The IRS issued 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
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TOPICS / INDIVIDUALS
Income
Regulations Issued on Treasury Inflation-Protected Securities Issued at a Premium
The IRS issued regulations on the tax treatment of TIPS that have more than a de minimis amount of premium and on debt instruments with bond premium carryforward in the holder’s final accrual period.
Excluding and Rolling Over Gain on Disposition of Qualified Small Business Stock
Sec. 1202 allows noncorporate taxpayers to exclude from gross income 50% of any gain from the sale or exchange of qualified small business stock acquired before Feb. 18, 2009, or after Dec. 31, 2011, and held for more than five years.
IRS Illustrates Employee Reimbursement Plans
The IRS has described four situations where employers have recharacterized taxable wages as nontaxable business expense reimbursements and has ruled on whether these arrangements satisfy the business connection requirement of the accountable plan rules.
State Law Property Classifications Do Not Control “Like Kind” Determination
The IRS ruled that state law property classification does not control whether exchanged properties are considered of “like kind” for purposes of Sec. 1031.
Regs. Issued on Integrated Hedging Transactions of Qualifying Debt
The IRS published regulations addressing certain integrated transactions that involve a foreign currency denominated debt instrument and multiple associated hedging transactions.
IRS Clarifies When Debt Instruments Are Publicly Traded
The IRS issued final regulations clarifying the circumstances in which property is traded on an established market (i.e., publicly traded) for purposes of determining the issue price of a debt instrument.
IRS Issues Proposed Regs. on 3.8% Net Investment Income Tax
The IRS released proposed regulations governing the 3.8% net investment income tax imposed under Sec. 1411.
Who Can or Must File a Form 1099-C?
With taxpayers and businesses defaulting on credit and loans, tax advisers may consider whether their clients should issue a Form 1099-C for a bad debt.
Prop. Regs. Provide Guidance on Meals and Entertainment Expenditures
Proposed regulations clarify the definition of a reimbursement or other expense allowance arrangement and provide guidance on the applicability of the Sec. 274(e)(3) exception under various circumstances including employer/employee, two-party, and multiparty arrangements.
Crop Insurance Proceeds: Appropriate Tax Planning Strategies
The severe drought experienced by much of the United States this year, especially in agricultural regions, is expected to produce a record number of crop insurance claims.
Individual Tax Update
This article covers recent developments affecting individual taxation.
Receipt of Form 1099-C May Not Signal Taxable COD Income
It is up to the taxpayer and his or her advisers to correctly identify the appropriate year in which to recognize COD income based on the date it is clear the debt will not be repaid.
Is the Sale of Real Property Ordinary Income or Capital Gain?
Determining whether a real estate sale produces ordinary income or capital gain is difficult and is potentially an issue that can cause a taxpayer to be liable for significantly higher taxes.
Income from Partnership Is Self-Employment Income Where Taxpayer Chose Not to Be a Partner
The Eleventh Circuit held that payments a taxpayer received from a nursing home business were taxable self-employment income despite the taxpayer’s convoluted attempts to characterize them as partnership distributions.
Leave-Based Donation Programs Allowed for Hurricane Sandy Relief
In response to the extraordinary damage caused by Hurricane Sandy and the extreme need for relief, the IRS has released guidance for employers who are considering adopting leave-based donation programs to aid the storm’s victims.
Prop. Regs. Limit Conditions Resulting in Substantial Risk of Forfeiture Under Sec. 83
The IRS issued proposed regulations (REG-141075-09) to clarify specifically which conditions result in a substantial risk of forfeiture under Sec. 83.
Compensation and Benefits Update: Retirement Plans and Executive Compensation
This article focuses on recent changes affecting qualified retirement plans and executive compensation.
Employee Expense Reimbursement Arrangement Guidance Issued
The IRS issued guidance on employee reimbursements and whether they satisfy the business connection and other requirements to be treated as paid under an accountable plan under.
Ponzi Schemes, Clawbacks, and the Claim of Right Doctrine
Many people who lost money in Ponzi schemes are later told by a bankruptcy trustee that they were “net winners” and are required to pay back past withdrawals to be redistributed to the larger pool of victims.
employee benefits & pensions
Profits interests: The most tax-efficient equity grant to employees
By granting them a profits interest, entities taxed as partnerships can reward employees with equity. Mistakes, however, could cause challenges from taxing authorities.
