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September 2019

Capital Gains Indexing, Payroll Tax Cuts

President Trump recently walked back consideration of capital gains indexing and a payroll tax cut, less than 24 hours after signaling his support for both.

Payroll Tax CutReports on Capitol Hill had begun swirling recently that the Trump administration was considering cutting payroll taxes.

“We’re looking at various tax reductions,” Trump told reporters at the White House on August 20. “I have been thinking […]

LB&I Withdraws Guidance on Cost-Sharing Arrangement Stock Based Compensation

The IRS Large Business and International Division (LB&I) has withdrawn its directive to examiners that provided instructions on transfer pricing issue selection related to stock based compensation (SBC) in cost sharing arrangements (CSAs).

U.S. taxpayers that are cost sharing participants must include SBC as intangible development costs (IDCs), under Reg. §1.482-7A(d)(2) and Reg. §1.482-7(d)(3) if these costs are directly identified with, or reasonably allocable to, […]

Proposed Regulations Classify Cloud and Digital Content Transactions

Transactions involving digital content and cloud computing have become common due to the growth of electronic commerce. The transactions must be classified in terms of character so that various provisions of the Code, such as the sourcing rules and subpart F, can be applied.

Digital Content TransactionsExisting Reg. §1.861-18 provides rules for classifying transactions involving computer programs. The proposed regulations broaden the scope […]

Final Regs Tweak Safe Harbor for Partnership Allocations of Creditable Foreign Tax Expenditures

The IRS has adopted final regulations with respect to the allocation by a partnership of foreign income taxes. The final regulations are intended to improve the operation of an existing safe harbor rule. This safe harbor rule, under Reg. §1.704-1(b)(4)(viii), determines whether allocations of creditable foreign tax expenditures (CFTEs) are deemed to be in accordance with the partners’ interests in the […]

Nondiscrimination Relief for Closed Defined Benefit Plans Extended Again

The temporary nondiscrimination relief for closed defined benefit plans provided in Notice 2014-5, I.R.B. 2014-2, 276, is extended through plan years beginning in 2020. Notice 2014-5 provided temporary nondiscrimination relief for certain defined benefit pension plans that were “closed” before December 13, 2013. Notice 2014-5, I.R.B. 2014-2, 276, Notice 2015-28, I.R.B. 2015-14, 848, Notice 2016-57, I.R.B. 2016-40, 432, Notice 2017-45, I.R.B. 2017-38, 232, and Notice 2018-69, I.R.B. 2018-37, 426, are […]

Proposed Regulations Update Fleet-Average, Vehicle Cents-Per-Mile Valuation Rules

Proposed regulations increase a vehicle’s maximum value for eligibility to use the fleet-average valuation rule or the vehicle cents-per-mile valuation rule. The increase to $50,000 is effective for the 2018 calendar year. The maximum value is adjusted annually for inflation after 2018. The proposed regulations provide transition rules for certain employers.

Taxpayers may rely on the proposed regulations until final regulation […]

Eligible Partnerships Granted Extension to File Form 1065 and Schedules K-1

The IRS has granted a six-month extension to eligible partnerships to file a superseding Form 1065, U.S. Return of Partnership Income, and furnish corresponding Schedules K-1, Partner’s Share of Income, Deductions, Credits. For a calendar year partnership, the deadline to file Form 1065 and corresponding Schedules K-1 was March 15, which has now been extended to September 15.

The relief is […]

100 Percent Bonus Depreciation Guidance for Certain Tax Years Allows Late Elections, Revocations

Bonus depreciation guidance that applies to property acquired after September 27, 2017, in a tax year that includes September 28, 2017, allows taxpayers to make a late election or revoke a prior valid election to:

elect out of 100 percent bonus depreciation;elect 100 percent bonus depreciation on specified plants in the year of planting or grafting; orelect the 50 percent rate […]

Top Senate Tax Writers Release First Round of Bipartisan Reports Examining Tax Extenders

The Senate’s top tax writers have released the first round of bipartisan task force reports examining over 40 expired and soon to be expired tax breaks known as tax extenders. Congress is expected to address these particular tax breaks, as well as temporary tax policy in general, when lawmakers return to Washington, D.C. in September.

Tax Extenders Task ForcesSenate Finance Committee […]

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