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PREVIEW * Penalties assessed by the IRS will sometimes be waived for reasonable cause where the taxpayer shows reliance on the advice of a tax professional. * Where a taxpayer [...]

Investors are advised to buy low and sell high. Many are also advised to establish a limit on losses and, if the investment declines to that point, to sell it. [...]

The S corporation tax rules were designed for small corporations, and even though there can now be 100 shareholders (even more if the shareholders are related), the majority of S [...]

For many years, taxpayers have been able to defer recognition of gain on the disposition of assets by engaging in Sec. 1031 like-kind exchanges. Consequently, many questions and issues surrounding [...]

In May 2013Treasury issued final regulations under Sec. 336(e).(1) This Code subsection allows taxpayers to elect to treat a corporation's sale of at least 80% of its stock in a [...]

Usually attorneys and accountants can identify those financial instruments that qualify as corporate stock and then apply the appropriate tax rules. The decision becomes more complicated if the corporation is [...]

The frequent transfer of cash between closely held businesses and their owners is very common. If the owner works in the business, the transfer is likely to be either a [...]

Schedule M-3, Net Income (Loss) Reconciliation, is required for returns of corporate and partnership entities that report assets of $10 million or more on their Schedule L balance sheet, to [...]

In July 2010, the Wall Street Journal reported that BP may be able to reduce its U.S. tax bill by $10 billion as a result of the money it set [...]

The question of whether courts owe a deference to administrative agencies' interpretation of law in cases where an agency's practice is being contested is examined. The US Supreme Court decisions of Skidmore v. Swift & Co., Chevron U.S.A. v. Natural Resources Defense Council, and United States v. Mead Corp. are reviewed and their applicability to tax law is examined.

Both employees and employers are required to pay FICA tax on all wages--a broadly defined term. In today's economy, many workers are being laid off or asked to take early [...]

A ruling of the 7th Circuit Court of Appeal in U.S. Freightways, rejecting the IRS's contention that the company could not deduct annual recurring expenses, such as fees, licenses, insurance and permits, when some benefits would be enjoyed in the following year, is analyzed.

The author discusses the use of partial liquidations with subsidiary corporations' restructuring and pitfalls to be aware of to avoid double taxation.

Businesses with acquisition plans must meet the requirements for tax deductions under Section 195 of the tax code. They are then required to furnish a statement to the tax return as provided in the regulations after complying with the code requirements. The statement should be filed early so that it can be amended while a late filing results in the loss of opportunity for amortization. For businesses with expansion plans, the expansion costs are not automatically deductible. They should be able to prove that they did not create a separate organization or generate a significant future benefit to qualify for a tax deduction.

The "origin-of-the-claim" doctrine (OCD) has been developed and long-used by the courts to determine the nature, and hence the deductibility, of certain types of expenses. However, the courts themselves differ [...]

TRA '97 mandates that a significant amount gained from the sale of a principal residence can be tax excluded. Under the old law, taxpayers are allowed to defer taxation of the gain either by buying another home for at least the sale price or if they were the right age when the sale was made. Aimed to eliminate the complications of the old law, TRA '97 has repealed Sec 1034, rollover of gain and Sec 121, which refers to an exclusion in tax for sold residences that were once used as principal residences for at least two of the last five years. The new law has also resolved some tax fiascos related to divorce, involuntary conversion and death that may arise under the old law. Despite the benefits of the new law, however, a taxpayer still has to prove that the property was used as a residence and that any land and additional structures sold were reasonable vis-a-vis the residence.

In the corporate world, trigger is not always better. Corporate spin-offs have become a popular way for companies to release shareholder value and achieve other business purposes. A spin-off involves [...]

The acquisition of real property leases continues to provide tax planning opportunities. While leases are not intangibles amortizable under Sec. 197, changes enacted by the Revenue Reconciliation Act of 1993, [...]

The Tax Court denied a deduction for a house donated to a fire department for burning in a training exercise, saying its value was decreased by restrictions on its disposition [...]

A discarge of indebtedness does not result in income to the extent a taxpayer is insolvent, but how you define insolvency? Whether the taxpayer is insolvent is a vital consideration [...]

During a Prolonged Recession, It's Especially Useful to Know How to Minimize Economic Loss As a result of the prolonged economic recession in the United States, numerous businesses have been [...]

The use of intercorporate transfers between related corporations by some shareholders in order to avoid reporting dividend income has been overturned by a recent court decision. In the US vs Mews case, the Seventh Circuit Court of Appeals has made it imperative for the taxpayer to show a business purpose for such transfers and to demonstrate that he has not personally benefitted as a result of the transfer., In a classical tax system, corporate earnings are subject to double taxation--once when earned and again when distributed as dividends. Since dividends are the only form of income subject to [...]