The recent riots around the country have resulted in many storefronts, office buildings and business properties being destroyed. In the case of stores or other businesses with inventory, some of these businesses lost products after looters ransacked their property. Windows were smashed, property was vandalized, and some buildings were burned to the ground. This damage was especially devastating because businesses were reopening after the COVID-19 pandemic eased.

A commercial insurance property policy should generally cover some, or all, of the losses. (You may also have a business interruption policy that covers losses for the time you need to close or limit hours due to rioting and vandalism.) But a business may also be able to claim casualty property loss or theft deductions on its tax return. Here’s how a loss is figured for tax purposes:

Your adjusted basis in the property
MINUS
Any salvage value
MINUS
Any insurance or other reimbursement you receive (or expect to receive).

Losses that qualify

A casualty is the damage, destruction or loss of property resulting from an identifiable event that is sudden, unexpected or unusual. It includes natural disasters, such as hurricanes and earthquakes, and man-made events, such as vandalism and terrorist attacks. It does not include events that are gradual or progressive, such as a drought.

For insurance and tax purposes, it’s important to have proof of losses. You’ll need to provide information including a description, the cost or adjusted basis as well as the fair market value before and after the casualty. It’s a good time to gather documentation of any losses including receipts, photos, videos, sales records and police reports.

Finally, be aware that the tax code imposes limits on casualty loss deductions for personal property that are not imposed on business property. Contact us for more information about your situation.

© 2020

Restaurants and entertainment venues have been hard hit by the novel coronavirus (COVID-19) pandemic. One of the tax breaks that President Trump has proposed to help them is an increase in the amount that can be deducted for business meals and entertainment.

It’s unclear whether Congress would go along with enhanced business meal and entertainment deductions. But in the meantime, let’s review the current rules.

Before the pandemic hit, many businesses spent money “wining and dining” current or potential customers, vendors and employees. The rules for deducting these expenses changed under the Tax Cuts and Jobs Act (TCJA), but you can still claim some valuable write-offs. And keep in mind that deductions are available for business meal takeout and delivery.

One of the biggest changes is that you can no longer deduct most business-related entertainment expenses. Beginning in 2018, the TCJA disallows deductions for entertainment expenses, including those for sports events, theater productions, golf outings and fishing trips.

50% meal deductions

Currently, you can deduct 50% of the cost of food and beverages for meals conducted with business associates. However, you need to follow three basic rules in order to prove that your expenses are business related:

1. The expenses must be “ordinary and necessary” in carrying on your business. This means your food and beverage costs are customary and appropriate. They shouldn’t be lavish or extravagant.
2. The expenses must be directly related or associated with your business. This means that you expect to receive a concrete business benefit from them. The principal purpose for the meal must be business. You can’t go out with a group of friends for the evening, discuss business with one of them for a few minutes, and then write off the check.
3. You must be able to substantiate the expenses. There are requirements for proving that meal and beverage expenses qualify for a deduction. You must be able to establish the amount spent, the date and place where the meals took place, the business purpose and the business relationship of the people involved.

It’s a good idea to set up detailed recordkeeping procedures to keep track of business meal costs. That way, you can prove them and the business connection in the event of an IRS audit.

Other considerations

What if you spend money on food and beverages at an entertainment event? The IRS has clarified that taxpayers can still deduct 50% of food and drink expenses incurred at entertainment events, but only if business was conducted during the event or shortly before or after. The food-and-drink expenses should also be “stated separately from the cost of the entertainment on one or more bills, invoices or receipts,” according to the guidance.

Another related tax law change involves meals provided to employees on the business premises. Before the TCJA, these meals provided to an employee for the convenience of the employer were 100% deductible by the employer. Beginning in 2018, meals provided for the convenience of an employer in an on-premises cafeteria or elsewhere on the business property are only 50% deductible. After 2025, these meals won’t be deductible at all.

Plan ahead

As you can see, the treatment of meal and entertainment expenses became more complicated after the TCJA. It’s possible the deductions could increase substantially under a new stimulus law, if Congress passes one. We’ll keep you updated. In the meantime, we can answer any questions you may have concerning business meal and entertainment deductions.

© 2020

In its 2018 decision in South Dakota v. Wayfair, the U.S. Supreme Court upheld South Dakota’s “economic nexus” statute, expanding the power of states to collect sales tax from remote sellers. Today, nearly every state with a sales tax has enacted a similar law, so if your company does business across state lines, it’s a good idea to reexamine your sales tax obligations.

