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 They replace controversial proposed regs that were issued on the same subject in 2006 and that IRS has now withdrawn.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.
Starting March 2008, casinos and other sponsors of poker tournaments will be required to report most winnings to winners and the Internal Revenue Service, according to the IRS.
Mike Habib, EA
myIRSTaxRelief.com
The new requirement, which went into effect on March 4, 2008, was contained in guidance released Sept. 4 by the Treasury Department and the IRS. The guidance is designed to clear up confusion about the tax reporting rules that apply to poker tournaments. In recent years, some casinos and players have been confused over whether poker tournament sponsors who hold the money for participants in a poker tournament are required to report the winnings to the IRS and withhold tax on the winnings.
Examination and Compliance Check Processes For Exempt Organizations
myIRSTaxRelief.com
Help Yourself by Filing Past-Due Tax Returns
Mike Habib, EA
myIRSTaxRelief.com
Most citizens voluntarily file their tax returns and pay their taxes. Most people explain it by saying they want to pay their fair share. Others file to get a refund, claim a credit or avoid breaking the law.
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.
IRS explains how to correct a failure to follow retirement plan terms
Retirement News for Employers
In its Retirement News for Employers, IRS has explained how to correct the common retirement plan mistake of failing to follow the plan terms in its operation. IRS clarified when a plan amendment can be used to correct this mistake via the Employee Plans Compliance Resolution System’s (EPCRS) Self-Correction Program (SCP).
IRS provides guidance on new rules for employment tax levies
The IRS has issued interim guidance to its directors and collection area offices that explains when it is permissible to issue a levy to collect employment taxes without first giving the taxpayer a pre-levy collection due process (CDP) notice.
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.
Tax Relief Blog