No deductions for related party payments

-

Denial of deduction for certainrelated party payments.

No deduction is allowed for losses from sales or exchanges of property (except in corporate liquidations), directly or indirectly, between certainrelated persons. Under pre-Act law, there was no explicit disallowance of a deduction for any disqualifiedrelated party amount paid or accrued under a hybrid transaction or by, or to, a hybrid entity.
New law. For tax years that begin after Dec. 31, 2017, the Act denies a deduction for any disqualified relatedparty amount paid or accrued pursuant to a hybrid transaction or by, or to, a hybrid entity. A disqualifiedrelated party amount is any interest or royalty paid or accrued to a related party to the extent that: (1) there is no corresponding inclusion to the related partyunder the tax law of the country of which such relatedparty is a resident for tax purposes, or (2) such related party is allowed a deduction with respect to such amount under the tax law of such country. In general, a hybrid transaction is one that involves payment of interest or royalties that are not treated as such by the country of residence of the foreign recipient. And, in general, a hybrid entity is an entity that is treated as fiscally transparent for federal income purposes but not so treated for purposes of the tax law of the foreign country, or vice versa. (Code Sec. 267A, as added by Act Sec. 14222)

Comments

Post a Comment

Popular posts from this blog

Employee Business Expenses

-
If you itemize deductions and are an employee, you may be able to deduct certain work-related expenses. The IRS has put together the following facts to help you determine which expenses may be deducted as an employee business expense. Expenses that qualify for an itemized deduction include: Business travel away from home Business use of car Business meals and entertainment Travel Use of your home Education Supplies Tools Miscellaneous expenses You must keep records to prove the business expenses you deduct. For general information on recordkeeping, see IRS Publication 552, Recordkeeping for Individuals available on the IRS website , http://www.irs.gov , or by calling 800-829-3676 . If your employer reimburses you under an accountable plan, you do not include the payments in your gross income, and you may not deduct any of the reimbursed amounts. ...
Read more

If you must amend a return, The IRS wants you to know....

-
Top Ten Facts about Amended Returns Taxpayers who need to make a change or adjustment on a return they already filed can do so by filing an amended return. Here are the top 10 things every taxpayer should know about amending your federal tax return. 1. Taxpayers needing to amend their return use Form 1040X, Amended U.S. Individual Income Tax Return. 2. Taxpayers can use Form 1040X to correct previously filed Forms 1040, 1040A or 1040EZ. The 1040X can also be used to correct a return filed electronically. 3. Taxpayers should file an amended return if they discover any of the following items were reported incorrectly: filing status, dependents, total income, deductions or credits. 4. Generally, you do not need to file an amended return for math errors as the IRS will be ale to make the correction for you. 5. You also do not usually need to file an amended return because you forgot to include forms – such as W-2s or schedules – when you filed; the IRS normally requests thos...
Read more

Vamos A Cuba

-
WASHINGTON — In a measured break with a half-century of U.S. policy toward communist Cuba, the Obama administration lifted restrictions Monday on Cuban-Americans who want to travel and send money to their island homeland. In a further gesture of openness, U.S. telecommunications firms were freed to seek business there, too. But the broader U.S. trade embargo remained in place. The White House portrayed its changes, which fulfilled one of President Barack Obama's campaign promises, as a path to promoting personal freedom in one of the few remaining communist nations. They also marked another major step away from the foreign policy priorities of the Bush administration. But the moves fell far short of the more drastic policy adjustments that some _ including Republican Sen. Richard Lugar _ have argued are required to promote U.S. interests in Latin America and to bring about change in Cuba. For most Americans, Cuba remains the only country in the world their government prohibits them...
Read more