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PostHeaderIcon Tax News – August 16, 2013

Not a lot of news the last couple of days so I’m going to double up.

I’m from the Detroit area and Bill Davidson, who passed away a few years ago, is a well known name in Detroit sports.  Amongst other things, he owned the Detroit Pistons  and I even interviewed for a job at his company, Guardian Glass, over a decade ago.  It looks like his estate is being questioned and the IRS has sent out a $2 billion (yes, that’s a “b”) notice for estate and gift taxes due.  Some of it is estate tax but they’re also questioning some past gifts that were made to heirs with valuations lower than what the IRS thinks.

While this article talks about farm equipment, it’s a Section 179 issue and it’s available to all businesses.  Normally if you buy fixed assets, you have to depreciate them over their useful life.  If you don’t buy a lot of assets, you have the option of immediately expensing them via Section 179.  With bonus depreciation, this has been less of an issue but the amount a person can deduct is going to drop from $500,000 in 2013 all the way down to $25,000 if Congress doesn’t do anything about it.  This is one of those things where every year or two, Congress bumps it up but makes the increase temporary.  While not an extender (the law has been around for a long time), the amount has been the equivalent of an extender in that you never quite know what the amount is going to be until Congress acts.  Also interestingly, I found a website that’s specifically dedicated to the Section 179 deduction with ticker and all.

Finally, we have an agreement between the US and the Cayman Islands to fight tax evasion.  I wonder if there was a run on Cayman banks this week.