Tax Insights

KBKG Tax Alert: Update on the 174 Capitalization Fix, 2024 Tax Relief Act

KBKG Tax Alert: Update on the 174 Capitalization Fix, 2024 Tax Relief Act

03/11/2024

KBKG Tax Alert: Update on the 174 Capitalization Fix, 2024 Tax Relief Act The American Families and Workers Act of 2024 (“the Act”), aimed at reinstating the ability to deduct R&D expenditures, extending bonus depreciation, and expanding the Child Tax Credit has hit a significant roadblock in the Senate. Despite its bipartisan passage in the … Read More

ERC Tax Season Reminders and Updates

ERC Tax Season Reminders and Updates

03/04/2024

ERC Tax Season Reminders and Updates Thought Leadership by Ian Williams, Principal | KBKG As we near tax filing deadlines we are also approaching the first Employee Retention Tax Credit (ERC or ERTC) filing deadline (4/15/2024 for any 2020 ERC claims, 4/15/2025 for any 2021 ERC claims). Many taxpayers are still awaiting the processing of … Read More

Biotech R&D Tax Benefits

Biotech R&D Tax Benefits

03/01/2024

Understanding R&D Tax Credits for Biotech, Bioscience, and Pharma Research and development (R&D) is a huge part of the biotech, bioscience and pharmaceutical industries. Biotech, bioscience, and pharmaceutical companies operate on the forefront of innovation, constantly seeking new solutions to complex problems through cutting-edge technology and scientific research. R&D is the lifeblood of these industries, … Read More

R&D Tax Credit for Robotics Industry

R&D Tax Credit for Robotics Industry

02/26/2024

R&D Tax Credits for Robotics Industry If you run a small business, large corporation, or a startup, business payroll taxes could take a big bite out of your profitability. Companies in the robotics industry can lower their tax burden with the research and development (R&D) tax credit. This tax credit can help businesses developing exciting innovations … Read More

Common Misconceptions About R&D Tax Credits: Debunking Myths and Clearing Up Confusion

Common Misconceptions About R&D Tax Credits: Debunking Myths and Clearing Up Confusion

02/26/2024

Common Misconceptions About R&D Tax Credits: Debunking Myths and Clearing Up Confusion The R&D credit refers to tax-saving opportunities for companies that invest in research and development. The R&D tax credit incentivizes businesses of all sizes to develop or improve products and processes within their industry. Unfortunately, many misconceptions may unnecessarily stop a company from claiming the … Read More

Is Your Company Overpaying Taxes While Operating Internationally?

Is Your Company Overpaying Taxes While Operating Internationally?

02/05/2024

by Alex Martin | Principal, KBKG Transfer pricing (TP) regulations govern the prices for goods, services, royalties, loans, and other transactions between related companies operating in different tax jurisdictions. The prices charged in cross-border transactions drive how much tax a multinational company pays by country. Transfer pricing regulations are designed to ensure intercompany transactions are … Read More

Expanded 45L Tax Credits Boost Affordable Housing Development

Expanded 45L Tax Credits Boost Affordable Housing Development

02/05/2024

Expanded 45L Tax Credits Boost Affordable Housing Development The Inflation Reduction Act (IRA) has ushered in a significant expansion of the 45L Tax Credit, providing a substantial boost to affordable housing developers. These tax credits have seen an impressive increase, now offering up to $5,000 per unit – nearly a threefold jump from previous amounts. … Read More

Tax Credits for Developing Battery Tech and Chemicals for Electric Vehicles

Tax Credits for Developing Battery Tech and Chemicals for Electric Vehicles

01/31/2024

Using the R&D Tax Credit to Join the EV Market The production and sale of electric vehicles (EVs) are on the rise, with more consumers switching to this eco-friendly option each year. The EV market has witnessed substantial growth, driven by factors such as increasing environmental awareness, government incentives, advancements in battery technology, and improvements … Read More

How the PATH Act Helps Small Businesses

How the PATH Act Helps Small Businesses

01/31/2024

Understanding R&D Tax Credits for Forest Products | KBKG Companies in the forest products industry increasingly rely on research and development initiatives to optimize manufacturing, increase revenue, and create a competitive edge. Even small and medium-sized forestry businesses may qualify for valuable tax incentives related to R&D. Unfortunately, the U.S. Chamber of Commerce estimates that … Read More

Understanding R&D Tax Credits for Forest Products

Understanding R&D Tax Credits for Forest Products

01/31/2024

Understanding R&D Tax Credits for Forest Products | KBKG Companies in the forest products industry increasingly rely on research and development initiatives to optimize manufacturing, increase revenue, and create a competitive edge. Even small and medium-sized forestry businesses may qualify for valuable tax incentives related to R&D. Unfortunately, the U.S. Chamber of Commerce estimates that … Read More

KBKG Tax Alert: Proposed Bill Fixes 174 Capitalization and Cuts Off New ERC Claims

KBKG Tax Alert: Proposed Bill Fixes 174 Capitalization and Cuts Off New ERC Claims

01/16/2024

KBKG Tax Alert: House passes proposed bill to Fix 174 Capitalization, Extend 100% bonus depreciation, and Cut Off New ERC Claims, now in Senate consideration. Proposal Aims to Boost Businesses with Immediate Deductions for Domestic Research and Experimental (R&E) Expenditures and Capital Investments on qualified property while reining in the Employee Retention Credit (ERC). The … Read More

New IRS Amendments to the Amortization of Specified Research or Experimental Expenditures

New IRS Amendments to the Amortization of Specified Research or Experimental Expenditures

01/03/2024

New IRS Amendments to the Amortization of Specified Research or Experimental Expenditures Thought Leadership by KBKG The Internal Revenue Service (IRS) issued updates regarding the amortization of specified research or experimental (SRE) expenditures under Section 174. These modifications, outlined in Notice 2024-12 and complemented by Rev. Proc. 2024-9, introduce crucial changes that tax professionals should … Read More

Understanding the IRS’ ERC Voluntary Disclosure Program

Understanding the IRS’ ERC Voluntary Disclosure Program

01/03/2024

Understanding the IRS’ ERC Voluntary Disclosure Program Thought Leadership by KBKG The IRS’ introduction of the Employee Retention Credit Voluntary Disclosure Program (ERC-VDP) is a significant development that offers businesses, tax-exempt organizations, and government entities a chance to rectify any ineligible claims for the Employee Retention Credit (ERC). We summarize the key points from the IRS announcement … Read More

Year-End Legislation Aimed at Changing the TCJA

Year-End Legislation Aimed at Changing the TCJA

12/20/2023

Year-End Legislation Aimed at Changing the TCJA Kevin Zolriasatain, Principal • Research & Development Tax Credit Services A sizable coalition of House Republicans has advocated for end-of-year legislation addressing three key business tax provisions altered by the 2017 tax reform bill. They characterize this proposal as a pro-growth economic package. In a letter dated November … Read More

KBKG Tax Insight – Does Coke Owe the IRS $10+ Billion for Transfer Pricing?

KBKG Tax Insight – Does Coke Owe the IRS $10+ Billion for Transfer Pricing?

12/09/2023

What Happens if Coke Continues to Lose in Tax Court? Coca-cola recently lost an appeal of a transfer pricing court case, which concluded that Coke owes an additional $3.1 billion in tax for 2007 through 2009.¹ In addition to denying the Motion for Reconsideration on procedural grounds, Tax Court Judge Albert Lauber decided to elaborate … Read More

Qualifying AI for the R&D Tax Credit | KBKG

Qualifying AI for the R&D Tax Credit | KBKG

11/21/2023

Qualifying AI for the R&D Tax Credit | KBKG Artificial intelligence (AI) has recently been a mainstay of news headlines worldwide, and for good reason. Publicly released AI tools now allow individuals and companies to generate images and text nearly indistinguishable from those created by humans.  If you are a company or have a department … Read More

Cost Segregation for Airbnb, Vrbo, HomeAway

Cost Segregation for Airbnb, Vrbo, HomeAway

11/18/2023

Cost Segregation for Airbnb, Vrbo, HomeAway If you’re an Airbnb, Vrbo, or HomeAway host, you’re likely familiar with the complexities of managing and optimizing rental properties. What you may not be aware of, however, is a powerful financial tool that can help you maximize your property’s financial benefits while minimizing your tax liability – Residential … Read More

Reviving Michigan’s R&D Tax Credit

Reviving Michigan’s R&D Tax Credit

11/08/2023

Reviving Michigan’s R&D Tax Credit Michigan businesses are one step closer to large tax benefit. On February 7, Michigan’s governor, Gretchen Whitmer, presented her FY2025 Executive Budget Recommendation. Included in the budget is a proposal for a $100 million research and development (R&D) credit, the state’s first R&D credit since the corporate income tax (CIT) … Read More

Why Allocation Letters are Needed to Claim 179D

Why Allocation Letters are Needed to Claim 179D

11/07/2023

Why Allocation Letters are Needed to Claim 179D A guide on the intricacies of designers securing an allocation letter to claim 179D Thought Leadership from Jillian Jones, Senior Manager – Green Building Tax Incentives   Architects and designers play a crucial role in creating energy-efficient, tax-exempt buildings, and many need to be made aware of how … Read More

Withdrawal of ERC Claims: A Comprehensive Guide for CPAs

Withdrawal of ERC Claims: A Comprehensive Guide for CPAs

11/06/2023

Withdrawal of ERC Claims: A Comprehensive Guide for CPAs Thought Leadership by Ian Williams, Director | KBKG In IRS notice, IR-2023-193, released this week, the IRS has taken a significant step to protect small businesses and organizations from potential scams related to the Employee Retention Tax Credit (ERC) by introducing a novel withdrawal process. This process is designed … Read More

A Guide to Claiming the 179D Deduction

A Guide to Claiming the 179D Deduction

10/31/2023

Using the 179D Deduction Successfully running and managing a business requires paying attention to a lot of things, including tax planning. Taxes get complicated, and it can be tough for the average business owner to know which deductions and credits could benefit their company. Take the 179D deduction. This provision allows eligible taxpayers to get … Read More

Take Advantage of the 45L Tax Credit for Residential Development

Take Advantage of the 45L Tax Credit for Residential Development

10/29/2023

Take Advantage of the 45L Tax Credit for Residential Development Residential builders, investors, and developers can now qualify for up to $5,000 in tax credits for every energy-efficient dwelling unit. The IRS updated its 45L tax credit program in 2023 to align with Department of Energy programs for Energy Star and Zero Energy Ready Homes. … Read More

IRS Puts 150 Companies on Notice: Your Transfer Pricing is a Problem

IRS Puts 150 Companies on Notice: Your Transfer Pricing is a Problem

10/26/2023

IRS Puts 150 Companies on Notice: Your Transfer Pricing is a Problem The IRS recently announced several new initiatives as a result of funding from the Inflation Reduction Act, with a special emphasis on making sure multinationals and high-wealth individuals pay their ‘fair share’ of taxes. First item on the press release – the IRS … Read More

New Questions People Are Asking About ERC

New Questions People Are Asking About ERC

10/23/2023

New Questions People Are Asking About ERC Thought Leadership by KBKG Originally published 5/1/2023, updated 10/10/2023  On September 14th, 2023, the IRS took the significant step of suspending the acceptance of new ERC claims until at least December 31st, 2023. This was in response to mounting concerns about the integrity of the Employee Retention Credit … Read More

