United States

The Tax Exchange - October 2016

New guidance on REIT asset tests; income tests guidance forthcoming

New guidance on REIT asset tests; income tests guidance forthcoming

Real estate investment trusts (REITs) must adhere to both quarterly asset tests and annual income tests, amongst a host of other administrative requirements, to maintain the tax-advantaged REIT designation. The Treasury and the IRS recently released new final regulations regarding the definition of real property for purposes of the REIT quarterly asset tests.

  • October 27, 2016
IRS rules payment of M&A breakup fee generated capital loss

IRS rules payment of M&A breakup fee generated capital loss

Many M&A transactions include provisions for breakup fees payable if a party to the transaction backs out of the deal. Many taxpayers generally view a breakup fee as an ordinary expense deductible by the payor. However, the IRS recently issued a Field Attorney Advice ruling that a breakup fee generated a capital loss.

  • October 14, 2016
B&O reconciliation due October 31 to avoid substantial penalty risk

B&O reconciliation due October 31 to avoid substantial penalty risk

Taxpayers apportioning service income under the Washington B&O Tax must file a reconciliation form by October 31 annually to avoid penalty.

  • October 10, 2016