avoiding pitfalls with credits and incentives - …（避免与信贷陷阱和激励-u2026）.pdf

Avoiding Pitfalls withAvoiding Pitfalls with Credits and IncentivesCredits and Incentives David J. YankeeDavid J. Yankee Deloitte Tax LLPDeloitte Tax LLP Avoiding Pitfalls with Credits and Incentives Agenda • Types of credits and incentives • Federal income tax treatment – Section 118 •• BackgroundBackground • Current developments – Impact on other federal income tax benefits Types of Credits and Incentives • Income tax • Grants • Property tax • Loans • Sales/use tax •• Tax rate reductionsTax rate reductions • Tax abatements • Tax credits – Refundable – Transferable • Tax exemptions • Tax rebates Credits and Incentives Federal Income Tax Treatment • Taxable – included immediately in gross income • Taxable – reduction of otherwise currently deductible item •• DeferredDeferred –– excludable, reduction in tax basisexcludable, reduction in tax basis • Permanent benefit Sections 61 and 118 Summary of Statutes • Section 61(a) – gross income means all income from whatever source derived, unless excluded by law • Section 118(a) – exclusion from gross income for any contribution to the capital of a corporate taxpayer • Section 118(b) – exception from the term “contribution to the capital of the taxpayer” for any contribution in aid of construction from a customer or potential customer • Section 118(c) – the term “contribution to the capital of the taxpayer” includes contributions in aid of construction received by water and sewer utilities Contributions to the Capital of a Corporation – Reg. Sec. 1.118-1 • Shareholder contributions, including if there is no additional issuance of stock • Non-shareholder contributions – The exclusion applies to the value of land or other property contributed to a cor