The IRS announced that it intends to issue proposed regulations confirming that taxpayers may continue to defer including market discount income in income for tax purposes until there is a payment or sale at a gain.
The Federal Circuit held that the “associated property” rule requiring capitalization of interest expense under Sec. 263A was invalid insofar as it applies to property temporarily withdrawn from service.
Deficiency interest is often overlooked after the audit cycle closes. Taxpayers can effectively plan the timing of deducting deficiency interest simply by being aware of when proposed audit adjustments are agreed upon.