Tax Law Updates | New Proposed Legislation
June 23, 2010
U.S. Senate Votes to Terminate Corporate Deductions for Punitive Damages to Pay for Extension of Homebuyers Tax Credit Program
American Jobs and Closing Tax Loopholes Act – Amendment of June 16, 2010
Amendment to H.R. 4213, 6/16/2010
By a vote of 60 to 37, the United States Senate has decided to finally put an end to federal tax exemptions for corporate payments for punitive damage awards, ostensibly to compensate for the extension of the homebuyer tax credit.
These tax provisions are part of the whole package of amendments to the American Jobs and Closing Tax Loopholes Act of 2010, H.R. 4213.
Under current law, a deduction is allowed for damages paid or incurred as ordinary and necessary expense in the course of a trade or business. However, no deduction is allowed for a fine or penalty paid to…
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