Pearson s Federal Taxation Corporations, Partnerships, Estates & Trusts (2017 edition) Textbook Updates

Size: px

Start display at page:

Download "Pearson s Federal Taxation Corporations, Partnerships, Estates & Trusts (2017 edition) Textbook Updates"

Laurence Lyons
6 years ago
Views:

1 Pearson s Federal Taxation Corporations, Partnerships, Estates & Trusts (2017 edition) Textbook Updates Several chapters Table of Updates Sorted by Chapter The IRS has issued its annual Revenue Procedure with the inflation-adjusted amounts for the personal exemption, standard deduction, etc. Here is the link to Rev. Proc , which has these inflation-adjusted amounts for 2017: Chapter C:1 Tax Research Chapter C:2 Corporate Formations and Capital Structure Page C:3-11 Problem C:3-66 PowerPoint slide C:3-10 Chapter C:4 Corporate Nonliquidating Distributions Chapter C:5 Other Corporate Tax Levies Page C:5-6 Chapter C:6 Corporate Liquidating Distributions Chapter C:7 Corporate Acquisitions and Reorganizations Page C:8-38 Page C:8-40 Chapter C:9 Partnership Formation and Operation Chapter C:10 Special Partnership Issues 1

2 Chapter C:11 S Corporations Chapter C:12 The Gift Tax Problem C:12-31 Problem C:12-58 Chapter C:13 The Estate Tax Problem C:13-63 Chapter C:14 Income Taxation of Trusts and Estates Problem C:14-44 Chapter C:15 Administrative Procedures Page C:15-11 Chapter C:16 U.S. Taxation of Foreign-Related Transactions 2

3 Posted 10/12/2016: Table of Updates Sorted by Date of Posting on Web Site Page C:3-11 PowerPoint slide C:3-10 Posted 11/2/2016: Several chapters: Rev. Proc Page C:8-40 Posted 1/26/2017: Chapter C:12 The Gift Tax Problem C:12-31 Problem C:12-58 Chapter C:13 The Estate Tax Problem C:13-63 Chapter C:14 Income Taxation of Trusts and Estates Problem C:14-44 Posted 2/24/2017: Chapter C:5 Other Corporate Tax Levies Page C:5-6 Page C:8-38 Chapter C:15 Administrative Procedures Page C:15-11 Posted 4/21/2017: Problem C:3-66 3

4 Textbook Updates Several chapters: The IRS has issued its annual Revenue Procedure with the inflation-adjusted amounts for the personal exemption, standard deduction, etc. Here is the link to Rev. Proc , which has these inflation-adjusted amounts for 2017: Chapter C:1 Tax Research Chapter C:2 Corporate Formations and Capital Structure Page C:3-11 (10/12/2016) The second point following the paragraph titled Timing of the Deduction should read as follows (changed language in bold italics): The corporation pays the contribution on or before the fifteenth day of the fourth month following the end of the accrual year (third month if the corporation has a June 30 year-end). Problem C:3-66 (4/21/2017) In the Instructor Resource Manual s solution, Form 1120, Schedule C, Line 20, the amount should be $6,720 rather than $6,270. The correct number, $6,720, nevertheless is correctly displayed elsewhere on Schedule C and also is reported correctly on Form 1120, Page 1, Line 29. PowerPoint slide C:3-10 (10/12/2016) The 3½ months that item b) under Exception mentions is generally correct. However, it is only 2½ months for a C corporation whose taxable year ends on June 30 (for taxable years ending before January 1, 2026). Chapter C:4 Corporate Nonliquidating Distributions 4

