| Do you own real estate? At the very end of | | | | hires a targeted individual on August 31, |
| 2007, Congress passed a bill with several tax | | | | 2011, the credit will be available for wages |
| law changes impacting real estate. Expect | | | | paid through August 30, 2012.) The targeted |
| some changes when you file your 2007 tax | | | | veterans group is expanded to include |
| return! Here are a few highlights from the | | | | veterans with service-connected disabilities, |
| Small Business and Work Opportunity Act of | | | | and doubles the maximum credit for hiring |
| 2007. | | | | those veterans. The "high-risk youth" |
| | | | targeted group has been replaced with a much |
| Expect some changes when you file your 2007 | | | | broader group that includes older individuals |
| tax return! Here are a few highlights from | | | | (up through age 39), and individuals who |
| the Small Business and Work Opportunity Act | | | | reside in certain rural counties. The |
| of 2007. | | | | rehabilitation referrals group has been |
| | | | expanded to include individuals referred |
| Do you own real estate? | | | | through a Social Security Administration |
| | | | Ticket to Work and Self-Sufficiency Program. |
| At the very end of 2007, Congress passed a | | | | Applies to individuals who begin work for the |
| bill with several tax law changes impacting | | | | employer after May 25, 2007. |
| real estate. Qualified Joint Ventures by | | | | |
| Married Taxpayers If a husband and wife who | | | | Waiver of AMT Limits on Work Opportunity and |
| file a joint return are the only members of a | | | | FICA Tip Credits: The work opportunity tax |
| qualified joint venture, they can elect not | | | | credit and the credit for portion of FICA |
| to be treated as a partnership for Federal | | | | taxes paid with respect to employee cash tips |
| tax purposes. Applies to tax years beginning | | | | may offset alternative minimum tax liability. |
| after December 31, 2006. | | | | The waiver of AMT limits apply to credits |
| | | | determined in tax years beginning after |
| §179 Deductions: This great deduction has | | | | December 31, 2006, and to carrrybacks of such |
| been extended through 2010. Taxpayers with | | | | credits. Effective for tax years beginning |
| $500,000 or less in assets placed in service | | | | after December 31, 2006, and to carrybacks of |
| on or after January 1, 2007 can elect to | | | | such credits. |
| expense immediately up to $125,000. | | | | |
| | | | Sale of Stock in a Qualified Subchapter S |
| GO ZONE §179 Deductions: For 2007 | | | | Subsidiary: An S corporation's sale of a |
| Taxpayers with $1,050,000 or less in assets | | | | QSub's stock is treated as a sale of an |
| placed in service on or after January 1, 2007 | | | | undivided interest in the QSub's assets |
| can elect to expense immediately up to | | | | followed by a deemed creation of the |
| $212,000. | | | | subsidiary in a §351 transaction. These |
| | | | new rules are not intended to affect current |
| FICA Tip Credit: The FICA tip credit will | | | | law treatment of transfers of QSub stock in |
| continue to be based on the old minimum wage | | | | otherwise nontaxable transactions. For |
| of $5.15 even though the minimum wage is | | | | example, certain pro rata distributions of |
| scheduled to increase to $7.25 over the next | | | | QSub stock by a parent S corporation to its |
| two years. Applies to tips received for | | | | shareholders can qualify for tax free |
| services performed after December 31, 2006. | | | | treatment if the requirements of §355 and |
| | | | §368(a)(1)(D). Applies to tax years |
| Work Opportunity Tax Credit: The Work | | | | beginning after December 31, 2006. |
| Opportunity Tax Credit is extended an | | | | |
| additional 44 months through August 31, 2011. | | | | What changes are in store for your 2008 |
| (Note that with respect to an employer that | | | | taxes? |