Monday, December 27, 2010
Thursday, November 25, 2010
Wednesday, November 24, 2010
Sunday, October 17, 2010
Tuesday, October 12, 2010
Implications of China’s foreign tax credit regime on outbound investment structures World Tax Advisor
World Tax Advisor
Implications of China’s foreign tax credit regime on outbound investment structures
Implications of China’s foreign tax credit regime on outbound investment structures
China’s State Administration of Taxation (SAT) issued long-awaited guidance on 22 July 2010 (Bulletin No. 1 “Guidance on Administration of PRC Enterprise Foreign Tax Credit,” or “Guidance”) that provides a detailed interpretation and examples of the calculation of the foreign tax credit (FTC) available under articles 23 and 24 of the Enterprise Income Tax Law (EIT Law) and its implementation rules. The Guidance is intended to supplement Circular No. 125, a notice issued jointly by the SAT and the Ministry of Finance at the end of 2009.
ICI - President's Economic Recovery Advisory Board Report on Tax Reform Includes Mutual Fund and Retirement Recommendations
ICI - President's Economic Recovery Advisory Board Report on Tax Reform Includes Mutual Fund and Retirement Recommendations: "[24544]
�
September 16, 2010
TO: PENSION MEMBERS No. 37-10
TAX MEMBERS No. 28-10
FEDERAL LEGISLATION MEMBERS No. 6-10
RE: PRESIDENT'S ECONOMIC RECOVERY ADVISORY BOARD REPORT ON TAX REFORM INCLUDES MUTUAL FUND AND RETIREMENT RECOMMENDATIONS
�
The President’s Economic Recovery Advisory Board released its report on tax reform, proposing options for changes in the current tax system to achieve three broad goals: simplifying the tax system, improving taxpayer compliance with existing tax laws, and reforming the corporate tax system. [1]� The report includes one proposal relating to mutual fund taxation and a number of options to simplify savings and retirement incentives, described below.� The Board states that the report does not represent Obama Administration policy."
�
September 16, 2010
TO: PENSION MEMBERS No. 37-10
TAX MEMBERS No. 28-10
FEDERAL LEGISLATION MEMBERS No. 6-10
RE: PRESIDENT'S ECONOMIC RECOVERY ADVISORY BOARD REPORT ON TAX REFORM INCLUDES MUTUAL FUND AND RETIREMENT RECOMMENDATIONS
�
The President’s Economic Recovery Advisory Board released its report on tax reform, proposing options for changes in the current tax system to achieve three broad goals: simplifying the tax system, improving taxpayer compliance with existing tax laws, and reforming the corporate tax system. [1]� The report includes one proposal relating to mutual fund taxation and a number of options to simplify savings and retirement incentives, described below.� The Board states that the report does not represent Obama Administration policy."
Thursday, September 30, 2010
Sunday, August 29, 2010
Thursday, August 5, 2010
Thursday, July 29, 2010
SubChapter M Tax: Foreign withholding issues - Deloitte | France Tax Alert - 8 July 2010 | International Tax
SubChapter M Tax: Foreign withholding issues - Deloitte | France Tax Alert - 8 July 2010 | International Tax: "Deloitte | France Tax Alert - 8 July 2010 | International Tax: 'The French Administrative Lower Court of Paris ruled on 22 April 2010 that the withholding tax levied on French-source dividends paid to an Irish UCIT violated the free movement of capital principle in the Treaty of the Functioning of the EU and EEA. The French tax authorities have four months to lodge an appeal against the decision (until August 2010), although they have not yet done so.
Under French law, dividends paid by a French company to a non-French UCIT are subject to a 25% withholding tax, whereas dividends paid by a French company to a French UCIT are exempt from taxation in France (i.e. no withholding tax and no corporate income tax at the level of the UCIT). In addition, the French tax authorities take the position that tax treaties do not apply to UCITs, unless specific provisions are included in a treaty (see, for example, France’s treaties with Germany, Spain and Sweden).'"
Under French law, dividends paid by a French company to a non-French UCIT are subject to a 25% withholding tax, whereas dividends paid by a French company to a French UCIT are exempt from taxation in France (i.e. no withholding tax and no corporate income tax at the level of the UCIT). In addition, the French tax authorities take the position that tax treaties do not apply to UCITs, unless specific provisions are included in a treaty (see, for example, France’s treaties with Germany, Spain and Sweden).'"
