Financial accounting and cost accounting with preparation of SSARS No. 21 financial statements

• Construction
• Government grants
• Manufacturing
• Professional corporations
• Service companies
• Trusts and estates

US tax compliance

• Corporations
• Managing net operating losses
• Individuals
• Multi-state tax compliance
• Organizations  exempt from tax
• Partnerships, limited liability companies and hedge funds
• Startups
• All aspects of corporate life cycle: Formation, growth and stock or asset sale, decline and dissolution  trade or business in the US
• Determination of Fixed, Determinable and Periodical [FDAP] passive income

        ∞Assessment of  bookkeeping compared to generally accepted accounting principles

        ∞Transition support from bookkeeping to generally accepted accounting principles

• Perpetual inventory system design and management consulting
• Forensic data analysis for expert witness testimony

Foreign tax compliance

• Foreign earned income exclusion and foreign tax credit
• Reporting foreign ownership of a US corporation, foreign subsidiary of a US corporation and ownership by US persons of foreign corporations
• Foreign partner withholding and tax treaty compliance, including determination of effectively connected income [ECI]

Planning for the termination of the Tax Cuts and Jobs Act

• Planning for the dramatic changes to the Internal Revenue Code when the Tax Cuts and Jobs Act sunsets on December 31, 2025.
• New: House and Senate budget resolution below

House and Senate Budget Resolution

and 2025 Tax Planning

[7/3/25 Updates: H.R. 1]

The slow pace in reaching a reconciliation bill in Congress can be interpreted by the  difficulty in rationalizing extension of the provisions of the Tax Cuts and Job Act [TCJA]. Specifically the pass-through qualified business income [QBI] deduction [IRC Sec.199A] is perhaps the major point of contention as indicated by the scaling back of the initial $4.5 trillion proposed federal budget cuts by the House Ways and Means Committee to $2 trillion [Title IV, Sec. 4002(a)(1) of the continuing resolution] occurring from fiscal year 2025 through fiscal year 2034. [The Tax Cuts and Jobs Act is made permanent, including the QBI]

The cuts were targeted to reducing the Health Insurance Premium Tax Credit, Supplemental Social Security Income [SSI], Temporary Assistance for Needy Families, Social Services Block Grants as well as other agency-targeted cuts, for example, to the Consumer Financial Protection Bureau formed in 2011 resulting from a proposal by Senator Elizabeth Warren to return compensation resulting from financial institution fraud. [No appreciable change to the budget resolution]

In order to try to put Section 199A into federal budgetary perspective, the cost of it to the taxpayers since its inception in 2018 has been estimated to be between $200 billion and $400 billion. Extending QBI from  2025 and 2034 is estimated to be conservatively $600 billion, and the Congressional Budget Office has estimated the cost in terms of increasing federal deficits to be as much as $4.6 trillion.

The math is relatively simple: $4.5 trillion in proposed cuts to pay for $4.6 trillion to extend QBI. Complicating the math, however, are the following tax changes promised during the election adding approximately $1 trillion to the federal deficit. Those include:

• No tax on tips [Replaced with a provision for an above-the-line partial deduction for tip income if adjusted gross income is $160,000 or less]
• No tax on social security [Replaced with a provision for a partial increase in the standard deduction]
• No tax on overtime [Replaced with a provision for an above-the-line partial deduction for tip income if adjusted gross income is $160,000 or less]
• Raising the cap on deducting state and local income taxes [Increased from $10,000 to $40,000]

Additional provisions of H.R. 1:

• Bonus depreciation of 100%
• $250 federal tax on electric cars and $100 federal tax on hybrid cars
• Above-the-line deduction of interest on the purchase of a new passenger vehicle limited to $10,000 and subject to a phase-out beginning at $100,000 of adjusted gross income
• Expensing R&D is allowable.

Further complicating the math in reaching a reconciliation bill is an expected widening gap between 2025 and 2034 in social security receipts from $100 billion to $500 billion. Though sunsetting the QBI provision of the TCJA altogether may not necessarily be imminent, it may alternatively become politically expedient to reduce the 20% QBI deduction, especially given the slim Republican majorities presently existing in the House and in the Senate.

Pass-through entity elective tax

With the passage of H.R. 1 [One Big Beautiful Bill], California has passed SB 132 implementing traditional rules for the PTE SALT election.

H.R. 1 increased the state and local tax [SALT] itemized deduction from $10,000 to $40,000. As a result of this change, states which allow the SALT workaround have implemented transition rules.

California SB 132, Section 8 [6/17/25] stipulates a pass-through entity credit reduction/penalty in which a payment originally due 6/15/25 for an election made in 2025 was not remitted and would therefore not disqualify an election made to extend the pass-through entity election for tax years beginning 1/1/26 through 12/31/30. Notwithstanding the One Big Beautiful Bill [H.R. 1] increased the itemized deduction limit for state and local taxes from $10,000 to $40,000 for tax years beginning in 2025, you made the election prior to 2025 and you are not “opting in” in 2025, as SB 132 does not change the 6/15 payment requirement for pass-through entity elections made prior to 2025 in which an election will not be made to extend the election from 2026 to 2030.

Payment of state taxes before 12/31/25 in order to be able to be reported as an itemized deduction on a 2025 income tax return is indicative of the underlying principle of SB 132 for transitioning into elections made subsequent to 2025, as taxpayers may not have remitted state estimated tax payments prior to 7/4/25 when H.R. 1 was signed into law. Logic dictates that if the requirement for remitting the two PTE SALT payments on 6/15/25 and 3/15/26 (the due date of the corporation income tax return) for elections made prior to 2025 had been repealed by SB 132, the result would be the imposition of unnecessary state tax underpayment penalties. 



Topics of general interest...

SECURE Act basics for inherited IRAs:

Post 12/31/19 inherited IRAs are required to distributed within 10 years of the date of death.

Exceptions apply for beneficiaries who are not eligible designated beneficiaries:

Surviving spouses

Individuals not more than 10 years younger than the account owner

Chronically ill individuals

Disabled individuals

Minor children

An exception applies to designated beneficiaries, meaning one who is not an eligible designated

beneficiary. Designated beneficiaries can "stretch" inherited IRA RMD (required minimum distributions)

over their lifetime if they are not more than 10 years younger than the account owner

Decedents' Estates

A trust or a decedent's estate is a separate legal entity for federal tax purposes. A decedent's estate comes into existence at the time of death of an individual. A trust may be created during an individual's life (inter vivos) or at the time of their death under a will (testamentary). If the trust instrument contains certain provisions, then the person creating the trust (the grantor) is treated as the owner of the trust's assets. Such a trust is a grantor type trust and, accordingly, obtaining an EIN for a decedent's estate is required. Source: https://www.irs.gov/pub/irs-pdf/i1041.pdf

In general, deducting expenses on an inherited property is allowed so long as you have never occupied it personally. The amount of your loss that you will be able to deduct, however, will only be limited to the difference between the price you sell it for and the fair market value of the home when you inherited it, and an appraisal at the date of death establishes fair market value.