Electing S status by an LLC - The Tax Adviser
WEBApr 1, 2020 · An LLC that is eligible to elect S status and timely files an S election (Form 2553, Election by a Small Business Corporation) is considered to have made the election to be taxed as a corporation (Regs. Sec. 301. 7701 - 3 (c) (1) (v) (C)). These entities are not required to file Form 8832, Entity Classification Election.
Summary of tax rules for liquidating corporations - The Tax Adviser
WEBOct 1, 2020 · Editor: Mark Heroux, J.D. Domestic corporations, either S corporations or C corporations, are liquidated by applying Secs. 331-346. This discussion provides a review of the rules that apply to liquidating corporations, but it does not address the exceptions set forth in Sec. 361 via a reorganization plan or the exceptions arising from having foreign …
Capitalized improvements vs. deductible repairs - The Tax Adviser
WEBOctober 1, 2021. Taxpayers generally must capitalize amounts paid to improve a unit of property. A unit of property is improved if the cost is made for (1) a betterment to the unit of property; (2) a restoration of the unit of property; or (3) an adaptation of the unit of property to a new or different use (Regs. Sec. 1.263 (a)- 3 (d)).
Sec. 743(b) adjustments: Shortcuts and surprises - The Tax Adviser
WEBJul 1, 2020 · In that case, A would have a $30 Sec. 743 (b) basis adjustment in the land (equal to the difference between A's $50 outside basis and A's $20 share of XYZ's inside basis) as a result of its acquisition from X. A's Sec. 743 (b) adjustment would offset A's allocable share of the gain recognized by XYZ on a subsequent sale of the land for $150.
Employer-provided and company-owned vehicles - The Tax Adviser
WEBFor 2022, the limit is $56,100 for a passenger automobile, van, or truck (Notice 2022-3). The cents-per-mile valuation includes insurance, maintenance, and fuel. If fuel is not provided by the employer, the cents-per-mile rate may be reduced by no more than 5.5 cents per mile (Regs. Sec. 1.61-21 (e) (3)).
Limiting business interest expense - The Tax Adviser
WEBSep 1, 2019 · Limiting business interest expense. For tax years beginning after 2017, the deduction for business interest expense cannot exceed the sum of the taxpayer's: Floor plan financing interest expense (Sec. 163 (j); Prop. Regs. Sec. 1.163 (j)-2 (b)). The prior Sec. 163 (j) rules, which covered so - called earnings stripping and denied a …
IRS releases guidance on treatment of transaction costs - The Tax …
WEBOct 1, 2019 · The IRS's Large Business and International Division in 2018 released a practice unit, "Examining a Transaction Costs Issue" (available at www.irs.gov, regarding the U.S. federal income tax treatment of transaction costs incurred in certain business transactions. Taxpayers often incur millions of dollars in professional and advisory fees …
QBI deduction: Interaction with various Code provisions - The Tax …
WEBDec 1, 2020 · The qualified business income (QBI) deduction of Sec. 199A can result in significant savings for individuals, estates, and trusts. To maximize the deduction, it is important for tax practitioners to understand the interaction between various Code provisions so that items of income and deduction are included in QBI in the same period …
Classifying business entities under the check-the-box regulations
WEBMay 1, 2020 · Editor: Michael C. Swenson, CPA. May 1, 2020. Under the check - the - box entity - classification regulations, an organization that is recognized for federal tax purposes as an entity separate from its owners can potentially be classified as: (1) an association taxed as a corporation, (2) a partnership, (3) a disregarded entity, or (4) a trust.
Determining the Taxability of S Corporation Distributions: Part I
WEBJan 1, 2014 · This two-part article provides a comprehensive review of the rules for determining the taxability of an S corporation’s distributions to its recipient shareholders. Part I provides an overview of the intent of Sec. 1368 and the related regulations, the shareholder- and corporate-level attributes that drive a distribution’s taxability, and the …