October 2022

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?

As 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?

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