What’s nexus?

A state is constitutionally prohibited from taxing business activities unless those activities have a substantial “nexus,” or connection, with the state. Before Wayfair, simply selling to customers in a state wasn’t enough to establish nexus. The business also had to have a physical presence in the state, such as offices, retail stores, manufacturing or distribution facilities, or sales reps.

In Wayfair, the Supreme Court ruled that a business could establish nexus through economic or virtual contacts with a state, even if it didn’t have a physical presence. The Court didn’t create a bright-line test for determining whether contacts are “substantial,” but found that the thresholds established by South Dakota’s law are sufficient: Out-of-state businesses must collect and remit South Dakota sales taxes if, in the current or previous calendar year, they have 1) more than $100,000 in gross sales of products or services delivered into the state, or 2) 200 or more separate transactions for the delivery of goods or services into the state.

Nexus steps

The vast majority of states now have economic nexus laws, although the specifics vary:Many states adopted the same sales and transaction thresholds accepted in Wayfair, but a number of states apply different thresholds. And some chose not to impose transaction thresholds, which many view as unfair to smaller sellers (an example of a threshold might be 200 sales of $5 each would create nexus).

If your business makes online, telephone or mail-order sales in states where it lacks a physical presence, it’s critical to find out whether those states have economic nexus laws and determine whether your activities are sufficient to trigger them. If you have nexus with a state, you’ll need to register with the state and collect state and applicable local taxes on your taxable sales there. Even if some or all of your sales are tax-exempt, you’ll need to secure exemption certifications for each jurisdiction where you do business. Alternatively, you might decide to reduce or eliminate your activities in a state if the benefits don’t justify the compliance costs.

Need help?

Note: If you make sales through a “marketplace facilitator,” such as Amazon or Ebay, be aware that an increasing number of states have passed laws that require such providers to collect taxes on sales they facilitate for vendors using their platforms.

If you need assistance in setting up processes to collect sales tax or you have questions about your responsibilities, contact us.

© 2019

Most business owners would probably agree that, when it comes to sales, there’s always room for improvement. To this end, every company should strive for organic sales growth — that is, increases from existing operations unrelated to a merger or acquisition.

That’s not to say a merger or acquisition is necessarily a bad idea, but you can’t rely on major moves like this to regularly boost your numbers. Let’s look at three best practices for achieving organic sales growth.

1. Attentive customer service

Premier customer service is more than just a smile and a handshake. Are your employees really hearing clients’ problems and concerns? Do their solutions not only fix the issue but also, whenever possible, exceed the customers’ expectations?

The ability to conduct productive dialogues with your customers is a key to growing sales. Maintaining a positive, ongoing conversation starts with resolving any negative (or potentially negative) issues that arise as quickly as possible under strictly followed protocols. It also includes simply checking in with customers regularly to see what they may need.

2. Smart marketing

Do you often find yourself wondering why all your marketing channels aren’t generating new leads for your business? Most likely, it’s because some of those channels are no longer connecting with customers and prospects.

Therefore, you might want to step back and reassess the nature and strengths of your company. If you work directly with the buying public, you may want to cast as wide a net as possible. But if you sell to a specific industry or certain types of customers, you may be able to grow sales organically by focusing on professional networking groups, social organizations and trade associations.

3. Great employees

Ultimately, people are what make or break a company. Even the best idea can fail if employees aren’t fully prepared and committed to designing, producing, marketing and selling that product or service. Of course, as you well know, employing talented, industrious staff requires much more than simply getting them to show up for work.

First, you must train employees well. This means they need to know both: 1) how to do their jobs, and 2) how to help grow sales. You might ask: Does every worker really contribute to sales? In a sense, yes, because quality work — from entry-level office staff to executives in corner offices — drives sales.

Second, once an employee is trained, he or she must be periodically retrained. Happy workers are more productive and more likely to preach the excellence of your company’s products or services to friends and family. Sales may occur as a result.

The right moves

These best practices are, obviously, general in nature. The specific moves you need to make to boost your business’s sales numbers will depend on your size, industry, market and focus. Our firm can help you identify optimal strategies for organic sales growth and measure the results.

© 2020

The Financial Accounting Standards Board (FASB) hasn’t issued any major new accounting rules in 2019. But there have been some important developments to be aware of when preparing annual financial statements under U.S. Generally Accepted Accounting Principles (GAAP).

