There are a lot of changes in H.R. 1, the Tax Cuts and Jobs Act, that is up for a vote this week by the House and Senate. I often find it useful in understanding the changes to see them as "track changes" in the relevant Internal Revenue Code section. I hope to get a few of these put together and will post them as I have them. Here is one on IRC Section 451 on timing of income, mostly for accrual method taxpayers. One of the changes is to codify Rev. Proc. 2004-34 on deferral of certain advance payments received by accrual method taxpayers (new Section 451(b)). The other is to ensure that in most fact patterns, an accrual method taxpayer can't get longer deferral of income that is allowed on its books. I think this is mostly already the case today, but this provision should catch most of what is not covered by other provisions today.
See Section 451 as modified by Sec. 13221 of H.R. 1 (also see information at the end of the document on links to the conference explanation and effective date information). The changes are to new subsections (b) and (c) and re-lettering of the subsequent subsections.
What do you think?
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1 comment:
Have you looked at using closely held insurance companies to shift earnings, including to children who may have lower marginal rates?
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