Newsletters

Proposed Regs Detail Election to Transfer Eligible Tax Credits, NPRM REG-101610-23

Proposed regulations describe rules for an eligible taxpayer to make the Code Sec. 6418 election to transfer eligible credits to an unrelated person. In particular, the proposed regs:

The regs are proposed to apply to tax years ending on or after the date they are published in the Federal Register as final. However, taxpayers may rely on the proposed regs before that date, provided the taxpayers follow the proposed regulations in their entirety and in a consistent manner with respect to all elections made.

Comments are requested.

Definitions

The proposed regs would define several relevant terms, including eligible taxpayer, eligible credit, paid in cash, specified credit portion, transferred specified credit portion, transfer election, transferee taxpayer, transferee partnership, transferee S corporation, transferor partnership, and transferor S corporation. The regs would also modify the definition of eligible credit property for several of the eligible credits.

Making the Transfer Election

The proposed regs describe the general requirements for making a transfer election, including clarifying when a transfer election can be made in certain ownership situations, situations where no transfer election may be made, the manner and due date for the election, limitations related to a transfer election, the determination of an eligible credit, payments related to a transfer of eligible credits, and a transferred specified credit portion by the transferee taxpayer.

Partnerships and S Corporations

The proposed regs provide several detailed rules for transfers of eligible credits by transferor partnerships and S corporations; and for purchase of eligible credits by transferee partnerships and S corporations. The regs also provide special recapture rules and election rules for these pass-through entities.

Registration

The proposed regs require eligible taxpayers to register before filing the return on which a transfer election is made, and provide information related to each eligible credit property for which the eligible taxpayer intends to transfer a specified credit portion. After the registration process is completed, an eligible taxpayer will receive a unique registration number from the IRS for each registered eligible credit property for which the eligible taxpayer intends to transfer a specified credit portion. An eligible taxpayer that does not obtain and report the registration number is ineligible to make a transfer election.

These registration rules are identical to temporary regulations provided in T.D. 9975. The IRS intends for the pre-filing registration process to occur through an IRS electronic portal.

Special Rules

Finally, the proposed regs would provide special rules relating to the determination of an excessive credit transfer, reasonable cause for a transferee taxpayer, the difference between an excessive credit transfer and recapture, the mechanics for basis reduction and recapture notification, rules for ineffective elections, and rules for the carryback and carryforward of transferred eligible credits.

Comments Requested

The IRS requests comments on the proposed regulations. Comments may be submitted by mail or via the Federal eRulemaking Portal at https://www.regulations.gov (indicate IRS and REG-101610-23). All comments must be received by August 14, 2023. A public hearing is scheduled for August 23, 2023.

FL - Guidance issued on catastrophic event property damage

Florida provides guidance on catastrophic event property damage for property tax purposes. Topics discussed include the payment of property taxes, […]

Read More
FL - Guidance issued on catastrophic event property damage

FL - Tax relief provided for taxpayers affected by Hurricane Idalia

In response to Hurricane Idalia, eligible taxpayers that file Florida corporate income tax returns with original due dates or extended […]

Read More
FL - Tax relief provided for taxpayers affected by Hurricane Idalia

Rates Used in Computing Special Use Value Issued, Rev. Rul. 2023-15

The 2023 interest rates to be used in computing the special use value of farm real property for which an election is made under Code Sec. 2032A were issued by the IRS. In the […]

Read More
Rates Used in Computing Special Use Value Issued, Rev. Rul. 2023-15

IRS Warns About ESOP Compliance Issues, IR-2023-144

As part of ensuring high income taxpayers pay what they owe, the IRS warned businesses and tax professionals to be alert to […]

Read More
IRS Warns About ESOP Compliance Issues, IR-2023-144

Taxpayers Reminded of Identity Protection PINs' Importance, IR-2023-134

The IRS has reminded taxpayers about the IRS Identity Protection PIN opt in program to help protect people against tax-related identity theft. “The Identity Protection (IP) PIN is […]

Read More
Taxpayers Reminded of Identity Protection PINs' Importance, IR-2023-134

Contractors Reminded of Expanded New Energy Efficient Homes Tax Credit, IR-2023-142

The IRS has reminded eligible contractors who build or substantially reconstruct qualified new energy efficient homes that they might qualify for a tax credit […]

Read More
Contractors Reminded of Expanded New Energy Efficient Homes Tax Credit, IR-2023-142

IRS Reminds Educators About Expense Deductions in 2023, IR-2023-150

The IRS has reminded eligible educators that they will be able to deduct out of pocket classroom expenses upto $300 while filing their federal income tax returns next year. […]

Read More
IRS Reminds Educators About Expense Deductions in 2023, IR-2023-150

FL - Guidance provided on 2023 tax holiday for tools used by skilled trade workers

Guidance is provided regarding the Florida sales tax holiday on tools commonly used by skilled trade workers, which is held […]

Read More
FL - Guidance provided on 2023 tax holiday for tools used by skilled trade workers

FL - Highlands County tourist development tax rate hike announced

The Florida tourist development tax rate in Highlands County is increased from 4% to 5% effective August 1, 2023. Combined […]

Read More
FL - Highlands County tourist development tax rate hike announced

IRS Reminds Employers of New Electronic Filing Requirements for Forms W-2, W-2c

The IRS has reminded employers that the new lower threshold for required electronic filing of information returns applies to tax year 2023 Forms W-2, Wage and Tax Statement, because they […]

Read More
IRS Reminds Employers of New Electronic Filing Requirements for Forms W-2, W-2c