For many years, taxpayers have been able to defer recognition of gain on the disposition of assets by engaging in Sec. 1031 like-kind exchanges. Consequently, many questions and issues surrounding these transactions have been addressed, but many cases and rulings continue to arise each year. This article analyzes these cases and rulings and identifies questions that still need to be answered.
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TOPICS
C Corporation Income Taxation
“Killer B” Anti-Abuse Rules to Be Introduced
Recognizing that taxpayers are exploiting the rules in ways it had not intended, the IRS announced that it will amend the existing regulations on cross-border triangular reorganizations, popularly known as “Killer B” transactions.
Regs. Tighten Form 5472 Filing Requirements
The IRS is amending the rules for filing Form 5472, Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business.
Regulations Permit Election of Alternative Simplified Research Credit on Amended Returns
The IRS issued temporary regulations permitting taxpayers to elect the Sec. 41(c)(5) alternative simplified research credit on an amended return.
Retail Advertising: IRS Affirms Potential Application of Sec. 199
Retailers may be eligible to claim a Sec. 199 deduction for advertising revenue derived from producing and distributing printed fliers in cooperation with vendors. This item reviews recent IRS guidance and considers what it might mean for taxpayers that are engaged in cooperative advertising arrangements.
IRS Issues Updated Guidance on the Examination of Milestone Payments
The IRS’s Large Business and International exam division issued a directive instructing examiners not to challenge a taxpayer’s application of the safe harbor to “eligible milestone payments” incurred during the course of a covered transaction if the directive’s requirements are satisfied.
Proposed Rules Would Amend Definition of Acquiring Corporation in Corporate Reorganizations
The IRS issued proposed regulations under Sec. 381 that in certain acquisitions would change which corporation succeeds to the tax attributes, including the E&P, of the transferor or distributor corporation.
Tangible Property Regs. De Minimis Safe-Harbor Election: Frequently Asked Questions
The de minimis safe harbor is one of the areas of the regulations where taxpayers have significant questions. This article answers some of the most frequently asked questions.
Regs. Define Disregarded Stock for Purposes of Sec. 7874 Inversion Transactions
The IRS issued temporary regulations providing guidance on when foreign corporate stock is taken into account in determining whether the ownership test is satisfied for Sec. 7874.
Goodwill as Part of a Corporate Asset Sale
This article offers guidance on helping clients take advantage selling personal goodwill as a tax strategy.
Qualifying as a Small Business Corporation for AMT Purposes
A corporation qualifying for small business corporation status avoids both the administrative burden and the potential additional tax liability of the AMT.
Automobile Depreciation Limits Issued for 2014
The IRS issued the 2014 inflation adjustments to the depreciation limitations and lease inclusion amounts for certain automobiles under Sec. 280F.
Automatic Recognition of Consolidated Return Filing Status Permitted
An affiliated group of corporations that did not file a consolidated return for the immediately preceding tax year may file a consolidated return in lieu of separate returns for the tax year under certain conditions.
Cancellation of Debt Income for Debtor Subsidiary Corporations
This item addresses the U.S. corporate income tax effects of cancellation of debt (COD) income; the contribution-to-capital exception to COD income; partial cancellation of COD income; the impact of insolvency; and, finally, some COD income issues to consider in the international corporate context.
Bringing Clarity to Fuel Excise Taxes and Credits
The federal excise taxes, tax credits, and exemptions for various types of fuel constitute a confusing area of the tax law. This item is intended to clear up much of the confusion faced by taxpayers and advisers alike when attempting to claim these tax credits.
Structuring Minority Interest Acquisitions With a Step-Up in Basis: Sec. 1239 and Beyond
A recent court decision is a reminder of the related-party traps and the importance of properly structuring a minority investment.
Foreign Corporations: Procedures and Pitfalls in Adopting and Changing Methods of Accounting for Purposes of Determining E&P
This item provides a high-level discussion of the general timing for certain foreign corporations’ adoption of methods of accounting for purposes of determining E&P, the procedural rules regarding how such foreign corporations change their method of accounting, and the importance of understanding when and how a method is adopted in light of the increased limitations such foreign corporations may face in changing methods.
Major Developments in Cost Segregation
This article discusses the rules that must be followed to use the principle of cost segregation in any form.
Final Rules Issued on Employment Tax Responsibilities of Designated Payer Agents
Final regulations contain rules on the liability for employment taxes when an employer designates an agent under a “service agreement” to pay its employees and to satisfy its employment tax obligations instead of following normal IRS procedures to designate an agent.
New Procedure Permits Automatic Recognition of Consolidated Return Filing Status
The IRS announced that it will permit an affiliated group of corporations that did not file the required Form 1122 for all of its subsidiaries to be treated as if its subsidiaries had filed Form 1122.
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.
