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Lynn Nichols of Nichols Patrick CPE presents the week’s podcast on the latest federal tax updates. For more information on federal tax, you can click here for the latest tax CPE programs from the FICPA. The podcast covers the following:
[Doc numbers after each item are locaters in Tax Analysts, Tax Notes Today, the first choice of tax professionals for current developments and expert commentary on federal tax matters. The author relies on and recommends Tax Notes Today to anyone whose job requires them to be well informed about current federal tax developments.]
- Rental Income From S Corp's Leasing of Tower Access Was Passive
(Francis J. Dirico et ux. v. Commissioner; 139 T.C. No. 16; 11/13/2012)
The Tax Court held that the self-rental rule didn't apply to income an individual received from leasing land with telecommunications towers to his wholly owned S corporation, which then leased tower access to unrelated third parties, and that it was passive activity income, but that rental income from land-only leases was non-passive.
- Practitioners Seek Guidance on Definition of Limited Partner
(Tax Analysts’ Tax Notes Today article by Amy Elliott; 11/15/2012)
A panel of tax practitioners on November 10 recommended that the terms "general partner" and "limited partner" be defined on a section-by-section basis according to the legislative intent of each code provision, because passthrough entities have come to be governed by numerous state laws, 12 code sections, and more than 70 regulatory sections.
- Excise Tax Applied to Lease of Imported Truck
(ILM 201245018; 10/2/2012; rel. 11/9/2012)
In a legal memorandum, the IRS concluded that the section 4051 retail truck tax applies to the lease of an imported truck by a U.S. company from a foreign company.
- Relief for Hurricane Sandy Victims Seeking Distributions and/or Loans From Retirement Plans
(Announcement 2012-44; 2012-49 IRB 1; 11/16/2012)
The IRS has provided relief to taxpayers who have been adversely affected by Hurricane Sandy and have retirement assets in qualified employer plans they would like to use to alleviate hardships caused by the storm.
- Bankruptcy Court Holds Debtor's Taxes Were Discharged
(Peter George Martin v. United States; No. 11-01536; BnkCt CO; 11/15/2012)
A U.S. bankruptcy court held that a debtor's tax liabilities for two tax years were discharged in his bankruptcy proceeding, finding that the Forms 1040 he filed after the IRS had assessed the taxes against him for those years qualified as returns under section 523(a)(1)(B)(i) of the Bankruptcy Code and the amounts weren't excepted from discharge.
- Bonuses Must Be Taken Into Account in Year Paid
(ILM 201246029; 7/31/2012; rel. 11/16/2012)
In a legal memorandum, the IRS concluded that a taxpayer's liability arising from bonus compensation must be taken into account in the year the bonuses were paid because the payment is contingent on the employees being employed on the date of payment and because forfeited amounts revert to the taxpayer.
- Allowances for M & IE Provided by Travel Industry Employer Not Per Diems
(ILM 201246031; 6/28/2012; rel. 11/16/2012)
In a legal memorandum, the IRS determined that some allowances for meals and incidental expenses paid by a travel industry employer to its employees are not per diem allowances because the amounts are not deductible travel expenses under section 162.
- Packaging Pills Qualifies for QDPD
(ILM 201246030; 8/9/2012; rel. 11/16/2012)
In a legal memorandum, the IRS concluded that the exception for repackaging and labeling activities from the definition of manufactured, produced, grown, or extracted under reg. section 1.199-3(e)(2) does not apply to a taxpayer who manufactures and sells packages of pills it did not make.
- AMT Recomputation Required When AMT NOL Is Carried Back
(ECC 201246034; 8/8/2012; rel. 11/16/2012)
In e-mailed advice, the IRS explained that a recomputation of the alternative minimum tax credit carryover is required if a taxpayer carries back an alternative tax net operating loss, resulting in a reduction of the AMT credit available for use by the taxpayer in a later year.
- Final Regs on Deduction and Capitalization of Tangible Assets Imminent
(Notice 2012-73; 2012-51 IRB 1; 11/20/2012)
The IRS has issued guidance alerting taxpayers that Treasury and the IRS plan to issue final regulations in 2013 on the tax treatment of amounts paid to acquire, produce, or improve tangible property under sections 162 and 263(a) and on the accounting for, and disposition of, property subject to section 168.
- 'Repair vs. Capitalization' Tax Issue Subject of IIRP
(Reported in Tax Notes Today, 11/19/2012)
The IRS and Treasury have announced they are working to develop and publish guidance under the IRS's industry issue resolution program on repair versus capitalization issues for tangible property.
- IRS Won't Acquiesce in Decision on Defined Valuation Clause
(AOD 2012-04; 2012-46 IRB 1; 11/13/2012)
In an action on decision, the IRS has announced it won't acquiesce in the Tax Court's holding in Wandry v. Commissioner that a couple made a completed transfer of only a 1.98 percent membership interest in a limited liability company.
- 2013 Standard Mileage Rates for Passenger Automobiles Used for Business
(Notice 2012-72; 2012-50 IRB 1; 11/21/2012)
The IRS has issued guidance providing the 2013 standard mileage rates for taxpayers to use in determining the deductible costs of operating a car for business, charitable, medical, or moving expense purposes.
LAST UPDATED 11/26/2012