On April 19, 2021, through the enactment of the 2021-2022 Budget Bill, New York State created new Article 24-A of N.Y. Tax Law, which establishes a new elective Pass-Through Entity Tax (PTET) that applies to partnerships, LLCs (taxed as partnerships), and S corporations.
Before year end, it's important for people who own stocks and other capital assets to evaluate their current tax situations — and consider whether it makes sense to hold or sell those assets to avoid unfavorable tax consequences. Beware: A proposal from the Biden administration could change the tax law provisions related to long- and short-term gains and losses, net investment income tax and stepped-up basis on inherited assets for some taxpayers.
Can business owners deduct losses incurred during the pandemic? Limited liability company owners who meet one of seven "material participation" tests may be exempt from the passive activity loss rules, which would otherwise allow them to deduct losses only to the extent that they have passive income from other sources. There are also other unfavorable exceptions for limited partners, investors and self-rentals. Here are the details.
If you want your vacation home to qualify as a rental property for federal income tax purposes, you'll need to limit your personal use. But, as the COVID-19 pandemic lingers on, you may want to increase the time spent at your home-away-from-home, rather than rent it out to others. Here's a summary of the federal income tax rules for vacation homes that are classified as rental properties to help you decide what's right for your situation.
Good news! Uncle Sam offers some lucrative tax breaks for families, and many of those benefits have been expanded for certain families under recent legislation. Here's an overview of current rules related to the child credit, the dependent care credit, two credits for higher education expenses and the adoption credit.