After a more than 20-year debate regarding tax affecting, the U.S. Tax Court recently sided with the taxpayer in the case of Estate of Cecil v. Commissioner (Cecil) in its March 2023 ruling. Since 1999, the Tax Court, IRS, taxpayers, and appraisers have been challenged with the question of whether it is appropriate to apply an entity-level corporate income tax to an S corporation in determining value. As tax affecting is commonly accepted and performed in the appraisal practice in a variety of areas, this recent court ruling is welcome news for taxpayers and appraisers alike.

Capital gains taxes can severely erode investment performance over time. Effectively managing portfolio gains through strategic tax loss harvesting can create significant annual tax savings and increase real portfolio returns over the long term. Tax loss harvesting involves selling investments at a loss to offset taxable gains in an investor's portfolio, thus reducing annual tax liability. Capital losses that exceed capital gains each year (in excess of the $3,000 generally allowed against ordinary income) can be carried forward to offset gains realized in future years.

In the world of gift and estate tax, for the tax year 2023, a U.S. citizen and/or resident decedent currently receives a $12.92 million lifetime exemption from tax on their worldwide assets.

In recent years, the shift from brick-and-mortar retailers to the digital marketplace has spurred innovations but also some headaches for consumers and businesses alike. Now, more than ever, consumers are likely to shop online rather than go to a physical store.

Let's take a trip down memory lane. The year is 2017, President Trump is in office, and the Tax Cuts and Jobs Act (TCJA) is signed into law. Among a myriad of other tax law changes, the TCJA limits the deduction individuals may take for state and local taxes to $10,000 on their individual income tax returns (i.e., the SALT Cap). The limitation sunsets, like many of the provisions within TCJA, at the end of 2025.

The Washington State Supreme Court in Quinn v. Washington recently upheld the state's 7% excise tax on certain capital gains exceeding $250,000 in a calendar year. As a result, individual taxpayers in a state that does not impose a net income tax just became subject to capital gains excise tax and new filing requirements.

Andersen Managing Director Joe Calianno's comments are featured in the recent Tax Notes article, "IRS Narrows Scope of Excess Asset Basis Rules in ‘Killer B' Regs". The article covers recently proposed regulations on Sec. 367(b) related to so-called Killer B triangular reorganizations. The proposed rules follow earlier IRS notices, which aim to block certain types of transactions using Killer Bs. In the article, Joe characterized the interplay between earlier IRS guidance and Killer B transactions as a "cat and mouse game,” which had largely shut down the transactions. He added that the scaling back of the excess asset basis rules in the proposed regulations was a positive development.

Andersen, the fastest-growing independent, multidisciplinary professional services firm in the world, has launched a new global valuation practice to broaden its platform of tax, legal and related services for clients.