Minnesota Management and Budget’s Post

Net general fund revenues totaled $2.2 billion in August, $187 million (9.1%) more than forecast in February. Individual income tax revenues continue to be above the February forecast due primarily to higher than forecast withholding. Other revenues are also above forecast because of high investment income and unusually high estate tax revenues. FY 2025 year-to-date receipts are now $4.2 billion, $197 million (4.9%) more than forecast. https://lnkd.in/gycyvBnw

Budget 2024 Amendments on Capital Gains – Effective from FY 2024-25 1. For classifying assets into long-term and short-term, there will only be two holding periods: 12 months and 24 months. The 36-month holding period has been removed. The holding period for all listed securities is 12 months. All listed securities with a holding period exceeding 12 months are considered long-term. The holding period for all other assets is 24 months. 2. The taxation of Short-Term Capital Gains for listed equity shares, units of equity-oriented funds, and units of business trusts has increased to 20% from 15%. Other financial and non-financial assets held for the short term will continue to be taxed at slab rates. 3. The exemption limit for Long-Term Capital Gains on the transfer of equity shares, equity-oriented units, or units of Business Trust has increased from ₹1 lakh to ₹1.25 lakh per year. However, the tax rate has increased from 10% to 12.5%. The exemption limit of ₹1.25 lakh applies for the entire year, while the new tax rate of 12.5% is effective from 23rd July 2024. 4. The tax on other assets is reduced from 20% to 12.5% with effect from 23rd July 2024. The indexation benefit previously available on the sale of long-term assets has been eliminated. However, taxpayers can choose to compute taxes on real estate transactions purchased before 23rd July 2024 either at 12.5% without indexation or at 20% with indexation. These amendments call for a thorough review of investment strategies to align with the new tax structure. #incometax #LTCG #capitalgain #taxlaws

CAPITAL GAINS TAX Yesterday's calls were quite interesting. I had multiple conversations regarding the new Tax implications coming June 25th of this year. For any Corporate Owners that are currently selling or contemplating selling, it is ideal to know the math behind the new tax to understand how much more you will be paying. I had a fascinating late night chat with my accountant Freddy Trigiani, MAcc, CPA, CA and we ran through some scenarios as I am currently negotiating a few deals. Below is one of the examples we talked through. You purchased a building back in the 90s for $1,000,000 and you are currently on the market and have an offer for $10,000,000. Your gain is $9M. Under today's taxes if you were to sell, you would owe a total of approximately $2,250,000. On June 25th, your taxes owed would be approximately $3,000,000. That is a $750,000 difference. Of course, that $750,000 is after tax money and would be in your pocket - no more tax until you spend it.... This is quite a significant difference. Contact me for further details Rtrigiani@indusite.com 647 - 802 - 8744

The IRS recently announced various inflation-adjusted federal income tax amounts for next year, including those for Section 179 deductions. For tax years beginning in 2024, small businesses can potentially write off up to $1,220,000 of qualified asset additions in year one (up from $1,160,000 for 2023). However, the maximum deduction amount begins to be phased out once qualified asset additions exceed $3,050,000 (up from $2,890,000 for 2023). Various limitations apply to these deductions. Also, keep in mind that under the (separate) bonus depreciation break, you can deduct up to 60% of the cost of qualified asset additions placed in service in 2024. For 2023, you could deduct up to 80%.

