Additional_reading_0921

Additional_reading_0921 - Checkpoint Contents Federal...

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Checkpoint Contents Federal Library Federal Editorial Materials Practical Tax Strategies 2010 Volume 84, Number 01, January 2010 Articles ROUNDUP OF SIGNIFICANT INCOME TAX DEVELOPMENTS IN 2009, Practical Tax Strategies, Jan 2010 TAX DEVELOPMENTS ROUNDUP OF SIGNIFICANT INCOME TAX DEVELOPMENTS IN 2009 Besides far-reaching legislation, recent tax developments include guidance on Ponzi losses, mortgage interest, discharge of debt, compensation, and the work product privilege. Author: MATTHEW A. MELONE MATTHEW A. MELONE, J.D., CPA, is an associate professor of law at Lehigh University in Bethlehem, Pennsylvania. [pg. 26] This past year has been noteworthy due to the continuing effects of the economic meltdown that occurred in 2008 and the recovery, albeit slowly, of business and consumer confidence. Among the more significant developments were: Tax incentives included as part of the massive stimulus legislation in early 2009. Favorable rules for persons grappling with Madoff-related Ponzi scheme losses. Favorable court decisions interpreting the passive activity loss rules. A federal circuit court decision that has potentially far-reaching implications for audit procedures undertaken with respect to income tax exposures. Legislation On 12/2/08, President Bush signed the Worker, Retiree, and Employer Recovery Act. 1 This legislation, in addition to making several technical corrections to the Pension Protection Act of 2006, provides that qualified plan participants and IRA owners are not subject to the required minimum distribution rules for 2009. In general, account owners must begin taking minimum distributions by April 1 of the year following the year in which the taxpayer attains age 70 1/2. Failure to do so subjects the owner to a 50% excise tax pursuant to Section 4974. In light of the performance of financial markets in 2008 there has been widespread concern that the requirement to take distributions could create hardships for many taxpayers. The IRS refused to eliminate the requirement for 2008. The legislation also mandates, effective in plan years after 2009, that qualified retirement plans offer nonspouse beneficiaries the option to roll over inherited accounts into an IRA established for such purpose. Prior to the effective date of the change, plans may, but are not required to, offer this option. President Obama signed the American Recovery and Reinvestment Act of 2009 on 2/17/09. 2 This law, part of the massive stimulus legislation, contains several tax incentives for business. Among them are the following: Expansion of additional first-year 50% depreciation allowances for qualified property.
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Additional_reading_0921 - Checkpoint Contents Federal...

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