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William Byrnes (Texas A&M) tax & compliance articles

TaxFacts Intelligence: December 27, 2022

Posted by William Byrnes on December 27, 2022

The Texas A&M Master and LL.M. programs (e.g. international tax, transfer pricing, wealth management, or risk management) are accepting applications from financial professionals and from lawyers. Over 850 enrolled, the enrollment for a course’s section is kept to between 20 and a maximum of 30 so that each student receives meaningful feedback throughout the course from the full-time academic faculty and renowned professional case study leaders, and each other via teamwork and peer review. https://law.tamu.edu/distance-education

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

This week we address client considerations for cryptocurrency holdings when building their estate and gift tax planning strategies. some cities are considering mandatory employer-sponsored commuter benefit programs to help employees cope with rising costs and sky-high gas prices. Read on for more.

Are Mandatory Commuter Benefits Coming to U.S. Cities? The Philadelphia Council and Mayor this summer signed a provision that requires certain employers to begin providing commuter benefits to employees. Philadelphia employers with 50 or more covered employees will be required to offer a pre-tax payroll deduction for certain mass transit expenses, qualified bicycle expenses or employer-covered benefits for fare instruments beginning December 31, 2022. A “covered employee” is one that has worked, on average, 30 hours per week in the city for the same employer over the prior 12 month period. The benefits provided will be equal to the amounts permitted by federal law for transit benefits. In 2022, the maximum exclusion for transportation in a commuter highway vehicle or for transit passes is $280 per month.  In 2018 through 2025, bicyclists cannot exclude qualified bicycle commuting reimbursements under federal law. Employers, however, are entitled to deduct their reimbursements as business expenses for those years. While the commuter benefit requirement is city-specific, it’s likely that many more cities may consider implementing their own programs in light of gas price increases–and that employers themselves may consider their own programs in order to attract and retain employees in a tough labor market.  For more information on the federal rules governing transit benefit reimbursements and deductions, visit Tax Facts Online.  Read More  

Section 127 Expansion Allows Employers to Offer Tax-Free Student Loan Benefits. Under IRC Section 127, employers can provide up to $5,250 in tax-free payments to employees for qualified educational expenses under a written educational assistance plan. The 2020 CARES Act expanded the rule to allow student loan repayment assistance as a qualified educational expense. Employees receive the assistance tax-free and employers can deduct the payments as a business expense. To qualify, the employer must have a written educational assistance plan that doesn’t offer any other taxable benefits or compensation to the employee (whether case or non-cash). The plan must not be discriminatory and employees must receive reasonable notice about the available plan benefits. The expansion is currently temporary, and is set to expire after December 31, 2025 unless extended by Congress. For more information on the educational assistance plan requirements, visit Tax Facts Online. Read More 

Are Your Clients Considering Gift and Estate Tax Consequences for Cryptocurrency Holdings?  Like any other piece of property, cryptocurrency can be subject to gift and estate taxes whether transferred as a lifetime gift or a gift at death. Cryptocurrency assets are treated as property for all federal tax purposes.  In 2022, taxpayers can transfer up to $12.06 million worth of property per person without worrying about the federal estate tax. However, the exemption is scheduled to revert to around $5 million after 2025.  That means many clients may wish to take advantage of a lifetime gifting strategy.  Cryptocurrency assets gifted during life are removed from the donor’s estate–and the IRS has already clarified that there will be no clawback provision if an individual donor takes advantage of the expanded estate tax exemption during life.  Clients with significant cryptocurrency holdings may also wish to consider trust planning techniques, such as a spousal lifetime access trust (SLAT) which can remove the cryptocurrency from their estate for the benefit of a spouse and other heirs. Cryptocurrency assets that are inherited receive a step up in basis like any other property transfer, which can reduce or even eliminate capital gains on cryptocurrency sales after the original owner’s death. For more information on the tax treatment of cryptocurrency, visit Tax Facts Online.  Read More 

Look in your Tax Facts Online app for our continuing analysis of 2022 and 2023 legislative and regulatory updates, weekly intelligence, and the impact on planning for a client’s wealth preservation and growth.

Texas A&M, operating budget of $9.6 billion (FY2022) and capital budget of $1.9 billion, is #1 for U.S. public universities, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space! The law school, ranked in the 1st tier of law schools and is ranked in the top 10 for the employment of its graduating law students among U.S. law schools.

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