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" this was IS a forum for the discussion of income taxes. That should include present tax law as well as proposed tax law." ^^ That is correct. It's understandable that some members may want to discuss this act's potential impact, and the title is perfectly clear so that anyone wishing to avoid discussions of pending legislation may easily do so. In all likelihood the legislation will pass and if that is the case, some of us will be doing more last minute tax planning to advise our clients on some of these changes. For those that have some time and don't mind the early effort, I don't think it hurts to get a start on understanding its complexities and effects so that we aren't starting from scratch days from now since we are so close to year end as it is.

Ahh I missed that. Thanks for the reply! Jack, as usual, you are extremely helpful

I have to agree Abby. I never thought of a sole proprietorship as being a pass through entity. I like my profit to pass directly into my pocket.

They were afraid (and rightfully so) that repealing the mandate would throw the insurance markets into turmoil, so they are giving everyone a year to plan for it.

Yes, plus they are specifically mentioned in the text of the law.

Catherine, when owners of a joint account sustains a loss, it still must be track because 1/2 of a joint loss is attributable to each, and that amount that is attributable to the deceased IS lost in the year's subsequent to the year of death. Basically, each person only gets their share of a loss. In the case of the question posed, if the husband predeceases the wife, the joint return in the year of his death will be the final year that the loss carryover can be used since the property that generated the loss was titled solely in the husband's name.

No, that is not correct. It must be tracked by whose loss it is, even on a joint return. On a joint return in the year of death, any loss belonging solely to the decedent can still be used if filing a joint return for that year, but the loss dies with the decdent and can't be used by the surviving spouse in future years. This article from The Tax Advisor is good and covers the losses in the 3rd paragraph and then farther down discusses each type of loss carryover under separate bold headings also. https://www.thetaxadviser.com/issues/2017/jan/carryovers-death-spouse.html

Whether it passes or not, I'm being inundated with calls and questions. I answer them with what is current law and what is proposed as of today. I already gave heads up to my business clients that use entertainment a lot, so that they would at least be aware of the possibility of a change as of 1/1/18. I was not aware of that proposed change until this weekend. If it does not pass, no harm done.

Their is a new $ 500 credit available for dependents who no longer qualify for the CTC. Also the old 10%/15%/25% brackets are now 10%/12%/22%. The results vary client by client.

Just read a commentary on the website Tax Pro Today, that says the the bill specifically prohibits prepaying and deducting 2018 state and local income taxes, but it does not prohibit prepayment and deduction of 2018 property taxes. On the other hand, there is an article on the AICPA website that says, there is no authority supporting the prepayment and deduction of any of these taxes.

I believe you are correct. How on earth would the IRS differentiate the original owner a decade plus later? I have a client who is in this situation and has been writing off all capital gains for 20+ years. He has the assets, just rarely sells anything to recognize the gain.

Now I'm wondering where my ID proof was last summer. I went thru online steps and I'm waiting for an "activation code" to come thru snail mail during the busiest postal time of the year. Meanwhile I have a client that would really like me to get online for them!!

Someone will jump in here to tell me if I am wrong. The capital loss belongs to the husband, if the property was in his name. If the husband passes away, the capital loss is gone. You might want to research if they did commingle the property and created a joint loss, if the wife "owns" any of the capital loss, in case she survives her husband.

I bet within a day (working day) of the signature, the IRS will release new withholding calculations, like happened at least one other time the rules were changed late in the year. The IRS already likely has people, if not directly ordered, wisely reviewing and preparing, just like some here choose to do. For the common folk, the withholding changes are what they wait for (and what the President keeps touting - paycheck changes). The rest can be worked through. Those that have means to shuffle income and expenses, are wisely looking at what will likely pass, and will have a signature (or not) by the end of the week. That leaves a few working days to shuffle. There was, today I believe, a procedural fix, which was likely the last Dem grasp at straws for their next campaign literature. I have seen nothing about any possible last minute issue. Also, the ability of McCain to go home, rather than stay, likely tells the outcome will not require his vote, or the VP vote. But, anything can happen, even just before signing, or just after, so every day is a new adventure. The interesting part is the daily questions I get asking why "I" do not already know the 2018 withholding calculations.

Well, first of all it wasnt an assumption. It was a question based on the information that has been provided (mostly by the media) so far as the proposed tax changes. Last I checked this was a forum for the discussion of income taxes. That should include present tax law as well as proposed tax law. If you have better things to do then why did you bother to grace me with your brilliant reply?

