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Luxury Cars for Resorts Alimony LONG INSTALL TIMES HAVE YOU

While many larger resorts have generous sponsorship Working in the ski industry can be especially tough on
deals with luxury car brands (Cadillac, Volvo, etc), many relationships, particularly with working over Christmas,
ski areas aren’t as fortunate. But under the new tax law, New Years, Valentine’s Day, and weekends. Under the new PULLING YOUR HAIR OUT?
Congress is allowing all businesses a more generous write- law, alimony will no longer be deductible from the ali-
off for “luxury cars” used in business operations (which the mony payer’s taxes, and will no longer be taxable income
tax code basically calls any car). Previously, the old tax law for the recipient of alimony; however, this new provision
allowed businesses to only write off up to $15,000 for a car, will not kick in until 2019. The new alimony rules will
and then depreciate the vehicle over 19 years (even though only apply to divorces and separate agreements entered into
few own a car that long). after December 31, 2018. Ironically, given this delay until
But now, the new tax law allows for deducting upwards of 2019, the new tax legislation may actually encourage more BUILT IN
$50,000 over five years. The deductions are tied to the extent divorces in 2018, so that alimony payments can be deduct- 4 MONTHS !
that the vehicle is used with business use. Oddly, the tax code ible from federal income taxes before the new tax provi-
distinguishes between traditional cars and heavier vehicles like sions kick in beginning in 2019.
SUVs or trucks with weights of more 6,000 pounds. For an
SUV or truck used for your business, you have the flexibility HOW EMPLOYEES COULD BENEFIT
of immediately deducting 100 percent of the cost of the vehi-
cle under the new bonus depreciation rules, or under the new Employees & the New Tax Law BUILT IN
Section 179 provisions (more traditional cars, though, cannot There are a surprising number of ways the new tax bill 5 MONTHS !
take advantage of Section 179 expensing). will impact the relationship between employers and
their employees, including providing better pay and
Home Equity Loans bonuses as well as other incentives and perks that can
One of the biggest changes to tax policy is the erosion of how aid in employee recruiting and retention (see “Employee
homeowners can deduct interest related to home equity loans Compensation,” pg. 36). Certainly, while businesses are
and lines of credits. Previously, the tax code allowed home- enjoying most of the benefits of the new tax changes,
owners to borrow against their equity and use the proceeds for most ski area employees, the doubling of the stan- BUILT IN
for whatever purpose they chose, while deducting the inter- dard deductions for individual and married couples— 3 MONTHS !
est from their federal taxes. Homeowners used these home from $6,350 to $12,000 for single filers, and $12,700 to
equity loans—which typically came with very low interest $24,000 for joint filers—will be very helpful in simpli-
rates backed by the collateral of a home— fying their taxes, often eliminating the
for new cars, college tuition, vacations, or need to itemize deductions.
to pay down high-interest rate credit cards. 13% One key question about the impact of
Under the new tax bill, home equity loans Percentage of companies this tax legislation: Will businesses pass
BUILT IN
are far more restrictive. Now, you can who plan to use tax on some of their corporate and business BUILT IN
!
deduct up to $100,000 in interest on home savings for raises, bonuses tax savings to their employees, through 5 MONTHS
equity loans and lines of credit if the pur- or employee benefits bonuses, raises, or other benefits, or add-
pose of the loan is to make capital improve- (Morgan Stanley) ing more employees? After all, the new
ments on your residence. law is titled the Tax Cuts and Jobs Act.
While home equity loans are generally now only According to a survey conducted by Morgan Stanley, 13 BRANSON
deductible for improvements to the home itself, there is the percent of businesses surveyed said they planned to offer MOUNTAIN
possibility that a home equity loan interest could be deduct- raises, bonuses, or other perks to their employees. Of BUILT IN
ible if related to business expenses, if the taxpayer can utilize course, even with these steep cuts to corporate and busi- 4 MONTHS !
the interest tracing rules and obtain a business or invest- ness taxes, many businesses are taking a “wait-and-see”
ment interest deduction from their home equity loan. Check approach on how these tax changes will impact their busi-
with your CPA about how you may be able to maximize nesses. And for most ski areas, their ability to pass on
the deductibility of the interest from a home equity loan for these tax savings will be dependent on the outcome of this
purposes of using that loan for your business. Because these ski season. GET UP & RUNNING
loans are collateralized by the home itself, the rates are very But some of the tax changes highlighted below could FASTER WITH
attractive, and may provide more options for funneling low- be used by resorts to improve employee morale, recruit- ADG MOUNTAINSIDES.
cost loans to your business. ment, and retention.
FIND OUT HOW
20 | NSAA JOURNAL | SPRING 2018 ADGMOUNTAINSIDES.COM