Further, taxpayers cannot compare variations of the SPM with a burden rate method or other method that would allocate costs to specific inventory items.
The IRS concluded the taxpayer's method was not a permitted method because the taxpayer did not allocate costs to specific inventory items, thus requiring the taxpayer to use the SRM.
UNICAP controversy
If a client makes and reports current-year gifts that use up her unified credit and to which she
allocates some of her GST exemption, and the CPA later discovers prior taxable gifts already had exhausted the credit or exemption, the client will owe taxes, interest and penalties.
Iceberg ahead! Navigating the murky waters of gift-tax-return preparation
* A Delphi team of three to seven members, typically including the engagement partner, manager, in-charge auditor, statistical or computer specialists and other pertinent personnel, votes to
allocate tolerable misstatement after discussing specific aspects of the audit.
Comparison risk ranking applications: here's one method of allocating tolerable misstatement
However, the deemed-allocation rules make it harder to keep track of the exemption amount used because, in some instances, returns are no longer required to
allocate the GST exemption.
Sec. 2632 prop. regs. on electing out of deemed GST allocations
When the mailing's contents are particular to program and fund-raising, specific identification can be used to allocate printing costs.
Assuming this difference is due to handling costs, one solution is to allocate P2's excess stand-alone cost to PI and FR in a 2-to-1 ratio, the resulting proportions after eliminating P2.
Reasonable joint cost allocations in nonprofits
The partners should have amended the partnership agreement in year 4 to
allocate Fats 80% of the depreciation deductions and 80% of all property appreciation over $50,000 (i.e., a sale above $440,000).
Understanding the mechanics of minimum gain
group must directly
allocate a portion of its unrelated party interest expense to foreign source income.
Final regulations: CFC netting rule
shareholder and FC1 became a CFC in 2001, USP would still be required to
allocate any excess distribution amount to years in which FC1 was a CFC.
PFIC deferred tax amount: timing is everything
Regulations section 1.338 requires taxpayers to
allocate a business's total purchase price among identifiable tangible and intangible assets based on their relative fair market values (FMVs).
Deducting the cost of intangibles
It is also used to calculate the GST tax on lifetime direct-skip transfers and to
allocate the donor's GST exemption to (1) such transfers and (2) transfers to trusts that may produce a taxable distribution or taxable termination.
Navigating the revised gift tax return
Although an intangible asset appraisal may be necessary for a number of reasons, one of the most common reasons is to
allocate the purchase price for tax reporting purposes.
How to value covenants not to compete; the appraiser must put a dollar figure on a series of qualitative assessments
If an irrevocable life insurance trust (ILIT) holds only term insurance (i.e., with no cash surrender value (CSV)), it is possible (and often recommended) not to
allocate any generation-skipping transfer (GST) tax exemption to the trust until after the insured dies.
"Wait and see" GST tax planning
The plan
allocates its administrative expenses among employees' accounts based on the ratio of each account balance to total account balances.
Rev. Rul. permits allocation of expenses to former employees