Business Frame Weekly – Biden and McCarthy announced a deal to increase the government's debt limit / Bitcoin climbed to the highest level in more than two weeks

The AICPA State and Local Tax Technical Resource Panel (SALT TRP) continues to see states moving ahead with adopting and implementing new passthrough entity taxes (PTETs).

Biden and McCarthy announced a deal to increase the government's debt limit, enabling the nation to avoid a debt default and economic turmoil.

Bitcoin climbed to the highest level in more than two weeks amid a boost to investor sentiment from a deal on raising the US debt limit.

In this newsletter:

• Update on states moving ahead with PTETs
• Debt Limit Deal Includes Cut in IRS Funding, Other Measures
• Bitcoin Jumps to More Than Two-Week High on Relief Over US Debt Ceiling
• Yen firms on policymaker meeting, dollar swings after debt deal
• Nvidia is not the only firm cashing in on the AI gold rush
• Billionaire investor Leon Cooperman says the US is going through a 'textbook' financial crisis and the S&P 500 won't hit a new high for a long time

March 30, 2023

Update on states moving ahead with PTETs

The AICPA State and Local Tax Technical Resource Panel (SALT TRP) continues to see states moving ahead with adopting and implementing new passthrough entity taxes (PTETs). States are enacting these laws as a workaround to the $10,000 cap on the federal deduction for state and local taxes for tax years 2018 through 2025 enacted by the law known as the Tax Cuts and Jobs Act, P.L. 115-97 (Sec. 164(b)(6)). A PTET is a state or other jurisdiction's mandatory or elective entity-level income tax on partnerships and/or S corporations. Under Notice 2020-75, the IRS stated that the payment of a PTET to domestic jurisdictions is deductible in computing the entity's nonseparately stated income or loss and is not taken into account in applying the cap to an individual partner or shareholder in the entity

Debt Limit Deal Includes Cut in IRS Funding, Other Measures

Biden and McCarthy announced a deal to increase the government's debt limit, enabling the nation to avoid a debt default and economic turmoil. Over the weekend, President Joe Biden and House Speaker Kevin McCarthy announced a deal to increase the government’s debt limit, enabling the nation to avoid a debt default and economic turmoil. Biden, McCarthy and their allies are framing the deal as victories for their respective parties. Notably, McCarthy is touting the deal in the face of Biden’s past and insistent refusal to negotiate over the debt ceiling. Speaking on Sunday from the White House, Biden said the deal averts default while protecting “our hard-earned and historic economic recovery.”

Bitcoin Jumps to More Than Two-Week High on Relief Over US Debt Ceiling

Bitcoin climbed to the highest level in more than two weeks amid a boost to investor sentiment from a deal on raising the US debt limit. The largest digital token added as much 3.2% on Monday before paring some of the advance to trade at $28,006 as of 8 a.m. in London. Smaller tokens ranging from Ether to Binance Coin posted gains but were also off intraday highs. The debt-ceiling deal between President Joe Biden and House Speaker Kevin McCarthy has helped risk appetite in global markets. But the agreement still has to clear Congress quickly to avert a US default. A recent jump in Treasury yields and bets on more US monetary tightening are other potential headwinds.

Yen firms on policymaker meeting, dollar swings after debt deal

Currency markets were choppy on Tuesday as the dollar hit a 10-week high against peers and a six-month top versus the yen before Japanese officials gave their currency a nudge, as investors kept a wary eye on global policy makers. Japan will closely watch currency market moves and respond "appropriately" as needed, the country's top currency diplomat said on Tuesday after financial authorities met in response to a weakening in the yen to its softest in six months versus the dollar.

Nvidia is not the only firm cashing in on the AI gold rush

On May 24th Nvidia, which designs the semiconductors of choice for many AI servers, beat analysts’ revenue and profit forecasts for the three months to April. It expects sales of $11bn in its current quarter, half as much again as what Wall Street was predicting. As its share price leapt by 30% the next day, the company’s market value flirted with $1trn. Nvidia’s chief executive, Jensen Huang, declared on May 29th that the world is at “the tipping point of a new computing era”.

Billionaire investor Leon Cooperman says the US is going through a 'textbook' financial crisis and the S&P 500 won't hit a new high for a long time

The US is going through a "textbook" financial crisis – and that means investors should expect sluggish returns for in the S&P 500 for a long time, according to billionaire investor Leon Cooperman. In an interview with Bloomberg on Monday, the Omega Advisors CEO pointed to recent market volatility stemming from the failure of Silicon Valley Bank, which has shaken confidence in the US banking sector. This week, First Republic Bank was downgraded for the second time by S&P Global further into junk territory, and Credit Suisse stock plummeted another 52% on Monday following the takeover by UBS announced over the weekend.

Random Ramblings

• AI means everyone can now be a programmer , Nvidia chief says.
• 529 college savings plans took a hit last year: How to protect your money with more volatility ahead.
• AICPA backs bill to make it easier to file for tax extensions
• 3 investing tips as the federal debt ceiling ‘X-date’ approaches.
• Second Chance Properties' (SGX:528) investors will be pleased with their notable 67% return over the last three years.
• Young adults are taking longer to reach ‘key life milestones’ impacting finances later, analysis shows.