CHANGES TO THE BASIS OF ASSESSMENT PART 2 **The Transitional Year 2023/24** A further complication with the change in the basis of assessment is the calculation of profits in 2023/24, the “transitional year”, which seeks to transition from the old ‘current year’ basis to the new tax year basis. The rules in 2023/24, where the business has a year-end that doesn’t correspond with the tax year, seek to tax the profits from the day after the end of the period taxed in 2022/23 until 5 April 2024. A business preparing accounts to 31 December each year would have a 15-month period from 1 January 2023 to 5 April 2024 potentially taxable in 2023/24. However, the 3 months’ profits in the period 1 January 2024 to 5 April 2024, less any overlap relief, is not all taxed in 2023/24 but spread over 5 years, unless the taxpayer elects to be taxed on a higher amount. If, in the above example, the sole trader makes profits of £120,000 in year ended 31 December 2024 then £30,000 less any overlap relief (typically from the early years when some profits were taxed twice) would be spread over 5 years. Assuming no overlap relief, an extra £6,000 profits would be added to the profits assessable from 2023/24 to 2027/28 unless the individual elects to be assessed on a higher amount, in which case the balance of the £30,000 would then be spread over the remaining years to 2027/28. This is not at all straightforward and we can work with you to calculate the transitional profits and advise you of your tax liabilities going forward. Get in touch so we can support you: https://buff.ly/30whgCJ #SelfAssessmentTaxReturn #tax #SmallBusinessAccountants #CloudAccountants #accountants #AdamFernandes

CHANGES TO THE BASIS OF ASSESSMENT PART 2 **The Transitional Year 2023/24** A further complication with the change in the basis of assessment is the calculation of profits in 2023/24, the “transitional year”, which seeks to transition from the old ‘current year’ basis to the new tax year basis. The rules in 2023/24, where the business has a year-end that doesn’t correspond with the tax year, seek to tax the profits from the day after the end of the period taxed in 2022/23 until 5 April 2024. A business preparing accounts to 31 December each year would have a 15-month period from 1 January 2023 to 5 April 2024 potentially taxable in 2023/24. However, the 3 months’ profits in the period 1 January 2024 to 5 April 2024, less any overlap relief, is not all taxed in 2023/24 but spread over 5 years, unless the taxpayer elects to be taxed on a higher amount. If, in the above example, the sole trader makes profits of £120,000 in year ended 31 December 2024 then £30,000 less any overlap relief (typically from the early years when some profits were taxed twice) would be spread over 5 years. Assuming no overlap relief, an extra £6,000 profits would be added to the profits assessable from 2023/24 to 2027/28 unless the individual elects to be assessed on a higher amount, in which case the balance of the £30,000 would then be spread over the remaining years to 2027/28. This is not at all straightforward and we can work with you to calculate the transitional profits and advise you of your tax liabilities going forward. Get in touch so we can support you: https://buff.ly/30whgCJ #SelfAssessmentTaxReturn #tax #SmallBusinessAccountants #CloudAccountants #accountants #AdamFernandes

The IRS recently announced various inflation-adjusted federal income tax amounts for next year, including those for Section 179 deductions. For tax years beginning in 2024, small businesses can potentially write off up to $1,220,000 of qualified asset additions in year one (up from $1,160,000 for 2023). However, the maximum deduction amount begins to be phased out once qualified asset additions exceed $3,050,000 (up from $2,890,000 for 2023). Various limitations apply to these deductions. Also, keep in mind that under the (separate) bonus depreciation break, you can deduct up to 60% of the cost of qualified asset additions placed in service in 2024. For 2023, you could deduct up to 80%.

The IRS recently announced various inflation-adjusted federal income tax amounts for next year, including those for Section 179 deductions. For tax years beginning in 2024, small businesses can potentially write off up to $1,220,000 of qualified asset additions in year one (up from $1,160,000 for 2023). However, the maximum deduction amount begins to be phased out once qualified asset additions exceed $3,050,000 (up from $2,890,000 for 2023). Various limitations apply to these deductions. Also, keep in mind that under the (separate) bonus depreciation break, you can deduct up to 60% of the cost of qualified asset additions placed in service in 2024. For 2023, you could deduct up to 80%.

The IRS recently announced various inflation-adjusted federal income tax amounts for next year, including those for Section 179 deductions. For tax years beginning in 2024, small businesses can potentially write off up to $1,220,000 of qualified asset additions in year one (up from $1,160,000 for 2023). However, the maximum deduction amount begins to be phased out once qualified asset additions exceed $3,050,000 (up from $2,890,000 for 2023). Various limitations apply to these deductions. Also, keep in mind that under the (separate) bonus depreciation break, you can deduct up to 60% of the cost of qualified asset additions placed in service in 2024. For 2023, you could deduct up to 80%.