This item discusses how an ELA can occur and potential methods to minimize or eliminate these balances before they are recaptured into taxable income.
The TCJA significantly broadened the application of loss limitation rules.
The proposed regulations effectively treat a consolidated group as a single entity for purposes of determining the sharing of tested loss.
To satisfy the Ilfeld standard, the court noted that there is a presumption that regulations do not permit double deductions for the same loss.
This column examines the meaning of the standard and discusses whether the economic substance doctrine still should be applied to a transaction that does not run afoul of the “with a view” standard.
The regulations under Sec. 108(i) provide special rules for consolidated groups.
The IRS ruled that a distributing corporation’s acquisition of an interest in a partnership was not an acquisition of a new or different business.
Proposed Regulations Would Provide Guidance for Allocation and Absorption of Losses on a Consolidated Return
Proposed regulations address an issue when there is a consolidated net operating loss.
Compliance With Short-Period Return Rules Can Stave Off Penalties and Rejection of Elections as Untimely
The unextended due date of the return of a domestic corporation, Form 1120, U.S. Corporation Income Tax Return, generally is the 15th day of the third month following the close of the corporation's tax year. However, when a target corporation joins the consolidated group of a purchasing corporation on a date other than the first day of the target corporation's tax year, the due date for the target corporation's short-period final return is determined without regard to the last day of the short period.
The IRS concluded that two professional corporations could file a consolidated return with another corporation, even though licensed professionals, not one of the members of the consolidated return group, were the actual legal owners of these PCs' stock, as required by state law.
The Tax Court held that all the consolidated income of an affiliated group that consisted of a corporation that was a qualified personal service corporation and another corporation that was not a qualified personal service corporation should be taxed using the graduated tax rates of Sec. 11(b)(1).
When entities change their classification, several income tax issues that are not immediately apparent may come into play. When these issues are discovered, they may require amending tax returns and could result in tax penalties as well.
An affiliated group of corporations that did not file a consolidated return for the immediately preceding tax year may file a consolidated return in lieu of separate returns for the tax year under certain conditions.
The IRS announced that it will permit an affiliated group of corporations that did not file the required Form 1122 for all of its subsidiaries to be treated as if its subsidiaries had filed Form 1122.
This item summarizes some of the relevant rules that govern the tax years of subsidiaries that join or leave a consolidated group.
Under the provisions of ATRA, corporations or consolidated groups with AMT credits from pre-2006 tax years may continue to accelerate the use of these credits instead of claiming bonus depreciation for eligible qualified property.
Groups can effectively eliminate the intercompany gain in certain circumstances, thereby reducing the possibility of inadvertently triggering intercompany gain and freeing taxpayers from the need to plan transactions so as to avoid a trigger.
Under the consolidated return rules, special considerations apply when a subsidiary member (Sub) joins or leaves a consolidated group during the tax year.
The tax treatment of an insolvent debtor realizing discharge of indebtedness income under the U.S. consolidated income tax return rules can vary considerably depending on the particular circumstances.
This item illustrates how transfers of items outside a U.S. consolidated group can trigger a deferred intercompany gain and suggests ways to avoid that result in certain situations.