The Bottom Line
The Bottom Line is where Klatzkin’s advisors provide analysis and insight into key developments in taxation, accounting, and other issues and how they affect businesses and individual taxpayers.

New Opportunities in the Inflation Reduction Act

By FRANK G. SWEENEY

In late August, President Biden signed the Inflation Reduction Act into law. As the name suggests, the legislation is designed to help counter the ill effects of inflation while creating new jobs, lowering healthcare costs, revitalizing manufacturing, and promoting clean energy investment. Key priorities in the legislation include the reduction of carbon emissions and the investment in domestic clean energy manufacturing. To facilitate the changes, several tax updates have been introduced including a 15% corporate minimum tax, a 1% stock buyback fee, and bolstered IRS tax enforcement efforts. There are also new and expanded tax incentives to promote clean energy investments. These incentives create a unique opportunity for real estate and construction companies to obtain significant tax savings.

New Standard for Nonprofit Reporting of Contributed Nonfinancial Assets

By CHRISTOPHER S. MAYNARD

In September 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2020-07, Not-for-Profit Entities (Topic 958): Presentation and Disclosures by Not-for-Profit Entities for Contributed Nonfinancial Assets.  The new standard is now in effect for annual periods beginning after June 15, 2021, and interim periods within fiscal years beginning after June 15, 2022.

Improperly Forgiven PPP Loans Are Now Taxable

By CHRISTOPHER S. MAYNARD

In a memorandum released in September 2022, the IRS has confirmed that if a PPP loan was forgiven based on misrepresentations or omissions by the taxpayer, the taxpayer is not eligible to exclude the forgiven amount from income.  Any portion of the loan proceeds that were forgiven in error must be included in their gross income. 

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