International Financial Law Prof Blog

Editor: William Byrnes
Texas A&M University
School of Law

Thursday, August 9, 2018

TCJA Analysis in TaxFacts Intelligence Weekly from Byrnes & Bloink

TAX REFORM DEVELOPMENTS

New Association Health Plan Rules Can Impact Employee-Owners
The new regulations on association health plans generally expand access to these types of plans by broadening the types of businesses that qualify (i.e., the regulations eliminated the requirement that all participating employers be in the same trade or business). However, the new rules also expanded the availability of association health plans to "working owners" of small businesses. For more information on the health insurance options available to self-employed individuals, visit Tax Facts Online and Read More.

IRS Releases Guidance for Post-Reform Small Business Change in Accounting Methods
The 2017 tax reform legislation expanded the availability of the cash basis accounting method to small businesses with average annual gross receipts of less than $25 million for the three prior years. Revenue Procedure 2018-40 provides the procedures by which small businesses can obtain automatic consent to change to the cash basis accounting method for tax years beginning after December 31, 2017. For more information on which entities are permitted to use the cash basis method, visit Tax Facts on Individuals and Small Business Online and Read More.

REG WATCH

Proposed Regs Define UBIA for Determining the Section 199A Deduction 
The proposed regulations provide a definition of "Unadjusted Basis Immediately After Acquisition" (UBIA), for purposes of the Section 199A deduction. Under the regulations, UBIA is defined as the property's basis determined under IRC Section 1012 (which provides the general rules for determining cost basis) or other applicable section of Chapter 1. UBIA must be determined without regard to (i) adjustments required under IRC Section 1016(a)(2) or (3), (ii) adjustments for tax credits or (iii) adjustments for any portion of the basis that the taxpayer has elected to treat as an expense (i.e., under Section 179). Basis, for this purpose, is determined as of the date the property is placed into service under Proposed Regulation §1.199A-2. Therefore, basis will typically be the cost of the property under IRC Section 1012 as of the placed-in-service date.

TO OUR CUSTOMERS: The Section 199A regulations came out early today and we are planning on having an initial summary of these complex regs in a special edition later today.

 
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