The Covid-19 pandemic continues to alter life as we know it in America and around the globe. Catanese and Wells is committed to researching the latest information from the federal and state government to put all of the clients we represent in the best situation possible. Recently, our founder, Randy Catanese Esq., was asked to comment on the latest tax deferment news from the Federal government in the American Horse Council Tax Bulletin.
The news came in the middle of March as there was an emergency declaration pursuant to the Stafford Act from President Trump. In the wake of the emergency declaration, the Internal Revenue Service and the U.S. Treasury Department provided guidance, which allows all non-corporate tax filers to defer up to $1 million of federal income tax payments due on April 15 2010 and July 15th of 2020 without risk of interest or penalties. The news out of the IRS and U.S Treasury Department also stated that corporate taxpayers could take advantage of a similar deferral of up to $10 million of federal income tax payments. The initial guidance in March didn’t push back the April 15th deadline, but it was later pushed back by the federal administration to July 15th of 2020.
Randy Catanese was excited for the opportunity to shed more light on the subject for those curious of how this news impacts the equine industry at large. Catanese explained that the Tax Cuts and Jobs Act (“TCJA”) enacted in late 2017 increased the amount of Bonus Depreciation from 50% to 100% of the purchase price for property placed in service after September 27, 2017 and before January 1, 2023, so long as the property is eligible. In other words, the deferral payment system has already been established in the Equine industry.
Catanese went on to explain in the American Horse Council Bulletin that “to qualify, these horses must be used predominantly within the United States. Other property to be eligible must have a recovery period of 20 years or less under the Modified Accelerated Cost Recovery System. The asset must be “placed in service” during the tax year where the bonus depreciation is claimed by the taxpayer. Under the TCJA the IRS was directed to promulgate regulations related to Section 168(k) of the Internal Revenue Code, as amended.”
As always, the incredible team at Catanese and Wells is available to assist you with all of your equine industry related legal issues. Reach out today with any questions you may have!