Sec. 987 foreign currency regulations applicability date extended again
On Aug. 15, 2022, the IRS announced that it intends to defer by one more year the applicability date of certain foreign currency regulations under Sec. 987.
Income
Sec. 163(j) business interest limitation: New rules for 2022
This item discusses how the rules for calculating ATI have changed for 2022 and beyond and how this affects the deductibility limit.
Social Security wage base, COLA set for 2023
The Social Security Administration announced the maximum amount of wages subject to Social Security tax in 2023 and a cost-of-living adjustment (COLA) for Social Security benefits. The COLA is 8.7%.
Dispute remains over whether couple sold house due to poor health
Taxpayer’s health may have been the reason for sale of personal residence, but the issue may not be material to whether taxpayers are entitled to an exclusion of gain on the sale.
‘Swag bags’ are back: Influencers and noncash compensation
This item discusses whether and when ‘freebies’ or discounts result in taxable income to the influencer and possible limitations on deductions for the related expenses.
New, lower Form 1099-K threshold prompts cautions, criticisms
The new, lower $600 reporting threshold for reporting credit card and cash payment app transactions will likely lead to problems for taxpayers and payment settlement entities, the Taxpayer Advocate Service warns.
Current developments in taxation of individuals
This semiannual update covers recent federal tax developments involving individuals, highlighting noteworthy IRS guidance and decisions of the Tax Court and other courts, as well as tax changes made by legislation.
Taking possession of coins in IRA causes a taxable distribution
A taxpayer has taken a distribution from a self-directed IRA if he or she takes physical possession of IRA assets;
Trust terms do not create legal obligation for claim-of-right purposes
A potential restriction on the sale of stock by a trust does not cause the trust’s grantor’s right to the income to be restricted for claim-of- right doctrine purposes.
Lenders should not report student loans discharged under ARPA
The IRS advises that Form 1099-C, Cancellation of Debt, should not be filed for student loans covered by the ARPA temporary special rule excluding most discharges from borrowers’ income.
Seven strategies to accelerate income in response to increasing rates
Due to concern about tax rate increases, some taxpayers may be looking to accelerate income. While income acceleration does not make sense in all circumstances, this article outlines seven strategies for accelerating income when it does.
New FAQs cover interplay of unemployment income exclusion and credits
The IRS advises on the effects on tax credits and the Free Application for Federal Student Aid and what taxpayers should do.
Net investment income tax: C corporation shareholders who are also employees
Chief Counsel Advice found that a taxpayer who was both a shareholder and an employee of the dividend-issuing corporation did not qualify for the exception to the net investment income tax for dividend income derived from a trade or business.
Making the Sec. 83(i) election
Sec. 83(i) allows a qualified employee to defer income inclusion from the exercise of a restricted stock unit or option of the qualified stock of a nonpublicly traded corporation for up to five years from the date of vesting.
Tax Court rules on property basis reduction timing
The Tax Court held that a taxpayer was required to reduce the bases of depreciable real properties to calculate the basis adjustment necessary for determining the amount of the QRPBI discharge that may be excluded from income.
Individual tax update
This semiannual update surveys recent federal tax developments involving individuals.
IRS refunding taxes overpaid on unemployment benefits
To help taxpayers who might otherwise have been required to file amended income tax returns, the IRS announced that it will automatically issue to eligible taxpayers refunds of income tax paid on 2020 unemployment benefits.
Compensatory split-dollar life insurance benefits are compensation
Economic benefits from a compensatory split-dollar life insurance arrangement are not property distributions.
Credit card rewards for purchases of gift cards are not taxable income
Credit card rewards attributable to purchases of Visa gift cards are purchase price rebates.
Revisiting withholding on equity compensation
In the time of COVID-19, where employers may increasingly turn to equity compensation to save on cash compensation expenses and employees are increasingly mobile, there is increased risk for employers.
