A new Congressional Budget Office Report shows a shifting of business structures to using pass-through entities, subjecting the income only to the individual income tax (as compared to the corporate income tax). The report notes that the shift has reduced federal revenues but has probably promoted overall investment and a more efficient allocation of resources. The… Continue Reading
Category Archives: Corporate
Subscribe to Corporate RSS FeedIRS Provides Sample 83(b) Election and Related Examples
Posted in Compensation, Corporate, Partnership/LLCThe IRS published new Rev. Proc. 2012-29, to provide both a sample election under section 83(b) and examples of the income tax consequences of making such an election with respect to compensatory stock. It is common for a partnership or corporation to issue equity-based compensation to an employee subject to vesting and transfer restrictions. In… Continue Reading
Proposed Regulations Address RIC and REIT Built-in Gains Tax
Posted in Corporate, REITsNew taxpayer-favorable regulations clarify the application of the section 337(d) and section 1374 built-in gain rules for transfers of property to RICs and REITs. The new regulations clarify the prior 2003 regulations. Under the prior regulations, when C corporations transfer appreciated property to a RIC or a REIT, section 1374 rules track any carryover built-in… Continue Reading
New Final and Temporary Foreign Tax Credit Regulations – Technical Taxpayer Rule and Credit Splitter Rules
Posted in Corporate, International, Partnership/LLCThe IRS issued Final Regulations under section 901 and Temporary Regulations under Section 909. The section 901 regulations adopt, with some changes, the 2006 proposed regulations, relating to who is considered to pay a foreign income tax for purposes of the foreign tax credit (the technical taxpayer rule). The temporary section 909 regulations include and… Continue Reading
Proposed Regulations Issued for DC’s New Combined Reporting Rules
Posted in Corporate, General, REITs, State and Local TaxIn the fall of 2011, the District of Columbia (DC) adopted a “combined reporting” regime that effectively shares the taxable income of a DC subsidiary to certain related non-DC corporations. Other states have adopted similar rules, although the specifics vary significantly per state on questions such as whether related non-DC corporations are removed from combined… Continue Reading
Treasury finalizes temporary “hot stock” regulations without material change
Posted in Corporate, GeneralTreasury has finalized temporary regulations that address the treatment of so-called “hot stock” in spin-offs, split-ups and other transactions intended to be tax-free under Code Section 355. Such tax-free transactions require that the parent or “distributing” corporation and the subsidiary or “controlled” corporation both have been active trades or businesses for at least five years…. Continue Reading
IRS-Treasury 2011-2012 Business Plan Released
Posted in Corporate, Corporations: International, Estate and Gift, General, Partnership/LLCThe IRS released its annual Priority Guidance Plan on September 2, containing 317 projects that are priorities for the twelve-month period from July 2011 through June 2012. Although the total number of items on the list is similar to the prior year, some categories contain a more robust list of projects. For example, partnership tax… Continue Reading
Broker Basis Reporting Guidance
Posted in CorporateThe IRS published interim guidance on the computation of basis of stock subject to broker reporting under section 6045. Taxpayers can rely on new Notice 2011-56 until final regulations are published. The Notice addresses detailed basis calculations in cases such as when a taxpayer changes from a broker’s default averaging method for regulated investment company… Continue Reading
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