Trouble in Transamerica: deferred compensation, contingent debt, and overstated basis
Article Abstract:
Congress and the IRS must act to limit the motion picture industry's overstatement of basis and front-loading of depreciation deductions despite the US Court of Appeals for the Ninth Circuit's ruling in Transamerica Corp. v. United States. The Court approved the taxpayer's use of the income forecast method allowing contingent liabilities to be included in depreciable basis even though the liabilities, linked to participations and residuals, had not yet accrued. This practice is contrary to sound tax principles and violative of IRC section 404 governing deferred compensation.
Publication Name: Virginia Tax Review
Subject: Law
ISSN: 0735-9004
Year: 1996
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Which concept of depreciation should guide us? Trying to develop a consistent framework for the federal income tax system
Article Abstract:
The Tax Court majority opinions in Simon v. Commissioner and Liddle v. Commissioner appear to disregard the useful life requirement for depreciation and, in so doing, undermine the purpose of allowing depreciation deductions. The cases involved two 19th century violin bows and a 17th century viol. In both cases, the majorities found that the costs of the instruments could be depreciated, even though evidence was presented to show that the value of the items would not decline with age and that the items were not going to be worthless at some point.
Publication Name: Virginia Tax Review
Subject: Law
ISSN: 0735-9004
Year: 1995
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Capitalizing and depreciating cyclical aircraft maintenance costs: more-trouble-than-it's-worth?
Article Abstract:
Capitalization and depreciation of cyclical aircraft maintenance costs have been subject intermittently to the separate asset doctrine and the future benefit capitalization rule by courts and the IRS. The IRS has followed the courts' wavering treatment while professing otherwise. The IRS should issue general capitalization regulations which use a discretionary justice approach which includes several safe harbor deductions.
Publication Name: Virginia Tax Review
Subject: Law
ISSN: 0735-9004
Year: 1997
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