The IRS issued proposed regulations governing the availability of NOL deductions that are attributable to corporate equity reduction transactions.
Gains & Losses
Understanding the rules for deducting losses on worthless securities is necessary to determine the correct timing of the loss deduction.
Financial blocker entities are used as a mechanism to prevent funds from potentially being engaged in a U.S. trade or business.
Assumptions and other transfers of debt between corporations and shareholders or between partnerships and partners can often be tax free as part of a contribution, distribution, reorganization, or liquidation. This article analyzes several types of debt transfers and their potential for recognition of gain or loss and income from cancellation of debt.
The emergence of online marketplaces and auction houses has provided a single point of contact for both sellers and buyers, making sales and purchases of transferable state tax credits more common.
This item illustrates how transfers of items outside a U.S. consolidated group can trigger a deferred intercompany gain and suggests ways to avoid that result in certain situations.
This item discusses IRS guidance illustrating the impact of extinguishment of intercompany debt immediately preceding a Sec. 338(h)(10) election.
Sec. 6045B requires an issuer of a specified security to report certain information to the IRS and to its shareholders following an organizational action that affects the basis of a specified security.
Sec. 382 and the regulations thereunder rank among some of the most complex, nonintuitive rules in federal tax law, all aimed at curbing the practice of trafficking in NOLs, or other loss attributes, in a corporation.
The IRS recently proposed revisions to the consolidated return regulations on the application of Sec. 382 and calculation of net unrealized built-in gains and losses.
The IRS issued a general legal advice memorandum that addressed the tax consequences when an insolvent foreign subsidiary of a domestic U.S. corporation elected to be classified as a partnership.
The IRS concluded that a taxpayer may include in its computation of taxable income or NOL only an amount of recognized built-in loss (RBIL) equal to its Sec. 382 limitation, whether or not the taxpayer has taxable income without regard to RBIL.
This item reviews an anomalous situation that occurs in some cases under ASC ¶740-20-45-7 for entities generating NOLs with an investment portfolio.
The IRS has released an Industry Issue Directive instructing its examining agents to offer a safe-harbor election to certain taxpayers under examination regarding the market values used in their mark-to-market calculations.
FIRPTA is quite complex and filled with traps for the unwary, especially in the area of return of capital distributions.
The IRS issued proposed regulations on the time for taking into account deferred losses on the sale or exchange of property between members of a controlled group (REG-118761-09).
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.
By exercising its setoff authority, the IRS has been able to achieve the same limitation period in Form 1120X carryback situations as in tentative refund cases with Form 1139.
This item explores whether an adjustment is made for E&P purposes when a member of a consolidated group is required under the unified loss rules to reduce its basis in the stock of another member for regular tax purposes upon the first member's disposition of the second member's stock at a loss for regular tax purposes.
The IRS recently signaled its increasing interest in the tax treatment of hedging transactions, particularly with regard to proper taxpayer identification.