LexisNexis® Legal Newsroom
Property Acquired from a Decedent and the Consistent Basis Requirement

Under IRC Section 1014, the basis of property acquired from a decedent is the fair market value of the property on the date of the decedent's death. [ IRC § 1014(a)(1) .] The provisions of IRC Section 1014, along with the Treasury Regulations under IRC Section 1401, contain the rules for determining...

The Challenge of Taxing the Sharing Economy

by Jessica L. Kerner, J.D., LL.M. * In 2007, a hotel room shortage in San Francisco prompted two roommates to create a website to rent out air mattresses in their apartment. Less than eight years later, the company they founded, Airbnb, has been valued at more than $25 billion. ["Value of Airbnb...

April ’16 Inversion Regs Impose Anti-Earnings Strippings Rules

On April 8, 2016, the IRS and Treasury took additional action against corporate inversions and issued temporary, proposed, and final regulations targeting inversion transactions. Among the proposed regulations were much anticipated rules that address earnings strippings transactions. This article briefly...

Temporary Regs Take on Previously Unaddressed Inversion Issues

The IRS and Treasury recently issued the latest set of rules aimed at corporate inversions. The temporary, proposed, and final regulations target: (1) transactions structured to avoid the objectives of IRC Section 7874 ; and (2) certain post-inversion tax avoidance transactions. [ T.D. 9761 (final...

Officials Open to Clarifying Political Subdivision Regs

Officials on June 6 appeared willing to clarify provisions in controversial proposed regulations that would redefine the meaning of political subdivision in issuing tax-exempt bonds. At a hearing at IRS headquarters in Washington, Spence Hanemann, branch 5 attorney, IRS Office of Associate Chief Counsel...

Subchapter K: In or Out?

by Dmitriy Kustov CPA EA MS Tax * Sub K's Cubist Period The word, "partnership," has so many common place meanings and could mean so much these days that we should not blame those taxpayers who do not understand all the technicalities of partnership for tax purposes. Curiously, the...

Application of the Accuracy-Related Penalty to an Inconsistent Estate Basis

Last year, IRC Section 1014 was amended by the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 to provide that the basis of inherited property must be consistent with the estate tax return. [Pub L No 114-41, 114th Cong, 1st Sess, § 2004(a) (July 31, 2015); IRC §...

New Law Allowing IRS to Seize Passport

by Mark A. Muntean * Introduction A new law allows the Internal Revenue Service ("IRS" or the "Service") to revoke or deny passports for certain taxpayers who owe unpaid federal taxes. This change to the tax law was included in the Fixing America's Surface Transportation...

Dodd-Frank and Oil & Gas Audit Fees

by Max Choi, Dr. Rudolph Jacob and Dr. Susanne O'Callaghan * The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank Act"), was passed in response to the financial crisis of 2007-2009. The purpose of this exploratory study is to examine whether the Dodd-Frank...

Tax Reform Policies of the Presidential Candidates

INTRODUCTION When the Tax Reform Act was enacted 30 years ago, Congress was able to implement major tax reform by collaborating across bipartisan lines. [1] It was the last time the Internal Revenue Code underwent a major overhaul, and the elements that came together to create such a major change...

Estate Planning Aspects of Qualified Pension & Profit Sharing Plan Distributions

I. Overview II. Income Tax Treatment [1] Income Tax Deferred Until Receipt by Employee or Beneficiary [2] Income Tax on Distributions [a] Averaging Methods No Longer Generally Available [b] Rollovers of Lump Sum Distributions [c] 10% Penalty on Early Withdrawals [d] Income in Respect of a Decedent III...

IRC Section 2704 Proposed Regulations

Treasury published long-awaited proposed revisions to the existing I.R.C. Section 2704 regulations on August 4, 2016. 81 Fed. Reg. 51413 . If published as final regulations in current form, the revisions will inhibit transfers of closely-held business interests to family members. Treasury provided a...

