Small businesses get accounting-related relief from the Tax Cuts and Jobs Act (TCJA). Among the lesser-known provisions of the TCJA are several accounting method changes for tax years beginning after 2017. Key changes include the rules businesses must follow when recognizing income on their financial statements. Other changes include a more lenient gross receipts test for businesses seeking to use the cash method of reporting; eased requirements for inventory maintenance; and more. Contact us if you have questions about your business.
Successive dispositions won’t jeopardize like-kind exchange treatment. In a Private Letter Ruling, the IRS determined that two transactions involving dispositions of property acquired by a limited liability company from a related entity in a like-kind exchange, within two years of the property’s acquisition, qualified for the “non-tax avoidance exception.” Under Section 1031 of the tax code, both subsequent dispositions were nonrecognition transactions. That meant they didn’t have federal income tax avoidance as a principal purpose.