Unlocking Hidden Value: The Power of Cost Segregation Studies

Unlocking Hidden Value: The Power of Cost Segregation Studies

10/17/2023

Unlocking Hidden Value: The Power of Cost Segregation Studies Optimizing tax benefits and enhancing cash flow are pivotal to achieving financial success in finance and real estate. One strategy with significant potential is cost segregation. Dive into cost segregation basics, explore what a cost segregation study entails, understand its timing and relevance, and discover KBKG’s … Read More

KBKG’s ERC Guidance for CPAs and Tax Professionals

KBKG’s ERC Guidance for CPAs and Tax Professionals

10/16/2023

KBKG’s ERC Guidance for CPAs and Tax Professionals Thought Leadership by KBKG Regarding the latest IRS rules and regulations on the Employee Retention Tax Credit program, it’s paramount for Certified Public Accountants (CPAs) and Tax Professionals to stay ahead of the curve. The Internal Revenue Service (IRS) recently introduced a moratorium on processing Employee Retention … Read More

Advice for Taxpayers About the ERC Moratorium

Advice for Taxpayers About the ERC Moratorium

10/11/2023

Advice for Taxpayers About the ERC Moratorium Thought Leadership by Ian Williams, Director | KBKG  The Employee Retention Tax Credit (ERC) is a complex tax credit created by the Coronavirus Aid, Relief, and Economic Security (CARES) Act in 2020 to help businesses keep their employees on the payroll during the COVID-19 pandemic. The ERC is … Read More

KBKG’s Approach to Residential Cost Segregation

KBKG’s Approach to Residential Cost Segregation

10/08/2023

KBKG’s Approach to Residential Cost Segregation Here at KBKG, we conduct in-depth cost segregation studies for a number of clients. Our studies can help you reduce your tax burden and save money. We realize that performing a residential cost segregation study can be intimidating, so we work closely with you every step of the way. … Read More

Can You Do Cost Segregation on Residential Rental Property

Can You Do Cost Segregation on Residential Rental Property

10/06/2023

Can You Do Cost Segregation on Residential Rental Property? If you’re a real estate investor or property owner, you’ve probably heard about cost segregation and how it can help you maximize tax benefits. But can you do cost segregation on residential rental property? The answer is “yes.” Below, we explore how cost segregation works for … Read More

Navigating The New Phase of ERC

Navigating The New Phase of ERC

10/02/2023

Navigating the New Phase of Employee Retention Credits (ERC) By Ian Williams, Director | Employee Retention Tax Credits KBKG As Certified Public Accountants (CPAs), staying current with tax regulations is a top priority. In recent times, the Employee Retention Credit (ERC) program has undergone significant changes. The Internal Revenue Service (IRS) Commissioner’s latest signals have … Read More

Why KBKG for Claiming 45L Credits

Why KBKG for Claiming 45L Credits

09/30/2023

Why KBKG for Claiming 45L Credits Educating housing developers on tax credits for energy-efficient homes Working with a reputable and ethical tax consultant is essential for any multifamily home developer looking for ways to benefit from energy-efficient tax programs. As a trusted source of knowledge since 1999, KBKG’s expertise has helped affordable housing and other … Read More

Green Building Tax Incentives and How the Inflation Reduction Act Expanded Them

Green Building Tax Incentives and How the Inflation Reduction Act Expanded Them

09/30/2023

Green Building Tax Incentives and How the Inflation Reduction Act Expanded Them A guide to how building owners and designers benefit from constructing a more sustainable future To create more environmentally responsible practices in the construction sector and boost the utilization of energy-efficient materials in commercial and residential buildings, the federal government has implemented a … Read More

IRS Issues New Guidance for 45L Tax Credit

IRS Issues New Guidance for 45L Tax Credit

09/29/2023

IRS Issues New Guidance for 45L Tax Credit Meeting energy-efficiency requirements can make projects eligible for the maximum amount of $5,000 per unit The Internal Revenue Service (IRS) recently issued new guidance with Notice 2023-65, surrounding the 45L Tax Credit that impacts how single-family, multifamily, and manufactured homes qualify for this Green Building Tax Incentive. … Read More

Optimizing Tax Benefits Through Green Building Tax Incentives

Optimizing Tax Benefits Through Green Building Tax Incentives

09/29/2023

Optimizing Tax Benefits Through Green Building Tax Incentives A guide on how claiming Green Building Tax Incentives results in additional tax benefits With more building owners and designers constructing commercial and residential buildings that meet the energy-efficiency standards to qualify a project for Green Building Tax Incentives, candidates should also know what other opportunities for … Read More

Prevailing Wages and Green Building Tax Incentives

Prevailing Wages and Green Building Tax Incentives

09/29/2023

Prevailing Wages and Green Building Tax Incentives A guide on how paying prevailing wages impacts Green Building Tax Incentives Taking advantage of Green Building Tax Incentives has proven to be a financially viable way to reduce one’s tax burden when constructing or designing sustainable and environmentally friendly buildings. While the signing of the Inflation Reduction … Read More

Kansas Issues New Notice to the Research and Development Tax Credits

Kansas Issues New Notice to the Research and Development Tax Credits

09/26/2023

Kansas Issues New Notice to the Research and Development Tax Credits Thought Leadership by Jonathan Tucker, Principal – Research and Development Tax Credit Services As certified public accountants, staying abreast of changes in tax laws and regulations is crucial to best serve your clients. In this blog, we’ll dive into the recent amendments by House Bill … Read More

KBKG Tax Insight:  Qualified Improvements, Bonus Depreciation, and 179

KBKG Tax Insight: Qualified Improvements, Bonus Depreciation, and 179

09/20/2023

KBKG Tax Insight: Qualified Improvements, Bonus Depreciation, and 179 By John Manolos | Senior Manager – Cost Segregation With the passage of the CARES Act on March 27, 2020, Congress addressed the much anticipated “Retail Glitch” associated with the 2017 Tax Cuts and Jobs Act (TCJA). This rule previously prevented investments in qualified improvement property … Read More

Cost Segregation: How It Can Benefit Your Business

Cost Segregation: How It Can Benefit Your Business

09/19/2023

Cost Segregation: How It Can Benefit Your Business Tax planning is a vital part of any company’s financial strategy. At its core, it focuses on legal ways of optimizing tax breaks and reducing liabilities. Maybe you’ve heard the term “cost segregation” used by tax professionals. You may wonder, “What is a cost segregation study and … Read More

IRS Pauses New Claims for Employee Retention Credit Program

IRS Pauses New Claims for Employee Retention Credit Program

09/15/2023

IRS Pauses New Claims for Employee Retention Credit Program Thought Leadership from KBKG, Sep 15, 2023 In response to mounting concerns about the integrity of the Employee Retention Credit (ERC) program, the Internal Revenue Service (IRS) has taken the significant step of suspending the acceptance of new ERC claims until at least December 31, 2023. … Read More

KBKG Tax Insight: IRS Releases Guidance on Section 174 R&E Expenses

KBKG Tax Insight: IRS Releases Guidance on Section 174 R&E Expenses

09/11/2023

KBKG Tax Insight: IRS Releases Guidance on Section 174 R&E Expenses Monday, September 11, 2023  By Kevin Zolriasatain | Principal, Research & Development Tax Credits On Sept. 8, 2023, the Internal Revenue Service (IRS) unveiled Notice 2023-63. This significant and eagerly awaited update to tax regulations under Section 174 marks a pivotal moment in the realm … Read More

Wisconsin Department Revenue Updates Publication 131 – R&D Tax Credits

Wisconsin Department Revenue Updates Publication 131 – R&D Tax Credits

08/30/2023

Wisconsin Department Revenue Updates Publication 131 – R&D Tax Credits Thought Leadership by Michael Maroney, Director – Research and Development Tax Credit Services | KBKG Understanding tax incentives and research credits can often be as intricate as deciphering a complex puzzle. Fortunately, the Wisconsin Department of Revenue has developed the newly updated Publication 131, a … Read More

South Carolina Court Cancels Tractor Supply Co.’s Transfer Pricing Strategy

South Carolina Court Cancels Tractor Supply Co.’s Transfer Pricing Strategy

08/25/2023

South Carolina Court Cancels Tractor Supply Co.’s Transfer Pricing Strategy A recent ruling from a South Carolina judge in the Tractor Supply Co. v. S.C. Dep’t of Revenue case highlights the need for substance when implementing state tax savings strategies. The Court’s rejection of Tractor Supply Company’s (TSC) transfer pricing approach resulted in an additional … Read More

Supply Chain Disruption – How to Get Compliant for the ERC

Supply Chain Disruption – How to Get Compliant for the ERC

08/22/2023

Supply Chain Disruption – How to Get Compliant for the ERC Thought Leadership on Employee Retention Credit by Ian Williams, DIRECTOR | KBKG In response to widespread abuse and negligence in the due diligence process related to employee retention credit eligibility (ERC or ERTC) via supply chain disruption, IRS Chief Counsel issued a generic legal advice … Read More

ERC Eligibility for Supply Chain Disruption

ERC Eligibility for Supply Chain Disruption

08/17/2023

ERTC Eligibility for Supply Chain Disruption By Ian Williams, Director, Research & Development Tax Credits and Employee Retention Credits | KBKG The IRS Chief Counsel recently published a Generic Legal Advice Memorandum (GLAM), providing guidance on the eligibility criteria for the Employee Retention Credit (ERC or ERTC) in cases where employers claimed government shutdown qualification via shutdowns of … Read More

Everything You Need to Know About R&D Tax Credits

Everything You Need to Know About R&D Tax Credits

07/25/2023

Everything You Need To Know About R&D Tax Credits Business owners often consider taxes an inconvenient but necessary part of everyday operations. However, a better understanding of taxes can save you money by taking advantage of various credits, such as the R&D tax credit. How does the R&D tax credit work? Get an in-depth look into everything … Read More

Why Choose KBKG as Your Transfer Pricing Partner

Why Choose KBKG as Your Transfer Pricing Partner

07/11/2023

Why Choose KBKG as Your Transfer Pricing Partner Transfer pricing (TP) is widely considered the most contentious tax issue for multinational companies. KBKG is positioned to deliver practical transfer pricing insights with personalized service. Our relationships with multinationals, CPAs, and other professional service providers enable our clients to optimize cash flow, reduce global effective tax … Read More

Can You Do Cost Segregation for Commercial Real Estate?

Can You Do Cost Segregation for Commercial Real Estate?

