In early 2007, the IRS published a substantially revised Form 1120-F, U.S. Income Tax Return of a Foreign Corporation, to be used for tax years beginning in 2007.
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TOPICS
C Corporation Income Taxation
IRS Clarifies Guidance on Small Business NOL Carrybacks
The IRS has issued Rev. Proc. 2009-26, which clarifies the guidance in Rev. Proc. 2009-19 on how small businesses can elect to carry back 2008 net operating losses (NOLs) for three, four, or five years, as provided for by Sec. 172(b)(1) (H) (instead of the usual two years).
Correcting Employment Tax Errors
Correcting an employment tax error that is discovered in the year in which the error occurs is generally a simple process. However, employers often discover such errors after the close of the calendar year in which they paid the wages to an employee. The adjustment process to correct those errors is confusing and often leads to further mistakes.
Stock Basis Recovery in Outbound Sec. 304 Transfers
The IRS recently issued final and temporary regulations addressing recovery of basis in a stock sale subject to both Secs. 304(a)(1) and 367.
Effect of Debt Recharacterization on Worthless Securities Deductions
The IRS recently addressed concerns that the recharacterization of intercompany debt as common equity might prevent a worthless securities deduction.
Customs Valuation: A Concern for Unsuspecting Tax Practitioners
Customs valuation often involves issues that may be unfamiliar to a tax practitioner. Yet failure to recognize this tax-customs intersection may result in unexpected additional tax (nonduty) costs.
Sec. 1245 Recapture Rules Can Apply to Stock
This item discusses how a reduction in a debtor’s stock basis through application of the Sec. 108 attribute reduction rules can result in Sec. 1245 recapture on a disposition of that stock. It also examines how the consolidated return rules in certain circumstances eliminate, in whole or in part, the potential Sec. 1245 recapture on a disposition of stock of a subsidiary member.
Sec. 382 After the Bailout
Treasury issued several notices as part of the government’s response to the economic crisis. The notices allow relief from Sec. 382 for loss corporations acquired under TARP. They also provide relief for obligations and other securities issued by Fannie Mae and Freddie Mac in the recent bailout.
Circular Like-Kind Exchange Disallowed
The Tax Court disallowed tax-free treatment for a like-kind exchange transaction in which the taxpayer exchanged properties with a related entity.
IRS Reverses Position on Eligibility of Intangibles for Like-Kind Exchange Treatment
The IRS Office of Chief Counsel has announced a change in its position on the use of certain intangible property in Sec. 1031 like-kind exchanges.
Legislation Extends Aviation Taxes
The Federal Aviation Administration Extension Act of 2009. This act extends the taxes that fund the Airport and Airway Trust Fund through the end of September.
Using Statistical Sampling to Support the Sec. 199 Deduction
As the Sec. 199 deduction percentages are phased in to the full 9% for tax years beginning in 2010, taxpayers will be faced with greater opportunities to maximize their Sec. 199 deductions and increase compliance risk.
Sec. 199 Issues Arising from Contract Manufacturing Arrangements
In order to determine whether the taxpayer or the contract manufacturer is entitled to the Sec. 199 deduction for the same manufacturing activity, the Sec. 199 rules require an analysis of which party in a contract manufacturing relationship has the “benefits and burdens of ownership” under judicially developed federal income tax principles.
Final Consolidated Return Regs. on Transactions Involving Intercompany Debt
The IRS issued final regulations for transactions involving debt obligations between members of a consolidated group.
Seventh Circuit Finds $20 Million Bonus Reasonable
The Seventh Circuit has reversed a Tax Court decision holding that most of an executive’s $20 million compensation was unreasonable and therefore a nondeductible dividend.
IRS Releases Guidance on New Five-Year NOL Carryback
The IRS has issued guidance on how eligible small businesses can take advantage of the increased net operating loss (NOL) carryback provisions enacted in the American Recovery and Reinvestment Act of 2009.
Depreciation Options for Avoiding Corporate AMT Adjustments and Preferences
An election of a particular depreciation system affects both taxable income and the taxpayer’s administrative burden.
Like-Kind Exchanges: Deferral Is Not Always the Best Option
Sec. 1031 gives taxpayers the opportunity to defer taxation on the gains they may have on their transactions. Anytime there is an opportunity to defer tax costs, tax practitioners and their clients automatically tend to assume that they should take advantage of the opportunity. However, in the case of like-kind exchanges, it is not always in the taxpayer’s best interest to elect to defer the recognition of gain on realty.
Transfer Pricing: The New Temporary Cost-Sharing Regs.
On December 31, 2008, the IRS introduced new temporary cost-sharing regulations (T.D. 9441) that replace the old cost-sharing regulations introduced in 1995.
Discharge of Indebtedness: Conversion vs. Contribution of Indebtedness
In an effort to de-leverage, more and more creditors, particularly those also holding an equity position, are willing to accept repayment for less than the face amount of the debt. Apart from settling the debt in cash for less than its face value, there are other methods debtors and creditors may use to modify, reduce, or even eliminate debt.
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.
