On December 17, the President signed into law the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (the 2010 Tax Relief Act).

By Michael D. Fisher, CPA, MST

Senior International Tax Manager, PIASCIK

A Statement of the Problem

Legislatures and government tax authorities worldwide have long recognized that affiliated companies under common control sometimes have the ability to exploit differences in tax environments between nations through the artful adjustment of transfer prices within corporate groups constituting integrated enterprises.

While the new law tax changes in the health reform legislation and the hiring legislation were the most significant developments in the first quarter of 2010, many other tax developments may affect you, your family, and your livelihood.

Although there are only about four weeks left to go before the year ends, it's not too late to implement some planning moves that can improve your tax situation for 2009 and beyond. This letter reviews some actions that you can take before December 31 st to improve your overall tax picture.

The following is a summary of the most important tax developments that have occurred in the past three months that may affect you, your family, your investments, and your livelihood. Please call us for more information about any of these developments and what steps you should implement to take advantage of favorable developments and to minimize the impact of those that are unfavorable.

H.R. 1, the “American Recovery and Reinvestment Act of 2009”—the Recovery Act—was signed into law by the President on February 17, 2009. This new law includes many business tax breaks, such as extended bonus depreciation, boosted expensing, and tax-deferred debt forgiveness income on the repurchase of qualifying debt. Tax breaks for individuals include a refundable “making work pay” stimulus credit, enhanced child tax credit and EITC, an improved homebuyer credit, a new deduction for state sales and excise taxes paid on new vehicles, and a sweetened higher education credit. There's a one-year AMT patch as well.

The Recovery Act is over 1,100 pages and covers an extraordinary number of tax relief provisions. However, I'm writing to give you an overview of the more widely applicable tax changes specifically effecting both individuals and families and small businesses. 

On Mar. 30, 2010, President Obama signed into law H.R. 4872, the Health Care and Education Reconciliation Act of 2010, thus completing a massive overhaul of the U.S. health care system affecting nearly all taxpayers, many employers, and many elements of the health care industry.

Tax Changes in How Individuals are Affected by The Emergency Economic Stabilization Act of 2008

H.R. 3221, the “American Housing Rescue and Foreclosure Prevention Act of 2008”—the Housing Act—was signed into law by the President on July 30, 2008.  This sweeping measure is designed to shore up the ailing housing market as well as tighten lending practices and reform financial institutions associated with that market.  It also contains a number of tax changes, including tax breaks for homebuyers and homeowners, relaxed requirements for tax-exempt bonds, eased AMT rules, tax changes for businesses, as well as highly specialized changes affecting low-income housing and special investment vehicles called Real Estate Investment Trusts (REITs).
I'm writing to give you an overview of the more widely applicable tax changes in the Housing Act.  Please call our offices for details of how the new changes may affect you, your family, your investments, or your business.