Video instructions and help with filling out and completing Will Form 1065 Schedule M 3 Hedging

Instructions and Help about Will Form 1065 Schedule M 3 Hedging

Welcome to this week's current federal tax developments brought to you by Kaplan professional education and your State Society of CPAs this week we're going to be looking at some developments that have occurred interesting enough the big things have occurred in instructions and forms I met Sollers from Phoenix and we're going to look at a few things before we get to the forms and instructions first the IRS fixed a a troublesome problem that was created when the tax cuts and Jobs Act went to 100 percent bonus depreciation with regard to what we all refer to as luxury auto rules we'll take a little private letter ruling that a lot of sub trust to qualify as a conduit trust for IRA distribution purposes the AICPA this week sent out a letter to the IRS asking for some regulatory changes that would fix a problem we discussed last month regarding the problem of the syndicate rules and the potential that has for taking away a number of potential tax benefits from small businesses then we'll get to our forms and instructions problem first we'll talk about the form 1065 instructions that now require certain partnerships that were not reporting tax bases on schedule k-1 for the partners to report that information if the tax basis number would be zero and secondly we're going to talk about not so much a new thing it's something's been true on S corporations for a number of years but something that is now been added a new box has been added to Schedule E if you're required to attach a basis computation and the IRS then recently added updated the instructions for Schedule E and they added a requirement more requirements I should say for cases where you're going to have to attach that basis computation so we'll talk about how that goes well as you're probably all aware this is the week when the brokers had to get their 1099 consolidate to ninety nine out that doesn't mean we won't have changes on them but it does mean that probably you're finding a lot more of your clients now have everything ready to go and they're going to be starting tax season for real now so we're getting into the into the mode of its tax season time does mean that hey I'm not going to be doing any or shall we say CP courses don't believe I will until tax season ends there are still a few thence those of you who are in the various states are some courses being offered I know New Jersey's going to offer a couple of hour and a half sessions related on section 199 cafe because that's still a big deal but to assert to a large extent the CPE season is finished now that we're into major time frame the two months run to April 15 and so hopefully you're all ready for that but IRS and things don't start happening with the IRS I should say just because we're in tax season and we have a few developments this week the first one is kind of a welcome development this is revenue procedure 20 1913 this was issued on February 13th and this one deals with a quirk we have due to the tax cuts and Jobs Act and going to a hundred percent bonus depreciation generally that's a good thing but as you're all aware we have this rule in Section 2 ad F which we have all I think called you know informally the luxury auto rule and we know it's not really luxury autos but remember we have limitations on how much you can claim for depreciation or section 179 expenses if you have an automobile a passenger auto and generally under the bonus depreciation rules we're capped at eighteen thousand dollars as the maximum amount for the first year depreciation why is there a problem with what they did with the tax cuts and Jobs Act well here's our problem under the rules of two ATF you know if you will go back you remember them you take a look at them generally what happens is we compute our depreciation like normal any depreciation that's disallowed in a year from what it would have been normally is a five-year makers depreciation is held back and then we begin to use that up after we get past the end of the recovery period so generally in year seven you know because it takes us basically six years remember half year for the factor convention the first year half your life that means a five-year asset has six years on the schedule well that means that basically in your seven we pick up whatever is left over now the problem remember a standard five-year asset with bonus depreciation would have 100 percent of its cost recovered the first year that means the entire cost in excess of $18,000 would suddenly become in that disallowed category that would drift all the way back to year number seven before we would start picking it up and writing it off well that seems somewhat shall we say counterintuitive certainly it doesn't seem like that was what Congress intended by increasing bonus depreciation to be totally honest this has always been the issue you know as they increased most appreciation this amount thrown to the back gets got higher but now it's ridiculous because if you look at it and if you download the article that I wrote and I put on the website you download the PDF we have of this you're going to see that you know we take $18,000 we got a $60,000 car let's say we take $18,000 depreciation on 2018 returns that's fine but then 2019 through 2023 we take no depreciation on the car and then we begin to appreciate in the car at fifty seven sixty per year beginning at 2024 why 57 60 because