Taxpayers that are eligible for the domestic production activities deduction under Sec. 199 often face the difficult question of how to properly allocate prior-period expenses between activities that created domestic production gross receipts (DPGR) and activities that did not create DPGR (non-DPGR).
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TOPICS
C Corporation Income Taxation
Parent’s Payment on Behalf of Subsidiary
This item summarizes the tax law related to when a parent corporation pays an expense on behalf of a subsidiary and recent related IRS guidance.
IRS Releases Guidance on Expanded NOL Carryback Rules
The IRS has issued guidance on the expanded five-year net operating loss (NOL) carryback rules, which were amended by the Worker, Homeownership, and Business Assistance Act.
Renewable Energy Tax Incentives
As part of the economic stimulus, federal and state governments are stepping up their efforts to encourage individuals and businesses to take advantage of renewable energy technologies to be more energy efficient. These incentives include income tax incentives, sales or property tax incentives, rebates, grants, loans, industry support, and bonds (these vary by jurisdiction).
Homebuyer Credit, NOL Carrybacks Extended; Mandatory E-Filing Enacted
The Worker, Homeownership, and Business Assistance Act of 2009 contains a handful of tax provisions. These include changes to the first-time homebuyers’ credit, increased NOL carrybacks for small businesses, and mandatory e-filing for most tax return preparers.
New Rules on Treatment of Certain Stock of a Foreign Corporation Under Sec. 7874
The IRS announced its intention to issue regulations that will identify certain stock of a foreign corporation that is to be disregarded for determining foreign corporation ownership under the requirements of Sec. 7874
Court of Federal Claims Upholds LILO Transaction
The Court of Federal Claims held that a lease-in, lease-out (LILO) transaction involving a Dutch power plant undertaken by a New York utility company was a valid business transaction that had economic substance.
Significant Recent Corporate Developments
This article discusses selected developments in U.S. federal income taxation of corporations and consolidated groups during 2009.
LMSB Identifies New Repairs Issue
In an IRS Large and Mid-Size Business (LMSB) Division memorandum (LMSB-4-0509-019), the IRS notified LMSB executives of an emerging issue relating to the recharacterization of costs associated with tangible assets previously capitalized under Sec. 263(a) as currently deductible repairs under Sec. 162.
Grants in Lieu of Business Energy Credits
The American Recovery and Reinvestment Act of 2009 included the option to receive a cash grant in lieu of taking the business energy credit for taxpayers who place in service specified energy property.
Charitable Contribution of Qualified Conservation Easement
The Tax Court held that a conservation easement of air space over an historic structure that was donated by a taxpayer to a nonprofit organization did not meet the requirements to be considered a qualified conservation easement.
Determining Basis in Tax-Free Acquisitions
Mergers and acquisitions are often a significant component of the growth strategies for many companies. CPAs who support these activities can help acquiring companies decide whether to buy the assets of the target corporation or acquire its stock.
Electing to Accelerate AMT and Research Credits in Lieu of Bonus Depreciation
The Housing Assistance Tax Act of 2008 allows corporations to make an election to forgo bonus depreciation and instead claim an accelerated pre-2006 research and/or AMT credit.
Proposed Regs. Would Simplify Reduced Research Credit Election
On July 15, the IRS released proposed regulations that simplify the procedures for taxpayers claiming the reduced research credit under Sec. 280C(c)(3) (REG-130200-08).
IRS Further Clarifies WOTC “Disconnected Youth” Definition
The IRS released a notice defining the terms “unemployed veteran” and “disconnected youth” for purposes of the Sec. 51 work opportunity tax credit.
Sec. 162(m)(5) Implications for TARP Recipients
The Emergency Economic Stabilization Act created Sec. 162(m)(5) to impose strict limitations on the deductibility of certain executive remuneration.
AMT Consequences of an Ownership Change
While most tax planning routinely contemplates the impact of the Sec. 382 limitation on the use of a corporation’s net unrealized built-in losses (NUBILs) following an ownership change, the corresponding impact of Sec. 56(g)(4)(G) for adjusted current earnings (ACE) is often overlooked and may have a significantly different effect than Sec. 382.
Treatment of Grants as Nonshareholder Contributions to Capital
Corporations are generally exempt from tax on contributions made to corporate capital.
Intangibles Can Be Like-Kind Property
The IRS ruled that exchanged intangibles such as trademarks, trade names, mastheads, and advertiser and subscriber accounts may be eligible for like-kind exchange treatment.
Merger Termination Fee Deductible
The Tax Court held that a termination fee paid by the taxpayer to cancel a merger agreement in order to consummate a more lucrative merger was deductible.
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.
