This discussion focuses on how state worldwide reporting works and what taxpayers should consider in determining whether to elect it or avoid it.
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TOPICS
C Corporation Income Taxation
Limiting business interest expense
Under new Sec. 163(j), business interest expense deductions are limited, and a business interest expense that is disallowed in the current year is
carried forward to the succeeding tax year.
Rethinking NOL waivers by a consolidated group
Now that NOL carryforwards are unlimited for tax years beginning after Dec. 31, 2017, practitioners
should be rethinking the use of the waiver of NOL carryforwards under Regs. Sec. 1.1502-32(b)(4) in acquisitions of a company with NOLs by a member of a consolidated group.
Impact of S corp. shareholder agreements in M&A transactions
Shareholders and their advisers should be prepared to verify the validity of the S election when the decision is made to begin marketing the company
for sale.
IRS provides clarity in second round of opportunity zone regulations
Several tax benefits can accrue to taxpayers that make investments in certain low-income communities through qualified opportunity funds. A second round of proposed regulations addresses many outstanding questions about this new vehicle for taxpayer-friendly investing in distressed communities.
Certified professional employer organization rules finalized
Certified professional employer organizations enter into contracts with employers to be treated as the employer for employment tax purposes and are subject to IRS rules in order to qualify as CPEOs and maintain that status.
Foreign-derived intangible income guidance addresses many open questions
Sec. 250 allows domestic corporations a deduction for their “foreign-derived intangible income.” Proposed regulations that were issued earlier this year answer many outstanding questions regarding the calculation of this new deduction but also include documentation requirements that may prove onerous for some taxpayers.
IRS issues second set of proposed regulations on opportunity zones
This item discusses the clarifications and questions that were answered with the issuance of a second set of proposed regulations on May 1, 2019.
Restructuring with Sec. 987 QBUs? Watch for limitations under new Sec. 987 regs.
Before transferring Sec. 987 QBUs to related domestic or foreign parties, practitioners should consider the tax implications of the May final regulations.
IRS provides safe harbor for professional sports teams trading personnel contracts and draft picks
Rev. Proc. 2019-18 allows teams that fit within the safe harbor to treat the contracts as having a zero value for determining gain or loss.
Allocating previously taxed income in a Sec. 355 tax-free distribution
This discussion explores the allocation of E&P in a distribution to which Sec. 355 applies.
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.
Consolidated return regs. provide special return due-date rules for short tax years
This item discusses special return due-date rules for a target corporation’s short tax year when it joins a consolidated group.
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.
W-2 methods proposed for Sec. 199A(g) deduction by agricultural co-ops
The IRS issued methods for calculating W-2 wages for the Sec. 199A(g) deduction for agricultural and horticultural cooperatives, similar to the former Sec. 199 domestic production activities deduction.
Ninth Circuit upholds IRS cost-sharing regulation
The Ninth Circuit Court of Appeals reversed a Tax Court decision that had held that a cost-sharing regulation that required allocation of stock-based compensation was invalid.
IRS suspends spinoff revenue rulings
The IRS announced that it is reviewing its approach to the active trade or business requirement that must be met for a five-year period for a business to qualify for a tax-free spinoff under Sec. 355 and, as a result, is suspending two revenue rulings, Rev. Ruls. 57-464 and 57-492, in which it previously ruled on the topic.
Excise tax refunds for purchases of frequent flyer miles
Banks, hotel groups, large retailers, utilities, and car rental companies may be eligible for refunds of federal excise tax paid when purchasing frequent flyer miles from domestic airlines to use in reward and loyalty programs.
Conversion of a C corporation to an LLC
Converting a C corporation to a limited liability company can sometimes be beneficial, but the tax
consequences must be planned for.
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