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.
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TOPICS
C Corporation Income Taxation
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.
Success-based fees safe harbor: A ruling raises concerns
The Service’s denial of regulatory relief to elect a 70% immediate deduction of the fees contradicts previous rulings and Rev. Proc. 2011-29’s policy goals.
Decision holding Corporate Transparency Act unconstitutional appealed
The U.S. Justice Department filed an appeal Monday challenging the district court’s decision that the law, which requires businesses to report beneficial ownership information, is unconstitutional.
Plaintiffs: FinCEN should pause all CTA enforcement
The plaintiffs who won a summary judgment that bars enforcement of the Corporate Transparency Act against them said the Financial Crimes Enforcement Network should pause beneficial ownership information reporting requirements for all businesses.
Federal court holds Corporate Transparency Act unconstitutional
While acknowledging that the law is well intentioned, the opinion from a U.S. district court in Alabama said Congress lacked authority to enact the business ownership information reporting requirement.
Recent developments in Sec. 355 spinoffs
Tax-free reorganizations under Sec. 355 may pose unforeseen complications, including implications for the new corporate alternative minimum tax and stock repurchase excise tax.
The research credit: Documenting qualified services
Court decisions delineate common pitfalls for companies claiming the Sec. 41 credit of substantiating qualified research expenditure amounts and whether the company followed a process of experimentation.
Tax Court rules cancellation of debt is part of gain realization
Determining whether debt cancelled as part of a property sale is recourse or nonrecourse — a crucial factor in determining whether its cancellation gives rise to Sec. 1001 gain or cancellation-of-debt income — is made more difficult when the debtor is a disregarded entity.
Income tax treatment of loyalty point programs
The Tax Court held that Hyatt Hotels’ gross income included customer reward program revenues, denying that the company could exclude them under the trust fund doctrine.
FinCEN guide lists rules for some financial institutions’ access to BOI
The rules in the Small Entity Compliance Guide apply to access for some financial institutions and cover security and confidentiality, authorized use, administration of requests, and violations.
The clean-energy direct-pay election for not-for-profits and governmental entities
Under the Sec. 6417 direct-pay election, tax-exempt organizations, including not-for-profits and governmental agencies, can claim certain energy credits on their federal income tax returns, but to claim them for 2023, the direct-pay election must be made on a timely filed 2023 federal income tax return.
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.
