This discussion highlights uncertainties that may arise in determining a corporation’s taxable income for purposes of calculating its foreign-derived intangible income deduction under Sec. 250.
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TOPICS
C Corporation Income Taxation
Inflation Reduction Act implications for Sec. 355 distributions
This item examines the implications for distributions described in Sec. 355(a) that follow from the introduction by the Inflation Reduction Act of the stock repurchase excise tax and the corporate alternative minimum tax.
Defining software development costs
Until guidance is issued, taxpayers seeking to determine the fundamental characterization of software costs in order to evaluate what expenditures fall within the scope of new Sec. 174 may find other sources helpful, including those that have historically governed this area.
‘Blocker’ corporations: Considerations for investment fund managers
This item outlines several issues for fund managers to consider as they analyze how to use blocker corporations in their fund structures.
IRS cannot assess Sec. 6038(b) penalties
The IRS does not have statutory authority to assess Sec. 6038(b) penalties.
Including common improvement costs in real property basis
The IRS recently released Rev. Proc. 2023-9, which provides guidance for real estate developers to determine when common improvement costs may be included in the basis of individual units of real property held for sale.
Stock repurchase excise tax reporting and payment delayed by IRS
The IRS says covered corporations will not have to report or pay the new 1% stock repurchase excise tax until it issues forthcoming regulations.
Penalty for underpayment of estimated corporate AMT waived for 2023
The IRS waived the penalty for corporations that did not make estimated payments of corporate AMT for their 2023 tax year, saying the move is “in the interest of sound tax administration.”
The inadvertent-error exception to identifying hedging transactions
If taxpayers make a good-faith effort to comply with the hedge identification rules, then most unidentified hedges would likely have at least an argument for inadvertence.
Taxation of employees’ use of corporate apartments
The use of a corporate apartment as part of business travel generally could be excluded as a working condition fringe benefit, provided substantiation and other requirements are met.
Not all employee parking lots are created equal
An employer will have to make some effort to document that the parking available at an employee parking facility has no value, many employers will find that this burden is worth bearing because it allows deducting the full expenses of operating and maintaining the facility.
State conformity to federal treatment of Sec. 174 R&E costs
This item explores which states likely conform to the amendments to Sec. 174, which states likely decouple from those changes, and the issues raised by conformity to or decoupling from the changes.
Sustainable aviation fuel incentives take off
Tax credits were enacted recently to encourage increased production and use of sustainable aviation fuel in lieu of conventional jet fuel, which produces around 3% of the world’s annual carbon emissions.
Taxing marketplace facilitators: Sourcing issues
This items discusses how various types of revenue earned by marketplace facilitators may be sourced under state laws and regulations.
What the Inflation Reduction and CHIPS acts could mean for US importers
This item discusses what the Inflation Reduction and CHIPS acts could mean for U.S. importers, beginning with the CHIPS Act.
Pillar 2: Time for US multinational enterprises to act
Large U.S. multinationals can take steps now to assess the potential impact of the global top-up corporate tax system that appears on the verge of being implemented.
Proposed regs. provide rules for repatriation of intangible property
The regulations would terminate the continued application of the Sec. 367(d) annual inclusion in certain cases when intangible property is repatriated to the United States after previously being transferred to a foreign corporation.
Deducting costs that are usually capitalized
Certain environmental cleanup costs, restaurant ‘smallwares,’ and certain vehicle replacement tires have expensing options that business owners may be unaware of.
M&A pitfalls for deferred research expenditures
Treasury and the IRS have issued minimal guidance on current Sec. 174, and future guidance may provide more clarity or different results than what is detailed in this item.
IRS obsoletes 1958 revenue ruling on research and experimental costs
The ruling, which is being obsoleted as of July 31, allowed a taxpayer that used the expense method for research and experimental expenditures to deduct on an amended return research and experimental expenditures the taxpayer did not deduct in prior years.
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.
