Effective for transfers after February 15, 2021, the exemption from reassessment only applies to the excess of the fair market value of a primary residence (qualifying for the homeowner's real estate tax exemption) over the transferor's assessed value up to $1 million.
Tax highlights of the Consolidated Appropriations Act, 2021
President Trump changed his mind and signed The Consolidated Appropriations Act, 2021 on December 27, 2020. The Act is more than 5,000 pages. There were not very many tax law changes in the Consolidated Appropriations Act compared to the CARES Act enacted during March 2020. Here are a few highlights
Coronavirus Relief Package includes PPP loan deduction relief
Section 278 of Subtitle B, COVID-related Tax Relief Act of 2020, clarifies that otherwise deductible expenses paid with proceeds of a PPP loan that is forgiven remain tax deductible.
Does waiting to apply for PPP loan forgiveness change the time for the expense offset?
the IRS clarifies that when a taxpayer satisfies all of the requirements (having qualified expenses during 2020) and expects to apply for forgiveness of the related PPP loan, those expenses aren't tax-deductible for 2020, even when the application for forgiveness isn't made until 2021.
Year end tax moves for Biden’s tax plan
Here are some of the most significant changes, with suggested year-end tax planning moves for 2020, assuming the proposals are enacted.
Final regulations for required minimum distributions include important changes
Most significantly, the final regulations are effective for required minimum distributions for tax years after 2021. Under the proposed regulations, the new rules would be effective for tax years after 2020.
Taxpayers located in wildfire counties get tax return filing extension
Taxpayers located in California wildfire counties get tax return due date extension.
Some simplification for $50K or less PPP loans
The requirement to reduce debt forgiveness for reductions of full-time equivalent employees or reductions in salaries or wages has been waived for these borrowers.
More Paycheck Protection Program Loan guidance from SBA
The SBA has issued PPP loan forgiveness guidelines for owner employees, home office expenses, subleased space and related party rent expenses
Due date to “undo” 2020 IRA required minimum distributions is August 31, 2020
Normally distributions from IRAs that are required minimum distributions aren’t eligible to be rolled over. Required minimum distributions are amounts that are required to be distributed that are based on the life expectancy of the account owner once the account owner reaches age 70 ½ or usually based on the initial beneficiary’s life expectancy for an inherited IRA account.
As a relief measure, the CARES Act suspended required minimum distributions for 2020. The reason was the value of many IRAs had fallen and distributions would deplete the value of the account. The CARES Act was passed on March 27, 2020, so many IRA owners and beneficiaries had already taken distributions.
In addition to the prohibition from rolling over required minimum distributions, there are two other restriction blocking potential rollovers of the distributions. (1) Beneficiaries of inherited IRAs are prohibited from making rollovers and (2) Taxpayers are limited to one IRA rollover for a 12-month period.
The IRS provided additional relief from these requirements in Notice 2020-51. The IRS designates restoration of 2020 IRA required minimum distributions as “repayments.” As repayments, the restoration of the funds to an IRA is not a rollover. Since they are not rollovers, beneficiaries of inherited IRAs are permitted to make restorations and the limitation to one IRA rollover for a 12-month period doesn’t apply.
In order to qualify for this relief, a restoration must be completed by August 31, 2020.
If the deadline is missed, the only way to restore the funds will be as a rollover, subject to the once in a 12-month period limit and not available for inherited IRA accounts.
If you have a question about this matter, consult your tax advisor.