Tax-exempt bond allocations; final regulations | KPMG | US

KPMG report: Tax-exempt bond allocations; discussion of final regulations

Tax-exempt bond allocations; final regulations

Final regulations issued in October 2015 concern the allocation and accounting rules for purposes of the “private activity bond” restrictions under section 141. The final regulations apply to all tax-exempt bond issuances by state and local governments, including “qualified” section 501(c)(3) bonds.


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Prior to the release of the final regulations, issuers had been relying on proposed regulations (2006) with regard to the allocation and accounting rules for tax-exempt bond proceeds, including special rules for so-called “mixed use” projects and rules regarding the use of partnerships. The final regulations withdrew certain provisions of the 2006 proposed regulations; clarified other portions of those regulations; and provide guidance on “remedial actions” to prevent tax-exempt bonds from becoming private activity bonds after issuance.


Read a March 2016 report [PDF 178 KB] prepared by KPMG LLP: What’s News in Tax: Final Regulations Provide Guidance on Tax-Exempt Bond Allocations

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