This approach allocates
100% of "premium" to operating units.
Any method that does allocate
costs to specific inventory items may be compared to any other permissible method that allocates
costs to specific inventory items to determine reasonableness (this is hardly ever the case).
The example concludes that since the president's travel is engaged in for lobbying and non-lobbying purposes, the taxpayer must reasonably allocate
the travel expense between the two purposes.
A donor cannot allocate
GST exemption to an inter vivos transfer (a transfer the donor makes during his lifetime) if the property would be included in his or her spouse's gross estate (other than under IRC section 2035) if the donor died immediately after the transfer.
Although a trustee who allocates
capital gain to trust income with a power to adjust must do so "reasonably and impartially," the regulations neither define nor illustrate this concept.
The principal reason costs may be higher is because the expense amount a company records for new shares will be based on the fair market value of the shares the plan allocates
to participant accounts--measured at the time of allocation--rather than on the amount of the cash contribution the company makes to the ESOP to repay the loan.
If a taxpayer has a loss in a separate limitation category in a noncontrolled section 902 company as a result of interest expense apportionment it may elect to allocate
interest expense to any other separate limitation category that is in an excess credit position.
Because it is impracticable (or impossible) to trace and allocate
each individual discount through the system, some sort of allocation method should be allowed as long as such method clearly reflects income and is consistently applied.
The entity should allocate
other costs not identifiable with a particular component of the activity between fundraising and the appropriate program or management and general function.
However, Congress realized that tax advisers were often failing to properly allocate
the GST exemption to trusts ultimately intended to benefit skip persons.
A corporate general partner or any limited partner cannot allocate
its share of partnership interest expenses between foreign- and U.
Thus, when a partnership interest is exchanged for debt, the partnership must recognize cancellation of debt income and allocate
it to its historical partners.
On first consideration, it might appear appropriate to simply allocate
aggregate preliminary materiality in proportion to the balances of the various financial statement elements.
Larry and the retail sales corporation could allocate
more of the sales price to the land to increase the portion of the gain that is capital gain.