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Lynn Nichols from Nichols Patrick CPE delivers the podcast for the week. The FICPA online CPE catalog is now open for 2012. Go to www.ficpa.org/catalog to find the best CPE for you. The podcast this week covers the following:
- Aircraft Management Fees Are Subject to Transportation Excise Tax
- No Exempt Status for Organization Providing Health Services
- Trust Is Valid “See-Through” Trust
- IRS Rules on Bonus Depreciation, Limited Component Election
- Extensions Granted to Elect Alternative Method and Not to Deduct Additional First-Year Depreciation
- Extension Granted to Defer Tax on Canadian Retirement Savings Plan
- Eligible Representatives Could Name Others as Eligible Representatives
- Most Components of Apartment Complex Depreciable as Buildings
- Foster Care Payments Taxable Due to Separate Residences
- IRS Memo Re: Exams Involving Capitalization of Repair Expense
- Arbitration Award Must Be Included In Gross Income
- Aircraft Management Fees Are Subject to Transportation Excise Tax - (ILM 201210026; 2/15/2012; rel. 3/9/20120)
In a legal memorandum, the IRS concluded that control of an aircraft's pilots is a factor in determining which party has possession, command, and control of an aircraft for purposes of the section 4261 excise tax and that monthly fees paid by the owner of the aircraft to an aircraft management company are subject to the tax.
- No Exempt Status for Organization Providing Health Services - (LTR 201210041; 12/15/2012; rel. 3/9/2012)
The IRS denied tax-exempt status to an organization formed to provide support and health services to low-income individuals, minorities, and rural residents, finding that the organization's primary purpose is to operate a doctor's office, which is a substantial non-exempt purpose
- Trust Is Valid “See-Through” Trust - (LTR 201210047; 12/15/2012; rel. 3/9/2012)
The IRS ruled that a decedent's trust constitutes a valid see-through trust, that the division of the decedent's IRA by a trustee-to-trustee transfer will be tax free, and that each surviving son may receive the required minimum distributions under section 401(a)(9) from his respective IRA using the life expectancy of one of the sons.
- IRS Rules on Bonus Depreciation, Limited Component Election - (LTR 201210004; 11/22/2012; rel. 3/9/2012)
The IRS ruled that a self-constructed property is acquired when construction commences for purposes of determining whether a corporation's electric-generating plant projects qualify for the 50 percent or 100 percent additional first-year depreciation deduction and ruled on the application of the limited component election under Rev. Proc. 2011-26.
- Extensions Granted to Elect Alternative Method and Not to Deduct Additional First-Year Depreciation - (LTR 201210011; 12/5/2012; rel. 3/9/2012)
The IRS granted an affiliated group of corporations extensions of time to elect not to deduct additional first-year depreciation under section 168(k) for qualified property, to elect to use the alternative depreciation system under section 168(g)(7) for specified tangible depreciable property, and to make a section 59(e)(1) election.
- Extension Granted to Defer Tax on Canadian Retirement Savings Plan - (LTR 201210013; 12/8/2012; rel. 3/9/2012)
The IRS granted a U.S. resident a 60-day extension to file an election to defer tax on income accrued in earlier years in a Canadian retirement savings plan.
- Eligible Representatives Could Name Others as Eligible Representatives - (ECC 201210035; 2/1/2012; rel. 3/9/2012)
In e-mailed advice, the IRS said that individuals named by a taxpayer as eligible representatives of the taxpayer could, in turn, authorize other individuals to represent the taxpayer before the IRS by executing Forms 2848 on behalf of the taxpayer.
- Most Components of Apartment Complex Depreciable as Buildings - (AmeriSouth XXXII Ltd. et al. v. Comm.; T.C. Memo. 2012-67; 3/12/2012)
The Tax Court held that the majority of the components in an apartment complex were structural components of the buildings depreciable over the 27.5 years applicable to the apartment buildings rather than at the shorter periods claimed by the complex's owner.
- Foster Care Payments Taxable Due to Separate Residences - (Jonathan E. Stromme et al. v. Comm.; 138 T.C. No. 9; 3/13/2012)
The Tax Court held that under section 131 a couple could not exclude payments from the Minnesota government for the care they provided to disabled individuals because they did not reside in the same house as those individuals.
- IRS Memo Re: Exams Involving Capitalization of Repair Expense - (LB&I-4-0312-004; 3/15/2012)
The IRS Large Business and International Division has issued a memorandum providing direction to the field in the examination of the repair v. capitalization issue under temporary regulations on the application of sections 162(a) and 263(a) to amounts paid to acquire, produce, or improve tangible property.
- Arbitration Award Must Be Included In Gross Income - (Salvador F. Neri et ux. v. Comm.; T.C. Memo. 2012-71; 3/15/2012)
The Tax Court, declining to uphold an accuracy-related penalty, held that the arbitration award a husband received from his former employer for failing to accommodate his disability wasn't excludable from a couple's gross income because they failed to show that it was received due to personal physical injuries or sickness.
LAST UPDATED 3/19/2012