Sec. 467 revisited: payments vs. allocations.
The Tax Adviser › Vol. 25 Nbr. 9, September 1994
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Summary
The IRS has provided little guidance on the application of IRC section 467 to rental agreements in which rental payments are paid after the close of the year to which they are allocable or increase over time. It has also been unclear whether the IRS would rely on rent allocations or rent payments to determine the applicability of section 467, but Blue Book guidelines appear to indicate that a separate rent allocation schedule is not necessary. Section 467 requires the parties to use the accrual method for qualifying rental agreements in excess of $250,000.
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Sec. 467 revisited: payments vs. allocations.
Sec. 467 was enacted as part of the Deficit Reduction Act of 1984. The provision generally puts lessors and lessees on the accrual basis with respect to certain rental agreements. Unfortunately, although Sec. 467 has been on the Treasury's semiannual agendas for regulations since 1985, no regulation...
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