The IRS has released an Industry Issue Directive instructing its examining agents to offer a safe-harbor election to certain taxpayers under examination regarding the market values used in their mark-to-market calculations.
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TOPICS / CORPORATIONS
Gains & Losses
Separately Identifiable Intangible Assets: Tax Opportunities and Traps
Treating self-created customer-based intangibles as assets separate from goodwill can result in more favorable tax treatment for these intangibles. This article examines the rules regarding the separate treatment of self-created customer-based intangibles and the situations in which separate treatment may be beneficial.
Special Limitation Periods for Carryback Assessments
By exercising its setoff authority, the IRS has been able to achieve the same limitation period in Form 1120X carryback situations as in tentative refund cases with Form 1139.
Ordinary Worthless Stock Deductions: Characterizing Subsidiary Receipts
An ordinary loss deduction for worthless stock of an affiliated operating subsidiary generally is permitted as long as more than 90% of the subsidiary’s gross receipts are from active operating income. This item discusses the difficulty of determining whether a subsidiary’s gross receipts qualify as active operating income for this purpose under various circumstances.
FIRPTA and the Return of Capital Distributions
FIRPTA is quite complex and filled with traps for the unwary, especially in the area of return of capital distributions.
The Impact of Unified Loss Rules on Earnings and Profits
This item explores whether an adjustment is made for E&P purposes when a member of a consolidated group is required under the unified loss rules to reduce its basis in the stock of another member for regular tax purposes upon the first member’s disposition of the second member’s stock at a loss for regular tax purposes.
Prop. Regs. on Controlled Group Deferred Losses
The IRS issued proposed regulations on the time for taking into account deferred losses on the sale or exchange of property between members of a controlled group (REG-118761-09).
IRS Increases Focus on Tax Hedge Identification Rules
The IRS recently signaled its increasing interest in the tax treatment of hedging transactions, particularly with regard to proper taxpayer identification.
IRS Issues Proposed Regulations on Controlled Group Deferred Losses
The IRS issued proposed regulations on the time for taking into account deferred losses on the sale or exchange of property between members of a controlled group.
Built-In Gains Recognition Period Temporarily Reduced for 2011 Transactions
The Small Business Jobs Act of 2010 includes an additional temporary reduction of the recognition period for built-in gains tax under Sec. 1374.
Unrealized Built-in Gains and Losses Under Sec. 382 and the Tax Accounting Rules
Do not forget to consider the tax accounting method rules (for accrued income or expense items) when dealing with Sec. 382.
Extended NOL Carrybacks and the AMT
The addition and expansion of the Sec. 172(b)(1)(H) election has created numerous tax planning opportunities for corporations that have sustained NOLs; the ability to change the character of election-year ATNOLs creates an additional benefit of making this election.
Planning to Escape the S Corporation Built-in Gains Tax in 2010
The American Recovery and Reinvestment Act of 2009 suspended imposition of the built-in gains (BIG) tax for tax years beginning in 2009 and 2010 for qualifying S corporations.
Tax Implications of the Five-Year NOL Carryback
An extended carryback period of up to 5 years is available for NOLs generated in 2008 or 2009. The author reviews some of the practical issues that should be considered when deciding whether to take advantage of the extended NOL carryback period.
Sec. 465 Traps for the Unsuspecting S Corporation Shareholder
Without proper planning, the at-risk rules set out in Sec. 465 can limit the amount of deductible S corporation losses.
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.
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.
Significant Recent Corporate Developments
This article discusses selected developments in U.S. federal income taxation of corporations and consolidated groups during 2009.
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.
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.
PRACTICE MANAGEMENT
2026 tax software survey
CPAs rate their return preparation software’s performance during this year’s tax season.
