For years, Code § 1031 has been a popular way to defer taxation on the sale of capital gain assets. However, Code § 1031 has significant requirements, including complex timing and identification requirements and a requirement that the capital gain asset be exchanged with “like kind” property that, as of the enactment of the so-called Tax Cuts and Jobs Act in 2017, must be real property. With the enactment of Code §§ 1400Z-1 and 1400Z-2 in the Tax Cuts and Jobs Act, the ... Keep Reading »
Seizing the Opportunity with Qualified Opportunity Zones
The December 2017 tax legislation commonly referred to as the Tax Cuts and Jobs Act (the Act) provides significant tax incentives for taxpayers to invest in certain low-income communities designated as Qualified Opportunity Zones under Code Section 1400Z-1. Proposed regulations published by the U.S. Department of the Treasury in October 2018 provide additional guidance regarding Qualified Opportunity Zone investments (the Proposed Guidance). The following analysis is ... Keep Reading »
IRS Issues Interim Guidance on Certain 2017 Tax Act Changes Affecting Exempt Organizations: Excess Remuneration and Parachute Payments Excise Tax
The IRS issued Notice 2019-09, which provides interim guidance in a fairly lengthy Q&A format relating to Code Section 4960, enacted on December 22, 2017. Code Section 4960 imposes a 21 percent excise tax on the amount of compensation in excess of $1 million and any excess parachute payment paid by an applicable tax-exempt organization to a covered employee. The interim guidance is intended to assist taxpayers in applying Code Section 4960 while the Treasury ... Keep Reading »
Recent Change to Hardship Distributions Can Increase Employer Liabilities
This alert should interest sponsors of retirement plans subject to IRC sections 401(k), 403(b), or 457(b) that authorize hardship distributions (often called “unforeseeable emergency distributions” in 457(b) plans). This is not a general summary of the recent changes,[i] but a focused explanation of our concern with one particular aspect that could increase plan sponsor liabilities. Cause of Concern Among the changes made is an allowance for participants to ... Keep Reading »
IRS Allows Employer ‘Matching Contribution’ Based on Student Loan Repayments
With U.S. student loan debt totaling $1.5 trillion, employers are seeking ways to ease the burden of repayment for their employees and prospective employees. These have included signing bonuses and direct repayment of outstanding loans. Now, employers appear able to make matching-type contributions to retirement plans based on student loan repayments instead of on salary deferrals alone. On Aug. 17, the IRS publicly released a private letter ruling, allowing an employer ... Keep Reading »
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