Advisory Notes

Volatility in the Market and Inflation

Those of you who remember 2008 (and earlier cycles), have seen volatility and inflation before.  Periods of instability are not new.  Thankfully, we have had a very long period of growth.  Your investments should rebound at some point.  However, inflation will increase your costs in all areas.  We suggest you take a proactive approach and increase your pricing to stay ahead of the inflation curve.  Remember that “in the midst of crisis, lies great opportunity” (A. Einstein).  Very true!   If you are concerned about your investments, and/or want guidance on protecting your profit margins due to inflation, and want to talk, give us a call.  As your trusted advisors, we are here for you.

Avoiding the SALT Tax Restrictions for PTE (Pass Thru Entity) Owners –S Corps, Partnerships, etc

20 states now have now quietly enacted workarounds to protect you from the $10,000 cap on the federal deduction for state and local taxes (SALT).   Virginia is one of the latest states to enact a workaround.  We have used these workarounds as they become available.  In the case of Maryland, we are aggressively using the new workaround to benefit you.  We will use VA’s workaround as soon as it is available.  DC does not apply as it is not a PTE jurisdiction.

IRS Destroyed 30 Million Paper Tax Documents

An audit by the Treasury found that the IRS made an intentional decision “to destroy an estimated 30 million paper-filed information return documents in March 2021.”   Here, at CAS, we require all returns to be filed electronically for your protection.  The IRS now allows most amended returns to be filed electronically, as well.  This change in IRS policy provides more protection for taxpayers.  Our systems are designed to file returns with all necessary attachments to allow for quick processing by the IRS, even in these times when the IRS is struggling to keep up.

Selling or buying a Business

It’s a fact that when selling or buying a business an ‘asset sale’ is more beneficial to the buyer and a ‘stock’ sale is more beneficial to the seller…tax-wise.  However there are strategies available to a seller to avoid double taxation on an asset sale.  These strategies can make this type of sale more attractive to a buyer and provide a lower tax bite to the seller, even providing the potential for capital gain treatment.

Have a great week!
Your Staff at CAS