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Federal Open Market Committee Update

The Federal Open Market Committee left its targeted Federal Funds rate unchanged, and the stance of monetary policy remained accommodative. While acknowledging that the case for an increase has strengthened, citing the solid labor market and improving pace of economic activity, the committee nonetheless decided to wait for further evidence of continued economic expansion. The statement also noted that business investment remains soft and inflation is still below target. However, 3 members did vote for a rate increase, the largest number since the initial tightening last year. The language is being viewed as a signal that a rate hike in 2016 is still very much on the table.

Rates and Market:

Federal Funds Target: ¼ to ½ percent
Policy Bias: Remains accommodative
Market Reaction: Bond yields initially jumped slightly only to retrace 1-2bp below pre-announcement levels.

The FOMC announced the following actions and analysis:

7 to 3 vote
Economic activity accelerating from sluggish pace earlier in the year
Labor and consumer spending is strong, business investment is still weak
Inflation is soft and expected to remain so
The case for tightening has strengthened, but more evidence is required

The Statement:

Information received since the Federal Open Market Committee met in July indicates that the labor market has […]

By Linkenheimer LLP|2020-09-03T20:05:08+00:00September 27th, 2016|Uncategorized|0 Comments

Update Regarding the Tangible Property Regulations

Update: The IRS issued Revenue Procedure 2015-20 0n Friday, February 13, effective for tax years beginning on or after January 1, 2014, that provide a “small business exception” for taxpayers to adopt the tangible property regulations without the filing of Form 3115, (Application for Change in Accounting Method), if a set of conditions are met.

Each separate and distinct trade or business (the most important requirement is that the activity maintains a complete and separable set of books and records, meaning the activity qualifies for its own methods of accounting on their own), qualifies for the small business exception if at least one of the following conditions is met:

The activity has total assets of less than $10 million as of, or after January 1, 2014.
Average annual gross receipts of $10 million or less for the prior three taxable years.

Taxpayers who use the small business exception will forfeit certain benefits that are only available to those who file Form 3115 for their first tax year beginning on or after January 1, 2014. Before your 2014 income tax return is filed, you must decide whether to apply the small business exception or file Form 3115 . […]

By Linkenheimer LLP|2020-09-03T20:05:31+00:00February 24th, 2015|Tangible Property Regulations|0 Comments