07/08/2023

Can You Do Cost Segregation for Commercial Real Estate? Claiming tax benefits can help you avoid losing money on your commercial real estate investments, especially if you intend to operate your properties for years to come. A common tax benefit is to claim your buildings on your tax form as depreciations. Using cost segregation for … Read More

Five Key Considerations for Transfer Pricing

Five Key Considerations for Transfer Pricing

06/26/2023

by Alex Martin | Principal, KBKG Transfer pricing (TP) is far more than ‘just another tax compliance issue.’ Multinational companies should understand the implications of cross-border pricing policies. Transfer pricing laws and regulations govern the pricing of goods, services, royalties, loans, and other transactions between related companies. These rules impact the taxes payable and cash … Read More

The Dangers of Inaccurate Filing Deadlines for the ERC

The Dangers of Inaccurate Filing Deadlines for the ERC

06/23/2023

The Dangers of Inaccurate Filing Deadlines for the ERC Thought Leadership by KBKG Beware of Dubious Tax Advisors Tax season can be stressful for individuals and businesses alike, as the intricacies of tax laws and regulations can often be overwhelming. Unfortunately, unscrupulous tax advisors take advantage of this confusion, employing dubious tactics to market inaccurate … Read More

Using Transfer Pricing Wisely and Strategically

Using Transfer Pricing Wisely and Strategically

06/15/2023

Using Transfer Pricing Wisely and Strategically As companies expand globally, there are opportunities to make smarter business decisions that maximize revenue. Using strategic transfer pricing can be helpful, but the process may be difficult to understand and execute properly. With guidance from tax experts at KBKG, you can make this a productive part of your … Read More

Boost to Businesses – Build It In America Act

Boost to Businesses – Build It In America Act

06/15/2023

Boost to Businesses – Build It In America Act by Kevin Zolriasatain | Principal, KBKG, 6/15/2023 Tax Insight: Research and Development (R&D) Tax Credit / Research and Expenditures On Tuesday, June 13, the House Ways and Means Committee approved three bills: the Small Business Jobs Act, or H.R. 3937, and the Build It in America Act, or … Read More

A Guide to Filing Form 941-X for Employee Retention Credits

A Guide to Filing Form 941-X for Employee Retention Credits

06/14/2023

A Guide to Filing Form 941-X for Employee Retention Credits Thought Leadership by KBKG If you believe your company is eligible to receive the Employee Retention Credit, the good news is that qualifying companies have until April 15, 2024 for the 2020 credit and April 15, 2025 for the 2021 credit, to file. However, to … Read More

Section 174 and R&E – Uncertainty and Questions

Section 174 and R&E – Uncertainty and Questions

05/23/2023

Section 174 and R&E – Uncertainty and Questions by Kevin Zolriasatain | Principal, KBKG, 3/23/2023 Many businesses, small and large, rely on research and development to improve their offerings, compete with international markets, and increase profits. The implications of recent changes to section 174 and no movement from Congress have left many business owners unsure … Read More

Top Five Questions Architects Ask About 179D

Top Five Questions Architects Ask About 179D

05/22/2023

Top Five Questions Designers Ask About 179D Designers’ role in reducing the carbon footprint has left many wondering where the incentive behind designing energy-efficient buildings has come from. This recent push results from the 179D Tax Deduction, a program the U.S. government introduced as part of the Energy Policy Act (EPAct) to encourage architects to … Read More

Why KBKG is Your Trusted Partner for 179D

Why KBKG is Your Trusted Partner for 179D

05/17/2023

Why KBKG is Your Trusted Partner for 179D Partnering with an experienced provider whose reputation for upholding ethical standards is invaluable. For years, KBKG’s knowledge and expertise have educated architects and designers on some of the most complex issues of the U.S. tax code to help them save money on taxes through the 179D Tax … Read More

IRC/Multistate Corporate Income Tax Comparison Guide

IRC/Multistate Corporate Income Tax Comparison Guide

05/05/2023

IRC/Multistate Corporate Income Tax Comparison Guide Friday, May 5, 2023 – Thought Leadership by R&D | KBKG Note: The data in the chart is only current as of the publish date of this blog. We expect this data to change. Research and experimental expenditures are essential to many businesses, especially in technology, manufacturing, and healthcare. … Read More

Accounting Today: Risks Associated With the ERC

Accounting Today: Risks Associated With the ERC

04/18/2023

Accounting Today: Risks Associated With the ERC As published in Accounting Today | by Jason C. Melillo, 4/18/2023   This excerpt is from “Risks Associated With the ERC.”  Read the full article now in Accounting Today. […] We have seen many questionable claims by ERC mills, one for example saying, “All businesses impacted by supply … Read More

IRS Issues Revenue Ruling on the Deductibility of R&E Expenditures

IRS Issues Revenue Ruling on the Deductibility of R&E Expenditures

04/18/2023

IRS issues Revenue Ruling on the Deductibility of Research and Experimental Expenditures by Jonathan Tucker, Principal | KBKG, 4/18/2023 Revenue Ruling 58-74 No Longer Applicable – The IRS issued Revenue Ruling 2023-8, making obsolete Revenue Ruling 58-74 on a prospective basis as of July 31, 2023. This means that taxpayers can no longer file an amended … Read More

Mississippi Allows Businesses to Deduct Research or Experimental Expenditures

Mississippi Allows Businesses to Deduct Research or Experimental Expenditures

04/04/2023

Mississippi Allows Businesses to Deduct Research or Experimental Expenditures By Jonathan Tucker, Principal | Published Monday, April 3rd, 2023 On Monday, April 3, 2023, Mississippi passed H.B. 1733, a change in the Mississippi State Income Tax Law. The law allows businesses to elect to fully deduct research or experimental expenditures in the year they are … Read More

KBKG Tax Insight: Tax Court Denies Construction Company R&D Credits

KBKG Tax Insight: Tax Court Denies Construction Company R&D Credits

12/13/2022

A summary judgment was recently granted when the government successfully argued that a construction company did not conduct qualified research activities during the tax year in question and was therefore not entitled to the $576,756 refund they were paid. In this case, the defendant was a shareholder of a civil construction company and the contested … Read More

KBKG to Exhibit and Sponsor Tal Glenn Memorial Golf Tournament

KBKG to Exhibit and Sponsor Tal Glenn Memorial Golf Tournament

10/13/2022

Attending the 2022 Tal Glenn Memorial Golf Tournament is our Principal, Eddie Price, and our Regional Director, Matthew Geltz, who will represent KBKG at the event, which takes place on October 24th in Tyler, Texas at The Cascades Golf & Country Club. About the Event The Tal Glenn Memorial Golf Tournament is an annual golf … Read More

Inflation Reduction Act Signed by President Biden: Increases 179D Benefits for Architects, Engineers, Design Build Contractors, and More

Inflation Reduction Act Signed by President Biden: Increases 179D Benefits for Architects, Engineers, Design Build Contractors, and More

08/16/2022

President Biden signed the Inflation Reduction Act into law, minting a historic climate bill with aims to reduce carbon emissions by 40% by 2030 among many major economic initiatives. Within the 700+ page bill, the Inflation Reduction Act includes significant tax incentive opportunities which expand 179D Deductions for Architects, Engineers, Design Build Contractors, and other … Read More

How the Inflation Reduction Act of 2022 Expands Energy Efficiency Tax Incentives for the Real Estate Industry

How the Inflation Reduction Act of 2022 Expands Energy Efficiency Tax Incentives for the Real Estate Industry

08/12/2022

As featured in Accounting Today On Tuesday, August 16, 2022, President Biden signed the Inflation Reduction Act. Both existing and expired energy efficiency tax incentives including 179D Deductions and 45L Credits have been expanded significantly. Who Benefits? Commercial Building Owners Multifamily Building Owners Investors Developers Homebuilders Architects Engineers Design/Build Contractors Other designers and builders Increase … Read More

Senate Passes Groundbreaking Inflation Reduction Act, Expanding 179D Deduction for Architects, Engineers, and Designers

Senate Passes Groundbreaking Inflation Reduction Act, Expanding 179D Deduction for Architects, Engineers, and Designers

08/07/2022

We recently posted a brief update on the Inflation Reduction Act. After negotiations between Senate Majority Leader Chuck Schumer and Senators Manchin and Sinema, an updated Inflation Reduction Act has passed the Senate and moves one step closer to being enacted through the House of Representatives and President Biden. With the Senate being the toughest … Read More

KBKG Tax Insight: Changes to Recently Amended Texas Franchise Tax Regulations

KBKG Tax Insight: Changes to Recently Amended Texas Franchise Tax Regulations

06/27/2022

Published on June 10, 2022, Texas Register, the Texas Comptroller proposed revisions to the recently amended Texas franchise tax regulations surrounding the Texas sales and use tax exemption and the Texas franchise R&D tax credit. These revisions soften the Internal Use Software (IUS) and Combined Group definitions after receiving overwhelming feedback surrounding the Texas franchise … Read More

KBKG Tax Insight: IRS Updates Audit Technique Guide for Cost Segregation

KBKG Tax Insight: IRS Updates Audit Technique Guide for Cost Segregation

06/24/2022

IRS Updates Audit Technique Guide for Cost Segregation On June 1st of, 2022, the IRS published the latest edition of the Cost Segregation Audit Technique Guide (ATG). The Cost Segregation ATG assists IRS examiners during audits by providing an understanding of technical information, examination techniques, and what to look for when reviewing cost segregation reports. … Read More

KBKG Tax Insight: Reviving Missouri’s R&D Tax Credit 2023

KBKG Tax Insight: Reviving Missouri’s R&D Tax Credit 2023

06/20/2022

Beginning with the 2023 tax year, Missouri taxpayers can claim a research and development (R&D) tax credit on its state tax returns for R&D activities performed within the state. Not since 2005 have Missourians had the ability to reduce its state tax bill with this credit. If you are a taxpayer or have taxpayer clients … Read More

R&D Tax Credit Insights from Former IRS Executives

R&D Tax Credit Insights from Former IRS Executives

06/14/2022

R&D Tax Credit Insights from Former IRS Executives – Videos by Jack Jolly, Director and Mark Bodenstab, Director | KBKG, 6/14/2022 Jack Jolly is a Director of R&D Credit at KBKG. He worked 20 years for the IRS managing a team of IRS engineers who spent most of their time auditing R&D tax credit claims. … Read More

KBKG Tax Insight: Wisconsin’s Refundable R&D Tax Credit Gets a Boost

KBKG Tax Insight: Wisconsin’s Refundable R&D Tax Credit Gets a Boost

05/27/2022

Wisconsin’s Department of Revenue recently updated its Publication 131, entitled Tax Incentives for Conducting Qualified Research in Wisconsin for Taxable Years Beginning on or After January 1, 2021. It explains qualified research, eligibility and the mechanics for calculating and substantiating the credit. The most notable change to the Wisconsin credit is increasing the percentage of … Read More

KBKG Tax Insight: IRS and Treasury Release Rev. Proc. 2022-14 Earlier This Year

KBKG Tax Insight: IRS and Treasury Release Rev. Proc. 2022-14 Earlier This Year

05/20/2022

The IRS and Treasury released Rev. Proc. 2022-14 earlier this year, updating and superseding the current list of automatic method changes. Background Taxpayers generally cannot change from an established accounting method to a different method unless they first obtain IRS consent to change from the established accounting method. Taxpayers must obtain IRS consent to change … Read More

KBKG Tax Insight: Changes in Kansas Research and Development Tax Credit Incentive

KBKG Tax Insight: Changes in Kansas Research and Development Tax Credit Incentive

04/22/2022

Earlier this month, the Kansas University Jayhawks men’s basketball team captured the school’s 6th National NCAA Championship with a 72-69 victory over the North Carolina Tarheels. In one of the most competitive college basketball years to date, Kansas was crowned number 1. Much like college basketball, states compete to attract businesses and innovation to spur … Read More

Hawaii Senator Jarrett Keohokalole Seeks to Increase Annual Cap for State’s Research Credit

Hawaii Senator Jarrett Keohokalole Seeks to Increase Annual Cap for State’s Research Credit

02/08/2022

On January 21, 2022, Hawaii State Senator Jarrett Keohokalole introduced Senate Bill (SB) 2599, revising the certification requirements and increasing the annual aggregate cap for the State of Hawaii’s tax credit for research activities (“Hawaii R&D tax credit”). The proposed Section 235-110.91 revisions would first and foremost triple the aggregate cap of research credits available … Read More

