Fund financing can carry with it the potential for unintended tax consequences under Sec. 163(l)’s “disqualified debt” rules.
Expenses & Deductions
This article discusses the purchaser’s perspective of an investment in distressed obligations that are secured by leases on tangible property.
The IRS issued final regulations relating to the disallowance under Sec. 274 of deductions for the use of business aircraft for entertainment.
The IRS released proposed regulations clarifying which party is subject to the rule that limits the deduction for meals to 50% of the expenses incurred.
The IRS ruled on whether dividends paid on restricted stock were qualified performance-based compensation excluded from the applicable employee remuneration to which the $1 million limitation on the deduction for compensation by publicly held corporations applies.
When a company experiences a change in control, the golden parachute rules are intended to discourage excessive compensation for “disqualified individuals” by imposing adverse tax consequences on both the company and the disqualified individuals.
The IRS LB&I Division issued guidance to field examiners in determining whether a taxpayer conducting production activities under a contract manufacturing arrangement with an unrelated third party meets the benefits-and-burdens-of-ownership requirement outlined in the domestic production activities deduction rules under Sec. 199.
Rev. Rul. 2011-29 favorably upholds the current deductibility of a bonus pool that is determined based on a formula or board-approved amount by year end with employment required on a payment date within 2½ months of year end.
Many taxpayers may have noticed a recent increased IRS focus on R&E expenditures. As a result of this increased focus, it is time for taxpayers to increase their focus as well.
The IRS held that a taxpayer’s cashless exercise of stock options resulted in taxable income to the taxpayer and a compensation deduction for the company that issued the options.
In Rev. Rul. 2011-24, the IRS provided guidance for determining whether a taxpayer that provides telecommunications services derives gross receipts from services, leasing or renting property, or a combination of the two, for purposes of the domestic production activities deduction under Sec. 199.
The IRS issued final regulations (T.D. 9542) governing elections by individual taxpayers, corporations, and partnerships to deduct start-up expenses or organizational expenditures.
To eliminate the controversy over the allocation of success-based fees and corresponding documentation requirements, Rev. Proc. 2011-29 povides a safe-harbor election for allocating 70% of success-based fees paid or incurred in a covered transaction to activities that do not facilitate the transaction.
The IRS issued final regulations governing elections by individual taxpayers, corporations and partnerships to deduct startup expenses or organizational expenditures.
In a private letter ruling, the IRS allowed a private bank catering to high-wealth individuals to deduct payments it made to settle lawsuits arising from criminally fraudulent activities by one of the bank’s fund managers.
An ordinary loss deduction for worthless stock of an affiliated operating subsidiary generally is permitted as long as more than 90% of the subsidiary’s gross receipts are from active operating income. This item discusses the difficulty of determining whether a subsidiary’s gross receipts qualify as active operating income for this purpose under various circumstances.
Language used in investment banker (IB) engagement letters to implement fee payment arrangements can significantly affect the federal income tax treatment of such payments.
This article discusses the tax consequences of transaction costs in four settings: in general, when acquiring or producing tangible assets, when acquiring or creating intangible assets, and when acquiring a business.
Recent events have drawn attention to the disallowance of deductions where allowing the deductions would violate public policy. This article discusses the disallowance of deductions under Sec. 162 and Sec. 165 for public policy reasons.
In a private letter ruling, the IRS’ Office of Chief Counsel allowed a private bank catering to high-wealth individuals to deduct as ordinary and necessary trade or business expenses the payments it made to settle lawsuits arising from criminally fraudulent activities by one of the bank’s fund managers.