Status-Changing Citizens Gross Income Includes a Simple Trust Income Prorated over Period of Citizenship
Article Abstract:
Taxpayers can change their status according to residency situations. Income tax consequences with regard to these status changes are often problematic, especially when the status changer has beneficial interest in an entity, and status is changed within one taxable entity year. The case of the taxpayer in Estate of Petschek V. Comr., who lived in France and had simple trust income is analyzed. The trust and the beneficiary were calendar-year, cash- method taxpayers. Three basic arguments were heard in this case, including the lack of beneficiary knowledge of distributable net income prior to the end of the year for the trust and the end of the year inclusion rule. Petschek was decided on narrow grounds and does not clarify taxing issues with regard to persons who change status. Legislative treatment of the problem is needed.
Publication Name: Tax Management International Journal
Subject: Law
ISSN: 0090-4600
Year: 1983
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Marine Construction Activities Held to Constitute Manufacturing within Regs 1.61(a)-Rev. Rul. 83-118
Article Abstract:
This ruling hinged on the issue of the possible difference of gross income and gross receipts. When a taxpayer manufactures, merchandises or mines, gross receipts are offset by the expense of sales of goods. In a service business gross receipts constitute gross income. Rev. Rul. 83-118 likens various types of construction to manufacturing, which contradicts the sense of certain Treasury regulations. For corporate foreign based firm income, ten per cent is the cut-off mark of the gross. If less than ten per cent of gross is generated by a foreign based firm, none must be included in the gross income. When marine construction is considered to be manufacturing it will not be considered as service income. The The Internal Revenue Service (IRS) has a wide concept of the meaning of substanial assistance.
Publication Name: Tax Management International Journal
Subject: Law
ISSN: 0090-4600
Year: 1983
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Comments on Final and Proposed Foreign Base Company Shipping Regulations
Article Abstract:
In May of 1983 final regulations were made by the Internal Revenue Service (IRS) as to foreign base company shipping income (FBSCI) and qualified investment withdrawals. Subpart F of Sections 954 and 955 of the Internal Revenue Code points to this area, and states that FBSCI would normally be included in the gross income. FBSCI generally derives from the use of planes and ships engaged in foreign commerce. Changes made since 1976 as to the carry over rule, related groups, account movements and deficits are analyzed. The reorganization issue is far from settled.
Publication Name: Tax Management International Journal
Subject: Law
ISSN: 0090-4600
Year: 1983
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