Treasury has proposed revisions to the new market tax credit regulations to make the program more attractive to investors in non–real estate businesses in low-income communities.
Advertisement
Topics
Credits
100% Bonus Depreciation and the Corporate Election to Increase the Minimum Tax Credit Limitation
The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 extends the 50% bonus depreciation deduction to qualifying property placed in service through 2012. Congress also provided a 100% bonus depreciation deduction for qualified property acquired and placed in service after September 8, 2010, through December 31, 2011.
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).
Alternative Simplified R&D Credit Rules Finalized
The IRS has issued final regulations governing the election and calculation of the alternative simplified research and development credit. The regulations extend the election procedures for the alternative incremental research credit to the alternative simplified credit.
Final Regulations Simplify Reduced Research Credit Election
The IRS released final regulations on July 26 further simplifying 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.
IRS Finalizes Alternative Simplified R&D Credit Rules
The IRS issued final regulations governing the election and calculation of the alternative simplified research and development credit.
One-Year Extension of the ARRA Grant for Specified Energy Property
This item provides an overview of the Section 1603 renewable energy grant program, which was extended for one year by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010.
Sec. 168(k)(4)—Credit in Lieu of Bonus Depreciation
The election under Sec. 168(k)(4) to claim a refundable tax credit in lieu of bonus depreciation has been extended again for certain property placed in service during 2011 and 2012 as part of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010.
IRS Determines That Dual Purpose Photovoltaic Property Qualifies as Energy Property
Many taxpayers calculating the amount of the energy credit available under Sec. 48 face a hurdle in determining whether certain structural components that serve a dual purpose qualify as energy property. In Letter Ruling 201043023, the IRS addresses this issue in the context of a photovoltaic (PV) curtain wall and provides a valuable road map for taxpayers to analyze such issues.
Computing the Research Credit for Consolidated Groups
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.
IRS Revises Interim Guidance on Production Tax Credit for Refined Coal
In Notice 2010-54, the IRS modifies the definition of refined coal, allows certain processing of utility-grade coal to be taken into account for determining emissions reductions, and revises testing protocols.
Congress Votes to Limit Use of Foreign Tax Credits
P.L. 111-226 makes changes to how corporations can use the foreign tax credit and also terminates the advance refundability of the earned income credit (under Sec. 3507), effective for tax years beginning after December 31, 2010.
The Qualified Therapeutic Discovery Project Tax Credit and Grant
Included in the 2010 Patient Protection and Affordable Care Act are a few new income tax credits. In particular, there is one that many new startups and growing health care industry enterprises may benefit from—the qualifying therapeutic discovery project credit (Sec. 48D).
Analyzing the Tax Implications of Grants Received for Investment Tax Credit–Eligible Property
The recent availability of grants in lieu of the production tax credit (Sec. 45) and the investment tax credit (Sec. 48) has become a well-documented source of funding for the installation of certain energy property.
District Court Allows R&D Credit for Prototype Costs
In a recent case, the court held that the taxpayer is, in certain situations, entitled to the Sec. 41 research credit for qualified research expenditures (QREs) for activities relating to the design, development, and construction of new types/classes of ships.
IRS Publishes FAQs on Small Business Health Care Credit
On April 1, the IRS published on its website 22 questions and answers about the new small business health care tax credit.
Congress Enacts Hiring Incentives Act with Tax Provisions
The Hiring Incentives to Restore Employment Act contains several tax items, the biggest of which is a payroll tax credit for employers who hire workers who have been unemployed for at least 60 days and who are not replacement hires.
Substantiating the Research Tax Credit
Research tax credits present unusual problems of documentation and support. Substantiating activities and expenses to meet the statutory definition of “research” often requires subjective judgments, subject to disparate interpretations.
Growing Opportunities: The Agricultural Chemical Security Credit
Taxpayers that deal with fertilizers and pesticides should consider their own facts and circumstances to determine how the agricultural chemical security credit might apply.
Definition of Supplies Clarified for Purpose of R&D Credit
Taxpayers that use supplies in their research and development (R&D) efforts should reevaluate the costs they include in their R&D credit computations in light of a recent Tax Court decision (TG Missouri Corp.).
employee benefits & pensions
Profits interests: The most tax-efficient equity grant to employees
By granting them a profits interest, entities taxed as partnerships can reward employees with equity. Mistakes, however, could cause challenges from taxing authorities.
