The Tax Navigator – Key Changes to Tax Credits, Estate Tax and Corporate Tax Year End Changes

Join Sean Muller, The Tax Navigator, as he discusses recent IRS and legislative changes that impact ACA tax credits, estate tax closing letters and corporate tax year-ends for controlled foreign corporations. Additionally, this episode highlights a notable philanthropic initiative by Michael Dell and his wife to fund Trump accounts for young children, aiming to provide early financial support.

 
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Detailed Description of The Tax Navigator – Key Changes to Tax Credits, Estate Tax and Corporate Tax Year End Changes

00:00:00
Sean: All right. So, Congress is back in session. They’re trying to meet to try to bridge the gap on the ACA tax credits. It looks like now we may have a GOP bill only around the new health care plan, and we’ll see if that actually passes through on that.

00:00:18
Sean: The IRS did come out and lower the fee on estate tax closing letters. It lowered to $10 but a closing letter is really what the executor wants to have – that the IRS has received the estate tax return, and there’s no taxes or anything left so that they can release the funds. So many executors want to pay that fee, so they’re off the hook for that.

00:00:41
Sean: As part of the OBBBA bill, there was a deal with CFCs, that’s a Controlled Foreign Corporation owned by a U.S. company. They could have a one-month deferral on their year-end.

00:00:51
Sean: So, if you’re a 12/31 U.S. company, you can have an 11/30 CFC. Normally, you all have to have the same year-end, but they allowed this one-month deferral.

00:01:01
Sean: Well, OBBBA did away with that. And so for any CFCs after November 30, 2025, they have to go to their parents’ year-end.

00:01:13
Sean: So, if you’re an 11/30 CFC, you have got to go to 12/31, so you’re going have a one-month short period return. So, the IRS is proposing regulations on what to do with the foreign tax credits and how do you bridge those out, so you don’t lose foreign tax credit. So, they’re looking at rules around that as we go to the same-year end as your parent.

00:01:33
Sean: News of the weird here is the University of Texas, it’s deemed to have all the money in the world. There’s a UT club that’s actually in the stadium, and it’s a dining club.

00:01:43
Sean: They actually have a property tax lien against them for failure to pay property taxes, and Travis County is actually asking them to sell the UT club. So very interesting that everyone says they have more money than they know to do with, and they couldn’t even pay their property taxes.

00:01:58
Sean: When you look at the Trump accounts, we’ve talked about them before, we need to do another deep dive now on limiting investments because they come effective January 1.

00:02:05
Sean: Michael Dell and his wife came out this morning and announced they were going to fund $6 billion to fund Trump accounts for 25 million kids ages 10 and under.

00:02:17
Sean: If you were born prior to 01/01/2025 up to 10 years old, they’re going to go through and fund $250 for each one of these kids, to give them a start.

00:02:26
Sean: So that’s a great piece there. And that’s really about it for this week, so more to come.

This episode of The Tax Navigator was recorded prior to publication. Some references or updates discussed may reflect information current as of the recording date.