Highlights of new Highway Act

President Obama signed the "Surface Transportation and Veterans Health Care Choice Improvement Act of 2015" on July 31, 2015.  A few highlights:

Form 1098

Banks will be required to provide more details on Form 1098, Mortgage interest statements.  It's about time!  Under the old requirements, lenders had to include the name, tax ID number, and address of the interest payor, the amount of interest paid, amount of points paid, and the tax ID of the lender.  Under the new law, lenders now have to additionally provide: the outstanding mortgage principal as of the beginning of the calendar year, the mortgage origination date, and my favorite:  the address of the propery that secures the mortgage.  We've been waiting for that last one for a while.  How many times have clients given us a pile of Forms 1098 with no indication of which property they are associated with?!  Now we can get that information directly from the lender.

Changing filing deadlines for C Corporations and Partnerships
  Old Deadline New Deadline
Partnerships April 15, extend to September 15 March 15, extend to September 15
C Corporations March 15, extend to September 15

April 15, extend to September 15 

(or, after 2015, to October 15)

 

 

 

 

 

 

Bais Overstatement does cause Gross Understatement of income for 6-Year Statue of Limitations

As you may know, the time period in which a tax return remains open for audit (the statue of limitations) is generally three years from the date of filing.  But, it can be six years if the taxpayer has made a gross understatement (more than 25%) of income. When we say "income" here we generally mean gross receipts.  But what about the basis?  We used to say that income meant gross receipts without regard to basis (such as basis in stock).  In the 2012 Home Concrete & Supply case, the Supreme Court ruled to support that method of thinking.  Well, this new law reverses that ruling.  Now, an overstatement of basis, resulting in a lower adjusted gross receipts, IS an understatement of income and can cause the statue of limitations to extend out to six years.

Those are the top three tidbits from this law - enjoy!