We are all going to be looking for all the new rules. That $500 credit is going to be one of the things we are going to have to look up the rules for. Tom Modesto, CA

Well, actually I was voicing my suspicion that some fellow tax pros are making it harder on those of us who try to prepare an accurate return. I think that congress actually understands it better than some (many) tax preparers. Let's face it, this is an exceptionally good group of preparers here. The panic on a couple of FB groups from tax people who apparently don't understand that a credit beats a deduction, for example, has me just dumbfounded. I can imagine a good many of them just going with "unaffordable" on Form 8965. It's a bit discouraging.

In my state the DPAD was never recognized and has always been an add back, so Oregon could treat the pass through deduction the same way.

This seems to work somewhat like the DPAD. It looks almost as if it's taking its place. I do believe this will be less confusing and easier to figure out.

I have a client who is bugging the snot out of me on what to do. Last year, AMT and Reg tax were $200 apart. He has major changes to his income this year, most likely going to be in AMT. The 10K SALT limit is going to hurt him next year any way he goes about it (Prop taxes will take most of it and CA Taxes will far exceed 10K). Without current income, I can't tell him if he will be in AMT this year or not, so I can't tell him how much to pay in 2017 for his 4th qtr estimate. I went with 110% of last year on his es forms to keep him out of penalty, but he wants a better number for the last payment. So much for enjoying the holidays before tax season ramps up. I will be working up estimates for this client. Tom Modesto, CA

Even if it passes then the "work" only begins ///// here is an excerpt from an article in "Tax Pro Today" that basically makes the point ==== until it is totally done, what we think we know may NOT be what is really there for all intents and purposes: ---------------------------------------- excerpt begins --------------------------------- While it is normal for a major tax bill to beget a technical corrections act, the speed with which this one was drafted, plus the last-minute changes, almost certainly will require voluminous legislative language to correct its mistakes. And although the IRS may comply with the Trump two-for-one mandate, expect the regulations explaining the law’s requirements to be voluminous. For example, the measure in the 21st Century Cures Act that allows small employers to reimburse their employees’ health insurance took one page of legislative language, but it took 59 pages for the IRS to set out the requirements that must be met. And it may take a while for a technical corrections bill to see daylight, ...

Some years back, I had a new client come to me; and in reviewing his prior years returns, I had him explain a Schedule E, page 2, Unreimbursed Partnership Expense that appeared on one year and not others, with no MMLLC line, just the UPE line. He'd had the situation above and called the IRS (back when the IRS answered phone calls). They told him to use Schedule E, page 2, as if the MMLLC was still open, as he would for any UPE. So, he'd done that for that one year the partners personally paid an expense after they closed the LLC. Now, with K-1 matching, that might generate an IRS letter. I haven't had an occasion to look into it. Keep researching to see if you can use that method for your client.

Lion makes a good point too, because it is impossible to pay the tax on New Years Day since it is a legal holiday. In that case, it is either paid early in 2017, or would be late if the person tried to pay in 2018. Are we having fun yet?

Back to the discussion of state estimates - Now I'm confused; time for more coffee! If the 4th quarter 2017 state estimate due by 1/15/18 is paid before 12/31/17, the tax year for which that tax is imposed IS 2017 and IS being paid in the tax year for which it is imposed, shouldn't it still be deductible in 2017 with the way the conference report is worded? Ah, I think cbslee was editing his post above to clarify and confirm what I expressed here. Headed for the coffee pot now. Sorry for my confusion!

Just finished recalculating my 2016 ta return under the new law. Despite my taxable income going up due the loss of my personal exemptions, the change in tax rates/brackets resulted in a $ 700 savings in my federal taxes. If I qualify for the 20 % pass thru deduction, that would save me another $ 2,000. Happy Holidays

Everything we "think" we know now is maybe not what it actually is and can change once complete picture is finalized. /// all in perspective :

No the 15 % rate was was discarded, so small regular corporations will end up paying an additional $ 3,000 of tax every year on the first $ 50,000 of taxable income. Not very small business friendly !

As usual, a gift of continued full employment for those who have to manage what those we elect regurgitate.

IR-2017-204, Dec. 14, 2017 WASHINGTON ― The Internal Revenue Service today issued the 2018 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. Beginning on Jan. 1, 2018, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be: 54.5 cents for every mile of business travel driven, up 1 cent from the rate for 2017. 18 cents per mile driven for medical or moving purposes, up 1 cent from the rate for 2017. 14 cents per mile driven in service of charitable organizations. https://www.irs.gov/newsroom/standard-mileage-rates-for-2018-up-from-rates-for-2017

I'm probably a dinosaur, but up until this year I mailed out pre-tax stuff - engagement letter, privacy letter, organizer, etc. This year, I sent that stuff as an attachment for clients who have email. There are only a very few who don't. Big difference, and no paper cuts!

It wasn't so much what he said, as how he said it. And he certainly didn't need to add "For all I care".