WHY IT’S GOOD TO BE GRATEFUL
On February 23, 2018, The Wall Street Journal published an article, “How to Raise More Grateful Children.” The subtitle for the article stated: “A sense of entitlement is a big problem among young people today, but it’s possible to teach gratitude.” This last idea is what I hope to do with my clients.
WHY IT’S GOOD TO BE GRATEFUL
On February 23, 2018, The Wall Street Journal published an article, “How to Raise More Grateful Children.” The subtitle for the article stated: “A sense of entitlement is a big problem among young people today, but it’s possible to teach gratitude.” This last idea is what I hope to do with my clients.
Much of what I’ve learned about Gratitude has come from personal experience. When I look back, every personal crisis I’ve had has ultimately led me to Gratitude. Whether it’s a serious, life threatening illness for me, my wife, or loved ones; a major setback in business; or a natural disaster like Hurricane Sandy, I now see the positives in those events and feel more grateful for what I‘ve learned from them. I’ve learned that adversity can be a great teacher, if you pay attention to the lessons, but, it wasn’t always that way.
Like most people, I grew up complaining about the way things were and resenting those who I viewed as “lucky” because they were born into families with monetary wealth. Now, I view it as a blessing that I had to work hard for everything I now have. I’ve learned to be grateful that I chose the career that I have and that I can help so many people with the knowledge and experience I’ve gained. I’ve learned to appreciate the material wealth that I have, modest as it is, and to be content making an honest living and serving others.
I’ve also learned a lot about Gratitude from my coach, Lee Brower, at Strategic Coach. Like myself, he and members of his family have had health issues, but we have all learned to appreciate and not take good health for granted. Through Lee’s teachings on Gratitude, I have learned the value of having family members who get along and care about each other; as well as, the value of friendship and being part of a community where I feel like I belong. Most of all, Lee and members of his firm, Empowered Wealth, have emphasized that Gratitude is a lifestyle. A practice that starts with self-respect and respect for others, grows into appreciation for the many blessings we all have, and inspires the spirit of generosity that gives fulfillment and meaning to the way we live our lives.
Charles Sarowitz, CPA/PFS
Acknowledging the good that you already have in your life is the foundation for all abundance.
Eckhart Tolle
TAXES AND GRATITUDE?
You probably never thought you would see these two words paired together. Let me share my perspective on how this unique combination arises.
TAXES AND GRATITUDE?
You probably never thought you would see these two words paired together. Let me share my perspective on how this unique combination arises.
During this time of year, many clients come into my office upset about taxes and expressing concerns about how the upcoming changes in the tax code will impact them, their interests, their finances, and their legacies. Many people are willing to go to extraordinary lengths to avoid taxes and let their fear of the unchartered waters of the new tax polices keep them from leaving port. And while my professional career largely incorporates minimizing the amount of taxes my clients owe, in an effort to maximize the amount of money they can have, now and in the future, I have learned to recognize that there are more important things to focus on than simply tax minimization.
I advise them to consider “What's more important to you than money?” I wonder, would they:
- Sacrifice their health for more money? Health is vital to one’s happiness and well-being, yet too many of us are allowing stress and overworking to ruin our health.
- Compromise their closest relationships for more money? Too many people put their quest for more money above their connection to their family and friends.
- In order of importance, value having money higher than their moral, ethical, or spiritual beliefs? I've seen people of great wealth live empty lives and suffer at the end of life.
Wouldn't you rather have the satisfaction of living a good, honest life – a life of simple joys and pleasures, a life of health and well-being, a life of close relationships – than only having more money?
In the course of my career, I have come to realize and believe that there is much more to “true wealth” than just accumulating money and minimizing taxes. In my experience, the key to “true wealth” is the practice of gratitude. Gratitude leads us all to a happier, fulfilled, and more meaningful life.
Charles Sarowitz, CPA/PFS
Gratitude is a currency that we can mint for ourselves, and spend without fear of bankruptcy.
