Many countries have implemented preferential
tax systems to bolster incentives to keep research and innovation activities onshore.
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TOPICS
C Corporation Income Taxation
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.
Third-Party Borrowing and the Sec. 385 Prop. Regs.: End-Around or Hail Mary?
The proposed regulations target three types of transactions formerly considered well-established and routine mechanisms for creating internal leverage within a controlled group’s entity structure.
R&D Tax Credit Changes Benefit Small Businesses
The PATH Act of 2015 included important changes to the R&D credit.
Debt Restructurings and Contingencies
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.
Understanding the Problems of PHC Status
Tax problems and administrative difficulties can arise if a corporation is classified as a personal holding company.
Documenting Deductible Transaction Costs for Acquisitive Transactions
This item discusses the ability of a target in a Sec. 338(h)(10) transaction to use the safe-harbor election provided by Rev. Proc.
2011-29.
Complexities of Stock Deals in M&A Transactions
Proper planning needs to take place to avoid the potential negative tax consequences and complexities of a taxable stock purchase.
Corporations Restricted From Tax-Free REIT Spinoffs
Temporary and proposed regulations implement the amendments to the real estate investment trust spinoff rules.
Charitable Donations of Food Inventory
A recent change in the law makes it easier for taxpayers to claim charitable deductions for food products donated to charity.
IRS Provides Safe Harbors for Acquisition of Control in Certain Corporate Transactions
The IRS issued guidance that provides safe harbors for corporations, under which the IRS will not assert that a distributing corporation lacks control of another corporation within the meaning of Sec. 355(a)(1)(A).
Double and Triple Drops With Liquidations Clarified in Pair of Revenue Rulings
This item discusses these rulings along with the technical aspects surrounding their issuance and addresses whether the IRS reached the right results.
Practical Documentation of QRAs for the R&D Tax Credit
In the absence of records specifically created to document the research tax credit, taxpayers
often have to rely on estimates and an assortment of documents, interviews, and other evidence to substantiate expenditures that qualify for the research tax credits.
INDIVIDUALS
Current Developments in Taxation of Individuals: Part 1
This update surveys recent federal tax developments involving individuals, including court cases, rulings, and guidance issued during the six months ending October 2025.
