As described in two previous Holland & Knight Energy and Natural Resources Blog posts, "Recent Changes Expected to Impact Environmental Enforcement" and "Tax Changes Impacting Government Enforcement: Comments Due November 13, 2018," the Tax Cuts and Jobs Act (TCJA) of 2017, P.L. 115-97 (Dec. 22, 2017), made changes to the long-standing rule precluding deductibility of "any fine or similar penalty paid to a government for the violation of any law.
With respect to the establishment requirement, the proposed regulations require the taxpayer to substantiate with documentary evidence, "the taxpayer's legal obligation, pursuant to the order or agreement, to pay the amount identified as restitution, remediation, or to come into compliance with a law, the amount paid, and the date the amount was paid or incurred." Among the documents identified to meet this requirement are the following:
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Proposed Regulations Would Conform Subpart F High-Tax Exception to GILTI High-Tax Exception -
On July 20, 2020, the US Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) issued proposed regulations (REG-127732-19) (the 2020 Proposed Regulations) that would conform the historic Subpart F high-tax exception under section 954(b)(4) with the new global intangible low-taxed income (GILTI) high-tax exception.
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Subpart F High-Tax Exception under Section 954(b)(4) and Treas. Reg. § 1.954-1(d) Section 951(a)(1) generally requires a US shareholder of a CFC to include in gross income its pro rata share of the corporation’s Subpart F income for a taxable year. However, a US shareholder may elect to exclude from its gross income any item of Subpart F income that is subject to a high foreign income tax rate.
The GILTI High-Tax Exclusion and the Tested Unit Standard: New Administrative Burdens Await for
On July 23, 2020, the US Department of the Treasury and the Internal Revenue Service (IRS) published final regulations addressing the global intangible low-taxed income (GILTI) high-tax exclusion (85 FR 44620) (the “Final Regulations”). One notable development in the Final Regulations is the adoption of a new standard for determining whether items of income generated by controlled foreign corporations (CFCs) or their separate business units qualify as high-taxed.
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The Proposed Regulations applied a QBU-by-QBU approach to identify the relevant items of income that may be eligible for the GILTI high-tax exclusion, which aimed to minimize the “blending” of income subject to different foreign tax rates and more accurately identify income subject to a high rate of foreign tax.
IRS: Section 1061 Carried Interest Taxation Regulations Proposed
On July 31, 2020, the Internal Revenue Service (" IRS ") and the Department of the Treasury released proposed regulations (the " Proposed Regulations ") implementing the provisions of Section 1061 of the U.S. Internal Revenue Code of 1986, as amended (the " Code "). [1] Section 1061, which was enacted as part of the most recent U.S.
A close examination of the guidance reveals multiple gaps, areas of uncertainty and unintended consequences attributable to the very broad scope of the Proposed Regulations. We expect that impacted industry groups and practitioners will ask for additional guidance to address at least some of these issues, although the outcome of the coming presidential election may impact these efforts as well as other applicable tax rules.
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IRS T.D.: BEAT Regulations CFR Change Published (IRC §59A)
Fund Managers Rejoice: Treasury Issues Long-Awaited Carried Interest Regulations - Lexology
As stated above, an applicable partnership interest for purposes of section 1061 generally covers the receipt of carried interest by private equity, venture capital and hedge fund managers. Its importance notwithstanding, section 1061 has proved both to be complex and ambiguous. As a result, the release of the proposed regulations provides some much needed guidance to fund managers and tax practitioners alike.
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The proposed regulations begin by (i) expanding the definition of an “applicable partnership interest” to include any “financial instrument or contract, the value of which is determined, in whole or in part, by reference to the partnership (including the amount of partnership distributions, the value of partnership assets, or the results of partnership operations)” and (ii) limiting the section’s applicability to only section 1222 capital gains.
Carried Interest – Proposed Regulations – Impact on Real Estate: The Good and the Bad | Ballard
On July 31, 2020, the IRS and Treasury released the long-awaited proposed regulations on the new carried interest rules in Section 1061 of the Internal Revenue Code (IRC) that became law as part of the Tax Cuts and Jobs Act (TCJA).
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The TCJA recharacterizes certain gain that otherwise would be long-term capital gain (1) allocable to the holder of a carried interest (defined as an “applicable partnership interest” or API) from the sale of a partnership asset or (2) from the sale of an API as short-term capital gain, unless something unspecified by the TCJA (the API, the partnerships assets, or both?) was held for more than three years.
Welfare for the rich: the basics | Opinions | kpcnews.com
Our book, "Welfare for the Rich," is designed to inform Americans — especially taxpayers who are footing most of the bill — about the massive movement of money from millions of middle- and lower-income Americans to much wealthier people and corporations that do not need and should not be entitled to these favors.
The ways by which government policies transfer taxpayer funds to the wealthy break down into four basic categories:
Cash and in-kind payments directly to wealthy individuals and companies. The U.S. farm program is the most egregious example of this. Originally designed during the New Deal to assure adequate food supplies to the poor and to help struggling farmers, the farm program hasn't truly served those purposes for decades. The U.S. today is a major food exporter, and farmers as a group are no longer needy.
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