Proposed tax increases have accelerated deals. Transactions will continue despite any tax changes, just with new pricing considerations.
Proposed tax increases have accelerated deals. Transactions will continue despite any tax changes, just with new pricing considerations.
President Biden and Congress have proposed to increase the capital gains tax rate. Taxpayers may wish to create a taxable event.
Partnerships and corporations they control may trigger unexpected tax liabilities by transferring value from one to pay costs of the other.
Recent leveraged spin-off ruling shows favorable tax treatment may still be available even outside of safe harbors provided in IRS guidance.
IRS rules anti-churning rules apply to deemed asset sales when certain intangible assets remain within the same consolidated group.
The Complex Media Tax Court case and its applicability to section 351 transactions and the step-transaction doctrine.
The IRS has issued final regulations under section 301 which become effective Sept. 22, 2021, to reflect current law.
By preparing for a sale through sell side tax due diligence, a seller can fix issues before they are identified by a potential buyer.
Learn how the U.S. Consolidated Return Unified Loss Rules affect mergers and acquisitions and how taxpayers can benefit from some elections.
A single-debtor Chapter 11 reorganization, may trigger a Form 8937 filing requirement for the reorganized company. Learn more about it.
Learn more about the U.S. attribute reduction rules for stand-alone C corporations and how they apply to federal consolidated return groups.
House Ways and Means issues its discussion draft amendment with revenue items to offset $3.5 trillion spending package.
Companies abandoning plans for IPO or SPAC transactions should consider the deductibility of transaction costs and termination fees.
The Internal Revenue Service Security Summit discusses the common warning signs of identity theft and unemployment benefits theft.
Companies that have taken care of their workers, embraced technology and adjusted to a rapidly evolving marketplace have been rewarded.
In GSS Holdings Inc., the court applied step-transaction and substance-over-form doctrines to a series of financial transactions.
IRS will begin issuing letters to approximately 100,000 businesses with Employer Identification Number to update their information.
Issues to consider when incorporating a partnership to benefit from the qualified small business stock exclusion
IRS proposes new regulations for mandatory e-filing of business and information returns. IRS reduces form threshold numbers.
A debtor company was found liable for predecessor’s tax liability, where the debtor company carried on a very similar line of business.
The IRS ruled that a plan of reorganization tied a series of steps together even though they were anticipated to span over five years.
The basis reduction following a discharge of qualified real property business indebtedness (QRBPI) may take place in the year of discharge.
Is a payment to a life science company monetizing a royalty stream a loan or sale proceeds? Is the income ordinary or capital?
Taxpayer relied on statute of limitations to defer tax on merger, then reversed course and said merger was taxable to reduce acquirer’s tax.
Ninth Circuit reverses Tax Court, based on Congress’ provision of tax benefits based on form rather than substance.
Administration issues Presidential priorities and pay-fors. Corporations and wealthy individuals face prospect of increasing tax rates.
Mexico bans subcontracting arrangements. Companies need to act by Aug. 23 2021 to avoid tax, legal and judicial consequences.
Tax-deferral techniques—possibly spurred by a potential increase to capital gains rates—must be scrutinized, as evidenced by this IRS memo
Sellers are able to command top dollar if they go into the sales process ready to hit the ground running which includes tax preparation.
Spin-off ruling reflects viability of post-spin-off stock repurchases, with added twist: investment banks effect repurchases.
The hub creates opportunities for private equity and offers unparalleled insight into cross-border transactions in key economies.
Bill would treat carried interest as ordinary income and subject to it to self-employment tax, regardless of the holding period.
Information on the instant asset write-off and tax loss carryback measures in Australia with potential tax savings for clients.
Management fees paid to shareholders not made purely for services and unreasonable in amount are not deductible under section 162.
Mexico released tax changes for 2021. Some new rules may have significant impact on U.S. companies doing business in Mexico.
LB&I’s compliance campaign focuses on taxpayer reporting of purchase price allocations in taxable asset acquisitions.
New final regulations include rules for CFCs, depreciation/amortization ‘add-back recapture’ and self-charged interest.
Revenue procedure allows treatment of qualified residential living facility operations as a section 163(j) real property trade or business.
Some European member states are extending the application of the anti-hybrid rules to common non-abusive structures.
German tax may apply to payments for the licensing or sale of German registered IP, even if neither party resides in Germany.
China has dominated global supply chains, but with rising labor costs, a U.S.-China trade war and the COVID-19 outbreak, this may change.
In line with decades of case law and rulings, IRS ruling looks to benefits and burdens of ownership to determine tax ownership.
