What is the Cadillac tax? Introduced by the Affordable Care Act ACAthe so-called "Cadillac tax" is an excise tax on employers that offer high-cost health plans to their employees.
But a catch exists. Rather, Section says taxpayers can deduct the ordinary and necessary expenses of running a trade or business—and then it and the related regulations describe the detailed rules for taking these deductions. These court and IRS decisions, by the way, all sort of work the same way.
And if you happen to be interested, probably your best place to dip toes into the water is the Groetzinger v. Groetzinger summarizes nicely what a Section trade or business needs to look. The activity needs to be continuous and not sporadic.
And the activity needs to be conducted with regularity and with a profit motive. The one special case situation where direct real estate investment automatically counts as a trade or business? When someone rents property to another trade or business they own at least 50 percent of.
For example, say you own an office building. Further, say you rent the office building to a corporation or partnership. You get to take the Section A deduction only when your real estate activity rises to the level of a trade or business. The expenses count as Section expenses.
But Section and Section differ. And now lets try to nail down this concept of a trade or business as it applies to rental property. Trade or Business Status: You want to look at these positions to get clarity on this trade or business stuff.
To me, it seems like it does. You have a profit motive coupled with regular activity and continuity… Green v. Commissioner In Green v.
Commissioner, an individual gives blood 95 times over a year, earning money as a plasma donor. A home owner with a large front yard, living across the street from the state fair grounds, rents parking spots 95 times to fair visitors. This seems to me another example that shows regularity, continuity and a profit motive.
Commissioner, a professor co-authors a textbook and then, though under no obligation to do so, revises the textbook five years later. No continuity and no regularity, right? A professor on summer sabbatical to Europe maybe to work on a textbook revision?
And say five years later, he again does the same thing. No continuity and no regularity. Commissioner, a part-time inventor patents and sells his occasional inventions. A real estate version of this situation? Someone with a lake cabin who occasionally rents to vacationers—though not every year.
Again, no regularity and no continuity… which should mean no Section A deduction.
He therefore leases his fishing permit. And arguably the fishing permit leasing action fails on all accounts to be a trade or business: No continuity, no regularity, and no profit motive.
A real estate version of this example might go like this: A homeowner gets sick and checks into assisted care facility temporarily while in recovery. Or maybe into hospice for the last months of life. He or his family rents the house while in the care facility.
Again, no continuity, no regularity and no real profit motive.
The Corporate Officer In Revenue Rulinga corporate officer earned a transaction-based fee for negotiating the sale of some company stock.
The lack of continuity and regularity squelched any Section business deductions.A business authorized by the IRS to participate in the IRS e-file Program. The business may be a sole proprietorship, a partnership, a corporation, or an organization. Direct Deposit is a fast, simple, safe, secure way to get a tax refund.
The taxpayer must have an established checking or savings account to qualify for Direct Deposit. The Affordable Care Act aims to provide more Americans with access to affordable health insurance, to improve the quality of healthcare and health insurance, to regulate the health insurance industry, and to reduce health care spending in the US.
Compensation Planning. The IRS, February 10, , released highly anticipated final regulations regarding the Affordable Care Act’s employer mandate requiring certain-sized employers to pay a penalty if minimal health insurance is not provided to employees. Affordable Care Act: Summary of Provisions Affecting Employer-Sponsored Insurance 4 Multiemployer plan transition rule: Until any new guidance is released on this topic, employers will not owe a penalty if, pursuant to a collective bargaining agreement, they contribute to a multi-.
2 The Affordable Care Act – What Employers Need to Know for When it comes to the Affordable Care Act (ACA), CDPHP® is committed to providing you with the information that matters most. Take a fresh look at your tax and wealth planning objectives to see beyond the changing landscape.
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