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tax cut The short answer is “yes.” On October 18, 2022, the Internal Revenue Service (the “IRS”) issued Revenue Procedure 2022-38 (the “Procedure”). This Procedure adjusted certain dollar amounts related to tax items due to inflation. What you may not know is that certain dollar amounts contained in the tax code are subject to inflation. This means the IRS will adjust these items on a yearly basis to take into account inflation.

As we all know, inflation has hit an all-time high this year, and costs continue to rise with no end in sight. However, one piece of good news is that the Procedure adjusts the individual tax brackets and many more items for the 2023 tax year to take into account this inflation. This means there is a possibility that you may see a slightly larger refund or slightly less amount due when you file your 2023 tax return.

The Standard Deduction

The standard deduction for a married couple filing jointly increased to $27,000, which is up $1,800 from the previous year.

For single taxpayers and married individuals filing separately, the standard deduction increased to $13,850, which is up $900.00.

For head of households, the standard deduction will be $20,800, which is up $1,400 from last year.

The Individual Tax Brackets

Continue Reading Did inflation just save me money on my taxes?

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IRSAs you may recall from our previous post, Hurricane Ian extended certain due dates with respect to tax returns for those affected. There is also relief for certain taxpayers who have an ongoing Section 1031 Exchange. Under the Revenue Procedure 2018-58 (“Rev. Proc. 2018-58”), two sections grant relief to taxpayers involved in a Section 1031 Exchange and who are Affected Taxpayers.

Section 6 Relief

Section 6 of Rev. Proc. 2018-58 (“Section 6 Relief”) states that if a taxpayer has a deadline (the 45-day or 180-day deadline) that falls between the Relief Period prescribed by the Internal Revenue Service (the “IRS”), the taxpayer may extend that deadline date to the end of the Relief Period.

Calculating the Relief Period

Let’s unpack this; the Relief Period is September 23, 2022 through February 15, 2023 as stated in the IRS’s notice FL-2022-19, dated September 29, 2022 and updated on October 5, 2022. Therefore, if the 45-day or 180-day deadlines fall between the Relief Period, the taxpayer may extend such deadline to February 15, 2023. An Affected Taxpayer includes individuals who live, and businesses (including tax-exempt organizations) whose principal place of business is located, in the state of Florida.

For example:

Facts: Taxpayer has its principal place of business in Lee County, Florida and is therefore classified as an Affected Taxpayer. Taxpayer relinquished their property on June 15, 2022, the 45-day deadline ends July 30, 2022 and the 180-day deadline ends December 12, 2022.

Analysis: The 45-day deadline does not fall between the Relief Period and, therefore, cannot be extended. However, the 180-day deadline does fall between the Relief Period and can be extended until February 15, 2023.

Section 17 Relief

The other section that provides relief in Rev. Proc 2018-58 is Section 17. Section 17 states that if the relinquished property was transferred or parked on or before the date of the disaster, the 45-day and 180-day deadlines that have not yet lapsed, may be extended 120-days from the last day of such deadline or to the last day of the Relief Period, whichever is later (“Section 17 Relief”).

Continue Reading Did Hurricane Ian extend deadlines with my Section 1031 Exchange?

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Last week, Southwest Florida felt the wrath of Hurricane Ian. With the surplus of vessels around the Southwest Florida area, property owners are finding vessels washed up on their properties or left abandoned in the waters around them. This spurs the question,

“What do I do if a vessel is on my property due to Hurricane Ian?

First, a property owner can always attempt to locate the registration number on the vessel’s side to ascertain who the owner is. Once the owner is determined, the property owner can demand the vessel’s rightful owner remove the vessel from the property.

Additionally, a property owner can report the vessel to Florida Fish and Wildlife Conservation Commission (FWC). FWC will collect a fee for beginning an investigation, conduct an investigation under Section 705.103, Florida Statutes, and determine the vessel’s owner. If the vessel’s owner does not remove the vessel, it could be declared “derelict” by the Florida Fish and Wildlife Conservation Commission. In Florida, a vessel is considered derelict when it is left stored or abandoned in a wrecked, junked or demolished condition on public waters or private property without the consent of the property owner.

Continue Reading Hurricane Clean-Up: Tips for Handling Abandoned Vessels on your Property

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Hurricane Tax ReliefHurricane Ian definitely brought destruction, but it also brought tax relief for those who were affected. Taxes are likely the last thought one may have if you were affected by Hurricane Ian, but know there is tax relief out there for those affected by Hurricane Ian.

