Stock redemption: Capital gain or ordinary income?
Sec. 302 affords a shareholder the advantage of sale or exchange (capital gain transaction) treatment on redeemed stock but only if the redemption meets one of several tests.
Corporations
New IRS compliance campaigns
LB&I recently announced it was adding six new compliance campaigns to its list of areas on which to focus its examinations.
Traversing Sec. 163(j) aggregation for affiliated service groups
This discussion provides a high-level overview of the affiliated service group rules.
IRS releases guidance on treatment of transaction costs
The IRS’s Large Business and International Division released “Examining a Transaction Costs Issue” regarding the treatment of transaction costs incurred in certain business transactions.
Demystifying the new international E&P rules
This discussion provides a summary of some of the basic previously taxed earnings and profits ordering rules likely to apply to distributions made by controlled foreign corporations .
US MNCs facing implications of economic (vs. physical) nexus
This item summarizes the complexities of a digitalized economy for MNCs and considers the multifaceted implications to U.S. MNCs with respect to financial statements and tax reporting.
Corporations have short period to apply for IRS CAP program
The IRS announced that it is opening its Compliance Assurance Process (CAP) program to new applicants for the first time in years, but applications must be made between Sept. 16 and Oct. 31.
Built-in gains and losses subject of new proposed regs.
The IRS issued proposed regulations that provide a safe harbor for corporations to calculate built-in gains and losses after an ownership change.
Application of new life insurance reportable policy sale rules to M&A transactions
Recently issued proposed regulations on the transfer of life insurance contracts create significant uncertainty regarding their application to tax-free asset acquisitions.
Rethinking NOL waivers by a consolidated group
Now that NOL carryforwards are unlimited for tax years beginning after Dec. 31, 2017, practitioners should be rethinking the use of the waiver of NOL carryforwards under Regs. Sec. 1.1502-32(b)(4) in acquisitions of a company with NOLs by a member of a consolidated group.
Limiting business interest expense
Under new Sec. 163(j), business interest expense deductions are limited, and a business interest expense that is disallowed in the current year is carried forward to the succeeding tax year.
Worldwide combined reporting: An underutilized opportunity
This discussion focuses on how state worldwide reporting works and what taxpayers should consider in determining whether to elect it or avoid it.
Certified professional employer organization rules finalized
Certified professional employer organizations enter into contracts with employers to be treated as the employer for employment tax purposes and are subject to IRS rules in order to qualify as CPEOs and maintain that status.
IRS provides clarity in second round of opportunity zone regulations
Several tax benefits can accrue to taxpayers that make investments in certain low-income communities through qualified opportunity funds. A second round of proposed regulations addresses many outstanding questions about this new vehicle for taxpayer-friendly investing in distressed communities.
IRS issues second set of proposed regulations on opportunity zones
This item discusses the clarifications and questions that were answered with the issuance of a second set of proposed regulations on May 1, 2019.
Impact of S corp. shareholder agreements in M&A transactions
Shareholders and their advisers should be prepared to verify the validity of the S election when the decision is made to begin marketing the company for sale.
Foreign-derived intangible income guidance addresses many open questions
Sec. 250 allows domestic corporations a deduction for their “foreign-derived intangible income.” Proposed regulations that were issued earlier this year answer many outstanding questions regarding the calculation of this new deduction but also include documentation requirements that may prove onerous for some taxpayers.
Allocating previously taxed income in a Sec. 355 tax-free distribution
This discussion explores the allocation of E&P in a distribution to which Sec. 355 applies.
Consolidated return regs. provide special return due-date rules for short tax years
This item discusses special return due-date rules for a target corporation’s short tax year when it joins a consolidated group.
IRS issues more proposed regs. on qualified opportunity funds
The regulations define the term “substantially all,” the definition of which was reserved in the earlier proposed regulations issued in October 2018.
