Craig Kotani of Sawin & Kotani | November 20, 2017

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On Monday, November 20th the Executives Association of Long Beach met for their weekly networking luncheon to hear Craig Kotani, owner of Sawin & Kotani speak on accounting and the changes to the tax law the House is trying to pass.

These are the notes from Craig's talk:

2017 Tax Reform: The Tax Cuts and Jobs Act

House Version: 

4 brackets (currently 7 brackets)

12% on first $90k (15% on first 75k)

25% $90k to $260k (25%/28% 75k to 231k)

35% $260k to $1m (33%/35% 231k to 431k)

38.5% over $1m (39.6% from 413k)

Reduced rates for small business with net active business income. 25% maximum rate. 9% on first 75k earning less than $150k in taxable income from pass through business. Not available for personal service businesses. 

No change to capital gains rates. 

Repeals Alternative Tax Minimum Tax

Increased child tax credit $1,600 (was $1,000)and increased income levels $230k ($100k)

Plug in electric drive motor vehicles repealed for cars after Dec 31, 2017. 

 

Deductions: 

Standard deduction increased to $24,400 married/$12,200 for single (was $12,700 Married/$6,300 single)

No personal exemptions (was $4,050)

Medical Expenses Repealed

No state and sales tax deduction.

Limits property tax deduction to $10k

Mortgage interest to interest on first $500k in loan balance. ($1.1 loan balance) Limited to one qualified residence. Homes after November 2, 2017.

Unreimbursed Employee Expenses

Moving Expenses Repealed

Gain on Sale of Residence changed to 5 out of previous 8 years and only used once every 5 years. Will phase out higher income levels. 

Estate Tax exclusion to $11.2m

Estate and GSR taxes repealed for deaths after Dec 31, 2023. Still keeping the stepped up basis provisions. This will be better than the 2010 law. 

 

Corporations:

20% flat tax rate (15%/25%/24%/35%)

Personal Service corporation flat 25% (from 35%)

100% cost recovery deduction for new qualified property purchases Sept 27, 2017 to Dec 31, 2022. (50% old deduction)

Increased Sec 179 deduction $5m (from$550,000). Phase out at $20m. Effective new property after Nov 2, 2017. Includes qualified energy efficient heating and AC equipment. 

Like kind exchanges only applies to real property. 

50% food and beverage and qualifying business meals. No deduction for all other entertainment. 

Extension of solar energy credit of 30% but reduced starting in 2020 to 26% and repealed after Dec 31, 2021. 

 

Next Meeting: 

We are Dark next week (November 27th) post-Thanksgiving. Have a happy Thanksgiving with your family! We look forward to seeing you at the EALB Holiday Dinner at the Long Beach Yacht Club on Friday, December 1st at 6pm. 

Announcements:

Remember to invite guests to keep our membership continually growing!

1st Classification Postings:

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2nd Classification Postings:

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Membership Postings:

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Welcome New Members:

Welcome Mary Loos of Bixby Neighbors in the classification of Magazine: Bixby Knolls. 

Other Membership News: 

Frank Messano of Dilday & Associates has gone into abeyance after Jack's passing in accordance with our bylaws. We look forward to his return in a month. 

Classification of the Month:

Featured Classification for November:

 Pest Control

Advertisements/Want Ads:

Traveling? Call Pat Ellington for toady's hot deals.

PGA West La Quinta Condo. Call Jim Nesmith for details (562) 900-2230.

Board Meeting Minutes: 

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