What is qualified basis for reportable transaction?
i A qualifying basis, in general, is one equal to the amount paid in cash for the asset, plus improvements, or acquired. in certain tax-free corporate reorganizations, inheritance, gift or a like-kind exchange.
What is an IRC Section 165 loss?
I.R.C. § 165(g)(1) General Rule — If any security which is a capital asset becomes worthless during the taxable year, the loss resulting therefrom shall, for purposes of this subtitle, be treated as a loss from the sale or exchange, on the last day of the taxable year, of a capital asset.
What is a prohibited tax shelter transaction?
Generally, the term “prohibited tax shelter transaction” means listed transactions, transactions with contractual protection, or confidential transactions. There may be additional disclosure requirements for tax-exempt entities with respect to these types of transactions.
Who must file Form 8886?
Any taxpayer
Any taxpayer, including an individual, trust, estate, partnership, S corporation, or other corporation, that participates in a reportable transaction and is required to file a federal tax return or information return must file Form 8886.
How to disclose information on a reportable transaction?
Each taxpayer that has participated in a reportable transaction and that is required to file a tax return must disclose information for each reportable transaction in which the taxpayer participates. Use Form 8886 to disclose information for each reportable transaction in which participation has occurred.
When do loss transactions need to be disclosed?
One reportable transaction that must be disclosed is a loss transaction. If a taxpayer claims a loss under § 165 of at least one of the following amounts on a tax return, then the taxpayer has participated in a loss transaction and must file Form 8886.
What kind of transaction must be disclosed on a tax return?
One reportable transaction that must be disclosed is a loss transaction. Losses that must be reported on Forms 8886 and 8918 If a taxpayer claims a loss under § 165 of at least one of the following amounts on a tax return, then the taxpayer has participated in a loss transaction and must file Form 8886.
When is transaction offered under conditions of confidentiality?
A transaction is considered to be offered to a taxpayer under conditions of confidentiality if the advisor who is paid the minimum fee places a limitation on disclosure by the taxpayer of the tax treatment or tax structure of the transaction and the limitation on disclosure protects the confidentiality of that advisor’s tax strategies.