Wide limits on reinvesting disaster insurance proceeds

Article Abstract:

Rev. Rul. 95-22, 1995-12 IRB 4, was released by the IRS in response to the recent natural calamities in California and other places. This ruling focuses on the treatment of insurance proceeds obtained after such natural disasters. It concerns a taxpayer with a principal residence and its contents which are devastated by presidentially declared disaster. The ruling explains that a reinvestment of the insurance proceeds in a new replacement residence and contents is necessary. It points out that there is no gain because the taxpayer paid out $350,000 in rebuilding his residence and its contents while he received only $310,000 in insurance proceeds. Amounts obtained for unscheduled contents do not result in gain, no matter what it is to be used for, if it is to be used for replacement of residence or contents.

Management, Property and casualty insurance

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IRS explains limits on educational assistance

Article Abstract:

The IRS has issued Notice 96-68 to provide guidance on the reactivation of a limited exclusion for educational assistance offered by employer to an employee. The paper discusses what a graduate level course is and when a course starts for purposes of implementing the two cut-off dates. There are two tests for determining a graduate level course. It must be attended by an employee with a bachelor's degree or one who is getting credit toward a more advanced degree. It can be taken for getting credit in a program resulting in a law, medical, business or other advanced academic or professional degree. The Notice points out that a course usually commences on the first regular day of class for the course.

Graduate students, Limitation of actions (Taxation), Statute of limitations (Taxation), Educational assistance, Foreign educational assistance

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Exempt religous organizations have strict limits

Article Abstract:

Exempt religious institutions must emphasize certain aspects of Section 501(c)(3) when faced by the IRS' increasingly aggressive enforcement of exempt provisions. Section 501(c)(3) exempts religious organizations provided that they pass both an 'organizational' test and an 'operational' test. Aspects of this Section to which religious organizations must adhere to keep their exemption include provisions on the absence of private inurement, substantial lobbying, political activities, and excessive unrelated business or trade.

Religious institutions, Religious organizations, Tax exemption, Tax exemptions, Church fund raising

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