Tax Deductions

News & Analysis as of

Pennsylvania’s Commonwealth Court Finds NOL Cap Unconstitutional, Grants Refund to Taxpayer

In a 5–2 decision, the Pennsylvania Commonwealth Court in an en banc panel has held that Pennsylvania’s NOL cap violates the Uniformity Clause of the Pennsylvania Constitution, and granted the taxpayer (Nextel Communications...more

Year-End Tax Planning and Expanded Scholarship Tax Credits

The Alabama Accountability Act of 2013 (the “Act”) provides state income tax credits to certain donors who make contributions to a state-approved scholarship granting organization (SGO) operating within Alabama. The Act was...more

Looking For a Way to Satisfy a Charitable Donation? Donate Israeli Bonds!

For many of us in the Jewish community, Israeli Bonds, have become a familiar part of our religious culture. Parents, grandparents and friends give Israeli Bonds as gifts for holidays, special occasions and milestones and...more

Commonwealth Court Approves PA PUC’s Implementation of Distribution System Improvement Charge

The Commonwealth Court of Pennsylvania issued a decision on November 3, 2015, available here, that has significant implications for public utilities in Pennsylvania seeking to recover costs associated with distribution system...more

Consultation over Fixed Cap on UK Tax Deductibility of Corporate Interest Expense: Plucking the Feather in the Cap?

The UK Government launched a consultation on 22 October 2015 regarding the UK corporate tax rules for interest deductibility. The consultation seeks views on the design of a general limitation for UK corporation tax...more

New Legislation Makes Sweeping Changes Impacting All Partnerships

All partnerships will be audited at the entity level unless they have 100 or fewer partners AND no partnerships as direct partners. The two-year budget plan passed by Congress on October 30, 2015, and expected to be...more

No Tax Deduction for Medical Marijuana Company

As more and more states are allowing for medical marijuana or other legal uses of marijuana, it is important to recognize that the federal government’s treatment of marijuana as a controlled substance can have more than...more

A Real Bummer for The Marijuana Industry

As a general rule, in accordance with IRC § 162(a), taxpayers are allowed to deduct, for federal income tax purposes, all of the ordinary and necessary expenses they paid or incurred during the taxable year in carrying on a...more

Worthless Debt Deduction – A Cautionary Tale

For partnership, individuals and other types of taxpayers that are not in the business of making loans, the main avenue for tax relief when a loan goes bad is Section 166 – the bad debt deduction. In order to claim this...more

IRS Issues Guidance on Bonus Depreciation

The IRS issued guidance on Tuesday dealing with first-year bonus depreciation. The Tax Increase Prevention Act of 2014 amended Section 168(k)(2) by extending the one year placed-in-service date for property that...more

Massachusetts Denies ‘True Debt’ Treatment for Cash Management Obligations

The Massachusetts Appellate Tax Board (“ATB”) has once again issued a Findings of Fact and Report upholding a Department assessment on the basis that a taxpayer’s intercompany obligations under a cash management system were...more

Taxpayers Must Correctly Write-Off Balances for Partial Bad Debt Deduction

Code Section 166(a)(2) allows for a deduction for partially worthless debts for business debts. One of the requirements to be able to deduct is that the amount deducted “was charged off” on the books during the tax year....more

Final Section 162(m) Regulations Clarify Exceptions to $1 Million Deduction Limit

Section 162(m) of the Internal Revenue Code ("Section 162(m)") limits the tax deduction that a publicly held corporation may take with respect to compensation paid to each of the corporation's chief executive officer and its...more

How Is a Relator’s Recovery in an FCA Settlement Taxed?

This rarely litigated question was presented to the Seventh Circuit in Patrick v. Commissioner of Internal Revenue, No. 14-2190, 2015 WL 5024985, — F.3d —- (Aug. 26, 2015). Previously, the First Circuit, in Fresenius Medical...more

Tax Changes Included in the Trade Preferences Extension Act of 2015

The recently enacted Trade Preferences Extension Act of 2015 (the "Act") contains a number of tax provisions affecting businesses and individuals which have not been widely reported. The Act adds a requirement for claiming...more

"Treasury Releases Notice Addressing Transactions Involving Related-Party Partnerships"

On August 6, 2015, the Department of the Treasury issued Notice 2015-54 (the Notice) announcing its intent to issue new regulations addressing transactions involving partnerships formed by related parties. According to the...more

Tax Newsletter - May/June 2015 (China & Hong Kong)

The tax arena in both China and Hong Kong has been a buzz since the last issue of our Tax Newsletter. In this edition, we draw your attention to certain recent developments that may carry legal and tax implications for your...more

Tax and Estate Planning Newsletter - Summer 2015

Dear Clients and Colleagues: This summer’s weather is a mix of hot and cold temperatures, and the rain we need so desperately is coming now in sprinkles along with thunder and lightning. Along with changes in the...more

Tax Court: Stock based Compensation Costs Need not be Included in International Cost-Sharing Arrangements

The Stunning Altera Case - Employee stock options are an important part of compensation—both as income to the executives and as a deduction for the employer. But when stock options are used by multinational companies,...more

On-Line Fundraising, Some Tax Implications

Many have participated in, or know someone who has launched, a “Kickstarter” campaign or other online means of securing funds for a project. Others may have encountered a request for contributions to a “fund” for some tragic...more

The ABLE account: A good alternative to a special needs trust?

Late last year, Congress passed, and the President signed, the Achieving a Better Life Experience (ABLE) Act. The act authorizes a new, tax-advantaged savings account, modeled after the Section 529 college savings account,...more

FINRA Warns on Muni Shorts & Fails: Substitute Interest is Taxable

FINRA issued its late-July Regulatory Notice 15-27 warning brokerage firms that inadvertent short positions or fail-to-delivers in municipal securities trading can create situations where the member-firm pays a customer...more

Tax Proposals to Eliminate Interest Deductions Miss the Mark

The proposal to eliminate the interest deduction may have a material adverse impact on U.S. middle-market companies. In March, Republican presidential candidate Senator Marco Rubio, together with Senator Michael Lee,...more

Lessons Learned in Conservation Partnerships

The Internal Revenue Code has provided an incentive under Section 170(h) for charitable conservation gifts. Since at least 2002 there has been an interest in combining through partnership those land owners who may have little...more

UK Summer Budget 2015 – Key Issues for Asset Managers and Non-UK Domiciled Individuals

On 8th July 2015, the UK Government announced several changes to UK tax legislation that will affect those holding carried interest in fund structures which utilise at least one partnership (including a limited partnership),...more

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