What Comes Around Goes Around; Where Is The Santa Ana Empowerment Zone; Three Weeks And Counting.
1. Downtown Los Angeles, Where Art Thou?
One of the best articles on downtown Los Angeles hit the Sunday L.A. Times [now owned by the Chicago Tribune] for the Democratic Convention. The statistics are very interesting, including the fact that the largest fashion district in the United States, the largest Jewelry District in the United States, the largest Toy/ Games District in the the United States are all located downtown "...the most industrialized downtown in the Unitied States..." and all of it is within the Los Angeles Federal Empowerment Zone; it was not even mentioned.
How can they be complaining, IRC Section 179 deductions went to $40,000 per year, as of January 1, 2000, Wage Credits became available, along with Tax Exempt Facilities Bonds of $3M or less for hard assets. Better yet next month, additional tax incentives will be available, all of which was not mentioned.
We also suggest that downtown Los Angeles is not Midtown Manhattan, but it sure has a shot at being the Flatiron District, one of the hottest residential markets in the Silicon Alley Area of New York. However, if the entertainment tax advisors start to read up then downtown Los Angeles, where the motion picture industry was founded in the early 1900's, may come alive once again.
The same was true in a New York Times article "In Seattle, a Cobbler's Legacy Is Being Repaired on Seattle's Pioneer Square." As was the discussion in the same issue, "On 14th Street, Less Grit, More Glamour." Or in the September issue of Architectural Digest "Personal Offices at Home." No mention of the tax issues of these Multimillion dollar work/live facilities. We suspect the tax advisors at the major accounting firms may be more interested in the "Son of Boss" promotions, if you believe the IRS.
On the other hand, Congress is about to pass "... legislation, formally known as H.R. 4986, the FSC Repeal and Extraterritorial Income Exclusion Act of 2000, which enjoys widespread bipartisan support. The Ways and Means Committee favorably reported out the chairman's mark on July 27 by a vote of 34 to 1..." That will allow U.S. Businesses to exclude income FROM foreign customers. If you have an Internet Business and sell worldwide or, if you live in San Diego and sell into Mexico, this is a MUST Read.
2. Where is the Santa Ana Empowerment Zone?
Recently we had a discussion of tax favored areas with a major securities broker whose offices are in Irvine near Campus and VonKarman, which is near ground zero for the Irvine, Newport Beach, Tustin, and Costa Mesa area of high tech, financial institutions, legal, accounting and investment banking consultants. Did anyone know where the Santa Ana Empowerment Zone was, and did they care? We suggest that will change in a short time if H.R. 4923 "Community Renewal and New Markets Act of 2000" becomes law. Capital gains roll over begins for investments made after its passage.
3. Three weeks and counting.
Congress comes back September 5, 2000 and then the real fun begins, with a five week rush to the door. The sleeper is S. 2936, a bill by Senator Robb to provide incentives for new markets and community development, and for other purposes. We suggest that at 290 pages and with 18 Co-Sponsors the "other purposes," may be important.
The biggie is the Historic Homeownership Act which provides 20% tax credits [not subject to the passive loss rules] for rehabing historic personal housing, not to exceed $200,000 of rehab. The older neighborhoods may never be the same after this passes. [This bill has strong bipartisan support with over 40 senators and 220 house members as co-sponsors].
We also suggest that Social Security Tax Relief, and Pension Reform will make it, but where are the Small Business Tax Cuts? It appears that President Bill Clinton and Vice President Al Gore know more about high tech than home-based businesses, and as such have missed the fact that 27M potential voters are interested in 100% health care deductions for SOHO businesses.
Jim Schneider, LL.M.
The Taxman86 Speaks... is copyright 1998-2010 by James E. Schneider, LL.M. Inc.