Capaldi Reynolds & Pelosi Partners and Employees Go Red for Women

Go Red for WoFor ten years, Capaldi Reynolds & Pelosi partners and employees have been “Going Red for Women” and the American Heart Association (AHA) to help bring awareness to women and heart disease. According to the AHA, cardiovascular disease (CVD) and stroke are the No. 1 cause of death in American women, claiming nearly 400,000 lives each year, or about one death each minute. CVD kills approximately the same number of women each year as all forms of cancer, chronic lower respiratory disease and diabetes combined.
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A Word to the Wise Issuer of 1099s

1099Every year some of our clients go through a mad rush getting the information needed to file 1099s timely and correctly. How does one stop this madness? A Form W-9 should be obtained from the vendor BEFORE any payments are issued. W-9s can be more easily obtained while the vendor is awaiting approval, when the vendor has more incentive to cooperate than after payment has been made.
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Get Ready for Taxes: Safekeeping tax records helps for future filing, amended returns, audits

Get ready for taxesGet Ready for Taxes!

WASHINGTON — With the tax filing season quickly approaching, the Internal Revenue Service wants taxpayers to understand how long to keep tax returns and other documents.

This is the seventh in a series of reminders to help taxpayers Get Ready for the upcoming tax filing season. The IRS has recently updated its
Get Ready page with steps to take now for the 2019 filing season.

The IRS generally recommends keeping copies of tax returns and supporting documents at least three years. Employment tax records should be kept at least four years after the date that the tax becomes due or paid, whichever is later. Tax records should be kept at least seven years if a return claims a loss from worthless securities or a bad debt deduction. Copies of previously-filed tax returns are helpful in preparing current-year tax returns and making computations if a return needs to be amended.
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Celebrating Anniversaries at Capaldi Reynolds and Pelosi

Robert ReynoldsChairman Bob Reynolds is celebrating sixty years in the profession, many of them at the helm of the Firm that bears his name. He has specialized in complex tax issues, business planning, and wealth creation. Bob remains a mentor to the many professionals he has brought into the Firm, although he will be scaling back his hours a bit.

Jeffrey WilsonJeff Wilson, a partner at CRP, has now been with the Firm for twenty years. Jeff’s specialties are accounting and auditing and tax planning and preparation. Jeff is also the chair of the very successful United Way campaign at the Firm.

Nonprofit Organizations: Charity Registration Filing Requirements with State of New Jersey

Nonprofit organizations are subject to numerous federal and state tax filing requirements, including annual tax returns. Most nonprofit organizations are required to file an annual federal tax return (Form 990, 990-EZ, 990-PF, or 990-N); however, state filing requirements are different and vary from state to state. The State of New Jersey (NJ) requires a nonprofit organization to file an annual tax return (initial registration and renewal registration) if it has 501(c)3 tax exempt status, is domiciled in NJ, or solicits NJ residents for a charitable cause.
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Qualified Opportunity Funds: A property investment opportunity?

The 2018 Tax Cuts and Jobs Act added something new to the tax code called Opportunity Zones. An Opportunity Zone is an economically-distressed community where new investments, under certain conditions, may be eligible for preferential tax treatment. Localities qualify as Opportunity Zones if they have been nominated for that designation by the state and that nomination has been certified by the Secretary of the U.S. Treasury through their authority to the IRS. Opportunity Zones have now been designated covering parts of all 50 states, the District of Columbia and five U.S. territories.

Opportunity Zones are being used to spur economic development and job creation in distressed communities and in return they are providing tax benefits to investors. A Qualified Opportunity Fund (QOF) is formed and used for investing in eligible property that is located in a Qualified Opportunity Zone. A partnership or corporation can be used as an entity type.

Investors can defer tax on any prior gains invested in a QOF until the earlier of the date on which the investment in a QOF is sold or exchanged, or December 31, 2026. To defer/exclude prior capital gain, within 180 days you have to invest the gain amount in a QOF.

  • If the QOF investment is held for longer than 5 years, 10% of the deferred gain is excluded and goes away forever.
  • If the QOF investment is held for more than 7 years, the 10% becomes 15% and now that 15% deferred gain is excluded and goes away forever.
  • If the QOF investment is held for 10 years, any deferred gain recognized on the sale of your interest in the QOF is excluded forever, as long as the sale takes place before the end of 2047.

A list of Opportunity zones can be found here.
If you would like to discuss this topic further, please feel free to call us.

This article was contributed by Michael J. Reynolds, CPA, CEPA

Photo by Pierrick Barfety on Unsplash

Cannabis Business Income Taxes

cannabis taxes

Generally income tax returns are constructed to report business income, and then subtract cost of sales (the cost of producing or purchasing the product being sold) and the expenses of carrying on the business (things like employee wages, rent, and office supplies). There is an overriding provision for businesses that sell cannabis, however. Even though cannabis is legal in certain states, Section 280E of the federal income tax code states that no deduction is allowed for an amount paid or incurred in carrying on a business if the business consists of trafficking in controlled substances. Since marijuana is on the list of controlled substances, no deductions can be taken for the costs of carrying on the business of marijuana sales. Because of this, income tax represents a significant cost for these businesses.
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New Jersey Cannabis Law Update

New Jersey cannabis lawDespite approval of three cannabis bills, including adult use legalization, following a four hour hearing held before the joint session of the New Jersey Senate and Assembly Budget and Appropriation Committees on November 26, 2018, it appears unlikely that marijuana legislation will be voted upon in 2018. December 17, 2018 is the latest voting day of the legislative year and work still remains on gaining consensus on key issues in the bills including the tax rate, expungements and whether the proposed Cannabis Regulatory Commission would be a full-time commission. Work also remains in ensuring the number of votes needed for passage.
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