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Federal Tax Update with Lynn Nichols #37

Federal Tax Update with Lynn Nichols #37

Update: 2019-04-18
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Lynn Nichols Federal Tax Update Podcast

April, 18 2019, Episode 37

Listen as Lynn Nichols provides commentary on 6 Items pertaining to current developments in U.S. tax law. 

  1. IRS Explains Negative Tax Basis Capital Reporting Requirement

The IRS has responded to taxpayer concerns about a new partnership reporting requirement by providing definitions and real-world examples of what’s required to be handed over to partners, but some practitioners are surprised by the clarifications.

[Tax Notes Today; 4/8/2019, article by Eric Yauch]

 

  1. IRS Denies Exemption to Organization Formed to Support Accident Victim

The IRS denied tax-exempt status to an organization established to raise funds for an accident victim and his family because the organization is serving private rather than public purposes.

[LTR 201911008, 12/20/2018, rel. 3/15/2019]

 

  1. (a) IRS Revises Practice Unit on Tax Home Determination

The IRS has revised a prior international practice unit on tax homes for purposes of section 911 to provide its staff with explanations of general international tax concepts and information about specific types of transactions.

 

(b) Practice Unit on Interest Capitalization Revised for TCJA Changes

The IRS has revised a prior practice unit to reflect changes made by the Tax Cuts and Jobs Act on the section 263A(f) requirement to capitalize interest if a taxpayer produces designated property, identifying taxpayers subject to section 263A(f) and the steps for determining how much interest must be capitalized to the basis of designated property.

 

The IRS has revised a prior practice unit, incorporating changes made by the Tax Cuts and Jobs Act, on land developers’ and subcontractors’ use of the completed contract method of accounting or the percentage of completion method for long-term contracts in the construction industry.

 

  1. Business Consultant’s Travel Expense Deductions Denied

The Tax Court, sustaining accuracy-related penalties, held that a consultant who operated a concierge chief financial officer business wasn’t entitled to claim travel expense deductions under section 162, finding that his tax home was in New Jersey, where he had a three-year contract with a client, and not Atlanta where he and his family had a home.

[Michael E. Brown; No. 21096-15; T.C. Memo. 2019-30, 4/8/2019]

 

  1. Tax Court Lacks Jurisdiction to Hear Suspended Corporations’ Cases

The Tax Court held that it lacked jurisdiction to hear deficiency challenges by two corporations because the state of California had suspended their corporate rights prior to the filing of the petitions and that the revival of their corporate rights was beyond the time allotted to file a petition once a deficiency notice is received.

[Timbron International Corp. et al. T.C. Memo. 2019-31, 4/8/2019]

 

  1. Fact Sheet Outlines Section 199A Deduction

The IRS has released a fact sheet (FS-2019-8) outlining the new section 199A deduction, which allows varying deduction amounts for qualified business income, qualified real estate investment trust dividends, and qualified publicly traded partnership income.

[FS-2019-8; 4/11/2019]

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Federal Tax Update with Lynn Nichols #37

Federal Tax Update with Lynn Nichols #37

SCACPA