KBKG Tax Insight: ABA Urges IRS for Proposed Regulations for R&D

KBKG Tax Insight: ABA Urges IRS for Proposed Regulations for R&D

01/19/2022

The American Bar Association (ABA) is calling on the Internal Revenue Service (IRS) to issue regulations regarding new tax filing procedures required by taxpayers to comply with a Chief Counsel Memorandum issued by the IRS on October 15, 2021. Effective January 10, 2022, these new procedures significantly expand the documentation required to accompany the filing … Read More

[Updated] KBKG Tax Insight: R&D Tax Credits – Protective 280C(c)(3) Elections

[Updated] KBKG Tax Insight: R&D Tax Credits – Protective 280C(c)(3) Elections

01/07/2022

Updated January 7, 2022 The Section 41 Research Credit was enacted in 1981 as a temporary code section and made permanent with the passage of the Protecting Americans from Tax Hikes (“PATH”) Act of 2015. The research credit is an incentive providing taxpayers across all industries, performing qualified activities, the opportunity to reduce their tax … Read More

KBKG Tax Insight: ERTC Terminated for Q4 2021

KBKG Tax Insight: ERTC Terminated for Q4 2021

11/08/2021

The Infrastructure Bill (H.R. 3684) was passed by the House on November 5, 2021, and is expected to be signed into law by President Biden. As part of the Bill, the employee retention credit (with the exception of the recovery startup business credit) is no longer in effect for the fourth quarter of 2021. A … Read More

[PRESS RELEASE] KBKG Named One of the World’s Leading Transfer Pricing Practice by International Tax Review

[PRESS RELEASE] KBKG Named One of the World’s Leading Transfer Pricing Practice by International Tax Review

11/04/2021

Chicago, Illinois—November 4, 2021—KBKG, a nationwide tax specialty firm, was named one of the world’s leading transfer pricing firms by International Tax Review for 2021-2022. International Tax Review surveyed over 13,000 clients and 2,700 practitioners to identify the most effective transfer pricing advisors across 84 countries. KBKG’s transfer pricing practice is led by Alex Martin, … Read More

KBKG Tax Insight: Medical Providers Can Claim ERTC

KBKG Tax Insight: Medical Providers Can Claim ERTC

11/02/2021

Medical providers that perform elective procedures could have an opportunity to claim the Employee Retention Tax Credit (ERTC). While most medical offices had to make a variety of operational changes to adapt to a safe environment during COVID, many of those operational changes do not meet the definition of a government shutdown for ERTC. However, … Read More

KBKG Tax Insight: Bonus Depreciation for Gas Stations with Convenience Stores

KBKG Tax Insight: Bonus Depreciation for Gas Stations with Convenience Stores

09/08/2021

Acquiring or constructing a gas station with a convenience store (“C-store”) can be a lucrative addition to a real estate portfolio. Current rules allow investors to immediately write off all the improvements if certain requirements are met, and the property is placed in service after September 27, 2017. This went into effect after the Tax … Read More

KBKG Tax Insight: Iowa Now Conforms to IRC §168(k)

KBKG Tax Insight: Iowa Now Conforms to IRC §168(k)

06/22/2021

Governor Kim Reynolds recently signed into law Senate File 619 relating to a multitude of state and local tax issues. Included within this law is the retroactive applicability of Federal Bonus Depreciation rules for qualified assets placed into service on or after January 1, 2021. Additionally, the State of Iowa will remain decoupled from the … Read More

KBKG Tax Insight: Monetize R&D Tax Credits: Start-ups and Small Businesses

KBKG Tax Insight: Monetize R&D Tax Credits: Start-ups and Small Businesses

06/22/2021

The Protecting Americans from Tax Hikes (PATH) Act of 2015 made it possible for start-ups and small businesses to qualify for a tax credit of up to $250,000. Start-ups and small businesses that were previously unable to benefit from the research and development (R&D) tax credits due to lack of taxability should take advantage of … Read More

Research Tax Credit Opportunities for Architects and Engineers

Research Tax Credit Opportunities for Architects and Engineers

05/17/2021

Architecture and engineering firms may want to take another look at the often forgotten Research & Development (R&D) Tax Credit. Many may be eligible for federal and state research credits without realizing it. Historically, the R&D Tax Credit was geared to only benefit large companies; mostly in the manufacturing, software, high-tech and pharmaceutical industries. However, … Read More

KBKG Tax Insight: (AB 80) PPP Loan is Tax Deductible in CA & Impact on R&D Tax Credit

KBKG Tax Insight: (AB 80) PPP Loan is Tax Deductible in CA & Impact on R&D Tax Credit

05/10/2021

After months of uncertainty, California taxpayers can begin to proceed with some degree of clarity around the treatment of Economic Injury Disaster Loans (“EIDL”) as well as Paycheck Protection Program (“PPP”) loans received and forgiven for income tax purposes. Assembly Bill 80 (“A.B. 80” or the “bill”) allows taxpayers that meet certain criteria to exclude … Read More

KBKG Tax Insight: Guide to Expensing HVAC Costs

KBKG Tax Insight: Guide to Expensing HVAC Costs

04/19/2021

As featured in AICPA Tax Adviser – April 15, 2021 Heating, ventilation, and air conditioning (“HVAC”) replacement costs can be significant expenses for businesses that own or lease real estate. This guide is intended to help tax practitioners distinguish between deductible repairs and more extensive work that must be capitalized. Each year, tax professionals who … Read More

KBKG Tax Insight: The American Rescue Plan Extends Employee Retention Tax Credits

KBKG Tax Insight: The American Rescue Plan Extends Employee Retention Tax Credits

03/12/2021

We released an update on November 8, 2021. Please see this KBKG Tax Insight for the latest. On Thursday, March 11th, President Biden signed the American Rescue Plan Act (ARPA) into law. The historic $1.9 Trillion stimulus package expands COVID-19 relief for individuals, families, local governments, and businesses. Specifically, the plan includes updates to the … Read More

KBKG Tax Insight: New Illinois Bill Makes R&D Tax Credit More Valuable

KBKG Tax Insight: New Illinois Bill Makes R&D Tax Credit More Valuable

02/24/2021

Companies performing qualified research and development activities in Illinois are one step closer to a much-improved state R&D credit.  Historically, companies in Illinois must have experienced an increase in qualified research expenditures (QRE) over the previous three years to receive the state tax credit. Illinois State Representative Tony McCombie has introduced a bill for an … Read More

KBKG Tax Insight: Biden Will Have to Deal With Tax Revenue Shortfall From COVID-19

KBKG Tax Insight: Biden Will Have to Deal With Tax Revenue Shortfall From COVID-19

02/11/2021

As featured in Accounting Today When Joe Biden was inaugurated last month, he assumed all the responsibilities of the American presidency, including tax policy decisions. With the advantage of a Democratic majority in both houses of Congress, his administration will probably pursue tax policy options to raise revenues to offset the deficit attributable to the … Read More

KBKG Tax Insight: Energy Efficiency Tax Incentives Extended and Made Permanent

KBKG Tax Insight: Energy Efficiency Tax Incentives Extended and Made Permanent

12/21/2020

After months of negotiations, Congress will pass a $900 billion COVID-relief package along with a $1.4 trillion spending package that funds the government for the 2021 fiscal year. President Donald Trump is expected to sign and enact this bill. In addition to providing a second round of COVID relief, the spending bill includes tax relief … Read More

KBKG Tax Insight: IRS Releases Guidance on Bonus Depreciation

KBKG Tax Insight: IRS Releases Guidance on Bonus Depreciation

12/03/2020

On November 6, 2020, the IRS released Revenue Procedure 2020-50 providing guidance on implementing the most recent bonus depreciation regulations. These regulations, issued in September 2020, addressed feedback and slightly revised provisions of the 2019 proposed bonus regulations. Since the Tax Cuts and Jobs Act bonus depreciation rules have changed over the iterations of proposed … Read More

KBKG Tax Insight: Transfer Pricing Changes Drive Tax Savings for Coronavirus Impacted Companies

KBKG Tax Insight: Transfer Pricing Changes Drive Tax Savings for Coronavirus Impacted Companies

11/04/2020

As featured in Accounting Today Intercompany pricing corrections now can help generate cash by utilizing tax net operating losses. In a pandemic environment, longstanding transfer pricing policies can lead to suboptimal tax results. Multinationals that incur losses in some locations while earning generous profits in others could be overpaying taxes. For many companies, modifications to … Read More

KBKG Tax Insight: Partial Dispositions & Deduction of Demolition Costs

KBKG Tax Insight: Partial Dispositions & Deduction of Demolition Costs

07/07/2020

Subsequent to the acquisition of a property, taxpayers often incur capital expenditures related to property renovations and improvements. As this work occurs, the existing components are often removed or disposed of.  IRC Section 1.168(i)-8(d)(2) allows taxpayers to realize a gain or loss by making an election to partially dispose the adjusted basis of the aforementioned … Read More

KBKG Tax Insight: CARES Act Offers Overlooked Opportunities for Refunds – First Check Cross Border Prices

KBKG Tax Insight: CARES Act Offers Overlooked Opportunities for Refunds – First Check Cross Border Prices

06/25/2020

As featured in Accounting Today Some multinational companies can generate additional carryback tax loss relief through transfer pricing planning. Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, US corporations can now elect to carryback losses incurred in 2020 for a five-year period (2015 to 2019).[1]  The Act was implemented to provide badly-needed cashflow … Read More

KBKG Tax Insight: Senate Finance Committee Discusses Potential for New Coronavirus Bill that Would Allow Accelerated Federal Tax Breaks

KBKG Tax Insight: Senate Finance Committee Discusses Potential for New Coronavirus Bill that Would Allow Accelerated Federal Tax Breaks

06/23/2020

As the Coronavirus pandemic continues to impact the country and economy, the Senate Finance Committee is continuing to discuss ways to help American businesses weather the storm. According to insiders, the potential proposal, which could be as large as $1 Trillion in relief funds, will include a provision that would remove limitations on businesses that … Read More

KBKG Tax Insight: Concurrent IRS Form 3115 Template (DCN 244 & 7)

KBKG Tax Insight: Concurrent IRS Form 3115 Template (DCN 244 & 7)

06/17/2020

On April 17, 2020, the IRS released Rev. Proc. 2020-25 outlining how to implement the Qualified Improvement Property (QIP) changes that were part of the CARES Act of 2020 using Form 3115, Change in Accounting Method. Section 6.03(4)(b), states that a taxpayer making a change 244 to correct QIP and changed related to depreciation recovery … Read More

KBKG Tax Insight: New and Improved Changes to Research and Development (R&D) Tax Credit: Furthering the American Recovery from the Coronavirus

KBKG Tax Insight: New and Improved Changes to Research and Development (R&D) Tax Credit: Furthering the American Recovery from the Coronavirus

05/06/2020

Senator Chris Coons of Delaware recently introduced legislation (S. 3593) called “Furthering Our Recovery With American Research & Development Act” (“FORWARD”), which makes changes to and expands Internal Revenue Code Section 41: Credit for Increasing Research Activities (“IRC 41”). Applying these modifications to the existing law could allow companies that invest in the research and … Read More

KBKG Tax Insight: R&D Studies Can Make Audits Easier and the Credits More Sustainable

KBKG Tax Insight: R&D Studies Can Make Audits Easier and the Credits More Sustainable

04/28/2020

As featured in Accounting Today Internal Revenue Service examinations of the research tax credit can burden both the client and the IRS. Throughout most of its decades-long history, research credit audits have exposed areas of misunderstanding and, in many circumstances, led to major disagreements. There is little “bright line” guidance, and each examiner must consider … Read More

