Final regulations expand on and modify the proposed rules that curb the practice of “earnings stripping.”
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TOPICS
C Corporation Income Taxation
IRS Clarifies Definition of “Construction of Real Property” for Purposes of Sec. 199
The IRS determined a taxpayer’s substantial renovation, construction, and erection of certain
property qualified as the construction of real property under Sec. 199.
IRS Eliminates No-Rule Policy for Business Purpose and Device Rule Issues
The application of the business purpose and device rules often involves both legal and factual questions.
Ascertaining the Tax Impact on the Shareholder of a Corporate Assumption of Liabilities in a Sec. 351 Transfer
The transfer of debt to a corporation will create a taxable event in some situations.
Final Regulations Clarify Definition of Real Property for REITs
The IRS issued final regulations clarifying the definition of real property for purposes of the REIT provisions.
How to Document a Tax-Free D Reorganization With a Split-Off
A taxpayer that treats a split-off transaction
as a tax-free D reorganization must be able to
prove to the IRS that the transaction meets all requirements.
Despite PATH Act, Some Tax Provisions Expire at End of 2016
The expiring provisions include tax incentives for individuals and businesses, as well as several energy provisions.
Why Personal Service Corporations Should Care About the Amount Paid to Shareholders
Personal service corporations risk having compensation reclassified as dividends, which are subject to double taxation.
Some Internal-Use Software Qualifies for Research and Development Credit
Taxpayers that develop software for their own internal use will be able to claim a credit for research and development expenditures in some cases.
Permanent Tax Savings Available Through the Use of an IC-DISC
IC-DISC provides a permanent tax benefit to
entities that export products that are manufactured, grown, or extracted in the United States.
Rev. Rul. 2016-15 and the Uniform Application of Sec. 108 to QRPBI
Real property developed and held by a taxpayer for lease in its leasing business is “real property used in a trade or business.”
Should the United States Enact a Patent Box?
Many countries have implemented preferential
tax systems to bolster incentives to keep research and innovation activities onshore.
Tax Court Finds Compensation Reasonable, Rejects IRS Attempt to Modify Independent-Investor Test
In this case, compensation paid by a closely held corporation was reasonable and therefore deductible.
IRS Updates Safe Harbor on Contributions to Capital for Transfers to Public Utilities
These transfers are considered a nontaxable contribution of capital by a nonshareholder to the utility.
Acquired Taxpayer Is Not Eligible for Success-Based Fee Safe Harbor of Rev. Proc. 2011-29
An S corporation was not eligible to elect the safe harbor since it was the target of the acquisition, and it must capitalize the success-based fees that it claimed as an expense.
Dental Practice’s Management Fees Were Not Ordinary and Necessary Business Expenses
The fees were unnecessary because the taxpayer did not provide proof to show that any services were actually performed in exchange for the fees.
Clarification of the Fair Market Value Calculation for the Discharged QRPBI Exclusion
Recently issued advice clarifies some of the rules regarding the limitations on the amount of the exclusion.
Transaction Pursuant to Qualified Stock Purchase Treated as Distribution in Liquidation
A Sec. 338 election can provide benefits to buyer and seller, but the transaction must be structured so that it satisfies the conditions to be a qualified
stock purchase.
Earnings-Stripping Rules Make Many Changes From Proposed Regs.
The new rules are part of the Treasury Department’s larger effort to curb corporate inversions.
Final Rules Allow Credit for Development of Internal-Use Software in Some Cases
Software a taxpayer develops for its own general and administrative internal use can qualify for the research and development credit under regulations finalized by the IRS.
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.
