What’s new for 2022 in federal taxes
A law change and some regulations take effect while an array of provisions expire.
Deductions
Voluntary carbon offsets: The evolution of a business expense
This article discusses the disclosure and reporting of VCOs and whether VCOs should be treated as deductible ordinary and necessary business expenses, capitalizable expenses, deductible charitable contributions, or nondeductible expenses.
Standard mileage rates to go up in 2022
The IRS issued the annual update of the mileage rate taxpayers may use to compute their deductible automobile costs.
Beware of IRS initiatives against microcaptive insurance arrangements
Microcaptive insurance arrangements have been vigorously scrutinized recently by the IRS.
IRS memo illustrates application of Sec. 263 to amounts paid to acquire or create intangibles
The memo provides an analysis of the capitalization of amounts paid to acquire or create intangibles, providing insight into capital expenditures under Sec. 263 and trade or business expenses under Sec. 162, clarifying capitalizing vs. expensing.
Foreign notional interest regimes may hinder deductions of US subsidiaries
Inbound structures involving interest or royalty payments by U.S. subsidiaries to foreign affiliates may trigger anti-avoidance rules where the foreign affiliates operate in countries that have notional interest deduction tax regimes.
Capitalized improvements vs. deductible repairs
The distinctions among betterments, improvements, routine maintenance, and the effects of normal wear and tear are key to determining whether building expenditures are currently deductible or must be capitalized.
Business meal deductions after the TCJA
This article discusses the history of the deduction of business meal expenses and the new rules under the TCJA and the regulations and provides a framework for documenting and substantiating the deduction.
Generic drug manufacturer can deduct patent infringement suit expenses
Legal expenses for notice letters required as part of an application to the FDA for permission to produce and market generic drugs are capitalizable, but legal expenses for patent litigation as a result of certain certifications made during the approval process are deductible.
Safe harbor allows 2020 PPP expenses to be deducted in 2021
The IRS issued guidance on a safe harbor permitting qualifying taxpayers who have PPP loans, who did not deduct expenses related to those loans paid or incurred in 2020 on their 2020 returns, to deduct the expenses on their returns for 2021.
‘Restaurant’ defined for 100% deductible business meals in 2021 and 2022
The IRS issued guidance on the temporary rule that allows a 100% deduction for eligible restaurant meals in 2021 and 2022.
Stock-based compensation cost-sharing regs. following Altera
The Supreme Court’s denial of Altera’s petition could have significant tax and financial reporting consequences for companies that have excluded SBC costs from CSA intangible development cost pools.
Casualty losses related to COVID-19 when there are no physical losses
The COVID-19 pandemic brings taxpayers into uncharted territory with regard to casualty losses without physical damage but where there is still an undeniable impact to the business, especially where property values are permanently reduced due to the pandemic.
Handling tax issues related to noncompete agreements
Covenants not to compete can protect a company’s interest as long as they are drafted in an appropriate manner, but their 15-year amortization period can cause issues.
Deductibility of business expenses funded by PPP loans
This item discusses whether expenses paid for with PPP loans can be deducted as business expenses.
Expenses paid with 2020 PPP loans can be deducted on 2021 tax returns
The IRS issued guidance on a safe harbor permitting qualifying taxpayers who have PPP loans, who did not deduct expenses related to those loans paid or incurred in 2020 on their 2020 returns, to deduct the expenses on their returns for the immediately subsequent tax year, instead of on an amended return or administrative adjustment request for the 2020 tax year.
IRS explains which meals qualify for temporary 100% expense deduction
The IRS issued guidance on Thursday on the temporary rule that allows a 100% deduction for eligible restaurant meals in 2021 and 2022.
Final rules determine when fines and penalties are deductible
The IRS issued final regulations on when fines and penalties paid to a government are not deductible by a taxpayer, including defining when a payment counts as restitution, which may be deductible.
IRS issues additional rules on the business interest expense limitation
The IRS issued final regulations containing rules on the Sec. 163(j) interest expense limitation, including rules for specific passthrough entities and regulated investment companies.
IRS finalizes $1 million executive compensation limit rules
The IRS issued final rules on the $1 million executive compensation limits enacted by the TCJA, finalizing proposed rules with a few changes in response to comments.
