Pub. 8 2013-2014 Issue 3

www.nebankers.org 14 Extraordinary Service for Extraordinary Members.  Proposition — continued determines the treatment of bad loans for tax purposes. 18 Banks that have the option of how to treat debt must make an election to use either the specific charge-off method or the reserve method. A change from one method to the other is a change in method of accounting, and generally requires the bank to receive the consent of the IRS commissioner. 19 However, as banks change in size and are party to certain mergers, the method change rules apply differently to different types of transactions. In some cases a bank may be required (rather than have the option) to change, and in others, a bankmay benefit fromone taxmethod over another. In the next issue of Nebraska Banker, we’ll highlight these differences and apply the tax rules and regulations discussed here to bank acquisition and merger transactions.  Jason Maus is an associate in Husch Blackwell’s Financial Services industry group and concentrates his practice in Tax Credits – Banking and Finance. You may contact him at (402) 964-5141 or jason.maus@huschblackwell.com . “Can I get help paying for health insurance?” Starting in 2014, many Americans will qualify for financial help that could lower monthly health insurance costs. For a free guide to the new health care law, go online or call us. You’ll get straight answers from a Nebraska neighbor. And the simple question, “How can we help?” 888.926.2583 nebraskablue.com 18 Treas. Reg. § 1.166-2(d)(3) See Rev. Proc. 92-84,1992-2 C.B. 489, regarding making this elec- tion. See also, Rev. Rul. 2001-59, 2001-51 I.R.B. 1, where the IRS concluded that a bank that elected this method of accounting for bad debts fell within the conformity rule despite having erroneously charged off certain credit card debts, because the bank’s deduction for worthless debts was not “substantially in excess of the amount warranted by reasonable business judg- ment under applicable regulatory standards.” 19 See Treas. Reg. § 1.585-2(d); Rev. Proc. 2011-14.