Deferral of major accounting rules

Accounting Standards Update (ASU) No. 2019-09 delays the effective date of the updated guidance for long-term insurance contracts. For public business entities, except smaller reporting companies (SRCs), the effective date is delayed until fiscal years beginning after December 15, 2021. For all other entities, the effective date is postponed until fiscal years beginning after December 15, 2023.

In addition, ASU 2019-10 defers the effective dates for three other ASUs as follows:

1. ASU 2016-02, Leases. For public business entities (including SRCs) and certain nonprofit organizations and employee benefit plans, the effective date remains as fiscal years beginning after December 15, 2018. For all other entities, the effective date is deferred to fiscal years beginning after December 15, 2020.

2. ASU 2016-13, Financial Instruments — Credit Losses: Measurement of Credit Losses on Financial Instruments. For public business entities that don’t meet the definition of an SRC, the effective date remains fiscal years beginning after December 15, 2019. For all other entities, the effective date is deferred to fiscal years beginning after December 15, 2022.

3. ASU 2017-12, Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities. For public business entities (including SRCs) the effective date remains as fiscal years beginning after December 15, 2018. For all other entities, the effective date is deferred to fiscal years beginning after December 15, 2020.

Effective dates going forward

ASU 2019-10 also updates the FASB’s philosophy for setting the effective dates for all major ASUs going forward. It will group entities into two overall buckets, as follows:

Bucket 1. Large public companies that are SEC filers and don’t meet the SEC definition of SRCs, and

Bucket 2. Entities other than large public companies, including SRCs, private companies, nonprofit entities and employee benefit plans.

In general, the FASB plans to set the effective dates of major ASUs for Bucket 2 entities at least two years after the initial effective dates for entities in Bucket 1.

Revenue recognition

Starting in 2019, private companies that follow GAAP must use an updated five-step method to recognize revenue from long-term contracts. Public companies that made the switch in 2018 report that the process was more difficult than expected.

Unfortunately, many private companies underestimate the amount of work it takes to apply the updated rules — and many accounting software solutions can’t effectively handle the changes, including the disclosure requirements. If you haven’t started implementing the updated revenue recognition guidance, contact us to get you back on track.

Other developments

Throughout 2019, the FASB has issued some other narrow-scope accounting rules, including guidance that 1) updates the rules for reporting share-based payments to customers and nonemployees, 2) extends the scope of private company alternatives for reporting goodwill to nonprofit organizations, and 3) clarifies major accounting standards updates. Contact us to discuss how the changes to GAAP, including various proposed amendments, will affect your financial statements in 2019 and beyond.

© 2019

Finding the right person to head up your company’s finance and accounting department can be challenging in today’s tight labor market. While it may be tempting to simply promote an existing employee, external candidates may offer fresh ideas and skills that take your financial reporting to the next level. Here are four traits to put on your wish list.

1. Leadership and strategy experience

The finance and accounting department provides critical feedback on how your company is performing and is expected to perform in the future. That information helps the rest of the management team make critical business decisions.

The CFO must provide timely, relevant financial data to other departments — including information technology, operations, sales and supply chain logistics — to help improve how the business operates. He or she also must be able to drum up cross-departmental support for major initiatives. If you operate overseas or plan to expand there soon, experience operating and reporting in a global context would be a bonus.

2. Command of the basics

Your CFO must have a working knowledge of finance and accounting fundamentals, such as:

• U.S. Generally Accepted Accounting Principles (GAAP) and, if applicable, international accounting standards,
• Federal and state tax law,
• Budgeting and forecasting, and
• Financial planning and benchmarking.

Accounting rules and tax law have undergone major changes in recent years. Candidates should understand the business provisions of the Tax Cuts and Jobs Act, as well as the impact of updated accounting standards on reporting revenue, leases and credit losses. It’s also helpful to have experience with managerial accounting and cost-cutting initiatives.

3. Previous employment in public accounting

Many CFOs start off their careers in public accounting for good reason: They learn about a broad range of accounting, tax and consulting projects in many different industries.

This experience positions candidates for leadership roles in the private sector. Former CPAs know how the auditing process works and can implement procedures to support that process within your organization. They’ve also seen the best (and worst) business practices in the real world. This insight can help your company seize opportunities — and avoid potential pitfalls.

