Sec. 83 governs the tax treatment of digital assets that employees receive in connection with their performance of services.
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TOPICS / CORPORATIONS
Income
Combining debtor and creditor positions: COD income considerations
Cancellation-of-debt income arises in a variety of merger-and-acquisition contexts, often with unclear tax treatment.
Application of Sec. 72(e) to annuity advisory fees
In a letter ruling, the IRS ruled that the investment advisory fees paid by an annuity contract would not be considered an amount received in gross income by a contract’s owner.
Complying with the SRLY rules
Strategies for ameliorating limitations on carryovers by members of a consolidated group may include amending a corporation’s ownership structure.
Tax Court rules cancellation of debt is part of gain realization
Determining whether debt cancelled as part of a property sale is recourse or nonrecourse — a crucial factor in determining whether its cancellation gives rise to Sec. 1001 gain or cancellation-of-debt income — is made more difficult when the debtor is a disregarded entity.
Income tax treatment of loyalty point programs
The Tax Court held that Hyatt Hotels’ gross income included customer reward program revenues, denying that the company could exclude them under the trust fund doctrine.
Recapture of foreign loss does not exempt other gain from tax
Gain on the disposition of controlled foreign corporation stock, in excess of the amount of gain required to be recognized as foreign income to offset a taxpayer’s overall foreign loss under Sec. 904(f)(3), is not exempt from tax.
Carbon sequestration payments are qualifying REIT income
An IRS letter ruling concluded that payments to a real estate investment trust for allowing a third party to permanently store CO2 underground on its timberlands were qualifying income for the purpose of the 75% and 95% gross income tests.
A primer on cancellation-of-debt income and exclusions
Various forms of debt workouts and restructurings can trigger COD income, which results in taxable income to the debtor unless specifically excluded under Sec. 108.
Inflation Reduction Act includes 15% corporate minimum tax on book income
For applicable corporations that report over $1 billion in profits to shareholders, the act includes a 15% corporate alternative minimum tax based on book income.
Shareholder’s forgiveness of insolvent corporation’s debt
A debt cancellation or forgiveness by a corporation’s shareholder is a common transaction, but some critical tax consequences are uncertain including
the determination of any income from the cancellation of debtunder certain circumstances.
Seven strategies to accelerate income in response to increasing rates
Due to concern about tax rate increases, some taxpayers may be looking to accelerate income. While income acceleration does not make sense in all circumstances, this article outlines seven strategies for accelerating income when it does.
Practical considerations of Sec. 1202 in M&A transactions
This article provides an overview of the Sec. 1202 requirements and discusses the practical considerations of the provision in merger-and-acquisition transactions.
Like-kind exchanges of real property: New final regs.
This article provides background on like-kind exchanges and examines how final regulations define real property for purposes of like-kind exchanges.
Sec. 163(j) final regs. address the classification of lender fees
This column discusses when loan fees are considered interest expense for purposes of Sec. 163(j)’s interest expense limitation.
State implications of Sec. 163(j) under TCJA and CARES Act
States’ approaches to TCJA and CARES Act conformity will be driven by budget estimates and whether they can follow the reduction to the federal taxable income base while still balancing their budgets.
Top 10 business income tax planning ideas for the pandemic
Right now, some basic tax planning ideas can make a significant difference in reducing income tax, thereby increasing cash flow and even creating tax refund opportunities.
Prop. regs. address eliminating LIBOR, other interbank-offered rates
To facilitate the transition away from IBORs and minimize the resulting market disruption, the IRS
issued the proposed regulations with an aim of reducing associated tax uncertainty and taxpayer burden.
Traversing Sec. 163(j) aggregation for affiliated service groups
This discussion provides a high-level overview of the affiliated service group rules.
Application of new life insurance reportable policy sale rules to M&A transactions
Recently issued proposed regulations on the transfer of life insurance contracts create significant uncertainty regarding their application to tax-free asset acquisitions.
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.
