Special Industries

Capital Construction Funds Program

The Capital Construction Funds program encourages construction, reconstruction, or acquisition of vessels by allowing owners or operators to defer federal income taxes under Sec. 7518 on certain money or other property placed into a CCF.

IRS Allows Oil and Gas Company a Bulk Sale Exception

A recent IRS letter ruling provides helpful insights to independent producers of oil and gas that, by claiming allowable percentage depletion deductions, can lower their costs, while at the same time securing contracts for bulk sales of oil and gas with industrial, commercial, and government entities.

Capital Construction Funds: Sec. 7518

This item reviews the Capital Construction Fund (CCF) program, which allows owners and operators of U.S. flag vessels to accumulate the large amounts of capital by deferring federal income taxes on certain deposits of money or other property placed into the fund.

Payments for Future Remediation Expenses Are Not Insurance Premiums

Editor: Joel E. Ackerman, CPA, MST The IRS ruled in Rev. Rul. 2007-47 that payments to an insurance company to cover future capped costs were not insurance payments for tax purposes. The "premium" was an amount equal to the present value of estimated future remediation costs required by the government.

Evolution of Commodity-Linked Investments by Mutual Funds

Editor: Annette B. Smith, CPA Historically, a mutual fund seeking to maintain status as a regulated investment company (RIC) has had limited economic exposure to commodity prices. For example, neither commodity futures contracts nor direct purchases or sales of commodities generate RIC qualifying income under Sec. 851(b)(2). Recently, Rev. Rul.

Service-Warranty Companies—the Hybrid of the Insurance Industry

Executive Summary Premiums from a service-warranty contract can be taken into account in four different ways: full inclusion; service-warranty accounting; advance payments; or as an insurance company. Under the first three methods, the warranty provider is not subject to mandatory C corporation status; however, the insurance company route offers the

Newsletter Articles

SPONSORED REPORT

States look to unclaimed property for revenue

State audits of abandoned and unclaimed property (AUP) have exploded in recent years. This report outlines the escheat process, common types of AUP, how different states are handling it and how companies can plan for potential audits and liabilities.

DEDUCTIONS

Understanding the new Sec. 199A business income deduction

The new deduction allows certain business owners to keep pace with the significant corporate tax cut provided by the Tax Cuts and Jobs Act.