Washington (Feb. 23, 2004) -- The Treasury Department and the Internal Revenue Service say 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."
The notice also requests comments on whether, as a policy matter, capitalized costs that facilitate a tax-free transaction should be treated in the same manner as the capitalized costs that facilitate a similar taxable transaction.
-- WebCPA staff
