Thursday, August 30, 2007

IRS To Demand More Detailed Data Next Year

Per the Kiplinger Washington Letter, the IRS is expected to require additional detailed data from larger businesses in 2008:
  • Form 1120 (C Corporations): Corporations will have to list entities that are at least 10% owners and any individuals who own more than 50%. Corporations will also have to disclose more details about foreign firms they own. New Schedule B for corporations with $10 million or more in assets will ask a variety of questions related to Schedule M-3, changes in accounting method and more; see a draft here.
  • Form 1065 (Partnerships and LLCs): Expect this form to be revamped to get more details about cancelled debt, like-kind exchanges and more. A new Schedule C will have questions about majority owners and related-arty transactions.

The IRS though cut a break for small partnerships - those with assets under $1 million won't be required to file several other schedules. This is an increase from $600,000.

It will be pretty easy for producers with large asset bases to be subject to these new disclosures.

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