Compensation and benefit deductions when domesticating a CFC
This item briefly discusses some risk areas for newly domesticated CFCs to help advisers spot issues for clients.
Deductions
Regs. governing $1 million compensation limits are proposed
The IRS issued proposed regulations on the Sec. 162(m) $1 million limit on executive compensation paid by certain publicly held corporations.
Proposed regs. issued on meal and entertainment expense deductions
The IRS issued proposed rules clarifying that taxpayers may generally continue to deduct 50% of the food and beverage expenses associated with operating their trade or business, despite changes to the meal and entertainment expense deduction under Sec. 274.
Tax Court shoots down finder’s fee deduction
A company acquired by another company cannot take a deduction for a fee from the acquisition transaction that it paid on behalf of the acquiring company.
The business meal expense deduction after the TCJA
This article explores the competing perspectives and discusses the IRS’s interim guidance on the deductibility of business meals.
Proposed regs. would govern Sec. 162(m) executive compensation limits
The IRS issued proposed regulations on the Sec. 162(m) $1 million limit on executive compensation paid by certain publicly held corporations.
IRS releases guidance on treatment of transaction costs
The IRS’s Large Business and International Division released “Examining a Transaction Costs Issue” regarding the treatment of transaction costs incurred in certain business transactions.
Foreign-derived intangible income guidance addresses many open questions
Sec. 250 allows domestic corporations a deduction for their “foreign-derived intangible income.” Proposed regulations that were issued earlier this year answer many outstanding questions regarding the calculation of this new deduction but also include documentation requirements that may prove onerous for some taxpayers.
W-2 methods proposed for Sec. 199A(g) deduction by agricultural co-ops
The IRS issued methods for calculating W-2 wages for the Sec. 199A(g) deduction for agricultural and horticultural cooperatives, similar to the former Sec. 199 domestic production activities deduction.
Taxation of sexual harassment settlements post-TCJA
Because of the considerable tax consequences, the new law will encourage plaintiffs and defendants to refrain from including a nondisclosure agreement in their sexual harassment settlements.
Potential pitfalls of charitable contribution substantiation and reporting
Failure to properly complete all required fields on Form 8283, including the donor’s cost or other basis, could jeopardize the entire deduction with respect to the donated property.
New business interest expense rules issued in proposed form
The IRS issued proposed regulations on the business interest expense limitation in Sec. 163(j), which was amended by the law known as the Tax Cuts and Jobs Act.
IRS issues chief counsel advice on success-based fees
The IRS concluded that a taxpayer was required to capitalize 100% of an investment banking fee because it failed to satisfy the documentation requirement for success-based fees under Regs. Sec. 1.263(a)-5.
More positive news for taxpayers with pilot model supply expenses
Recent events should give taxpayers greater confidence to include pilot model expenses as Sec. 74 expenses and R&D supply costs.
Sec. 162(m) grandfather rule can apply to more than just performance-based compensation
The Sec. 162(m) grandfather rule provides multiple opportunities outside of the exemption for performance-based compensation.
Commitment fees related to revolving credit agreement
The IRS released advice that concluded that an accrual-based taxpayer was entitled to deduct quarterly commitment fees paid related to its revolving credit agreement.
IRS says no to dividends-received deduction related to ETF shares
The IRS concluded that a derivative that referenced a stock index was “substantially similar or related property” to the stock of an exchange-traded fund that held the components of the index.
Certain moving expenses incurred in 2017 not subject to withholding and employment tax in 2018
Employer reimbursements made in 2018 of qualified moving expenses incurred prior to 2018 in connection with a move that occurred prior to Jan. 1, 2018, may be excluded from employees’ wages and gross income despite the suspension of the exclusion for tax years 2018 through 2025.
IRS clarifies deductibility of business meals
The IRS issued guidance on the deductibility of meal and entertainment expenses after the modification of Sec. 274 by the TCJA.
Proposed regs. outline new business interest expense limitation
The IRS issued proposed regulations on the business interest expense limitation in Sec. 163(j), which was amended by the law known as the Tax Cuts and Jobs Act.
