When Is Income Recognized Under Cost-Plus Contracts

Article:  The IRS recently issued taxpayer-favorable guidance, ruling that an accrual-method taxpayer recognizes income from the reimbursement of allowable costs under cost-plus contracts when the amounts are billed and due, not when the taxpayer incurs the reimbursable costs.
Published on May 18, 2010

Traps for the Unwary Rollovers and the Sec. 338 Election

Article:  This item focuses on how to structure the transaction when one or more S corporation shareholders wish to roll over their S corporation investment. If structured incorrectly, a rollover can render a Sec. 338(h)(10) election unavailable.
Published on May 18, 2010

Sec. 199 Final Regs. on TIPRA Amendments and More

Article:  This item discusses how recent final regulations interpret statutory changes to Sec. 199 and how the regulations eliminate a potential issue in calculating taxable income for purposes of the Sec. 199 deduction.
Published on May 14, 2010

Swallows Decision Renews Questions About Judicial Deference to Tax Regs.

Article:  In Swallows, the Third Circuit upheld the validity of an “interpretive” Treasury regulation and applied the high degree of deference to the regulation prescribed by Chevron.
Published on May 14, 2010

Sec. 1341 Roundup Court Decisions and IRS Advice Offer Little Clarity

Article:  This item discusses four recent judicial decisions and administrative pronouncements addressing Sec. 1341.
Published on May 14, 2010

IRS Issues Prop. Regs. on Capitalization of Improvements to Property

Article:  Proposed regulations under Sec. 263(a) clarify the treatment of expenditures incurred in selling, acquiring, producing, or improving tangible assets.
Published on May 14, 2010

Reduced Credit for Increasing Research Activities

Article:  A recent IRS chief counsel internal memorandum, AM 2008-002 (2/8/08), provides insight relative to electing the reduced credit available under Sec. 280C(c)(3) when claiming a research tax credit.
Published on May 14, 2010

Prop. Regs. Ease UBTI Consequences for CRTs

Article:  The Service has issued proposed regulations to reflect the change made by TRAHCA to impose a 100% excise tax on the unrelated business taxable income (UBTI) of charitable remainder trusts (CRTs) that have UBTI.
Published on May 14, 2010

IRS Previews Sec. 529 Plan Anti-abuse Regs.

Article:  The IRS has announced that because of the potential for the abuse of Sec. 529 accounts, it intends to issue proposed regulations and is requesting written comments from tax practitioners on the rules it is contemplating.
Published on May 14, 2010

Pilot Program Tests EFTPS Interface with QuickBooks

Article:  Treasury has been testing an interface between Intuit’s QuickBooks Payroll product and the electronic federal tax payment system (EFTPS).
Published on May 14, 2010

IRS Posts Guidance on Changing from C Corp. to S Corp.

Article:  The IRS has posted on its website guidance for C corporations that wish to change to S corporation status.
Published on May 14, 2010

IRS Issues Prop. Regs. in Response to Kohler Case

Article:  The IRS has issued proposed regulations clarifying that under Sec. 2032 an estate may take into account a reduction in the value of the gross estate following the decedent’s death in determining the value of the estate on the alternate valuation date if the reduction is due to market conditions
Published on May 14, 2010

Gift Card and Gift Certificate Income Deferral

Article:  This item analyzes IRS audit guidelines for the treatment of gift card and gift certificate income, focusing on situations that require an examining agent to raise issues with IRS industry technical advisers.
Published on May 14, 2010

IFRS Is Coming What Does This Mean for Tax

Article:  Many companies are in the early stages of considering what impact the transition to International Financial Reporting Standards (IFRS) from U.S. generally accepted accounting principles (GAAP) will have on financial reporting. However, are they also thinking about the impact it will have on tax reporting?
Published on May 14, 2010

Handling Gifts and Bequests of LLC Interests

Article:  The gift of an LLC interest generally does not result in the recognition of gain or loss by the donor or the donee.
Published on May 14, 2010