The IRS has issued final regulations (T.D. 9914) as guidance on the definition of an eligible terminated S corporation and rules relating to distributions of money by such a corporation after the post-termination transition period. To see final regs, click Final Regs - T.D. 9914: Eligible Terminated S Corps (Sept. 15, 2020).
The IRS Large Business and International (LB&I) division has released a series of practice units for IRS agents, which are a resource on substantive topics for agents, on S corp distributions of accumulated earnings and profits. See the IRS Practice Units Below: Distributions with accumulated earnings & profitsGeneral overview of accumulated earnings & profits
The Treasury Department and the IRS are proposing updates to the partnership form for tax year 2021 (filing season 2022). The updates will provide greater clarity for partners on how to compute their U.S. income tax liability with respect to international tax matters, including how to compute deductions and credits. The redesigned form and instructions … Continue reading IRS News: Proposed International Changes to Form 1065, U.S. Return of Partnership Income for Tax Year 2021
Edward A. Morse has made available for download his paper, Important Developments in Federal Income Taxation. The Abstract is as follows: This outline covers significant developments in federal income taxation along with a few other interesting or noteworthy tax topics arising during the preceding calendar year. It offers a selective treatment focusing on items likely … Continue reading Edward A. Morse, Important Developments in Federal Income Taxation (Dec. 5, 2019)
BDO Seidman has published an article on its website about CARES Act relief for partnership filings. Its article begins as follows: General Rules for Amending Partnership ReturnsPrior to 2018, partnerships were generally subject to unified partnership audit and litigation rules enacted by the Tax Equity and Fiscal Responsibility Act of 1982, commonly referred to as … Continue reading BDO Seidman: IRS Provides Welcome Relief for Partnership Filings to Obtain CARES Act Benefits
Seth J. Entin, of Holland & Knight, has published an article, Tax Reform Presents Opportunities for Foreign Investors in U.S. Businesses Holland & Knight Alert (Feb. 20, 2020). The abstract is as follows: The U.S. Tax Cuts and Jobs Act (the TCJA), which was enacted at the end of 2017, dramatically changed the U.S. cross-border … Continue reading Entin: Tax Reform Presents Opportunities for Foreign Investors in U.S. Businesses Holland & Knight Alert (Feb. 20, 2020)
Bloomberg is making available for download without charge its special report, Pass-Through Entities Face Myriad State-Level Taxes, Compliance Obligations. The summary is as follows: While pass-through entities (PTEs) are the most common form of business entities in the U.S., identifying whether a PTE is subject to tax at the state level can be surprisingly complicated. … Continue reading Bloomberg Special Report: State Taxation of Passthrough Entities
In Railroad Holdings, LLC v. Commissioner, T.C. Memo 2020-22 (Feb. 5, 2020) the Tax Court held that an LLC was not entitled to a charitable contribution deduction for a conservation easement. The taxpayer executed a deed declaring a conservation easement in favor of a tax-exempt charitable organization. The deed provided that, if the easement was … Continue reading Railroad Holdings, LLC v. Commissioner, T.C. Memo 2020-22 (Feb. 5, 2020): LLC Not Entitled to Charitable Conservation Deduction for Conservation Easement
KPMG reports that the IRS has released updated versions of the 2019 draft instructions for Form 1065 and its Schedule K-1. It's announcement reads as follows: • Read the 2019 draft instructions for Form 1065 [PDF 941 KB] U.S. Return of Partnership Income• Read the 2019 draft instructions for Schedule K-1 [PDF 395 KB] Partner’s Share of Income, Deductions, Credits, etc. … Continue reading KPMG: Changes proposed in 2019 draft instructions for Form 1065 and Schedule K-1 (Dec. 27, 2019)
Manoj Viswanathan, UC-Hastings, has made available for download his article, The Qualified Small Business Stock Exclusion: How Startup Shareholders Get $10 Million (Or More) Tax-Free, 119 Colum. L. Rev. F. ___ (2019). The Abstract is as follows: The IPO parade of 2019 is making the early shareholders of technology startups such as Uber, Lyft, Slack, … Continue reading Viswanathan: The Qualified Small Business Stock Exclusion — How Startup Shareholders Get $10 Million (Or More) Tax-Free, Virginia Tax Review (2020).