ICI - 2010 Tax & Accounting Conference
ICI - 2010 Tax & Accounting Conference: "Tax and Accounting Conference
September 26–29, 2010
Phoenix, AZ
For the latest information on tax, accounting, and regulatory developments, don't miss the Investment Company Institute's 2010 Tax and Accounting Conference at the JW Marriott Desert Ridge in Phoenix, Arizona. A welcoming reception will take place on the evening of Sunday, September 26. Conference sessions are scheduled for Monday, September 27 through Wednesday, September 29."
September 26–29, 2010
Phoenix, AZ
For the latest information on tax, accounting, and regulatory developments, don't miss the Investment Company Institute's 2010 Tax and Accounting Conference at the JW Marriott Desert Ridge in Phoenix, Arizona. A welcoming reception will take place on the evening of Sunday, September 26. Conference sessions are scheduled for Monday, September 27 through Wednesday, September 29."
SubChapter M Tax: irs private letter ruling 201025031 - qualifying income under 851 from a CFC
SubChapter M Tax: irs private letter ruling 201025031 - qualifying income under 851 from a CFC: "This is in response to your letter dated August 9, 2009, requesting a ruling that (1) income and gain arising from the commodities-linked notes described below constitute qualifying income to Fund under section 851(b)(2) of the Internal Revenue Code of 1986, as amended (the “Code”) and (2) income earned from Fund’s investment in a wholly-owned subsidiary (Subsidiary) that is a controlled foreign corporation (CFC) under section 957(a) constitutes qualifying income to Fund under section 851(b)(2)."
Taxation of Real Estate Investment Trusts: Retroactive QEF election made by REIT - IRS Private Letter Ruling 201029016
Taxation of Real Estate Investment Trusts: Retroactive QEF election made by REIT - IRS Private Letter Ruling 201029016: "This is in response to your letter received by our office on November 9, 2009, requesting the consent of the Commissioner of the Internal Revenue Service to make a retroactive qualified electing fund ('QEF') election under section 1295(b) of the Internal Revenue Code ('Code') and Treas. Reg. �1.1295-3(f) with respect to your investment in FC.
The rulings contained in this letter are based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party. While this office has not verified any of the material submitted in support of the request for rulings, it is subject to verification on examination.
FACTS
Taxpayer is a State X corporation. Taxpayer and Company A, a Real Estate Investment Trust (Taxpayer’s indirect shareholder), both made an election to treat Taxpayer as a taxable REIT subsidiary effective Date 1. Company B (Taxpayer’s majority direct shareholder) is an operating partnership owned primarily by Company A. Taxpayer is a calendar year taxpayer and uses the accrual method of accounting."
The rulings contained in this letter are based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party. While this office has not verified any of the material submitted in support of the request for rulings, it is subject to verification on examination.
FACTS
Taxpayer is a State X corporation. Taxpayer and Company A, a Real Estate Investment Trust (Taxpayer’s indirect shareholder), both made an election to treat Taxpayer as a taxable REIT subsidiary effective Date 1. Company B (Taxpayer’s majority direct shareholder) is an operating partnership owned primarily by Company A. Taxpayer is a calendar year taxpayer and uses the accrual method of accounting."
Taxation of Real Estate Investment Trusts: State Tax Matters
Taxation of Real Estate Investment Trusts: State Tax Matters: "Effective for tax years ending on or after July 1, 2010, new law generally requires a defined captive real estate investment trust (REIT) to add back its federal dividends paid deduction, as well as requires a “captive REIT affiliated group” to file its Tennessee franchise/excise tax return on a combined basis. A captive REIT is generally defined as a federal income tax REIT under Internal Revenue Code Sec. 856(c)(1) that is not publicly traded and is 80% or more owned directly or indirectly by a single entity or individual. A captive REIT affiliated group includes any entity that is greater than 50% owned (directly or indirectly) by a captive REIT; although the law provides an exception for captive REITs owned directly or indirectly by a bank or bank holding company or a public REIT. Also, the federal dividends paid deduction add-back requirement does not apply to a captive REIT that is owned, directly or indirectly, by a bank or a bank holding company or a public REIT."
SubChapter K Tax: Qualifying Income of a Publicly Traded Partnership under IRC 7704 - IRS Private Letter Ruling 201027003
SubChapter K Tax: Qualifying Income of a Publicly Traded Partnership under IRC 7704 - IRS Private Letter Ruling 201027003: "This letter responds to a letter from your authorized representative dated February 16, 2010 submitted on behalf of X requesting a ruling under the publicly traded partnership rules of �7704 of the Internal Revenue Code.