Fred De Witt Van Amb
THE STORY OF THE GRATITUDE ROCK
How I started practicing Gratitude
My coach and mentor, Lee Brower, is well-known as a thought leader on Gratitude. He’s been featured on television, in articles, and in the movie, “The Secret,” on the topic of Gratitude. But Lee, by his own admission, wasn’t always a grateful person. In fact, one of the defining moments of his life started out as one of his most ungrateful moments.
THE STORY OF THE GRATITUDE ROCK
How I started practicing Gratitude
My coach and mentor, Lee Brower, is well-known as a thought leader on Gratitude. He’s been featured on television, in articles, and in the movie, “The Secret,” on the topic of Gratitude. But Lee, by his own admission, wasn’t always a grateful person. In fact, one of the defining moments of his life started out as one of his most ungrateful moments.
It happened more than two decades ago. Lee was at the apex of his rise as a successful estate planner in Salt Lake City, Utah. He was both a leader in his church and a respected member of his local business community. Yet, he had a personal challenge within his family: His teenage daughter developed a substance abuse problem. Lee initially saw her problem as a personal and family embarrassment. He wondered how something like this could happen to him and thought that other people must be judging him negatively.
But one day, while walking on the beach, he picked up a rock that, to his eye, had the image of a butterfly embedded in it. Suddenly he felt differently because, coincidentally, his daughter’s nickname was “Mariposa,” meaning “butterfly” in Spanish. He saw it as the hand of God speaking to him, reminding him of how precious his daughter is to him. Ever since then, he carries that rock in his pocket as a daily reminder that he should be grateful for the blessings in his life.
Inspired by Lee’s story, I’ve done my best to do the same, to be grateful for the good fortune I have and to help others realize that we’re all so much better off than we perceive from moment to moment. My wish for you is that it doesn’t take a personal crisis for you to experience the difference that Gratitude can make in your life.
ABOUT THIS LETTER
This is no ordinary letter to clients or newsletter briefing. When I had a recent health scare, it was Gratitude for the many blessings in my life (and, really, all of our lives) that got me through the tough time I went through. Now, I want to help you, and all of our clients, to live happier, more-fulfilled, and more meaningful lives. To me, there’s no better way to start than through practicing and living Gratitude daily. Please enjoy and share this message if it inspires you as well.
Charles Sarowitz, CPA/PFS
The Treasury Department and IRS have finalized regulations regarding the deduction of up to $10,000 in personal car loan interest by individuals for tax years 2025 through 2028. This includes regulations on information returns required to be filed by a lender or other person engage in a trade or business who receives $600 or more of qualified interest during the calendar year. The final regulations adopt the proposed regulations published in January 2026 (NPRM REG-113515-25) with some changes in response to public comments.
The Treasury Department and IRS have finalized regulations regarding the deduction of up to $10,000 in personal car loan interest by individuals for tax years 2025 through 2028. This includes regulations on information returns required to be filed by a lender or other person engage in a trade or business who receives $600 or more of qualified interest during the calendar year. The final regulations adopt the proposed regulations published in January 2026 (NPRM REG-113515-25) with some changes in response to public comments.
Qualified Personal Vehicle Loan Interest
For tax years beginning in 2025 through 2028, a noncorporate taxpayer may claim a deduction of up to $10,000 for qualified personal vehicle loan interest (QPVLI) paid or accrued during the tax year on a specified passenger vehicle loan (SPVL) incurred by the taxpayer for the purchase of an applicable personal vehicle (APV) for personal use. Generally, interest includes an amount paid, received, or accrued as compensation for the use or forbearance of money under the debt instrument.
The final regulations clarify that QPVLI also includes prepaid interest in the form of points and deferred or capitalized interest. In addition, it may include origination-related or financing-related charges, prepayment penalties, late-payment charges, default-related charges, and similar fees, if characterized as an interest expense for federal income tax purposes.
