There are some unique rules for sporting and other live entertainment events under accountable plans.
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TOPICS
C Corporation Income Taxation
Benefits and Burdens Would No Longer Determine Sec. 199 Deduction
The IRS has proposed removing the benefits-and-burdens-of-ownership rule for determining which party to a contract manufacturing agreement should get the Sec. 199 domestic production activities deduction.
Benefits and Burdens Would No Longer Determine Sec. 199 Deduction
The IRS has proposed removing the benefits-and-burdens-of-ownership rule for determining which party to a contract manufacturing agreement should get the Sec. 199 domestic production activities deduction.
Regulations Determine Allocation of Wages for Domestic Production Activities Deduction
The new rules govern the Sec. 199 deduction when two taxpayers employ the same employees.
Deemed Dividends on Convertible Debt Under Sec. 305(c)
Over the past decade or so, several public companies have issued convertible debt instruments that provide for a conversion rate adjustment so that a conversion rate is changed if a distribution is made on corporate stock.
Final Rules Define Substantial Business Activities Under Sec. 7874
The IRS issued final regulations to determine when an expanded affiliated group will be considered to have substantial business activities in a foreign country, which could allow a foreign corporation to escape application of the inversion rules.
Attacking Transactions to Evade General Utilities Repeal
Temporary regulations prevent corporations from avoiding tax through the use of partnerships.
Tax Court Invalidates Stock-Based Compensation Rule in Cost-Sharing Agreements
The Tax Court held that Regs. Sec. 1.482-7(d)(2), requiring entities to share stock-based compensation costs under qualified cost-sharing agreements, failed to meet the reasoned decision-making standard and was invalid.
“Substantially Complete” Buildings Eligible for GO Zone Depreciation
In Stine, LLC, No. 2:13-cv-03224 (W.D. La. 1/27/15), a retailer’s store buildings were considered “placed in service” for federal tax depreciation purposes when they were “substantially complete” rather than when they subsequently were “open for business” resulting in the taxpayer’s being able to take an accelerated depreciation deduction for the buildings. This decision highlights the importance of properly identifying an asset’s placed-in-service date.
Recent Legislation Creates Professional Employer Organization Status
Professional employer organizations (PEOs) provide comprehensive payroll, benefits, and human resource outsourcing solutions to unrelated third-party employers. PEOs are often also referred to as employee leasing companies or "co-employers." The model for providing those services, which has been relatively consistent for many decades, may change significantly because of recent legislation that will bifurcate PEOs into two categories.
State Tax Consequences to Shareholders on Distributions of Property
When a company distributes property to its shareholders, tax consequences arise for the distributing corporation and the receiving shareholder. This item addresses the state tax consequences to the shareholder, which can differ between states with separate-return filing rules and states that follow the federal consolidated-return filing rules.
Compliance With Short-Period Return Rules Can Stave Off Penalties and Rejection of Elections as Untimely
The unextended due date of the return of a domestic corporation, Form 1120, U.S. Corporation Income Tax Return, generally is the 15th day of the third month following the close of the corporation’s tax year. However, when a target corporation joins the consolidated group of a purchasing corporation on a date other than the first day of the target corporation’s tax year, the due date for the target corporation’s short-period final return is determined without regard to the last day of the short period.
IRS Concludes That Banking App Does Not Qualify for Sec. 199 Deduction
Computer software provided to customers for their direct use while connected to the internet or other public or private communications network, collectively known as online software, is classified as a service provided to customers.
Desirability, Mechanics of Making Sec. 362(e)(2) Elections for State Tax Returns
Sec. 362(e)(2) acts as a barrier to prevent two taxpayers from obtaining the benefit associated with the built-in loss amount, by requiring an election to preserve the loss in either the parent or subsidiary.
IRS Issues Two Rulings on D Reorganizations
The IRS issued two corporate reorganization rulings, one of which involved a domestic corporation and a number of foreign subsidiaries while the second involved a reorganization of domestic entities with a limited liability company that elected to be a disregarded entity after the reorganization.
IRS: Corporations Cannot Circumvent Gain on Appreciated Property Using Partnerships
The IRS issued regulations that take aim at transactions that attempt to avoid the repeal of the General Utilities doctrine.
Bright-Line Test Determines Substantial Business Activities Under Inversion Rules
Final regulations were issued for determining when an expanded affiliated group will be considered to have substantial business activities in a foreign country, which allows a foreign corporation to escape application of the inversion rules.
IRS Applies Option Rule to Find Covered Transaction for 50% or Less Stock Acquisition
Some taxpayers that incur costs for taxable stock acquisitions after which they own less than 50% of a corporation may qualify for an exception.
Evolving Trends in Captive Insurance
Recent tax developments relating to captive insurance companies present potential new opportunities for some captive arrangements while raising caution about others. This item highlights current, practical considerations regarding qualification of a captive as an insurance company for federal income tax purposes.
Former Shareholders Held Liable for Corporate Tax Debt
The Tax Court held that the four former shareholders of a corporation were liable as transferees for a portion of the tax debts of the corporation arising from a land sale that occurred before they sold their stock in the corporation to a third party.
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.
