Learn to identify options and methods to limit or defer the recognition of income via certain provisions contained within Section 451 regulations.
Income and its recognition is the starting point for all for-profit entities as they determine their ultimate tax liability for a given tax year. The IRS regulations under Section 451(b) and (c), applicable for 2021 and future tax years, provide taxpayers with guidance related to the timing of income inclusion generally as well as the treatment of advance payments for goods, services, and certain other items. The final Section 451 regulations include new concepts and optional methods with respect to income recognition, which requires taxpayers to have a detailed understanding of their specific facts to determine how such rules apply to them. In addition, the final Section 451 regulations include certain provisions that may provide opportunities to limit the amount of income recognized in a given tax year, which taxpayers should consider as part of their overall implementation of the final regulations. This course will provide an overview of and guidance on the final Section 451 regulations. The material will explore opportunities to limit income acceleration and discuss in detail the procedural guidance in place to implement the final Section 451 regulations.
Learning Objectives
- You will be able to recognize how income recognition has changed in the past five years.
- You will be able to identify general income recognition.
- You will be able to identify advance payments.
- You will be able to recognize how to implement the Section 451 final regulations.
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Agenda
Background - How Income Recognition Has Changed in the Past 5 Years
- Section 451 (Pre-TCJA)
- Section 451 (as Modified by the TCJA)
- Release of Treas. Reg. §1.451-3 and -8
- Release of Rev. Proc. 2021-34 (Incorporated Into Rev. Proc. 2022-14)
General Income Recognition - Treas. Reg. §1.451-3
- Special Methods of Accounting
- Income Inclusion - Historic All Events Test vs. Book Recognition (General Rule)
- Optional Methods That Defer Recognition of Income:
- Enforceable Right
- AFS Cost Offset Method
- Tax vs. Book Treatment of a Transaction
Advance Payments - Treas. Reg. §1.451-8
- Full Inclusion Method
- Deferral Method
- Optional Methods That Defer Recognition of Income (Beyond Use of the Deferral Method):
- Advance Payment Cost Offset Method
- Specified Goods Exception
Implementing the Section 451 Final Regulations - Rev. Proc. 2021-34 (as Incorporated Into Rev. Proc. 2022-14)
- Accounting Methods Refresh - Adopting and Changing an Accounting Method
- Method Changes Available to Implement the Section 451 Final Regulations
- Optional Streamlined Method for Implementing the Section 451 Final Regulations
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Over 37 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.
Credits
OnDemand Course
This course was last reviewed on May 29, 2024.
Call 1-866-352-9540 for further credit information.
- AIPB 2.0
- This program is acceptable for 2.0 CPEC(s) towards the CB designation through the American Institute of Professional Bookkeepers (AIPB).
CPE/NASBA - QAS Self Study 2.8 including Taxes 2.8
- Noggin Guru, Inc. dba Lorman Education Services and BankersHub is registered with the National Association of State Boards of Accountancy (NASBA) as a QAS Self Study sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its web site: www.nasbaregistry.org. For more information regarding administrative policies such as complaint and refund, please contact our offices at 866-352-9539. CPE Credit: Maximum Credit Hours: 2.8 each session (based on a 50 minute credit hour). You must attend at least 50 minutes to obtain credit. Field of Study: Taxes for 2.8 hours. Prerequisite: . Level of Knowledge: Intermediate. Teaching Method: Seminar/Lecture. Advance Preparation: None. Delivery Method: QAS Self Study. Please refer to the information in this advertisement for outline, course content and objectives. Upon completion of this course, you will receive a certificate of attendance. Final approval of a course for CPE credit belongs with each state's regulatory board.
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Why Lorman?
Over 37 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.
Faculty
Alison Jones
Ernst & Young LLP
- Principal in Ernst & Young LLP’s Accounting Methods, Periods, and Credits Group
- Specializes in federal tax accounting method matters, including the accrual of income and deductions, capitalization, depreciation issues, and accounting method change requests
- Over the past several years, she has worked with an interdisciplinary team focused on the tax considerations of the new FASB/IASB Revenue Recognition Standard as well as the Tax Cuts and Jobs Act changes to the tax income recognition rules
- Worked with a variety of public and private clients in the manufacturing, distribution, retail, financial services, health care, oil and gas, utilities, and telecommunications industries and currently serves as EY’s Americas Tax Director for Engineering and Construction
- Frequent speaker at ABA and TEI events and served as an adjunct professor in the L.L.M. program at Georgetown University for almost a decade
- Licensed in the state of Texas and is a member of the American Bar Association Tax Section and a past vice-chair of the Capital Recovery and Leasing Subcommittee
- J.D. degree and B.A. degree in economics, University of Texas
Sam Weiler
Ernst & Young LLP
- Principal in Ernst & Young LLP’s National Tax – Accounting Methods, Periods, and Credits Group
- Primarily provides federal tax advisory services on capitalization and cost recovery items and issues, the timing provisions governing income and expense recognition, income exclusion provisions of the Internal Revenue Code, leasing, and like-kind exchange issues, as well as Internal Revenue Service procedures regarding the application of accounting methods and changes in accounting methods and periods
- Frequent speaker on various tax accounting topics and currently serves as a contributor/editor of the Bloomberg Tax Portfolio, Depreciation: MACRS and ACRS, No. 531; the Bloomberg Tax Portfolio, First-Year Expensing and Additional Depreciation, No. 532; and the Wolters Kluwer/CCH U.S. Master Depreciation Guide
- Member of the American Bar Association and its Tax Section, where he is the former Chair of the Capital Recovery and Leasing Committee and was previously named a John S. Nolan Fellow
- J.D. degree, The Ohio State University Moritz College of Law; M.S.A. and B.B.A. degrees, Ohio University
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Why Lorman?
Over 37 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.
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