This item explores which states likely conform to the amendments to Sec. 174, which states likely decouple from those changes, and the issues raised by conformity to or decoupling from the changes.
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TOPICS / CORPORATIONS
Deductions
Deducting costs that are usually capitalized
Certain environmental cleanup costs, restaurant ‘smallwares,’ and certain vehicle replacement tires have expensing options that business owners may be unaware of.
M&A pitfalls for deferred research expenditures
Treasury and the IRS have issued minimal guidance on current Sec. 174, and future guidance may provide more clarity or different results than what is detailed in this item.
IRS obsoletes 1958 revenue ruling on research and experimental costs
The ruling, which is being obsoleted as of July 31, allowed a taxpayer that used the expense method for research and experimental expenditures to deduct on an amended return research and experimental expenditures the taxpayer did not deduct in prior years.
Determining compensation deductions in M&A transactions
This item explores three types of compensation paid to employees of the target.
Uncertainties remain in analyzing success-based fees
This item surveys four areas in which taxpayers face uncertainty in analyzing success-based fees.
Determining gross receipts under Sec. 165(g)(3)
This item summarizes some of the relevant authorities and then covers the facts and conclusion in Letter Ruling 202140002.
Recent changes to the Sec. 179D energy-efficient commercial buildings deduction
The energy efficient commercial buildings deduction under Sec. 179D provides taxpayers with an incentive to make certain commercial building property more energy efficient.
Issues in allocating income under Sec. 384
Although the IRS has addressed several issues in the application of Sec. 384 with letter rulings and other guidance, the Service has yet to come out with comprehensive regulations and, thus, has yet to address several issues with its application.
Deduction of startup expenses
When is a company allowed to report as deductions on a tax return the expenses that have been incurred during the time leading up to getting the doors open for business?
Capital loss rules limit deduction of fees paid to terminate merger agreement
Chief Counsel Advice provides insight to taxpayers planning or negotiating merger-and-acquisition transactions.
M&A transactions: Deducting accrued liabilities
This item discusses the rules for deducting accrued liabilities in M&A transactions and then provides an illustration by looking at a recent IRS technical advice memorandum.
Deferred compensation deduction and the sale of a business
This item discusses business acquisitions that include assumption of deferred compensation costs and who — buyer or seller (or neither) — has a right to deduct those compensation amounts.
Implications of legislative changes for R&E and software development costs
Modifications to Sec. 174 may affect other areas of taxation which must also be reflected in financial statements and estimated tax payments.
A strategy to raise a business’s interest limitation
This article discusses a strategy to allow more interest to be deducted under the limitation involving the strategic adoption of FASB Accounting Standards Codification Topic 606, Revenue From Contracts With Customers.
What’s new for 2022 in federal taxes
A law change and some regulations take effect while an array of provisions expire.
Voluntary carbon offsets: The evolution of a business expense
This article discusses the disclosure and reporting of VCOs and whether VCOs should be treated as deductible ordinary and necessary business expenses, capitalizable expenses, deductible charitable contributions, or nondeductible expenses.
Standard mileage rates to go up in 2022
The IRS issued the annual update of the mileage rate taxpayers may use to compute their deductible automobile costs.
IRS memo illustrates application of Sec. 263 to amounts paid to acquire or create intangibles
The memo provides an analysis of the capitalization of amounts paid to acquire or create intangibles, providing insight into capital expenditures under Sec. 263 and trade or business expenses under Sec. 162, clarifying capitalizing vs. expensing.
Beware of IRS initiatives against microcaptive insurance arrangements
Microcaptive insurance arrangements have been vigorously scrutinized recently by the IRS.
INDIVIDUALS
Current Developments in Taxation of Individuals: Part 1
This update surveys recent federal tax developments involving individuals, including court cases, rulings, and guidance issued during the six months ending October 2025.
