A new entity generally adopts a permissible
tax year by filing its first federal income tax return using that
tax year; no Form 1128, Application to Adopt, Change, or Retain a
Tax Year, needs to be filed.
Standard Life's Julie Russell commented: "Our research shows that few people know when the
tax year ends.
Under the new law, for
tax years beginning after 2005, the Kiddie Tax applies to children not attaining age 18 before the close of the
tax year if either parent is alive at the end of that year and the child does not file a joint return for that year.
Small businesses can deduct up to 70% (up from 60%) of their healthcare costs for
tax year 2002.
The period of mutual indebtedness is from March 15, 1990, the date the liability for the $1 million deficiency on the 1989
tax year first arises, to June 30, 1999, the date the overpayment of $1,000,000 for the 1987
tax year is refunded to the taxpayer.
You and/or your spouse's aggregate participation in the operation of all of your "significant participation activities, " including your timber activity, exceeds 500 hours during the
tax year. An activity is a "significant participation activity" if it is a trade or business in which you participate for more than 100 hours during the
tax year.
Because the change is made under the majority-interest rule, no further change in
tax year (due to changes in majority members'
tax years) will be required for the two
tax years following the year of change (Sec.
The basic standard deduction for joint returns will be twice the basic standard deduction for single returns for
tax years 2004-10, instead of dropping to 174 percent of what singles pay.
Education credits and QSTPs: A student can take advantage of the education IRA provisions, as well as the HOPE and lifetime learning credits and a QSTP, in the same
tax year. A beneficiary no longer needs to waive tax-free treatment for distributions from an education IRA to use education credits during the same
tax year; instead, the taxpayer must elect not to claim the education credits for qualified tuition and related expenses paid during the
tax year, according to code sections 25A(e) and 530(d)(2)(C); further, no 6% excise tax will apply.
Hence, a taxpayer may not compel the IRS to apply the same, higher interest rate to contemporaneously extant overpayments and underpayments from different
tax years. The court confirmed, however, that the IRS has discretion to credit overpayments against underpayments.
The required year is generally the
tax year of the members who own, in the aggregate, more than 50% of the interests in the capital and profits of the LLC (Sec.
shareholder that has ownership of stock in a CFC on the last day of the CFC's
tax year (or the last day in a year the corporation was a CFC) must include its pro rata share of the CFC's subpart F income for that
tax year in its gross income regardless of whether the CFC actually makes a distribution to the U.S.