- quote -

If she wants to be so employed.

--
Thomas E Healy, CPA, PC
1650 38th St., Ste 202W
Boulder, CO 80301
Please send email to: tom[at]tomhealycpa.com, since I block all email at my
newsgroup address.
phone (303) 443-1804
fax (720) 489-3772

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- quote -

Or why not remain a SP and just hire your spouse.

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- quote -

Just came back from Don Farmer's wonderful tax seminar.
While this dealt with individual tax, not business tax, he
did discuss it briefly. It appears that the production
deduction is the "simplified" way to give US producers a 1
(next year) to 3 (at full implementation) percentage rate
reduction on their income tax, which was one of the promises
made by the administration.

I think the general contractor would be eligible for the
credit. The people who can't get the credit are sole
proprietors without employees, since the credit is limited
to 50% of W-2 wages paid. One more thing to put into the mix
of whether deciding to convert a SP to an S corporation.

--
Thomas E Healy, CPA, PC
1650 38th St., Ste 202W
Boulder, CO 80301
Please send email to: tom[at]tomhealycpa.com, since I block all email at my
newsgroup address.
phone (303) 443-1804
fax (720) 489-3772

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JMc wrote:

- quote -

My guess it that it will be quite some time before we know
how these provisions are supposed to work. If I were a
gambler, I'd bet that Congress will repeal (or very
substantially overhaul) this before it takes effect.

MTW

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I was taking a look at the domestic production deduction as
it relates to construction.

The committe defines construction activities as it applies
to the domestic production deduction as activities that are
directly related to the erection or substantial renovation
of residential and commercial buildings and infrastructure.
Substantial renovation would include structural
improvements, but not mere cosmetic changes, such as
painting.

However, there is no instruction as to who can claim the
deduction with regards to a subcontractor doing work for a
contractor (e.g. someone only is involved on one part of the
construction, such as the drywall contractor).

It seems as though the subcontractor can claim the deduction
because they are involved in an activity that is directly
related to the erection or substantial renovation of
residential and commercial buildings.

Also, it seems as though the person who hired the
subcontractor would not be able to claim the deduction for
the particular activity because they were not involved in
that particular activity, they just paid for their services.

I guess it gets even more complicated with regards to who
buys the supplies that are used in the construction.

Any thoughts?

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