Law Commons^™

The Tax Reform Act Of 1986: Simplicity, Equity, And Efficiency, Douglas Holtz-Eakin

Akron Tax Journal

The Tax Reform Act of 1986 (TRA86) has added another chapter to the already crowded tax history of the 1980's. Since the election of Ronald Reagan in 1980, the nation has seen several major tax changes: The Economic Recovery Tax Act in 1981, The Tax Equity and Fiscal Responsibility Act in 1982, and TRA86. With tax reform now well down on the list of legislative priorities (at least until next year!) it seems a propitious time for a general assessment of the structure of the federal tax system.

This paper reviews TRA86 with an eye toward these issues. The order …

Federal Income Tax Developments: 1985, Merlin G. Briner, James W. Childs

Akron Tax Journal

This article discusses the federal income tax developments of 1985, including relevant Supreme Court cases, deductions, legislative and treasury regulations, and income recognition and related topics.

Fiduciary Income Taxation And The Holloway Adjustment, Dennis E. Bires

Akron Tax Journal

A great deal of the complexity of the rules dealing with income taxation of trusts and estates' can be attributed to the imperfect compatibility of two different regimes of law: the federal taxation of income and local rules of trust accounting. Just as the confluence of two rivers may generate turbulence exceeding that of either branch, the meeting of federal tax law and state trust law in Subchapter J of the Internal Revenue Code generates problems that neither discipline would present by itself.

In 1972, a New York Surrogate's Court introduced the Holloway adjustment to fiduciary accounting. This equitable adjustment …

Commentary: Does The United States Need An Alternative Tax Base?, James W. Childs

Akron Tax Journal

This article looks at the alternative tax systems of France, Italy, Greece, Switzerland, and Yugoslavia and compares that to the system in the United States. It uses this comparison to discuss whether an alternative tax base is necessary in the United States.

Tax Consequences Of Purchases Of Computer Hardware And Software, Robert W. Malone

Akron Tax Journal

The advent of the computer age has resulted in a significant increase in the investment by businesses in computer hardware and software. The term "hardware" refers to the physical equipment which accepts (input), processes, and prints (output) information received by it. The term "software" refers to the instructions (language) used to direct a computer to perform desired tasks and the documentation (discs, tapes, etc.) on which such instructions are recorded.' Examples of types of software include Basic, Fortran, Cobol, and RPG. This article addresses the tax aspects and planning opportunities associated with the purchases of computer hardware and software.

Selling A Business And Starting Anew: Liquidation-Reincorporation In The Simple Situation, John R. Dorocak

Akron Tax Journal

A client approaches his attorney with a fairly common problem. The client, as sole or predominant shareholder, operates a business in the corporate form. He wishes to sell all the assets of that business to a third party. The client will then take the proceeds of the sale, after distribution to himself as shareholder, and use a part of them to capitalize a new corporation, which will purchase a new business. The question for the attorney is whether this simple transaction will ever call forth the tax doctrine of liquidation-reincorporation. This article will examine the likelihood of the liquidation reincorporation …

Proceedings From The 1984 Tax Institute Symposium: Partnerships: Special Allocations Under The New Regulations, The Proposed Regulations Or Whatever, John C. Siegesmund

Akron Tax Journal

This article discusses Section 704 of the Internal Revenue Code and the 1984 proposed regulations related to the section. It looks at the major test of the regulations, that an allocation will be approved if it has substantial economic effect. It examines the two parts of this - that the allocation has to have an economic effect, and that the economic effect has to be substantial.

Proceedings From The 1984 Tax Institute Symposium: Cash Or Deferred Arrangements Under I.R.C. Section 401(K), John H. Appel

Akron Tax Journal

This article examines the reasons why an employer might consider a cash or deferred profit sharing or stock bonus plan. It looks at the rules for a cash or deferred arrangement (CODA) under Section 401(k) of the Internal Revenue Code. It covers the four primary requirements under the I.R.C., and then fifth, and biggest requirement, nondiscrimination.

Assisting Dislocated Workers: Dimensions, Needs And Tax Policy Options, Lewis D. Solomon, Janet S. Solomon, Brian M. Malsberger

Akron Tax Journal

The involvement of the federal government in retraining of dislocated workers raises the specter of rigidity, bureaucracy, paternalism, and cost. After examining the dimensions of the dislocated worker problem and the need for governmental involvement, this article examines the use of tax policy to enable workers to bridge the gap between old and new jobs and to thrive in an economy in transition. The policy making challenge can be succinctly stated: is it possible to use the federal income tax system to the advantage of society by creating tax incentives for a retraining program based on individual choice and limited …

Subchapter S As A Vehicle In Real Estate And Oil & Gas, Lorence L. Bravenec

Akron Tax Journal

This article discusses several significant problem areas faced in real estate and oil & gas activities under the new rules for S corporations enacted by the Subchapter S Revision Act of 1982 (hereinafter the "1982 Act"),' as modified by the Tax Reform Act of 1984 (hereinafter the "1984 Act"). The 1982 Act brought the taxation of S corporations and shareholders more in line with the partnership model, thus making the law conform more to the expectations of the parties. At the same time, the 1982 Act removed many of the serious pitfalls and the sought after planning devices under the …

Federal Income Tax Developments: 1983, Merlin G. Briner, Richard J. Kovach

Akron Tax Journal

This article surveys substantive federal income tax developments in 1983, including relevant Supreme Court cases, deductions, legislative and treasury regulations, and income recognition and related topics.

