Pat: And welcome to Tax Talk. This is Pat Dougher, Jeff Pickering CPA, Rex Hogue of Bollinger and Hogue in the North Texas area. We’ve got your tax answers. You know a lot of people listen to this show, they get so much information for their business, their personal information as far as how to lower your tax bill. I mean when you really get down to it, the more you know the more you get to keep. That’s what the show is really out to give you and help you with. Jeff you’ve got some deadlines coming up, why don’t we go right into those.
Jeff: Right. So our first deadline is actually a retroactive deadline. We reported that on the 17th if you are a nonprofit, if you’re a small group like a PTA, your gross receipts were under $25,000 a year, then previously you were required to file a Form 990 for Nonprofits. And this year that changed because of a law change back in 2006 and so we were telling people you need to file your extension. And the IRS has told people, you need to file the extension or you need to file your nonprofit form if you’re one of these little bitty nonprofits. And lo and behold, the IRS has recognized that many of them did not get the word and so Doug Shulman, the Commissioner, has said it don’t worry, we’ll figure something out for those of you who didn’t.
Pat: That’s really good. One of the things that I want to make sure is that people know they can call and get their questions answered at 214-787-1570, that’s 214-787-787-1570. If you’re outside the DFW area, it’s 800-583-1570 or #KLIF on your Sprint wireless phone. I know that there’s so much information people can get from us here on this, a lot of people wonder “can I call and with a question that’s not being covered on the air?” Yes. Taxes, estate planning and estate taxes, those are things that come up incidentally sometimes, and so if you’ve got a question, if you got a concern, if you have something that’s changing in your family then you want to call in at 214-787-1570. I know we’ve got more stories from…
Jeff: Sure. And I’d like to remind people on property taxes protests also are coming up, at least here in Collin County, the due date is May 30. Other counties have their own due dates so you might just check it out. If you want to protest your property taxes this is the month to do it in. Okay so we’ve got an American Jobs and Closing the Loopholes Tax Act. So this is an act that is designed to close some loopholes and some other stuff. So this is in Congress right now and it looks like it has some good legs on it, so it looks like many of the provisions are going to, it hasn’t actually passed yet, but it looks like it’s going to. There’s not a lot of discussion about the stuff that’s in this bill. So what we have on the good side, we have a year or more for the research credit, 15 year write-offs for lease hold improvements for restaurant buildings and improvements, the five year write-offs for farm equipment that’s extended. We’ve got the, people were able to deduct charitable contributions from their IRA and that’s saved them money; that’s in there another year. The enhanced deduction for food and book inventories, so that’s out there. On the bad side, let’s talk about the bad side, what loopholes are being closed, there’s a thing called carried interest and people in the real estate and the hedge fund business know what that is because that’s how they get paid usually. They get paid by having a share of the business, instead of getting paid in cash so they are going to close that loophole. Most people were getting their money in capital gains because they had a share of the business. That’s going to go away. Now that carried interest is going to be converted into ordinary income, at least 75% of it is.
Pat: Explain exactly what that would mean, as far as who’s the person, if they are in the real estate business, you’re saying they own a part of something? Clarify that a little bit.
Jeff: Yes. It’s easier to do it in the hedge fu
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