Taxing Thoughts

October 2017

Economic Obsolescence: Determining Loss of Property Value Caused by Shifting Consumer Demands

By | October 11, 2017|Categories: Taxing Thoughts|

Shifting consumer tastes in wine can result in the economic obsolescence of winery property and assets, leading to a decline in property value (real and personal) that remains for many years.  Fortunately, Section 51 of the California Revenue and Taxation Code allows the Assessor to temporarily reduce the assessed value (and property tax) when the [...]

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September 2017

Top 5 California Tax Planning Opportunities

By | September 27, 2017|Categories: Taxing Thoughts|

Weather aside, a rapidly growing economy and profitable marketplace has named California one of the most desirable states for new and expanding businesses and individual taxpayers.  One major obstacle that taxpayers face when seeking to enter into, or expand in California, is state taxes.  California is a high-tax state with some of the highest sales/use, [...]

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August 2017

What Tax-Exempt Organizations Should Know About Filing a Form 926

By | August 17, 2017|Categories: Nonprofit, Taxing Thoughts|Tags: , , , |

Many tax-exempt organizations invest frequently in foreign alternative investments (e.g., hedge, private equity, real estate and venture capital funds). When investing into such funds, these tax-exempt organizations’ primary tax concern is generally to mitigate their risk of Unrelated Business Taxable Income (“UBTI”). Funds commonly avoid this UBTI issue for their tax-exempt organization investors by structuring [...]

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July 2017

Required Minimum Distribution “RMD” Rules for Retirement Accounts

By | July 20, 2017|Categories: Taxing Thoughts|

2016 was the first year that the baby boom generation reached age 70 ½, and millions more will hit that milestone in the years ahead. The gift from the IRS is that they must begin withdrawing funds from their traditional individual retirement accounts and employer-sponsored retirement plans, such as 401(k) plans. Overview of RMDs Individuals [...]

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May 2017

California Sales and Use Tax: Nonprofits and Taxable Food Sales

By | May 10, 2017|Categories: Taxing Thoughts|

What is sales and use tax, and how is it applied California? California's sales tax generally applies to the sale of merchandise, including vehicles, in the state. California's use tax applies to the use, storage, or other consumption of those same kinds of items in the state.  Generally, if sales tax would apply when you [...]

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Avoiding PFIC Status – Practical Considerations

By | May 3, 2017|Categories: Taxing Thoughts|

Overview: One area where complexities of U.S. taxation is clearly demonstrated is the Passive Foreign Investment Company (“PFIC”) rules.  These PFIC rules generally apply to U.S. investors in a foreign corporation where U.S. ownership is 50% or less.[1]  A PFIC is any foreign corporation if – 75 percent or more of the gross income of [...]

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March 2017

Form 926 Filing Requirements – a Potential Trap for the Unwary Tax-Exempt Organization

By | March 31, 2017|Categories: Nonprofit, Taxing Thoughts|Tags: , , , |

By: Sunil Patel (Tax Supervising Senior) and Jason Booth (Tax Principal) Many tax-exempt organizations invest frequently in foreign alternative investments (e.g., hedge, private equity, real estate and venture capital funds). When investing into such funds, these tax-exempt organizations’ primary tax concern is generally to mitigate their risk of Unrelated Business Taxable Income (“UBTI”). Funds commonly [...]

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Nexus: The New Era of State Taxation

By | March 16, 2017|Categories: Taxing Thoughts|

The physical presence nexus standard is becoming a thing of the past as state governments try to shift the tax burden from in-state to out-of-state taxpayers. If a state has jurisdiction to tax either the business entity or the subject matter, then a taxpayer has nexus in a state with or without physical presence. The [...]

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Certain Entities Now Subject to the Form 8938 Filing Requirements

By | March 9, 2017|Categories: Taxing Thoughts|

Co-Authors Sunil Patel and Jason Booth Internal Revenue Service Form 8938, Statement of Specified Foreign Financial Assets, has been one of the primary reporting mechanisms imposed directly on taxpayers under the Foreign Account Tax Compliance Act (FATCA), which is designed to enhance tax reporting compliance with respect to certain foreign assets.  Form 8938 is used to report foreign [...]

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