Overview
IRS Issues Guidance on Deductibility of Expenses for Grantor Trusts: Today, the Treasury Department and the IRS released Notice 2018-61 announcing that Treasury intends to issue regulations regarding section 67(g) as enacted by P.L. 115-97, commonly known as the Tax Cuts and Jobs Act. These regulations will clarify that estates and non-grantor trusts may continue to deduct expenses described in section 67(e)(1) or allowable under section 642(b), 651, or 661, in determining the estate or non-grantor trust’s adjusted gross income for all taxable years, even while the application of section 67(a) (relating to miscellaneous itemized deductions) is suspended pursuant to section 67(g). Estates and non-grantor trusts may rely on this notice for taxable years beginning after December 31, 2017.
IRS Sends Letter to Senate Finance on Syndicated Conservation Easements: In a letter dated July 12, Acting IRS Commissioner David Kautter briefed Senate Finance Chairman Orrin Hatch on information reported to the IRS regarding syndicated conservation easement transactions that were identified as listed transactions in Notice 2017-10. The letter states that 248 pass-through entities claimed conservation easement deductions worth $6 billion for tax year 2016, and the IRS has begun enforcement activity with respect to more than 40 of these entities.
IRS Issues Updated Weighted Average Interest Rates, Yield Curves, and Segment Rates: Today, the Treasury and the IRS issued Notice 2018-60 providing guidance on the corporate bond monthly yield curve, the corresponding spot segment rates used under section 417(e)(3), and the 24-month average segment rates under section 430(h)(2). The notice also provides guidance as to the interest rate on 30-year Treasury securities under section 417(e)(3)(A)(ii)(II) as in effect for plan years beginning before 2008 and the 30-year Treasury weighted average rate under section 431(c)(6)(e)(ii)(I).