IRS Issues Guidance Related to Determining Built-in Gain or Loss under Section 382
Posted on May 9, 2018 in News, Tax Accounting
Recently released Notice 2018-30 provides that the two safe harbor approaches in Notice 2003-65–related to recognizing built-in gain or loss–will be determined without regard to the bonus depreciation rule under section 168(k). Section 382 imposes limits of the amount of built-in losses that can offset future taxable income following ownership change. The notice states that...
IRS Considering the Definition of a “Trade or Business” under Section 163(j)
Posted on May 4, 2018 in News, Tax Accounting
The IRS is in the process of defining a “trade or business” for purpose of determining what counts as business interest for the purposes of section 163(j). The text of the statute and Notice 2018-28 indicate that all income earned by a corporation is business interest, but questions still remain on whether a corporation that receives only passive dividend income is a business and...
New Notice Requests Recommendations for the IRS and Treasury 2018-2019 Priority Guidance
Posted on Apr 30, 2018 in News
Notice 2018-43 was released by the IRS, asking taxpayers for recommendations on the 2018-2019 Priority Guidance Plan. The Priority Guidance Plan is used each year by the Treasury and IRS to identify and prioritize what tax issues to prioritize and address through guidance such as regulations, rulings, procedures and notices. According to the Notice, there has been focus on the...
IRS Releases Fact Sheet on Depreciation
Posted on Apr 24, 2018 in News
The IRS recently released a factsheet that provides an overview of the changes to depreciation and expensing under the new tax law. The fact sheet addresses immediate expensing for section 179 property, first year bonus depreciation, limitations on luxury automobiles and personal use property, treatment of certain farm property, the applicable recovery period for real property, and the...
Fiscal Year Taxpayers Reminded about Blended Corporate Tax Rate
Posted on Apr 18, 2018 in News, Tax Accounting
Notice 2018-38, released April 16, reminds fiscal year taxpayers about the requirement to apply a blended tax rate under Section 15 of the Code to their taxable year that includes January 1, 2018. The Tax Cuts & Jobs Act (the “TCJA”) changed the corporate tax rate, effective for taxable years beginning after December 31, 2017, in the middle of fiscal year taxpayers’ tax year....
IRS Updates Q&As about Section 965 Reporting
Posted on Apr 16, 2018 in Individual Taxation, News
On April 13, the IRS updated its Questions and Answers page to include additional discussion on reporting amounts owed under section 965—the so-called “transition tax”—on a taxpayer’s 2017 tax return. The Q&As provide answers to questions on reporting requirements, such as how section 965 amounts are reported or steps that a taxpayer should take if the taxpayer had previously filed...
The OMB and Treasury Release Memo on OMB’s Oversight of Tax Regulations
Posted on Apr 12, 2018 in News, Tax Accounting
The Office of Management of Budget (OMB) and the Department of Treasury recently issued a memo describing the framework for the OMB’s review of tax regulations. The memo provides that regulations will be subject to review if they 1) create a serious inconsistency or interfere with an action of another agency, 2) raise novel legal or policy issues, or 3) have an annual non-revenue...
IRS Releases Notice on the Withholding Obligations of Non-publicly Traded Partnerships
Posted on Apr 4, 2018 in News, Pass-through Taxation
On April 2, 2018, the IRS issued Notice 2018-29, which provides guidance related to withholding under Section 1446(f) with respect to the disposition of a partnership interest in a partnership that is not publicly traded. Read more here: Notice 2018-29
IRS Releases Guidance on Section 163(j)
Posted on Apr 4, 2018 in Individual Taxation, News
On April 2, 2018, the IRS issued Notice 2018-28, which provides guidance related to the interest deductibility limitation in Section 163(j). The Notice clarifies that Section 163(j) will treat taxpayers who file a consolidated return as a single taxpayer and that interest disallowed under the prior version of Section 163(j) may be carried forward and treated as business interest in...
Transitional Guidance on Fines and Penalties Issued by IRS
Posted on Apr 3, 2018 in News, Tax Accounting
Last week, the IRS issued Notice 2018-23 to assist government officials and taxpayers with complying with Sections 162(f) and 6050X of the Internal Revenue Code. The Tax Cuts and Jobs Act revised Section 162(f), which disallows deductions for fines and penalties, defined to exclude amounts paid as restitution or as reimbursement for investigations, or paid in suits where there is no...
Videocast: Implications of tax reform on income recognition
Posted on Apr 2, 2018 in Tax Accounting
The changes made to the Internal Revenue Code by the Tax Cuts and Jobs Act (TCJA) included a number of modifications to the rules associated with income recognition. Although the TCJA codified certain taxpayer-favorable methods (i.e., the Deferral Method under Rev. Proc. 2004-34), the revised Section 451(b) likely will result in an acceleration of taxpayers’ historic recognition of...
President Trump Considers Subjecting the Treasury to OMB Oversight
Posted on Mar 28, 2018 in Individual Taxation, News
President Trump is considering whether to grant the Office of Management and Budget (“OMB”) oversight over regulations issued by the Treasury Department. While the Treasury Department has been exempt from OMB review since the 1980s with respect to tax regulations, President Trump’s move would end that autonomy and add an additional layer of review to forthcoming Treasury regulations....
Resignation of Treasury Official Expected to Result in Guidance Delays
Treasury Deputy Assistant Secretary of Tax Policy Dana Trier stepped down from his position on February 23. Trier’s role focused on developing guidance on various aspects of the new tax reform law, including the partnership and international tax provisions. Practitioners have expressed concern that his departure will result in delays in issuing regulations, which could result in...Treasury Considering Treatment of Foreign Taxes Under Transition Tax
Under the new Tax Act, U.S. shareholders are charged a one-time tax on deferred foreign earnings of their foreign subsidiaries; these earnings and profits are measured as of November 2 if the amount is greater than on December 31. Taxpayers have brought to Treasury’s attention that the use of the November 2 date can result in an overstatement of earnings because foreign taxes...Treasury to Issue Regulations Limiting Exclusion to the New Carried Interest Holding Period to C Corporations
Posted on Mar 2, 2018 in News
The legislation formerly known as the Tax Cuts and Jobs Act extended the section 1061 carried interest holding period from one year to three years. However, section 1061(c)(4) provided an exception for “any interest in a partnership directly or indirectly held by a corporation.” The reference to a corporation arguably applies to both S corporations and C corporations, which provides...