The IRS issued revisions to the regulations on restricted property (Reg. §1.83‑3(c), TD 9659, https://s3.amazonaws.com/public-inspection.federalregister.gov/2014-03988.pdf) that added language to, in the IRS’s view, clarify the application of the law.
In the case of Shea Homes, Inc. v. Commissioner, 142 TC No.3, http://www.ustaxcourt.gov/InOpHistoric/SheaHomesDiv.Wherry.TC.WPD.pdf, the question of the scope of contracts of a homebuilder when making use of the completed contract method was the key issue.
The taxpayer developed large planned residential communities which had substantial common area developments and improvements required by the localities in which the developments were located.
Special rules are provided in the preamble to the final regulations regarding the “large employer” shared responsibility payment found in TD 9655 [Explanation and Summary of Comments, Section XV.D.6.a] for tax year 2015. The provision provides relief from applicability of the shared responsibility payment for certain “not quite large” large employers for 2015 only.
In Revenue Procedure 2014-20 (http://www.irs.gov/pub/irs-drop/rp-14-20.pdf) a safe harbor is provided under which a debt secured by an interest in a single member LLC operating as a disregarded entity holding real estate will be treated as debt secured by real estate for purposes of the qualified real property indebtedness exclusion under IRC §108(c)(3)(A).
In the State of the Union address, the President announced a “new” retirement program (myRA), additional details of which were released in a fact sheet the following day (http://www.whitehouse.gov/the-press-office/2014/01/28/fact-sheet-opportunity-all-securing-dignified-retirement-all-americans). The speech contained a mix of items that can be currently enacted via executive action of the President, and proposed additional options that would require Congressional action.
For tax advisers the key question boils down to simply what is this thing? How is it classified under the Internal Revenue Code? And what should we tell clients who ask about the program?
In Revenue Procedure 2014-18 (http://www.irs.gov/pub/irs-drop/rp-14-18.pdf) the IRS provides a short-term automatic relief provision for the election of portability if the estate failed to timely file a Form 706 in cases where a return is not otherwise required.
The IRS has consistently held that if a due date for an election is set by statute, the IRS has no authority to grant relief to taxpayers seeking such relief. In this case, the IRS determined that while the due date for a portability election is set by statute for an estate required to file a return, the due date for an estate not otherwise required to file a return is set by Reg. §20.2010‑2T(a) and not by statute. Thus, while the IRS concludes it cannot grant relief to an estate that was required to file a return that neglected to elect portability, the agency does have the authority to grant relief if a return is not otherwise required.