Are the sec. 1374 final regulations a BIG improvement?

The Tax Reform Act of 1986 overhauled Section 1374 by imposing a tax on built-in gains on conversion from C to S corporation status. Proposed regulations issued in 1992 generated critical comments from the public, particularly in 9 key areas: 1. accounting methods, 2. recognition period, 3. accrual...

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Bibliographic Details
Published in:The Tax Adviser 1996-03, Vol.27 (3), p.157
Main Authors: Orbach, Kenneth N, Lassar, Sharon S
Format: Magazinearticle
Language:English
Subjects:
Built-in gains & losses
C corporations
Capital losses
Carryforward losses
Double taxation
Internal Revenue Code
Laws, regulations and rules
Net losses
Receivables
Reg. 1.1374
S corporations
Section 1374
Stockholders
Tax elections
Tax regulations
Taxable income
Taxation
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Summary:The Tax Reform Act of 1986 overhauled Section 1374 by imposing a tax on built-in gains on conversion from C to S corporation status. Proposed regulations issued in 1992 generated critical comments from the public, particularly in 9 key areas: 1. accounting methods, 2. recognition period, 3. accrual method rule, 4. Section 481 adjustments, 5. installment method, 6. partnership interests, 7. valuing inventory, 8. Section 1374(d)(8) transactions, and 9. effective date. The Section 1374 final regulations are an improvement over the proposed regulations and, in general, represent a reasonable interpretation of the statute.
ISSN:0039-9957