In addition, there are also two safe-harbor methodologies the taxpayer may use for allocating
discounts to all inventory generally conforms to the best accounting practice in various trades or businesses.
This article illustrates one such technique: A detailed model for allocating
tolerable misstatement is presented and other applications are suggested.
An excellent basis for allocating
postage is the incremental weight a program or fund-raising contributes to the mailings weight.
First, according to the IRS, not every method of allocating
plan expenses is reasonable and could result in a significant detriment.
Exhibit 4 at left presents a corresponding Schedule C, Part 2, allocating
GST exemption to this transfer.
This lack of conflicting interests weakens the economic reality test's usefulness in allocating
a portion of the purchase price to intangible assets.
The two methods involve allocating
a GST exemption either (1) to the trust on an annual basis equal to each trust contribution or (2) against the trust's fair market value (FMV) at the time of the allocation.
Under these circumstances, there is no factual basis for allocating
two thirds of the total amount paid to B to emotional distress; the allocation does not reflect the economic substance of the settlement, nor the realities of the underlying claim.
2642(g)(1)(B), taxpayers should treat the time for allocating
the GST exemption to lifetime transfers and transfers at death, the time for electing to opt out of the automatic allocation rules, and the time for electing to treat any trust as a GST trust as if not expressly prescribed by statute.
752-3 currently provides a three-tiered system for allocating
nonrecourse liabilities, which applies sequentially.