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Year-End Tax Guide summarizes new tax laws

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3B-2017-10-MonumentOne prominent feature of Grant Thornton’s Year-End Tax Guide 2017 is the inclusion of write-ups on new tax legislation. The rules change periodically throughout the year, so having these write-ups in one location can take the place of hours of searching. All the tax changes listed below are more fully explained in our Public and Privately Held versions of the Year-End Tax Guide.

Tax law changes: Public companies
  • A public business can now claim up to half its pre-2016 alternative minimum tax credits as refundable each year in lieu of claiming bonus depreciation until the credits are exhausted or bonus depreciation is not in effect.
  • A number of states have enacted legislation meant to challenge the decision in 1992’s Quill Corp. v. North Dakota governing sales taxes on online purchases. At least 20 states currently have “click-through nexus” rules that establish their ability to collect sales taxes from online purchase links from in-state businesses with out-of-state seller agreements.
  • The Eighth Circuit Court of Appeals nullified a $1.2 billion tax assessment for 2005 and 2006 in Medtronic, Inc. v. Commissioner, dealing a blow to the IRS’s ability to use the courts to enforce transfer pricing rules.
  • Though the federal government extended funding relief to counter the effect of low interest rates on funding obligations, Pension Benefit Guaranty Corporation premiums are set to rise in the coming years.
  • New regulations for distinguishing debt from equity could affect routine related party lending. The Treasury Department has delayed the burdensome documentation requirements and are considering replacing them altogether, but many other rules are already in effect.

Tax law changes: Privately held companies
  • Expensing provisions are more valuable this year. Businesses can fully expense up to $510,000 in new equipment in 2017 under Section 179 if they placed no more than $2.03 million in eligible property in service. Congress also made a new kind of building improvement eligible for bonus depreciation: qualified improvement property.
  • The IRS is reviewing regulations that limit owners’ ability to pass their business to heirs while still living through family limited partnerships. The IRS proposed regulations last year seeking to reduce the ability to take valuation discounts when transferring assets within such an entity, but the Trump administration may withdraw these regulations.
  • To combat identity thieves, who often file early in the season before the IRS has enough data to reject claims, the deadlines for compensation reporting have changed. Employee wage and tax statements on Forms W-2 and W-3 are now due Jan. 31.

See Also:

Contacts

Compensation and Benefits
Eddie Adkins
Partner, Washington National Tax Office
T +1 202 521 1565

Accounting Methods and Periods
Sharon Kay
Partner, Washington National Tax Office
T +1 202 861 4140

International Taxes
David Sites
Partner, Washington National Tax Office
T +1 202 861 4104

Tax Legislation and Updates
Dustin Stamper
Director, Washington National Tax Office
T +1 202 861 4144