X was organized as a limited partnership under the laws of State. It is a publicly traded partnership within the meaning of � 7704(b). X is engaged through its operating partnership, Y, and through Y's subsidiaries (hereinafter, any references to X include a reference to Y and Y's subsidiaries), in a variety of activities, including the marine transportation of crude oil, refined petroleum products and other products for a variety of charterers, including major and independent oil and gas refining companies and petroleum marketing companies. X currently provides its marine transportation services under (i) spot contracts covering a single voyage and (ii) term contracts that range from a to b in length. Vessel charters, including fully found charters, time charters, consecutive voyage charters, contracts of affreightment and single voyage charters, as currently in effect and as may be entered into in the future, are referred to herein as the “Charters”."
X was organized as a limited partnership under the laws of State. It is a publicly traded partnership within the meaning of � 7704(b). X is engaged through its operating partnership, Y, and through Y's subsidiaries (hereinafter, any references to X include a reference to Y and Y's subsidiaries), in a variety of activities, including the marine transportation of crude oil, refined petroleum products and other products for a variety of charterers, including major and independent oil and gas refining companies and petroleum marketing companies. X currently provides its marine transportation services under (i) spot contracts covering a single voyage and (ii) term contracts that range from a to b in length. Vessel charters, including fully found charters, time charters, consecutive voyage charters, contracts of affreightment and single voyage charters, as currently in effect and as may be entered into in the future, are referred to herein as the “Charters”."
Tuesday, July 27, 2010
Little Change for PCAOB Under High Court Ruling
Little Change for PCAOB Under High Court Ruling
The Supreme Court’s 5–4 decision Monday in the constitutional challenge to the PCAOB will leave the agency virtually unchanged. The court’s ruling will not affect day-to-day operations of the PCAOB, the agency said.
Chief Justice John Roberts wrote the majority opinion. In it, he said the court was isolating, or “severing,” from the rest of the Sarbanes-Oxley Act the one constitutional flaw the court found regarding the power to remove PCAOB members. “The consequence is that the [PCAOB] may continue to function as before, but its members may be removed at will by the [
The court also emphasized that all other provisions of the SOX will remain in effect. “The Sarbanes-Oxley Act remains ‘fully operative as a law’ with these tenure restrictions excised,” the court said.
“The decision effectively fixes the constitutionality of the PCAOB by making board members subject to ‘at will’ removal by the
High Court Denies Business-Method Patent
High Court Denies Business-Method Patent
The U.S. Supreme Court ruled Monday that a method of hedging against fluctuations in the price of energy or other commodities was an unpatentable abstract idea. The court, however, rejected the idea that a business method could never be patentable. The case, Bilski v. Kappos (08-964), has been widely followed because of its possible far-reaching implications for business-method patents. Some business-method patents have been approved by the U.S. Patent and Trademark Office, including some concerning taxes. Some tax practitioners and groups, including the AICPA, have opposed patents for tax strategies or planning methods.
The high court upheld the substantive holding of the Federal Circuit Court of Appeals. However, the Supreme Court rejected the reasoning behind the lower court’s holding. The Federal Circuit had concluded that the hedging method was not eligible for patent under 35 USC § 101, the main statutory definition of patentable subject matter, because it failed the machine-or-transformation test. The Supreme Court’s majority opinion, written by Justice Anthony M. Kennedy, held that the application at issue was not patentable principally because it embodied an abstract idea, a mathematical procedure that, broadly applied, could allow the applicants rights over many types of hedging activities.
“Allowing petitioners to patent risk hedging would pre-empt use of this approach in all fields, and would effectively grant a monopoly over an abstract idea,” Kennedy wrote.
Financial Regulatory Reform Bill Clears Congress
Financial Regulatory Reform Bill Clears Congress
pdate: Obama Signs Dodd-Frank Reform Bill, July 21, 2010
The Senate on Thursday approved a major financial regulatory reform package that President Barack Obama is expected to quickly sign into law.
The Dodd-Frank Wall Street Reform and Consumer Protection Act, which was approved by the House on June 30 before narrowly clearing the Senate, will create new regulations for companies that extend credit to consumers, exempt small public companies from Sarbanes-Oxley section 404(b), make auditors of broker-dealers subject to PCAOB regulation and change registration requirements for investment advisers. The profession successfully advocated for CPAs to be carved out of the new Consumer Financial Protection Bureau for usual and customary activities.
