Final regulations issued regarding capitalization of interest under Section 263A(f) of the Code

Article Abstract:

IRC Section 263A(f) final regulations cover capitalization of interest costs incurred during the production period in which specified property is developed or improved. These complex rules, effective beginning in 1995, outline the avoided cost method, requiring capitalization of all interest costs otherwise avoidable had the taxpayer repaid debt rather than incur production period expenses. The final regs feature several changes from the original proposed regs, including a more liberal de minimis rule.

Accounting and auditing, Real estate investment, Real estate investments, Interest, Interest (Finance)

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The Service expands interest deduction opportunities for ARMs

Article Abstract:

The IRS has issued revenue ruling 92-91 which allows full deductions from income tax of interest payments and overpayments on adjustable rate mortgages. Returns of overpayment must be included in income and questions of timing, tax treatment and the tax benefit rule must be considered. Judicial rulings, legislative interpretations and administrative interpretations exist for further consideration. This revenue ruling may also apply to overpayments for other types of mortgages.

Taxation, Interest deductions, Adjustable rate mortgages

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"Based on this unsatisfactory evidence" - the Tax Court's decisions on undivided interest discounts

Article Abstract:

The author examines the US Tax Court's memorandum decisions in the Estates of Brocato, Busch, and Stevens in regards to undivided interest discounts and shows the need for sound financial reasoning and empirical evidence in the valuation of such discounts.

United States, Valuation, Discount (Finance), Interest (Law), Co-ownership, Co-ownership (Real estate)

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