The IRS announced that it was further extending the effective date until 2014 for proposed regulations issued under Sec. 871(m).
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Tax Accounting
Corporation Cannot Deduct California Business Privilege Tax in Year Paid
An accrual-basis taxpayer could not deduct the California business privilege tax in the year it was paid, even though California treated the tax as being incurred in that year.
Is Office Artwork Depreciable Property?
Whether office artwork and decor is depreciable depends on whether the decorations are considered “valuable and treasured” art pieces or just plain tangible property used in the trade or business.
Is the Value of Cost Segregation Depreciating?
An analysis of recent Tax Court decisions suggests that any purported demise of cost-segregation studies may be premature.
Customer Reward Programs: Deducting Fulfillment Costs Prior to Economic Performance
Regs. Sec. 1.451-4 provides a narrow exception to the economic performance rules that allows accrual-basis taxpayers who issue premium coupons (or trading stamps) to deduct the estimated fulfillment cost of the coupons (or stamps) at the time they are issued.
AICPA Recommends Changes to Tangible Property Guidance
The AICPA recommended various changes and simplifications to the regulations regarding the treatment of expenditures incurred in selling, acquiring, producing, or improving tangible assets.
Post-Deal Depreciation: Impact of Certain Nonrecognition Transactions
When planning an incorporation or reorganization transaction, taxpayers and their advisers may not examine in depth the related accounting method and depreciation issues that arise as a result of the transaction.
Nonaccrual-Experience Book Safe-Harbor Method
Taxpayers generating revenues from services may now be able to use the nonaccrual-experience book safe-harbor method to exclude qualifying uncollectible revenues from taxable income.
Accounting for Customer Loyalty Programs: Opportunities and Pitfalls
An often overlooked regulation may offer substantial benefits with respect to the treatment of redemption costs for taxpayers with loyalty programs.
Recurring-Item Exception: Can Economic Performance Be Accelerated?
Rev. Rul. 2012-1 addresses the application of the economic performance rules and whether the recurring-item exception may be applied to accelerate economic performance with respect to liabilities for the lease of equipment and a related maintenance agreement.
Appeals Court Invalidates Associated Property Rule in Capitalization Regulations
The Federal Circuit held that the “associated property” rule requiring capitalization of interest expense under Sec. 263A was invalid insofar as it applies to property temporarily withdrawn from service.
Are Taxpayers Bound by Purchase Price Allocations?
A recent Tax Court opinion highlights the importance of preacquisition planning with respect to agreed-upon purchase price allocations in asset acquisition agreements under Sec. 1060.
Removal of Sec. 163(j) Limitation Does Not Qualify as Accounting Method Change
The IRS concluded that removing the Sec. 163(j) limitation on the deduction of interest paid on a loan from a related party does not qualify as an accounting method change under Sec. 446.
Tax Method Accounting Change Required for Change in Book Recognition on Multiple-Deliverable Contracts
Taxpayers using the one-year deferral method to recognize advance payments on multiple-deliverable contracts for federal income tax purposes should note that a change in the underlying revenue recognition method used for book purposes could trigger a tax accounting method change in the year of the change.
Post-Implementation Review of FIN 48
The Financial Accounting Foundation issued its Post-Implementation Review (PIR) Report on FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes.
Tangible Property Regulations
The IRS recently released the long-awaited tangible property regulations, commonly referred to as the “repair” regulations.
IRS Issues Guidance on Accounting Method Changes for Repair Regs.
The IRS issued two revenue procedures detailing how taxpayers may obtain IRS automatic consent to the accounting method changes required by the new repair and tangible property regulations.
2012 Automobile Depreciation Limits
The IRS issued the 2012 inflation adjustments to the depreciation limitations and lease inclusion amounts for certain automobiles under Sec. 280F (Rev. Proc. 2012-23).
IRS Issues Prop. Regs. on Retail-Inventory Method
Taxpayers using the retail-inventory method should review their calculations to determine if they are currently reducing both the numerator of the cost-complement ratio and the retail selling price of ending inventory for sales-based vendor allowances and related markdowns.
IRS Suspends Repair/Capitalization Exams Pending Accounting Method Changes
The IRS issued a directive for field examinations on the repair vs. capitalization issue that essentially suspended current examinations so as to permit taxpayers to file accounting method changes under just-issued revenue procedures.
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.