Secured by First Lien
Interest is QPVLI only if it is paid or accrued on debt for the purchase of an APV for personal use that is secured by a first lien. The final regulations clarify that an SPVL is secured by a first lien with the first voluntary security interest recorded against the vehicle. Any involuntary liens are disregarded even if given temporary higher priority at a later date.
A vehicle also may be considered secured by a first lien even if the lien has not yet been perfected or recorded due to short-term delays arising under State or local law. It may also be considered secured by a first lien where the lien is removed in connection with the taxpayer no longer owning the vehicle, but the taxpayer continues to be liable for the loan (repossession or insurance payout).
Purchase of Applicable Passenger Vehicle
An SPVL is qualified only to the extent the debt is incurred for the purchase of a new vehicle and any other items or amounts customarily financed in the same purchase transaction (for example, vehicle service plans, extended warranties, sales taxes, and vehicle-related fees). Any portion of a loan for items or amounts not customarily financed in the purchase are not qualified.
The taxpayer must allocate the debt on a pro rata basis. Whether items are customarily financed and directly related to the purchase of the vehicle is determined on an industry-wide basis and not on the particular financing terms. The final rules, however, expand the list of examples of items customarily financed in an APV purchase. The final regulations also maintain that debt incurred for negative equity in a prior purchased vehicle is not incurred for the purchase of an APV.
The requirement that an APV must be a new vehicle under the loan documentation refers to the lender’s classification of the vehicle for purposes of its financing programs. The original use of the vehicle must commence with the taxpayer. However, original use does not commence with a dealer if the vehicle is held primarily for sale to customers in the ordinary course of its trade or business. Original does not commence with a lessee if the lessee purchases the vehicle during or at the end of the lease term.
Information Reporting
Any lender or other person who, in the course of that trade or business, receives from any individual interest aggregating $600 or more for any calendar year on an SPVL, must report the receipt of interest on Form 1098-VLI to the IRS and the payee. The final regulations affirm that lenders are required to include only interest received on an SPVL for the purchase of an APV, the first use of which begins with the payee. This is required by statute and may require the lender to collect information it currently does not collect. The lender must file Form 1098-VLI for each SPVL.
T.D. 10054
The Treasury Department and IRS have issued proposed regulations providing that a private school is not eligible for Federal income tax exemption under section 501(c)(3) if it considers race, color, or national or ethnic origin in any of its educational, admissions, scholarship, athletic, or other school-administered policies. Any such consideration, under the proposed regulation subsection, would be considered de facto racial discrimination. The proposed rules would apply to taxable years beginning after May 31, 2027.
The Treasury Department and IRS have issued proposed regulations providing that a private school is not eligible for Federal income tax exemption under section 501(c)(3) if it considers race, color, or national or ethnic origin in any of its educational, admissions, scholarship, athletic, or other school-administered policies. Any such consideration, under the proposed regulation subsection, would be considered de facto racial discrimination. The proposed rules would apply to taxable years beginning after May 31, 2027.
Racial Nondiscrimination
The proposed regulations would treat all race-based consideration in private education as contrary to a fundamental public policy, regardless of its purpose, including remedial or diversity-related objectives. This restriction does not inclulde policies or actions designed to eliminate prejudice or other forms of discrimination. The rules would cover private primary and secondary schools, colleges, professional or trade schools, and universities. The rules specifically do not include governmental units, any agency or instrumentality of a governmental unit, or any organization owned or operated by such an agency or instrumentality.
Application to Private Schools
To qualify for tax exemption, a private school could not consider race, color, or national or ethnic origin in:
- (1) Educational or admissions policies
- (2) Scholarship or loan programs
- (3) Athletic or other school-supported programs
The proposal would not prevent religious schools from maintaining religious missions or selecting students based solely on religious affiliation. If finalized, Rev. Proc. 75-50 would also be modified to remove provisions permitting certain race-based preferences for minority groups.
The proposed regulations would add §1.501(c)(3)-2 and apply to taxable years beginning after May 31, 2027.
