Federal Tax Update - June 6, 2013

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Lynn Nichols of NicholsPatrick CPE presents this week’s podcast on federal tax issues.  You can find all of the CPE you need at www.ficpa.org/cpe.  The podcast this week covers the following topics:

  1. Distribution of Foreign Company Stock Is Indirect Disposition of Intangible Property
    (ILM 201321018; 11/13/2012; rel. 5/24/2013)
    In a legal memorandum, the IRS concluded that a target's section 361(c) distribution of a foreign company's stock as part of a reorganization is an indirect disposition of intangible property and that the target must take into account the disposition rule amount at the time of the distribution.     [Doc 2013-12796]
  2. Settlement Agreement Does Not Result in Self-Dealing
    (LTR 201321027; 2/16/2013; rel. 5/24/2013)
    The IRS ruled that the execution, delivery, and performance of a settlement agreement that will affect bequests to a private foundation and involve the purchase of all the interests in a limited partnership will not constitute self-dealing.     [Doc 2013-12805]
  3. Relief for Single Rental Real Estate Activity Treatment Available At Appeals
    (ECC 201321021; 5/1/2013; rel. 5/24/2013)
    In e-mailed advice, the IRS concluded that as long as Appeals has the authority to accept amended returns from a taxpayer, then Appeals may accept the amended return required by section 4.02 of Rev. Proc. 2011-34, which addresses late elections to treat all interests in rental real estate as a single rental real estate activity.     [Doc 2013-12799] 
  4. New Draft Form for Reporting Specified Foreign Financial Assets
    (Form 8938 (Dec. 2013); 5/23/2013)
    The IRS has released a new draft Form 8938, "Statement of Specified Foreign Financial Assets," which is used to meet reporting requirements under the Foreign Account Tax Compliance Act.     [Doc 2013-12880]                       PDF . . . Form 8938 .
  5. Supreme Court Denies Cert in Historic Boardwalk
    (Tax Notes Today; 5/29/2013; Article by Jaime Arora)
    The Supreme Court on May 28 denied certiorari to a partnership seeking review of the Third Circuit's holding that Pitney Bowes Corp., a private-sector equity investor, was not a bona fide partner and could not claim historic rehabilitation tax credits from a project with a state entity to renovate a historic convention center.     [Doc 2013-12912]
  6. Individual Granted Equitable Innocent Spouse Relief
    (Erica L. Alvarado et al. v. Commissioner; T.C. Summ. Op. 2013-41; 5/29/2013)
    The Tax Court, in a summary opinion, held that an individual was entitled to equitable innocent spouse relief under section 6015(f), finding that although she signed a termination notice so that her former husband could receive funds from his retirement account, she didn't receive any of the unreported proceeds from the terminated account.      [Doc 2013-13129]
  7. Partnership Continues Following Series of Transactions That Make It A Single Member Entity
    (FAA 20132101F; 4/16/2013; rel. 5/24/2013)
    In partially redacted field attorney advice, the IRS concluded that an entity is a continuation of a partnership following a series of transactions in which partnership interests are exchanged for interests in an entity and the partnership becomes a disregarded entity that is owned by the entity.    [Doc 2013-13117]