This discussion explores the allocation of E&P in a distribution to which Sec. 355 applies.
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TOPICS / CORPORATIONS
Gains & Losses
CFC worthless stock deductions after tax reform
This discussion focuses on the GILTI and BEAT implications for the benefit received by a U.S. corporation reporting a worthless stock deduction
under Sec. 165(g) for a CFC’s stock.
IRS issues more proposed regs. on qualified opportunity funds
The regulations define the term “substantially all,” the definition of which was reserved in the earlier proposed regulations issued in October 2018.
Traded player contracts and draft picks have zero value under safe harbor
The IRS will permit professional sports teams that trade player contracts to recognize zero gain if both parties to the exchange adopt the safe harbor and do not exchange cash.
Opportunities beckon in new qualified opportunity zones
With their prospects for deferral or even exclusion of gains from certain investments in them, the newly created qualified opportunity zones offer an intriguing tax planning option for investors and a potential boon for distressed communities.
More proposed regs. on qualified opportunity funds issued
The regulations define the term “substantially all,” the definition of which was reserved in the earlier proposed regulations issued in October 2018.
Sec. 1202: Consequences of capital contributions to closely held corporations
One of the requirements of Sec. 1202 is that the issuing corporation must be a qualified small business as of the date of issuance and immediately after the issuance.
Opportunities beckon in new qualified opportunity zones
With their prospects for deferral or even exclusion of gains from certain investments in them, the newly created qualified opportunity zones offer an intriguing tax planning option for investors and a potential boon for distressed communities.
First round of opportunity zone guidance offers flexibility for investors, but questions remain
Taxpayers should carefully review the proposed regulations for relevant limitations and be mindful of how future guidance may affect their investments.
Managing corporate state net operating losses
This article offers guidance on maximizing the use of corporate state NOLs, recording deferred
tax assets and valuation allowances for them, and incorporating their value in the pricing of M&A transactions.
Capital gains deferral benefits of qualified opportunity zones
The TCJA created an incentive program that allows a taxpayer to elect to exclude from gross income
capital gain if it is properly reinvested in a qualified opportunity zone.
Qualified small business stock gets more attractive
The new lowered corporate tax rate will probably lead to more C corporations and a resulting increase in taxpayers’ interest in the Sec. 1202 100% exclusion on gain from the sale of QSB stock.
Updates to Sec. 382 NUBIG and NUBIL safe harbors
With the increased use of stock acquisitions, buyers must correctly apply the Sec. 382 limitations, including the additional analysis to determine the impact of NUBIG and NUBIL.
Tax treatment of individual owners of bitcoin and other virtual currencies held for personal use or investment
Tax preparers will need to be proactive in helping their clients identify and report any potentially taxable transactions.
Code’s plain language prevails, despite anomalies
The owner of a hotel and restaurant complex was not entitled to capital gains treatment under Sec. 1234A for a deposit it retained after a would-be buyer terminated a contract to purchase the complex.
IRS withdraws portions of Subchapter C nonrecognition rules
Treasury and the IRS withdrew parts of proposed net value regulations that would require an exchange of net value for transactions intended to
qualify under Secs. 351 and 368 and a distribution of net value for transactions intended to qualify under Sec. 332.
House bill features many business tax changes
The House tax reform bill contains a large number of proposed changes that would affect businesses.
Phantom stock: Termination of right to buy or sell, treatment of asset and basis
The Tax Court considered whether redemption of phantom stock was a sale of a capital asset and
what the tax basis in the redeemed phantom stock was.
Potential merger incentives resulting from proposed tax reform
The House Blueprint, if enacted, may provide incentives for certain taxpayers to merge in the future.
Minimizing gain in a dividend-equivalent redemption
This item presents an opportunity to minimize the tax impact of a distribution by a closely held corporation that is not made out of the corporation’s E&P.
employee benefits & pensions
Profits interests: The most tax-efficient equity grant to employees
By granting them a profits interest, entities taxed as partnerships can reward employees with equity. Mistakes, however, could cause challenges from taxing authorities.
