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October
22-23, 2008 |
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Las
Vegas, NV |
Register |
DAY
ONE
9:00
- 10:00 OVERVIEW OF BANK DEFINITION AND BANK-SPECIFIC CODE SECTIONS
The bank-specific provisions found within the Internal Revenue Code apply only to entities that meet the definition of a bank for federal income tax purposes. Thus, it is important to understand how a bank is defined in the Code. It is also important to understand the significant Code sections applicable specifically to banks, as these provisions are
often different from the rules applied to other taxpayers. In certain areas, different rules are applied to “large” banks than are applied to “small” banks. Because different rules may exist for various members of a bank holding company group, pitfalls can be avoided and advantages can be secured with proper planning.
10:00 - 11:30 (10:30 - 10:40 Refreshment Break) INTEREST AND FE INCOME
There are numerous differences between the accounting of income items for book and tax purposes. Explore the book and tax differences in the treatment of income items. This session focuses on areas of recent IRS attention, recently issued regulations, and court decisions. Among the items examined are commitment fees, loan origination fees and costs, credit card fees, market discount on securities and the OID rules.
11:30 - 12:00 MORTGAGE SERVICING
Mortgages that are originated and sold often result in the bank earning mortgage servicing fees. In addition some banks purchase servicing from other originators. The taxation of mortgage servicing fees will depend upon whether the fee is “normal” or “excess.” In addition the cost recovery period of purchased servicing is sometimes controversial. This segment will consider the taxation of all aspects of originated and purchased mortgage servicing.
12:00 - 12:30 NON-PERFORMING LOANS
One of the most troublesome audit areas is the treatment of interest income on loans in non-accrual status. Banks, both large and small, are experiencing significant adjustments to this item on audit. Benefit from this session’s exchange of information and learn the most recent approaches by the IRS. Also learn how an adjustment to income can be avoided with a minimum of effort.
12:30 - 1:30 LUNCHEON
1:30 - 3:30 BAD DEBTS AND REAL ESTATE FORECLOSURES
Perhaps the most significant of all booktax differences in banking, this session will provide a thorough overview of the tax rules surrounding the deductibility of bad debts related to loans and securities. It is important to understand the operational rules for deducting these losses, when the loss can be claimed, the extent of the allowable
deduction and the different rules applicable to “large” and “small” banks. This session will also provide an in-depth analysis of the “conformity election” available to provide IRS audit protection in this area and whether such an election is advisable. Finally, the operational rules governing the taxability of loan foreclosures will be examined, as the timing and nature of related gains and losses is an important issue in bank taxation.
3:30 - 3:40 Refreshment Break
3:40 - 4:10 MARK-TO -MARKET RULES
The rules are intricate and exposure is significant. This session will consider: when a bank is likely to be treated as a dealer in securities; how identification should be made; whether the de minimis exceptions can apply; the risk associated with a security tainting large categories of loans, and transfer of securities among bank holding company members.
4:10 - 5:00 SPECIAL RULES FOR S-CORPORATION BANKS
As a result of recent legislation, S-corporation status is now more widely available to banks. This session provides a general overview of the specific qualification requirements for banks to elect S-corporation status and the special operational rules for bank S-corporations. Topics for discussion include qualification requirements for electing bank S-corporations, qualification if IRA shareholders, continued application of bank-specific provisions to a QSUB bank and various operational issues, such as the availability of the cash-basis method of accounting and the inability to use the reserve method of deducting bad debts.
5:00 - 5:30 Q & A SESSION
DAY
TWO
8:30 - 9:30 CAPITAL GAINS AND LOSSES
Capital gains have no preferential rate for a “C” corporation, but they may be desperately needed to receive the benefit associated with capital losses. This session will explore the issues of particular concern to banks and offer some opportunities for planning around the inability to utilize a capital loss.
9:30 - 10:30 CAPITALIZATION OF INTANGIBLE COSTS
Nearly all of the assets of a financial institution are intangibles. Treasury regulations now prescribe detailed rules
for cost recovery of acquired and created intangibles. In addition, rules are prescribed for financial institutions that start up a new business and that acquire a business. In this segment, all of these will be examined.
10:30 - 10:40 Refreshment Break
10:40 - 12:15 INTEREST EXPENSE
The largest deduction that any bank takes is for interest expense. Special provisions prescribe the rules for deducting interest when a bank holds tax exempt obligations. The rules limit the deduction, but they, themselves, are subject to limitations. This session will examine the rules and then outline the ways that a bank can maximize its
interest expense deduction by avoiding the TEFRA disallowance.
12:15 - 1:15 LUNCHEON
1:15 - 2:30 TREATMENT OF ACQUISITION PREMIUM
Corporate acquisitions in a variety of forms are common in the banking industry. The tax treatment of premium paid in an acquisition can vary significantly from the book treatment, depending on the form of the acquisition. This session will provide an overview of the most common forms of bank acquisitions and provide an analysis of the
tax treatment of the purchase premium for each.
2:30 - 3:30 OVERVIEW OF FIN 48: ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES
Financial accounting for income tax exposure items has received a great deal of attention in recent years. The issuance of FASB Interpretation No. 48 in 2006 has changed the way taxpayers are required to analyze, measure and account for these tax exposure items for financial reporting purposes. This session will highlight the unique characteristics of FIN 48 and illustrate how it is being applied by financial institutions.
3:30 - 4:00 Q & A SESSION
4:00 COURSE ADJOURNMENT
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Course Leaders
From:
Executive
Financial Institutions Tax Group
Crowe
Chizek & Company LLC |
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GARY
A. FOX, CPA
MICHAEL J. GIAMMALVO, CPA
DAVID
A. THORNTON, CPA
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