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IRS Allows Election Relief for Bonus Depreciation

On July 31, 2019, the IRS issued Rev. Proc. 2019-33, which allows taxpayers to change their elections regarding bonus depreciation for property acquired after September 27, 2017 and placed in service during the taxpayer’s 2016 or 2017 taxable year. Under the revenue procedure, a taxpayer may make late elections to use bonus depreciation on such property or revoke its election to use...

IRS Official States that Final Foreign Tax Credit Regulations Likely to Be Released by Fall and BEAT Regulations Likely to Be Released Before the End of the Year

At an event for the National Association for Business Economics on July 16, Peg O’Connor (deputy associate chief counsel (Operations and International Programs) at the IRS Office of the Associate Chief Counsel, International) stated that she expects final regulations addressing foreign tax credits to be released by the end of the summer and final regulations under section 59A (Base...

IRS Provides Additional Q&A Guidance on Section 965

On July 16, 2019, the IRS released additional guidance in a Q&A format with respect to section 965. Enacted by the Tax Cuts and Jobs Act, section 965 generally imposes a transition tax on a US shareholder’s pro rata share of the accumulated earnings and profits of certain foreign corporations. The guidance includes information on making subsequent installment payments and filing...

IRS Releases Proposed Regulations Addressing the Excise Tax on Certain Educational Institutions Under Section 4968

On June 28, 2019, the IRS released proposed regulations under section 4968. Section 4968 was added to the Code by the Tax Cuts and Jobs Act and generally imposes an excise tax of 1.4% on the net investment income of applicable educational institutions that have at least 500 tuition-paying students (of which more than 50% are located in the United States) and that have assets of at...

IRS Releases Proposed Regulations Addressing the FDII and GILTI Deduction under Section 250

On March 4, 2019, the IRS released proposed regulations under section 250. Section 250 generally allows a domestic corporation a deduction for its foreign-derived intangible income (FDII) and its global intangible low-taxed income (GILTI). The proposed regulations provide rules for determining the amount of the deduction, including guidance related to the provision’s taxable income...

Passthrough Regulations and Guidance Released

Final section 199A regulations and additional proposed rules concerning passthrough deductions were released on January 18. The final regulations concern the 20 percent business income deduction available to passthrough owners meeting certain income thresholds that was introduced under the Tax Cuts and Jobs Act (TCJA). Included in the final regulations are a technical definition of...

IRS Releases Proposed Regulations Addressing Hybrid Arrangements

On December 20, the IRS released proposed regulations under sections 245A(e) and 267A. Section 245A allows a deduction for certain related party dividends, except in the case of certain hybrid dividends, and section 267A disallows deductions for certain amounts paid in a related-party hybrid transaction or to a related hybrid entity. The proposed regulations under section 267A clarify...

OMB Receives Final and Proposed Section 199A Regulations

The Office of Management and Budget (OMB) received the proposed and final regulations regarding the new section 199A pass-through deduction regime on December 13 and 14.  The proposed regulations focus on regulated investment company-specific guidelines while the final regulations follow up on the proposed pass-through deduction rules released in August.  The regulations are not marked...

IRS Releases Proposed BEAT Regulations

On December 13, the IRS released proposed regulations (REG-104259-18) concerning the base erosion and anti-abuse tax (BEAT) under section 59A. Section 59A generally operates as a minimum tax on income without regard to certain deductible payments made to foreign related parties. The new regulations clarify who is an “applicable taxpayer” under the provision, as well as provide further...

OIRA Receives Foreign Partner Sales Regulations

On December 4th the Office of Information and Regulatory Affairs (OIRA) received regulations pertaining to the treatment of foreign partners’ gains on the sale of a U.S. partnership.  The regulations will provide guidance on section 864(c)(8), enacted by the Tax Cuts and Jobs Act, which treats gain from the sale of an interest in a partnership engaged in the conduct of a U.S. trade or...

IRS Releases Proposed Foreign Tax Credit Regulations

On November 28, the IRS released proposed regulations (REG-105600-18) concerning the treatment of foreign tax credits and related issues taking into account the changes made by under the Tax Cuts and Jobs Act (TCJA).  Foreign tax provisions under the TCJA modified the method for calculating taxable income for purposes of the foreign tax credit limitation; added two additional foreign...

House Republicans Release Tax Package

House Republicans released a 297 page tax bill on the evening of November 26, with the possibility of voting on the proposed bill as soon as this week. The legislation includes a number of “extenders,” which would renew certain tax provisions set to expire; tax breaks for smaller businesses; and technical corrections to the Tax Cuts and Jobs Act (TCJA) passed in 2017. The five...

IRS Releases Business Interest Expense Proposed Regulations

The IRS has released proposed regulations (REG-106089-18) concerning the business interest expense deduction limits applied to certain taxpayers. As amended by the Tax Cuts and Jobs Act (TCJA), section 163(j) generally places a limit on the amount of deductible business interest expenses in a current taxable year. The proposed regulations, released on November 26, provide rules for...

OIRA Receives Section 267A Regulations for Review

The IRS on November 13th submitted its proposed section 267A anti-hybrid regulations to the Office of Information and Regulatory Affairs for expedited review. Section 267A of the Tax Cuts and Jobs Act, eliminates deductions for any “disqualified related party amount” paid or accrued through a related hybrid entity or transaction. The regulations are expected to address such issues as...

Single Entity Can Apply 199A De Minimis Rule Multiple Times, According to IRS Official

Speaking at the American Institute of CPAs Fall Tax Division Meeting in Washington, D.C. on November 14, IRS associate chief counsel Holly Porter stated that the section 199A de minimis test applied to identify specified service businesses could apply multiple times for the same entity if separate businesses are being operated.  Enacted by the Tax Cuts and Jobs Act (TCJA), section 199A...


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