Safe Harbor for Rental Real Estate – What You Need to Know

real estate safe harbor tax law

Last month the IRS issued the final regulations regarding Section 199A.  The IRS also issued IRS Notice 2019-07 which set forth a safe harbor under which a rental real estate enterprise would be treated as a trade or business under Section 199A.  The purpose of the Notice is to give taxpayers guidelines as to the application of the 199A deduction for rental real estate properties. To qualify for the safe harbor requirements, the taxpayer must meet the following requirements: Keep separate books and records setting out the income and expenses for the rental real estate enterprise; For tax years beginning

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Professional Tax Preparation Recommended for Businesses

professional tax preparation

The Tax Cuts and Jobs Act has added a number of complex issues to the tax preparation for businesses. Taxpayers who previously prepared their own tax returns with Schedule C’s or Schedule F’s will face many complex issues under the new tax act.  One issue is the new 20 percent pass–through deduction for non-C corporation businesses. The Act also has significant changes regarding depreciation and the deduction of expenses. Another item that adds complexity to tax preparation for 2018 is that the State of Iowa has not adopted the changes in federal tax law for the year 2018. I highly

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IRS Guidance on Large Gifts Made Prior to 2026

irs tax on gift

Last month the Internal Revenue Service issued a proposed regulation addressing large gifts made prior to 2026.  The basic exclusion amount for estate or gift tax for the year 2017 was $5,490,000.00.  The 2017 Tax Cuts and Jobs Act increased the basic exclusion amount from 5 million to 10 million for tax years 2018 through 2025 with both dollar amounts adjusted for inflation.  For the year 2018 the basic exclusion amount adjusted for inflation is $11,180,000.00 million.  For 2019 the basic exclusion amount adjusted for inflation is $11,400,000.00.  Under the 2017 Tax Cuts and Jobs Act in the year 2026,

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Business Tax Update: Business Meals Still 50 Percent Deductible

iowa business tax law meal entertainment

The Internal Revenue Service recently issued a Notice (Notice 2018-76) regarding the deductibility of business meal expenses under the new Tax Act.  The Notice may be relied on until proposed regulations are published.  The Notice provides that most business meal expenses will be 50 percent deductible as long as a separate invoice is provided for the food.  The new Tax Act prohibits the deduction of entertainment expenses.  It has been unclear until this Notice whether business meals involving a client or a potential client would fall into the entertainment expense category.  As such, until the proposed regulations are published, a

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New Law Allows Consumers to Freeze Accounts at Credit Bureaus for Free

how do I freeze my credit

Consumers now have the power to freeze their accounts at the three Credit Bureaus for free, effective September 21, 2018, due to the Regulatory Relief, Economic Growth and Consumer Protection Act which was passed in May of 2018. In addition, consumers are allowed to unfreeze their accounts for free.  Consumers who are interested in placing a freeze on their Credit Bureau accounts should contact the three major reporting agencies, Experian, TransUnion, and Equifax.  In addition, consumers should also notify the National Consumer Telecom & Utilities Exchange (NCTUE) to have their account frozen.   NCTUE is the reporting agency used when individuals

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Iowa Governor Signs Real Estate Partition Law

iowa real estate law contract

The Governor recently signed SF 2175 into law which replaces Iowa Code Chapter 651 which deals with Partition of Real Estate.  The biggest change in the new law is the establishment of a partition procedure for “heirs property”.  For the first time a new law allows the equitable remedy of “owelty” which provides for a payment of money to equalize the value of property received in a partition in kind action.  Under the new Chapter, an individual who inherits property as a tenant in common with other relatives and who does not want to sell the property, in all likelihood

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New Health Care Options For Iowans

health care for small business

The Governor recently signed SF 2349 into law. The purpose of the law is to assist Iowans who are having difficulties purchasing health insurance on the individual market. First of all, the law allows Iowa Farm Bureau to offer new “health benefit plans” to its members. The plans are not defined as insurance and as such they are exempt from the Affordable Care Act Requirements and Iowa Insurance Division Regulation. Such plans will be self-funded and will be administrated by Wellmark Blue Cross and Blue Shield. It is projected that the plans will cost $5,000.00 per year for family coverage.

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When Gifting to Charity Make Sure to get Written Acknowledgements

donations to charity tax rules des moines

Many individuals regularly make gifts to qualified organizations to receive tax-deductible contributions.  Pursuant to the IRS rules, a taxpayer who makes a single donation of $250.00 or more to a qualified charity must have an written acknowledgement from the Organization for each single donation of $250.00 or more or an written acknowledgement from the Organization setting out the date and amount of each contribution in excess of $250.00. The $250.00 amount set out above does not mean that you add up all contributions to see if you reach the $250.00 limit.  The $250.00 threshold is only reached when you make

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New Laws Pertaining to First-Time Homebuyer Savings Accounts

first time homebuyer contract des moines

A new law was recently signed by the Governor which authorizes tax-preferred First-Time Homebuyer Savings Accounts beginning in the year 2018.  Under the law, when an individual sets up a FTHSA account, he or she may exclude from their Iowa adjusted gross income yearly deposits of $2,000.  Married taxpayers who file a joint return may exclude up to $4,000.00 a year if the money is deposited into a joint FTHSA.  Any interest earned on a FTHSA account, will not be included in a taxpayer’s income. At the time that the FTHSA is opened, an individual can designate a sole beneficiary. 

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Iowa Uniform Fiduciary Access to Digital Assets Act

laws about digital assets iowa

On April 20, 2017, Governor Branstad signed the Iowa Uniform Fiduciary Access to Digital Assets Act which is codified in Chapter 638 of the Iowa Code.  The Act broadly defines “digital asset” to mean any electronic record in which an individual has a right or interest.  However, the term “digital asset” does not include an underlying asset or liability unless the asset or liability is itself an electronic record and the term “digital asset” does not include health information or individually identifiable health information as those terms are defined in the Federal Health Insurance Portability and Accountability Act of 1996. 

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