carried back. In prior years, such losses could be carried back
two years. This is no longer allowed. Therefore, if possible,
recognize losses in 2017, not 2018 so they can be carried back.
Does this mean Estate Tax Planning is no longer
needed if my estate is less than $22 million?
This would be true if both you and your spouse plan on going
to the afterlife before the political winds blow in a different
direction. The estate tax provisions can be changed by another
Congress and administration. In addition, your estate value (that
is not currently taxable) may increase in the future.
One strategy that will emerge in the near term will be gifting
estate value to heirs using up the increased lifetime exemptions
while those higher exemptions exists. There is no one size fits
all plan when dealing with estate tax and succession, so continue
to engage your advisors on the subject despite the relaxed tax
law.
Did Obamacare go away?
No, the 3.8% net investment tax on certain portfolio income is
still in place. All the requirements related to health reform are
still in place. The only thing that did change as part of the new
law is the requirement for individual taxpayers to pay a penalty if
they do not have adequate health insurance.
Since the 2017 year has ended, are there still some
things I can do in light of Tax Reform changes?
There has been a lot of noise about various tax tricks that can
be done for your 2017-year-end. Many have been generated
from the tax “headlines” and not by actually reading the bill or
making educated guesses on how the IRS will interpret the law.
Some items are clear however:
• Since tax rates are going to be lower in most instances (top
rate going from 39.6% to 37% or less for S corp/partnership
owners), tax deductions are worth more in 2017. If there were
expenses you expected to incur in early 2018, accelerating them
to 2017 will save tax. The obvious type of items are accrued
expenses, prepaid items, etc.
As noted, it will take some time for the dust to settle on this
law. The IRS interpretations are just starting to come out and
will continue for years. They will be followed up by tax court
decisions. Over the next year, we will be reviewing your current
structure and discussing transactions to maximize savings from
the new laws.
Please reach out to us with any questions or concerns you have
regarding the new laws. We strongly suggest you contact us as
you consider future business decisions so that we can assist you
in understanding the impact these new laws will have.
Dave Wiggins, CPA is a partner with
CliftonLarsonAllen and is a member of the firm’s
dealership team. He has extensive knowledge
of the inner-workings of trailer dealership
operations. Dave has deep experience working
with federal and state tax laws regarding trailer
and other dealerships. He can be reached at 314-925-4300
or [email protected].
About CliftonLarsonAllen
CliftonLarsonAllen is a certified public accounting and consulting
firm dedicated to providing services to privately held businesses and
their owners. Structured to provide clients with highly specialized
dealership insight, the firm delivers assurance, tax and advisory
capabilities. For more information about CliftonLarsonAllen, visit
www.cliftonlarsonallen.com.
• Consider accelerated depreciation to expense fixed asset
purchases, service loaners and rental vehicles.
• Write off obsolete parts inventories.
• Adjust used vehicles down to market value.
• Write off old uncollectible receivable.
• Accruing bonuses to employees.
Although there are savings from these items; we recommend
only doing things that are economically prudent. If you were
going to spend the money anyway, accelerating it into December
makes sense. Making a spending decision solely based on the
tax savings typically does not make sense. It is similar to buying
something you do not need just because it was on sale.
www.natda.org
NATDA Magazine
27