Financial Stability Oversight Council. The legislation creates a new systemic risk regulator called the Financial Stability Oversight Council. The council, chaired by the Treasury secretary and whose members will be heads of regulatory agencies, including the chairmen of the Federal Reserve, FDIC and SEC among others, will identify any company, product or activity that could threaten the financial system. The Federal Reserve will supervise the companies identified by the council, and the FDIC would carry out instructions by the council to close large entities under a new orderly liquidation authority. The council, through the Federal Reserve, will also have the power to break up large firms, require increased reserves, or veto rules created by another new regulator—the Consumer Financial Protection Bureau—with a two-thirds vote. Consumer Financial Protection Bureau. The Consumer Financial Protection Bureau consolidates most federal regulation of financial services offered to consumers and replaces the Office of Thrift Supervision’s seat on the FDIC board. Almost all credit providers, including mortgage lenders, providers of payday loans, other nonbank financial companies, and banks and credit unions with assets over $10 billion will be subject to new regulations. CPAs providing “customary and usual” accounting activities, including the provision of “accounting, tax, advisory, or other services that are subject to the regulatory authority of a [s]tate board of accountancy” are carved out from the bureau’s authority. In addition, other services “incidental” to such usual and customary accounting activities, to the extent that they are not offered or provided separate and apart from such customary and usual accounting activities or to consumers who are not receiving such customary and usual accounting activities, are also carved out. Refund anticipation loan providers are not exempt. SOX section 404(b) exemption. The act amends Sarbanes-Oxley (SOX) to make permanent the exemption from its section 404(b) requirement for nonaccelerated filers (those with less than $75 million in market cap) that has temporarily been in effect by order of the SEC. The act also requires the SEC to complete a study within nine months of the act’s enactment on how to reduce the burden of 404(b) compliance for companies with market caps between $75 million and $250 million. The study will consider whether any such methods of reducing the burden, or a complete exemption, would encourage companies to list on exchanges. Auditors of broker-dealers. The Dodd-Frank act amends SOX to require auditors of all broker-dealers to register with the PCAOB and gives the PCAOB rulemaking power to require a program of inspection for those auditors. However, the act allows the PCAOB, in its inspection rule, to differentiate among broker-dealer classes and exempt introducing brokers such as those who do not engage in clearing, carrying or custody of client assets. The act reconciles registration with inspection so that any auditors not covered by the inspection rule would also no longer be required to register with the PCAOB. Accounting standards. The act gives the Financial Stability Oversight Council the duty to monitor domestic and international financial regulatory proposals and developments, including insurance and accounting issues, and to advise Congress and make recommendations in such areas that will enhance the integrity, efficiency, competitiveness and stability of the U.S. financial markets. The council may submit comments to the SEC and any standard-setting body with respect to an existing or proposed accounting principle, standard or procedure. Registered investment advisers. Currently, the Investment Advisers Act of 1940 requires investment advisers with over $30 million in assets under management to register with the SEC. Advisers with assets under management between $25 million and $30 million may elect to register with the SEC. Under the Dodd-Frank act, this threshold will be raised to $100 million, thus shifting over 4,000 of approximately 11,500 SEC-registered investment advisers to state securities regulatory oversight, said AICPA Senior Manager Teighlor March. However, the act provides certain exceptions to this requirement. For example, if an adviser would have to register in 15 or more states as a result, the act provides an option to register instead with the SEC. Aiding and abetting securities fraud. Because it lowers the legal standard from “knowing” to “knowing or reckless,” the act may make it easier for the SEC to prosecute aiders and abettors of those who commit securities fraud under the Securities Act of 1933, the Securities Exchange Act of 1934, and the Investment Advisers Act of 1940. The AICPA and state CPA societies successfully lobbied to exclude more onerous amendments to the bill that would have opened the door for trial attorneys to file private rights of action. Advisers to private funds. Significantly, the act eliminates the private adviser exemption under the Investment Advisers Act of 1940, which will consequently result in more advisers’ having to register with the SEC. Advisers to venture capital funds remain exempt from registration, as well as advisers to private funds if such an adviser acts solely as an adviser to private funds and has U.S. assets under management below $150 million. It also amends the Investment Advisers Act to specifically exclude “family offices” from registration as an investment adviser. Executive compensation. The act requires a nonbinding shareholder vote on executive pay. Compensation based on financial statements that are restated must be returned for the three years preceding the restatement in an amount equal to the excess of what would have been paid under the restated results. Listing exchanges will enforce the compensation policies. “Management focus on accounting accuracy may be enhanced, but in the end compensation committees may still set compensation at the board’s discretion,” said AICPA Technical Manager Sharon Strother. “Companies may need to review existing compensation contracts.” The act also requires directors on compensation committees to be independent of the company and its management, and requires new disclosures regarding compensation. Chairman and CEO structure disclosure. The bill requires the SEC, within 180 days after enactment, to issue rules requiring companies to disclose in the proxy statement why they have separated, or combined, the positions of chairman and CEO. Office of Thrift Supervision (OTS). The OTS, which is currently the regulator for savings-and-loan (S&L) financial institutions, will be abolished. Under the reforms, financial institutions currently chartered as S&Ls will be regulated by the Office of the Comptroller of the Currency, which also regulates federally chartered banks. —Matthew G. Lamoreaux (mlamoreaux@aicpa.org) is a JofA senior editor.
