The Worker, Homeownership, and Business Assistance Act of 2009 contains a handful of tax provisions. These include changes to the first-time homebuyers’ credit, increased NOL carrybacks for small businesses, and mandatory e-filing for most tax return preparers.
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TOPICS / CORPORATIONS
Gains & Losses
Significant Recent Corporate Developments
This article discusses selected developments in U.S. federal income taxation of corporations and consolidated groups during 2009.
AMT Consequences of an Ownership Change
While most tax planning routinely contemplates the impact of the Sec. 382 limitation on the use of a corporation’s net unrealized built-in losses (NUBILs) following an ownership change, the corresponding impact of Sec. 56(g)(4)(G) for adjusted current earnings (ACE) is often overlooked and may have a significantly different effect than Sec. 382.
Intangibles Can Be Like-Kind Property
The IRS ruled that exchanged intangibles such as trademarks, trade names, mastheads, and advertiser and subscriber accounts may be eligible for like-kind exchange treatment.
Should a Company Elect to Defer Cancellation of Debt?
The American Recovery and Reinvestment Act of 2009 provides certain business debtors with a cancellation of debt (COD) income deferral election under new Sec. 108(i) for reacquisitions by the debtor or by certain related parties of applicable debt instruments after December 31, 2008, and before January 1, 2011.
IRS Clarifies Guidance on Small Business NOL Carrybacks
The IRS has issued Rev. Proc. 2009-26, which clarifies the guidance in Rev. Proc. 2009-19 on how small businesses can elect to carry back 2008 net operating losses (NOLs) for three, four, or five years, as provided for by Sec. 172(b)(1) (H) (instead of the usual two years).
Effect of Debt Recharacterization on Worthless Securities Deductions
The IRS recently addressed concerns that the recharacterization of intercompany debt as common equity might prevent a worthless securities deduction.
Customs Valuation: A Concern for Unsuspecting Tax Practitioners
Customs valuation often involves issues that may be unfamiliar to a tax practitioner. Yet failure to recognize this tax-customs intersection may result in unexpected additional tax (nonduty) costs.
Circular Like-Kind Exchange Disallowed
The Tax Court disallowed tax-free treatment for a like-kind exchange transaction in which the taxpayer exchanged properties with a related entity.
IRS Reverses Position on Eligibility of Intangibles for Like-Kind Exchange Treatment
The IRS Office of Chief Counsel has announced a change in its position on the use of certain intangible property in Sec. 1031 like-kind exchanges.
IRS Releases Guidance on New Five-Year NOL Carryback
The IRS has issued guidance on how eligible small businesses can take advantage of the increased net operating loss (NOL) carryback provisions enacted in the American Recovery and Reinvestment Act of 2009.
Like-Kind Exchanges: Deferral Is Not Always the Best Option
Sec. 1031 gives taxpayers the opportunity to defer taxation on the gains they may have on their transactions. Anytime there is an opportunity to defer tax costs, tax practitioners and their clients automatically tend to assume that they should take advantage of the opportunity. However, in the case of like-kind exchanges, it is not always in the taxpayer’s best interest to elect to defer the recognition of gain on realty.
Sec. 382 Ownership and Fluctuation in Value
For a corporation with more than one class of stock, the effects stock price fluctuations can play a significant role in determining whether use of the NOLs could become limited as a result of trading and other equity shifts.
Significant Recent Corporate Developments
This article summarizes selected income tax developments during the past year affecting corporations, including those that file consolidated returns.
Tax Considerations for Corporate Aircraft
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
Prop. Regs. Create Capital Gains and Losses for Non-bank Lenders
Editor: Frank J. O’Connell, Jr., CPA, Esq. On August 7, 2006, the IRS issued Prop. Regs. Sec. 1.1221-1(e), in an attempt to clarify the character of gains and losses resulting from sales of loans and notes receivable acquired through purchase or loan origination; see REG-109367-06. While the character of such
New Regs. for Use of Foreign Losses Included in U.S. Tax Filings: Dual Consolidated Losses
Editor: Anthony S. Bakale, CPA, M.Tax. On March 19, 2007, new regulations were issued to control the use of losses generated in a foreign jurisdiction and included in a U.S. tax filing; see TD 9315. These final regulations apply to dual consolidated losses (DCLs) incurred in tax years beginning after
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.
