Final regulations issued Thursday restate and clarify retailers’ computation of ending inventory value, including the application of common vendor discounts (T.D. 9688). The amendments to Regs. Sec. 1.471-8 are intended to render that section’s provisions in plainer language and provide rules for how sales-based vendor allowances and vendor markdown allowances
Advertisement
TOPICS
Tax
Regs. govern dispositions of depreciable property
The IRS issued final regulations providing rules for how to determine gain or loss when property subject to depreciation is disposed of, how to determine the asset disposed of, and how to account for partial dispositions of depreciated property (T.D. 9689). The regulations apply to property that is subject to
Whistleblower final rules expand definition of collected proceeds
Comprehensive final regulations issued Thursday provide rules for whistleblower awards under Secs. 7623(a) and (b), as well as rules governing the disclosure of return information under Sec. 6103(h) to pursue these claims (T.D. 9687). The regulations provide the rules for submitting information to the IRS, define key terms, provide rules
IRS introduces voluntary certification program for tax preparers
After failing to win court approval for its mandatory tax return preparer regulation program, the IRS introduced a voluntary certification program to take its place.
QDROs demand the attention of CPAs
Expertise in qualified domestic relations orders and dividing retirement benefits in divorce can be a valuable accounting and tax specialty.
Treating partners as employees: Risks to consider
Partnerships often grant equity interests to valued employees but often mistakenly continue to treat them as employees for employment tax and other purposes. This article examines the risks a partnership and the partner run in continuing this treatment and suggests a few solutions.
Gain exclusion lost upon reacquisition of former principal residence
A repossession of a former principal residence pursuant to default on a contract for deed results in the partial recognition of gain previously excluded under Sec. 121. The Tax Court held that the portion of a taxpayer’s gain excluded under Sec. 121 was properly recognized when he repossessed his former
Exemption from PFIC regime for indirect ownership expanded
The IRS clarifies that shares held through a variety of tax-exempt organizations, plans, and accounts are generally excluded. On April 14, Treasury and the IRS announced they will amend the regulations under Sec. 1291 to provide that a U.S. person who indirectly owns stock of a passive foreign investment company
Final rules on fiduciary fees keep “unbundling” requirement
Controversial rules prompted by the Knight decision parse certain income tax deductions of estates and trusts. The IRS issued final regulations on the controversial question of which costs incurred by trusts and estates are subject to the 2% floor on miscellaneous itemized deductions under Sec. 67(a). The regulations apply to
Inherited home triggers denial of first-time homebuyer credit
A home in which a taxpayer inherited an ownership interest was his principal residence, even though he lived there only a few months, the Tax Court holds. The Tax Court held that a home inherited by a taxpayer disqualified him from a first-time homebuyer credit for a new residence. The
High-functioning firms
High-functioning firms have leadership teams that assess situations, develop strategies, and make and execute decisions with relative ease, speed, and success. Others, however, function with a drag that pulls against their momentum, causing the business of leading, managing, and executing to take longer and produce less-than-stellar results. High-functioning firms seem
Taxpayer wins partial IRA rollover contribution issue on appeal
Partially reversing the Tax Court, the Eighth Circuit holds that a taxpayer made a timely partial rollover contribution to his IRA. The Eighth Circuit held that the IRS and Tax Court improperly denied a taxpayer’s claim of a partial qualifying rollover contribution to his individual retirement account (IRA) by ignoring
Electing to aggregate rental activities: Better late than never
Taxpayers that own several rental properties have to make many decisions when it comes to reporting income or loss from those properties. Among them is whether it would be more beneficial for the income or loss to be characterized as active rather than passive. If the taxpayer wants active characterization
Most qualified plan distributions to pay accident or health premiums are taxable
Final regulations exclude amounts to pay for disability insurance replacing retirement contributions. The IRS finalized regulations providing that distributions from qualified retirement plans to pay accident or health insurance premiums are taxable unless a statutory exclusion applies. However, arrangements where amounts are used to pay premiums for disability insurance to
New treatment of disguised sales and partnership liabilities
The IRS issued proposed regulations in January dealing with disguised sales of property to or by a partnership under Sec. 707 and the treatment of partnership liabilities under Sec. 752 (REG-119305-11). According to the IRS, the proposed regulations are designed to address “deficiencies and technical ambiguities” in the current regulations.
IRS provides guidance for Sec. 6707 material adviser penalty
On Wednesday, the IRS issued final regulations under Sec. 6707, which imposes a large penalty on any material adviser who fails to file a return required under Sec. 6111(a) disclosing a reportable transaction or who files a false or incomplete return (T.D. 9686). The regulations adopt the proposed regulations issued
IRS issues guidance on health insurance premium tax credits
The IRS issued regulations and revenue procedures Thursday addressing how to calculate the Sec. 36B premium tax credit, including how the credit is calculated in conjunction with the Sec. 162(l) deduction for health insurance premiums of self-employed individuals. The temporary regulations (T.D. 9683) also provide rules for taxpayers who are
New IRS rules simplify compliance for money market fund shares
In response to new SEC pricing rules for shares in certain money market funds (MMFs), the IRS on Wednesday issued guidance that allows a simplified method for calculating gain or loss on shares in MMFs subject to the new rules and exempts redemptions of shares in these MMFs from the
Federal courts disagree on health care credits for federal exchanges
The appellate courts for the D. C. Circuit and the Fourth Circuit issued conflicting decisions on Tuesday regarding the availability of the Sec. 36B premium tax credit for taxpayers who purchase health insurance on exchanges set up by the federal government. The D.C Circuit held that the regulation permitting taxpayer’s
Final rules issued on bona fide indebtedness and terminating partnership’s startup expenses
On Tuesday, the IRS issued T.D. 9682, which finalized proposed regulations relating to basis of indebtedness of S corporations to their shareholders that provide that S corporation shareholders increase their basis of indebtedness of the S corporation to the shareholder only if the indebtedness is bona fide, which is determined
Features
FROM THIS MONTH'S ISSUE
Want to thrive in an AI world? Power up your people skills
Learn how CPAs can strengthen their human relationships by developing their communication, curiosity, and self-awareness. Artificial intelligence can’t replicate these people skills.
From The Tax Adviser
April 30, 2026
Current developments in taxation of individuals: Part 2
April 30, 2026