Tax planning opportunities for consideration in light of COVID-19, the resulting economic crisis, and evolving tax laws and regulations.
SBA procedural guidance provides answers on how to navigate PPP loan changes in ownership; deals can now move forward with certainty.
IRS to focus on taxpayer compliance with the documentation requirement to allocate and deduct success-based fees.
Companies must minimize financial exposure and maximize their potential recoveries if their business clients face bankruptcy.
What are the top business issues and opportunities trending for middle market beauty sector companies in 2020?
IRS releases final and proposed regulations on the deduction for dividends from foreign corporations and related reporting rules.
Recent memo provides IRS view that certain stockless contributions create a split holding period on the stock.
Final regulations generally taxpayer-favorable versus 2018 proposal, additional proposed regulations give guidance on pass-throughs, others.
The IRS clarifies overpayment claims for tax attributes created or released by carrying back an NOL enjoy an extended limitation period.
Final regulations allow any reasonable method to be applied in calculating deduction amounts allowed under sections 250, 172, and 163(j).
Changes to NOL rules under the TCJA and CARES Act are implemented for consolidated corporate groups under new proposed regulations.
Temporary regulations provide election filing procedures to implement retention of NOL tax benefits by acquiring consolidated group.
Retroactive law changes found in the CARES Act raise questions on the proper timing for adjusting corporate E&P.
Questions and answers about how NOL carryback refund claims should address AMT calculations are now available on the IRS’ website.
Write-off of capitalized IPO costs after a go-private transaction disallowed because the costs do not create a separate and distinct asset.
Finalized section 385 debt-equity regulations proposed in 2016, government still plans to issue some less harsh rules in the future.
The economic impact of COVID-19 is immense. Distressed companies in need of capital may drive future M&A deals.
Funds holding distressed debt may consider whether accrual of interest income may be stopped under the ‘doubtful collectability’ exception.
Corporate taxpayers filing a consolidated return have an added layer of rules to navigate when carrying back a net operating loss.
The five-year carryback rule applies to insurance companies, both life and non-life, although both categories are singled out in the Act.
Investors looking to accelerate write-offs on investments should be aware of an obscure section 382 rule that could destroy the tax-shield.
As businesses renegotiate debts in the aftermath of COVID-19, it is critical to understand whether the debt is considered publicly traded.
Accelerating worthless stock deductions on an insolvent subsidiary without disposing of the business to increase NOL carrybacks.
Before filing NOL carryback claims it is important to understand whether a previous M&A transaction impacts who benefits from the refund.
Act contains broad relief for individuals and businesses; includes funding vehicles, recovery payments, and modifications to TCJA provisions
CARES Act provides general increase to the limitation amount (i.e., the maximum allowable deduction) and special rule for partnerships
Proper tax planning in a workout or restructuring is necessary to provide valuable tax attributes to the restructured business.
During a debt workout or restructuring, it is critical that businesses evaluate their restructuring options and the related tax impact.
Coronavirus Aid, Relief and Economic Security Act provides liquidity by providing five-year NOL carryback and other help for corporations.
On March 19, the U.S. Senate released the third round of emergency assistance resulting from the 2020 COVID-19 pandemic.
With evolving tax regulations on a federal, state and international level, understand the key tax due diligence when selling.
The IRS recently released a PLR allowing a section 355 tax-free distribution, despite no revenue in the spun-off subsidiary’s business.
In early September, Mexico released a proposed tax reform package with significant changes in the country’s international tax regime.
Ruling expresses IRS’ views in areas where regulations are silent; reinforces the need for transaction cost analysis.
Transition rules for proposed built-in gain regulations helpful, but do they signal impending finalization of anti-taxpayer rules?
Notwithstanding unfavorable changes to the Code, capital gain treatment is still available on the sale of patents in certain scenarios.
Ruling explores the difference between a capital contribution and a deductible payment on behalf of a corporate subsidiary.
Comments address concerns and recommendations regarding proposed regulations addressing section 382 built-in gains and losses.
Favorable rule for corporate stock acquisitions where life insurance contracts are less than 50 percent of the target corporation’s assets.
IRS to retain regulations treating some related party debt as equity, but will propose rules easing one of the regulations’ harshest rules.
Guidance would facilitate transitions of existing debt and derivatives to alternative benchmark rates without creating taxable exchanges.
Target company’s deduction claim denied because investment banking firm did not provide services to Target or for Target’s benefit.
Proposal would clarify how the bonus depreciation related party rules and no prior use rules apply in the context of consolidated returns.
Final bonus depreciation rules similar to previously proposed rules, uncertainty remains for certain transactions.