Report On Tax Aspects Of Farmers In Bankruptcy, Ralph T. Turner

Akron Tax Journal

This article will deal only with the individual taxpayer who utilizes the bankruptcy court and not with the tax treatment of corporations and partnerships in bankruptcy. There are special rules for the tax treatment of these entities. This article will review the general principles of tax treatment of an individual whose indebtedness was discharged in bankruptcy under the prior law and under the Bankruptcy Tax Act of 1980. After this general review and comments on their application to farmers, a hypothetical fact situation will be reviewed and the handling of the tax returns for the individual and the bankruptcy estate …

Over The Back Fence: Tax Shelters And Other Sales Of Federal Income Tax Reductions, Thomas A. Robinson

Akron Tax Journal

Structural features of the federal income tax system frequently make the same tax reduction' more valuable to one taxpayer than to another. There are many types of such tax reductions (including deductions and credits), creating a fertile environment for the tax shelter markets. Black letter law says tax reductions are nontransferable. In other words, taxpayers are not allowed to sell their mortgage interest deductions over the back fence to their neighbors. Yet, observation reveals some transactions where tax reductions are in effect bought and sold. This article will examine four of these transactions: business sales, divorce agreements, sale-leasebacks, and partnership …

Federal Income Tax Developments: 1982, Merlin G. Briner

Akron Tax Journal

This article discusses federal income tax developments in 1982, including relevant Supreme Court cases, oil and gas, tax shelters, deductions, corporations and interest free loans. The Tax Equity and Fiscal Responsibility Act (TERFA) is discussed in a separate section.

Use Of Multiple Qualified Pension Plans By Small Employers After The Tax Equity And Fiscal Responsibility Act Of 1982, Daniel R. Sharpe

Akron Tax Journal

Since the adoption of the Employee Retirement Income Security Act of 1974, many employers have adopted more than one pension or profit sharing plan for a variety of reasons. The rules governing the design and structure of multiple pension plans have remained relatively static since 1974 until the adoption of the Tax Equity and Fiscal Responsibility Act of 1982. This article will explore some of the radical changes made by TEFRA to the design and operation of multiple pension plans, particularly by small employers.

Death Of A Partner: Pre And Post-Mortem Planning, Jerome Hesch

Akron Tax Journal

There are several alternative techniques which can be employed to alleviate the income tax problems associated with the death of a partner. The sophisticated tax advisor will understand, however, that some of the suggested techniques may not be practical for all situations. The purpose of this article is to describe these planning techniques and to guide the tax advisor as to which technique is appropriate for his client.

Is The Will The Way? Transmitting Interests In A Family Corporation, Gail Levin Richmond

Akron Tax Journal

This article examines the effects of recent enactments upon the methods of transmitting interests in a closely-held corporation. Because the tax consequences will frequently vary depending upon whether the corporation is a C corporation or an S corporation, a brief description of each form precedes the discussion of the relevant tax consequences. The tax consequences, which will be discussed thereafter, involve interrelated questions: which consequences are involved, and who will bear their brunt? Because nontax considerations also influence the timing of stock transfers, the discussion will address them as well.

The Step-Transaction Doctrine In Subchapter C: The Search For A Unifying Theory Continues, Robert Willens

Akron Tax Journal

This article discusses the Step-Transaction Doctrine in Subchapter C of the Internal Revenue Code. It is generally conceded that the Doctrine can apply if it meets any of the three alternative tests: : the "end result" test, the "mutual interdependence" test, or the more restrictive "binding commitment" test. However, there is difficult in determining which test will apply to the particular transaction under scrutiny. This is explored through a review of decisions dealing with Section 302 which relates to redemptions; Section 351 which deals with corporate organization; Section 368 which governs corporate reorganizations; and finally, the "integrated transaction" doctrine under …

Proceedings From The 1983 Tax Institute Symposium: Corporate Asset And Corporate Stock Acquisitions, Harvey Frutkin

Akron Tax Journal

This article discusses corporate assets and corporate stock acquisitions. It looks at the choices and decisions that are involved in the purchase and sale of a business, including the purchase and sale of a corporation's stock and the corporation's assets. Those are the choices: the asset deal or the stock deal.

Tax Equity And Fiscal Responsibility Act Of 1982, Merlin G. Briner

Akron Tax Journal

O N AUGUST 20, 1982, President Reagan signed into law the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), the fourth piece of major tax legislation in less than seven years. Though TEFRA has been said to provide the single largest tax increase in American history, President Reagan lobbied for it not as a tax bill, but as a revenue measure which, to his mind, in no way represented a backing-off from his vaunted "supply side-trickle down" economic program. This article will discuss the implications of TERFA on both the individual taxpayer and businesses.