KBKG Tax Insight: Opportunity Zones and Cost Segregation

KBKG Tax Insight: Opportunity Zones and Cost Segregation

04/27/2020

As Featured in Accounting Today Opportunity Zones are garnering increased interest across the country. Taxpayers who meet the requirements for investing in an Opportunity Zone can potentially take advantage of increased depreciation deductions through cost segregation, further decreasing their tax liability. KBKG Insight: There is an opportunity to take advantage of cost segregation for certain … Read More

KBKG Tax Insight: Qualified Improvement Property (QIP) Guidance from the IRS

KBKG Tax Insight: Qualified Improvement Property (QIP) Guidance from the IRS

04/07/2020

For the most up-to-date information on Qualified Improvement Property, see our latest post. In response to our previous release last week, Qualified Improvement Property (QIP) Technical Correction in CARES Act, KBKG has received several inquiries related to the changes in QIP law. Since that post, we have also learned more through discussions with high ranking … Read More

KBKG Tax Insight: Qualified Improvement Property (QIP) Technical Correction in CARES Act

KBKG Tax Insight: Qualified Improvement Property (QIP) Technical Correction in CARES Act

03/31/2020

For the most up-to-date information on Qualified Improvement Property, see our latest post. With the passage of the CARES Act on Friday, March 27, 2020, Congress addressed the much anticipated “Retail Glitch” associated with the 2017 Tax Cuts and Jobs Act (TCJA). This rule previously prevented investments in qualified improvement property (QIP) from qualifying for … Read More

KBKG Tax Insight: Senate Passes $2 Trillion Stimulus Package – CARES Act

KBKG Tax Insight: Senate Passes $2 Trillion Stimulus Package – CARES Act

03/26/2020

For the most up-to-date information on Qualified Improvement Property, see our latest post. On March 25, the Senate unanimously approved the Coronavirus Aid, Relief, and Economic Security (CARES) Act and sent it to the House for voting. If passed by the House, the President is expected to sign into law. The bill includes the following: … Read More

KBKG Tax Insight: Words Matter When Describing R&D Credit Activities

KBKG Tax Insight: Words Matter When Describing R&D Credit Activities

01/08/2020

As featured in Accounting Today We’ve all experienced a situation where our intent and the meaning of something we’ve said or written was misinterpreted by the recipient. There are numerous articles available for many situations to help us avoid this problem, such as the how to ask the boss for a raise or the best … Read More

2019 Legislative Tax Updates for Real Estate

2019 Legislative Tax Updates for Real Estate

12/20/2019

For the most up-to-date information on Qualified Improvement Property, see our latest post. Our technical team has been keeping tabs on the latest updates on the Hill in regard to tax extenders and technical corrections, given how they may impact 45L Tax Credits and 179D Deductions and the cost recovery of Qualified Improvement Property for … Read More

Operating Internationally? Practical Strategies for Managing Your Top Tax Issue

Operating Internationally? Practical Strategies for Managing Your Top Tax Issue

11/04/2019

It is no secret that many companies see overseas markets as a pillar of long-term growth strategies. Whenever a US business makes investments internationally or a foreign parent expands to the US market, company management is often surprised by a host of new tax requirements. Regardless of whether a company has a well-established global footprint … Read More

KBKG Tax Insight: Congressional Letter Urges Year End Clean Energy Tax Policies

KBKG Tax Insight: Congressional Letter Urges Year End Clean Energy Tax Policies

10/31/2019

Yesterday, a letter signed by over 70% of House Democrats was delivered to Speaker Nancy Pelosi and House Majority Leader Steny Hoyer urging them to prioritize the inclusion of clean energy tax policies in negotiations around must-pass legislation this year. As the House Ways and Means Committee takes action on a clean energy tax package, … Read More

[PRESS RELEASE] Tax Specialty Firm KBKG Joins Real Estate Roundtable

[PRESS RELEASE] Tax Specialty Firm KBKG Joins Real Estate Roundtable

10/21/2019

Last year, specialty tax incentive firm KBKG joined the Real Estate Roundtable (RER), and several of KBKG’s executive leadership team currently serve as members of the organization’s President’s Council, Associate Council, and Committees. RER’s mission is to bring together leaders of the nation’s top, publicly held and privately-owned firms with major national real estate industry … Read More

KBKG Tax Insight: Impact of Final Regulations and New Proposed Regulations for Additional First Year Depreciation Deduction

KBKG Tax Insight: Impact of Final Regulations and New Proposed Regulations for Additional First Year Depreciation Deduction

09/20/2019

For the most up-to-date information on Qualified Improvement Property, see our latest post. On September 13, 2019, the IRS and Treasury Department released the much-anticipated final regulations that provide guidance regarding additional first year bonus depreciation deductions under section 168(k) of the Internal Revenue Code (REG-104397-18). While the final regulations clarified some questions, there are … Read More

KBKG Tax Insight: Final Regulations and New Proposed Regulations for Additional First-Year Depreciation Deduction

KBKG Tax Insight: Final Regulations and New Proposed Regulations for Additional First-Year Depreciation Deduction

09/17/2019

For the most up-to-date information on Qualified Improvement Property, see our latest post. On September 13, 2019, the IRS and Treasury finalized first-year bonus regulations (REG-104397-18). In tandem, they issued additional proposed regs (REG-106808-19) for bonus nuances. Here are a few highlights: Final Regulations: Qualified Improvement Property (QIP) – 2018 and beyond: The IRS and … Read More

KBKG Tax Insight: The Impact of TCJA on Cost Segregation & Like-Kind Exchange

KBKG Tax Insight: The Impact of TCJA on Cost Segregation & Like-Kind Exchange

04/02/2019

Reproduced with permission from Daily Tax Report, 62 DTR 12, 4/2/19. Copyright _ 2019 by The Bureau of National Affairs, Inc. (800-372-1033) https://news.bloombergtax.com/daily-tax-report/insight-tax-insight-the-impact-of-tcja-on-cost-segregation-and-like-kind-exchange Like-kind exchange has been a popular tax deferral tool for decades. Under IRC 1031, a taxpayer can defer tax on gain from the sale of a business or investment property if it … Read More

Tax Insight: Senate and House Updates on Tax Extenders for 2018-2019

Tax Insight: Senate and House Updates on Tax Extenders for 2018-2019

03/07/2019

Senate Update Last Thursday, February 28, 2019, Senate Finance Committee Chairman Chuck Grassley (R. Iowa) and Ranking Member Ron Wyden (D. Oregon) introduced bipartisan legislation to retroactively extend tax extenders for 2018 and 2019 while also providing disaster tax relief benefits to those affected by major disasters in 2018. “Congress needs to get out of … Read More

Tax Insight: Tax Extender Update from Senator Chuck Grassley

Tax Insight: Tax Extender Update from Senator Chuck Grassley

02/22/2019

On Thursday, February 14, 2019, Senate Finance Committee Chairman Chuck Grassley (R. Iowa) addressed tax policy and various provisions that KBKG and the Real Estate Roundtable have been monitoring closely. In his speech, Senator Grassley expressed his commitment to pursue tax extenders and rejection of press reports suggesting that some provisions may no longer be … Read More

KBKG Tax Insight: Updates to “Qualified Improvement Property”

KBKG Tax Insight: Updates to “Qualified Improvement Property”

11/09/2018

For the most up-to-date information on Qualified Improvement Property, see our latest post. With the 2017 tax year behind us, tax professionals are laser focused on the various new rules presented by the recent Tax Cuts and Jobs Act (TCJA) effective for the 2018 tax year. One of the most significant changes related to real … Read More

KBKG Tax Insight: R&D Tax Credit – Qualified Research Expenses for Software Development Activities

KBKG Tax Insight: R&D Tax Credit – Qualified Research Expenses for Software Development Activities

09/17/2018

What software development activities and expenditures can be included in an R&D Tax Credit claim for software projects? Companies performing qualified research in creating or improving their software may qualify for federal and state R&D tax credits for the software development activities they are already conducting. These credits are a dollar-for-dollar reduction in federal and … Read More

KBKG Tax Insight: Utilize Statistical Sampling with Cost Segregation

KBKG Tax Insight: Utilize Statistical Sampling with Cost Segregation

09/04/2018

If you are a taxpayer that owns multiple building improvement properties which are similar in construction, utilizing a statistical sampling along with cost segregation can greatly reduce the fees and resources needed to allocate each property for tax depreciation. Pairing this with an accounting method change to claim missed cost segregation opportunities over multiple years … Read More

KBKG Tax Insight: Major PATH Act<sup>1</sup> Changes to the R&D Tax Credit

KBKG Tax Insight: Major PATH Act1 Changes to the R&D Tax Credit

08/27/2018

Major PATH Act2 changes to the R&D Tax Credit for the years beginning after December 31, 2015: The federal R&D Tax Credit has provided taxpayers conducting qualified research a significant tax benefit since it was first signed into law by President Reagan in 1981. Although billions of dollars worth of R&D credits were claimed each … Read More

KBKG Tax Insight: R&D Credit Opportunity – Improving an Existing Product

KBKG Tax Insight: R&D Credit Opportunity – Improving an Existing Product

06/11/2018

Businesses who are creating a brand-new product may be aware that the expenses associated with the cost of developing the prototype, or first article, of that product can qualify for the Research & Development (R&D) tax credit1. Qualifying expenses can include employee wages, materials used in the construction of the prototype and any third-party contractors … Read More

KBKG Tax Insight: 179D Energy Efficiency Deductions Extended through 2017

04/03/2018

The 179D energy efficiency tax deduction has been extended retroactively for improvements completed by the end of 2017. This financial incentive is geared towards: 1) building owners (commercial or multifamily), 2) tenants making improvements, and 3) architects, engineers, and other designers of government buildings. The tax deduction is worth up to $5.00 / square foot … Read More

KBKG Tax Insight:  IRS Penalizes Cost Segregation Provider for Aiding and Abetting

KBKG Tax Insight: IRS Penalizes Cost Segregation Provider for Aiding and Abetting

03/06/2018

Tax preparers and their clients often cannot recognize quality differences among cost segregation service providers, leading to buying decisions based on who proposes the lowest fee or promises the highest tax benefit. However, the real test of quality is how the cost segregation results stand up in an IRS audit. What are the consequences of … Read More

45L: The Energy Efficient Home Credit – Extended through 2017

03/05/2018

Homebuilders and multi-family developers have a unique opportunity to capitalize on an energy efficient home credit that is often overlooked. Low-rise apartment developers and homebuilders are eligible for a $2,000 tax credit for each new or rehabbed energy efficient dwelling unit that is first leased or sold by the end of 2017. Taxpayers also have … Read More

Tax Insight: How to Co-ordinate Cost Segregation with Like-kind Exchange

Tax Insight: How to Co-ordinate Cost Segregation with Like-kind Exchange

01/23/2018

The Tax Cuts and Jobs Act (TCJA) was signed by the President on December 22, 2017. The TCJA is the most significant overhaul of Internal Revenue Tax code since the 1986 Tax Act under President Reagan. The Committee Report has over a thousand pages of modifications to many areas of the tax code. One piece … Read More

KBKG Tax Insight: Avoid Common R&D Expense Documentation Errors

KBKG Tax Insight: Avoid Common R&D Expense Documentation Errors

01/14/2018

Business owners are often surprised to learn they may be able to claim the Research & Development (R&D) tax credit. The credit was originally created as way to encourage American companies to conduct R&D activities domestically. While initially thought to apply to large companies with formal R&D departments, “smaller businesses” in a wide range of … Read More

