Environmental remediation costs.The Taxpayer Relief Act of 1997 added new Sec. 198, which allows taxpayers to elect to treat certain environmental remediation Generally, remediation means providing a remedy, so environmental remediation deals with the removal of pollution or contaminants from environmental media such as soil, groundwater, sediment, or surface water for the general protection of human health and the environment or from a expenditures as deductible if paid or incurred after Aug. 5, 1997 and before 2001. The deduction applies for both regular and alternative minimum tax purposes, but is subject to recapture as ordinary income on the property's sale or other disposition.
Sec. 198 generally defines a qualified environmental remediation (QER QER Qeradiant
QER Quarterly Economic Report
QER Qualitative Equipment Requirements
QER Qualification Evaluation Release
QER Quinte Exhibition and Raceway (Ontario, Canada)
QER Quarterly Executive Review
QER Quasi-Electric Response ) expenditure as any expenditure otherwise chargeable to capital account and paid or incurred in connection with the abatement or control of hazardous substances at a qualified contaminated contaminated,
v 1. made radioactive by the addition of small quantities of radioactive material.
2. made contaminated by adding infective or radiographic materials.
3. an infective surface or object. site, which is an area:
* Held by the taxpayer for use in a trade or business, for the production of income or as inventory;
* Certified by the appropriate state environmental agency to be located in a targeted area (as defined in Sec. 198(c)(2)); and
* In which there has been a release, threat of release or disposal of any hazardous substance.
Generally, a "hazardous substance" is any substance defined or designated in Sections 101(14) and 102 of the Comprehensive Environmental Response, Compensation and Liability Act of 1980.
Under Rev. Proc. 98-47, the Sec. 198 election must be made on or before the due date (including extensions) for filing the income tax return for the tax year the QER expenditures are paid or incurred. Individuals must include the total amount of Sec. 198 expenses on the line for "Other expenses" on Schedule C, E or F (as appropriate) for Form 1040. Whenever a schedule requires that the taxpayer separately identify each expense included in "Other expenses," he must write "Section 198 Election" on the expense line on which the Sec. 198 expense amounts separately appear.
All other taxpayers must include their total Sec. 198 expenses on the line for "Other deductions" (or the equivalent thereof) on their appropriate Federal income tax returns. On a schedule attached to the return that separately identifies each expense included in "Other deductions" (or the equivalent thereof), the taxpayer must write "Section 198 Election" on the line on which the Sec. 198 expense amounts separately appear.
Under a transition rule, taxpayers who claimed a deduction for QER expenditures paid or incurred after Aug. 5, 1997, on a return filed before Oct. 15, 1998, will be deemed to have made a Sec. 198 election for those expenditures, even if no reference to Sec. 198 is contained in the return. If a taxpayer did not claim a deduction for such expenditures on a previously filed return, he may make the Sec. 198 election for those expenditures only by filing a timely amended return Amended Return
A return filed in order to make corrections to a tax return from a previous year. It can be used to correct errors and claim a more advantageous filing.
An amended return is filed using Form 1040X. that complies with the reporting requirements escribed above.
A taxpayer may make a Sec. 198 election for one QER expenditure and choose to capitalize other expenditures. Also, a Sec. 198 election for one year has no effect for other years. Thus, a taxpayer must make a Sec. 198 election for each year in which he intends to deduct QER expenditures. A Sec. 198 election is revocable rev·o·ca·ble also re·vok·a·ble
That can be revoked: a revocable order; a revocable vote.
Adj. 1. only with prior IRS An abbreviation for the Internal Revenue Service, a federal agency charged with the responsibility of administering and enforcing internal revenue laws. consent. To obtain the Service's consent, the taxpayer must request a letter ruling.
The tax treatment of environmental cleanup costs that do not qualify under Sec. 198 is governed by the normal tax rules for the deduction or capitalization of expenses. Rev. Rul. 94-38 provides public guidance for the treatment of certain non-Sec. 198 remediation expenditures. Rev. Proc. 98-17 provides special procedures for requesting private written guidance from the IRS on the tax treatment of environmental cleanup costs incurred in projects that span several years, including future and prior years (whether or not under examination). (See Tax Clinic, "Environmental Remediation," TTA TTA Telecommunications Technology Association (Korea)
TTA Teacher Training Agency (UK)
TTA Triangle Transit Authority (Raleigh/Chapel Hill/Durham, North Carolina, USA) , May 1998, p. 289.)
Rev. Rul. 98-25 distinguished Rev. Rul. 94-38. (See Tax Clinic, "Current Tax Deduction Tax deduction
An expense that a taxpayer is allowed to deduct from taxable income.
See deduction. for Underground Storage Tank An Underground Storage Tank (UST), in United States environmental law, is a tank and any underground piping connected to the tank that has at least 10 percent of its combined volume underground. Removal," TTA, October 1998, p. 670.) The IRS has issued a Coordinated Issue Paper on certain underground storage tanks. (See Tax Clinic, "Coordinated Issue Paper Gives Guidance on Underground Storage Tanks" T-FA, June 1998, p. 371.)
FROM ERIC S. LASCH LASCH Local Authority Secure Children's Home (UK) , CPA (Computer Press Association, Landing, NJ) An earlier membership organization founded in 1983 that promoted excellence in computer journalism. Its annual awards honored outstanding examples in print, broadcast and electronic media. The CPA disbanded in 2000. , BUFFALO, NY