The new safe-harbor guidance for digital asset transaction reporting in Rev. Proc. 2024-28 goes into effect Jan. 1, 2025. This article explains how taxpayers may rely on the safe harbor to allocate unused basis of digital assets to digital assets held within each wallet or account of the taxpayer.
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Tax Accounting
Bonus depreciation phaseout planning
With bonus depreciation phasing out through 2027, taxpayers have an opportunity to review their accounting methods with regard to fixed assets to ensure they are using the best methods.
Card reward liabilities are eligible for the recurring-item exception
A Chief Counsel Advice memo confirms that accrual-method credit card issuers may use the favorable method, distinguishing the situation from that of Giant Eagle.
Electing the UNICAP historic absorption ratio under the modified simplified production method
To avoid contending with the complex and time-consuming calculations of the uniform capitalization rules under Sec. 263A, taxpayers may want to consider electing the historic absorption ratio with this method.
Automatic accounting method changes list updated by IRS
The IRS on Tuesday provided a comprehensive list of changes in tax accounting methods to which the automatic change procedures in Rev. Proc. 2015-13 apply. The list includes 21 changes described as significant.
Recognizing transactions that trigger built-in gains or losses
Various types of transactions can cause an S corporation to incur built-in gains or losses, including Sec. 481 adjustments from a change in accounting method.
Increased U.S. transfer-pricing enforcement: What’s at stake?
Multinational enterprises can expect an IRS encouraged by a string of court victories in recent years to more closely scrutinize transfer pricing and perhaps assert hefty penalties.
IRS updates list of automatic changes
the IRS has updated the list of accounting method changes for which the automatic change procedures of Rev. Proc. 2015-13 (as modified) apply.
Defining software development costs
Software development costs that historically may not have been identified as qualified research expenditures for purposes of the Sec. 41 tax credit for increasing research activities need to be identified to comply with the capitalization requirement under Sec. 174.
A UNICAP exception for real estate development
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.”
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.
INDIVIDUALS
Current Developments in Taxation of Individuals: Part 1
This update surveys recent federal tax developments involving individuals, including court cases, rulings, and guidance issued during the six months ending October 2025.
