Carl T. Crow Partner

On December 17, 2010, President Obama signed into law the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (the “Act”).  Among other provisions, the Act extends for one additional year the exclusion from gross income of 100% of future capital gains of non-corporate taxpayers from certain investments in qualified small business stock.

On September 27, 2010, President Obama signed into law the Creating Small Business Jobs Act of 2010 (the “Act”).  Among other provisions, the Act excludes from gross income for regular income and alternative minimum tax purposes 100% of the capital gains (subject to a per issuer limitation described below) of non-corporate taxpayers from investments in qualified small business stock made after September 27, 2010 and before January 1, 2011.  For investments in qualified small business stock made after December 31, 2010, only 50% of the capital gains generally will be excluded from gross income.

The IRS recently issued Revenue Procedure 2010-14, which provides long-awaited guidance for taxpayers whose deferred like-kind exchange of relinquished property would be non-taxable under Section 1031 of the Internal Revenue Code but for the failure of the qualified intermediary ("QI") to acquire and transfer identified replacement property due to the QI's insolvency proceedings.

Until recently, the taxability of Smart Grid Investment Grants (SGIGs) was an undecided issue. Effective March 10, 2010, the Internal Revenue Service (IRS) has announced that these grants will be treated as nonshareholder contributions to the capital of grant recipients and thus not included in their taxable gross income.

The American Recovery and Reinvestment Act of 2009, commonly referred to as the Stimulus Bill, was signed into law on February 17, 2009 and contains an expanded tax credit for first-time homebuyers who make qualifying purchases prior to December 1, 2009.

The American Recovery and Reinvestment Act of 2009, commonly referred to as the Stimulus Bill, signed into law on February 17, 2009, contains renewable energy tax incentives, defers realization of certain cancellation of debt income, suspends certain restrictions on the deductibility of original issue discount, and limits S corporation built-in gain recognition.

The IRS recently issued Revenue Ruling 2008-13, which clarifies the IRS's new position with
respect to the applicability of the performance-based compensation exception for purposes of Section 162(m) of the Internal Revenue Code and grants transition relief to provide public companies an opportunity to review outstanding compensation plans, agreements and other arrangements in light of the IRS's new position.

The IRS recently issued Revenue Ruling 2007-49, which provides guidance on the tax consequences of certain transactions involving new vesting restrictions on fully vested stock. This update provides a brief background on Section 83 of the Internal Revenue Code, summarizes the key highlights from the revenue ruling and offers practical tips.

This week the IRS issued guidance on identifying "covered employees" for purposes of Section 162(m) of the Internal Revenue Code in response to the SEC's recent amendments to its executive compensation disclosure rules. This Update summarizes the key highlights from this IRS guidance.

Public companies, and other companies that need audited financial statements, must begin accounting for uncertain income tax positions under a new rule: Financial Accounting Standards Board Interpretation No. 48, which was released in July, and is effective for fiscal years beginning after December 15, 2006. Most reporting companies will implement the new rule for their first quarter 2007 financial statements.

On October 22, 2004, President Bush signed into law the American Jobs Creation Act of 2004 (the "Act"). The Act partially restores the federal income tax deduction for state and local sales and use taxes that was eliminated by Congress in 1986.

Today, President Bush signed the American Jobs Creation Act of 2004 (H.R. 4520) into law. The $145 billion corporate tax package contains a range of international tax reforms, corporate tax breaks and tax incentives that are intended to make United States manufacturing, service and high-technology businesses and workers more competitive and productive both in the United States and abroad.

In August 2004, the Internal Revenue Service issued final regulations relating to incentive stock options (ISOs). Although the final regulations are similar to the proposed ISO regulations published last year, the final regulations contain important guidance and changes relating to a number of issues affecting ISOs.

On January 7, 2003, President Bush, as part of his overall economic stimulus package, announced a proposal that would, among other things, exclude dividends from taxable income, (the "Proposal"). Following this announcement, on January 14, the Treasury Department published a summary fact sheet explaining the Proposal and highlighting how it would stimulate economic growth.

The IRS has issued temporary regulations that treat the merger of a target corporation into a wholly owned limited liability company (an "LLC") of an acquiring corporation as a tax-free reorganization described under Internal Revenue Code Section 368(a)(1)(A) (a "direct merger"), provided the shareholders of the target corporation receive stock in the acquiring corporation sufficient to satisfy the judicially created "continuity of interest" requirement. The new rules treat the transaction as if the target corporation merged directly into the acquiring corporation. In the past, there was considerable uncertainty as to whether this transaction would qualify as a tax-free reorganization, except in narrow circumstances.