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This item addresses the tax consequences when a nonpublic, financially healthy company renegotiates a debt that was incurred to purchase the company’s assets, and the resulting new debt is contingent on the occurrence of future events.
Proper planning needs to take place to avoid the potential negative tax consequences and complexities of a taxable stock purchase.
The regulations under Sec. 108(i) provide special rules for consolidated groups.
This item summarizes the current law and discusses the facts and conclusion in Letter Ruling 201517003.
As the merger and acquisition business continues to prosper, practitioners should be aware of the tax implications and compliance requirements of the interest charge on deferred tax under Sec. 453A that applies to certain installment sale obligations.
This item addresses the U.S. corporate income tax effects of cancellation of debt (COD) income; the contribution-to-capital exception to COD income; partial cancellation of COD income; the impact of insolvency; and, finally, some COD income issues to consider in the international corporate context.
This item provides a high-level discussion of the general timing for certain foreign corporations’ adoption of methods of accounting for purposes of determining E&P, the procedural rules regarding how such foreign corporations change their method of accounting, and the importance of understanding when and how a method is adopted in light of the increased limitations such foreign corporations may face in changing methods.
The IRS issued final regulations on the application of Sec. 108(i), providing guidance to C corporations regarding the accelerated inclusion of deferred cancellation of debt income and accelerated deduction of deferred original issue discount.
The IRS addressed whether rental income from software leasing to third parties outside the country of a controlled foreign corporation is foreign personal holding company income.
The IRS issued Rev. Proc. 2013-29, which allows taxpayers to defer income from the sale of gift cards or gift certificates redeemable by an unrelated entity until the cards or certificates are redeemed for goods and services by that entity.
It is important for businesses organized and taxed as regular corporations to maintain a current, accurate accounting of their earnings and profits (E&P).
The IRS issued final regulations on the rules to accelerate COD income that taxpayers elected to defer over a five-year period when an applicable debt instrument was reacquired by the issuer or a related party in 2009 or 2010.
The IRS issued final regulations clarifying the circumstances in which property is traded on an established market (i.e., publicly traded) for purposes of determining the issue price of a debt instrument.
The severe drought experienced by much of the United States this year, especially in agricultural regions, is expected to produce a record number of crop insurance claims.
Fund financing can carry with it the potential for unintended tax consequences under Sec. 163(l)’s “disqualified debt” rules.
For a closely held U.S. company engaged in export sales, an IC-DISC offers opportunities to both reduce the amount of revenue subject to the ordinary income tax rate and provide financial compensation to employees, shareholders, or other stakeholders.
The IRS ruled that income a REIT receives from an interest-rate swap agreement that hedges indebtedness of the REIT’s lower-tier partnership is not includible in the REIT’s gross income for purposes of applying the 95% and 75% gross income tests.
The Court of Federal Claims held that, for purposes of interest netting under Sec. 6621(d), a taxpayer was the same taxpayer if it had the same identification number in the underpayment and overpayment years.
An IRS memorandum advises that grant applicants must include in gross income any amounts they received but were not entitled to under a grant program of Section 1603 of the American Recovery and Reinvestment Act of 2009.
Governments sometimes make payments to telecommunications carriers for providing telephone and communication services to low-income users and those in remote or isolated areas. The courts have recently addressed the tax treatment of those payments.
DEDUCTIONS
Business meal deductions after the TCJA
This article discusses the history of the deduction of business meal expenses and the new rules under the TCJA and the regulations and provides a framework for documenting and substantiating the deduction.
TAX RELIEF
Quirks spurred by COVID-19 tax relief
This article discusses some procedural and administrative quirks that have emerged with the new tax legislative, regulatory, and procedural guidance related to COVID-19.