The IRS determined a taxpayer’s substantial renovation, construction, and erection of certain
property qualified as the construction of real property under Sec. 199.
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TOPICS / CORPORATIONS
Deductions
Tax Court Finds Compensation Reasonable, Rejects IRS Attempt to Modify Independent-Investor Test
In this case, compensation paid by a closely held corporation was reasonable and therefore deductible.
Dental Practice’s Management Fees Were Not Ordinary and Necessary Business Expenses
The fees were unnecessary because the taxpayer did not provide proof to show that any services were actually performed in exchange for the fees.
Documenting Deductible Transaction Costs for Acquisitive Transactions
This item discusses the ability of a target in a Sec. 338(h)(10) transaction to use the safe-harbor election provided by Rev. Proc.
2011-29.
Charitable Donations of Food Inventory
A recent change in the law makes it easier for taxpayers to claim charitable deductions for food products donated to charity.
Tax Planning Businesses Can Do Before Year End
Here are some suggestions to help business clients reduce 2015 taxes by accelerating deductions into this year and delaying income until next year.
Capitalization Not Required for Payment to Terminate Management Agreement Prior to IPO
In a Letter Ruling, the IRS concluded that a payment made to terminate a management services agreement did not create an intangible asset or facilitate a transaction.
Deducting Expenses for Sporting Events Under an Accountable Plan
There are some unique rules for sporting and other live entertainment events under accountable plans.
Benefits and Burdens Would No Longer Determine Sec. 199 Deduction
The IRS has proposed removing the benefits-and-burdens-of-ownership rule for determining which party to a contract manufacturing agreement should get the Sec. 199 domestic production activities deduction.
Benefits and Burdens Would No Longer Determine Sec. 199 Deduction
The IRS has proposed removing the benefits-and-burdens-of-ownership rule for determining which party to a contract manufacturing agreement should get the Sec. 199 domestic production activities deduction.
Regulations Determine Allocation of Wages for Domestic Production Activities Deduction
The new rules govern the Sec. 199 deduction when two taxpayers employ the same employees.
IRS Concludes That Banking App Does Not Qualify for Sec. 199 Deduction
Computer software provided to customers for their direct use while connected to the internet or other public or private communications network, collectively known as online software, is classified as a service provided to customers.
IRS Issues Final Rules on Performance-Based Compensation
IRS finalized regulations regarding the exception under Sec. 162(m)(4)(c) to the $1 million deduction limitation for compensation paid by publicly held corporations to covered employees.
Qualified Performance-Based Compensation Rules Are Finalized
The IRS issued final regulations regarding the exception under Sec. 162(m)(4)(c) to the $1 million deduction limitation for compensation paid by publicly held corporations to covered employees.
IRS Issues Final Regulations on Sec. 162(m)(6) Deduction Disallowance
The IRS issued final regulations under Sec. 162(m)(6), which imposes a $500,000 federal income tax deduction limitation for compensation paid by a covered health insurance provider.
Revisions Clarify R&E Expenditures Regs. for Taxpayers
Recent regulations provide clarity through enhanced definitions and numerous additional examples to assist taxpayers in determining what are includible as R&E expenditures.
IRS Broadens 70% Safe-Harbor Deduction for Investment Advisory Milestone Payments
Recent guidance is favorable to taxpayers and simplifies the determination of which milestone payments qualify for the 70% elective safe harbor.
Fifth Circuit Affirms Tax Court’s Valuation of Façade Easement
The Fifth Circuit affirmed the Tax Court’s determination of the value of a façade easement, finding that the Tax Court had properly followed its instructions on remand.
Definitions of R&E Expenditures Are Amended Under Final Rules
The IRS issued final regulations on which amounts paid or incurred in connection with the development of tangible property, including pilot models, qualify for the Sec. 174 deduction (or amortization) for research and experimental expenditures.
Sec. 199 “Benefits and Burdens” Analysis: Key Guidance
The IRS’s primary objective with respect to any contract manufacturing arrangement is ensuring that only one party to the contract can claim to have the benefits and burdens during any qualifying activity. This protects the IRS from being “whipsawed,” i.e., being subject to claims by both parties to have the benefits and burdens during a qualifying activity.
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.
