The Internal Revenue Service issued its annual inflation-adjusted update of depreciation limitations for passenger automobiles, including passenger vans and trucks, placed in service in 2022.
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Tax Accounting
LB&I provides insight into Sec. 263A computations for resellers
This item outlines the general provisions of Sec. 263A, including special rules and exceptions for resellers, and provides insight into a reseller’s uniform capitalization calculation that may be areas of focus during an IRS examination.
Revenue recognition: Time to implement the final regulations
Beginning a detailed analysis early will allow taxpayers the time and flexibility to make those choices and to perform complex computations or make required tax filings.
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.
List of automatic tax method changes updated
A revenue procedure catalogues changes subject to general procedures of Rev. Proc. 2015-13.
IRS issues accounting-method change procedures for small businesses
New procedures follow final regulations to implement simplifications by the law known as the Tax Cuts and Jobs Act.
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.
IRS provides new guidance on accounting method changes for CFCs
For a limited time, the IRS is allowing automatic change procedures for CFCs changing to the ADS method and has clarified the process and certain aspects of audit protection.
AICPA requests LIFO safe harbor
Global supply chain problems caused by the COVID-19 pandemic have made it difficult for US companies to replace inventories, potentially subjecting them to additional taxable income. The AICPA has requested relief under Sec. 473.
Automatic accounting method change procedures updated
The IRS updated the list of accounting method changes to which automatic change procedures apply.
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.
Simplifying the accounting for income taxes
As part of its initiative to reduce complexity in accounting standards, FASB issued ASU No. 2019-12 in late 2019 for the purpose of simplifying accounting for income taxes.
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.
Naked credits and the interest expense limitation
New regulations providing guidance on the application of the Sec. 163(j) interest expense limitation may change how some companies calculate their naked credit.
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.
Interruption of LIFO inventories due to COVID-19 and Sec. 473 relief
Global supply chain problems caused by the COVID-19 pandemic have made it difficult for US companies to replace inventories, potentially subjecting them to additional taxable income. The AICPA has requested relief under Sec. 473.
Automatic accounting method change procedures updated
The IRS updated the list of accounting method changes to which automatic change procedures apply.
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.
Commercial real estate: Landlords can turn to Sec. 467
This item explores commercial property holders’ use of Sec. 467, which governs the timing of rental income and expense in certain circumstances.
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.
