4) The taxpayer must not deduct any payroll taxes with respect to any employee whose pay could exceed the wage caps at the time the accrued wages are paid (i.
If these facts are established, the taxpayer may be allowed to deduct employment taxes on vacation/bonus pay accrued at year-end, but not paid until the subsequent year.
Thus, the IRS concluded that S could deduct the vacation payments in tax year X.
The IRS has issued a controversial TAM, Letter Ruling 9715001,(13) on how much an employer can deduct for flying an executive and his spouse to their vacation destination in a company-owned plane.
The IRS rejected the taxpayer's argument that it could deduct contributions accrued in a particular tax year as long as they were made within 2 1/2 months of the close of that year.
463 had provided that an actual-basis employer could elect to deduct vacation pay for pre-1987 tax years if paid in the year for which the deduction was sought or within 8 1/2 months after the close of that year.
However, if leasehold improvements are made in lieu of rent, the lessor recognizes income on the receipt of such improvements and can depreciate its basis in them; the lessee will deduct
rent rather than depreciation.
How are seller-paid points handled by a buyer who bought a home in 1991 but did not deduct
the seller-paid points, and then sold the home in 1993?
In addition, a domestic corporation owning less than 20% of an FSC can deduct
70% of the portion of a dividend received from an FSC that is paid out of income effectively connected with a U.
This change of position allowed a taxpayer who resigned permanently from his present job, rather than merely taking a leave of absence, to deduct
his education expenses.
This case seems clearly distinguishable from K-U's casualty loss issue, since Wallingford dealt with a successor corporation attempting to deduct
voluntary payments on a predecessor corporation's debt.
It was P&G's practice to deduct
expenditures when paid and to report income when it received retainers or settlements from CSAA.