Tax Court allows ordinary business bad debt deduction, rejecting argument that loans not secured by real property were nonbusiness loans.
Proposed regulations would accelerate credit card fee income and similar items, but would not affect most interest income items.
Proposed section 382 rules would prohibit section 338 approach for determining NUBIG/RBIG, and require a modified section 1374 approach.
Changes to the built-in gain rules under section 382 would drastically reduce the availability of NOLs following an ownership change.
A favorable ruling on a "fit and focus" spin-off reiterates that only a minimal amount of employee overlap is permissible.
Fluctuation in value of stock did not impact exception to gain recognition, but no ruling on overall tax-free nature of reorganization.
IRS Chief Counsel opined that Target’s consolidated group survived notwithstanding the explicit language of the reverse acquisition rules.
In PLR 201930011, the Service rules that it is OK to “go your own way” without tax penalty in a textbook split-up.
Taxpayer must use the year-by-year method in determining NOL carryover due to section 170 adjustments to modified taxable income.
IRS allows early reconsolidation given waiver of capital loss generated by the disaffiliation and lack of other tax benefits.
Active trade or business present in subsidiary without independent current revenue but with a plan to make future product sales.
Buyers and sellers should take into account tax and regulatory changes when considering tax purchase price allocations.
IRS: The “share-by-share approach” to recovery of stock basis, although broadly appropriate, might not apply to every scenario.
Proposed rule would benefit certain purchasers of banks and other C corporations owning life insurance contracts.
Tax considerations and planning tips for taxpayers undergoing a stock or asset sale with payments contingent on both earn-out and employment
Proposed regulations for section 250 deductions provide multi-step process to account for NOL deductions and interest deduction limitation.
Master service and related agreements raise ownership questions as well as question as to qualification under secs. 199A and 1202.
Proposed rules address many open issues and would prescribe complex calculations for taxpayers deducting business interest expense.
IRS Deputy Associate Chief Counsel Daniel McCall said government is working on regulations to correct downward attribution of CFC status.
The IRS issued long-awaited guidance on the treatment of negative amounts subject to capitalization under the simplified UNICAP methods.
The IRS is reconsidering the traditional rule requiring revenue to satisfy the active trade or business requirement of section 355.
The IRS, in a recent PLR, has allowed a taxpayer to change its entity classification election inside the general 60-month no change period.
Tax deferral sought by Exelon denied; deficiency and penalty amounts in excess of $526 million affirmed on appeal.
Tax-advantaged debt repayments addressed in new revenue procedure, providing roadmap for certain spin-off transactions.
Fiscal year corporations seeking to carry back certain net operating losses gain reason to hope from Committee members’ letter.
Tax Court denies S corporation’s deductions claimed for its shareholders’ expenses; reason and requirement for payment determinative.
IRS’ attempt to re-characterize loan as a distribution from subsidiary’s earnings fails under debt-equity principles.
The Internal Revenue Service releases the proposed regulations under section 168(k) (100 percent bonus depreciation).
IRS proposed regulations explain when acquisitions will qualify for bonus depreciation (expensing) under the 2017 tax changes (TCJA).
Alta Wind case illustrates requirement to use residual method of allocation is broad and may apply in cases where no goodwill is present.
The IRS denies taxpayer deduction of Merger & Acquisition transaction fee due to lack of sufficient documentation.
IRS issues Practice Unit addressing application of costs incurred in an M&A transaction reinforcing benefit of a transaction cost analysis.
IRS Field Attorney Advice memo reflects potential for IRS audit questions on deduction or capitalization of debt-related fees.
Parties' intent that settlement payment was compensatory and deductible, not punitive and nondeductible, did not govern tax treatment.
Financial assistance of $52 million provided to Russian subsidiary gave rise to no US tax deduction for American parent company.
Regulations finalized preventing tax avoidance via certain transfers of corporate assets to a partnership owning corporate partner stock.
Constructive distributions resulting from bargain sales between related parties triggered withholding tax and penalties.
Notice requires calculation of recognized built-in gain or loss without regard to section 168(k) for ownership changes after May 8.
IRS Field Attorney Advice denies domestic parent’s deductions for amortization of brand intangibles purchased from a foreign subsidiary.
When considering this technique to accomplish a tax-free asset distribution, favorable IRS rulings have become more difficult to obtain.
Availability of full expensing for stepped-up basis in assets after an M&A transaction may depend on acquisition structure.
Tax Court applies 11 factor test in disallowing bad debt deduction, holding advances were capital contributions and not debt.
