

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31 de octubre de 2018

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Cómo la reforma tributaria afecta a los agricultores y ganaderos

Muchos agricultores y rancheros se beneficiarán de los cambios en las leyes tributarias que se produjeron el año pasado bajo la Ley de Empleos y Reducción de Impuestos. Estos son algunos de esos cambios, junto con detalles acerca de cómo afectarán a los agricultores y sus resultados finales:

Pérdidas operacionales netas (NOL, en inglés):

Ahora se pueden trasladar hacia adelante indefinidamente. Según la ley anterior, solo podían trasladarse por 20 años.
Las NOL están limitadas al 80 por ciento de los ingresos.
Se pueden trasladar hacia atrás por dos años para negocios de granjas y ranchos. Según la ley anterior, las NOL podían trasladarse hacia atrás por cinco años.

Deducción de ingresos de negocios calificados:

Para los años tributarios que comienzan después del 31 de diciembre de 2017, los contribuyentes que no sean corporaciones pueden tener derecho a una deducción de hasta el 20 por ciento de sus ingresos comerciales calificados de un comercio o negocio calificado. Esto incluye los ingresos de una entidad de transferencia, pero no de una corporación C, más el 20 por ciento de los dividendos calificados de inversión en bienes raíces e ingresos calificados de sociedades cotizadas en bolsa.
La deducción está sujeta a múltiples limitaciones, como el tipo de comercio o negocio, el ingreso tributable del contribuyente, el monto de los salarios W-2 pagados con respecto al comercio o negocio, y la base no ajustada inmediatamente después de la adquisición de la propiedad calificada en poder de comercio o negocio.
La deducción se puede tomar además de las deducciones estándar o detalladas. En algunos casos, los empleadores de cooperativas hortícolas o agrícolas pueden ser tener que reducir su deducción. El IRS emitirá directrices por separado para cooperativas.

Cambios en el método de contabilidad:

Conforme a la nueva ley, más corporaciones y asociaciones agrícolas ahora pueden usar la base de efectivo de la contabilidad para fines tributarios. Esto incluye a los contribuyentes de pequeñas empresas, tales como:
- Agricultores y ganaderos con ingresos brutos anuales promedio de $25 millones o menos en el período anterior de tres años.
Los agricultores pueden consultar las directrices del IRS para obtener más información acerca del proceso que los contribuyentes elegibles de pequeñas empresas pueden usar para cambiar métodos de contabilidad.

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IR-2018-210: IRS issues proposed regulations reducing potential income inclusions for certain domestic corporations that own stock in foreign corporations

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October 31, 2018

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Issue Number: IR-2018-210

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IRS issues proposed regulations reducing potential income inclusions for certain domestic corporations that own stock in foreign corporations

WASHINGTON — The Internal Revenue Service today issued proposed regulations reducing the amount determined under Internal Revenue Code section 956 for certain domestic corporations that own (or are treated as owning) stock in controlled foreign corporations (CFCs).

The Tax Cuts and Jobs Act (TCJA), passed in December 2017, made major changes to the tax law, including enacting a participation exemption system for the taxation of certain foreign income. The new proposed regulations are intended to ensure that the application of section 956 is consistent with the new participation exemption system.

Treasury and IRS welcome public comments on these proposed regulations. For details on submitting comments, see the proposed regulations.

Updates on the implementation of the TCJA can be found on the Tax Reform page of IRS.gov.

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e-News for Small Business, Issue 36

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Oct. 31, 2018

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e-News for Small Business, Issue #36

Tax Cuts and Jobs Act: A comparison for businesses

The Tax Cuts and Jobs Act (TCJA) changed deductions, depreciation, expensing, tax credits and other tax items affecting businesses. This side-by-side comparison can help businesses understand the changes and plan accordingly.

Some provisions of the TCJA affecting individual taxpayers can also affect business taxes. Businesses and self-employed individuals should review tax reform changes for individuals and determine if and how these provisions may concern their business situation.

Visit IRS.gov/taxreform regularly for tax reform updates. Businesses can find details and the latest resources at Tax Reform Provisions that Affect Businesses.

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