Income Tax

T.D. 9834, page 233. Final regulations addressing transactions that are structured to avoid the purposes of sections 7874 and 367 of the Code and certain post-inversion tax avoidance transactions.

Notice 2018–61, page 278. This notice announces that the Department of the Treasury and the Internal Revenue Service intend to issue regulations providing clarification of the effect of section 67(g), enacted on December 22, 2017, by “An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018,” P.L. 115–97, on the deductibility of certain expenses described in section 67(b) and (e) and §1.67-4 of the Income Tax Regulations that are incurred by estates and non-grantor trusts. These regulations will clarify that estates and non-grantor trusts may continue to deduct each expense that is described in section 67(e)(1) or is allowable under section 642(b), 651 or 661, including the appropriate portion of a bundled fee, in determining the estate or non-grantor trust’s adjusted gross income for all taxable years, even while the application of section 67(a) is suspended pursuant to section 67(g). Additionally, the regulations will clarify that deductions enumerated in section 67(b) and (e) continue to remain outside the definition of “miscellaneous itemized deductions” and thus are unaffected by section 67(g). This notice also requests comments on section 642(h)(2) and §1.642(h)– 2(a) in light of new section 67(g).