The guidance focuses on nonidentical governing provisions; principal-purpose determinations regarding the one-class-of-stock requirement; disproportionate distributions; certain errors on forms; missing administrative or acceptance letters for an S or QSub election; and the requirement to file returns consistent with an S election.
Advertisement
Topics
Reporting & Filing Requirements
Domestic filing exception requirements modified in draft Scheds. K-2, K-3
Revised draft instructions for partnership and S corporation Schedules K-2 and K-3 contain significant changes to the requirements to qualify for the domestic filing exception for filing and furnishing the 2022 schedules.
Real estate dealer or investor? A recent Tax Court case
This dispute in this tax case was whether the land was a capital asset or inventory.
Employer-provided and company-owned vehicles
General or special methods of valuing employer-provided vehicles are available for determining the employer’s and employee’s tax treatment of this fringe benefit.
AICPA recommends changing cryptoasset question
In a comment letter to the IRS, the AICPA recommended changes and clarifications regarding the tax treatment of cryptoassets or “virtual currency.”
State PTE elections: A big picture perspective
Practitioners may face a difficult analysis in helping their clients understand their possible PTE election opportunities.
Estates can now request late portability election relief for 5 years
The IRS extended to five years the period under which a taxpayer can use a simplified method (in lieu of a letter ruling request) to obtain an extension of time to make a portability election.
Foreign earned income exclusion: Pandemic-related relief
The IRS provides relief for taxpayers who would have qualified for the foreign earned income exclusion in 2019 and 2020 but for COVID-19.
IRS extends e-filing to more 1040-series amended returns
Nonresident alien amended returns and those for Puerto Rico residents are added; superseding returns can be designated.
Schedules K-2 and K-3 e-file capability postponed for S corporations
The IRS delays e-filing capability for schedules reporting S shareholders’ items of international tax relevance, earlier forecast for mid-June, to July 24.
More Schedule K-2 and K-3 FAQs posted
In eight new FAQs on its website, the IRS covers some special issues, including several that it says will be added to the forms’ instructions.
Cryptoassets: How should proof-of-stake rewards be taxed?
In light of the lack of guidance from the IRS and Treasury, the case for deferred recognition of income for staking rewards has recently gained traction.
Individual taxpayers must answer cryptoasset question, IRS notes
Front and center on Form 1040 is whether taxpayers had a virtual currency transaction.
IRS waives estimated-tax penalties for farmers and fishermen
The IRS, citing earlier problems e-filing a new form reporting S corporation owners’ basis, has granted relief to certain farmers and fishermen who missed their March 1 filing deadline.
Current developments in taxation of individuals
This semiannual update covers recent federal tax developments involving individuals, highlighting noteworthy IRS guidance and decisions of the Tax Court and other courts, as well as tax changes made by legislation.
Complying with new schedules K-2 and K-3
What partnerships, S corporations, and others with foreign partnership interests need to know for tax year 2021 and beyond.
Practitioners wary of IRS service lapses as tax season begins
Continuing problems in timely processing of returns and correspondence may threaten more headaches.
IRS to accept 2021 tax returns starting Jan. 24
The IRS announced the start date for tax season and that the due date for most individuals is April 18.
SALT payments before year end a priority for passthroughs
To be deductible at the entity level, payments by passthrough entities of state and local taxes should be made in the tax year of the liability, but state-specific elections may complicate that timing, tax advocates advise.
Seven strategies to accelerate income in response to increasing rates
Due to concern about tax rate increases, some taxpayers may be looking to accelerate income. While income acceleration does not make sense in all circumstances, this article outlines seven strategies for accelerating income when it does.
TAX PRACTICE MANAGEMENT
2025 tax software survey
AICPA members in tax practice assess how their return preparation software performed during tax season and offer insights into their procedures.
