The Tax Court recently issued a long-awaited ruling in the GROWMARK section 199 case.   As in the AGP case (issued in October), the Tax Court ruled that section 199(d)(3) does not require separate domestic production activities deduction (DPAD) computations for patronage and nonpatronage activities. However, once DPAD is computed it must be allocated between patronage...

Final regulations implementing new Code section 163(j) could be released by the end of the year.  The Treasury and IRS are working on additional section 163(j) regulations, but they may not be released at the same time.  Regulations are usually effective for tax years ending after the date the final regulations are published.  With the...

Under some circumstances in which the tax years overlap the calendar year, there seems to be some confusion about which “Tax Period” to use. When making a corporate tax payment to the IRS using their Electronic Funds Transfer Payment System, either by phone or on the IRS’ website,   the correct year is always the tax...

Earlier this year, the IRS issued changes to the Form 1065 instructions, requiring partners to disclose negative capital tax basis accounts as part of their on-going anti-abuse enforcement effort.   The newly designed Schedule K-1 for the 2019 tax year requires partnerships to report partners’ capital accounting using tax basis as opposed to other methods, including...

The IRS has issued new reporting requirements regarding the 2019 Form 1099-PATR.  One particular concern for specified agriculture and horticultural Cooperatives is Box 7 – Qualified Payments. What are qualified payments under this proposed regulation? Proposed regulations are just that, proposed. They may fluctuate and are often vague to accommodate changes, offering little guidance and...

Our winter newsletter addressed interest deduction limitations under the Tax Cuts and Jobs Act of 2017, Section 163(j). In general, the new section limits the deduction of business interest expense to the sum of the following: 1. Business interest income, plus 2. 30% of the adjusted taxable income, plus 3. Floor plan financing interest Your...