Thursday, July 15, 2010
Saturday, July 10, 2010
SubChapter M Tax: irs private letter ruling 201024049 - collars and hedges
SubChapter M Tax: irs private letter ruling 201024049 - collars and hedges: "Taxpayer entered into a collar transaction (involving a series of puts and calls) which�you believe was designed to manage pricing risks associated with its inventory sales. �Though not identified as such, Taxpayer later claimed that the puts that it acquired were�hedging transactions under section 1221, but it contends that the calls were not�hedges. You are currently assisting Exam with the audit and evaluation of the call�options, including whether they were hedging transactions. You have also generally�inquired regarding Taxpayer’s tax accounting treatment of the call options. For purposes�of this email, it is assumed that facts will show the calls were qualifying section 1221�hedges but for Taxpayer’s failure to identify them as hedges."
SubChapter K Tax: irs private letter ruling 201016026 - rulings under 7704
SubChapter K Tax: irs private letter ruling 201016026 - rulings under 7704: "This letter responds to a letter dated July 1, 2009, and subsequent�correspondence by X's authorized representative, requesting rulings under � 7704 of�the Internal Revenue Code on behalf of X."
Taxation of Publicly Traded Partnerships: SubChapter K Tax: irs private letter ruling 201025037 - qualifying income under 7704(d)
Taxation of Publicly Traded Partnerships: SubChapter K Tax: irs private letter ruling 201025037 - qualifying income under 7704(d): "'This letter responds to a letter dated ----------------------, submitted on behalf of X,�requesting a ruling that income derived from providing marine services to facilitate the�berthing of liquefied natural gas (LNG) tankers that call on X’s LNG receiving terminal is�qualifying income within the meaning of � 7704(d)(1)(E) of the Internal Revenue Code'"
Monday, July 5, 2010
Tuesday, June 29, 2010
SubChapter M Tax: IRS Notice 2010-49 - request for comments on modification of regs under 382 for treatment of non-5% shareholders
SubChapter M Tax: IRS Notice 2010-49 - request for comments on modification of regs under 382 for treatment of non-5% shareholders:
"REQUEST FOR COMMENTS: MODIFICATION TO THE REGULATIONS UNDER � 382 REGARDING THE TREATMENT OF SHAREHOLDERS WHO ARE NOT 5-PERCENT SHAREHOLDERS
Notice 2010-49
This notice invites public comments relating to possible modifications to the regulations under � 382 of the Internal Revenue Code regarding the treatment of shareholders who are not 5-percent shareholders (Small Shareholders)."
"REQUEST FOR COMMENTS: MODIFICATION TO THE REGULATIONS UNDER � 382 REGARDING THE TREATMENT OF SHAREHOLDERS WHO ARE NOT 5-PERCENT SHAREHOLDERS
Notice 2010-49
This notice invites public comments relating to possible modifications to the regulations under � 382 of the Internal Revenue Code regarding the treatment of shareholders who are not 5-percent shareholders (Small Shareholders)."
SubChapter M Tax: irs notice 2010-50 - guideance under 382 for measuring ownership shifts
SubChapter M Tax: irs notice 2010-50 - guideance under 382 for measuring ownership shifts:
"Part III - Administrative, Procedural, and Miscellaneous
SECTION 382(l)(3)(C)
Notice 2010-50
This notice provides guidance under � 382 of the Internal Revenue Code for measuring owner shifts of loss corporations that have more than one class of stock outstanding, and, in particular, regarding the effect of fluctuations in the value of one
class of stock relative to another class of stock (fluctuations in value). It provides interim guidance to the effect that the Internal Revenue Service (IRS) will accept certain methodologies for taking into account or not taking into account fluctuations in value, and identifies one methodology that the IRS views as inconsistent with � 382(l)(3)(C). It also requests comments to assist in the development of future guidance. Any terms and definitions used in this notice have the same meaning as they do in � 382 and the �382 regulations unless otherwise provided in this notice."
