Tax Planning & Compliance Blog

Taxpayers who paid a success-based fee to an investment banker or private equity firm that was contingent on the successful closing of the transaction may be able to deduct a large portion of the amount on their 2010 tax return.   Under previous IRS regulations, success-based fees were generally required to be capitalized. 

Earlier this year, the IRS issued Revenue Procedure 2011-29 which provided taxpayers with favorable treatment of these success-based fees.  However, the Rev. Proc. was...

Does your Company export goods to Canada, Mexico, or other countries?  Do you provide engineering, architecture, or design for property constructed outside the United States?  If so, you may be eligible for a Federal income tax incentive known as an Interest Charge Domestic International Sales Corporation (the “IC-DISC”).  The IC-DISC could potentially save you a significant amount of US income taxes.

What is the IC-DISC?

Many closely held businesses are enjoying the benefits of the IC-DISC....

The treatment of success-based fees has been the subject of controversy between the Internal Revenue Service (“IRS”) and taxpayers.  On April 8, 2011, the IRS issued Revenue Procedure (“Rev. Proc.”) 2011-29 that provides guidance on the deductibility of success-based fees.  These fees, generally paid to investment bankers or private equity firms, are contingent on the successful closing of certain transactions.  Often, these fees are the largest single expense of an acquisition.

Under IRS...

President Obama’s latest proposal would allow companies to write off 100% of their new investment in plant and equipment as “bonus” depreciation -- in previous years, companies could deduct up to 50% of their new investment in plant and equipment.  Also included in this proposal is expansion of the R&D tax credit.  Details on the proposal will be laid out in a speech in Cleveland tomorrow. 

Click here to learn more and contact our Tax Planning & Preparation Group at 440-449-6800 with...

Investment banking fees are one of the biggest costs in any acquisition.  Since the 263(a) regulations were issued in December, 2003, the documentation requirements for deducting such fees under Treasury Regulation §1.263(a)-5(f) have resulted in significant controversy between taxpayers and the IRS.

In general, under Treasury Regulation §1.263(a)-5(a), a taxpayer must capitalize amounts paid to facilitate an acquisition of assets that constitute a trade or business and stock acquisitions.  An...

That’s right. State officials now say that California’s financial situation is so serious that many taxpayers may receive IOUs instead of refunds for state taxes. Warnings of delayed tax refunds and warrants started as early as January, 2009. 

The State of California is planning on issuing warrants instead of refund checks. A warrant is issued by a government agency when they are unable to pay currently and are redeemable at some point in the future, usually with interest. Only once since the...