To facilitate the transition away from IBORs and minimize the resulting market disruption, the IRS issued the proposed regulations with an aim of reducing associated tax uncertainty and taxpayer burden.
Under new Sec. 163(j), business interest expense deductions are limited, and a business interest expense that is disallowed in the current year is carried forward to the succeeding tax year.
This article provides an overview of the rules that apply to each type of interest after the passage of the TCJA.
Interest recharacterization rules under Regs. Sec. 1.1411-4(g)(5) can minimize clients’ exposure to the net investment income tax.
In a recent tax court decision, an individual was as determined for tax purposes to be the owner of assets in segregated asset accounts held for the benefit of private placement variable life insurance policies.
The Tax Court held that taxpayers who purchased a residence with the intention to treat part of the tract as investment property could not deduct any of the interest on indebtedness as investment interest.
The IRS issued interim guidance on registration of foreign-targeted bonds and provided transitional relief for withholding agents on the related portfolio interest exception.