Minimize Gains on Sale of Condos in Mixed-Use Developments. Condo Tax Basis Allocation Studies

Minimize Gains on Sale of Condos in Mixed-Use Developments. Condo Tax Basis Allocation Studies

01/09/2018

Traditional cost accounting for mixed-use residential projects often does not properly allocate all construction costs to each section of the property. Consequently, there may be a significant understatement of cost basis for residential condominium units resulting in higher taxable gains upon sale. This is most common within vertical mixed-use developments where residential condos are stacked … Read More

KBKG Tax Insight: Tax Reform & The R&D Tax Credit

KBKG Tax Insight: Tax Reform & The R&D Tax Credit

12/21/2017

It’s been over thirty years since the tax code has been modified to this extent. It has been a talking point for politicians since the Reagan administration brokered the bipartisan Tax Reform Act of 1986. However, the divide between the political parties have kept it a talking point since then, until now. The Tax Cuts … Read More

Reduce Taxes on Condo Sales in Mixed-Use Developments with Tax Basis Allocation Studies

Reduce Taxes on Condo Sales in Mixed-Use Developments with Tax Basis Allocation Studies

12/01/2017

Traditional cost accounting for mixed-use residential projects often does not properly allocate all construction costs to each section of the property. Consequently, there may be a significant understatement of cost basis for residential condominium units resulting in higher taxable gains upon sale. This is most common within vertical mixed-use developments where residential condos are stacked … Read More

KBKG Tax Insight: Maximizing the Value of the R&D Tax Credit – Pharmaceutical & Life Sciences Industry

KBKG Tax Insight: Maximizing the Value of the R&D Tax Credit – Pharmaceutical & Life Sciences Industry

11/27/2017

It is no secret that many Pharmaceutical and Life Sciences companies (“Companies”) conduct research and development activities that qualify for numerous tax incentives, including the Research and Development (R&D) tax credit. Recent groundbreaking legislation created a level of certainty for tax planning purposes and also includes provisions geared towards providing significant benefits to small businesses … Read More

KBKG Tax Insight: How Tax Reform Bills Impact Real Estate

KBKG Tax Insight: How Tax Reform Bills Impact Real Estate

11/10/2017

The commercial real estate industry can expect significant changes in the event that tax reform is passed. Yesterday, the House Ways and Means Committee finished marking up and approved a tax reform bill introduced last week – the “Tax Cuts and Jobs Act” with the goal of voting on it before Thanksgiving. Simultaneously, the Senate … Read More

KBKG Tax Insight: Effects of Tax Reform on R&D & Orphan Drug Credits

KBKG Tax Insight: Effects of Tax Reform on R&D & Orphan Drug Credits

11/10/2017

Senate Republicans released their own version of a tax plan on Thursday (November 9, 2017), just a week after the House proposal was unveiled. Although both plans keep the research and development tax credit in place, changes in the tax code will require some additional planning for taxpayers currently claiming or those planning on claiming … Read More

KBKG Tax Insight: 5 Tips for Properly Vetting a Specialty Tax Consultant

11/07/2017

CPAs know it is imperative to refer clients to 3rd party consultants for various issues that require deep specialization in an area of tax. In many ways, these specialty tax firms act as an extension of your team and require coordination to deliver results that often have a material impact on a tax return. While … Read More

KBKG Tax Insight: Can You Claim 45L Tax Credits Retroactively?

11/03/2017

Yes, 45L tax credits can be claimed retroactively if they have been missed on prior tax returns. Since 45L tax credits are triggered in the year that a dwelling unit is first leased or sold, some taxpayers incorrectly think that the tax credits need to be claimed timely on current year tax returns. In reality, … Read More

KBKG Tax insight: Tips for Documenting Qualifying R&D Expenses

10/26/2017

Every company seeks effective ways to reduce their overall tax liabilities. Although traditional tax planning can certainly reduce business taxes, there is often a limited impact, leaving owners and managers searching for additional savings opportunities. The good news is that the Research and Development (R&D) Tax Credit is available to qualifying companies that have or … Read More

New Tax Reform Proposal Makes Deductions More Valuable in 2017

10/06/2017

On Thursday, September 27, Republican leaders in Congress and the Trump administration released the Unified Framework for Fixing Our Broken Tax Code. Among the many ideas outlined within the plan is to reduce the corporate tax rate to 20% and provide a maximum tax rate of 25% for business income from flow through entities of … Read More

IRS Issues Guidance Around ASC 730 and the R&D Tax Credit

09/29/2017

According to a new guidance released by the IRS, the Large Business and International Division which serves corporations, subchapter S corporations, and partnerships with assets greater than $10 million are instructed to accept financial statements that comply with the GAAP standards as proof of Qualified Research Expenses (QREs). Ultimately, this new directive could lessen the formally … Read More

New Qualified Improvement Property Category in 2016

09/18/2017

For the most up-to-date information on Qualified Improvement Property, see our latest post. Many tax professionals are still unclear about the newest classification of building improvements eligible for bonus depreciation when placed in service on or after January 1, 2016. That’s understandable considering there has been over a dozen additions or changes to rules relating … Read More

KBKG Tax Insight: IRS Releases Tax Relief Opportunities for those Affected by Hurricane Harvey

08/29/2017

Updated 10/12/17 to include Caldwell, Comal, Guadalupe, Jim Wells, Milam, and San Augustine counties. Updated 9/20/17 to include Burleson, Grimes, Madison and Washington Counties. Updated 9/19/17 to include Bexar, Dallas, Tarrant, and Travis Counties. Updated 9/5/17 to include Austin, Batrop, DeWitt, Gonzales, Karnes, Lavaca, Lee, Polk, Tyler and Walker Counties. Updated 8/30/17 to include Colorado, … Read More

KBKG Insight: Does a Cost Segregation Study Increase the Likelihood of Audit?

08/25/2017

One of the most common concerns that is raised regarding Cost Segregation Studies is whether it increases the likelihood of an IRS audit down the road. While it’s well documented that these studies are accepted by the IRS if performed properly, there isn’t much evidence suggesting the implementation of a cost segregation study on a … Read More

45L: The Energy Efficient Home Credit – Infographic

08/14/2017

Homebuilders and multi-family developers have a unique opportunity to capitalize on an energy efficient home credit that is often overlooked. The 45L Tax Credit offers $2,000 per qualified dwelling unit that can also be claimed retroactively if missed in prior years; however, the clock is ticking. There is a limited timeframe for claiming missed credits, … Read More

KBKG Tax Insight: Maximizing the Value of the Orphan Drug Tax Credit

07/19/2017

  The Pharmaceutical and Life Sciences industry currently faces a range of issues, including the rising costs of discovery and development, major losses of revenue due to patent expirations, and increased complexities due to demanding regulatory requirements. Moreover, developers of orphan drugs must overcome a host of additional challenges that make it difficult to recoup … Read More

KBKG Tax Insight: Illinois Reinstates the R&D Tax Credit

07/07/2017

On Thursday, July 6th, the Illinois state legislature successfully voted to override Republican Governor Bruce Rauner’s veto, giving the state its first operating budget in two years.  Included in the $36 billion spending plan is an extension of the state’s research and development tax credit through December 31, 2021.  The research and development (R&D) credit … Read More

KBKG Tax Insight: Guide to Expensing Roofing Costs

06/21/2017

Each year, tax professionals who deal with real estate must evaluate the most recent building expenditures and determine which items should be written off as a repair expense or capitalized. The most common, and often significant, item that is evaluated is roofing-related work. In many cases, only a portion of the roofing system is replaced, … Read More

KBKG Insight: Tax Court Rejects Taxpayer’s Land vs. Building Allocation

06/13/2017

On May 8, 2017, the U.S. Tax Court released Summary Opinion 2017-31 to conclude that a county assessor’s allocation to land and improvement values were more reliable than the taxpayers proposed values.  The tax court noted they could not find any authority that suggests a taxpayer is qualified to allocate the value of the property … Read More

KBKG Tax Insight: Is a More Valuable R&D Credit Coming Soon?

06/08/2017

The R&D tax credit, which awards companies large and small for their innovative efforts and that was made permanent in 2015, could now be more lucrative with new bi‐partisan support. Senators Chris Coons (D‐DE) and Pat Roberts (R‐KS) have introduced a bill increasing the R&D credit up to 25% for companies that not only conduct … Read More

KBKG Tax Insight: IRS Takes Controversial Position on Building Placed in Service Dates

05/11/2017

For the most up-to-date information on Qualified Improvement Property, see our latest post. Internal Revenue Service in Action on Action on Decision 2017-02 announced that it will continue to litigate the issue surrounding placed in service dates for certain buildings that have received their certificate of occupancy but aren’t ready and available for their “specifically … Read More

KBKG Tax Insight: New R&D Payroll Tax Credit Estimator tool

05/02/2017

The R&D tax credit is now permanent and for the first time ever, small businesses and start-ups can take advantage of this lucrative tax credit. Every year, billions of dollars are given to qualified businesses. Estimate your tax savings using our quick, simple R&D Payroll Tax Credit Calculator and save up to $250,000. Author: Kevin … Read More

KBKG Tax Insight: IRS Updates Cost Segregation Audit Techniques Guide

04/18/2017

The Internal Revenue Service (IRS) released a relatively substantial update to their Cost Segregation Audit Techniques Guide (ATG) in order to incorporate various tax and legal developments since it was first released. Originally published in 2004, the Cost Segregation Audit Techniques Guide assists IRS examiners during audits by providing an understanding of technical information, examination … Read More

KBKG Tax Insight: Online Cost Segregation Savings Calculator Provides Instant Estimated Tax Projection for any Building

03/22/2017

KBKG’s complimentary online cost segregation tax savings calculator provides instant, estimated tax projections and is easy to use. Just enter the building details and instantly receive a summary detailing the additional depreciation deductions each year generated by a cost segregation study. “KBKG’s free Cost Segregation Calculator is quick and easy when I need a high-level … Read More

KBKG Tax Insight: Gian Pazzia Discusses Cutting Edge Cost Segregation Software

03/14/2017

Recently, the Tax Resolution Institute invited KBKG subject matter expert, Gian Pazzia, to present a live discussion on KBKG’s new cutting edge software, the Residential Cost Segregator®. Watch the video for an overview on the topic and to learn how tax preparers can use the software to accelerate deductions on smaller residential properties, which was … Read More

Affordable Housing Developers & Investors are Often Missing Out on $2,000 per Unit

01/29/2017

Affordable housing developers benefit from various tax credits from Low-Income Housing Tax Credits to Rehab Credits yet they still fail to claim a tax credit that is often geared towards their developments: the Section 45L Tax Credit. Section 45L is a commonly overlooked section of the tax code that rewards energy efficient dwelling units with … Read More

KBKG Tax Insight: Deductions are More Valuable in 2016. Accelerate Them.