For example, the Internal Revenue Service (the “IRS”) has provided extension relief for those individuals and businesses until February 15, 2023, to file tax returns and make payments to the IRS for individuals and households affected by Hurricane Ian that reside or have a business anywhere in the state of Florida. This applies to individuals who had a valid tax extension due to run out on October 17, 2022. Note, if tax payments relate to 2021 returns that were due on April 18, 2022, these are not eligible for this relief.

This relief applies to quarterly estimated tax payments, normally due on January 17, 2023, and to the quarterly payroll and excise tax returns normally due on October 31, 2022, and January 31, 2023. Businesses with an original or extended due date also have additional time, including calendar-year corporations whose 2021 extensions run out on October 17, 2022. In addition, penalties on payroll and excise tax deposits due on or after September 23, 2022, and before October 10, 2022, will be abated as long as the tax deposits are made by October 10, 2022.

If you receive a late filing or payment penalty notice from the IRS, the IRS encourages you to call the number on the notice letter and request that the penalty be abated.

There is also some additional relief that has been in the tax code prior to Hurricane Ian’s destruction, such as Qualified Disaster Relief (Code Section 165) and Disaster Relief Payments (Code Section 139).

Qualified Disaster Relief

Qualified Disaster Relief will apply if you are affected by a “Qualified Disaster,” which is a disaster that is federally declared (I will refer to this as “Section 165 Relief”). Hurricane Ian and the state of Florida have been declared a “federal disaster” qualifying those losses associated with Hurricane Ian as “Qualified Disaster Relief.”

What does this mean and how can I take advantage of this?

Continue Reading Hurricane Ian Brings Tax Relief for Those Affected

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It’s funny the vast differences acronyms have. On Instagram, “FTO” stands for “flexible time off,” and on Facebook, it stands for the game “Faery Tale Online.” For purposes of this article and in the patenting world, an FTO is an assessment of the ability to make, use, and/or sell products/services without infringing another party’s rights.

Do I need an FTO performed if I already have a patent?

Now for my favorite attorney answer…it depends. First, we must understand what rights a patent gives.

A registered patent provides the owner of a useful, new, and non-obvious invention of patentable subject matter with the legal right to exclude others from making, using, or selling the patented invention for a limited period of time.

Isn’t “legal right to exclude” just a fancy legal way of saying that I have the right to make, use or sell my patented invention?

No! The right to exclude does not mean the same as the right to make, use, or sell.

To illustrate this, suppose inventor Sue Yoo develops and patents a system – that has not been previously invented – for preventing the sinking of a boat with a breached hull. The patented invention involves manually or automatically deploying helium-filled balloons which provide the boat with the ability to remain afloat. From these basic facts, it appears that Sue Yoo’s invention met the requirements for patentability, it is useful (prevents boats from sinking), new (hasn’t been previously invented), non-obvious (debatable but hey, for our purposes it’s not obvious), and of patentable subject matter (trust me on this one).

Continue Reading What is an FTO?

Firing their first shot on June 6, 2022, Shosh Yonay and Yuval Yonay, heirs of Ehud Yonay, took aim at Paramount by filing a complaint in Federal Court asserting that the movie Top Gun: Maverick, infringes upon a copyrighted story written by Ehud Yonay (“Story”). Shosh and Yuval claim that in May of 1983, Paramount obtained from Ehud, exclusive motion picture and allied rights – creation of merchandise or a television series – to the Story. Shosh and Yuval assert further that in January of 2018, they notified Paramount of their election to terminate those rights as of January of 2020.

On May 27, 2022, flying high over complaints from Shosh and Yuval and well after the termination date, Paramount released Top Gun: Maverick domestically bringing in over $120,000,000 during its opening weekend. Have Shosh and Yuval found their cash cow??

Do Shosh and Yuval have legal standing?

First, can Shosh and Yuval ‘elect to terminate’ rights in which they did not give? 17 U.S.C. § 203(a)(2)(A-B) states that in the case of any work other than a work made for hire, the exclusive or nonexclusive grant of a transfer or license of copyright or of any right under a copyright, executed by the author on or after January 1, 1978, otherwise than by will, is subject to termination under the following conditions:

[w]here an author is dead, his or her termination interest is owned, and may be exercised, as follows: [t]he widow or widower owns the author’s entire termination interest unless there are any surviving children or grandchildren of the author, in which case the widow or widower owns one-half of the author’s interest and [t]he author’s surviving children, and the surviving children of any dead child of the author, own the author’s entire termination interest unless there is a widow or widower, in which case the ownership of one-half of the author’s interest is divided among them.

This means that Congress provided copyright owners with the ability to recapture their works thus allowing the copyright owner to take actions such as renegotiating an agreement or creating their own works based on the original work.

