Potential changes to federal taxation: What you need to know
By: Miles Welo
Sweeping changes to federal taxation: What you need to know
2018 will bring sweeping changes to the federal tax policy as the House and Senate passed a bill known as the Tax Cuts and Jobs Act.
We prepared this brief analysis of the bill to provide you with important information for your personal interests, business planning, and estate planning.
Estate tax
2017: Each individual is entitled to a lifetime exemption of $5.49 million (or nearly $11 million for married couples), which means a person can transfer up to $5.49 million dollars without being taxed, but are taxed at 40% on the amount transferred after $5.49 million.
New Law: the bill doubles the exemption levels to approximately $11.2 million for individuals and over $22 million for married couples. The bill keeps intact the tax of 40% for any transfer beyond the exemption limits.
Individual Tax Brackets
2017: There are currently seven individual tax brackets: 10%, 15%, 25%, 28%, 33%, 35%, and 39.6%.
New Law: There will remain seven individual tax brackets (with five of the brackets reduced) and they are as follows: 10%, 12%, 22%, 24% 32% 35%, and 37%.
Corporate Taxes
2017: the corporate tax rate is currently 35%.
New Law: the bill lowers the corporate tax rate from 35% to 21%.
Standard Deduction
2017: the standard deduction is currently $6,350 for individual filers, and $12,700 for married couples filing jointly.
New Law: the standard deduction has nearly doubled, as it has increased to $12,000 for individual filers, and $24,000 for married couples filing jointly.
State and Local Tax (SALT) Deductions
2017: Taxpayers who itemize their taxes can deduct state and local property, real estate, and either state and local income or sales taxes.
New Law: the new bill allows taxpayers who itemize their deductions to deduct their state individual income, sales, and property taxes up to a limit of $10,000.
President Trump plans to sign the bill before the end of 2017. Stay tuned, the sweeping changes to our Federal tax system will likely have a significant impact on your personal, business, and estate planning objectives.
Have questions about tax reform? Call our tax experts, Tom Turner, Julie (Fischer) Taft or Miles Welo, in our Estate Planning and Probate Group.
Tony Coyne will be a panel presenter at the 39th Annual Real Estate Law Institute Seminar on November 9 & 10 at the Cleveland Metropolitan Bar Association (CMBA) Conference Center in Cleveland. He will be part of a panel with Carolyn Downey from the City of Cleveland. Gillian Hall from Knez Homes will be the moderator. The seminar is titled “Not in my Backyard ≠ This Land is My Land.”
Tony is an attorney in our Real Estate and Land Use, Corporate and Business Services, and Environmental Practice Areas. To register or find out more about the seminar click here.
Mansour Gavin LPA was a sponsor of the Huntington’s Disease Society of America’s “Celebration of Hope — A Night in Venice” at Landerhaven in Mayfield Heights held on October 13, 2017. The event is an annual fundraiser to raise money and awareness about Huntington’s Disease. This goal was to raise $150,000 through attendees, sponsorships, and donations.
Data breaches. Ransomware. The “dark web.” Today’s cyberspace monsters are enough to give you nightmares during the day.
In response, Mansour Gavin hosted a seminar and panel discussion on cybersecurity on August 11 to answer questions about how best to protect yourself – and your business – from being hacked. Speakers included Ryan MacFarlane, Special Agent of the Cleveland Division of the FBI; John FitzGerald of United Agencies Insurance Group; Michael McCartney of Digits, LLC, a digital forensic services company; and Mansour Gavin attorney Ed Patton.
The group emphasized the importance of password selection, two-factor authentication, external e-mail tagging, and especially, employee awareness training – as approximately 75 percent of breaches occur because of an employee’s unintentional action. Panelists also strongly encouraged companies to develop or re-visit their cyber policies to ensure they are up-to-date, as security issues are now prevalent in every industry. As McCartney put it, “It’s no longer an ‘if’ but a ‘when.’”
For any legal questions concerning cyber policies or breach notification requirements, please contact Ed Patton at 216-523-1500. And if you were unable make this discussion, please stay tuned – an update on cybersecurity trends is one of several seminar topics planned for Mansour Gavin’s seminar series in 2018.
By: Brendon Friesen
More than a year has passed since Governor Kasich signed House Bill 523, legalizing medical marijuana (MMJ) in Ohio and making our state the 25th to adopt such a program. At the time, those interested in getting involved — as a cultivator, processor, dispensary, or physician — had little information on exactly what the program would look like from a practical and economic standpoint.
Rules and regulations are now being created by the Medical Marijuana Control Program (MMCP), part of the Ohio Department of Commerce that regulates Ohio’s MMJ program.