"Part III - Administrative, Procedural, and Miscellaneous
SECTION 382(l)(3)(C)
Notice 2010-50
This notice provides guidance under � 382 of the Internal Revenue Code for measuring owner shifts of loss corporations that have more than one class of stock outstanding, and, in particular, regarding the effect of fluctuations in the value of one
class of stock relative to another class of stock (fluctuations in value). It provides interim guidance to the effect that the Internal Revenue Service (IRS) will accept certain methodologies for taking into account or not taking into account fluctuations in value, and identifies one methodology that the IRS views as inconsistent with � 382(l)(3)(C). It also requests comments to assist in the development of future guidance. Any terms and definitions used in this notice have the same meaning as they do in � 382 and the �382 regulations unless otherwise provided in this notice."
Taxation of Business Development Companies: IRS Notice 2010-33 -frivolous positions under 6702(c)
Taxation of Business Development Companies: IRS Notice 2010-33 -frivolous positions under 6702(c):
"Part III – Administrative, Procedural, and Miscellaneous
Frivolous Positions – This notice lists positions identified as frivolous for purposes of section 6702(c) of the Code. Notice 2008-14, 2008-4 I.R.B. 310, modified and superseded.
Notice 2010-33"
"Part III – Administrative, Procedural, and Miscellaneous
Frivolous Positions – This notice lists positions identified as frivolous for purposes of section 6702(c) of the Code. Notice 2008-14, 2008-4 I.R.B. 310, modified and superseded.
Notice 2010-33"
Sunday, June 27, 2010
SubChapter M Tax: From Deloitte's State Tax Matters
SubChapter M Tax: From Deloitte's State Tax Matters: "Multistate Tax Alerts:
Colorado reportable and listed transaction disclosure – July 1 deadline approaching
On April 2, 2009, Colorado adopted House Bill 09-1093, which requires taxpayers to disclose participation in “reportable” and “listed transactions.” Taxpayers subject to these disclosure provisions include corporations, individuals, estates, trusts, partnerships, S corporations, and other entities required to file an income tax return under Col. Rev. Stat. � 39-22-601. The new law also requires “material advisors” to disclose reportable and listed transactions and maintain a list of persons advised with respect to such transactions. Significant taxpayer and material advisor penalties are imposed for failure to comply with these requirements."
Colorado reportable and listed transaction disclosure – July 1 deadline approaching
On April 2, 2009, Colorado adopted House Bill 09-1093, which requires taxpayers to disclose participation in “reportable” and “listed transactions.” Taxpayers subject to these disclosure provisions include corporations, individuals, estates, trusts, partnerships, S corporations, and other entities required to file an income tax return under Col. Rev. Stat. � 39-22-601. The new law also requires “material advisors” to disclose reportable and listed transactions and maintain a list of persons advised with respect to such transactions. Significant taxpayer and material advisor penalties are imposed for failure to comply with these requirements."
SubChapter M Tax: From Deloitte's State Tax Matters
SubChapter M Tax: From Deloitte's State Tax Matters: "ncome/Franchise:
Connecticut: New law requires defined “captive REITs” to add back federal dividends paid deduction
H.B. 5494, signed by gov. 6/7/10. Effective July 1, 2010, and applicable to income years commencing on or after January 1, 2010, new law requires the addition of the federal dividends paid deduction by a defined captive real estate investment trust (REIT). Specifically, the new law requires captive REITs that file state corporation business tax returns to add back to their federal taxable income the amount of dividends deductible under Internal Revenue Code Sec. 857(b)(2) in determining their state net income."
Connecticut: New law requires defined “captive REITs” to add back federal dividends paid deduction
H.B. 5494, signed by gov. 6/7/10. Effective July 1, 2010, and applicable to income years commencing on or after January 1, 2010, new law requires the addition of the federal dividends paid deduction by a defined captive real estate investment trust (REIT). Specifically, the new law requires captive REITs that file state corporation business tax returns to add back to their federal taxable income the amount of dividends deductible under Internal Revenue Code Sec. 857(b)(2) in determining their state net income."