Proposed Regulations, NPRM REG-119986-25
IR 2026-103
A Notice of Final Partnership Adjustment (FPA) issued by the IRS to a partnership was timely under Code Sec. 6235 because the partnership and IRS had agreed to extend the limitations period for making partnership adjustments. It was determined that the extended period under Code Sec. 6235(a)(1) controlled because the statute permits adjustments until the latest of the periods specified in Code Sec. 6235(a). Accordingly, the partnership’s motion for summary judgment was denied.
A Notice of Final Partnership Adjustment (FPA) issued by the IRS to a partnership was timely under Code Sec. 6235 because the partnership and IRS had agreed to extend the limitations period for making partnership adjustments. It was determined that the extended period under Code Sec. 6235(a)(1) controlled because the statute permits adjustments until the latest of the periods specified in Code Sec. 6235(a). Accordingly, the partnership’s motion for summary judgment was denied.
The partnership, which was subject to the centralized partnership audit (CPA) regime, challenged an FPA disallowing a charitable contribution deduction. The partnership argued that the FPA was issued outside the applicable limitations period because the 330-day period following the notice of proposed partnership adjustment had expired. However, the parties had previously executed an agreement extending the limitations period for partnership adjustments under Code Sec. 6235(b).
Further, it was concluded that the periods specified in Code Sec. 6235(a) were not sequential deadlines. The statutory phrase “later of” required use of the latest applicable period, and an agreed extension under Code Sec. 6235(b) extended the limitations period for making adjustments, including issuance of the FPA. Because the FPA was mailed before expiration of the agreed extended period, the FPA was timely.
Katanga Properties, LLC, 167 TC No. 10, Dec. 62,899
The Doug LaMalfa Federal Disaster Tax Relief Certainty Act has been signed into law by President Trump.
The Doug LaMalfa Federal Disaster Tax Relief Certainty Act has been signed into law by President Trump.
The law (H.R. 5366) allows victims of federally declared disasters to deduct qualified losses above $500 per disaster without itemizing and removes the 10 percent adjusted gross income threshold for those losses. A fact sheet on the bill can be found here.
Under the law, this treatment of personal casualty loss is available until Jan. 1, 2027.
It also excludes wildfire relief payments from taxable income regardless of when they are received, so long as the wildfire disaster declaration occurs after Dec. 31, 2014, and before Jan. 1, 2027.
President Trump signed the bill into law on Sept. 11, 2026.
The IRS has modified automatic accounting method change procedures for research or experimental expenditures and certain residential construction contracts. Rev. Proc. 2026-32 modifies sections 7 and 19 of Rev. Proc. 2025-23 to reflect changes made by the One, Big, Beautiful Bill Act (OBBBA).
The IRS has modified automatic accounting method change procedures for research or experimental expenditures and certain residential construction contracts. Rev. Proc. 2026-32 modifies sections 7 and 19 of Rev. Proc. 2025-23 to reflect changes made by the One, Big, Beautiful Bill Act (OBBBA).
For research expenditures, the procedure modifies accounting method changes under Code Secs. 174 and 174A. Code Sec. 174 continues to require capitalization and 15-year amortization for foreign research expenditures. Code Sec. 174A generally allows a current deduction for domestic research expenditures paid or incurred in tax years beginning after December 31, 2024.
The procedure also revises rules governing adjustments associated with accounting method changes. It coordinates certain Code Sec. 481 adjustments with the OBBBA transition method for recovering unamortized domestic research expenditures. It also extends through tax years beginning before 2028 waivers of certain eligibility restrictions for specified automatic changes.
Further, the IRS provides automatic accounting method changes for residential construction contracts affected by the OBBBA amendments to Code Sec. 460. Taxpayers may change from the percentage-of-completion method to an exempt contract method for qualifying contracts entered into in tax years beginning after July 4, 2025. Certain taxpayers may also change their treatment of costs under Code Sec. 263A.
The modified procedures generally apply to Form 3115, Application for Change in Accounting Method, filed after September 4, 2026. Special transition rules apply to certain previously filed Forms 3115.
Rev. Proc. 2026-32
