Congressional Republicans created a juicy new tax break for clients when they rewrote the U.S. tax code late last year. Three months later, hundreds of thousands of them still do not know if they qualify. The IRS has said it will provide guidance detailing exactly who is allowed to take the so-called pass-through deduction. With billions of dollars at stake, business groups are lobbying for the agency to open the doors to the deduction as widely as possible. To read the full article in FinancialPlanning, click: No One’s Sure Who Qualifies for this $415B Tax Deduction.
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U.S. has Leeway on Debt Limit, Economists Say Treasury Secretary Steven Mnuchin has called on Congress to raise the national debt limit before its August recess, but the federal government will not face a crisis if that does not happen, experts say. The U.S. has enough borrowing power to carry it through “sometime in early September,” economists at Wells Fargo said. To read the full article in Bloomberg Markets, click: U.S. Has Until at Least September to Lift Debt Cap, Analysts Say.
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Some valuation practitioners use a normalized risk-free rate in determining the cost of capital. This can inflate the cost of equity by up to a couple of percentage points, which in turn depresses valuation multiples. Is normalizing the risk-free rate a rational, reasonable practice? In today’s guest post, Chris Mercer suggests the answer is an emphatic no. To read the full article in Mercer Capital’s Financial Reporting Blog, click: Should Business Appraisers “Normalize” Long-Term Treasury Rates When Building Equity Discount Rates? This article is republished from Mercer Capital’s Financial Reporting Blog. It is reprinted with permission. To subscribe to the…
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Rate Hike Pause is Good News for Leveraged Closed-End Funds The Federal Reserve held steady on interest rates last week, not long after Fed chief Janet Yellen indicated officials would “proceed cautiously.” This could benefit leveraged closed-end funds. These funds tend to be more volatile than other financial products, Binyamin Appelbaum explains, but they may be a smart investment for people with a long-term focus. To read the full article in The New York Times, click: Fed Keeps Rates Steady and Says Labor Market Is Improving.
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Regulations Clarify Arm’s-Length Standard for Transfer-Pricing Rules The temporary regulations provide that the arm’s-length standard of Sec. 482 applies to all controlled transactions without regard to the form or character of the transactions, and they are particularly concerned with tax-favored transfers of assets outside the U.S. Jay L. Camillo, M.A. (international relations), Atlanta, and Kenneth P. Christman Jr., J.D., Washington, explain. To read the full article in The Tax Adviser, click: Temporary Regs. Under Sec. 482 Coordinate Transfer-Pricing Rules with Other Code.