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Katz on Tax

Wednesday, April 27, 2016

Who needs estate planning????

For years Bob and I have been preaching about the need for accounting professionals to be involved in the estate planning process.  As the most trusted part of a client's advisory team, the accountant is very often the first (or only) person that the client turns to for guidance.  Over the last few years, as the estate exemption has increased, however,  too many CPAs have been lulled into a false sense that if a client doesn't need tax planning, then they do not need estate planning.

In the last few days it has come out that the legendary musician, Prince, died without a will, and without any estate or tax planning.  Clearly, with an estate valued at in excess of $300 million, Prince was a candidate for some significant tax planning, and certainly his advisors failed him by not pushing him to do something.
Read more . . .

Tuesday, April 19, 2016

Another Tax Season is Complete!!!

Bob, Lara and I want to congratulate you on completing another tax season!!! 

We hope it was a successful season and we look forward to seeing you at one of the upcoming Summer Seminars or at the 13th Annual Tax Symposium in November.

2016 is going to be an exciting year for both our law firm and for Katz Tax Seminars and we will be letting everyone in on all that is happening very soon.  I can tell you that it will all begin with an introduction of a new logo for Katz Tax Seminars.  After hearing all of our seminars about residency issues, our bobcat (yes..
Read more . . .

Monday, August 31, 2015

Inherited Property Reporting Requirements Delayed

On July 31, 2015, President Obama signed the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015.  One of the Act's provisions requires consistent basis reporting for estate tax and income tax purposes. 

Section 6035(a)(1) provides that the executor of an estate must furnish to the IRS and the beneficiary, who acquires an interest in property of the estate, a statement identifying the value of each interest in such property and such other information that the IRS prescribes.

This provision applies to all estate tax returns filed after July 31, 2015.

The IRS has now issued Notice 2015-7 which delays the filing of these statements.  The Notice provides that any such statements to be filed with the IRS and the beneficiary before February 29, 2016, the due date for filing the statements is delayed to February 29, 2016.

If you require any further information please contact us.


Bob Katz

Monday, June 22, 2015

FBAR filing

Remember that the last day to file the FBAR is June 30, 2015.  THERE IS NO EXTENSION OF TIME TO FILE!  Also please remember that you can only file the FBAR electronically, even if you are filing for past years.

FBARs must be filed for all U.S. citizens or residents who have foreign financial accounts that exceed $10,000 in the aggregate, not on an account by account basis.


Bob Katz

Wednesday, June 17, 2015

Portability Regulations

Portability was enacted as part of the 2010 Tax Act and was subsequently made a permanent part of the Internal Revenue Code.  Previously, the IRS had issued temporary and proposed regulations regarding the ability to port over the applicable exclusion amount and how to elect portability.

The IRS has now finalized those regulations.  The final regulations adopt most of the rules contained in the temporary and proposed regulations, with a number of modifications and clarifications. 

The final regulations will be discussed in our Estate Planning Update next Tuesday at the  Melville Marriott.  If you would like to register please contact Marie at 516-364-4555.


Bob Katz

Thursday, May 28, 2015

Identity Theft

The number of tax related identity theft cases has increased substantially over the past few years.  In addition, the IRS has been severely criticized for taking too long to increase its measures to flag suspicious tax returns, prevent the issuance of fraudulent tax refunds and expedite identity theft case processing.

As a result, the IRS has implemented some new procedures for identifying and dealing with suspicious tax returns.  For example, if the IRS receives a suspicious return it will send a Letter 5071C or Notice CP01B to the taxpayer requesting that they visit or call a toll-free number within 30 days.  If the taxpayer responds they will be asked a series of questions to determine the validity of the return.  If they fail to respond or give incorrect answers the return will be considered fraudulent.

Have you had any of your clients' tax identity stolen?  If you have, please share your experience with us regarding your taxpayer's stolen identity.


Bob Katz

Wednesday, April 15, 2015

Happy April 15th

Neil, Lara and I want to congratulate you on completing another tax season!!! 

We hope it was a successful season and we look forward to seeing you at one of the upcoming Summer Seminars or at the 12th Annual Tax Symposium at Mohegan Sun in November.

As always if there is anything that we can do to assist you with a client matter, or help you in any area of your practice, please do not hesitate to call or email.

Bob Katz

Monday, February 16, 2015

Form 3115 - Revenue Procedure 2015-20

The most pressing issue for accountants filing business returns is the implementation of the finalized repair regulations and the filing of Form 3115.  The IRS has now issued Rev. Proc. 2015-20 which permits a small business taxpayer to make prospective tangible property changes (with an adjustment under Section 481(a)) without the need to file Form 3115.

A small business taxpayer is defined as a business that has:

1.  Total assets of less than $10 million as of the first day of the taxable year for which the change in accounting method is effective, or

2. Average annual gross receipts of $10 million or less for the prior three taxable years.

The final regulations allow a taxpayer to utilize the rules for years beginning on or after January 1, 2012.  To adopt this new simplified procedure the taxpayer is waiving the right to go back to a previous year.  One of the major changes, made by the repair regulations is the ability to write off partially disposed of property.  For example, if a roof is being replaced, under the prior rules, the cost of the new roof was added to the remaining balance of the old roof and depreciation continued.  Under the new repair regulations the remaining basis of the old roof can be written off in the year of replacement.  If this happened in 2012 or 2013 by electing the new simplified procedure your client will lose the write off of the old roof.

If the only accounting changes come under the safe harbor provisions of the final regulations Form 3115 is not required to be filed.  The IRS, in Rev. Proc. 2015-20, is also requesting comments as to what amount should be allowed as a deduction, per unit of property, if the taxpayer does not have an Applicable Financial Statement.  The regulations limit this deduction to $500 presently.

If you have any questions please call us.

Bob Katz

Wednesday, February 11, 2015

Proposed Legislation

The House of Representatives will be voting on two bills in the next few days that will make permanent the following tax provisions:

1. The ability to make charitable contributions directly from an IRA.

2. The Section 179 deduction at an amount of $500,000 subject to a $2,000,000 ceiling.

3. The reduction of the built-in-gains tax period from 10 years to 5 years.

4. Permanently extend and increase the charitable contribution deduction for food inventory contributions.

It should be noted that the Senate has not considered these changes as of this date, and President Obama has threaten to veto tax bills that have a permanent application without necessary offsets.

Monday, February 9, 2015

2015 Auto Depreciation

The IRS has issued the depreciation amounts for autos and light trucks placed into service in 2015.  The amounts are similar to those for autos placed into service in 2014.  However, for 2014 new automobiles and light trucks were entitled to an additional $8,000, in 2014, for bonus depreciation, which ended on December 31, 2014.

For automobiles placed into service in 2015:

$3,160 in 2015

$5,100 in 2016

$3,050 in 2017

$1,875 in each succeeding year.


For light trucks or vans placed into service in 2015:

$3,460 in 2015

$5,600 in 2016

$3,350 in 2017

$1,975 in  each succeeding year.


Bob Katz

Monday, February 2, 2015

New Tax Proposals

The issue regarding the repeal of the estate tax has been raised again.  The Republicans have introduced two bills in the House of Representatives that would repeal the estate and gift tax.  President Obama's most recent tax proposals do not include the repeal of the estate and gift tax but instead focus on the appreciation in the value of assets owned on the date of death.  If the Obama provisions are enacted there would be a capital gains tax, in the year of death, on the appreciation in the value of assets owned.  In addition, President Obama would increase the capital gain rate to 28%.

We will be following these proposals and reporting on their progress.


Bob Katz

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