- Final regulations regarding the additional first year depreciation deduction under section 168(k) were released for publication in the Federal Register. A version of these regulations was previously released by the IRS.
- Final regulations update the life expectancy and distribution period tables that are used to calculate required minimum distributions from qualified retirement plans, individual retirement accounts (IRAs) and annuities, and certain other tax-favored employer-provided retirement arrangements.
- Final and temporary regulations were published in the Federal Register as rules for determining the amount of gain or loss treated as effectively connected with the conduct of a trade or business within the United States—“effectively connected gain” or “effectively connected loss”—under section 864(c)(8). The regulations concern foreign persons that recognize gain or loss from the sale or exchange of an interest in a partnership that is engaged in a trade or business within the United States.
- Final and proposed regulations implementing foreign tax credit measures were released for publication in the Federal Register (with publication scheduled for 12 November 2020).
- Through the end of this calendar year, employers have additional leeway to amend nonqualified deferred compensation (NQDC) arrangements, to remove outdated provisions requiring the delay of payments expected to be nondeductible under section 162(m).
- Rev. Rul. 2020-23 provides that section 403(b) retirement plans funded through individual or group section 403(b)(7) custodial accounts can be terminated through the distribution of individual custodial accounts, If a distributed custodial account continues to comply with certain requirements, no portion of the distributed custodial account is includible in gross income until amounts are actually paid out of the account to a participant or beneficiary.
- Notice 2020-80 requests comments on the application of annuity and spousal rights provisions related to distributions in certain plans described in Rev. Rul. 2020-23. Comments are due on or before 3 February 2021.
- A final rule requires group health plans and health insurance issuers in the individual and group markets to disclose, upon request, cost-sharing information to a participant, beneficiary, enrollee or that person’s authorized representative. The final rule also requires health plans and issuers to disclose in-network provider rates, historical out-of-network allowed amounts and the associated billed charges, and negotiated rates for prescription drugs.
- An interim final rule describes implementation of a provision of the “Coronavirus Aid, Relief, and Economic Security Act” (CARES Act) that established Medicare Part B coverage and payment for a COVID-19 vaccine and its administration.
- Rev. Proc. 2020-48 provides discount factors for the 2020 accident year for use by insurance companies in computing discounted unpaid losses under section 846.
- Rev. Proc. 2020-49 extends until 30 September 2021 relief measures (allowing teleconferences) regarding the public approval requirement under section 147(f) for tax-exempt bonds.
- Correcting amendments made changes to final regulations governing the deduction for foreign-derived intangible income (FDII) and global intangible low-taxed income (GILTI).
- A KPMG report outlines certain considerations for late year like-kind exchanges, including extending return filing deadlines, installment sale reporting, and allocating partnership liabilities under section 752.
State and local tax
- The New Jersey Division of Taxation posted guidance on its website explaining how combined groups can fix the “trapped dividend exclusion” issue.
- A ballot initiative in California proposed revisions to the taxation of commercial and industrial properties.
- The Indiana Department of Revenue issued a “letter of findings” rejecting a recreational vehicle (RV) dealer’s position that it was taxable in other jurisdictions so that its receipts did not have to be “thrown back” to Indiana and included in the Indiana sales factor numerator.
- A New Mexico appeals court held that a taxpayer was not required to file an amended return as a prerequisite to requesting a refund claim.
- A South Carolina administrative law court concluded that a statute allowing an investment tax credit for qualifying property placed in service was ambiguous as to whether the credit limitation was $5 million annually or $5 million over the taxpayer’s lifetime. Because the credit functioned as a deduction, the court concluded that ambiguity was resolved against the taxpayer.
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