Capital gains vs. ordinary income treatment hinges on the nature of the underlying contractual rights or obligations and the underlying property.
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TOPICS
C Corporation Income Taxation
Check-the-box effects for foreign owners
A check-the-box election may either eliminate or impose U.S. tax and compliance burdens for foreign owners.
Using a divisive D reorganization to shift ownership by creating a new S corporation
A Type D tax-deferred spinoff or split-off followed by an S election may be available if the reorganization meets the requirements of Sec. 355 and Sec. 368(a)(1)(D), including a valid corporate business purpose.
Tax Court addresses disallowance of DRD and FTC
Tax Court disallows part of a taxpayer’s Sec. 245A dividends-received deduction and holds post–Sec. 965(c) amount must be included in formula to determine Sec. 245A(d)(1) foreign tax credit disallowance.
Seventh Circuit vacates Hyatt loyalty program decision
Seventh Circuit reverses and remands Tax Court decision regarding hotel loyalty program income.
Transfer pricing treatment of acquired intangibles
After a cross-border merger or acquisition, related affiliates often integrate and use the acquired intangibles, such as new products or innovative features. To help executives manage the resulting transfer pricing risk, this article examines the treatment of acquired intangibles in post-acquisition related-party transactions.
Planning for domestication transactions
Foreign companies can realize benefits from establishing domicile in the United States if they observe structural and special rules and considerations.
Planning for new charitable contribution limits
Thresholds and ceilings for individual and corporate deductions under the law known as the One Big Beautiful Bill Act may indicate a need for donation timing and other strategies.
Determining when a debt instrument has zero basis
Taxpayers issuing related-party loans should assess the consequences if those debt instruments are determined to have a zero basis.
The new CFC tax landscape after OBBBA
H.R. 1, P.L. 119-21, known as the One Big Beautiful Bill Act, introduced significant changes to the controlled foreign corporation rules that affect U.S. taxpayers with foreign corporate interests. Two key amendments introduced under Section 70353 of the OBBBA are particularly noteworthy.
R&D credits and the computer rental rules time forgot
Although computing has transformed radically in the past 45 years, the computer rental rules of Sec. 41 and regulations continue to reflect technology as it existed 1980s.
The historic shift in transfer pricing penalty enforcement
Once rarely imposed, transfer pricing penalties are now a routine feature of IRS examinations, making the quality of transfer pricing documentation more important than ever.
The end of deferral: Calculating QOZ gain recognition on Dec. 31, 2026
A critical milestone in the qualified opportunity zone program looms, and understanding how to calculate the required deferred gain recognition is essential.
VAT challenges in AI product development
Artificial intelligence may incrementally become a product’s component until it crosses a threshold into being a digital service subject to value-added tax.
Practical Sec. 174A tax planning in the post-OBBBA landscape
Before adopting the newly reinstated expensing of research and experimental expenditures, taxpayers should first consider the strategy’s broader tax effects.
Sec. 163(j) after OBBBA: Leveraging cost-recovery accounting methods
A variety of capitalization strategies can increase deductible interest expense now that depreciation, amortization, and depletion are again added back to adjusted taxable income in calculating the Sec. 163(j) interest limitation.
Startups and the OBBBA: Rethinking C corporation vs. passthrough
With enhanced Sec. 1202 gain exclusion, permanency of Sec. 199A, and other provisions, the calculus for entity choice has shifted.
Practical considerations for NUBIL positions under Sec. 382
Proactive management of net unrealized built-in losses in ownership changes is increasingly important in today’s volatile markets.
New IRS rules for digital content and cloud transactions
Businesses that offer software, software as a service, or other digital content to customers should carefully assess the implications of recent final digital content and cloud transaction regulations and proposed cloud transaction sourcing regulations.
Using a GRAT or GRUT to shift appreciation and maintain control of the corporation
Use of a grantor retained annuity trust or grantor retained unitrust can mitigate the gift tax consequences of a gratuitous transfer of stock.
INDIVIDUALS
Current Developments in Taxation of Individuals: Part 1
This update surveys recent federal tax developments involving individuals, including court cases, rulings, and guidance issued during the six months ending October 2025.
