It’s been a while since we did a Tax Geek Tuesday, but boy do I have a doozy planned for you today. It delves into partnership tax law, so even before we begin, you can rest assured that the subject matter is needlessly complicated and nearly impossible to communicate in any logical and practical manner.

But that’s never stopped us before; after all, we’ve previously ventured into subchapter K to take on Section 754 adjustments, technical terminations, and even partnership book-ups. So why not take a stab at Section 704(c), an area of the Code that most practitioners ignore until it becomes an immediate and important issue, at which point they have a whoooolllle lot of catching up to do.

What is Section 704(c)? It’s a provision with complex application but a simple goal: to prevent a partner from contributing appreciated property to a partnership and then shifting that pre-contribution gain to a non-contributing partner or partners.

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Authored by Tony Panico, Withum Partner

Admit it. As the battle over the future of healthcare divided our nation throughout the past few months, you remained squarely on the sideline. It’s not that you didn’t have an opinion on whether Obamacare should remain the law of the land or be replaced by one of two Republican offerings — the American Health Care Act or the Better Care Reconciliation Act — it’s just that you felt, well…stupid.

There was so much to understand and keep up with, and when that one guy in your office would give an impassioned defense of the preexisting conditions clause or rail against Medicaid, you felt like perhaps you weren’t quite informed enough to get involved.

Well, I’ve got news for you: that guy in your office? Total fraud. Nobody understands healthcare in this country. Not the people who receive it, not the people who provide it, and certainly not the lawmakers who determine its fate. Perhaps that last great bastion of journalism in this country — The Onion — put it best with this headline:
Man Who Understands 8% of Obamacare Vigorously Defends it from Man Who Understands 5%

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Authored by Tony Nitti, Withum Partner and writer for Forbes.com.

It has been a couple of months since Tony Nitti did his last podcast but The Nitti Gritty is officially back! Listen to Tony Nitti, Withum Partner and writer for Forbes.com, discuss where we stand with tax reform. Tony will also cover the below court cases that took place over the last month:

  1. Mudrich vs. Commissioner TC Memo 2017-101 (alimony)
  2. Anderson vs. Commissioner TC Summary Opinion 2017-17 (deductible moving expenses)
  3. Austin vs. Commissioner TC Memo 2017-69 (business purpose and non-tax profit motive requirements of the economic substance doctrine)

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Authored by Tony Nitti, Withum Partner and writer for Forbes.com.

It is no secret that Senate Republicans are at odds with respect to the repeal of the Affordable Care Act (“ACA”). The American Health Care Act (“AHCA”), was passed on May 4, 2017. The Senate Republican version of the AHCA, The Better Care Reconciliation Act (“BCRA”), was released in late June. The vote on the BCRA was originally set to take place the week of June 26th but was postponed to allow conservative and moderate Republicans time to resolve differences.

One major point of contention is the proposed three-year phase-out of Medicaid expansion. There are certain Republicans that would like to extend the transition beyond three years.

In addition, one Senate Republican aide confirmed that the 3.8% net investment income tax and the .9% additional Medicare surtax will not be repealed in the current version of the bill in which the Senate Republicans are working on.

There are a lot of moving parts to this as we have seen since the new Administration took over. Republican supporters of the ACA repeal bill are hoping to have a final version of the bill by tomorrow and hold a vote next week.

For additional details about the American Health Care Act progress and status, read American Health Care Act Pulled From the Floor, Amendment to the American Health Care Act, and MacArthur Amendment to the American Health Care Act Introduced.

To learn more, visit Withum.com

Authored by Tony Panico, Withum Partner

What a rip-off. This was supposed to be my fifteen minutes. The summer of 2017 was when the discussion surrounding tax reform was going to dominate the airwaves, newswires and internet, with every TV station, publication and web site coming to me for my opinion on the pros and cons of potential changes. And I was going to shine.

But none of that materialized. Instead, tax reform has been largely forgotten, as the legislative progress has been stopped in its tracks by the never-ending, irreconcilable argument over Obamacare and, more recently, some potential light treason.

But yesterday, the veritable eggheads at the Tax Policy Center snapped me out of my summer doldrums and brought tax policy back to the forefront of the social consciousness by publishing its analysis of President Trump’s most recent tax plan. And it’s nothing if not revealing.

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Authored by Tony Nitti, Withum Partner and writer for Forbes.com.

On tonight’s episode of Family Fraud, we’ve got two cunning clans eager to prove who has the most flagrant disregard for the tax law! Let’s meet our contestants:

Say hello to the Paynes! Hailing from Florida, the Paynes thought nothing of claiming $90,000 in non-cash charitable contributions in 2011, despite sporting an adjusted gross income of $180,000! Among those contributions were nearly $40,000 in gifts of furniture, a fact made all the more remarkable by the fact that the Paynes lived in a 1,600 square foot home with a one-car garage!

Next let’s welcome the Ohdes! This West Virginia family claimed $142,000 in non-cash charitable contributions in 2011, alleging that they made over 20,000 separate gifts to one local Goodwill organization! In addition to 3,500 items of clothing, included among the donations were 36 lamps, 22 bookshelves, 20 desks, and 16 bed frames. And if you think it’s unrealistic that one family could accumulate that much junk, well, then you’ve never driven through West Virginia.

Who are we kidding, with both families equally willing to throw conventional wisdom and common sense to the wind in hopes of a big tax break, everyone’s a winner. Gary, tell them what they’ve won!

Both families will enjoy an all-expenses paid (by them) trip to Tax Court, where the IRS will teach them the finer points of the substantiation requirements for charitable contribution deductions under Section 170! And they won’t be leaving there empty handed…both the Paynes and Ohdes will exit the court with substantial underpayments, penalties and interest!

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Authored by Tony Nitti, Withum Partner and writer for Forbes.com.

Moments after the Atlanta Hawks made Alpha Kaba the final pick in the 2017 NBA Draft, the attention of the basketball world turned to what promises to be a frenzied free-agency period. Beginning July 1st, a bevy of big-name players hit the open market, including Chris Paul, Blake Griffin, Gordon Hayward, and the tattered remains of Derrick Rose.

For these free agents, there is much to consider in choosing their next team. Who offers the most established leadership? (Miami) The best weather? (Miami) The most accessible network of HGH dealers? (Miami)

Then, of course, there’s the little matter of money, and when it comes to extracting the most coin possible out of a contract, it typically behooves a free agent to do nothing at all, and simply re-up with their previous employer.

That’s because the NBA’s collective bargaining agreement affords advantages to a team in re-signing it’s own free agents, provided the team has so-called “Larry Bird rights” in the player. Generally, this requires the player to have been with the team for three consecutive seasons, though there are a host of other ways a team can obtain these rights.

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Authored by Tony Nitti, Withum Partner and writer for Forbes.com.