The IRS recently issued temporary and final regulations addressing certain outbound transfers of property, indirect stock transfers, and certain outbound asset reorganizations.
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TOPICS
C Corporation Income Taxation
IRS Reverses Itself on Applying 70% Safe-Harbor Deduction for Success-Based Fees to Certain Milestone Payments
The IRS offers an elective safe harbor to deduct 70% of qualified success-based fees, and while certain “milestone payments” common to acquisition transactions do not qualify for the safe-harbor election, certain “eligible milestone payments” do.
Defining Stock of Insolvent and Bankrupt Corporations
This article discusses the special rules and issues surrounding the classification of stock ownership of corporations that are insolvent or in bankruptcy.
Final Sec. 336(e) Regulations: Election for Qualified Stock Dispositions
The IRS issued final regulations under Sec. 336(e) allowing a domestic corporation to make an irrevocable unilateral election to treat the sale, exchange, or distribution of a domestic corporation’s stock meeting the 80% vote and value requirements of Sec. 1504(a)(2) within a 12-month disposition period.
NOL Carrybacks Limited by Excess Distributions
While practitioners typically think of the application of the CERT rules in cases of debt-financed distributions or stock acquisitions, the rules could apply even if the underlying transaction is not debt-financed.
Final Regs. on Acceleration of COD Income Deferral
The IRS issued final regulations on the rules to accelerate COD income that taxpayers elected to defer over a five-year period when an applicable debt instrument was reacquired by the issuer or a related party in 2009 or 2010.
Buying or Selling C Corporation Stock
Unlike an asset sale, a taxable stock sale does not result in the recognition of taxable income or loss at the corporate level, although selling shareholders may recognize taxable gain on the sale of their shares.
Provision of Services by Corporation to Shareholder Not a Constructive Dividend
The Tax Court held that the sole shareholder of a corporation did not receive a constructive dividend when the corporation provided construction services to the shareholder at cost.
Chief Counsel Provides Guidance on Allocating Acquisition-Related Costs
This item summarizes some of the relevant rules that govern the tax years of subsidiaries that join or leave a consolidated group.
2012 Best Article Award
Winners of The Tax Adviser’s 2012 Best Article Award.
IRS Issues Final Rules on Exceptions From REIT or RIC Built-in Gain Recognition
The IRS issued final regulations that provide guidance on the recognition of built-in gain in certain transfers of property from a C corporation to a RIC or REIT.
IRS Changes Schedule M-3 Filing Requirements for Some Entities
The IRS on its website announced changes in the filing requirements for Schedule M-3 for certain corporations and partnerships.
New Method for Determining Who Gets Sec. 199 Deduction Under Contract Manufacturing Arrangements
The IRS issued new guidance regarding how to determine which taxpayer is entitled to claim the Sec. 199 domestic production activities deduction in a contract manufacturing arrangement.
Final Rules on Acceleration of COD Income Deferral Are Issued
The IRS issued final regulations on the rules to accelerate COD income that taxpayers elected to defer over a five-year period when an applicable debt instrument was reacquired by the issuer or a related party in 2009 or 2010.
Questions on EINs in F Reorganizations Involving Disregarded Entities
Until the IRS issues clarifying guidance on whether a corporation that converts to an LLC always must retain its historic EIN, potential procedural conflicts may exist in relying on Rev. Rul. 73-526 to retain an EIN in an F reorganization.
ATRA Allows Taxpayers to Continue to Accelerate Certain AMT Credits
Under the provisions of ATRA, corporations or consolidated groups with AMT credits from pre-2006 tax years may continue to accelerate the use of these credits instead of claiming bonus depreciation for eligible qualified property.
Whether Incentives That Require Companies to Provide Jobs Should Be Treated As Nonshareholder Capital Contributions
Imposition of a jobs requirement should not by itself prevent a subsidy from qualifying as a nonshareholder contribution.
Failing Subchapter C Requirements to Avoid Nonrecognition Treatment
If a transaction satisfies the substantive tests for certain subchapter C nonrecognition provisions, can the taxpayer nonetheless achieve a taxable exchange by intentionally violating procedural requirements?
Options for Compliance With Worker Classification Rules
Determining proper classification of workers, either as independent contractors or employees, can be subjective and a challenge for employers.
LIFO Inventory Considerations When Making a C-to-S Conversion
A taxpayer valuing its inventory under the last-in, first-out (LIFO) method should consider two significant implications for taxable income when converting from a C corporation to an S corporation.
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.
