Interest on Nonaccrual Loans: New Rules and a “Safe Harbor” Method
Author: James D. Goeller.; John E. Cederberg.
Source: Volume 20, Number 06, July/August 2007 , pp.19-25(7)
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Abstract:
On May 4, 2007, the IRS issued a Revenue Ruling and a Revenue Procedure (Rev. Rul 2007-32 and Rev. Proc. 2007-33) that dramatically change the taxation of nonaccrual interest. The authors believe that the two rulings must be considered as a unit, with Rev. Rul. 2007-32 establishing an accounting method, and Rev. Proc. 2007-33 providing additional insight on certain procedural aspects of the accounting method and the automatic adoption procedure.Keywords: Conformity election; nonaccrual loans
Affiliations:
1: Perry-Smith LLP.