Everyone loves a good deal, and the only thing better than a good deal is a great deal. Since the enactment of the federal income tax in 1913, certain taxpayers have looked for ways to structure their affairs to get a great deal for tax purposes.

Anticipated changes in the U.S. tax code led to what many thought would be a short-lived spike in dividend recapitalizations in late 2012. Instead, dividend recapitalization activity surged again this year. The appetite of the debt markets has remained strong, leading to favorable pricing and loan terms. Dividend recapitalization transactions totaled $60.2 billion in debt by October 18, 2013, versus $56.4 billion in all of 2012

Given the many restrictions under UK taxation law for interest deductions (anti-arbitrage, Worldwide Debt Cap, unallowable purpose etc.), the UK Tax Authorities are now offering an informal clearance process alongside Advance Thin Capitalisation Agreements (“ATCAs”). This will run alongside the more formal ATCAs to provide much needed certainty in uncertain tax times.

Did you know that Treasury and IRS officials appear close to issuing newly proposed Treasury regulations that could significantly impact the way partnership debt is characterized and allocated?

Determining the fair value of assets and liabilities for fresh-start accounting can be complex and requires a thorough understanding of the business, its assets and liabilities, industry / economic conditions, as well as the latest best practices in valuation.

On September 5, 2013, the IRS issued proposed regulations that are intended to clarify what most taxpayers already understood to be correct for the past 60 years. In particular, the proposed regulations, if adopted, make abundantly clear that the ultimate use of a product does not alter the nature of the expenditures incurred by the taxpayer to eliminate uncertainty.

Issue 35-2013 — If you are acquiring assets, make sure you really believe — and are willing to live with — the purchase price allocation agreed to and reflected in your purchase agreement. In other words, if you think you can do a more detailed review and adjust this allocation later, think again! In a recent decision (Peco Foods Inc. v. Commissioner, No. 12-12169 (11th Cir. July 2, 2013)), the U.S. Court of Appeals for the Eleventh Circuit upheld a Tax Court decision that a taxpayer could not retroactively modify a purchase price allocation by changing the descriptions in its allocation agreements related to the asset purchases of two plants. Specifically, Peco (the taxpayer) could not use the results from a cost segregation study to accelerate deductions in a manner that was inconsistent with the original contractually agreed to purchase price allocation.