On May 21, 2020, the Internal Revenue Service (the “IRS”) issued guidance on how to claim the rehabilitation tax credit under Section 47 of the Internal Revenue of Code of 1986, as amended (the “Code”). The guidance, in the form of proposed regulations, includes rules to coordinate the new 5-year period over which the credit may be claimed with other special rules for investment credit property.
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The TCJA repealed the ten percent (10%) credit for pre-1936 buildings and modified the rules for claiming the twenty percent (20%) credit for certified historic structures. These amendments were generally applicable to QRE amounts paid or incurred after December 31, 2017. In addition, the credit for certified historical structures remained at twenty percent (20%), but was to be claimed ratably over a 5-year period beginning in the tax year in which the QRB was placed in service.
Other things to check out:
Royce Micro-Cap Trust, Inc.
NEW YORK , June 1, 2020 /PRNewswire/ -- Royce Micro-Cap Trust, Inc. (NYSE-RMT) has declared a quarterly distribution of $0.15 per share on its Common Stock. The distribution, optionally payable in additional shares of Common Stock, or in cash by specific stockholder election, is to be paid on June 25, 2020 to stockholders of record at the close of business on June 11, 2020 (ex-dividend on June 10 , 2020).
The Fund estimates that it has distributed more than its income and net realized capital gains; therefore, a portion of your distribution may be a return of capital. A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Fund's investment performance and should not be confused with 'yield' or 'income'.
Treasury Issues Carbon Capture Credit Proposed Regulations - Lexology
Treasury is having a busy week! This afternoon, the U.S. Department of Treasury released proposed regulations under Code Section 45Q. Code Section 45Q provides for a U.S.
The K&L Gates team has worked with numerous clients on Code Section 45Q. The proposed regulations provide crucial guidance for contractual terms intended to ensure that carbon oxides are effectively sequestered and, therefore, that the credit becomes available. In addition, the proposed regulations include several other useful provisions:
Treasury, IRS Provide Regulations to Help Businesses Claim Credits for Carbon Capture - MyChesCo
The proposed regulations provide guidance regarding two new credits for carbon oxide captured using equipment originally placed in service on or after February 9, 2018, allowing up to:
Neither of these new credits is subject to a limitation on the number of metric tons of qualified carbon oxide captured. The new law also expanded carbon capture to include "qualified carbon oxide," a broader term than "qualified carbon dioxide." Prior to the change in law, carbon capture was limited to a total of 75,000,000 metric tons of qualified carbon oxide.
Quite a lot has been going on:
IRS clarifies carbon capture tax credit, but more policies needed to drive deployment, analysts
While carbon capture technology is still developing, the IRS guidance comes as some utilities are crafting plans for direct air carbon capture and similar technologies. Southern Company CEO Tom Fanning announced on Wednesday that the company is planning to invest in carbon capture technology as it continues work on its net zero carbon goals.
Other groups are less optimistic about near term applications of carbon capture in utility processes.
"We can't find a business model in a carbon capture sector that produces returns," Lisa Lambert, president of National Grid Partners, told Utility Dive prior to IRS issuing its guidance.
IRS & Treasury Propose TCJA IRC Section 512(a)(6) Regulations
On April 23, the Treasury Department and the Internal Revenue Service (the "IRS") issued helpful proposed regulations under section 512(a)(6) of the Internal Revenue Code (the "proposed regulations").
Very helpfully, the proposed regulations use the two-digit North American Industry Classification System ("NAICS") codes as the primary method of identifying separate trades or businesses, rather than the six-digit codes suggested in the Notice. This reduces the numbers of trades or businesses from over 1,050 under the Notice to twenty under the proposed regulations, which will greatly reduce the compliance burden for many tax-exempt entities and enhance their ability to use losses.
Elective capitalization as a TCJA planning tool
Sec. 266 prohibits a deduction for amounts paid or accrued in a given tax year for otherwise deductible "taxes and carrying charges" that the taxpayer elects to capitalize. Although phrased in the negative, Sec. 266 authorizes Treasury and the IRS to issue regulations permitting taxpayers to capitalize certain types of otherwise deductible interest, taxes, and carrying charges.
Enacted in 1932 and subsequently broadened and renumbered in 1942 and 1954, respectively, Sec. 266 was an early attempt by Congress to permit the same treatment of certain indirect costs that later became mandatory under the uniform capitalization rules of Sec. 263A (UNICAP rules). Although much of Sec. 266 was made redundant by Sec. 263A, the earlier provision remains in place and permits capitalizing certain indirect costs that escape the broad sweep of the UNICAP rules.
Hedging transactions: Timing of gain or loss
Taxpayers frequently seek to manage risks that arise in the ordinary course of their trades or businesses by entering into offsetting positions, usually in the form of derivatives. A taxpayer may, for example, wish to hedge the interest rate risk on its floating - rate borrowing by entering into an interest rate swap to economically convert the interest rate from a floating rate to a fixed rate. Taxpayers may enter into hedging transactions to manage either existing risk or anticipated
After entering into a hedging transaction within the meaning of Sec. 1221(a)(7), the taxpayer's concern (at least from a U.S. federal income tax perspective) usually moves to the issues of character and timing. In other words: What is the character of any gains or losses from the hedging transaction? When are those gains or losses recognized? While the U.S.
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