Monthly Archives: February 2019

The Treasury Department and the IRS issued final regulations and three related pieces of guidance, implementing the new qualified business income (QBI) deduction (section 199A deduction).

The new QBI deduction, created by the 2017 Tax Cuts and Jobs Act (TCJA) allows many owners of sole proprietorships, partnerships, S corporations, trusts, or estates to deduct up to 20 percent of their qualified business income. The guidance includes:

• A set of regulations, finalizing proposed regulations issued last summer
• A new set of proposed regulations providing guidance on several aspects of the QBI deduction, including qualified REIT dividends received by regulated investment companies
• A revenue procedure providing guidance on determining W-2 wages for QBI deduction purposes
• A notice on a proposed revenue procedure providing a safe harbor for certain real estate enterprises that may be treated as a trade or business for purposes of the QBI deduction.
  

The corrections include, among other edits, corrections to the definition and computation of excess section 743(b) basis adjustments for purposes of determining the unadjusted basis immediately after an acquisition of qualified property, as well as corrections to the description of an entity disregarded as separate from its owner for purposes of section 199A and §§1.199A-1 through 1.199A-6. 

Contemporaneously the IRS issued:

• Notice 2019-07 which contains a proposed revenue procedure that provides for a safe harbor under which a rental real estate enterprise will be treated as a trade or business solely for purposes of section 199A of the Internal Revenue Code (Code) and sections 1.199A-1 through 1.199A-6 of the Income Tax Regulations (Regulations) (26 CFR Part 1), which are being published contemporaneously with this notice. and
• Revenue Procedure 2019-11 provides methods for calculating W-2 wages, as defined in section 199A(b)(4) and section 1.199A-2 of the Income Tax Regulations, (1) for purposes of section 199A(b)(2) of the Internal Revenue Code (Code) which, for certain taxpayers, provides a limitation based on W-2 wages to the amount of the deduction for qualified business income (QBI); and (2) for purposes of section 199A(b)(7), which, for certain specified agricultural and horticultural cooperative patrons, provides a reduction to the section 199A deduction based on W-2 wages.

Canada’s largest cryptocurrency exchange, QuadrigaCX, has said that around USD190 million in cryptocurrency and fiat money cannot be repaid to investors, because the CEO and founder, who died in December 2018, had "sole responsibility for handling the funds and coins."

Today (February 5, 2019) the company issued a Message from QuadrigaCXan, stating that an order for creditor protection in accordance with the Companies' Creditors Arrangement Act (CCAA) was issued to allow us the opportunity to resolve outstanding financial issues that have affected our ability to serve our customers.

With this filing, the Court has appointed a monitor, Ernst & Young Inc., an independent third party to oversee these proceedings as we make every effort to address our customer obligations. Filing for creditor protection allows us to work diligently through the process, and to try ensure the viability of our company

Included is a Q&A, which they hope will address some of the questions you may have at this time.

A copy of the Oder issued by the Supreme Court of Nova Scotia on February 5, 2019 may be found here

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Individuals with signature-only authority over foreign financial accounts have been granted until April 15, 2020 to file their report of foreign bank and financial accounts (FBAR) forms to the US Internal Revenue Service for the tax year just ended. Previously the deadline was April 15, 2019, consistent with the federal income tax due date.  

On December 4, 2018, the US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) released Notice 2018-1, which states that certain persons who are obligated to file FinCEN Form 114: Report of Foreign Bank and Financial Accounts (FBAR) now have until April 15, 2020 to file the form.

 This extended filing deadline applies to certain individuals who have signature authority over, but no financial interest in, one or more foreign financial accounts. The extension also applies to certain employees or officers of investment advisers registered with the US Securities and Exchange Commission (SEC) who have signature authority over, but no financial interest in, certain foreign financial accounts.

 

Luxembourg has gazetted a law establishing the compulsory public register of company beneficial owners, as required by article 30 of the EU Fourth Anti-Money Laundering Directive.

Maples and Calder      DLA Piper