For those attendees viewing the Mass state tax update.

TY 2024 Filing Season slides (final) (002)

Attendees,

Please use the link below to access New York State’s powerpoint.

Department Messages and Updates.Cornell Tax School

Registration for the 2024 Cornell Tax Conferences is now open utilizing the link below:

https://cvent.me/b48VPL

All two day programs begin at 8:30AM.

We look forward to seeing everyone!

Dario Arezzo

Director, Cornell Tax Conferences

The following chapters will be taught at this year’s Conferences:

Trusts and Estates.

This chapter discusses the tax consequences when a debt owed by a decedent is cancelled, and the tax implications of cancellation of a debt owed to the decedent. It reviews when a taxpayer can obtain an income tax charitable contribution deduction or an estate tax charitable deduction for certain contributions, not in trust, of partial interests in property. This chapter explains planning techniques for use of the increased basic exclusion amount before it sunsets in 2026. This chapter reviews the grantor trust rules, and it includes sample language that a tax practitioner should look for to determine whether a trust is a grantor trust. This chapter discusses when jointly owned property is included in the gross estate, and how to determine the basis of property passing to a surviving joint owner. Finally, this chapter explains a recent case that created a split in the circuit courts regarding when life insurance proceeds used to redeem a deceased owner’s interest are included in valuing the deceased owner’s interest in the company.

Related Party Issues.

Related party rules frequently affect the timing or character of income or deductions and sometimes disallow a loss or deduction entirely. This chapter discusses the following:

• I.R.C. § 267 loss limits/income matching
• Transactions between related persons and partnerships
• Disallowance of the I.R.C.§ 179 deduction and bonus depreciation on property acquired
from a related party
• Ordinary income treatment of related party gain from the sale or exchange of depreciable
property
• Like-kind exchanges with a related party
• Related party installment sales

Limited Liability Company Issues.

This chapter covers important tax considerations for limited liability companies (LLCs). It reviews the default entity classifications, and how an entity can elect to change its default entity classification. It explains how a change in LLC ownership may cause a change in its default entity classification and the tax consequences of a change in classification. This chapter discusses tax issues for an LLC owned by spouses. It also examines the impact of LLC owner compensation on the QBI deduction and the section 179 deduction. Finally, this chapter explains a recent Tax Court case that applies a functional analysis to determine if a partner is a limited partner whose distributive share of partnership income may not be subject to self-employment tax.

Business Entity Tax Issues.

This chapter examines current issues that pertain to business entities, including beneficial ownership interest reporting and the pass through entity tax deduction and the tax benefit rule. It explains how a tax practitioner can help a nonprofit organization maintain its tax exempt status, and new guidance that allows an I.R.C. § 501(c)(3) organization to change to another exempt entity type. This chapter provides an overview of the centralized partnership audit regime, with a focus on how a partnership decides if it should elect out of that regime.

IRS Issues.

This chapter covers issues key IRS issues for practitioners. Topics include the following:

• When tax liens attach
• Record retention requirements
• IRS online accounts
• E-filing requirements and exceptions
• Taxpayer Advocate Service
• IRS Stakeholder Liaison
• Tax scams

Business Tax Issues.

This chapter reviews the deduction for certain interest on indebtedness that is contingent on a future event, and the tax impact of conditions that arise after the sale. This chapter explains how to calculate the gain on a contingent payment installment sale, where the sale price has not been fixed in the year of the sale. This chapter explains what constitutes a business bad debt and the timing and amount of the deduction. It also discusses when fringe benefits are available to small business owners on a tax-favored basis. It explains the business meal and entertainment expense deduction, including several important exceptions to the limit on the deduction. Finally, this chapter discusses how a marijuana business reports its income and expenses.

Rental Activities.

This chapter details information that is essential for a tax practitioner who prepares tax returns claiming income and expenses from rental activities. It includes the following topics:

• Residential real estate rentals
• Passive activity loss limits
• Self-employment tax on rental activities
• Repairs/capital expenditures
• Reporting rental activities on Schedule E (Form 1040)

Agricultural and Natural Resource Tax Issues.

This chapter covers several current issues for tax practitioners preparing returns for farmers and ranchers, including the following:

• Breweries, distilleries, and wineries, inventory and capitalization
• Vines, fruit trees, UNICAP, bonus depreciation
• Oil and gas depletion
• Farm and ranch tax elections
• Easements
• Qualified conservation easement contributions

Individual Tax Issues.

This chapter covers several current issues for tax practitioners preparing individual income tax returns, including the following:

• Clean vehicle credits
• Energy credits
• Digital assets
• Due diligence for head of household filing status, earned income tax credit, and other credits
• Cancellation of debt
• Health savings accounts
• Section 529 qualified tuition programs

International Tax Issues.

