KPMG report - Tax relief for “built-in gains” of S corporations, REITs 

February 4: The recently enacted American Taxpayer Relief Act of 2012 extended the temporary five-year recognition period for the section 1374 “built-in gains” tax for tax years beginning in 2012 and 2013.

This extension may be good news for some S corporations and REITs that disposed of assets in taxable transactions during tax years that began in 2012 or that are considering dispositions during tax years beginning in 2013.


The January 2013 legislation explicitly addresses how the temporary reduction in the recognition period interacts with the installment sale and taxable income limitation rules.


S corporations and REITs, however, need to be aware that not all states may follow the changes to the federal built-in gains tax rules.


Read a February 2013 report [PDF 240 KB] prepared by KPMG LLP: What’s News in Tax: Fiscal Cliff Legislation Includes BIG Tax Relief for Some S Corporations and REITs




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