Tax Law Tips

Opportunity Zone Basis Step-Up

Monthly Tax Law Tip

When you invest capital gain into a Qualified Opportunity Fund, to take advantage of the gain deferral provided by the Opportunity Zone provisions, your basis in the investment is zero. If you hold the investment for five years, your basis is increased by 10% of the amount of your investment. In order to take advantage of this basis step-up, you need to make your Opportunity Zone investment no later than December 31, 2021.

The filing date for federal and California tax returns has been moved forward

April 2021

Monthly Tax Law Tip

The filing date for federal and California tax returns has been moved forward from April 15 to May 17, but this is only for individuals.  Trusts and estates, and corporations, still have an April 15 filing date, and estimated payments for individuals are still due on April 15.

Exchange Period for 1031 Exchanges

March 2021

Monthly Tax Law Tip

If you are doing a 1031 exchange, your exchange period ends on the earlier of: (i) 180 days after the close of the sale of the relinquished property, or (ii) the next due date for your tax return. That means that, if your sale closed after October 17, you will need to file for an extension of the April 15 due date in order to receive the full 180-day exchange period.

Real Estate Owned by an Entity Can be Reassessed Due to Change in Control or Ownership

February 2021

Monthly Tax Law Tip

Real estate owned by an entity can be reassessed for California property tax purposes even with no transfer of the property. A transfer of interests in the entity resulting in a change in control or a change in ownership of the entity can result in reassessment even if the entity continues to own the real estate.

California’s Annual $800 LLC Tax Waived for First Year

January 2021

Monthly Tax Law Tip

Beginning on January 1, 2021, California’s annual $800.00 LLC tax is waived for the first year of existence of newly formed LLCs.  This is in effect through January 1, 2024.