Author: colonyfamily

Volatility spiked early last week after President Trump upended the expectation for an imminent trade agreement. After concluding that the Chinese were reneging on terms they had agreed to during earlier bargaining rounds, Trump opted to more than double tariffs on $200 billion in Chinese imports. This tariff increase to 25% from 10% took effect on Friday. The Trump  Administration also began the process of expanding tariffs to cover an additional $300 billion in imports, leaving almost no products from China entering the U.S. without incurring a tax. In retaliation, the Chinese government yesterday announced plans to impose tariffs ranging from 5% to 25% on 5,140 U.S. products worth about $60 billion. It said the tariffs will take effect on
June 1st.

Click here to read our market commentary regarding U.S. and China Trade Negotiations.

In late March, part of the U.S. Treasury yield curve “inverted” for the first time since 2007.  Specifically, the yield on the 3-month Treasury note rose above the yield on the 10-year Treasury bond. Over the last several months, there has been a lot of angst about the potential risk of an inversion and what it might signal about the health of the economy. Historically, yield curve inversions have been a fairly reliable predictor of economic slowdowns. In fact, every recession since 1957 has been preceded by an inverted curve. Yet, there have been multiple instances where the curve has inverted without a recession. We believe the current inversion will prove to be another exception to the rule.

In our view, the economy remains in decent shape and the risk of an imminent recession is still relatively low as technical factors have largely contributed to the recent inversion.  The attached Market Brief provides further insight from our Investment Team.

Final regulations governing the selection, designation and power of partnership representatives were issued on August 6, 2018. On December 21, 2018, the Treasury and the IRS issued final regulations addressing other aspects of IRS partnership audits. If your family owns a family limited partnership or other entity taxed as a partnership, such as a limited liability company (or an S corporation that has made an election to be taxed as a partnership), these rules could apply to you and may necessitate changes to existing organizational documents.

Partnerships and limited liability companies that have not yet reviewed their agreements should take steps now to comply with the new rules and regulations or risk compliance issues should they be selected for audit. Furthermore, partnerships and limited liability companies should take steps now to identify a partnership representative.

Please click here to read our helpful reminders for companies on the status of the new partnership audit rules and regulations now that 2018 has come and gone.