New proposed regs address complex issue–capitalization of tangible assets–Part II
Mike Habib, EA
myIRSTaxRelief.com
IRS has issued new comprehensive proposed regs on when amounts are treated as paid to acquire, produce, or improve tangible property. They replace controversial proposed regs that were issued on the same subject in 2006 and that IRS has now withdrawn. The new proposed regs would be effective for tax years beginning on or after the date that they are finalized.
New guidance for S corporations undergoing F reorganizations
Mike Habib, EA
myIRSTaxRelief.com
A new revenue ruling provides guidance for S corporations that undergo a type F reorganization where the operating S corporation becomes a qualified Subchapter S subsidiary (QSub) of a new holding corporation. It also explains which employer identification number (EIN) each entity is to use and provides guidance for corporations that have already engaged in such a transaction.
New proposed regs address complex issue–capitalization of tangible assets
Mike Habib, EA
myIRSTaxRelief.com
IRS has issued new comprehensive proposed regs on when amounts are treated as paid to acquire, produce, or improve tangible property. They replace controversial proposed regs that were issued on the same subject in 2006 and that IRS has now withdrawn. The new proposed regs would be effective for tax years beginning on or after the date that they are finalized.
This article explains how the proposed regs would define materials and supplies that are deductible under Code Sec. 162, and prescribe new rules for when the deduction for these items may be claimed. Future articles will explain other key aspects of the new proposed regs, such as how to treat amounts paid to sell property, transaction costs related to acquisitions, and what constitutes a repair versus an improvement or betterment to property.
Like-Kind Exchanges Under IRC Code Section 1031
Mike Habib, EA
myIRSTaxRelief.com
Whenever you sell a business or an investment property and you have a gain, you generally have to pay tax on the gain at the time of sale. IRC Section 1031 provides an exception and allows you to postpone paying tax on the gain if you reinvest the proceeds in similar property as part of a qualifying like-kind exchange. Gain deferred in a like-kind exchange under IRC Section 1031 is tax-deferred, but it is not tax-free.
Guidance on timing of PPA-related amendments for calculating plan cash-outs starting in 2008
Mike Habib, EA
myIRSTaxRelief.com
IRS has issued guidance, in question and answer format, that addresses the timing of plan amendments made to comply with Sec. 302 of the Pension Protection Act of 2006 (PPA 2006, P.L. 109-280, Sec. 302), which changed the statutory assumptions that must be used beginning in 2008 for calculating the present value of plan cash-outs.
Distressed asset trust transactions identified as listed transactions
In a Notice, the IRS has identified a distressed asset trust (DAT) transaction as a listed transaction under Reg. § 1.6011-4(b)(2), Code Sec. 6111 and Code Sec. 6112. In such a transaction, a tax-indifferent party contributes one or more distressed assets with a high basis and low fair market value to a trust or series of trusts and sub-trusts, and a U.S. taxpayer acquires an interest in the trust for the purpose of shifting a built-in loss from the tax-indifferent party to the U.S. taxpayer that has not incurred the economic loss.
Reconstructing records after a disaster may be essential for tax purposes, getting federal assistance or insurance reimbursement. Records that you need to prove your loss may have been damaged or destroyed in a casualty. While it may not be easy, reconstructing your records may be essential for:
As per the IRS Offer in Compromise
If taxpayers are unable to pay a tax debt in full and an installment agreement is not an option, they may be able to take advantage of an offer in compromise (OIC). Generally, an OIC should be viewed as a last resort after taxpayers have explored all other available payment options. The IRS resolves less than one percent of all balance due accounts through the OIC program.
Most common questions by corporations and other business entities on 1099 reporting requirements. Below is a direct IRS response to frequently asked question on 1099 issues.
IRS provides further guidance on Form 1099 reporting
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