This article discusses the tax consequences of transaction costs in four settings: in general, when acquiring or producing tangible assets, when acquiring or creating intangible assets, and when acquiring a business.
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TOPICS
Individuals
IRS Gives Relief for Late Elections to Combine Real Estate Activities
The IRS established a special procedure by which taxpayers can make a late election to treat all their real estate activities as a single activity for purposes of meeting material participation rules.
Capital Gain Exclusion on Small Business Stock
The Small Business Jobs Act of 2010 allows 100% exclusion from gross income of capital gains from the sale of certain qualified small business stock (QSBS). The deadline has been extended to January 1, 2012.
Interest on Home-Equity Indebtedness
The IRS ruled that a taxpayer can deduct as qualified residence interest up to $1.1 million of the debt securing the purchase of a taxpayer’s principal residence.
Violation of Public Policy and the Denial of Deductions
Recent events have drawn attention to the disallowance of deductions where allowing the deductions would violate public policy. This article discusses the disallowance of deductions under Sec. 162 and Sec. 165 for public policy reasons.
Day-Trading Losses Are Dissipation of Assets
The Tax Court held that a taxpayer’s losses from a period of day-trading activity constituted a dissipation of assets that the IRS could take into account in determining whether to accept the taxpayer’s offer in compromise.
A Blended Approach to Teaching Tax Writing Skills
This column describes how a group of tax professionals, one of whom is also an adult learning specialist, collaborated with a writing consultant to create a distinctive training experience for CPAs on how to write for the profession.
Cooperative Owner Cannot Deduct Cooperative’s Casualty Loss
A shareholder in a cooperative housing corporation was not allowed to deduct as a casualty loss an assessment levied against her by the cooperative to pay for damages caused by the collapse of a retaining wall on its property.
Noncompete Covenants in Mergers and Acquisitions: Compensation or Capital Gain?
This item discusses the tax rules surrounding the treatment of noncompete covenants and cautions against overreliance on financial accounting reporting in making tax determinations.
Electing to Treat Musical Works as Capital Assets
The IRS issued final regulations governing how to elect to treat the sale or exchange of a musical work or copyright in a musical work as a sale or exchange of a capital asset.
Contribution Deduction Denied for Gifts to Family Public Charity
The Tax Court denied a taxpayer’s claim for a deduction for a contribution of stock to a charitable foundation that the foundation used to set up a family public charity account in which the taxpayer’s contribution was segregated for investment and future distribution at the taxpayer’s discretion.
IRS Will Allow Costs of Breast Pumps as Deductible Medical Expenses
The IRS has announced that it will treat expenses for breast pumps and supplies that assist in lactation as deductible medical expenses, and that the amounts that a taxpayer is reimbursed for these expenses will not be income to the taxpayer.
Retirement Plans, IRAs, and Annuities: Avoiding the Early Distribution Penalty
This article discusses how the 10% penalty on early distributions and the exceptions apply to various types of plans, accounts, and annuities.
Unfair Lending Practice Settlement Does Not Result in Income to Borrower
The IRS advised that adjustments to loan principal amounts under a settlement to reform unfair lending practices do not result in income to the borrower, even though the adjustments result in a reduction in the amount the borrower will pay under the loan
Free File Program Expanded to Include Returns Filed from Overseas
The IRS announced that taxpayers who live in foreign countries can now use the Free File program to prepare and e-file their federal tax returns.
First-Time Homebuyer Credit Recapture Causing IRS Processing Problems
The IRS announced that it is having problems processing tax returns that involve repayment of the Sec. 36 first-time homebuyer credit for 2008 home purchases.
The Changing Landscape of Conservation Easements: Appendix
This appendix discusses various recent and landmark decisions affecting the law of conservation easements. It accompanies the article “The Changing Landscape of Conservation Easements.”
The Changing Landscape of Conservation Easements
Conservation easements are some of the most effective tools available to ensure permanent conservation of privately held land in the United States. This article discusses federal income tax benefits from the creation of conservation easements.
Required Minimum Distribution Alternatives for IRA Beneficiaries
This article discusses the distribution options available to IRA beneficiaries, with an emphasis on opportunities to control the timing of the distribution period and actions that must be taken on a timely basis to achieve the desired outcome.
Making Gifts to Minors
This column discusses the advantages and disadvantages of gifting under the Uniform Gifts to Minors Act or the Uniform Transfers to Minors Act and in what kinds of situations each should be used.
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.
