IRS T.D.: Coordination of Extraordinary Disposition, Disqualified Basis Rules (IRC §245A)

Nov. 20, 2020, 5:00 AM

Final rules that coordinate the extraordinary disposition rule under tax code Section 245A with the disqualified basis rule under Section 951A, issued by the IRS November 20. Information reporting rules under Section 6038 are also finalized. The coordination mechanism involves two operative rules, one that reduces disqualified basis in certain cases (the “DQB reduction rule”), and another that reduces an extraordinary disposition account in certain cases (the “EDA reduction rule”), the IRS stated. The regulations provide two versions of both the DQB reduction rule and the EDA reduction rule — the first for simple cases, the second for complex cases, ...

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