Early signs from Treasury on the scope of digital asset cost basis reporting
This item discusses issues Treasury will have to grapple with when it provides cost basis reporting guidance.
Tax Computation
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.
IRS confirms that Sec. 451(b) does not accelerate inclusion of market discount income
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.
IRS finds future costs of fuel rewards are subtracted from gross receipts when earned
An accrual-method taxpayer could reduce gross receipts by the estimated future cost of fuel reward redemptions in the tax year that the customer earns those rewards.
Income and Related Deductions for an Item Considered for an Accounting Method Change
A growing number of guidance items and recently issued Chief Counsel Advice suggest the IRS is continuing to move toward viewing gross income and related deductions jointly as one item in determining whether an accounting practice constitutes a method of accounting or an error.
Rules for Deferral of Income From Gift Card Sales Clarified
The IRS issued guidance clarifying that taxpayers that sell gift cards can defer recognizing income from the sale of gift cards redeemable by an unrelated third party until the year after the payment is received.
Appeals Court Invalidates Associated Property Rule in Capitalization Regulations
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requiring capitalization of interest expense under Sec. 263A was invalid insofar as it applies to property temporarily withdrawn from service.
Deferral of Income from Sale of Gift Cards
This item summarizes the recently released Rev. Proc. 2011-18, which provides guidance on the deferral of income from the sale of gift cards.
IRS Issues Guidance on Treatment of Gift Cards
This item provides background information on the tax and accounting treatment of gift card income and discusses two revenue procedures that address these issues.
Favorable Guidance Issued on Deferral of Gift Card Sales and Gift Cards Issued for Returned Goods
The IRS issued two taxpayer-favorable revenue procedures addressing the treatment of payments received for gift cards.
Deducting Deficiency Interest Expense in the Proper Tax Year
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.
Electric Utility Refunds Qualify for Sec. 1341 Tax Mitigation
In a recent private letter ruling, the IRS determined that a publicly regulated utility is entitled to claim benefits under Sec. 1341 for amounts paid to a purchaser of electricity to settle claims asserted against predecessor members of the publicly regulated utility’s affiliated group.
Treatment of Gift Card/Certificate Sales: No Answers, More Questions
This item highlights certain issues raised by a recent IRS Large and Mid-Size Business Division directive dated October 3, 2008, about the treatment of revenue from the sale of gift cards