01/24/2017

It may have been one of the most hotly contested, controversial campaigns in living memory, but there can be no denying the outcome of the 2016 US presidential election is generally friendly for business. President Donald Trump and the Republican Party both agree that that tax reform is a top priority to help stimulate the … Read More

KBKG Tax Insight: Using Cost Segregation with Estate Planning

01/13/2017

When a client dies, a critical estate planning area for tax professionals involves managing the step-up in basis on inherited assets for estate and income tax purposes. The general rule for real estate is that when a property is inherited, any gains built up during the decedent’s life are not recognized. The beneficiary also receives … Read More

KBKG Tax Insight: New 2016 Qualified Improvement Property Criteria

11/02/2016

For the most up-to-date information on Qualified Improvement Property, see our latest post. The new Qualified Improvement Property category put into effect in 2016 by the PATH Act will have a broad impact on almost all real estate owners for the near future by increasing the likelihood real property capital expenditures are eligible for bonus … Read More

KBKG Tax Insight: IRS Issues Final Regulations Surrounding the Qualification of Internal Use Software towards the R&D Tax Credit

10/04/2016

On October 4, 2016, the Internal Revenue Service issued final regulations which provide guidance on the qualification of internal use software (“IUS”) for purposes of the Section 41 Credit for Increasing Research Activities. The final regulations (TD 9786) address many of the comments received regarding the proposed regulations that were released in January of 2015. … Read More

Estate Planning Strategy Using Cost Segregation

08/19/2016

Real estate owners and investors often use cost segregation studies to accelerate depreciation deductions, generate current income tax benefits, and improve cash flow. But did you know that a cost segregation study can also be used as a powerful estate-planning tool?One of the advantages of transferring property at death (rather than by lifetime gift) is … Read More

KBKG Tax Insight: Avoiding Cost Segregation Recapture Tax

08/04/2016

Savvy tax professionals that recommend Cost Segregation studies are well aware of the recapture tax rules that require taxpayers to pay back any accelerated tax deductions when the property is sold. After all, for the right situation, the net present value of those tax savings far exceeds any recapture tax payback. While the effects of … Read More

IRS provides 1 year extension to claim missed repair deductions on 2015 returns

06/03/2016

The recently released Rev. Proc. 2016-29 details new procedures for automatic accounting method changes, as discussed in a previous KBKG Tax Insight, and effectively provides a one year extension for taxpayers to implement many portions of the Tangible Property Regulations (TPR).Taxpayers are generally not permitted to make an automatic method change if they made a … Read More

Deduct Your Demolished Building Using a GAA

05/18/2016

When a taxpayer acquires a building that may need to be demolished in the foreseeable future, they are often disappointed to learn from their tax preparer that they will lose all future tax depreciation deductions associated with the building. For many years, the tax code has not been forgiving to property owners who invest in … Read More

Rev. Proc. 2016-29: New Procedures for Automatic Accounting Method Changes

05/11/2016

The IRS recently released Rev. Proc. 2016-29, which lists automatic method changes and provides procedures for making them. Form 3115’s filed on or after May 5, 2016 must follow the updated rules. Background. Taxpayers make accounting method changes for numerous reasons, such as claiming missed depreciation from a Cost Segregation study, reclassifying capital expenditures as … Read More

KBKG Video: Using Cost Segregation with Estate Planning

05/05/2016

In an article recently published by the AICPA, Using Cost Segregation in Estate Planning, our subject matter expert, Gian Pazzia, CCSP, details the ability to create permanent tax savings after a death occurs through an often overlooked aspect of the step-up in basis tax law. Our short video explains the mechanics of how this strategy … Read More

Using Cost Segregation with Estate Planning

03/31/2016

When a client dies, a critical estate planning area for tax professionals involves managing the step-up in basis on inherited assets for estate and income tax purposes. The general rule for real estate is that when a property is inherited, any gains built up during the decedent’s life are not recognized. The beneficiary also receives … Read More

PATH Act 2015 Extends and Modifies Important Tax Incentives for Architects & Engineers

02/05/2016

In December, Congress passed and the President signed The Protecting Americans from Tax Hikes (“PATH”) Act of 2015. The bill includes the extension of the 179D Tax Deduction and changes ASHRAE requirements for projects placed in service in 2016. The extender package also included the permanent extension AND expansion of the Research and Development (“R&D”) … Read More

Retail/Restaurant Industry Safe Harbor Under Tangible Property Regulations

01/13/2016

The IRS recently issued Revenue Procedure 2015-56 providing a safe harbor for certain taxpayers operating retail or restaurant establishments for determining whether expenditures incurred to “remodel” or “refresh” their property can be expensed under the Tangible Property Regulations released in 2013. Generally, the safe harbor benefits those enhancing the physical appearance and layout of their … Read More

R&D Tax Credit Expanded for Small & Midsize Businesses

12/18/2015

Congress is spreading some cheer this holiday season in the form of tax breaks for both businesses and individuals. The Protecting Americans from Tax Hikes (“PATH”) Act of 2015 was passed by both the House and the Senate and is a groundbreaking $650 billion tax extender bill aimed at providing taxpayers certainty and opportunity into … Read More

Promising News on Tax Extender Legislation

12/09/2015

On December 7, 2015, House Ways and Means Chairman Kevin Brady (R-TX) unveiled proposed legislation to extend a number of tax provisions that expired at the end of calendar year 2014. The proposed legislation would prevent tax increases on millions of families and businesses as the 2015 tax year filing season begins early next year. … Read More

Late Partial Dispositions – It’s Not Too Late for Fiscal Year-end Taxpayers

11/30/2015

While the opportunity to file a late partial disposition election ended for calendar year taxpayers, fiscal year-end taxpayers still have time to review depreciation schedules for these missed deductions. In the context of a building, a late partial disposition occurs generally when any building component, such as a roof, has been removed in a prior tax … Read More

IRS Releases Retail & Restaurant Safe Harbor Related to Tangible Property Regulations

11/20/2015

On November 20, 2015, the IRS released Revenue Procedure 2015-56, providing certain “qualified taxpayers” engaged in the trade or business of operating a retail establishment or a restaurant a safe harbor accounting method for costs incurred related to remodeling and refreshing of their “qualified buildings.” “Qualified taxpayers” include those conducting activities within NAICS codes 44 … Read More

Tangible Property Regs – Reconsidering Small Taxpayer Relief under RP 2015-20

08/18/2015

Earlier this year, the IRS relieved small business taxpayers from having to file mandatory Form 3115’s to comply with the newly issued Tangible Property Regulations (TPRs). Accepting this relief under Rev. Proc. 2015-20 is done merely by filing of a federal tax return, leaving many CPAs unaware of the negative consequences of doing nothing. More … Read More

Senate Finance Committee approves renewal of expired tax provisions

07/22/2015

Yesterday, on July 21st, the Senate Finance Committee repeated history by overwhelmingly approving a 2-year extension of over 50 expired tax provisions with a strong bipartisan vote, setting the stage for Congress to address later this year. The bill extends many long awaited business tax extenders that originally expired at the end of 2014 and … Read More

IRS Releases New Draft Form 3115

07/20/2015

On July 15th, The IRS posted onto its website an early released draft of Form 3115, Application for Change in Accounting Method. Form 3115 is used for accounting method changes, including complying with the Tangible Property Regulations (“TPRs”) as well as making depreciation adjustments resulting from Cost Segregation studies. The current version of Form 3115 … Read More

R&D Tax Credits for the Food & Beverage Industry

06/08/2015

With the challenge of feeding an ever growing population, food & beverage companies in the United States are forced to increase their research and development efforts to meet demand. In addition to providing more options, food and beverage manufacturers are fighting to keep up with trends in the market place which include the reduction in … Read More

House Passes Permanent Extension of the R&D Tax Credit

05/22/2015

On May 20th, the US House of Representatives passed HR 880, making the Research & Development Tax Credit permanent. The House bill is called the American Research and Competitiveness Bill of 2015. HR 880 provides no revenue offsets which will likely be met with a presidential veto, consistent with what President Obama has promised to … Read More

AICPA Recommends Increasing De Minimis Safe Harbor Limit

04/28/2015

In a recent letter, the American Institute of Certified Public Accountants (AICPA) commended the IRS for requesting input on increasing the De Minimis Safe Harbor limit for taxpayers without applicable financial statements (AFS) and provided a recommendation. The safe harbor generally allows taxpayers with AFS (which usually means audited financial statements) to immediately deduct $5,000 … Read More

Practice Tool – Unit of Property & Major Component Chart for Buildings

03/24/2015

KBKG strives to be a thought leader in the areas we service and we’re proud so many CPAs rely upon the tools we’ve created. For those applying the new Tangible Property Repair Regulations, the first step in a proper Repair vs. Capitalization analysis is to identify and understand the Unit of Property (UOP). For real … Read More

Tangible Property Final Regulations FAQ

03/09/2015

Section 162 of the Internal Revenue Code (IRC) allows you to deduct all the ordinary and necessary expenses you incur during the taxable year in carrying on your trade or business, including the costs of certain materials, supplies, repairs, and maintenance. However, section 263(a) of the IRC requires you to capitalize the costs of acquiring, … Read More

Filing Relief Issued on Tangible Property Regulations under Rev. Proc. 2015-20

02/16/2015

Numerous tax professionals have struggled with the compliance requirements under the final Tangible Property Regulations (TPRs) and when Form 3115, Application for Change in Accounting Method, is required. In response to public concerns, the IRS issued Rev. Proc. 2015-20 providing a simplified method of compliance for small business taxpayers. The new revenue procedure allows small … Read More

Tangible Property Regulations – IRS Considering Filing Relief

02/11/2015

The 2014 tax season is underway and CPAs and tax professionals are knee deep in the implementation of the final Tangible Property Regulations (TPRs). Tax practitioners have expressed frustration regarding the overly burdensome filing requirements of the new TPRs. The number one question KBKG is asked is whether change #184 is really necessary for every … Read More

Treasury Releases Proposed Regulations on R&D Credits for Internal Use Software

01/20/2015

On Friday, January 16, 2015, the Department of Treasury issued proposed regulations regarding the applicability and inclusion of Internal-Use Software as part of the IRC Section 41 ‘Credit for Increasing Research Activities,’ providing increased availability of the research and development tax credit for a greater number of entities, particularly small to mid-sized taxpayers. These proposed … Read More

Senate passes Tax Extenders for 2014; President Expected To Sign Into Law

12/17/2014

On Tuesday December 16th, the Senate passed H.R.5771 to extend several expired tax provisions and President Obama is expected to sign it into law in the coming days. The extension is retroactive from January 1, 2014, through the end of this year with minimal changes to the prior tax provisions.H.R.5771 was originally passed by the … Read More

House on the verge of voting on Tax Extenders including the R&D Tax Credit

12/03/2014

Last week, congressional aides to Senate Majority Leader, Harry Reid (D-NV), and House Ways and Means Committee Chairman, Dave Camp (R-MI), were reportedly nearing a deal to address many of the tax provisions that expired at the end of 2013. The reported value of the deal was in excess of $400 billion. Many of these … Read More

How will the 2014 Midterm Elections Impact tax extenders?

11/07/2014

Not since World War II have Republicans had this large of a majority in Congress. The results from the 2014 midterm election are a staggering blow to Democrats. Prior to the 2014 midterm election, the Democrats had control in the Senate (53 out of the 100 seats with 2 Independents that caucus with the Democrats), … Read More

Dispositions of Tangible Property – IRS Restricts use of Discount Value Approach

09/23/2014

In August, the IRS issued final regulations on dispositions of tangible depreciable property under Sec. 168 (T.D. 9689) that are generally effective for taxable years beginning on or after January 1, 2014. Taxpayers can realize significant benefits from these regulations by identifying building components that have been replaced or demolished in current or prior years.One … Read More

IRS Releases R.P. 2014-54; Extends Deadline To Claim Retirement Loss Deductions!

