Editor: Joel E. Ackerman, CPA, MST In recent years, the number of entrepreneurs acquiring airplanes for their business operations has increased dramatically. Often the aircraft will be placed in a separate entity for legal liability protection and other reasons. Tax advisers need to be aware of the numerous federal income
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TOPICS / CORPORATIONS
Deductions
Payments for Future Remediation Expenses Are Not Insurance Premiums
Editor: Joel E. Ackerman, CPA, MST The IRS ruled in Rev. Rul. 2007-47 that payments to an insurance company to cover future capped costs were not insurance payments for tax purposes. The “premium” was an amount equal to the present value of estimated future remediation costs required by the government.
Deductibility of Nonqualified Deferred Compensation in Mergers and Acquisitions
Editor: Frank J. O’Connell, Jr., CPA, Esq Determining the tax treatment and timing of an employer corporation’s deduction for amounts paid under nonqualified deferred-compensation arrangements under Sec. 404 can be a daunting task, depending on the circumstances. Even if such arrangements have not triggered any of the pitfalls in Sec.
Expensing Restaurant Smallwares
Editor: Albert B. Ellentuck, Esq. Restaurants and taverns can deduct the cost of smallwares in the year in which the smallwares are received and used, instead of having to capitalize those expenditures; see Rev. Proc. 2002-12. The smallwares method applies to businesses engaged in the trade or business of preparing
Sec. 199 Final Regs. Affect Online Software and Advertising
Editor: Annette B. Smith, CPA Sec. 199 generally provides a deduction for qualifying domestic production activities equal to 9% (3% for tax years beginning in 2005 or 2006 and 6% for tax years beginning 2007–2009) of the lesser of the taxpayer’s (1) qualified production activities income for the tax year
Taxpayer-Favorable Letter Ruling on Consolidated Worthless Stock Deduction
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
Tax Incentives for Businesses in Distressed Communities
Executive Summary Businesses in designated EZs and RCs may be eligible for an employment credit, increased Sec. 179 expensing, tax-exempt bond financing and other tax incentives. A capital gain deferral applies to purchased EZ assets; a 60% exclusion applies to small business EZ stock. Enterprise zone facility bonds may be
Providing Meals and Lodging to Employees
Editor: Albert B. Ellentuck, Esq. Under Sec. 119(a), meals provided by an employer—including a C corporation employer—can be excluded from an employee’s gross income if they are furnished on the business premises and for the employer’s convenience. The employer can deduct the full cost of these meals (the normal 50%
Tax Court Capitalizes Model Home Display Costs
The issue is whether the costs of placing model manufactured homes on retail sales lots to assist local independent salespersons may be currently deducted or should be included in inventory under Sec. 263A. Facts A and its related corporations buy and sell manufactured homes, constructed at a factory location and
Rethinking Sec. 199 Based on New Developments
Co-Editors: Michael Metz, CPA; Nick Gruidl, CPA, MBT Beginning in 2006, there is a new deduction available for updating or constructing commercial building property to be more energy efficient. The Energy Tax Incentives Act of 2005 (ETIA), which took four years to pass, added new Sec. 179D. With so many
Energy-Efficient Commercial Buildings Deduction (April 2006)
Beginning in 2006, there is a new deduction available for updating or constructing commercial building property to be more energy efficient. The Energy Tax Incentives Act of 2005 (ETIA), which took four years to pass, added new Sec. 179D. With so many commercial buildings exceeding 15 years in age, many
Energy-Efficient Commercial Buildings Deduction Revisited
Co-Editors: Michael Metz, CPA; Nick Gruidl, CPA, MBT The deduction available for updating or constructing more energy-efficient commercial building property has been previously discussed; see Schuerman, Tax Clinic, “Energy-Efficient Commercial Buildings Deduction,” TTA, April 2006. At that time, little guidance was available on how to take the deduction under new
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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.
