Prop. regs. impute rent and interest for deferred rent leases

Article Abstract:

Sec 467 was introduced in 1984 to prevent mismatching that typically occur in deferred-rent leases, which are also known as stepped-up leases or backloaded leases. In 1996, Proposed Regulations were announced exposing tenants and landlords to the intricacies of Sec 467 whether or not they are escaping taxation. Even landlords that offer a rent holiday for acceptable business purposes may have to employ the accrual approach for reporting income for 'rent' that was not due. However, these Regulations, which are supposed to assist in the accrual of rent under Sec 467 rental agreements, involve complicated mathematical computations. Landlords and tenants should learn the Proposed Regulations to better understand the true after-tax costs of their lease arrangements.

Taxation, Leases, Landlords, Tenants, Deferred income (Business), Deferred income

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Marital dissolution can significantly affect tax situation of the parties

Article Abstract:

The dissolution of marriage has significant tax effects on both parties. The tax effects depend largely on the timing and classification of the transfers made upon dissolution. The three kinds of transfers are property settlements, child support and alimony. As a rule, alimony is deductible from the payor's income but must be included in the recipient's. Child support, however, is neither includable from the recipient's income nor deductable from a payor's. A property settlement, on the other hand, is not considered a taxable transaction. The tax effects of these transfers also vary depending on whether the parties involved are seeking divorce, separation, or have a prenuptial agreement.

Economic aspects, Laws, regulations and rules, Tax accounting, Separation (Law), Marital separation, Divorce

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