Under the consolidated return rules, special considerations apply when a subsidiary member (Sub) joins or leaves a consolidated group during the tax year.
The tax treatment of an insolvent debtor realizing discharge of indebtedness income under the U.S. consolidated income tax return rules can vary considerably depending on the particular circumstances.
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.
In some circumstances, C corporations can be surprised that the IRS denies their application for automatic extension of time to file when a consolidated return group parent company has acquired another consolidated return group.
Letter Ruling 201127004 reinforces the flexibility granted to taxpayers wishing to move assets around a qualified group without triggering gains or meeting the stringent qualifications of Sec. 355.
The IRS recently proposed revisions to the consolidated return regulations on the application of Sec. 382 and calculation of net unrealized built-in gains and losses.
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).
The IRS issued proposed regulations on the time for taking into account deferred losses on the sale or exchange of property between members of a controlled group (REG-118761-09).
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.
The IRS issued proposed regulations on the time for taking into account deferred losses on the sale or exchange of property between members of a controlled group.
This item examines how to compute the research credit for consolidated groups. The credit is determined by a calculation that is dependent on not only current-year QREs but also prior years’ activity.
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.
The IRS issued final regulations for transactions involving debt obligations between members of a consolidated group.
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
The IRS has modified the scope provision for corporations that exit a consolidated group and request consent to change their annual accounting periods.
This article discusses triggering events for dual consolidated losses and their consequences, as well as the transition rules from the 1992 to the 2007 regulations.
The 2007 dual consolidated loss regulations generally provide that a DCL of a dual-resident corporation or a separate unit of a U.S. corporation is not included in the computation of the taxable income of a consolidated group, unaffiliated DRC, or unaffiliated domestic owner.
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
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
Editor: Mary Van Leuven, J.D., LL.M. Often, a corporation will not qualify as a member of a consolidated group for its entire tax year. This could occur because an event (a “change in status”) causes the corporation to become or cease to be a member of the consolidated group on