Here, there is no indication that the work is for hire, the grant does not appear to be by will and allegedly occurred after 1977, plus Shosh is the widow and Yuval is the son of Ehud. It is clear that in this case, as the grant of rights occurred after 1977 and that Shosh and Yuval are widow and son, respectively, of Ehud, that they had the right to terminate the extension of rights to Paramount.

Did Shosh and Yuval provide Paramount with proper notice?

Continue Reading Copyright Claim Soars Over Top Gun: Maverick

Patent SearchA patentability search allows a patent practitioner to assess the likelihood of successfully obtaining a patent with the United States Patent and Trademark Office (“USPTO”). The USPTO may issue a patent to whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, subject to certain conditions and requirements.

A patentability search allows a patent practitioner to better understand the scope of the state of the art, the level of skill of a person in the art, and the potential for obtaining a peiroatent registration that protects the new and useful process, machine, manufacture, or composition of matter.

What does it mean to be “novel” and “non-obvious”?

To be patentable, the new and useful process, machine, manufacture, or composition of matter (“invention”) must be novel and non-obvious. In assessing novelty, a patent practitioner searches and reviews the universe of prior art, such as issued patents, expired patents, patent applications, and other non-patent literature, to determine if the exact invention has already been disclosed. In general, a prior disclosure by a third party is a complete bar to patentability, and a prior disclosure by the inventor is subject to specific timing as set by statute regarding such previous disclosures.

Continue Reading What is a patentability search and why should I have one conducted?

If you have not yet filed your 2021 tax return, the Internal Revenue Service provides a plethora of guidance. Below is a summary of few of the items taxpayers should know before filing:

Cryptocurrency

Did you receive, sell, exchange or buy any virtual currency? All taxpayers filing Form 1040, Form 1040-SR or Form 1040-NR must check one box answering either “Yes” or “No” to the virtual currency question. The question must be answered by all taxpayers, not just taxpayers who engaged in a transaction involving virtual currency in 2021. Click here for more information.

Tax Breaks for Teachers

Teachers or other educators can deduct the unreimbursed cost of books, supplies, computer equipment, software and COVID-19 protective items used in the classroom. For 2022, they will be able to deduct up to $300 of out-of-pocket classroom expenses when they file their federal income tax return next year. If they are married and file a joint return with another eligible educator, the limit rises to $600. Click here for more information. For those teachers and educators filing their 2021 tax returns due in April, the deduction is limited to $250. The limit will rise in $50 increments in future years based on inflation adjustments.

Need more time to file?

Continue Reading Important Reminders as 2022 “Tax Day” Approaches

Mandatory Arbitration of Sexual HarassmentEmployers who use arbitration agreements for employment disputes just had the scope of those agreements narrowed. On March 3, 2022, President Biden signed into law the Forced Arbitration of Sexual Assault and Sexual Harassment Act.

As the name of the Act implies, the new law prohibits employers from requiring that sexual harassment and sexual assault claims be arbitrated as part of a mandatory arbitration agreement of employment claims. The new law also overrides any terms of employment agreements that prohibit class actions for sexual harassment or sexual assault claims.

Finally, the law will have an immediate impact because it applies retroactively. This means that it invalidates any current arbitration agreement that an employee has signed to the extent that the claim is for sexual harassment or sexual assault. The only exception is for cases that are already pending or completed in arbitration.

Continue Reading New Law Prohibits Mandatory Arbitration of Sexual Harassment and Sexual Assault Claims

Bareboat CharterIn Florida, we are lucky to have a year-round boating season. However, with so many boats here in Southwest Florida, boat owners often look for ways to maximize their boats’ usage and, of course, their profitability. Boat owners can maximize profitability and limit liability by renting their boats under bareboat charter arrangements.

What is a Bareboat Charter?

A bareboat charter is a vessel that is leased by the owner to another person (a “charterer”) for a period of time without captain and crew. The person leasing the vessel is then responsible for the entire vessel’s operation and any captain and crewing requirements. For a valid bareboat charter, the vessel owner must completely relinquish “possession, command, and navigation” of the vessel.

Elements of a valid Bareboat Charter:

  1. The charterer must have the option of selecting and paying crew, although the owner may require general levels of proficiency for the crew that is retained based on federal statutes;
  2. The master/crew are paid by the charterer;
  3. All food, fuel, and stores are provided by the charterer;
  4. Insurance is obtained by the charterer;
  5. The charterer is responsible for the safe navigation of the vessel;
  6. The charterer may discharge, for cause, the master or any crew member without referral to the owner;
  7. The vessel is surveyed upon its delivery and return.

What are the benefits of a Bareboat Charter?

Continue Reading Bareboat Charters: Things to Consider