Insights & News

Tax Insights, July 22, 2015
Tracking Tax News You Need to Know

July 22, 2015

IRS Rules No Gain or Loss Realized on Series of REIT-Related Transactions
The IRS ruled, in Private Letter Ruling 201528006, that as part of a series of transactions involving a newly formed real estate investment trust, several liquidations will qualify as complete liquidations under Section 332 (Section references are to the Internal Revenue Code of 1986), and that no gain or loss will be recognized in a reorganization within the meaning of Section 368(a)(1)(D).

IRS Issues Proposed Regulations on Furnishing Section 83(b) Election with Tax Return
The IRS issued proposed regulations eliminating the requirement that a taxpayer provide a copy of a Section 83(b) election with his or her tax return for the year in which the property subject to the election is transferred. A Section 83(b) election permits a taxpayer to report income in the year non-vested property is received in connection with the performance of services, rather than when the property is substantially vested under the Section 83 rules. The proposed regulations would apply to property transferred on or after Jan. 1, 2016. A taxpayer is, however, permitted to rely on the proposed regulations for property transferred on or after Jan. 1, 2015. The proposed regulations remove obstacles to e-filing an individual tax return.

IRS News Release Reminds Taxpayers of Form 5500 Filing and Potential Penalty Relief
In News Release IR 2015-96, the IRS issued a reminder that (a) for calendar year retirement plans, a return in the 5500 series generally is due on July 31; and (b) the IRS offers penalty relief for certain small-business retirement plans that have failed to file 5500 series returns that were previously due.

IRS Releases Draft Form 3115 for Accounting Method Changes
The IRS has issued a draft of a revised Form 3115, Application for Change in Accounting Method. The majority of the changes will be contained in the instructions that accompany the form, which the IRS has not yet released.

FATCA Agreement With Georgia Now Available
The Foreign Account Tax Compliance Act agreement between the United States and Georgia is now available.

Philippines Signs Intergovernmental Agreement on FATCA
The Republic of the Philippines, on July 13, signed an intergovernmental agreement to implement FATCA.

IRS Updates FATCA Systems FAQs
The IRS has made many updates to the FATCA systems FAQ.

Iowa Passes Legislation Establishing Iowa ABLE Plans
Iowa passed legislation effective retroactively to July 1, 2015, creating the Iowa ABLE (Achieving a Better Life Experience) Savings Plan Trust under the enabling federal ABLE Act to assist individuals in saving funds for the purpose of supporting persons with disabilities.

PA Commonwealth Court Issues Opinion Denying Real Estate Tax Exemption
In ARC Human Services, Inc. v. Clearfield Cty. Assessment Office and Tax Bureau, et al., Pa. Commw. Ct., Dkt. Nos. 1155 C.D. 2014; 1156 C.D. 2014; 1157 C.D. 2014, 07/13/15, the Commonwealth Court found that the trial court properly determined that the taxpayer, an operator of group homes for intellectually disabled persons, was not entitled to tax exemption on three parcels of real estate. The taxpayer argued that it was entitled to such exemption because it was an institution of purely public charity and the parcels were used for charitable purposes. However, the trial court determined that the taxpayer failed to satisfy the criteria for establishing itself as an institution of purely public charity under Hospital Utilization Project v. Commw., 507 Pa 1, 487 A2d 1306 (HUP). In part, the court focused on the fact that the taxpayer’s evidence indicated that only a negligible portion of its costs of operating were from charitable contributions.

PA Department of Revenue Issues Common Level Ratio Factors
The Pennsylvania Department of Revenue issued new common level ratio real estate valuation factors for purposes of calculating realty transfer tax. The ratios, which are the mathematical reciprocals of the actual common level ratios, generally apply to documents accepted for filing from July 1, 2015, through June 30, 2016, except with respect to Greene and Lackawanna counties, whose common level ratios are still to be determined.

Information contained in this publication should not be construed as legal advice or opinion or as a substitute for the advice of counsel. The articles by these authors may have first appeared in other publications. The content provided is for educational and informational purposes for the use of clients and others who may be interested in the subject matter. We recommend that readers seek specific advice from counsel about particular matters of interest.

Copyright © 2015 Stradley Ronon Stevens & Young, LLP. All rights reserved.

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