09/19/2014

On September 18, the IRS released an advanced copy of Rev. Proc. 2014-54, which provides guidance on certain changes in method of accounting for dispositions of tangible depreciable property. One of the most notable changes in this 93-page document is that the time for making a late partial disposition election has been extended for one … Read More

Research Tax Credit Opportunities for Architects and Engineers

09/11/2014

Although Architecture and Engineering (A&E) firms don’t often claim tax credits, many may be eligible for Federal and state research & development (R&D) tax credits without realizing it. Historically, the R&D tax credit was geared to only benefit large companies; mostly in the manufacturing, software, high-tech and pharmaceutical industries. However, significant changes to the tax regulations … Read More

R&D Tax Credit Now Allows ASC on Amended Returns

06/02/2014

In a surprising, and long overdue modification to the Section 41 Research & Development tax credit, Treasury announced TD 9666 allowing taxpayer’s the opportunity to use the Alternative Simplified Credit (“ASC”) calculation methodology on amended returns in cases where the credit was not previously claimed on a return. Prior to this announcement, the taxpayer’s were … Read More

R&D Tax Credit Update

04/08/2014

The federal tax credit for “increasing research activities” – commonly known as the R&D credit – is one of several “tax extenders” currently being discussed by lawmakers. The credit expired at the end of 2013, but the expectation is that it will be renewed, as it has done consistently since the credit was first enacted … Read More

Expire Act 2014: Tax Extenders for 2014-2015 Passed by Senate Finance Committee

04/03/2014

Yesterday, on April 3, the Senate Finance Committee overwhelmingly approved the Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act of 2014 with a strong bipartisan vote, setting the stage for Congress to address. The bill extends many long awaited business tax extenders that originally expired at the end of 2013 and modifies certain tax provisions. … Read More

California Competes Tax Credit Applications Closes April 14

03/20/2014

Businesses may now apply for the first round of awards under the California Competes Tax Credit program. The last date to register for the current application window is April 14, 2014. The California Competes Tax Credit was part of Governor Brown’s three part successor program to the Enterprise Zone tax credit, which is currently being … Read More

Rev. Proc. 2014-16 – IRS releases procedural guidance to implement Final Repair Regulations

01/27/2014

The IRS recently released Revenue Procedure 2014-16, providing the procedural rules taxpayers follow to make “automatic” accounting method changes under the Final Repair Regulations. This revenue procedure modifies Rev. Proc. 2011-14 and supersedes Rev. Proc. 2012-19 regarding certain changes for amounts paid to acquire, produce, or improve tangible property.IRS PROCEDURE 2014-16 The automatic accounting method … Read More

Case Study: Retirement of Building Components

01/27/2014

The Final Repair Regulations clarified the rules related to whether a building expenditure is a capital improvement or can be a repair expense. However, one of the most significant rules that has changed under these Regs is in regards to the disposition of structural components of buildings. In the past, when a taxpayer renovated an … Read More

IRS issues Final Revised Tangible Property Repair Regulations

09/16/2013

On Friday (9/13/2013), the IRS issued the final, revised Tangible Property Repair Regulations for Sections 162(a) and 263(a) which modify and supersede the Temporary Regulations that were issued on December 23, 2011. While this is the fourth iteration of the Repair Regulations the IRS has released, it is the first time they have issued them … Read More

New Legislation Replaces California Enterprise Zones

07/11/2013

URGENT ACTION REQUIRED! 2013 will be the last tax year for which businesses may engage in qualified Enterprise Zone hiring or purchasing. Business should document as much Enterprise Zone tax credit as possible now to preserve credits for the eleven year carry forward period. » Contact us and MAXIMIZE your Enterprise Zone credits!Governor Brown signed … Read More

Texas Governor Signs R&D Credit Legislation

06/17/2013

On June 14, 2013, Texas Governor Rick Perry signed into law HB 800 reinstating the research and development (R&D) tax credit for Texas companies. Although not permanent, both the sales tax exemption and research credit are extended through 2026 and are expected to be a boost to Texas manufacturing and high-technology industries. Details regarding the … Read More

Texas Research and Development Tax Credit Legislation on Governor’s Desk

06/05/2013

On May 25, the Texas state senate approved HB 800 and sent it to Governor Rick Perry for his signature. The bill reinstates franchise tax credits for companies conducting qualified research and development (R&D) activities within the state. The Texas R&D credit was repealed in 2006, but proponents of the bill claim the tax incentives … Read More

Maryland’s Research and Development Tax Credit Extended and Annual Limits Increased

05/01/2013

On April 9, 2013, Maryland’s Governor, Martin O’Malley, approved HB 386, extending and expanding Maryland’s research and development (R&D) tax credit. Maryland’s current R&D tax credit law provides a credit against regular Maryland tax for companies incurring qualified research expenses (QREs) within the state. Maryland currently caps its R&D credits at $6 million per calendar … Read More

Taxpayer Negligence Penalty for Poor Cost Segregation Study

03/12/2013

Summary: In the recently released Chief Counsel Memo #20125201F, the IRS makes it clear that even if you engage a third party to perform a cost segregation analysis, taxpayers cannot avoid penalties for aggressive positions taken in the cost segregation report. The taxpayer attended a presentation that addressed open-air parking structures in which the presentation … Read More

Florida Research & Development Tax Credits are Available for 2012

01/23/2013

For tax years beginning on or after January 1, 2012, the State of Florida allows a qualified “business enterprise” to claim a state R&D credit of 10% for qualified research expenses (“QREs”) incurred in Florida (2012 Florida Statute §220.196).Is there an application process? Yes. An application process must be completed in order to be considered … Read More

R&D Tax Credit Receives Retroactive Two Year Extension through 2013

01/16/2013

Congress passed a two-year extension for the R&D Tax Credit as part of the Fiscal Cliff Relief bill. The “American Taxpayer Relief Act of 2012” (the Act), which the President signed into law on Jan 2, 2013, extends the credit retroactively and is now set to expire at the end of 2013. This is the … Read More

Fiscal Cliff Bill Extends 45L Tax Credits of $2,000 Per Apartment Unit

01/02/2013

Tax Alert: Energy Efficiency Tax Credits for Multifamily Developers Extended as Part of Fiscal Cliff AgreementIn an effort to avert the “Fiscal Cliff”, Congress passed the American Taxpayer Relief Act of 2012 on New Year’s Day, and President Obama has vowed to sign this into law soon. This bill extends many key business tax extenders … Read More

IRS Publishes Formal Amendments to Repair vs. Capitalization Regulations

12/17/2012

On Friday, December 14, the IRS published the amended temporary Repair vs. Capitalization regulations to incorporate the changes announced in the recent Notice 2012-73. The changes include a two year delay of the effective date of the regulations to January 1, 2014.While Notice 2012-73 indicated that taxpayers had the option to apply the temporary or … Read More

IRS Changes Rules For A&E Firms: Window Closing To Claim 179D Energy Tax Deduction For Prior Years

09/20/2012

Starting September 4, 2012, designers of government-owned buildings have one less option for retroactively pursuing missed Code Section 179D energy tax deductions. The IRS recently issued Revenue Procedure 2012-39 which prohibits designers from filing a Form 3115 (Application for Change in Accounting Method) to claim missed deductions.  Previous guidance appeared to indicate that architects and … Read More

Tax Alert: Positive Outlook on Extended Tax Credits for Multifamily Developers

08/14/2012

Good news for multifamily developers! On August 2, 2012, the Senate Finance Committee overwhelmingly approved the Family and Business Tax Cut Certainty Act of 2012 with a bipartisan vote of 19-5. The bipartisan bill is a comprehensive $205 billion package that extends numerous tax cuts but reverses the trends of the past by also reducing … Read More

Is the Value of Cost Segregation Depreciating?

08/10/2012

The IRS has challenged the classification components of cost segregation studies done for major corporations such as AmeriSouth XXXII, Ltd. They are calling into question the validity of cost segregation studies and its “savings” to taxpayers. The courts have generally ruled in favor of the IRS, however, even after such rulings, many believe that the … Read More

KBKG Tax Commentary on Regulations for Repairs vs. Capitalization

07/31/2012

It has been several months since the new “Repair Regulations” were issued and many companies are still trying to figure out how this impacts their business. The IRS’s intent was to clarify the existing rules for capitalization but the overwhelming sentiment among CPAs and taxpayers is that they are too cumbersome. The IRS initiated this … Read More

Repair Regulations

05/18/2012

The “Repair Regulations,” are applicable to businesses in all industries that acquire, produce, replace, or improve tangible property. Since these rules mostly affect real property, they can provide significant benefits to your clients even if cost segregation studies have already been performed. Further, the rules allow taxpayers to go back to previous years and take … Read More

Revenue Procedures 2012-19 and 2012-20

03/30/2012

On March 7, 2012, the Internal Revenue Service (IRS) released two Revenue Procedures 2012-19 and 2012-20 as guidance for taxpayers to make changes to accounting methods in regards to the temporary regulations, “Repair Regulations,” which were released on December 23 of 2011. These two revenue procedures are effective for taxable years beginning on or after … Read More

Tax Alert: IRS takes a stand on Cost Segregation for Apartment Buildings

03/15/2012

Summary: In the recently released AmeriSouth XXXII., Tax Court Memo 2012-67, the IRS makes its first meaningful strike in its attempt to marginalize the benefits of cost segregation studies for residential rental property. For many taxpayers and CPAs, this is a complete surprise. However, KBKG clients have been warned for over a year that this was … Read More

Release of the new Temp Regs. Under 263(a)

01/30/2012

The biggest news that came out over the last month was the long awaited Temporary Regs under 263(a). This clarified the rules related to whether a building expenditure is a capital improvement or can be a repair expense. However, one of the most significant rules that has changed under these Regs is in regards to … Read More

Tax Relief Act (H.R. 4853) Overview

01/10/2011

Summary of H.R. 4853 Benefits 100% Bonus Depreciation & Extension of 50% Bonus– Temporary 100% bonus depreciation deduction for qualifying property placed in service between 9/9/10 and 12/31/11. 50% Bonus Depreciation provisions have also been extended through the end of 2012 (2013 for certain property).   15-Year Life for Qualified Real Property – 2-year extension … Read More

Alternative & Renewable Energy Tax News Alert

12/10/2010

Senate begins consideration of tax “extenders” package including one-year extension of Treasury grant programOn Thursday evening, the Senate began consideration of a bill (H.R. 4853, the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010), that includes two-year extensions of Bush-era tax cuts for all taxpayers, changes to the estate tax, and a … Read More

Green Buildings Are Green in More Ways Than One

11/22/2010

The trend toward energy efficient building construction is saving on not only energy costs, but also on taxes for building owners and developers.Gian Pazzia, a shareholder in tax credit specialist KBKG Inc., told an audience at the Accounting Today Growth & Profitability Summit in Orlando last week about the expanding array of tax incentives available … Read More

Tax Incentives Available for Green Building Construction

03/31/2010

Several lucrative federal tax incentives have been extended and enhanced for energy efficient design, construction, and improvement of buildings and homes. Companies that developed properties without necessarily trying to “go green” are often pleasantly surprised to discover that they qualify for these credits and deductions. The types of taxpayers that are likely to benefit from … Read More

KBKG Tax Insight: Affordable Housing Developers & Investors Can Now Reap an Additional $2,000 Tax Credit for Each Unit Leased in 2017

03/08/2008

Affordable housing developers benefit from various tax credits from Low-Income Housing Tax Credits to Rehab Credits, yet they often fail to claim a tax credit that is geared towards their developments: the Section 45L Tax Credit. Section 45L is a commonly overlooked section of the tax code that was recently renewed and rewards energy efficient … Read More