This article discusses who qualifies to take the credit, how to make the election, the calculation and allocation of the credit, and how to report it.
Investors in a partnership were not entitled to deduct credits because the investment transaction was structured solely to facilitate the purchase of the credits.
Temporary regulations issued by the IRS amend an existing safe harbor that is used for determining whether allocations of CFTEs are deemed to be in accordance with the partners’ interests in the partnership.
New rules released by the IRS are intended to improve an existing safe harbor for allocating creditable foreign taxes so that they are deemed to be in accordance with the partners’ interests in the partnership.
The Third Circuit held that a corporate partner in a partnership was not entitled to claim historic rehabilitation credits passed through to it from the partnership because the corporation was not a bona fide partner in the partnership.
Passthrough entities may be overlooking the research tax credit because they are not aware that they are engaged in eligible activities, do not think their activities are qualified, or do not believe they can meet the various requirements.