Internal Revenue Bulletin: 2007-24
June 11, 2007
Cancellation of distributorship agreement. This ruling holds that the cancellation of an agreement to distribute a manufacturer’s products may be a sale or exchange of property. The gain may be capital gain or treated as capital gain and may be subject to recapture.
Proposed regulations provide rules under section 152(e) of the Code relating to a claim that a child is a dependent by parents who are divorced, legally separated under a decree of separate maintenance, separated under a written separation agreement, or who live apart at all times during the last 6 months of the calendar year.
Deductibility of lodging expenses. This notice announces that the Service and the Department of the Treasury intend to amend regulations section 1.262-1(b)(5) to provide that the costs of a taxpayer’s lodging not incurred while traveling away from home may qualify as deductible expenses under section 162 of the Code and thus would not be nondeductible personal expenses. The notice also provides interim guidance on the criteria that apply to determine whether these costs are deductible expenses pending the issuance of the amended regulations.
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