The IRS issued a draft of the tax year 2019 Form 1065, U.S. Return of Partnership Income (PDF), and its Schedule K-1, Partner’s Share of Income, Deductions, Credits, etc (PDF). The changes to the form and schedule aim to improve the quality of the information reported by partnerships both to the IRS and the partners of such entities. For … Continue reading IRS releases draft 2019 Forms 1065, 1120-S, and Schedules K-1 (September 30, 2019)
By Eric L. Green, Esq. Taxpayers often become frustrated and scared when dealing with the IRS on a back tax debt.In reality, however, resolving a tax debt is reasonably straightforward and can save taxpayers from unnecessary distress. A statutory lien is normally issued after tax returns are filed and payments must be arranged by the … Continue reading Resolving Tax Debts is Easy: It’s All About the Process
Baptiste describes recent activity in the merger-and-acquisition market for private companies and how transactions in the market have been structured as sales of stocks. Reportedly, sellers prefer this format because "they receive capital gain treatment on the entire transaction" while buyers "have been reluctant to purchase stock, as they do not receive a basis step-upon the … Continue reading Baptiste, Impact of S corp shareholder agreements in M&A transactions (AICPA)
Schreiber describes how the IRS is allowing certain partnerships the opportunity to file superseding 2018 tax returns in order to correct errors the partnerships could have made on their previously-filed returns. According to Schreiber, "The relief applies to partnerships that had timely filed their Forms 1065, U.S. Return of Partnership Income, and Schedules K-1 (Form … Continue reading Schreiber, IRS permits certain partnerships to file superseding partnership returns
By Annette Nellen, CPA, Esq. So, is a C corporation preferred after the TCJA? The best answer: “it depends.” Many tax rules and non-tax considerations are important for choice-of-entity decisions. As shown in the following examples, the QBI deduction is a significant benefit to non-corporate businesses to complement the 21% flat rate for C corporations. … Continue reading Is A C Corporation Preferred After Tax Reform?
Assistant Professor Monica Gianni, California State University Northridge, has made available for download her article, Partnership Audit Rules: After the Final Regulations, published in the Journal of Taxation of Financial Products. The Abstract is as follows: As part of the Bipartisan Budget Act of 2015 (BBA), Congress repealed the TEFRA audit rules and the audit … Continue reading Gianni, Partnership Audit Rules: After the Final Regulations
In TAM 201929019, the deemed distribution of a partnership interest in an assets-over merger of two partnerships was treated as a Code Sec. 761(e) "exchange," which required a mandatory Code Sec. 743(b) downward inside-basis adjustment when the resulting partnership had a substantial built-in loss. The issues presented and rulings made were as follows: Issues: 1. Is … Continue reading TAM 201929019: Deemed Partnership Distribution Treated as Exchange
The IRS in CCA 201928014 ruled that a corporation with several years of NOL carryovers and charitable contribution carryovers must determine a charitable contribution carryover adjustment using a chronological, year-by-year NOL absorption computation. The IRS stated that using an aggregate basis standard to determine the adjustment was not accurate. The IRS also stated that the … Continue reading CCA 201928014: Corporate Charitable Contribution Carryover Adjustment Determined Using NOL Absorption Computation
Adam Hales, CPA, and Dennis Tingey, CPA, have published their article, Sec. 1341: What is the claim-of-right doctrine? in the AICPA Tax Adviser. The introduction is as follows: The law known as the Tax Cuts and Jobs Act (TCJA), P.L. 115-97, enacted Dec. 22, 2017, made numerous changes to the U.S. tax rules affecting businesses and … Continue reading Hales & Tingey, Sec. 1341: What is the claim-of-right doctrine?
The Treasury Department and IRS has released proposed regulations (REG-105474-18) regarding passive foreign investment companies (PFICs) and specifically concerning legislative changes made by the Tax Cuts and Jobs Act of 2017 with regard to the “PFIC insurance exception.” The Regs summary is as follows: This document contains proposed regulations under sections 1291, 1297, and 1298 … Continue reading Proposed Regs: Passive foreign investment companies (PFICs) and PFIC insurance exception