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Income Tax Changes Coming for Select Intra-Entity Asset Transfers
Posted by Brad Jolie on Fri, Nov 18, 2016 @ 04:56 PM

Companies that exchange assets other than inventory between related parties will be facing changes to the timing of the recognition of the income tax effect of the transfer.

On October 24, 2016, the Financial Accounting Standards Board (FASB) released an accounting standards update that will require entities to recognize the income tax consequences for a non-inventory asset transfer on the date the transfer occurs. Accounting Standards Update 2016-16, Accounting for Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory will take effect for public business entities in annual periods, including interim periods within those annual periods, beginning after December 15, 2017 (i.e., 2018 calendar year). Non-public entities will adopt for annual periods beginning after December 15, 2018 (i.e., 2019 calendar year) and interim periods beginning after December 15, 2019 (i.e., 2020 calendar year).

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Topics: tax, Taxes, Income tax changes, Income Tax, Brad Jolie, Intra-Entity Asset Transfers

Important Lesson for Loss Corporations with Deferred Revenue Obligations
Posted by Chrissy Hammond on Thu, Sep 22, 2016 @ 01:56 PM

Corporations operating at a loss can utilize these losses in the future to offset taxable income – the net operating loss (NOL) carryover. But there may be limits to the tax benefits of these losses when a loss corporation is acquired by another entity. The limitations are outlined in Internal Revenue Code Section 382 (Section 382). For loss corporations, calculating the limitations of Section 382 seems relatively simple at first, but over the years this analysis has become somewhat complicated, as a recent Chief Counsel Advice demonstrates.

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Topics: tax planning, tax, NOL, deferred revenue, NUBIG, NOLs, section 382, loss corporations, NUBIL

Buying a Business? Stock Purchase vs. Asset Purchase or the Best of Both Worlds
Posted by Chrissy Hammond on Thu, Apr 7, 2016 @ 09:47 AM

Purchasing an incorporated business is often complicated, particularly since the interests of buyer and seller are typically adverse. Both sides want the best deal, one that favors their own interests. From the buyer’s perspective traditional wisdom holds true: buy assets and later on sell stock.

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Topics: tax planning, tax, Carl Giardino, Stock Purchase, Asset Purchase, 338(h)(10), H-10

Inflation-Adjusted Figures Released for 2015
Posted by Kristen Shepley on Mon, Nov 24, 2014 @ 09:23 AM

While everyone anxiously awaits the fate of popular tax extenders like bonus depreciation and the increased business expensing election, the IRS and the Social Security Administration have released various inflation-adjusted figures for 2015. While most figures will increase slightly in 2015, some, such as the annual gift exclusion, remain unchanged.

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Topics: tax, tax changes, Inflation-Adjusted, 2015 Tax Rate Tables

Opportunities and Obligations under the Tangible Property Regulations
Posted by Carl Giardino on Thu, Sep 11, 2014 @ 08:11 AM

Time is running out for taxpayers to implement the new tangible property regulations. The new rules must be followed beginning in 2014. All taxpayers with tangible business and investment property will need to analyze current accounting practices and potentially institute changes to conform to the new rules. Many taxpayers can leverage the final regulations to increase and accelerate tax deductions. Others may have to defer or recapture deductions as a result of the new rules. And given that many of these rules simply didn't exist a couple of years ago, virtually all taxpayers with tangible property will need to request one or more accounting method changes on their 2014 tax returns to become compliant.

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Topics: Tangible Property Regulations, tax planning, tax, Carl Giardino

IRS Continues to Attack Accrued Bonus Plans
Posted by Michael Corrente on Tue, Sep 9, 2014 @ 10:04 AM

Businesses with annual employee bonus plans have long operated under the assumption that as long as they pay bonuses within 2 ½ months after the end of the year in which the bonuses are earned, the bonuses are deductible in the year earned, rather than in the year paid. While it is true that the "2 ½ month rule" must be satisfied in order to deduct the bonus in the year earned, other requirements must be met as well. The IRS has issued several rulings in the last few years illustrating how many bonus plans may fail these requirements. While these rulings may cast doubt upon the deductibility of many employers' current bonus plans, they also shed light on how to structure a bonus plan to withstand IRS scrutiny.

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Topics: tax issues, Michael Corrente, tax, IRS Updates, Bonus Plans

New York Aims to Lose its Reputation for High Taxes with Cuomo’s FY 2015 Budget
Posted by Tarra Curran on Tue, Apr 15, 2014 @ 09:02 AM

On March 31, 2014 New York Gov. Andrew M. Cuomo signed the state’s FY2015 budget – an expansive piece of legislation intended to counteract New York’s reputation as a high-tax state and “create jobs, grow the economy and provide much-needed relief for struggling families.” 

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Topics: Tarra Curran, tax, tax changes, Cuomo’s Budget Proposal

Rhode Island Analyzes Two-Year Study; Considers Combined Reporting
Posted by Tarra Curran on Mon, Apr 7, 2014 @ 09:24 AM

Back in 2011, Rhode Island Gov. Lincoln D. Chafee proposed in his FY2012 budget that the state change its business corporation tax statute to a combined method of reporting. At the time, the proposal drew criticism from the Rhode Island Public Expenditure Council (RIPEC), which claimed there wasn’t enough data to evaluate the implementation of combined reporting.

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Topics: tax issues, tax update, Tarra Curran, tax returns, tax

New York Aims to Lose its Reputation for High Taxes with Cuomo’s Budget Proposal
Posted by Tarra Curran on Mon, Mar 10, 2014 @ 09:12 AM

On January 21, 2014 New York Gov. Andrew M. Cuomo announced an expansive $2 billion FY2014-2015 tax relief budget proposal intended to counteract New York’s reputation as a high-tax state and “create jobs, grow the economy and provide much-needed relief for struggling families.”

The $137.2 billion proposed budget represents a spending increase of less than 2 percent and is accompanied by business, property and estate tax relief. Specific cuts include those for property and business owners, renters and upstate manufacturers, among other constituents.

Among the most compelling proposals: shrinking the corporate income tax rate from 7.1 percent to 6.5 percent (by 2016) -- the lowest rate since 1968 -- and raising the estate tax exemption from $1 million to $5.25 million while cutting the top rate from 16 percent to 10 percent.

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Topics: Tarra Curran, tax, tax changes, Cuomo’s Budget Proposal

Market-Based Sourcing in Massachusetts to Begin in 2014
Posted by Tarra Curran on Thu, Sep 5, 2013 @ 09:16 AM

As part of the newly enacted transportation finance bill, effective in 2014, the Commonwealth amended the apportionment formula for multi-state taxpayers to reflect market-based sourcing.

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Topics: Tarra Curran, Market-Based Sourcing in Massachusetts, tax, Claudia Mullen

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