Urgent Tax Updates: FinCEN BOI Filing, Real Estate Losses, and More—What You Need to Know Now! 

Court Battles Rage: File Your FinCEN BOI Report Now or Wait?

Recent legal challenges have created uncertainty surrounding the Corporate Transparency Act (CTA) and its beneficial ownership information (BOI) reporting requirements. If you own a small corporation or LLC, understanding your filing obligations is crucial.

Background on the CTA

The CTA requires businesses to file a BOI report with FinCEN, listing individuals who own or control the entity. These reports are used strictly for law enforcement and are not publicly available. Originally, businesses formed before 2024 were required to file by January 1, 2025, while new entities in 2024 had a 90-day deadline.

Current Legal Status

As of January 1, 2025, a nationwide injunction has paused all BOI filing requirements, meaning:

• No current obligation to file

• No penalties for non-filing

• Applies to both pre-2024 businesses and new businesses formed in 2024

Should You File Voluntarily?

While filing is not required at the moment, voluntary filing can help businesses avoid last-minute rushes if the injunction is lifted unexpectedly. Staying prepared with required information is advised.

Can Real Estate Professional Status Free Up Old Passive Losses?

Many real estate investors seek professional status to unlock tax benefits. But can this status allow immediate use of prior suspended passive losses? Unfortunately, no.

Understanding Passive Loss Rules

The tax code limits passive loss deductions to passive income. Suspended losses carry forward and can be used only when:

1. You generate passive income from the same or other passive activities.

2. You completely dispose of the activity generating the losses.

Real Estate Professional Requirements

To qualify, you must:

• Spend more than 50% of your work time in real property trades.

• Work at least 750 hours per year in real estate activities.

Additionally, you must materially participate in rental activities to deduct losses against non-passive income.

Takeaway

While real estate professional status helps with current-year losses, it does not automatically release prior-year suspended losses.

Missed an Estimated Tax Payment—Now What?

Missing an estimated tax payment can lead to IRS penalties. Here’s what you need to know:

Key Deadlines

For tax year 2024:

• April 15, June 17, September 16, 2024, and January 15, 2025 For tax year 2025:

• April 15, June 16, September 15, 2025, and January 15, 2026

Avoiding Penalties

• Pay 90% of this year’s tax or 100% of last year’s tax (110% if AGI exceeds $150,000).

• Uneven income earners can use the annualized income method to align payments with earnings.

• Catch-up payments reduce further penalties but don’t erase past ones.

Tax-Free Home Sale: When and Why You Need to Report to the IRS

Selling your home? You can exclude up to $250,000 ($500,000 if married filing jointly) of gain from taxes, provided you owned and lived in the home for two out of the last five years.

Do You Need to Report the Sale?

• If you receive Form 1099-S, you must report the sale on your tax return—even if the entire gain is tax-free.

• If no 1099-S was issued and your gain is under the exclusion amount, reporting is optional but recommended to prevent IRS audit concerns.

How to Report

Use Form 8949 and enter your gain (or zero gain) on Schedule D.

These tax updates could impact your financial decisions. Stay informed and take action to maximize your benefits!