Consolidated Returns

Sidestepping Deferred Intercompany Gain

This item illustrates how transfers of items outside a U.S. consolidated group can trigger a deferred intercompany gain and suggests ways to avoid that result in certain situations.

Final Regs. Simplify Reduced Research Credit Election

The IRS released final regulations (T.D. 9539) that further simplify an election method by which taxpayers may use a standard rate to reduce a research credit under Sec. 41 in lieu of reducing their research expense deductions. The final regulations also clarify how members of a controlled group may make the election. The final regulations adopt with some modification proposed regulations issued in 2009 (REG-130200-08).

IRS Applies Reverse Acquisition Regulations: A Substance-over-Form Approach

Determining whether a transaction is characterized as a reverse acquisition under the consolidated return regulations can be challenging. This item focuses on tax implications of reverse acquisitions and reviews recent private letter rulings in which the IRS applied substance-over-form principles.

Deferral of Loss from Sale or Exchange Between Members

The IRS rejected a parent corporation’s argument that it was entitled to take into account a loss arising from its sale of domestic subsidiary (Sub1) stock to a foreign subsidiary (Sub2) as a result of the domestic subsidiary’s later liquidation.

Final Regs. on Consolidated Group Liquidations

Final regulations effective January 15, 2008, explain how the members of a consolidated group succeed to tax items, or “attributes,” of a subsidiary corporation when two or more members of the group own stock in the subsidiary and the subsidiary is liquidated on a tax-free basis

Professional Corporations: To Be or Not to Be a Member of a Consolidated Group

Editor: Annette B. Smith, CPA Many independent professional medical and dental practices are incorporated under state law as professional corporations (PCs). Generally, these state laws require that PCs issue shares only to individuals who are duly licensed or otherwise legally authorized to render the same type of professional services as

Taxpayer-Favorable Letter Ruling on Consolidated Worthless Stock Deduction

Editor: Mary Van Leuven, J.D., LL.M. IRS Letter Ruling 200710004 breaks new ground in determining the character of a worthless stock deduction in a consolidated group. Due to the lack of direct authorities on point and the absence of clear statutory support for the ruling’s favorable conclusions, taxpayers might consider

Newsletter Articles

50th ANNIVERSARY

50 years of The Tax Adviser

The January 2020 issue marks the 50th anniversary of The Tax Adviser, which was first published in January 1970. Over the coming year, we will be looking back at early issues of the magazine, highlighting interesting tidbits.

PRACTICE MANAGEMENT

2019 tax software survey

This annual survey shows how CPAs rate the tax preparation software they used during last tax season and how it handled the recent tax law changes.