Article Abstract:
A number of significant tax changes will take effect at the start of the 1991 tax year resulting from the passing of the Omnibus Budget Reconciliation Act of 1990 and other earlier tax bills. Taxpayers and tax planners should take note of these changes, which include providing the social security number of dependents who are at least one year old on Dec 31, 1991. A 2.9% medicare tax will also be imposed on wages and self-employment income within the range of $53,400 to 125,000. Other changes include new regulations regarding earned income credit, the taxation of cosmetic surgery and corporate directors' fees, and the expiration of special rules under the Tax Reform Act of 1986.
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Article Abstract:
The Omnibus Reconciliation Act of 1989 (OBRA) includes important provisions affecting corporate and partnership taxation such as like-kind exchanges, transfers of property to a controlled corporation, and partnership distributions. According to OBRA, a gain or loss is not recognized when like-kind property is involved in a trade or business, or when property is held for investment purpose is exchanged. A gain or loss is not recognized following the transfer of property to a controlled corporation if only stock is received. A gain or loss is not recognized when a partner contributes property to a partnership.
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Article Abstract:
The IRS has issued a notice amending a previously issued regulation relating to passive activity losses (PAL) as applicable to casualty losses. If taxpayers have casualty loss deductions, they are considered nonpassive activity losses. If taxpayers have enough insurance coverage so that gains result from the casualty settlements, the gains are treated as passive activity income that can be offset by PAL.
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