“Transactions of Interest” Regs Finalized


Proposed regulations under section 6011 concerning disclosure of reportable transactions, which include the new category of “transactions of interest,” have been finalized. In general, the final regulations apply to transactions entered into on or after Aug. 3. However, the provision regarding transactions of interest applies to transactions entered into on or after Nov. 2, 2006. The IRS defines a transaction of interest as one it believes has a potential for abuse, but about which it lacks sufficient information to designate it a tax-avoidance tactic. On Aug. 14, in notices 2007-72 and 2007-73, the IRS identified its first two transactions of interest. In one, charitable contributions of real-estate interests are valued significantly beyond the interests’ purchase price and normal appreciation. In the other, grantor trusts cancel out gains and recognize losses as they “toggle” grantor status off and on.

FEATURE

Maximizing the higher education tax credits

A counterintuitive strategy can save taxes by including otherwise excludable scholarships in gross income.

SPONSORED REPORT

Solving the lease accounting challenge

The challenges of the new lease accounting standard have been pervasive to say the least. In this free, independently-written report, you'll learn effective adoption strategies as well as resources for easing the transition to the new standard.