1. Divorce-Related Property Transfers Are Tax Free
    • The IRS ruled that an annuity payment arrangement includes nontaxable transfers between former spouses that are incident to divorce under section 1041 and that the transfers won’t be characterized as interest and won’t result in any taxable gifts under section 2501. [ LTR 202137005; 6/16/2021, rel. 9/17/2021]
  1. IRS Explains ‘Designated Individual’ Requirements Under Centralized Partnership Audit Regime
    • In emailed advice, the IRS said that the designated individual that partnerships must select under the centralized partnership audit regime created by the Bipartisan Budget Act of 2015 doesn’t need to have any relationship to the partnership representative that also must be selected. [ECC 202137011; 5/3/2021, rel. 9/17/2021]
  1. IRS Requests Comments on Ownership Change Reporting Regulations
    • The IRS has requested comments on regulations (T.D. 8352; T.D. 8531) used by corporations to report an ownership change, including whether the corporation has capital loss carryovers and excess credit. Comments are due by November 16. [86 F.R. 51965-51966, 9/17/2021]
  1. Final Regs Provide Guidance on Qualified Improvement Property, FTC
    • The IRS has published final regulations (T.D. 9956) under sections 250 and 951A addressing the treatment of qualified improvement property under the alternative depreciation system for purposes of calculating qualified business asset investment. The regs also provide revised transition rules regarding the impact on loss accounts of net operating loss carrybacks allowed because of the Coronavirus Aid, Relief, and Economic Security Act.[T.D. 9956; 86 F.R. 52971-52973, 9/24/2021]
  1. IRS Depreciation Addback Memo Not All That Broad
    • Taxpayers shouldn’t extrapolate too much from an IRS legal memorandum concerning the effect of a depreciation adjustment on the Tax Cuts and Jobs Act’s interest deduction limitation, according to officials who worked on it. [ILM 202123007; 5/10/2021, rel. 6/11/2021]
  1. IRS Webpage Answers Questions on Large Refunds Subject to Review
    • The IRS has announced (IR-2021-192) a new webpage that provides information to taxpayers whose large refunds are subject to further review by the Joint Committee on Taxation. [IR-2021-192; 9/22/2021]
    • “Large Tax Refunds and Credits Subject to Review by the Joint Committee on Taxation – What to Expect”
  1. Life Insurance Proceeds Included in Company’s Estate Tax Valuation
    • A U.S. district court denied an estate tax refund and held that life insurance proceeds a closely held corporation received to purchase the shares of one of its owners on his death were includable in the company’s fair market value, finding that a stock agreement didn’t meet the requirements of section 2703 to establish the company’s value for estate tax purposes.  [Thomas A. Connelly et al.; DC E MO E Div.,No. 4:19-cv-01410]

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(*** identifies item with useful analysis of current issue but not covered in Lynn’s recorded commentary due to complexity and time required for fair comment.)