Leo Berwick Tax Alert on New Investment Tax Credit Regulations
On Friday, November 17, 2023, the Treasury issued Proposed Regulations in connection with energy property. With some exceptions, these rules are intended to apply to property that is placed into service after December 31, 2022. There are a number of items presented but below we discuss a few highlights in particular 1) the requirement for energy property that contains previously-used components to pass the 80/20 test to claim additional ITCs 2) surprising clarifications...
Leo Berwick Appoints Four Infrastructure, Renewables and Private Equity Leaders
Leo Berwick, a dedicated mergers and acquisitions (M&A) tax advisory firm, today announced a series of executive hires aimed at elevating the company’s infrastructure, renewables, and private equity service offerings for its global clients. The appointments of Dorian Hunt, Joe Zenk, Steven Hurowitz, and John Troth, will lead key practice areas to support business leaders in these critical markets. “As the most sophisticated renewables and infrastructure tax practice in...
Making an investment in a company with significant R&D spend?
On Friday, September 8, 2023, the IRS and Treasury published Notice 2023-63 (the “Notice”), announcing their intention to propose regulations related to the amortization of research and experimental (“R&E”) costs. The forthcoming guidance anticipated by the Notice addresses (1) the capitalization and amortization of R&E expenditures pursuant to the Tax Cuts and Jobs Act (“TCJA”) of 2017, (2) the interaction of §174 and rules related to the tax treatment of long-term...
Canadian Clean Technology Investment Tax Credit
On August 4, 2023, Deputy Prime Minister and Minister of Finance Chrystia Freeland published legislative proposals (the “Proposal”) relating to various incentives discussed in Budget 2023, including the new Clean Technology Investment Tax Credit (“ITC”). Leo Berwick has read through the Proposal and summarized the highlights below. Note that these rules are continuously developing and this post is being reviewed and updated in real-time. If you have further questions about...
Whose Stock is it Anyway? – Applying FIRPTA Regularly Traded Stock Exception to Stock Held by Partnerships
On May 12, 2023, IRS Office of Chief Counsel issued GLAM 2023-003 (the “GLAM”) analyzing the application of the “regularly traded stock exception" in Section 897(c)(3) to stock of a US real property holding corporation (“USRPHC”) held by partnerships. Though not binding on the IRS, the GLAM provides helpful insight into the IRS view as to whether to apply the exception at the partner or partnership level. Section 897 Background Section 897 was enacted as part of the Foreign...
Takeaways from the Inaugural Tax Insurance Forum – Presented by Leo Berwick
The recent inaugural Tax Insurance Forum (TIF) hosted by tax advisory firm Leo Berwick in New York provided an opportunity for tax insurance brokers and underwriters to engage in a lively discussion led by several panelists. “The tax insurance market has grown substantially, beyond traditional M&A,” said Joe Volk, Managing Director at Leo Berwick. “It requires brokers, underwriters, and underwriter counsel to be creative in assessing non-traditional risks and to have...
Return to Sender – Treasury Issues Proposed Regulations under Section 367(d) Concerning Repatriation of Intellectual Property
On May 2, 2023, the Treasury Department and IRS released a new set of proposed regulations (the “Proposed Regulations”) which, under certain circumstances, would eliminate the annual income inclusion required under Section 367(d)[1] when intangible property (“IP”) is repatriated to certain U.S. persons. Taxpayers may be interested in returning IP to the U.S. for a variety of reasons, including taking advantage of the Section 250 deduction for “Foreign Derived Intangible...
Leo Berwick Adds Senior M&A Tax Experts To Rapidly Growing Firm
Three new female leaders round out firm’s diverse talent roster Leo Berwick, a leading M&A tax advisory firm today announced the addition of three senior tax experts to the consultancy’s expanding and diverse team. Tania Wang joins the company as a Partner from Deloitte, where she most recently held the role of M&A Tax Managing Director. Tania’s client base at Deloitte included primarily large and middle market private equity companies across a variety of sectors,...
FIRPTA Traps – Greenfield Projects and Start-up Businesses
By now, most foreign investors that are investing in US real property or US infrastructure projects have likely encountered the Foreign Investment in Real Property Tax Act of 1980 (“FIRPTA”). In general, FIRPTA was enacted to impose a tax on gains derived by foreign persons on the disposition of US real property interests (“USRPI”). Included in the definition of a USRPI is a US real property holding company (“USRPHC”), which is a corporation whose assets consist of more...
What is FIRPTA? A Guide for Buyers and Sellers in M&A Deals
What is FIRPTA? The Foreign Investment in Real Property Tax Act (FIRPTA) is a tax law that enables the IRS to tax non-US persons on their dispositions of U.S. Real Property Interests (USRPI). Understanding the application of FIRPTA is critical in conducting tax due diligence of Target companies, as the application of FIRPTA can have a significant impact on the after-tax IRR of a potential acquirer’s bid model, as well as create additional complications when...