Imp't Notice Regarding Impending IRS Legislation

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asu66
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Imp't Notice Regarding Impending IRS Legislation

Unread post by asu66 » Wed Dec 13, 2017 7:32 pm

By now, Yosef Club members and Season Ticket Holders should have received an e-mail message from Athletics concerning the soon-to-be completed-congressional-wordsmithing of new IRS code affecting tax-deductible contributions. I'm wondering if our Walker College CPA grads, Ms. Daphne and our other tax gurus have had time to digest the message?

I guess my after-thought is whether it's too early to form any resolute opinions or strategies since the wording may have already changed, may change tomorrow before Friday's targeted "distribution date" to all members of Congress or may change before next week's proposed voting?


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Re: Imp't Notice Regarding Impending IRS Legislation

Unread post by DaphneUrquhart » Wed Dec 13, 2017 8:57 pm

This a somewhat confusing issue as are most tax issues. The 80% rule applies to he donation required to purchase tickets in a certain zone. For example, if someone wants to sit in section 205, the minimum donation is $500. Therefore, only $400 of that donation is tax deductible (80% of $500).

Now, let's assume that same donor wanting to sit in section 205 makes a $3,500 donation. The tax deductible portion is $3,400 ($500 x 80% + $3,000). Note that the $3,000 donation over and above the required donation to sit in section 205 is not reduced because no additional benefit was received for the donation.

Of course, there are also reductions for accepting other benefits such as parking and other "gifts". The value of those benefits should be listed on the back of your Yosef acknowledgment letter.

That's the rule today. What finally comes out for the future is still uncertain. Schools that require steeper "donations" for the right to purchase tickets are at greater risk than we are (IMO). Think LSU here. Imagine that the required donation to sit in section 205 at KBS was the total $3,500 mentioned above. In today's world 80% of the $3,500 would be deductible. Under proposed rules, none of the $3,500 would be deductible.

The reason this doesn't likely hurt App as much is that our biggest required donation for regular seating is $500. Under proposed rules the donor giving $500 to sit in section 205 would deduct $0. The donor giving $3,500 would deduct $3,000.

What we do know is that we don't have a new law ... yet. Until we have a signed law, everything is still negotiable. We'll just have to see what comes out of conference.

The other issue is whether one should pay one's future year pledges before year end. The correct answer to every tax question is always, "It depends." If it's likely that the proposed increase to the standard deduction will significantly curtail or eliminate one's itemized deductions in 2018, grabbing that extra deduction in 2017 likely makes sense (assuming one is already itemizing deductions for 2017).

Incidentally, the deduction rules we have now have only been around since 1986. Ah, tax code!


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Re: Imp't Notice Regarding Impending IRS Legislation

Unread post by huskie3 » Wed Dec 13, 2017 9:18 pm

Are the individual states rewriting or will they just use federal rules?


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Re: Imp't Notice Regarding Impending IRS Legislation

Unread post by DaphneUrquhart » Thu Dec 14, 2017 8:58 am

huskie3 wrote:
Wed Dec 13, 2017 9:18 pm
Are the individual states rewriting or will they just use federal rules?
Individual states will have separate law changes. Each state is different and generally has what we call a "conformity date". In other words, the state taxable income is determined by reference to the Internal Revenue Code (IRC) of a certain date with various state adjustments. Right now, NC starts with federal AGI (adjusted gross income), makes some adjustments (teachers vested before 8/1/89 subtract total NC retirement pay, taxable Social Security is subtracted, etc.). Then NC deductions are calculated. We'll just have to wait and see what NC changes we get on down the road.

Public Service Announcement
Did you know that NC does not regulate the practice of accounting? That means that anyone in NC may say that he or she is an "accountant" whether he or she has had any formal training or not. That's right, your barber or doctor could start an accounting business and be well within his or her legal rights to do so.

CPA's (Certified Public Accountants) are governed by NC law and have been since 1925. We have annual continuing education requirements and standards that must be met on top of all the requirements just to become a CPA. CPA's being certified now must have 150 hours of college credit with specific courses being required, must pass the four part CPA exam, must work for a period of time under the direct supervision of another CPA, and must obtain character references prior to applying for certification. Either someone is or is not a CPA ... period. One cannot be "almost a CPA".

CPA's will generally focus on a small segment of the broad range of CPA work. For example, my practice is largely a tax practice and deals mostly with professionals (attorneys, dentists, physicians, architects, etc.) and HR. You would not want me to come close to your business if you needed an audit. Auditing is not something I enjoy or have any desire to do.

All that is to let you know that in NC it's quite possible that there's a wide chasm between the knowledge base of an "accountant" and a CPA. I strongly recommend using CPA's over "accountants" for work that needs our financial expertise because of the oversight built into NC law for CPA's.


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Re: Imp't Notice Regarding Impending IRS Legislation

Unread post by Saint3333 » Fri Dec 15, 2017 9:19 am

Club seats will also likely be impacted. Wonder if the athletic department would allow us to buy 2018 this year to take the deduction in 2017.



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Re: Imp't Notice Regarding Impending IRS Legislation

Unread post by asu66 » Fri Dec 15, 2017 9:31 am

Saint3333 wrote:
Fri Dec 15, 2017 9:19 am
Club seats will also likely be impacted. Wonder if the athletic department would allow us to buy 2018 this year to take the deduction in 2017.
Hey 3333, consider directing that quest. to Brian Tracy or Suzette Mauney and passing the answer along to everyone.


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Re: Imp't Notice Regarding Impending IRS Legislation

Unread post by DaphneUrquhart » Fri Dec 15, 2017 9:51 am

Saint3333 wrote:
Fri Dec 15, 2017 9:19 am
Club seats will also likely be impacted. Wonder if the athletic department would allow us to buy 2018 this year to take the deduction in 2017.
The impact on premium seat holders will likely be more significant. It's very likely that those folks are the ones to whom the e-mail was truly directed and who need to be in touch with athletics to prepay 2018.

The tax bill is supposed to come out of conference today ... so we wait ...


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Re: Imp't Notice Regarding Impending IRS Legislation

Unread post by Saint3333 » Fri Dec 15, 2017 10:29 am

asu66 wrote:
Fri Dec 15, 2017 9:31 am
Saint3333 wrote:
Fri Dec 15, 2017 9:19 am
Club seats will also likely be impacted. Wonder if the athletic department would allow us to buy 2018 this year to take the deduction in 2017.
Hey 3333, consider directing that quest. to Brian Tracy or Suzette Mauney and passing the answer along to everyone.
Called the Yosef office and got Alan, you can repay for club seats through your contract term. I'd urge those that are in that situation to look at your tax situation for 2017 and consider pre-paying to get those benefits while available.



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Re: Imp't Notice Regarding Impending IRS Legislation

Unread post by Appalachman » Fri Dec 29, 2017 8:26 am

It is a great year for bunching donations if you have the ability and particularly if you may not be able to itemize in the future with higher thresholds in place going forward. Bunching has been around a long-time and I may very well begin that alternating year itemizing/standard deduction myself as it worth thousands this year to me to accelerate 2019 donation activity and I am not in the elite giving or seating category. My itemized deductions would total similar amount to new standard deduction. Park in raley and sit outside for the games, but do give to church and some other charitable orgs. Time is short, credit card donations must be made by 12/31, mailed checks post marked by USPS by 12/30, etc. You can double contributions in any given year, possibly pay double property taxes every other year, pay 13 mortgage payments and 11 the next, un-reimbursed business expenses, etc. The late passing of this bill was a largely missed opportunity for tax planner accountants and their potential clients. There is a large group that could have benefited from planning this year that normal does not need it.



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