NOL & Other Tax Attributes

Like-Kind Exchange Rules: Continued Evolution

For many years, taxpayers have been able to defer recognition of gain on the disposition of assets by engaging in Sec. 1031 like-kind exchanges. Consequently, many questions and issues surrounding these transactions have been addressed, but many cases and rulings continue to arise each year. This article analyzes these cases and rulings and identifies questions that still need to be answered.

Caution: Sec. 1234A May Apply to an Abandonment Loss

Change the character of a loss from ordinary to capital, and a taxpayer runs the risk of deferring or even failing to realize a tax benefit. While the general rules regarding characterization of gains or losses are well-known, more obscure statutory provisions can change an otherwise ordinary gain or loss into a capital gain or loss.

NOL Carrybacks Limited by Excess Distributions

While practitioners typically think of the application of the CERT rules in cases of debt-financed distributions or stock acquisitions, the rules could apply even if the underlying transaction is not debt-financed.

Underwater Property and Like-Kind Exchanges

 Qualifying for like-kind exchange treatment becomes more complicated if the property exchanged is “underwater”—that is, the debt on the property exceeds its fair market value.

Taxing the Transfer of Debts Between Debtors and Creditors

Assumptions and other transfers of debt between corporations and shareholders or between partnerships and partners can often be tax free as part of a contribution, distribution, reorganization, or liquidation. This article analyzes several types of debt transfers and their potential for recognition of gain or loss and income from cancellation of debt.

Sidestepping Deferred Intercompany Gain

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.

Tax Insider Articles

DEDUCTIONS

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.

TAX RELIEF

Quirks spurred by COVID-19 tax relief

This article discusses some procedural and administrative quirks that have emerged with the new tax legislative, regulatory, and procedural guidance related to COVID-19.