SubChapter K Tax: From Deloitte's State Tax Matters
SubChapter K Tax: From Deloitte's State Tax Matters: "Income/Franchise:
Delaware: New law requires nonresident withholding on gains from real estate
H.B. 349, signed by gov. 6/11/20. Effective for tax periods commencing after December 31, 2010, new law requires nonresident persons (corporations, individuals, or pass-through entities) that sell real estate owned in Delaware to declare and pay their estimate of the associated corporate/individual income tax due on the gain recognized from the sale before the new deed is recorded."
Delaware: New law requires nonresident withholding on gains from real estate
H.B. 349, signed by gov. 6/11/20. Effective for tax periods commencing after December 31, 2010, new law requires nonresident persons (corporations, individuals, or pass-through entities) that sell real estate owned in Delaware to declare and pay their estimate of the associated corporate/individual income tax due on the gain recognized from the sale before the new deed is recorded."
Deloitte LLP | Final Rule Changes to Investment Adviser Custody Rule, Rule 206(4)-2
Deloitte LLP | Final Rule Changes to Investment Adviser Custody Rule, Rule 206(4)-2: "Final Rule Changes to Investment Adviser Custody Rule, Rule 206(4)-2
Navigating the road ahead
On December 30, 2009, the Securities and Exchange Commission (SEC) finalized the amendments to the custody requirements of Rule 206(4)-2 (the “Rule”), under the Investment Advisers Act of 1940. The Rule is effective March 12, 2010."
Navigating the road ahead
On December 30, 2009, the Securities and Exchange Commission (SEC) finalized the amendments to the custody requirements of Rule 206(4)-2 (the “Rule”), under the Investment Advisers Act of 1940. The Rule is effective March 12, 2010."
ICI - SEC Staff Responds to Questions About Money Market Fund Reform
ICI - SEC Staff Responds to Questions About Money Market Fund Reform: "RE: SEC STAFF RESPONDS TO QUESTIONS ABOUT MONEY MARKET FUND REFORM
The Staff of the SEC’s Division of Investment Management has prepared responses to questions related to Rule 2a-7, and other rules applicable to money market funds in light of the amendments recently approved by the SEC. [1] The questions and answers cover the following areas: compliance dates and implementation; liquidity; stress testing; quality; and website posting. The staff has indicated that it expects to update the document from time to time to include responses to additional questions."
The Staff of the SEC’s Division of Investment Management has prepared responses to questions related to Rule 2a-7, and other rules applicable to money market funds in light of the amendments recently approved by the SEC. [1] The questions and answers cover the following areas: compliance dates and implementation; liquidity; stress testing; quality; and website posting. The staff has indicated that it expects to update the document from time to time to include responses to additional questions."
ICI - Institute Submits Additional Comments on Proposed Cost Basis Reporting Requirements
ICI - Institute Submits Additional Comments on Proposed Cost Basis Reporting Requirements: "RE: INSTITUTE SUBMITS ADDITIONAL COMMENTS ON PROPOSED COST BASIS REPORTING REQUIREMENTS
The Institute has submitted additional comments (attached) to the Internal Revenue Service (the “IRS”) and the Treasury Department on the proposed regulations on cost basis reporting. [1] Specifically, the Institute urges the IRS and Treasury Department to adopt workable default rules for gifted and inherited shares."
The Institute has submitted additional comments (attached) to the Internal Revenue Service (the “IRS”) and the Treasury Department on the proposed regulations on cost basis reporting. [1] Specifically, the Institute urges the IRS and Treasury Department to adopt workable default rules for gifted and inherited shares."
ICI - SEC Staff Responds to Questions About Money Market Fund Reform
ICI - SEC Staff Responds to Questions About Money Market Fund Reform: "RE: SEC STAFF RESPONDS TO QUESTIONS ABOUT MONEY MARKET FUND REFORM
The Staff of the SEC’s Division of Investment Management has prepared responses to questions related to Rule 2a-7, and other rules applicable to money market funds in light of the amendments recently approved by the SEC. [1] The questions and answers cover the following areas: compliance dates and implementation; liquidity; stress testing; quality; and website posting. The staff has indicated that it expects to update the document from time to time to include responses to additional questions."
The Staff of the SEC’s Division of Investment Management has prepared responses to questions related to Rule 2a-7, and other rules applicable to money market funds in light of the amendments recently approved by the SEC. [1] The questions and answers cover the following areas: compliance dates and implementation; liquidity; stress testing; quality; and website posting. The staff has indicated that it expects to update the document from time to time to include responses to additional questions."
