Reducing GILTI liability using CFC accounting method change procedures
Methods of accounting may be an effective tool in tax planning for GILTI; however, method change procedures for CFCs differ from procedures for domestic taxpayers.
Accounting methods
UNICAP: Changing to the modified simplified production method
This discussion focuses on how to make the switch from the SPM to the MSPM.
ASC Topic 842 changes financial, but not tax, accounting for leases
Topic 842 does not affect how leases are treated for federal income tax purposes. Thus, differences in the treatment of leases for financial accounting and income tax accounting remain, and implementing Topic 842 may highlight improper historical tax accounting methods.
Inflation adjustments affect small business limits, Sec. 179 expensing
Inflation adjustments for 2019 and 2020 may increase the number of taxpayers that qualify as a small business and the amount of costs that can be expensed under a Sec. 179 election.
A renewed chance to revisit old assets for repairs and maintenance expense
For the 2019 tax year, taxpayers and their accountants should seriously consider revisiting repairs and maintenance when planning strategies for increased deductions.
Opportunities and pitfalls with automatic method changes for revenue recognition
Taxpayers must carefully examine their revenue line items to ensure that financial accounting changes or new tax laws have not exposed them to compliance risk.
Advance payments for goods and services
Treasury and the IRS released Prop. Regs. Sec. 1.451-8, which provides rules for the deferral of advance payments for goods, services, and certain other items under Sec. 451(c).
Comprehensive list of automatic method changes provides opportunities
This annual update allows taxpayers and practitioners to see what new automatic changes and favorable terms and conditions the IRS provides.
IRS updates its automatic accounting method change procedures
The IRS released updated procedures for automatic accounting method changes, which are accounting method changes that can be made without the IRS’s consent.
Timing of revenue: Prop. regs. issued under Sec. 451(b)
New Sec. 451(b) may require accrual-method taxpayers with applicable financial statements to accelerate the recognition of gross income in certain situations.
A quirk in the TCJA’s small business exceptions
This article discusses the tax shelter exclusion and how certain farm and nonfarm businesses will be considered tax shelters because they qualify as “syndicates.”
Automatic accounting method change procedures updated
The IRS released its updated procedures for automatic accounting method changes, which are accounting method changes that can be made without the IRS’s consent.
Tax accounting rules issued for advance payments
Taxpayers that use the accrual method and receive advance payments for good or services were given new rules by the IRS on when to include the advance payments in income.
Foreign corporations may not receive audit protection for accounting method changes
This item discusses the limitation on audit protection that arises as a result of Sec. 965, enacted as part of the TCJA, which imposes a one-time “transition” tax on unrepatriated E&P of certain FCs.
Tax accounting for businesses after the TCJA: Some widely applicable and lesser-known changes
This item discusses certain TCJA changes to domestic provisions relevant to tax accounting.
IRS issues safe-harbor procedure for vehicle bonus depreciation
The IRS issued a safe-harbor procedure that taxpayers may follow for determining the deduction for depreciating passenger vehicles when they are eligible for 100% bonus depreciation but are also subject to the Sec. 280F limits on deductions for luxury automobiles.
The not-so-simple aggregation rules for tax reform’s simplifying conventions
This discussion reviews the mechanics of the gross receipts test, highlights several potential traps for the unwary, and raises several common but still unanswered questions.
Updated automatic method change procedures ease transition to new revenue recognition rules
Updated procedures provide a streamlined way to comply with Sec. 451(b), which does not involve filing Form 3115 or attaching a separate statement to the tax return.
Accounting method change procedures provide for book-tax conformity
The IRS announced procedures for taxpayers to change their accounting method to comply with the amendment of Sec. 451(b) enacted by the tax law known as the Tax Cuts and Jobs Act.
Bonus depreciation safe-harbor rules for vehicles issued
The IRS issued a safe-harbor procedure that taxpayers may follow for determining the deduction for depreciating passenger vehicles when they are eligible for 100% bonus depreciation but are also subject to the Sec. 280F limits on deductions for luxury automobiles.
