Will going to $80K result in the law ending 1/1/22?
No still good for 2021 CA. Must be a full repeal of SALT.
Will going to $80K result in the law ending 1/1/22?
It looks like a payment in 2021 is really just a "deposit" so not deductible on the federal return until 2022 when (if) the election is made.
I'm not arguing with you. I have simply provided the thoughts of another practitioner. But disregard her comments with careful thought. She is brilliant and very well connected within the different organizations. As per the quote, she has raised the issue with the AICPA. I'm sure they take her seriously. We will see how this unfolds.
COGS wrote:I have heard that some folks or mimicking this in the 2020 software. If anyone is having success, what credit field are you using in 2020 to mimic the pass through entity credit? Thank you!
For example, lets say they pay $150K and end up with a $70K credit carry over. They are getting a 37% of $150K deduction that they are not getting now. So $55K in actual tax savings.
Everyone is assuming any unused credit limited by TMT is available for the 5 year carryover. As the statute is written I’m not so sure about that.
The statute allows carryover for any credit in excess of “net tax” as defined, which appears to not include any consideration for TMT. So if you have a credit of 100, regular tax of 120 and TMT of say 80, you get benefit up to the regular/TMT spread of 40, but does the 60 carry over? The statute says you get a carryover only if the credit exceeds “net tax” and net tax as defined appears to be basically regular tax with no regard for TMT. If this is correct, then in this example the 100 credit does not exceed the 120 net tax, so there is no carryover. The credit reduces net tax fully to 20, it’s below TMT so you pay TMT, and the unused portion is lost. You would have to apply tax benefit theory to take the carryover. I don’t read Cal law very often, maybe I’m missing something here.
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