Federal Budget

The 2023 Budget

Last week, the New York Legislature passed the State’s 2022-2023 Budget. The $220 billion Budget reflects an $8 billion increase over last year’s budget (a more than 3 percent jump). It is also $4 billion more than what the Governor had initially proposed. In fact, it is the largest spending bill ever to have been enacted by Albany.

I suppose the explanation is obvious: bolstered by still unspent Federal stimulus money[i] and better than expected tax revenues, the Governor and the Legislature decided to be especially generous to their constituents during this election year.[ii]…
Continue Reading The Deduction of Cannabis Business Expenses Following New York’s 2023 Budget

Counting the Days?

We are 302 days away from the national mid-term elections, to be held November 8, 2022, yet the first full week of the new year has already highlighted some of the economic issues with which the Administration will have to grapple over the next few months if it hopes to have any chance of enacting at least a portion of its social spending measures and the tax increases by which it plans to finance them.
Continue Reading Gifting Business Interests Before Selling the Business? Think Valuation

Timing

I had planned to post this piece during the third week of December, a day or so after the exchange between Senator Manchin and the White House sealed the fate of the Build Back Better plan, at least in its current iteration; by then, however, what had already proven to be one of the most challenging year-ends I’d ever experienced turned downright frenetic.[i]…
Continue Reading New York’s Pass-Through Entity Tax, F Reorgs, and the Sale of An Electing S Corp

 Down to the Wire?

“I have wondered at times what the Ten Commandments would have looked like if Moses had run them through the U.S. Congress.” – Pres. Ronald Regan

That line probably describes the exasperation with which many Americans are observing the behavior of their representatives in Congress these last few weeks.

At this point, a number of folks are wondering whether the eviscerated version of the legislation proposed by the Administration in April of this year, and passed by the House last month[i], will be enacted into law before the end of this year, early next year, or not at all.
Continue Reading The Tax-Deferred Rollover – Some Considerations

Haste Makes Waste?

How many of you are suffering from Build Back Better Fatigue? Seriously, it’s a thing.[i]

Sure, the House passed its version of the President’s tax and spending bill on November 19[ii], and the Senate took up the bill after its Thanksgiving recess, with Senate Majority Leader Schumer setting a Christmas deadline for its passage. During this past week, however, certain key Democrats have expressed doubts over Senator Schumer’s timeline. On December 1, the Chair of the House Ways and Means Committee, Richard Neal, said he was skeptical about Congress being able to meet that deadline. The very next day, Senator Manchin intimated that the bill may not be approved this year.[iii]…
Continue Reading Selling Your S Corporation’s Business? What If It’s Not an S Corporation?

Same old in D.C.

On Monday, November 15, the President will sign into law the approximately $1 trillion Infrastructure Investment and Jobs Act that was finally passed by Congress when the House approved the Senate’s version of the legislation on November 5. According to various reports, an estimated $6 billion of this monumental sum will find its way into Senator Manchin’s West Virginia:

“[Manchin] said $3 billion will go to federal highway programs in the state; nearly $200 million will go to complete Corridor H of the Appalachian Development Highway System, which is known within the state as the Robert C. Byrd Highway System; $190 million for statewide transit; $43 million for state airports and $700 million to rehabilitate abandon [sic] mine lands.”[i]

…
Continue Reading Gift Transfers: Not on the Congressional Agenda, But Still in the Crosshairs of the IRS

It Seemed Like a Good Idea

In July of this year, one of my partners, who chairs the board of a local grantmaking public charity,[i] asked if I would present at a CLE program to be sponsored by the charity on October 28 (last Thursday). When I asked if she had a particular topic in mind, she suggested I update the group on the tax features of the President’s $3.5 trillion Build Back Better plan.
Continue Reading The 2022 Federal Budget, Including Tax Changes – Are We There Yet?

What A Week

It was quite a week, wasn’t it?

Manchin

Senator Manchin continued to attract a lot of attention.

To the dismay of his fellow Democrats, the West Virginian – who also chairs the Senate Energy and Natural Resources Committee – challenged the wisdom of a “carbon tax” (which may harm his state’s coal industry), and unequivocally stated that natural gas (a fossil fuel) must be part of President Biden’s clean energy initiative.[i]…

Continue Reading Gifts, Sales and Effective Dates: The Race Against the Clock the Taxpayer Cannot See

First Step

Last Wednesday, the House Ways and Means Committee approved that portion of the 2022 budget legislation with which it was tasked by the Congressional Budget resolution of August 24. The text of the bill prepared by the Committee – almost nine hundred pages long – was passed along party lines, except for one Democrat who joined her Republican colleagues to oppose the measure.[i]…

Continue Reading Disposing of Assets Under The Ways and Means Committee’s Proposals

Summertime in Washington

On August 11, the Senate passed the $3.5 trillion budget resolution for the 2021-2022 fiscal year – S. Con. Res. 14, as amended – by a vote of 50 to 49, strictly along party lines, including Democratic Senators Manchin and Sinema who have repeatedly questioned the wisdom of such an expensive measure. The Senate’s overview[i] of the budget resolution began as follows:

On July 13th, 2021, the Senate Budget Committee, with the support of Leader Schumer and President Biden, announced a framework agreement of $3.5 trillion in FY2022 Budget Reconciliation instructions to enact the Build Back Better agenda. The agreement calls for the $3.5 trillion in long-term investments to be fully offset by a combination of new tax revenues, health care savings, and long-term economic growth. In addition, the agreement would prohibit new taxes on families making less than $400,000 per year, and on small businesses and family farms.

Then, on August 24, the House also passed the budget resolution – H. Res. 601 – by a vote of 220 to 212, also strictly along party lines, including every Democrat who threatened to vote against the resolution unless it included a provision that repealed the cap on the SALT deduction, and including those moderates who threatened to oppose the resolution unless the $1 trillion bipartisan infrastructure bill was enacted first, all of whom submitted to the Speaker.[ii]…
Continue Reading Tax Increases Are In Sight