Taxpayers should strongly consider these letter rulings when trying to determine whether they want to structure a borrowing with a regarded entity as the legal borrower or whether they prefer to have a DRE be the legal borrower of the debt.
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Tax Computation
Opportunities for taxpayers with residential rental properties and residential living facilities
During 2021, the IRS issued taxpayer-favorable procedures allowing certain taxpayers that have made the real property trade or business election under Sec. 163(j)(7)(B) with residential rental property to depreciate such property using the shorter 30-yearrecovery period, using ADS, and certain other taxpayers with qualified residential
living facilities to be eligible for the real property trade or business election.
Sec. 481(a) adjustment affects business interest deduction calculation
The IRS advised that a net negative Sec. 481(a) adjustment resulting from a change in method of accounting for depreciation must be included in calculating adjusted taxable income.
Automatic procedures to change a CFC’s depreciation method
The IRS issued Rev. Proc. 2021-26, which contains procedures for certain foreign corporations to obtain automatic consent to change their methods of accounting for depreciation to the alternative depreciation system.
Automobile depreciation limits adjusted for 2021
The IRS issued its annual inflation-adjusted update of depreciation limitations for passenger automobiles (including passenger vans and trucks) placed in service in 2021.
Final regs. issued on qualified improvement property under FDII, GILTI
Final regulations clarify the treatment of qualified improvement property in FDII and GILTI, and foreign tax credit transition rules address post-2017 NOL carrybacks to pre-2018 tax years.
Qualified improvement property and bonus depreciation
The CARES Act corrected an error that had made qualified improvement property ineligible for bonus depreciation; IRS regulations and guidance explain how to take advantage of the change.
IRS updates car and truck depreciation limits
The IRS issued its annual inflation-adjusted update of depreciation limitations for passenger automobiles (including passenger vans and trucks) placed in service in 2021.
Guide to expensing HVAC costs
This guide provides tax preparers an outline of questions to ask clients when evaluating HVAC repair costs.
Final Sec. 1031 regulations do not materially affect cost segregation studies
Compared to pre-TCJA rules, there is no material change in the tax treatment of a building involved in a like-kind exchange, where a cost segregation study has been performed.
IRS permits choice of bonus depreciation rules
The IRS issued final bonus depreciation regulations and withdrew proposed regulations.
Final regs. on bonus depreciation
Treasury and the IRS issued bonus depreciation final regulations that substantially modified the previous proposed regulations in four areas.
Using sampling to efficiently claim bonus depreciation for QIP
Statistical sampling and estimation can be an efficient solution to determine the amount of basis that can now be assigned a 15-year recovery period and to claim bonus depreciation.
Several tax provisions set to expire at end of 2020
Among the expiring provisions are the lower 7.5% AGI floor for medical expense deductions and the deduction for qualified tuition and related expenses.
More final rules on bonus depreciation are issued
The IRS issued final bonus depreciation regulations and withdrew proposed regulations.
Taxpayers allowed choice of bonus depreciation rules
The IRS issued rules for taxpayers to follow in applying recently issued bonus depreciation regulations, including how to make several elections.
Prop. regs. define real property for Sec. 1031 like-kind exchanges
How should components of real property segregated and depreciated as personal property be treated in a like-kind exchange? Newly issued proposed regulations help answer this question by
providing a definition of real property.
IRS issues more bonus depreciation rules
The IRS issued final bonus depreciation regulations and withdrew proposed regulations.
2020 depreciation limits for cars and trucks are issued
The IRS issued the 2020 limits on depreciation deductions for cars and trucks first placed in service in 2020 and the income inclusion amounts for passenger automobiles first leased in 2020.
Qualified improvement property change should prompt taxpayers to act
Taxpayers with qualified property must act to take advantage of changes to the treatment of qualified improvement property, which is now eligible for bonus depreciation. Here are some considerations for taxpayers and their advisers.
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.
