May 2010 - The Tax Adviser

Since 2004, Sec. 199 has allowed as a deduction a percentage of qualifying production expenses, with “production” defined broadly and requiring only that it take place “in significant part” within the United States.

This article discusses the Sec. 6664 reasonable cause and good-faith defense to the Sec. 6662 penalty.

This article highlights and analyzes some recent decisions concerning the research and development (R&D) tax credit and IRS administrative practices when auditing R&D credit claims, most notably the Union Carbide decision in the Tax Court.

A taxpayer may deduct losses generated from passive activities only to the extent of the income from such activities. For this purpose, any trade or business or other income-producing activity is passive with respect to a taxpayer if the taxpayer does not materially participate in the activity.