Congrats to our partner, Yvonne R. Cort on being a Top 50 Women in Business honoree! The award recognizes Long Island’s top women professionals for their business acumen, mentoring and community involvement. The program’s honorees are selected by a judging committee and represent the most influential women in business, government and the nonprofit fields. For a full listing of Long Island Business News 2020 award winners, click the link below.
Partner Gregory Matalon featured on The Business Journal’s Mass Mutual Business Owner’s Perspective Podcast
CBMS Partner Gregory Matalon was a guest on “The Business Journal’s Mass Mutual Business Owner’s Perspective Podcast” with Brian Bushlack. Many business owners don’t have a succession plan or estate plan in order. Without a plan, the business and business owner’s family may suffer. Click the link below to listen and learn more about the importance of planning.
On July 22, 2020, Capell Barnett Matalon & Schoenfeld LLP partner Yvonne Cort was quoted in Bloomberg Law regarding NYS Residency Issues, in an article entitled “New York’s Taxes Will Stalk You Even If You Fled During the Pandemic”. Click here for full article
We hope you are all in good health and safely waiting for this period to subside. Many of us are thinking about our businesses and what the new normal will hold. Many businesses will face tremendous challenges to reopen their doors and the enhanced ability to obtain tax refunds will be helpful. This letter summarizes the CARES Act provisions regarding harvesting business losses. A brief history will help highlight the importance of the changes.
The Tax Cut and Jobs Act enacted at the end of 2017 (TCJA) imposed limitations on the use of business losses. Net losses from active trades or businesses were limited to an inflation – adjusted amount of $250,000 for single filers and $500,000 for joint returns. These limitations dramatically affected taxpayers who suffered business losses or reported losses from partnerships or subchapter S corporations. For example, an individual, with no other source of income, who experienced a business loss of $350,000 was permitted to deduct only $250,000 in 2018; and the remainder carried forward indefinitely until sufficient income was recognized.
The TCJA also limited the use of that net operating loss. It generally eliminated the ability to carry the loss back to earlier years and limited the utilization in future years to 80% of taxable income. As a result, the taxpayer in our example was unable to currently benefit from the business loss and was forced to wait until future years to use the loss.
The CARES Act allows the full amount of these business losses to be used for 2018, 2019 and 2020. It also provides that net operating losses from those years may be carried back five years. The ability to recognize and carryback business losses will result in substantial refunds for many taxpayers. The taxpayer in our example may carry the entire $350,000 loss back to 2013 (and succeeding years) until the entire loss has been absorbed.
Another important change in the CARES Act applies to commercial properties, retail stores and restaurants. Any such business that made qualified property improvements in 2018 (and later years) is now permitted an immediate deduction. The CARES Act allows an amended return to be filed claiming these deductions – which can be used in conjunction with the changes in the net operating loss provisions to provide an immediate source of funds.
The above is an overview designed to inform you of these important opportunities. The Internal Revenue Service has just released new guidance describing how to amend returns and promptly apply for and receive these tax refunds. Consult your tax advisers as soon as possible because there are important time limitations for filing certain refund requests.
We again wish everyone good health for yourselves and for your family.
The information in this article is continuously changing and being updated. This article is for informational purposes only and does not constitute legal or business advice. In no way is Capell Barnett Matalon & Schoenfeld LLP advising that it is appropriate to only follow the information listed here. If you or your business requires assistance, please contact Robert Barnett, Esq., email@example.com
Amid the Covid-19 pandemic nonprofits and religious organizations can seek relief through the Paycheck Protection Program. Check out CBMS Attorney Jodi Warren’s article, ‘Economic Relief for Non-Profit Organizations Through the Paycheck Protection Program,’ that was recently published in the New York Real Estate Journal. See full article
Governor Cuomo recently announced his proposed State Budget for 2020-21 and it is making the many of us working with the elderly or disabled very nervous. The proposed budget states that $2.5 billion must be cut from the Medicaid program. Although the proposed budget does not specify which aspects of the Medicaid program will be cut, it does set up a Medicaid Redesign Team (“MRT”) designed to consider the aspects of the Medicaid program that should be changed or eliminated. These recommendations are expected to come out in mid-March.
Although no one knows for sure what these recommendations will be, we have some good guesses as to what is on the chopping block. The first item under the microscope is the Consumer Directed Personal Assistance Program (“CDPAP”). The CDPAP program allows consumers to recruit, hire, and direct their own home care workers, rather than using caregivers from agencies. In many cases, the most appropriate and suitable care can best be provided by a relative or other chosen caregiver rather than an agency.
The second item is the Spousal Refusal. The Spousal Refusal is utilized by many couples applying for long-term care benefits for an ailing spouse – either at home or in a facility. This essential eligibility strategy ensures that the “well” spouse can protect needed resources and income to pay living expenses. The elimination of this strategy would be devastating to many throughout the state as it would mean that both spouses would need to be impoverished to get on the program.
Various NYS bar associations are advocating for these needed programs. We at CBMS continue to vigilantly watch the changes to the Medicaid program and we urge our friends, colleagues and clients to be proactive about their own Medicaid planning. We are always here to address any questions and concerns.
CBMS is proud to announce that associate attorney David de Barros has been promoted to Partner, effective as of Jan 1, 2020.
CBMS Partner Robert Barnett recently presented a lecture through Lorman discussing how to utilize passive activity losses including recent tax legislation and cases.
With so many new tax rules, it is important to be informed before the upcoming tax season Lorman has graciously offered this 93-minute lecture to our friends and colleagues at a 50% courtesy discount. The course is eligible for 1.5 CPE credits in Connecticut, New Jersey and 9 other states.
Click the link below if you would like to access it as either an OnDemand Webinar, an audio file and reference manual delivered on USB flashdrive, or MP3 download of the webinar along with reference manual.