The New York State Society of CPAs

The Inflation Reduction Act, enacted in 2022, provides a groundbreaking framework for advancing clean energy initiatives across the United States. This legislation’s primary focus is to incentivize energy-efficient investments through tax credits, including provisions that allow local governmental agencies and other tax-exempt entities to benefit from these incentives via elective pay, also referred to as direct pay. By tapping into these opportunities, local governments can significantly reduce costs while advancing sustainability goals, modernizing infrastructure, and stimulating local economies.

Many Americans faced overreaching tax changes with the Tax Cuts and Jobs Act of 2017. Taxpayers’ attention went to items like the Qualified Business Income Deduction, Net Operating Losses, and sweeping tax rate changes across the board. However, an often overlooked change was a revision to Section 174 and the introduction of a new definition for specified research or experimental (SRE) expenditures. This change was not slated to go into effect until the 2022 tax year, and once it arrived, it came with endless taxpayer questions and a lack of federal guidance on implementation.

One of the most common concerns clients have about transferring a home that is subject to a mortgage to an inter vivos trust (a trust created during one’s lifetime) is whether doing so will trigger the due-on-sale (DOS) clause of the mortgage. Most mortgage agreements contain a provision stating that upon the conveyance of property subject to the mortgage, the entire outstanding amount of the mortgage is immediately due and payable to the lender.