4. Forensic and technology skills

CFOs sometimes need to examine the business from a forensic perspective. That could include overseeing a fraud investigation, evaluating compliance with new or updated government regulations, or remediating a data breach.

In turn, the prevalence of cyberattacks has made technology skills increasingly important for CFOs. Candidates should know how to protect against loss of sensitive data, including customer credit card numbers and company financial data and intangible assets. Candidates also must have a working knowledge of accounting systems and how they operate in the cloud.

Help wanted

As your business evolves, so too must the role of the CFO. We can help you evaluate candidates to find the right mix of skills and experience for your finance and accounting department.

© 2020

On Friday June 5, 2020, President Trump signed into law the Payroll Protection Program Flexibility Act of 2020 (PPPFA). The Bill was designed to address many of the concerns for recipients of Payroll Protection Program (PPP) loans. The Bill itself is extremely short and while it solves many problems created by this stimulus program it creates a growing list of questions. The following is an overview of the new provisions. We expect additional guidance from the Small Business Administration (SBA) in the coming weeks to provide added guidance on how some of these provisions will be administered. We will continue to monitor important developments and communicate relevant information.

1.     Time period to use funds extended from 8 to 24 weeks

The recipients of PPP loans before June 5, 2020 can choose to calculate their loan forgiveness over either 8 weeks or 24 weeks from the day they received their loan. However, the 24-week period cannot extend past December 31, 2020. For loans received after June 5th the forgiveness period is calculated over the 24-week period.

This provision was designed to assist businesses that were not open or had substantial reductions in employees due to COVID-19. PPPFA did not change any other provisions of the law regarding how to calculate forgiveness reductions. PPPFA simply extends the period for allowable expenses which should increase the likelihood of complete loan forgiveness.

PPPFA is silent as to how this impacts owners and employees who earn over $100,000. We anticipate more guidance from the SBA but expect the original limitations to remain intact under the new 24-week forgiveness period.

We will distribute revised PPP Loan Forgiveness Calculators once they become available.

Strategy & Advice

Since many employers are well into their 8-week forgiveness period it may be best to use this time frame for forgiveness. However, if you are unable to obtain full forgiveness, we recommend that you wait on filing for forgiveness to try to maximize the amount forgiven under the 24-week extended period. There are more provisions of PPPFA, outlined below, which will need to be considered. This provision will provide added flexibility to insure you maximize the amount forgiven.

2.     75% Threshold for Payroll Costs Dropped to 60%

The original PPP loan forgiveness provided that 75% of the funds used must be attributable to payroll costs. PPPFA dramatically changes this provision by stating that “at least” 60% of the covered loan amount should be used for payroll costs.

This appears to be an intentional “cliff” provision which means that no less than 60% of the loan proceeds must be used for payroll costs. Otherwise none of the loan is forgiven. For example, if you received a $100,000 PPP loan and use $59,000 for payroll costs with $41,000 in other eligible expenses (rent, mortgage interest and utilities) then none of the loan will be forgiven.

Strategy & Advice

Since this is a “cliff” provision that we do not expect to change, it is imperative that you ensure that at least 60% of the loan proceeds are used for payroll over either the 8-week or 24-week period.

UPDATE

Shortly after publication, the SBA and Treasury announced that this is NOT a “cliff” provision and will grant partial forgiveness.

3.     Deadline to Rehire Workers Extended to December 31, 2020

The original law provided that employers had until June 30, 2020 to restore their employee head count to pre-COVID-19 levels in order to avoid reductions in the amount of loan forgiveness. PPPFA extended this requirement to December 31, 2020. The new law also clarifies that they do not have to be the same employees, or even have the same job duties as the pre-COVID employees.

These provisions provide employers, particularly those unable to open at full capacity, with more flexibility to meet the expectations provided under PPP.

4.     Eased Rehire Requirements

The intent of PPP was to keep the same number of employees on the payroll as was used to calculate the loan. The only exception to this rule was if an employer could document in writing an attempt to rehire an employee who rejected this offer.

The new law makes two significant changes to these requirements. First, it extends the rehire date to December 31, 2020, as outlined above, and second, it adds other exceptions for a reduced head count. The law states a business can still receive forgiveness on payroll amounts if it is:

• Unable to rehire an individual who was an employee of the eligible recipient on or before February 15, 2020; or
• Able to show an inability to hire similarly qualified employees on or before December 31, 2020; or
• Able to demonstrate an inability to return to the same level of business activity as such business was operating at or before February 15, 2020, due to COVID-19 compliance requirements (i.e. reduced capacity for social distancing).

