The IRS issued more regulations that take aim at transactions that attempt to avoid the repeal of the General Utilities doctrine.
Advertisement
TOPICS / CORPORATIONS
Gains & Losses
Attacking Transactions to Evade General Utilities Repeal
Temporary regulations prevent corporations from avoiding tax through the use of partnerships.
Proposed Regulations Would Require Gain or Loss Recognition on Certain Installment Obligation Transfers
The IRS issued proposed regulations that would require transferors that transfer installment obligations for equity interests in corporations or partnerships in nonrecognition transactions in satisfaction of those obligations to recognize gain or loss.
IRS Clarifies Ordering Rules for Alternative Tax NOLs
IRS clarified that the amendment to Sec. 56(d) made by the WHBAA did not create new ordering rules for absorbing ATNOLs.
License vs. Royalty: The Constant Question for Pharmaceuticals
Pharmaceutical companies confront several tax differences when determining whether a transaction is a license or sale.
Transfers of Installment Obligations Would Trigger Gain or Loss Under Proposed Rules
The IRS issued proposed regulations relating to the nonrecognition of gain or loss on certain dispositions of an installment obligation.
IRS Finalizes Rules on Relief From Failure to File GRAs
The IRS finalized proposed regulations to update the rules that apply to U.S. taxpayers that fail to file gain recognition agreements when they transfer certain property to foreign corporations in nonrecognition transactions.
Caution: Sec. 1234A May Apply to an Abandonment Loss
Change the character of a loss from ordinary to capital, and a taxpayer runs the risk of deferring or even failing to realize a tax benefit. While the general rules regarding characterization of gains or losses are well-known, more obscure statutory provisions can change an otherwise ordinary gain or loss into a capital gain or loss.
Like-Kind Exchange Rules: Continued Evolution
For many years, taxpayers have been able to defer recognition of gain on the disposition of assets by engaging in Sec. 1031 like-kind exchanges. Consequently, many questions and issues surrounding these transactions have been addressed, but many cases and rulings continue to arise each year. This article analyzes these cases and rulings and identifies questions that still need to be answered.
Cost Basis Denied Due to Failure to Meet the All-Events Test
The Court of Federal Claims denied approximately $1.6 billion in cost basis related to decommissioning liabilities assumed in connection with the purchase of three nuclear power plants.
IRS Finalizes Regs. Addressing Limitations on Transfers of Built-In Losses
The IRS issued final regulations under Sec. 362(e)(2) that provide guidance on the determination of the bases of assets (including stock) transferred in certain nonrecognition transactions to which Sec. 362(e)(2) limitations on built-in losses apply.
Sec. 631(b) and the Taxation of Standing Timber Sales
Under Sec. 631(b), gains or losses from the sale of standing timber are considered gains and/or losses from the sale of business use property.
Qualified Small Business Stock: An Opportunity for Tech Startups
The existence of convertible debt, incentive stock options, warrants, and preferred stock, along with the need for additional capital, creates opportunities for tech companies to issue additional qualified small business stock in 2013.
Current Developments in S Corporations
This article discusses major changes and developments that directly affect S corporations and their tax advisers during the period of this update (July 10, 2012–July 9, 2013).
ATNOLs and Charitable Contribution Carryovers: Which Takes Precedence?
The uncertainty surrounding the ordering rules of the 10% limit on the charitable deduction and the 90% limit on the ATNOL deduction has been affecting more corporate taxpayers as the economy recovers and these corporations start generating current-period taxable income.
NOL Carrybacks Limited by Excess Distributions
While practitioners typically think of the application of the CERT rules in cases of debt-financed distributions or stock acquisitions, the rules could apply even if the underlying transaction is not debt-financed.
IRS Issues Final Rules on Exceptions From REIT or RIC Built-in Gain Recognition
The IRS issued final regulations that provide guidance on the recognition of built-in gain in certain transfers of property from a C corporation to a RIC or REIT.
Failing Subchapter C Requirements to Avoid Nonrecognition Treatment
If a transaction satisfies the substantive tests for certain subchapter C nonrecognition provisions, can the taxpayer nonetheless achieve a taxable exchange by intentionally violating procedural requirements?
Underwater Property and Like-Kind Exchanges
Qualifying for like-kind exchange treatment becomes more complicated if the property exchanged is “underwater”—that is, the debt on the property exceeds its fair market value.
IRS Not Allowed to Reclassify Passive Activity Income
The Tax Court held the IRS could not reclassify the taxpayer’s income from the rental of cellphone towers and the land they were situated on to his wholly owned S corporation as nonpassive income under the self-rental rule.
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.
