2021 YEAR-END TAX PLANNING

As the tax year draws to a close for many, taxpayers will naturally be evaluating their tax situation year to date and contemplating what additional steps they may take to positively impact their tax situation. This letter highlights some areas you may want to consider as you focus on your year-end planning process. We anticipate this letter may raise some questions, and we are here to help. We are hopeful that this letter will spark some ideas and begin to lay the groundwork for identifying and evaluating options specific to your circumstances and objectives with your DHG tax advisor.

We look forward to working with you in meeting the challenges of today and planning for the successes of tomorrow.

TABLE OF CONTENTS

Individuals
  • Mortgage interest
  • Sale of principal residence
  • State and local taxes
  • Home office
Retirement
  • Distributions
  • Required minimum distributions
  • Roth conversions
  • Contributions
Wealth preservation planning
  • Review of documents and plans
  • Utilization of increased exemptions
  • Intentionally defective irrevocable trust (IDIT)
  • Grantor retained annuity trusts (GRATS)
  • Spousal lifetime access trust (SLAT)
Charity
  • Partial above the line deduction
  • Increased deduction limits
  • Giving strategies
Investments
  • Interest and dividends
  • Capital gains and asset sales
  • Investment interest expense
  • 529 Plans
Business
  • Revenue recognition and timing of deductions
  • Inventory and UNICAP
  • Fixed assets and depreciation
  • Business interest expense
  • Conversions to qualified small business stock
  • State and local tax
  • State and local tax credits and incentives
  • Sales and use tax
Planning for losses
  • NOL carryforwards (382)
  • Loss limitations on pass-through businesses – Basis, At-Risk and Passive

Debt modifications and bankruptcy

Airplanes

International
  • FDII deduction
  • GILTII high-tax exclusion and section 163(j) CFC group election
  • Foreign tax credit regime
Other relief provisions
  • Employer FICA deferral