We anticipate additional guidance on how we “demonstrate an inability.” However, the intent of the law supplies more exceptions which should allow for maximum loan forgiveness under this program.

5.     Extends Repayment Term from 2 Years to 5 Years

PPPFA requires the minimum loan term for new loans to be 5 years. PPPFA does not change the original interest rate language, so we will need to see if the SBA changes the interest rate now that the loans have a longer maturity date.

Existing loans remain unchanged. However, PPPFA allows lenders and borrowers of existing loans to mutually agree to modify the term of the loan. We do not expect lenders to agree to modify the term without adequate interest rate concessions. We will see how lenders respond over the coming weeks.

PPFA also delays the first payment owed on the unforgiven portion of the loan to 6 months after the SBA decides on forgiveness. Additionally, if a recipient does not apply for forgiveness, the loan repayment will begin no later than 10 months after the end of 8-week or 24-week covered period.

6.     Payroll Tax Deferral Available to Every Business

Employers could defer payment of the employer’s share of Social Security payroll taxes (6.2%) through the later of the date PPP loan forgiveness was granted or December 31, 2020. Deferred payroll taxes are due 50% at the end of 2021 and the remainder at the end of 2022.

PPPFA eliminates the PPP loan forgiveness provision and makes this deferral available to all employers. Employers still can elect out of this deferral. However, since it is a no interest loan, we would advise that every employer elect into the deferral.

In these uncertain times, we are continually evolving to ensure that we do what is in the best interest of our clients, team, and community.

We will continue to closely monitor the economic and tax changes and communicate important information to you timely and accurately. We are always available by phone or email to address your questions and concerns.

We strongly encourage you to leverage our expertise during these trying times. We have a deep understanding and broad view of the economic climate, which can add significant value during times of uncertainty. We are committed to assisting you in successfully managing through the rapidly changing economic environment.

Thank you for your support and stay safe!

© 2020

In light of the novel coronavirus (COVID-19) pandemic, many businesses are interested in donating to charity. In order to incentivize charitable giving, the Coronavirus Aid, Relief and Economic Security (CARES) Act made some liberalizations to the rules governing charitable deductions. Here are two changes that affect businesses:

The limit on charitable deductions for corporations has increased. Before the CARES Act, the total charitable deduction that a corporation could generally claim for the year couldn’t exceed 10% of corporate taxable income (as determined with several modifications for these purposes). Contributions in excess of the 10% limit are carried forward and may be used during the next five years (subject to the 10%-of-taxable-income limitation each year).

What changed? Under the CARES Act, the limitation on charitable deductions for corporations (generally 10% of modified taxable income) doesn’t apply to qualifying contributions made in 2020. Instead, a corporation’s qualifying contributions, reduced by other contributions, can be as much as 25% of taxable income (modified). No connection between the contributions and COVID-19 activities is required.

The deduction limit on food inventory has increased. At a time when many people are unemployed, your business may want to contribute food inventory to qualified charities. In general, a business is entitled to a charitable tax deduction for making a qualified contribution of “apparently wholesome food” to an organization that uses it for the care of the ill, the needy or infants.  

“Apparently wholesome food” is defined as food intended for human consumption that meets all quality and labeling standards imposed by federal, state, and local laws and regulations, even though it may not be readily marketable due to appearance, age, freshness, grade, size, surplus, or other conditions.

Before the CARES Act, the aggregate amount of such food contributions that could be taken into account for the tax year generally couldn’t exceed 15% of the taxpayer’s aggregate net income for that tax year from all trades or businesses from which the contributions were made. This was computed without regard to the charitable deduction for food inventory contributions.

What changed? Under the CARES Act, for contributions of food inventory made in 2020, the deduction limitation increases from 15% to 25% of taxable income for C corporations. For other business taxpayers, it increases from 15% to 25% of the net aggregate income from all businesses from which the contributions were made.

CARES Act questions

Be aware that in addition to these changes affecting businesses, the CARES Act also made changes to the charitable deduction rules for individuals. Contact us if you have questions about making charitable donations and securing a tax break for them. We can explain the rules and compute the maximum deduction for your generosity.