From Deloitte's Tax News & Views
Tax News & Views
Regs forthcoming on domestic partnerships used to block subpart F income, IRS says
Regs forthcoming on domestic partnerships used to block subpart F income, IRS says
The Internal Revenue Service on May 14 announced in Notice 2010-41 that it will issue regulations classifying certain domestic partnerships as foreign for purposes of determining which U.S. shareholder must include in its gross income a pro rata share of a controlled foreign corporation’s (CFC’s) subpart F income. The regulations will apply to the taxable years of domestic partnerships ending after May 13, 2010.
ICI - ICI Submits Comments to the IRS on Stripping Transactions for Qualified Tax Credit Bonds
ICI - ICI Submits Comments to the IRS on Stripping Transactions for Qualified Tax Credit Bonds: "RE: ICI SUBMITS COMMENTS TO THE IRS ON STRIPPING TRANSACTIONS FOR QUALIFIED TAX CREDIT BONDS
The Institute has submitted the attached letter to the Internal Revenue Service (the “IRS”) and the Treasury Department commenting on interim guidance (Notice 2010-28) recently released by the government regarding stripping transactions for qualified tax credit bonds. [1] Specifically, the Institute recommends that the IRS and Treasury Department expand the list of persons with whom a taxpayer may hold a stripped credit coupon, so that a regulated investment company (a “RIC”) clearly is allowed the tax credit when it holds a stripped credit coupon in an account with a custodian. The Institute also recommends that the IRS simplify the information reporting requirements for tax credit bonds and stripped credit coupons with respect to RICs and their shareholders."
The Institute has submitted the attached letter to the Internal Revenue Service (the “IRS”) and the Treasury Department commenting on interim guidance (Notice 2010-28) recently released by the government regarding stripping transactions for qualified tax credit bonds. [1] Specifically, the Institute recommends that the IRS and Treasury Department expand the list of persons with whom a taxpayer may hold a stripped credit coupon, so that a regulated investment company (a “RIC”) clearly is allowed the tax credit when it holds a stripped credit coupon in an account with a custodian. The Institute also recommends that the IRS simplify the information reporting requirements for tax credit bonds and stripped credit coupons with respect to RICs and their shareholders."
Wednesday, June 9, 2010
IRS Announcement 2010-30 - Draft Schedule and Instructions for Uncertain Tax Positions Proposal
Part IV - Items of General Interest
Draft Schedule and Instructions for Uncertain Tax Positions Proposal Announcement 2010-30
In Announcement 2010-9, 2010-7 I.R.B. 408, and Announcement 2010-17, 2010-13 I.R.B. 515, the Internal Revenue Service announced it is developing a schedule requiring certain taxpayers to report uncertain tax positions on their tax returns. The Service is now releasing the draft schedule, Schedule UTP, accompanied by draft instructions that provide a further explanation of the Service’s proposal. The Service invites public comment on the draft schedule and instructions. The schedule and instructions will be finalized after the Service has received and considered all of the comments regarding the overall proposal and the draft schedule and instructions.
The draft schedule and instructions provide that, beginning with the 2010 tax year, the following taxpayers with both uncertain tax positions and assets equal to or exceeding $10 million will be required to file Schedule UTP if they or a related party issued audited financial statements:
Corporations who are required to file a Form 1120, U.S. Corporation Income Tax Return;
Insurance companies who are required to file a Form 1120 L, U.S. Life Insurance Company Income Tax Return or Form 1120 PC, U.S. Property and Casualty Insurance Company Income Tax Return; and
Foreign corporations who are required to file Form 1120 F, U.S. Income Tax Return of a Foreign Corporation.
The draft schedule and instructions also provide that, for 2010 tax years, the Service will not require a Schedule UTP from Form 1120 series filers other than those identified above (such as real estate investment trusts or regulated investment companies), pass-through entities, or tax-exempt organizations. The Service will determine the timing of the requirement to file Schedule UTP for these entities after comments have been received and considered.
The Service is reviewing the extent to which the proposed Schedule UTP duplicates other reporting requirements, such as Form 8275, Disclosure Statement; Form 8275-R, Regulation Disclosure Statement; Form 8886, Reportable Transaction Disclosure Statement; and the Schedule M-3, Net Income (Loss) Reconciliation for Corporations With Total Assets of $10 Million or More. The draft instructions provide that a taxpayer will be treated as having filed a Form 8275 or Form 8275-R for tax positions that are properly reported on Schedule UTP. The Service is considering other circumstances under which a tax position reported on Schedule UTP need not be separately reported elsewhere on the tax return or another disclosure statement.
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