Supreme Court grants certiorari in Gitlitz

Article Abstract:

The author discusses the case and regulatory law which will be before the U.S. Supreme Court in Gitlitz where the issue is whether S corporation shareholders' stock bases is to be stepped up when the corporation receives cancellation of indebtedness income and deducts suspended losses accordingly.

Extinguishment of debts, Debt cancellation, Accounting and auditing, Securities, S corporations, Basis (Taxation)

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The growing muddle regarding basis for shareholder notes in tax-free exchanges

Article Abstract:

The US 2d and 9th Circuit Courts of Appeals in Lessinger v. Commissioner and Peracchi v. Commissioner ruled against the IRS and reversed Tax Court decisions which disallowed as shams shareholder bases increases made in connection with IRC section 351 or 368(a)(1)(D) tax-free exchanges. Bases were increased to the extent transferred liabilities exceed adjusted bases of property transferred. The IRS apparently has not given up on its attack of these types of shareholder debt transactions and section 357(c) bases adjustments.

Mergers & Acquisitions, Liabilities (Accounting), Tax-free exchanges

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Final guidance on classification of computer program transactions

Article Abstract:

The IRS has issued final regulations regarding the taxation of computer program transactions which are generally effective for contracts entered into beginning in Dec 1998. The regulations contain rules which govern transfers of rights and articles and rules concerning know-how and services regarding these copyrighted works. Clarification of sourcing rules for international transactions and what constitutes public distribution are included.

Prepackaged software, Software, E-commerce software, Copyright, Copyrights

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