14 May 2024
A Rose by Any other Color. Municipal Bond Interest Can Be Taxable
Under IRC § 103(b)(2), interest which would otherwise be excluded from gross income under IRC § 103(a) is instead subject to federal income taxation if the obligation is classified as an arbitrage bond. Arbitrage bonds are one of several exceptions to the federal income tax exemption for interest on obligations issued by governmental entities. These bonds are obligations that are reasonably expected to be used to acquire obligations that yield "materially higher" returns than the original obligation during the original obligation's term of issue.
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- Business Entities. IRS provides additional guidance to clarify and amplify the procedures for the allocation of credits under IRC § 48C pursuant to the qualifying advanced energy project credit program under IRC § 48C(e)and announces the 2024 allocation round of the IRC § 48C(e) program (Round 2). Notice 2024-36.
- Business Entities. IRS and Treasury propose regulations providing guidance on reporting and paying the new excise tax on repurchases of corporate stock made after December 31, 2022, that would impact certain publicly traded corporations that repurchase their shares or whose shares are acquired by specified affiliates. 89 Fed. Reg. 25829 (Apr. 12, 2024).
- Business Entities. IRS provides a limited waiver of the addition to tax under IRC § 6655for underpaying estimated corporate income tax to the extent any underpayment is attributable to a portion of a corporation's corporate alternative minimum tax (CAMT) liability. IRS Notice 2024-33.
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