Tax-free corporate reorganizations, or divisions, can be achieved with split-ups, splitoffs, and spinoffs. A consideration of the reason for the corporate division should guide the determination of which technique would be most beneficial.
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TOPICS
C Corporation Income Taxation
New Sec. 163(j): Considerations for real estate and infrastructure businesses
This discussion highlights the treatment of an “electing real property trade or business” for purposes of the interest expense deduction limitation of Sec. 163(j).
Managing excess loss accounts
This item discusses how an ELA can occur and potential methods to minimize or eliminate these balances before they are recaptured into taxable
income.
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.
Sec. 965 transition tax regulations are finalized
The IRS finalized proposed regulations issued last August on the new transition tax, which generally taxes the accumulated post-1986 deferred foreign income of a corporation.
IRS reevaluating active trade or business requirement for spinoffs
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.
Corporate transactions’ effect on retirement plans
This article discusses several key factors that CPAs and benefit plan advisers should consider to help successfully integrate plans during a merger or acquisition.
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.
Potential pitfalls of charitable contribution substantiation and reporting
Failure to properly complete all required fields on Form 8283, including the donor’s cost or other basis, could jeopardize the entire deduction with respect to the donated property.
New business interest expense rules issued in proposed form
The IRS issued proposed regulations on the business interest expense limitation in Sec. 163(j), which was amended by the law known as the Tax Cuts and Jobs Act.
Commitment fees related to revolving credit agreement
The IRS released advice that concluded that an accrual-based taxpayer was entitled to deduct quarterly commitment fees paid related to its
revolving credit agreement.
Unintended consequences: How a drafting glitch turned Sec. 958 upside down
This item provides an overview of the Sec. 958 constructive ownership rules, explores the “glitch” and its consequences, and discusses planning options to mitigate the negative effects.
Missing links: Tax reform’s impact on the value chain
In a changing landscape, U.S. C corporation multinationals should consider reevaluating their value chain.
More positive news for taxpayers with pilot model supply expenses
Recent events should give taxpayers greater confidence to include pilot model expenses as Sec. 74 expenses and R&D supply costs.
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.
Proposed bonus depreciation regs. provide answers, create new questions
The proposed regulations clarify the elections available to all taxpayers regarding bonus depreciation.
Sec. 162(m) grandfather rule can apply to more than just performance-based compensation
The Sec. 162(m) grandfather rule provides multiple opportunities outside of the exemption for performance-based compensation.
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.
IRS says no to dividends-received deduction related to ETF shares
The IRS concluded that a derivative that referenced a stock index was “substantially similar or related
property” to the stock of an exchange-traded fund that held the components of the index.
TAX PRACTICE MANAGEMENT
2025 tax software survey
AICPA members in tax practice assess how their return preparation software performed during tax season and offer insights into their procedures.
