IRS requires contractor to use inventories
Article Abstract:
The IRS required a general contractor on construction projects to maintain inventories for materials and therefore the accrual method despite the fact that it did not supply the materials in general or individually bill them. The general contractor concerned, which is an S corporation that operates in light commercial and residential projects, employed the percentage-of-completion method for its financial statements and the cash method for the calculation of its taxable income. This contractor argued that it was not treating materials for sale as merchandise and that its materials were not income-generating because they were not individually billed, chosen by architects and generally provided by customers or subcontractors. Nevertheless, the IRS felt that the taxpayer still have to use inventories to precisely reflect its income.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1995
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Disclaimer requires more than intent to be effective
Article Abstract:
The IRS held in TAM 9640005 that a decedent failed to disclaim an interest in the estate of the predeceased spouse because he was not able to document a refusal to accept the property. The decedent did not meet three of the five requirements mandated by Reg. 25.2518-1(b). The decedent did not make an irrevocable and unqualified refusal to accept an interest in the property, did not make a written and signed disclaimer and did not pass without action the interest to the spouse. However, the decedent made a disclaimer within nine months after the transfer creating the interest of the disclaimant and did not accept the interest or any of its benefits. Nevertheless, these were not enough to qualify for a disclaimer.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1996
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Selecting the most beneficial stock option plan requires more than a crystal ball
Article Abstract:
There are four basic methods by which employers can transfer stock to employees as compensation: incentive stock options, employee stock purchase plans, nonqualified stock options, and restricted stock. The characteristics and advantages of these methods are discussed and compared. Factors that should be considering in selecting a plan include current and future tax rates of the employee, future tax treatment of capital gains, current and future values of the stock, and the length of time the option or stock will be held.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1989
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