Expenses & Deductions

Retail Advertising: IRS Affirms Potential Application of Sec. 199

Retailers may be eligible to claim a Sec. 199 deduction for advertising revenue derived from producing and distributing printed fliers in cooperation with vendors. This item reviews recent IRS guidance and considers what it might mean for taxpayers that are engaged in cooperative advertising arrangements.

Proposed Regs. Clarify Research Expenditure Eligibility Under Sec. 174

The IRS in September issued proposed regulations clarifying the application of Sec. 174 to the costs to create “pilot models” or prototypes. The proposed rules state that the reason a taxpayer creates a prototype or other product, and not its subsequent sale or use, determines whether it qualifies under Sec. 174.

Repair Regulations Are Finally Issued

The IRS issued long-awaited final and proposed regulations regarding the treatment of expenditures incurred in acquiring, producing, or improving tangible assets.

The Challenge of Contributing Off-Spec Food to Charity

Donations of “off-spec” food may not result in a charitable contribution deduction greater than the tax basis of the food inventory  because of the difficulty of determining the proper tax basis and FMV for the food.

Nonrefundable Milestone Fees Do Not Qualify as Success-Based

A business can expense 70% of “success-based fees,” meaning amounts that are contingent on the successful closing of a covered transaction. It is important to remember this safe-harbor election can apply to both sides of the transaction.

Newsletter Articles

PRACTICE MANAGEMENT

Tax software survey

Results of the annual survey are in, as more than 3,800 CPA tax preparers tell how their return preparation software worked for them during this year’s busy season.

PRACTICE MANAGEMENT

CPAs contend with tax ID theft

Tax-related identity theft fraud remains a widespread problem that is often difficult for victims and their tax preparers to correct.