Discussion:Amending for QTDP grant?....

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Discussion Forum Index --> Basic Tax Questions --> Amending for QTDP grant?....


Discussion Forum Index --> Tax Questions --> Amending for QTDP grant?....

Walden Belfiore (talk|edits) said:

30 January 2011
I have been reading about the QTDP grant companies received in the fall of 2010. It says that if a company received the QTDP grant for expenses in 2009 it will have to amend the 2009 return. It says that the company will have to add back the related expenses taken in 2009. This confuses me. To me the spirit of the grant is that it will not be taxable. But if you have to add back the expenses it would increase taxable income. What am I missing here? What would the offset be? It doesn't look like it can be capital.

Walden Belfiore (talk|edits) said:

30 January 2011
Dennis / kevinh5--thoughts?

Kevinh5 (talk|edits) said:

31 January 2011
Discussion:Question about an 1120X....QTDP

Kevinh5 (talk|edits) said:

31 January 2011
It sounds to me like the grant is not taxable, but the expenses deemed paid from the grant are not deductable. What's not fair about that?

Walden Belfiore (talk|edits) said:

31 January 2011
Well, I would guess the grant money deemed for 2009 would be picked up on the amended return as nontaxble grant income? If that is the case then it is simply presentation on the tax return.

Kevinh5 (talk|edits) said:

31 January 2011
I don't know that you would accrue the tax free income in '09. I agree, though, that the net effect is that expenses don't get deducted, which results in a higher taxable net income than previously reported.

Walden Belfiore (talk|edits) said:

31 January 2011
But to me a company would then owe penalties and interest on the additional tax due. I would guess the fact that the grant money received in 2010 will not be taxable and would possible create an NOL that would need to be carried back. To me this is a cumbersome way for the transactions to be handled.

Kevinh5 (talk|edits) said:

31 January 2011
I know nothing about this grant, but I would have preferred to reduce current expenses upon receiving it, rather than a prior period expenses.

Walden Belfiore (talk|edits) said:

31 January 2011
Thanks Kevinh5--this is a weird one because the Service indicated previously filed returns will have be be amended. There was no way one could have known they were going to receive this grant when the returns were originally filed. See the dilemma?

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