Individual income tax update: Legislative developments and selected IRS rulingsBy Thomas F. ArendsFederal Taxation, November 2002Introduction: The following update is a summary of recent legislative developments and selected IRS rulings in the individual income tax area that was set forth in the Federal Taxation Section's 2002 Federal Tax Conference recently held in Chicago and Bloomington, Illinois.
The Internet and personal property like-kind exchanges— The brave new worldBy Edward J. HannonFederal Taxation, November 2002Under the rules of section 1031 of the Internal Revenue Code, a taxpayer will recognize no gain for federal income tax purposes if, among other things, the taxpayer exchanges property that is used in the taxpayer's trade or business or held for investment solely for like-kind property that is used in the taxpayer's trade or business or is held for investment.
Tax procedure updateBy Thomas F. ArendsFederal Taxation, November 2002Introduction: The following update is a summary of selected topics on IRS tax collection procedure and representation issues presented and discussed at the Federal Taxation Section's Federal Tax Conference recently held in Chicago and Bloomington, Illinois.
Estate, gift and generation-skipping tax updateBy Kelli E. MadiganFederal Taxation, June 2002IRS Notice 2002-25: The Notice extends the time period for donees who made charitable contributions in excess of $250 between the period of September 10 and December 31, 2001, to obtain a written acknowledgment from the charitable organization as required under Section 170 (f)(8), or to acquire evidence of a good faith effort to obtain the documentation from such charity, until October 15, 2002.
Individual income tax updateBy James S. ZmudaFederal Taxation, June 2002In 1 122 S. Ct. 1414, 152 L. Ed. 2d 437 (2002), the United States Supreme Court held that an individual's interest in a tenancy by the entirety was a property interest to which a tax lien could attach.
The tax treatment of tenant-in-common ownership interests in a like kind exchange is now the subject of a recently issued revenue procedureBy Edward J. Hannon & Elizabeth S. TenneyFederal Taxation, June 2002On March 20, 2002, the Internal Revenue Service (IRS) issued Revenue Procedure 2002-22, which sets forth the conditions under which the IRS will consider a request for private letter ruling on the issue of whether an undivided fractional interest in real property qualifies as qualifying replacement property for purposes of the tax-free like kind exchange rules of Code Section 1031.
Corporate and partnership taxBy Michael L. EnglishFederal Taxation, March 20021. Corporate compensation deduction denied. The Tax Court, in Tesco DriveAway Co., Inc., T.C. Memo. 2001-294, ruled that an accrual method corporation could not deduction compensation paid to related cash method taxpayers where the payments were made after the close of its fiscal year but prior to the end of the taxpayer's calendar year.
Individual income tax updateBy James S. ZmudaFederal Taxation, March 2002In Mora v. Comm'r, 117 T.C. No. 23 (2001), the Tax Court held a woman was entitled to separate innocent spouse relief under I.R.C. §6015(c) with regard to her former husband's tax shelters.
Chairman’s cFederal Taxation, February 2002One of the goals of the section council over the past two years has been to establish and maintain a dialog with members of the Illinois Congressional delegation.
Estate and gift and generations gifting tax updateBy Kelli E. MadiganFederal Taxation, January 2002In two different Private Letter Rulings the IRS acknowledged two different state court orders reforming trust documents to correct a scriveners' error in the underlying document.
Chairman’s cornerFederal Taxation, October 2001Welcome to the first edition of the Federal Taxation Newsletter for the 2001-2002 year.
Estate tax repealBy Robert J. KruppFederal Taxation, October 2001Has the estate tax been repealed? It depends on what your definition of "repeal" is.
A new definition of incomeBy Kelli E. MadiganFederal Taxation, October 2001Historically, interest and dividends have been treated as income while capital gains have been treated as principal.
Recent developments in corporate and partnership taxBy Michael L. EnglishFederal Taxation, October 2001In Seggerman Farms, Inc., T.C. Memo. 2001-99, the Tax Court ruled that the shareholders of a family corporation recognized gain on the transfer of assets to their controlled corporation where the liabilities assumed by the corporation exceeded the shareholders' adjusted basis in the property transferred.
Chairman’s cornerBy John B. TruskowskiFederal Taxation, June 2001Representatives of the Federal Tax Section Council traveled to Washington, D.C. on May 10 to meet with legislative representatives of Senators Durbin and Fitzgerald and Representatives Hastert and Crane.
Individual income tax updateBy James S. ZmudaFederal Taxation, June 2001In Vinick v. United States, 205 F.3d 1 (1st Cir. 2000), the United States Court of Appeals for the First Circuit ("First Circuit") reversed a district court ruling that a corporate officer was a responsible person for purposes of Code §6672, which imposes a 100% "penalty" tax regarding the failure to withhold employment taxes.
Recent developments in estate and gift taxBy Michael L. EnglishFederal Taxation, June 20011. Service issues proposed regulations on ESBTs. The Service has issued proposed regulations on the qualification and treatment of electing small business trusts (ESBTs).
Tax planning opportunities using the new 18 percent capital gain rateBy Edward J. Hannon & Jonathan M. CesarettiFederal Taxation, June 2001The Taxpayer Relief Act of 1997 (the "1997 Act") changed the rate at which federal income tax was imposed on long-term capital gain rates. As originally enacted, the 1997 Act created three rates, a 28% rate, a 25% rate and a 20% rate
Estate and gift tax updateBy David R. ReidFederal Taxation, March 2001The estate and gift tax area is at a crossroad. President Bush has promised to repeal "the death tax."
Individual income tax updateBy James S. ZmudaFederal Taxation, March 2001In Service Center Advice 200105062, the Internal Revenue Service ("IRS") has advised service centers that they cannot abate individual estimated tax penalties resulting from income attributable to a conversion of a traditional Individual Retirement Account ("IRA") to a Roth IRA.
Individual income tax updateBy James S. ZmudaFederal Taxation, January 2001The Internal Revenue Services ("IRS") has issued Form 8869, Qualified Subchapter S Subsidiary Election, to be used by a parent S corporation to elect to treat one or more of its eligible subsidiaries as a qualified Subchapter S subsidiary ("Q Sub").
IRS and SSA announce new benefit limits for 2001By Thomas VasiljevichFederal Taxation, January 2001The Internal Revenue Service and Social Security Administration have announced the annual cost-of-living adjustments to various benefit limitations.
Recent developments on estate and gift taxBy Michael L. EnglishFederal Taxation, January 2001The Service, in REG-106511-00, issued proposed regulations relative to the filing of an application for an automatic six month extension of time to file an estate tax return.
Tax court discusses continuity of business enterprise requirementBy John B. TruskowskiFederal Taxation, January 2001In a recent decision, the U.S. Tax Court discussed the continuity of business enterprise, a judicially established and regulatory requirement for tax-free reorganizations.
Corporate partnership updateBy Michael L. EnglishFederal Taxation, October 2000The Service, in Letter Ruling 200030018, ruled that a trust created for the purpose of holding non-voting stock of an S corporation was an eligible shareholder under section 1361(c)(2)(A)(i).
Estate and gift tax updateBy David R. ReidFederal Taxation, October 2000The innocent spouse provisions of IRC section 6015 provide relief to "innocent spouses."
