Anti-Churning Rules

Anti-Churning Rules

Laws designed to prevent taxpayers from taking advantage of new laws by acquiring property eligible for benefits available under the new law from a related party that was used by the related property before the effective date of the new law. The term was first used when ACRS (Accelerated Cost Recovery System) was enacted in 1981. The term also applies to property eligible for MACRS depreciation (defined elsewhere) and to section 197 intangibles (defined elsewhere).
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Assuming that the intangible assets qualify for amortization under the anti-churning rules, XYZ would claim $10, 000 per year as an amortization deduction.
There may, however, be some planning opportunities in identifying different intangibles in order to reduce the impact of the anti-churning rules.
The IRS did not address whether the anti-churning rules under Sec.
Unless the anti-churning rules apply, goodwill is amortized over a 15-year period.
3 (acquired company held not related to acquirer for purpose of anti-churning rules on the investment tax credit); Rev.
7) Anti-churning rules prevent the taxpayer from converting existing intangible assets for which no deduction would be allowed in the absence of Section 197 into assets whose amortization would be deductible.
197 anti-churning rules do not apply, they would be eligible for 15-year amortization.
197 anti-churning rules do not apply and the partnership can make reverse Sec.
197 anti-churning rules to a partnership basis step-up under Sec.
The anti-churning rules prohibit taxpayers from claiming amortization from intangibles that were not amortizable before the enactment of Sec.
197(f)(9) provides anti-churning rules to prevent such situations.
197(f)(9)(E) states that the anti-churning rules can be applied at the partner level when a basis adjustment has been made under Sec.