This chapter discusses common tax issues for US taxpayers with income or assets abroad, and non US taxpayers with income or assets in the US. It explains the requirements to withhold tax under the Foreign Investment in Real Property Tax Act. It discusses when a taxpayer needs an individual taxpayer identification number (ITIN). It details reporting requirements for gifts or bequests from a foreign person and FBAR filing requirements. Finally, this chapter explains how to prepare Form 1040-NR, U.S. Nonresident Alien Income Tax Return, with a focus on the different reporting requirements that apply.

New and Expiring Legislation.

This chapter covers recently enacted tax legislation and procedures. It is organized by subject to help participants quickly find topics of interest and includes a table of tax provisions that expired or are set to expire.

Rulings and Cases.

This chapter summarizes selected rulings and cases that were issued from September 2023 through August 2024. It gives participants an update on issues that are being addressed by the IRS and the courts.

Tax Rates and Useful Tables.

This chapter reports the tax rates, deduction limits, credit limits, and income thresholds and limits that change each year.

• Syracuse (Doubletree) – November 4 & 5, 2024
• Rochester (RITCC) – November 6 & 7, 2024
• Saratoga Springs Holiday Inn – November 14 & 15, 2024
• On-line Seminar – November 21 & 22, 2024
• Complimentary Ethics On-line Seminar – November 25, 2024

We’re looking forward to seeing everyone this Fall!

Dario Arezzo

Director of Cornell Tax Conferences

The meeting room will open at 8:00AM to assist in any attendee logistical issues and training will begin at 8:30. The schedule of topics will be broken out in the following order:

8:30 – 10:00 – Instructor: Joe Baldwin

• Reviewing the K-1, including boxes K-2 and K-3
• Differences between profits interests and capital interests and what this means for clients
• Distributions, guaranteed payments, and draws
• The differences between recourse and non-recourse debt, the loss limitation issues, and how to allocate appropriately
• Built in gains

10: -10:10   Break

10:10 -11:40 – Instructor: Dario Arezzo

• The complexity of applying a hybrid of flow-through and entity concepts to various partnership transactions, including 1031 exchanges
• Partnership tax pitfalls, including related party transactions
• Gifting of a partnership interest
• Disguised sales and mixing bowl transaction pitfalls to be aware of

11:40 – 12:30 – Instructor: Joe Baldwin

• The sale and redemption of a partnership interest and the differences between them
• The impact of I.R.C. 751 “hot assets” on the sale or redemption of a partnership interest

12:30-1:00   Lunch

1:00- 2:10 – Instructor: Dario Arezzo

• Utilizing the LLC as a life insurance tool
• Estate planning techniques involving partnerships and LLCs

Registration for the June 27th Partnership Tax Seminar (8:30 AM start time) can be found here: https://cvent.me/olozby

We want to thank New York State representatives again this year for joining the program. 2023 Tax Updates and Department Messages.10.23.23

Norm, Joe and I are looking forward to a great fall season!

Joseph Baldwin, E.A.

Joe Baldwin is the Director of Training for Farm Credit East, ACA.  In addition to training the next generation of farm tax advisors,  Joe has worked for over 15 years with some of the most complex tax situations arising throughout Northeast Agriculture.  He holds a bachelor’s degree in Economics from Bucknell University, a Master’s degree in Business Administration from UMASS, and a Master’s degree in Taxation from Northeastern University. In addition to his involvement with the Farm Credit internal training program, Joe has also lectured through the Cornell Income Tax Conferences, the Farm Financial Standards Council, and the NY Society of Enrolled Agents.

Dario Arezzo, J.D., LL.M, CFP®

Dario Arezzo is the Director of the Cornell Tax Conferences. He specializes in tax consulting, research, planning and compliance for both individuals and businesses. Dario has a quarterly column titled Arezzo on Agriculture published in the prominent national tax publication State Tax Notes. Dario also authors the Cornell Income Tax Conferences’ New York State tax manual. Dario holds a B.S. from Cornell University, J.D. from Albany Law School and a LL.M from New York University.

Norm Provvidenza, CPA

Norm Provvidenza is a Tax Director with CBIZ. As one of the nation’s largest brokers of employee benefits and property and casualty insurance, and one of the largest accounting and valuation companies in the United States, the Company’s services are provided through nearly 100 Company offices in 32 states. He has over 30 years of tax and attest experience working with owners and management of closely held businesses. His expertise is in many industries including construction, manufacturing, agribusiness, real estate, retail and medical professionals. Norm has been instructing at the Cornell Tax Conferences for over a decade.

To register for the fall programs, please use the following link:

https://cvent.me/dEvxYB