New Regs on Earnings Strippings Transactions

On October 13, 2016, the Treasury and IRS issued regulations [T.D. 9790 (Oct. 13, 2016)] finalizing and revising proposed regulations issued earlier in the year that targeted post-inversion earnings strippings transactions, which are certain related-party debt transactions that inverting companies engage...

Classifying Debt and Equity

by Shahzad A. Malik J.D. LL.M and Ryan C. Gaglio J.D. * In General "There is no dearth of cases in this province of tax law. So large is their number and disparate their facts, that for every parallel found, a qualification hides in the thicket. At most they offer tentative clues to what is...

Qualified Terminable Interest Property Trust Basics

The Qualified Terminable Interest Property (QTIP) Trust was a creation of ERTA-1981 pursuant to IRC § 2056(b)(7) which qualifies for the marital deduction, even if the surviving spouse is not given a general power of appointment during life or at death. Under a QTIP Trust, the surviving spouse need...

Covered Asset Acquisitions Regulations Examined

Proposed and temporary regulations under IRC Section 901(m) affect covered asset acquisitions, which are transactions that are generally treated as asset acquisitions for U.S. income tax purposes and that either are treated as stock acquisitions or are disregarded for foreign income tax purposes. [TD...

Property Valuation Challenged in Wellmark v. Polk County Board of Review

by Joseph J. Calvanico, MAI, FRICS * Many people have said that real estate valuation is an “art,” not a “science.” It is reasonable to believe that five appraisers would offer five different opinions of value. That is most certainly the “art” portion, as everyone...

Required Compensation Risk Analysis, Claw Backs and Mandatory Deferrals

by Alison Stemler * One of the main purposes of the Dodd-Frank Act is to promote financial stability in the US economy, including through a significant number of provisions relating to financial institutions. [Incentive-Based Compensation Arrangements, 81 Fed. Reg. 37669 (proposed June 10, 2016) ...

Excess "Golden Parachute" Payments--Nondeductible and Penalty Tax

By Alison Stemler, J.D. * The golden parachute rules in IRC Section 280G state that if an employee or contractor receives or will receive compensation that is triggered by or closely related to a change in control, and that change in control compensation is in total more than three times the employee...

Tax Reform Consensus 'About a Week Away,' Hatch Says

The "Big Six" tax reform negotiators are closing in on a consensus plan for tax reform, Senate Finance Committee Chair Orrin G. Hatch, R-Utah, suggested following the group's September 12 meeting. The group is "about a week away" from unveiling its plan, Hatch told reporters....

Treasury May Consider Election Relief for Partnership Returns

A Treasury official indicated September 15 that the government is "open to considering" extending penalty relief previously granted to partnerships for late-filed returns to circumstances surrounding elections as well. Notice 2017-47, 2017-38 IRB 1, grants automatic penalty relief to partnerships...

IRS Appeals Moving Back to In-Person Conferences

The IRS Office of Appeals will issue guidance to employees in the next few weeks informing them that Appeals will return to allowing taxpayers to have in-person Appeals conferences in field cases, Andrew Keyso Jr., acting deputy chief of IRS Appeals, said September 15. Keyso added, however, that for...

Treasury Aims for More Regs on Partnership Audits by Year-End

Treasury aims to release more proposed regs on the partnership audit regime before the end of the year, filling in the brackets within the guidance that were previously reserved on in earlier guidance, an official said on September 15. "Our goal is to try to no-brackets propose regulations this...

TIGTA Examines IRS Adherence to Taxpayer Contact Rules

In a September 12 report, the Treasury Inspector General for Tax Administration said it found some instances in which IRS employees violated rules on direct contact with taxpayers, and it found that IRS employees could have better understanding of the restrictions.Reviewing a sample of case histories...

IRS Expands Tax Relief for Hurricane Irma Victims

The IRS has announced (IR-2017-155) that it is expanding tax relief to individual and business taxpayers throughout Florida that were affected by Hurricane Irma, postponing until January 31, 2018, various tax return filing and payment deadlines that occurred starting on September 4.The relief includes...