Expenses & Deductions
The de minimis safe harbor is one of the areas of the regulations where taxpayers have significant questions. This article answers some of the most frequently asked questions.
The IRS issued final regulations on sales-based royalties and vendor allowance rules.
Directives issued by the IRS Large Business & International Division describe circumstances in which the IRS will not challenge the taxpayer’s position that it has the benefits and burdens of ownership for purposes of the Sec. 199 deduction.
The IRS in September issued proposed regulations clarifying the application of Sec. 174 to the costs to create “pilot models” or prototypes. The proposed rules state that the reason a taxpayer creates a prototype or other product, and not its subsequent sale or use, determines whether it qualifies under Sec. 174.
The IRS issued long-awaited final and proposed regulations regarding the treatment of expenditures incurred in acquiring, producing, or improving tangible assets.
The IRS issued new guidance to examiners in its Large Business & International Division regarding how to determine which taxpayer is entitled to claim the Sec. 199 domestic production activities deduction in a contract manufacturing arrangement.
The IRS issued long-awaited final and proposed regulations regarding the treatment of expenditures incurred in acquiring, producing, or improving tangible assets.
The explained how the retroactive extension of the Sec. 179 rules operates when applied to qualified real property and how to allocate the portion of gain attributable to the qualified real property upon disposition or to calculate any carryover.
In proposed regulations , the IRS provided guidance on the treatment under Sec. 174 of R&D expenditures incurred in connection with the development of tangible property, including pilot models.
The IRS offers an elective safe harbor to deduct 70% of qualified success-based fees, and while certain “milestone payments” common to acquisition transactions do not qualify for the safe-harbor election, certain “eligible milestone payments” do.
The IRS issued new guidance regarding how to determine which taxpayer is entitled to claim the Sec. 199 domestic production activities deduction in a contract manufacturing arrangement.
The oil and gas industry faces numerous challenges in applying the fact-intensive rules of the so-called repair regulations to costs incurred to repair and maintain property during its service life.
The exception for packaging, repackaging, labeling, or minor assembly activities does not apply to disqualify the taxpayer’s sales receipts from meeting the MPGE requirement under Sec. 199.
Donations of “off-spec” food may not result in a charitable contribution deduction greater than the tax basis of the food inventory because of the difficulty of determining the proper tax basis and FMV for the food.
A recent IRS legal memorandum serves as a reminder to business taxpayers to consider modifying or updating their employee bonus plans to enable a deduction for bonus compensation accrued in the year of the related services, as provided in Rev. Rul. 2011-29.
The Federal Circuit issued a decision reversing and remanding a case to the Court of Federal Claims, which had upheld a LILO transaction.
The IRS has issued proposed regulations on allocating costs to property produced or acquired by a taxpayer for resale.
A business can expense 70% of “success-based fees,” meaning amounts that are contingent on the successful closing of a covered transaction. It is important to remember this safe-harbor election can apply to both sides of the transaction.
Proposed regulations clarify the definition of a reimbursement or other expense allowance arrangement and provide guidance on the applicability of the Sec. 274(e)(3) exception under various circumstances including employer/employee, two-party, and multiparty arrangements.
CCA 201228035 addresses specifically the tax treatment of patronage dividends among related parties and/or controlled groups.
States look to unclaimed property for revenue
Understanding the new Sec. 199A business income deduction