Over the past year, the MMCP developed rules for the program, but not without overhauling them several times – often in response to public comment and hearings held in Columbus, Ohio. Based on these rules, here are some “must knows” for anyone thinking about starting MMJ operations:
Cultivators
Cultivators grow cannabis for later production into medicine. There are two levels of cultivators: Level 1 may grow from 25,000 to 75,000 square feet of cannabis; Level 2 may grow from 3,000 to 9,000 square feet of cannabis. The MMCP received a total of 185 applications: 109 (Level 1) and 76 (Level 2). Cultivators also have the difficult task of selecting a growing space that qualifies under the rules: 1.) Cannot be closer than 500 feet to any school, public park, library, and other facilities; 2.) Has the blessing of the municipality, which is permitted to opt-out of the program.
Cultivators are the first group to receive a final set of rules and the application for submission to the MMCP. Applications were due in June, 2017. Cultivators will not know whether they are granted a license until November, 2017, and they are required to begin cultivation within nine months of obtaining a license.
Processors
Processors extract oils from the plant material that have a medicinal effect on the patient. The extracted oils — Tetrahydrocannabinol (THC) and Cannabidiol (CBD) — can be placed into a variety of consumer productions such as vape cartridges, transdermal patches, edibles, capsules, topical ointments and tinctures, which are used to treat the symptoms of many diseases and conditions.
Processors received a final set of regulations in August, which were effective September 8, 2017. Applications will be due later this fall.
Dispensaries
Unlike cultivators and processors, dispensary licenses will be divided up among the various regions created by the MMCP. For example, Cuyahoga County will have up to five dispensaries. Dispensary rules were also finalized in August and made effective September 8, 2017. Applications are due November 17, 2017.
Among other requirements, physicians must obtain a certification from the Ohio Medical Board in order to recommend (not prescribe) MMJ to patients that suffer from one or more of the 24 qualifying diseases and conditions.
Until patients can receive legal recommendations from their physicians under the Ohio program, criminal charges for possession of the drug is subject to the affirmative defense granted to patients by House Bill 523.
Looking forward
There is still a lot of work for the MMCP to meet its September 8, 2018 deadline. Cultivators have to build-out their facilities and get plants under lights and harvested. Then the processing and dispensing can begin. It is going to be tight – particularly with licenses for facilities to do the required testing of the cannabis products not coming available until July of 2018. We will continue to keep you apprised as the program develops. In the meantime, please contact me at (216) 453-5906 with questions.
Helpful links:
-Click here to read Mansour Gavin’s June 2016 Article on MMJ in Ohio, “Canna-business.”
-To be directed to the official medical marijuana website for the State of Ohio click here.
Edward Patton will present at the City of Mentor’s upcoming seminar: “How to Develop an Export Operations and Compliance Manual” on Friday, September 22, at the Holden University Center of Lakeland Community College in Kirtland. Patton’s talk titled, “Introduction to Export Controls,” is an overview on policies and procedures for developing a manual to mitigate export compliance risks. The seminar is tailored for compliance officers, business development executives, and managers and associates in sales, customer service, and shipping. Edward is a member of our Corporate and Business Services and General Civil Litigation practice groups. With extensive knowledge and experience about corporate compliance programs, Patton will share insightful, practical strategies. To Find out more about the seminar and to register click here.
Julie A. (Fischer) Taft participated in a luncheon discussion geared towards women who want to better understand the ins and outs of family estate planning. The event, “The Ws of Estate Planning: Why? What? When? . . . (and How?),” was put on by Dale Vernon at Bernstein, an investment research and management firm. The discussion focused on estate planning, including wills, trusts, and powers of attorney. Julie, an attorney in our Estate Planning and Probate, and Corporate and Business Services practice groups, was asked to participate because of her extensive experience with trusts and estates in all areas of wealth management and estate planning for high net worth individuals and their families. The event was held on September 13, 2017 at The Kirtland Country Club in Willoughby.
James A. Budzik will be a member of the speaking faculty at the National Business Institute’s Advanced Employment Law seminar on August 21 at the Hilton Garden Inn in Akron. His topics of discussion are “Conducting an Effective Internal Investigation” and “Deciphering FMLA, ADA, and Workers’ Compensation Issues.” The seminar, offering legal guidance for complying with employment laws and avoiding lawsuits, is targeted to attorneys; human resource managers; and company presidents, vice presidents, and CFOs. Jim is one of five faculty members. Please click here for more information.
Mansour Gavin is pleased to recognize Julie A. (Fischer) Taft for her recent appointments to the boards of two local organizations. Julie will serve as vice president for the Estate Planning Council of Cleveland as well as the chair of the Cleveland Metropolitan Bar Association’s Estate Planning, Probate and Trust Law Section. Julie is an attorney in the Estate Planning and Probate and Corporate and Business Services practice areas.