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Taxation of U.S. Company Debt Acquired by Related Party
Cancellation of debt (COD) refers to the act of a creditor releasing a borrower from a debt obligation to repay a debt. Taxpayers in the United States may face tax implications when debt is cancelled, a situation referred to as cancellation-of-debt (COD) income. As per the Internal Revenue Code, the discharge of indebtedness must be included in a taxpayer's gross income.
Introduction to U.S. State Minimum Taxes
All companies registered in the United States are generally required to file federal income tax and state income tax, which are generally related to the company's business net income in the state. Therefore, people often mistakenly believe that if a company has operating losses or no operating income, it does not need to pay taxes.
Federal Taxation of Bitcoin and Virtual Currencies
In 2014, The IRS issued Notice 2014-21 provides explicit clarification regarding the taxability of cryptocurrency transactions. Virtual currency is considered a capital asset for the majority of taxpayers, thus subjecting transactions involving virtual currency to the same general tax principles that govern property transactions.
Introduction to U.S. Partnership Schedules K-2 and K-3
Schedules K-2 and K-3 have been introduced for the tax year 2021. These schedules serve as replacements, supplements, and clarifications for the previous Form 1065, specifically Line 16, which pertained to Partners' Distributive Share Items and Foreign Transactions. The subsequent section will describe in detail the related schedules K-2 and K-3.
FASB Accounting Standard Update for Lessees
On February 25, 2016, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update (ASU) 2016-02, Leases (Topic 842). Under the new standard, Lessor accounting is substantially the same, however Lessees will recognize all lease assets and obligations on the Statement of Financial Position. Effective for all entities for annual periods beginning after December 15, 2022.
The Gig Economy in the United States
The phrase "gig economy" is initially used to describe employment opportunities such as working for rideshare companies like Uber or Lyft, However, it is important to note that the gig economy extends across various sectors and encompasses a significant portion of the labor force.
U.S. Tax Deductibility of Business Interest Expense
Section 163(j) of the Internal Revenue Code (IRC) states that business interest expense includes any interest paid or accrued on indebtedness that is "properly allocable" to a trade or business. In accordance with the Internal Revenue Code, the potential capitalization or general limitation of interest paid or incurred in a trade or business can impact its deductibility.
U.S. Tax Energy Credits Available to Businesses
With the aim of addressing climate change, the Inflation Reduction Act incorporates a range of tax incentives. The IRA increases the value of many existing energy tax credits, broadens the scope of activities eligible for such credits, and extends the duration for which these credits will remain in effect.
U.S. Tax Energy Credits Available to Individuals
When legislators contemplate the implementation of taxes, they take into account the necessity of taxation as well as its potential impact on consumer behavior. Increasing the availability of tax credits for energy-efficient products has the potential to incentivize consumers to increase their purchases of such goods.
Introduction to California's Sales Tax for Food Processors
In California, retail sales of tangible items are generally subject to sales tax. But some items are exempt from sales and use tax, including sales of certain unprocessed food or sales of items paid for with food stamps, etc.With all the above in mind, how do you deal with sales tax if you operate a food or food processing business in California?