Availability of newly refundable AMT credit carryforwards in light of section 383 credit utilization limitation presents issue.
Recent tax reform changes to NOLs included what appears to be bad news to NOL carrybacks but favorable rules for prior year NOL carryovers.
New corporate tax rules provide benefits, take away significant deductions and generally adds complexity to the corporate tax system.
While the Tax Cuts and Jobs Act generally will lower business income tax rates, businesses with debt financing may see an increased tax bill
Analysis of shareholders’ ownership overlap with “net decrease” methodology avoids gain under section 355(e) for three spin-offs.
Is a noncompete covenant with an employee-owner treated as compensation or capital gain during an acquisition? It depends.
Rulings similar to favorable rulings the IRS previously issued are somewhat limited, at least temporarily, and possibly permanently.
Proposal includes welcome aspects, but its potential applicability to ordinary bad debt deduction rules is uncertain and possibly adverse.
Essential employees of spun-off business will become employees of spun-off company to satisfy active trade or business requirement.
Third Circuit affirmed a Tax Court’s decision that rejected a taxpayer’s claimed netting of gains and losses on separate blocks of stock.
Improper application of tax rules for failed financial institution acquisitions can lead to tax adjustments in subsequent years.
IRS rules that preceding and subsequent steps in restructuring involving liquidations will not change the intended tax results.
Taxpayer’s issuance of additional debt for cash supports deduction of unamortized costs incurred at earlier issuance.
The proposed regulations provided that nonrecognition treatment would only be available in transactions involving an exchange of net value.
Decision calls for caution where deductions might be considered double deductions, as it requires clear authorization for double deductions.
Exelon’s power plant sale-leasebacks treated as loans, not as ownership of the property, so the tax deferral Exelon sought was denied.
The IRS determined that an LLC, although not a corporation, would act as agent for corporate members of a consolidated group.
Consolidated return regulations require tracking of deferred gains from intra-group transactions until triggered or eliminated.
IRS decision to re-open the ruling process for pre-spin-off debt issuances could add a monetization effect to a spin-off.
Companies considering certain pre-spin-off asset transfers between parent and subsidiary can rely on this new guidance from the IRS.
Tax Court finds taxpayers could not avoid tax on vesting of stock compensation, upholds IRS assessment of tax and negligence penalty.
Taxpayer reported sale of subsidiary stock as sale of holding company stock; IRS assertion of tax deficiency and penalties upheld.
Costs not subject to capitalization merely because they would not have been incurred but for an acquisition or merger.
Is your company a C corporation that may be undergoing a change in control? If so, you should be aware of the potential adverse tax consequences ...
Revised ruling procedures forego suggestion to reduce fees for routine requests. The IRS may no longer consider certain requests.
M&A breakup - the IRS recently issued a Field Attorney Advice ruling that a breakup fee generated a capital loss.
The IRS recently provided guidance regarding the treatment of deferred revenue in a reverse merger transaction. In this transaction, the seller, a ...
Advance tax planning can maximize shareholder value and help avoid any tax pitfalls or unnecessary marks to your purchase price.
Tax Court decision upholds IRS reclassification of intercompany debt as equity and denies taxpayer interest deductions.
The simple agreement for future equity (SAFE), a start-up friendly funding mechanism, was conceived as a substitute for convertible debt.
Taxpayers filing refund claims may be subject to penalties for the amount that is deemed erroneous (PATH) 2007.
M&A transactions often include circular cash flows that are disregarded for tax purposes.
F reorganizations can ease asset transfers where obstacles such as license requirements and contract restrictions may be present.
With careful planning, merger and acquisition transactions can provide optimal tax treatment to the parties involved.
Recent letter ruling renews uncertainty surrounding what is reasonable and a common situation where the question may arise.
Companies often overlook payroll and employment taxes during transactions. Learn how to avoid this potentially costly mistake.
Examination of your target company’s tax history and position should be a vital part of due diligence in any cross-border deal.
This article discusses six tax risks private equity firms should watch out for during due diligence.
A Tax Court decision confirms that personal goodwill remains a viable tax planning opportunity in closely held business M&A deals.
Failure to avoid legal or substantive stapling of debt and equity could result in lost tax deductions.
As the economy recovers from the recession, financial institutions are again focused on strategic growth.
Challenges remain, as taxpayers still must demonstrate that intangibles have an ascertainable value distinct from goodwill, useful life.
Carryback an NOL following a leveraged buy-out or distribution, the CERT rules of IRC section 172(h) are often a trap for the unwary.
Merger, acquisition, disposition or restructuring transactions require sophisticated tax advice from experienced M&A tax advisers.