To avoid contending with the complex and time-consuming calculations of the uniform capitalization rules under Sec. 263A, taxpayers may want to consider electing the historic absorption ratio with this method.
Advertisement
TOPICS
C Corporation Income Taxation
Revisiting FIRPTA and return-of-capital distributions
Although the Foreign Investment in Real Property Tax Act applies to foreign holders of U.S. real property interests, U.S. real property holding corporations also may find it advantageous to apply for a withholding certificate.
Regs. cover green energy incentive wage and apprenticeship requirements
Under new final regulations issued by the IRS, taxpayers can generally increase the base amount of certain credits or deductions by five times when they meet prevailing wage and apprenticeship requirements.
IRS gives another limited estimated corporate AMT underpayment waiver
The IRS issued a notice extending earlier relief for a corporation’s failure to pay the part of estimated income tax attributable to the revised corporate alternative minimum tax.
Rights for the R&D credit and Sec. 174
When claiming the Sec. 41 research and development credit for funded research, a taxpayer must determine whether it possesses economic risk related to the success of the research and retains substantial rights to the research results. How that correlates to a “right to exploit” research under Sec. 174 still needs clarification.
Taxpayer-initiated transfer pricing adjustments in MAP
When multinational enterprises proactively initiate transfer pricing adjustments to avoid penalties or for other reasons, a tax treaty’s mutual agreement procedure (MAP) can help prevent double taxation, but additional issues should be considered.
E-invoicing mandates and intercompany transactions
Value-added tax increasingly entails mandatory use of electronic invoicing and other “continuous transaction control” systems — even for intercompany transactions.
Trends in enforcement of VAT remote-seller rules
Guidelines have emerged for assessing value-added taxes in the global digital economy, although jurisdictions employ their own approaches to enforcing them.
The clean fuel production credit: A new incentive regime
The Sec. 45Z credit for production of low-emission motor fuels will largely replace a diverse set of expiring fuel incentives when it goes into effect in 2025.
The research credit: Adaptation exclusion
A recent Tax Court case sheds light on the uncertainty test for qualified research activities and its relation to the adaptation exclusion of expenditures eligible for the Sec. 41 research credit.
Lease termination payments: Considerations for the lessor
The payments are subject to capitalization, but the period and manner are unclear. The 12-month rule under Regs. Sec. 1.263(a)-4(f)(2) may help.
Sec. 338(g) elections for foreign corporations and ‘creeping acquisitions’
Electing a qualified stock purchase can offer advantages when acquiring a foreign target corporation but also present a pitfall when it is done in stages.
State income tax considerations for non-US corporations
Foreign corporations operating in the United States need to be aware of state income tax rules, including those involving nexus, determining state taxable income, and filing methods.
Interim guidance for SRE expenditures
An IRS notice and revenue procedure provide greater clarity on the treatment of specified research or experimental expenditures while practitioners wait to see whether Congress will repeal or delay recent changes.
Dual consolidated losses: Recapture considerations
An interesting issue can arise when a corporation must recapture dual consolidated losses on the sale of a foreign entity.
The de minimis and routine maintenance safe harbors
Two potentially valuable provisions can allow a business to currently deduct rather than capitalize expenses related to repair, acquisition, or production of tangible property.
Updated FAQs provide details on phase-in timing of BOI access
The FAQs from Treasury’s Financial Crimes Enforcement Network said access to beneficial ownership information will be phased in, beginning this spring with a pilot program for some federal agency users and concluding in spring 2025, when financial institutions with customer due-diligence requirements will be able to review BOI.
IRS grants limited waiver for underpayment of estimated corporate AMT
In light of the continuing challenges taxpayers are facing with the corporate alternative minimum tax, the IRS granted a waiver of the addition to tax for failure to pay estimated corporate AMT “in the interest of sound tax administration.”
Proposed regs. issued for 1% excise tax on corporate stock repurchases
Two sets of proposed regulations issued by the IRS provide guidance on the implementation of the new excise tax and on rules for the procedure and administration applicable to the reporting and payment of the tax.
AICPA: BOI ruling confuses businesses; enforcement should be delayed
In a letter to the Treasury secretary and the FinCEN director, the AICPA called for enforcement of beneficial ownership information reporting regulations to be suspended until after lawsuits are settled.
employee benefits & pensions
Profits interests: The most tax-efficient equity grant to employees
By granting them a profits interest, entities taxed as partnerships can reward employees with equity. Mistakes, however, could cause challenges from taxing authorities.
