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IRS to Crackdown on SALT Deduction Cap Workarounds

The IRS intends to issue regulations pertaining to states’ attempts to subvert the state and local tax deduction cap. The Tax Cuts and Jobs Act imposed a $10,000 ($5,000 for married individuals filing separately) limit on state and local tax deductions for federal income tax purposes. Certain states, including New York, New Jersey, and Connecticut, have enacted legislation to allow...

The Upcoming FAA Authorization May Not Contain Any Technical Corrections to the Tax Legislation

House Ways and Means Chairman Kevin Brady has indicated that the upcoming Federal Aviation Administration (“FAA”) reauthorization bill is unlikely to contain additional technical corrections to the 2017 tax bill, despite containing a tax title. Congress had previously passed, in the 2018 Consolidated Appropriations Act, a technical correction to fix a provision that encouraged farmers...

IRS Issues Guidance Related to Determining Built-in Gain or Loss under Section 382

Recently released Notice 2018-30 provides that the two safe harbor approaches in Notice 2003-65–related to recognizing built-in gain or loss–will be determined without regard to the bonus depreciation rule under section 168(k). Section 382 imposes limits of the amount of built-in losses that can offset future taxable income following ownership change. The notice states that...

IRS Releases Fact Sheet on Depreciation

The IRS recently released a factsheet that provides an overview of the changes to depreciation and expensing under the new tax law. The fact sheet addresses immediate expensing for section 179 property, first year bonus depreciation, limitations on luxury automobiles and personal use property, treatment of certain farm property, the applicable recovery period for real property, and the...

The OMB and Treasury Release Memo on OMB’s Oversight of Tax Regulations

The Office of Management of Budget (OMB) and the Department of Treasury recently issued a memo describing the framework for the OMB’s review of tax regulations. The memo provides that regulations will be subject to review if they 1) create a serious inconsistency or interfere with an action of another agency, 2) raise novel legal or policy issues, or  3) have an annual non-revenue...

IRS Releases Notice on the Withholding Obligations of Non-publicly Traded Partnerships

On April 2, 2018, the IRS issued Notice 2018-29, which provides guidance related to withholding under Section 1446(f) with respect to the disposition of a partnership interest in a partnership that is not publicly traded. Read more here: Notice 2018-29

IRS Releases Guidance on Section 965

On April 2, 2018, the IRS issued Notice 2018-26, which describes additional regulations to be promulgated under Section 965. The regulations will provide anti-avoidance rules under the authority granted by the statute, provide an exception to the treatment of a foreign corporation as a specified foreign corporation (SFC) in connection with the downward attribution of stock through a...

Videocast: Implications of tax reform on income recognition

The changes made to the Internal Revenue Code by the Tax Cuts and Jobs Act (TCJA) included a number of modifications to the rules associated with income recognition. Although the TCJA codified certain taxpayer-favorable methods (i.e., the Deferral Method under Rev. Proc. 2004-34), the revised Section 451(b) likely will result in an acceleration of taxpayers’ historic recognition of...

Treasury to Issue Regulations Limiting Exclusion to the New Carried Interest Holding Period to C Corporations

The legislation formerly known as the Tax Cuts and Jobs Act extended the section 1061 carried interest holding period from one year to three years. However, section 1061(c)(4) provided an exception for “any interest in a partnership directly or indirectly held by a corporation.” The reference to a corporation arguably applies to both S corporations and C corporations, which provides...

The Treasury Department Anticipates Releasing a Notice on IRC 163(j) in the Near Future

Krishna Vallabhaneni, Treasury deputy tax legislative counsel, recently stated that the Treasury Department plans on issuing a notice in the coming weeks to address some of the recent issues related to amended IRC 163(j) (interest expense deductions). Some of the specific issues the notice will address include the treatment of carryovers and limitations under the previous section...

EU Finance Ministers Debate the EU’s Response to the 2017 Tax Act

Finance ministers from key EU countries, including France, Germany and Italy, are questioning whether some of the provisions of the 2017 tax act are contrary to World Trade Organization (WTO) rules. The finance ministers are currently reviewing whether to file a complaint with the WTO out of concern that the tax act will spark a race to the bottom with respect to tax rates. EU finance...

IRS Releases Revenue Procedure Limiting Changes to Annual Accounting Periods

The IRS has restricted the ability of taxpayers to make certain changes in accounting periods, through the issuance of Revenue Procedure 2018-17. The revenue procedure modifies Revenue Procedure 2002-39 and Revenue Procedure 2006-45, which deal with approval for changes to annual accounting periods. The modification generally denies automatic approval for changes to tax years of...

Eversheds Sutherland Releases Videocast on the Interest Deduction Limitation under Section 163(j)

Eversheds Sutherland (US) LLP recently released a videocast covering the broadly applicable limitation on the ability to deduct interest under Section 163(j), enacted as part of the recent tax act. This short video includes an overview of the limitation, the differences between the current and prior limitation, and the exceptions to the limitation. Listen to the video:  The Interest...

Videocast: Eversheds Sutherland Releases Videocast on the new BEAT provision

Eversheds Sutherland (US) LLP recently released a videocast, discussing the new Base Erosion and Anti-Abuse Tax (“BEAT”). This brief video walks through an example of how BEAT would be calculated. View it here: Tax Reform: Base Erosion and Anti-Abuse Tax (BEAT)  

Eversheds Sutherland Releases Videocast Providing a Basic Overview of International Tax Provisions

Eversheds Sutherland (US) LLP recently released a videocast which provides a brief overview of the impact of international tax provisions. This short video provides a concise overview of various international provisions in the recent legislation formerly known as the Tax Cuts and Jobs Act, including those related to the reduced corporate tax rate, the shift to a hybrid...


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