© 2020

The Coronavirus Aid, Relief, and Economic Security (CARES) Act eliminates some of the tax-revenue-generating provisions included in a previous tax law. Here’s a look at how the rules for claiming certain tax losses have been modified to provide businesses with relief from the novel coronavirus (COVID-19) crisis.

NOL deductions

Basically, you may be able to benefit by carrying a net operating loss (NOL) into a different year — a year in which you have taxable income — and taking a deduction for it against that year’s income. The CARES Act includes favorable changes to the rules for deducting NOLs. First, it permanently eases the taxable income limitation on deductions.

Under an unfavorable provision included in the Tax Cuts and Jobs Act (TCJA), an NOL arising in a tax year beginning in 2018 and later and carried over to a later tax year couldn’t offset more than 80% of the taxable income for the carryover year (the later tax year), calculated before the NOL deduction. As explained below, under the TCJA, most NOLs arising in tax years ending after 2017 also couldn’t be carried back to earlier years and used to offset taxable income in those earlier years. These unfavorable changes to the NOL deduction rules were permanent — until now.

For tax years beginning before 2021, the CARES Act removes the TCJA taxable income limitation on deductions for prior-year NOLs carried over into those years. So NOL carryovers into tax years beginning before 2021 can be used to fully offset taxable income for those years.
For tax years beginning after 2020, the CARES Act allows NOL deductions equal to the sum of:

• 100% of NOL carryovers from pre-2018 tax years, plus
• The lesser of 100% of NOL carryovers from post-2017 tax years, or 80% of remaining taxable income (if any) after deducting NOL carryovers from pre-2018 tax years.

As you can see, this is a complex rule. But it’s more favorable than what the TCJA allowed and the change is permanent.  

Carrybacks allowed for certain losses

Under another unfavorable TCJA provision, NOLs arising in tax years ending after 2017 generally couldn’t be carried back to earlier years and used to offset taxable income in those years. Instead, NOLs arising in tax years ending after 2017 could only be carried forward to later years. But they could be carried forward for an unlimited number of years. (There were exceptions to the general no-carryback rule for losses by farmers and property/casualty insurance companies).

Under the CARES Act, NOLs that arise in tax years beginning in 2018 through 2020 can be carried back for five years.

Important: If it’s beneficial, you can elect to waive the carryback privilege for an NOL and, instead, carry the NOL forward to future tax years. In addition, barring a further tax-law change, the no-carryback rule will come back for NOLs that arise in tax years beginning after 2020.

Past year opportunities

These favorable CARES Act changes may affect prior tax years for which you’ve already filed tax returns. To benefit from the changes, you may need to file an amended tax return. Contact us to learn more.

© 2020

The law providing relief due to the coronavirus (COVID-19) pandemic contains a beneficial change in the tax rules for many improvements to interior parts of nonresidential buildings. This is referred to as qualified improvement property (QIP). You may recall that under the Tax Cuts and Jobs Act (TCJA), any QIP placed in service after December 31, 2017 wasn’t considered to be eligible for 100% bonus depreciation. Therefore, the cost of QIP had to be deducted over a 39-year period rather than entirely in the year the QIP was placed in service. This was due to an inadvertent drafting mistake made by Congress.

But the error is now fixed. The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020. It now allows most businesses to claim 100% bonus depreciation for QIP, as long as certain other requirements are met. What’s also helpful is that the correction is retroactive and it goes back to apply to any QIP placed in service after December 31, 2017. Unfortunately, improvements related to the enlargement of a building, any elevator or escalator, or the internal structural framework continue to not qualify under the definition of QIP. 

In the current business climate, you may not be in a position to undertake new capital expenditures — even if they’re needed as a practical matter and even if the substitution of 100% bonus depreciation for a 39-year depreciation period significantly lowers the true cost of QIP. But it’s good to know that when you’re ready to undertake qualifying improvements that 100% bonus depreciation will be available.

And, the retroactive nature of the CARES Act provision presents favorable opportunities for qualifying expenditures you’ve already made. We can revisit and add to documentation that you’ve already provided to identify QIP expenditures.

For not-yet-filed tax returns, we can simply reflect the favorable treatment for QIP on the return.

If you’ve already filed returns that didn’t claim 100% bonus depreciation for what might be QIP, we can investigate based on available documentation as discussed above. We will evaluate what your options are under Revenue Procedure 2020-25, which was just released by the IRS.

If you have any questions about how you can take advantage of the QIP provision, don’t hesitate to contact us.

© 2020