New PPP FAQs – Good News for Necessity Requirement
[vc_row][vc_column][vc_column_text]As addressed in previous Legal Beats, in order to qualify for a Paycheck Protection Program (“PPP”) second draw loan, the borrower must demonstrate that they had a 25% reduction in gross revenues, comparing a 2020 calendar quarter to a comparable 2019 calendar quarter (i.e., comparing the 2nd quarter of 2020 to the 2nd quarter of […]
PPP Borrower Tax Relief Under New Act
Under the Coronavirus Response And Relief Supplemental Appropriations Act of 2021(the “Act”), passed last week by Congress and ultimately signed into law, PPP borrowers will now be able to deduct payroll and non-payroll expenses funded with their PPP loans, and will not have to include PPP loan forgiveness in income. PPP Loan Deductibility For the […]
Having Your Cake and Eating It Too: Using a Self-Cancelling Installment Note to Reduce Estate Tax
A number of our clients have asked us about making gifts to family members in order to avoid Federal Estate Tax upon the second death. Currently each spouse can give away either during lifetime or at death, or some combination, $11,580,000 without Gift Tax or Estate Tax. This is known as the Exemption. The fear […]
IRS Issues New Guidance On Treatment of PPP Loan Expenses
On November 18th, the Treasury released new guidance concerning the tax treatment of expenses paid with Paycheck Protection Program (PPP) loan funds. Newly issued Revenue Ruling 2020-27 provides that recipients of PPP loans may not deduct expenses paid with PPP funds in the year in which such expenses were paid or incurred. The Ruling further […]
PPP Update – SBA Issues New Simplified Forgiveness Application for Small Loans
On October 8, 2020, the Small Business Administration “(SBA”) provided a simpler forgiveness application for PPP loans of $50,000 or less. The key simplification is that the borrower can ignore reductions in either employee headcounts or of salaries or wages! If you are eligible to use the simpler PPP loan forgiveness form, you probably want to […]
PPP Update – New SBA Notice Addresses Change of Ownership of PPP Borrowers
As the SBA gears up for borrowers to apply for forgiveness for their PPP loans, on October 2, 2020, they issued Procedural Notice 5000-20057 (“Notice”), the purpose of which is to provide information concerning the required procedures for changes of ownership of an entity that has received Paycheck Protection Program (PPP) funds (a “PPP borrower”). […]
MAJOR 2020 TAX ACT AFFECTS RETIREMENT AND ESTATE PLANNING
Here are major points of the new tax law concerning contributions to and distributions from retirement plans that are of most interest to our readers. The age for the required minimum distribution for the commencement of retirement benefits has been increased from 70½ to 72. IRA owners may contribute to traditional IRAs if they are […]
Stuck With An Irrevocable Trust You Don’t Like?
There are a number of ways an irrevocable trust can be modified without court approval. This article discusses two of them. They are a (i) non-judicial consent agreement and a (ii) non-judicial settlement agreement. Example 1. Mother sets up an irrevocable trust for her son when he was 25 and immature. She funds it with […]
Professional Practices: Choosing The Best Entity For Tax And Asset Protection
Drs. Jose Smith and Ryan Abraham, fed up with the bureaucracy of their large group practice, left to start a new practice together. They consulted their tax attorney for advice as to the best entity for tax and asset protection. Here’s what the lawyer said. Without making this overly complicated, we will only consider a […]
Tenancy In Common: How Not To Own Property
Here is a typical estate scenario. Father and Mother own their $1,000,000 homestead jointly with right of survivorship. They have three children- Sam, Stan, and Dora, all in their 50s. Father dies and the Mother becomes the owner. Mother dies a few years later intestate. Without a Will, Sam, Stan, and Dora become tenants-in-common under […]