Federal

Understanding the Built-in Gain and Loss Rules of Section 382—and Possible Significant Changes on the Horizon
Unprecedented NOLs have accompanied unprecedented times

As we all welcome the new year, companies look forward to the future and hope to leave 2020 to the history books. Because of the lingering economic effects of COVID-19 and the expansion by the Tax Cuts and Jobs Act (TCJA) of the application of the Section 168(k) first-year bonus… Read more »

Carrybacks, Carryovers, Statutes of Limitations, Audits, and Joint Committee on Taxation Review—Practical and Procedural Aspects of Tax Attribute Planning
Questions abound concerning the impact of the CARES legislation

The COVID-19 pandemic has had wide-ranging effects. The Coronavirus Aid, Relief, and Economic Security (CARES) Act legislation, signed into law on March 27 in response to COVID-19, has reshaped the tax landscape as we know it. Gone, for example, are the restrictions imposed on carrying back certain tax attributes, including… Read more »

Addressing Proposed Section 382 Regulations in Current M&A Transactions
These revisions will impact deal terms and valuation

In September 2019, the Internal Revenue Service (IRS) and the Treasury Department issued proposed Section 382 regulations that, when finalized, would significantly reduce the value of net operating losses (NOLs) following Section 382 ownership changes, including those that occur in connection with mergers and acquisitions.1 In particular, the proposed regulations… Read more »

Intersection of National Security With M&A: The Committee on Foreign Investment in the United States
Why does the United States have laws that regulate M&A activity from a national security perspective, and why are those laws now getting more attention?

Once a sleepy, shadowy backwater of the federal government, the Committee on Foreign Investment in the United States (CFIUS)—the U.S. government’s principal mechanism for screening foreign investment to assess and address its potential impact on U.S. national security—has hit the big time. In the last eighteen months, Congress passed sweeping… Read more »

Funds With Benefits: Investing in Qualified Opportunity Zones
Are you up to date on the two sets of IRS-proposed rules on QOZs?

The Tax Cuts and Jobs Act1 created qualified opportunity zones (QOZs) to spur economic development throughout the United States by providing tax benefits to investors who make qualifying investments in these zones. Thousands of population census tracts have been designated as QOZs. Under the QOZ program, taxpayers who timely roll… Read more »

Expect More Civil Tax Penalties—So, Now What?
How to prepare for and defend against the more frequent penalties

Imagine a street with a twenty-five-mile-per-hour speed limit, but everyone knows the police don’t patrol the street. Would you go twenty-five miles per hour? In a voluntary tax system, the Internal Revenue Service enforces the Internal Revenue Code (IRC, or the Code) with the threat of the civil tax penalty.… Read more »

Responses to Federal Tax Reform in Key States
Keeping pace with developing federal rules has challenged even the most sophisticated corporate tax departments

A tsunami of change has roiled the normally calm waters of state conformity to the Internal Revenue Code (IRC) as a result of federal tax reform. Passed in December 2017, shortly before state legislatures went into session in 2018, the Tax Cuts and Jobs Act of 2017 (PL 115-97), hereafter… Read more »

Part V: Section 965 Transition Tax
Yes, some issues are likely to persist for years after you’ve paid the tax

The Tax Cuts and Jobs Act (TCJA) added Section 965 to the Internal Revenue Code to tax earnings held offshore by controlled foreign corporations (CFCs) going back to 1987. In general, this transition tax is the price that U.S. persons who have accumulated earnings in CFCs must pay for the… Read more »

The Tax Cuts and Jobs Act: Introduction
It’s complex, sometimes unclear, but undeniably important

In 2017, the Tax Cuts and Jobs Act was signed into law—the most extensive tax reform legislation enacted in more than three decades. The measure is having a dramatic impact on both individuals and corporations. The statute’s laundry list of provisions significantly affect corporate taxpayers, according to the Tax Foundation,… Read more »

Part IV: Night at the Roxbury—TCJA Changes to Section 168(k)
Open the door to the full expensing club for some, leaving others out in the cold

Since 2001, Section 168(k) of the Internal Revenue Code has offered companies accelerated recovery for the costs of capital assets through “bonus depreciation.” Over the years, bonus depreciation has been regularly modified, changing both the amount of bonus depreciation as well as its application. Once again, as part of P.L.… Read more »

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