Treasury, IRS unveil new capitalization of transaction costs proposal

Washington — The Treasury Department and the Internal Revenue Service say that they will propose regulations regarding the treatment of amounts that facilitate certain tax-free and taxable transactions and other restructurings, and that are required to be capitalized under Code Section 263.

In Notice 2004-18, the Treasury requests comments regarding the appropriate treatment of certain transaction costs that are required to be capitalized, including whether such costs should be treated as giving rise to a new asset with an amortizable basis.

“The proper treatment of amounts incurred to facilitate certain transactions has been the subject of disputes between taxpayers and the IRS in recent years,” said acting Treasury assistant secretary for tax policy Greg Jenner. “This notice is the first step toward providing clear and administrable rules.”

For reprint and licensing requests for this article, click here.
Tax practice
MORE FROM ACCOUNTING TODAY