This item focuses on how real estate owners that develop, hold, and rent their own property can benefit from an exception to Sec. 263A uniform capitalization requirements if they qualify as “small businesses.”
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Tax Accounting
Partnership extraordinary-item treatment for accounting method adjustments
The regulations under Secs. 481(a) and 706 set forth rules governing a partnership’s treatment of accounting method changes and partner allocations but do not provide clear guidance on how income from an unfavorable Sec. 481(a) adjustment should be allocated among partners with varying interests during the four-year recognition period.
IRS updates list of automatic accounting method changes
The IRS on Thursday provided a comprehensive, updated list of changes in tax accounting methods to which the automatic change procedures in Rev. Proc. 2015-13 apply. The list includes 29 changes that the Service describes as significant.
The must-know accounting methods for 2022 (and after)
This item highlights five topics specifically related to accounting methods to help taxpayers and practitioners comply with law changes, streamline onerous compliance processes, and minimize tax liabilities.
R&E expenses: Automatic accounting method change procedures
This item discusses IRS guidance explaining the procedures for taxpayers to request automatic accounting method changes for specified R&E expenses to comply with the 2017 amendments to Sec. 174.
Improve fixed-asset management with technology
This item focuses on how to use technology to improve fixed-asset management.
Assessing the need for a valuation allowance
Companies must analyze all negative and positive evidence to determine whether a valuation allowance is needed.
Auto depreciation limitations make a big leap for second year in a row
The IRS issued sharply higher new depreciation limitations for passenger automobiles, including those for which bonus depreciation is applied.
All-events test for sales incentives — another perspective
Before a liability is considered as incurred, the ‘last event’ necessary to establish the existence of the taxpayer’s liability must have happened, and the liability cannot be contingent.
All-events test for sales incentives — one perspective
A company’s mere promise to pay was not sufficient to consider the liability fixed since all of the events to establish the fact of the liability did not occur during the year the offer was made.
Key tax provisions in the Senate reconciliation bill
The Inflation Reduction Act passed by the Senate on Sunday includes many tax items, some designed to raise revenue and others to promote various clean energy initiatives.
Depreciation recapture in the partnership context
This item discusses how depreciation recapture applies in certain situations involving partnerships.
Permanent component of a temporary difference: ASC Topic 740 analysis
The process of accounting for stock options, a mainstay in the equity compensation portfolio, is unique within the category of book-tax differences.
Senate passes CHIPS Act with semiconductor tax credit
The bill’s semiconductor production incentives would include a new 25% investment credit.
Sec. 451 regulations offer ways to reduce revenue acceleration
This item summarizes the TCJA’s changes to Sec. 451 and discusses the opportunities the December 2020 final regulations may provide to reduce income acceleration.
Foreign tax credit: Changing from cash to accrual basis
Regulations provide regulatory authority for Treasury’s long-held position that an individual taxpayer who elects on a timely filed return to claim the foreign tax credit on the cash basis may not change to the accrual basis on an amended return.
Early signs from Treasury on the scope of digital asset cost basis reporting
This item discusses issues Treasury will have to grapple with when it provides cost basis reporting guidance.
A strategy to raise a business’s interest limitation
This article discusses a strategy to allow more interest to be deducted under the limitation involving the strategic adoption of FASB Accounting Standards Codification Topic 606, Revenue From Contracts With Customers.
New accounting method change procedures issued for small business taxpayers
The IRS and Treasury released two revenue procedures on accounting method change procedures.
Letters from IRS to warn taxpayers about possible QOF actions needed
The IRS is sending letters to taxpayers who may need to take additional actions related to qualified opportunity funds.
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.
