In 2017, Congress amended Section 451(b) of the tax code to require accrual method taxpayers to include certain amounts in income no later than the time those amounts are reflected on applicable financial statements. On December 21, 2020, the IRS issued final regulations under Section 451(b).
Like the proposed regulations, which we discussed here, the final regulations confirm that Section 451(b) generally does not apply to amounts treated as original issue discount or market discount for tax purposes, other than certain credit card fees (which historically have been treated as giving rise to or increasing original issue discount).
Linda Z. Swartz
Partner
T. +1 212 504 6062
linda.swartz@cwt.com
Adam Blakemore
Partner
T. +44 (0) 20 7170 8697
adam.blakemore@cwt.com
Jon Brose
Partner
T. +1 212 504 6376
jon.brose@cwt.com
Andrew Carlon
Partner
T. +1 212 504 6378
andrew.carlon@cwt.com
Mark P. Howe
Partner
T. +1 202 862 2236
mark.howe@cwt.com
Catherine Richardson
Partner
T. +44 (0) 20 7170 8677
catherine.richardson@cwt.com
Gary T. Silverstein
Partner
T. +1 212 504 6858
gary.silverstein@cwt.com