5 Chapter C:5 Other Corporate Tax Levies Page C:5-6 (2/24/2017) Near the bottom of the page, replace the language starting with Property to which bonus depreciation applies... and continuing onto the first two lines of the next page with the following: Property for which the taxpayer claims bonus depreciation is depreciated the same way for AMT purposes as it is for regular tax purposes. Thus, no AMT depreciation is required. Property eligible for bonus depreciation for which the taxpayer elects out of bonus depreciation also is depreciated the same way for AMT and regular tax purposes if it is placed into service after However, if the taxpayer elects out of bonus depreciation for property placed into service before 2016, the taxpayer calculates AMT depreciation using the 150% declining balance method discussed above. Chapter C:6 Corporate Liquidating Distributions Chapter C:7 Corporate Acquisitions and Reorganizations Page C:8-38 (2/24/2017) The Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 changed the due date for calendar-year C corporations from March 15 to April 15. It also changed Sec. 6081(b) to allow an automatic five-month extension for such corporations through The IRS recently announced that, under Sec. 6081(a), it will allow an automatic six-month extension for calendar-year C corporations. The Additional Comment thus should read as follows: If a corporation or consolidated group has a June 30 year end, the filing deadline remains as the fifteenth day of the third month after the end of its taxable year (i.e., September 15) until tax years beginning after In addition, the extension for filing its tax return is seven months until The fourth sentence in the paragraph to the right of that additional comment should refer only to a June 30 year-end and no longer refer to a December 31 year-end. Here is a link to the IRS announcement regarding this change: 5

6 Page C:8-40 (11/2/2016) The second additional comment mentions an accounting standards change the FASB is considering. The FASB has issued ASU , finalizing the change. The treatment discussed on page C:8-40 continues to apply for intra-group inventory transfers, but it will not apply for intra-group transfers of non-inventory assets. The change is generally effective in 2018 for calendar-year entities, although early adoption is allowed. Chapter C:9 Partnership Formation and Operation Chapter C:10 Special Partnership Issues Chapter C:11 S Corporations Chapter C:12 The Gift Tax Problem C:12-31 (1/26/2017) The problem should state that Amir s taxable gift is $600,000 in 2016 (not 2015). The solution manual s answer uses 2016 as the year for this gift. Problem C:12-58 (1/26/2017) Delete the last sentence of the first paragraph. There is no need to assume whatever amount you like for the adjusted basis of gifted property as it is given in the information that immediately follows. Chapter C:13 The Estate Tax Problem C:13-63 (1/26/2017) There are two corrections to the Instructor Resource Manual s answer. At the bottom of page 1 of the tax return, it should say less the 2013 gift tax credit (i.e., change 2015 gift tax credit to 2013 gift tax credit). On page 3 of the tax return, the $800,000 should be on line 9 (not line 8). This has no effect on the $8,827,100 amount on line 11. 6

7 Chapter C:14 Income Taxation of Trusts and Estates Problem C:14-44 (1/26/2017) The solution manual s answer should say that Ali makes a present interest gift to Ali of $22,000 (not $25,000), which is the amount the problem specifies. Chapter C:15 Administrative Procedures Page C:15-11 (2/24/2017) The Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 changed the due date for calendar-year C corporations from March 15 to April 15. It also changed Sec. 6081(b) to allow an automatic five-month extension for such corporations through The IRS recently announced that, under Sec. 6081(a), it will allow an automatic six-month extension for calendar-year C corporations. The paragraph between Examples C:15-3 and C:15-4 thus should read as follows: Corporations. Corporations request an automatic six-month extension by filing Form 7004 (Application for Automatic Extension of Time to File Corporation Income Tax Return) by the original due date for the return. For tax years beginning after 2015, but before 2026, C corporations with a June 30 year-end may request an automatic sevenmonth extension until April 15. Here is a link to the IRS announcement regarding this change: Chapter C:16 U.S. Taxation of Foreign-Related Transactions 7

Pearson s Federal Taxation Comprehensive (2017 edition) Textbook Updates

Pearson s Federal Taxation Comprehensive (2017 edition) Textbook Updates Several chapters Table of Updates Sorted by Chapter The IRS has issued its annual Revenue Procedure with the inflation-adjusted