All Forum Posts by: Michael Plaks

I'm always sure when I post. I'm not always right, but I'm always sure. :)

In this case - I'm also correct, and @Brandon Hall already cited the bill in the other thread. NON-residential only, however!

Texas is open. You will have to renounce your liberal agenda, but other than that...   :)

On a less radical note, you'd have to consider bunching up 2 years of deductions (property taxes & donations) into 1 year, every other year.

@Dido Zdrav

For tax purposes, it really does not matter who has the title. If it is used 100% for business, you can deduct it even if under personal name - as if it was a business vehicle. Both methods are available: mileage or actual expenses. Just make sure the business pays for everything. It's also a good idea to document that the company authorizes you to buy the vehicle, but the company will assume all costs.

But, as @Darren Sager mentioned, saving on insurance can backfire. Insurance can refuse your claim if the vehicle is used for business but insured as personal. Check with your insurance agent.

@Jeff Brower

There is a debate currently whether 2017 conversions can still be recharacterized in 2018, especially conversions done earlier in 2017. The law is not clear. We expect it will be clarified at some point.

@Amy Webber

It's a speculation. Nobody can give you a certain answer. It depends on number of miles now and in the future, cost of the truck etc. Rule of thumb is: if you're going to drive tons of miles for many years, then mileage might be better. But the only reliable way is to run numbers side-by-side, and it still won't be totally reliable because it will be based on projections.

 I would still prepay. See discussion on this thread.

@Account Closed - can we help you with some planning? Just kidding.

@Chris K.

I was among many people who advised to prepay 2018 taxes. I did, however, insert a qualification to prepay taxes that are "currently due" - same as assessed. And it was before the IRS announcement. To be deductible, an expense needs to be both incurred and paid. Not assessed probably means not incurred, subject to fights over semantics.

Why do I not expect it enforced? Because in my 20 years of representing people in IRS audits, I have never had IRS auditors verify whether a tax (or any other expense, for that matter) had been assessed. Only that it had been paid. Could they verify? Of course. But there is too much other stuff for them to worry about.

Disclaimer: I'm not suggesting to ignore the rules. But the rules in this case leave room for interpretation.

@Chris K.

The IRS did issue an announcement this afternoon suggesting that prepaid taxes not yet assessed will not be deductible. It is actually consistent with the tax law, so it's not too surprising.

The worst that could happen to you is that you will have to push the deduction into 2018 and possibly lose it - which is what would have happened anyway if you did not prepay. In other words, at best you won. At worst you did not lose.

I doubt this rule will be enforced, frankly. And more rules and clarifications can come later.

Yes, as I mentioned, cost segregation becomes much more important under the new rules. Here is the dilemma. Technically, the law does not require a cost segregation report. But the burden of proof is on you. If you pay for a professional cost segregation study, their report will not be challenged by the IRS if audited. Your own or your CPA's rough estimates might be challenged. Plus, a professional study may identify more items to segregate.

So it's up to you to decide whether the additional safety and additional savings from a professional study warrant paying for the study. Assuming that the cost segregation companies agree to service SFHs. What do you say, @Yonah Weiss?