P and the members of its affiliated group were engaged in the business of poultry processing. P acquired a poultry processing plant in Sebastopol, Mississippi. P al...
Corporation A, (CA), is, and has been since prior to Date 1, a member of the affiliated group of which TP is the common parent ("the Group). CA issued the non-...
Where a taxpayer sells a security and realizes a loss on the sale, the loss will be deductible provided that the taxpayerhas not engaged in a "wash sale&...
Eastman Chemical Company, (E), and Solutia, Inc., (S), each a company that was spun-off manyyears agofrom another company, announced that they have ente...
By 2004, Holdner Farms, (HF), had grown into a profitable cattle farming operation. Mr. Randal Holdner, (RH), managed HF's day-to-day operations while Mr. William H...
The issue is whether petitioner effected a change of domicile from New York to Tennessee and was therefore not subject to tax as a resident of N.Y. for the period A...
C is a partnership. On December 31, 1999, C entered into a contract with RRE, Inc., (RRE). Under the contract, RRE assigned to C a 74.33 percent interest in a well...
Partnership X, (PSX), acquired, in 1995, 3,300x of shares of common stock of Y Corporation, (Y). Y's stock is listed on the New York Stock Exchange. It has outstand...
In 2008, the petitioner, W, found a house for sale in Rice, Texas ("the Rice house"). On December 18, 2008, W entered into an agreement for deed to purcha...
PPL Corporation, (PPL), in 1997, held a 25 percent stake in SWEB, a utility in the United Kingdom. SWEB was one of 32 U.K. companies subject to a one-time "win...
In May, 2006, the petitioner entered into a contract with a local contractor for an extensive renovation and expansion of his residence. The total contract price fo...
Ralcorp Holdings, (RH), is in the final stages of carrying out its plan to distribute 80 percent of the stock of Post Holdings, (PH), to its shareholders in a trans...
In 1980, Dr. Howard, (DH), incorporated his dental practice. At the time of such incorporation, DH entered into an employment agreement as well as a covenant not to...
On Date 0, C1 entered into a series of transactions with B. The end result was C1 holding "$y" in Series A preferred shares ("the Preferred Stock&quo...
We have received numerous inquiries over the past few days regarding the announcement by Aon Corporation, (AON), of its intention to "move its corporate headqu...
P Corporation, (P), owns all of the stock of D Corporation, (D), and all of the stock of Sub1 and Sub2. Sub1 and Sub2 are engaged in the active conduct of Business...
The taxpayer, Mr. B, purchased an RSA license ("the M4 license") in 1991. Mr. B organized RFB, an 'S' corporation, in 1991. He contributed the M4 license...
MF is the father of LF, ("the Fs"). During the year 1926, they were president and vice-president of KTC, Inc., (KTC). The stock of KTC was closely-held, t...
Comverse Technology, Inc., (CMVT),the beleaguered technology giant, has announced its intention to restructure in a transaction that might best bedescri...
The taxpayer, (TP), engaged in numerous calloption "spread" transactions. TP would buy a call option on a particular stock and sell a call option wi...
The products sold by Procter & Gamble Northeast Asia, (NEA), a corporation incorporated in Singapore whose principal office was located in Kobe, Japan, in Japan...
Sec. 67(e) of the Internal Revenue Code provides for an exception to the "2 percent floor" on miscellaneous itemized deductions (in the case of an individ...
TP, on its Year 1 and Year 2 tax returns, took the position that its interest deductions were limited by Sec. 163(j). The branch of the I.R.S. that administers Larg...
On their joint income tax returns for 2003 and 2004, Mr. and Mrs. Bogus reported, on Schedule C thereof, losses of $77,598 and $85,292, respectively. The I.R.S. dis...
Sears Holding Corporation, (S), isexperiencing well-publicized business issues that will necessitate the shuttering of hundreds of its stores. These business...
Mr. Philip F. Anschutz, (MA), is the sole shareholder of AC, an 'S' corporation. AC was the sole shareholder of TAC. AC elected to treat TAC as a qualified subchapt...
December 30, 2011 - Volume 5 Issue 251Print Report
GP, a foreign corporation, owned all of the stock of FS1, a foreign corporation engaged in the active conduct of Business A. FS1 owned all of the stock of FS2, a fo...
In January, AIG distributed 0.533933 of a warrant with respect to each share of its common stock. Each warrant enables the holder to purchase one share of AIG commo...
Total Gas & Power, (TO),a French corporation, currently owns 60 percent of the stock of SunPower, Inc., (SPWR). TO also owns all of the stock of Total Ene...
December 28, 2011 - Volume 5 Issue 249Print Report
Where a recently-acquired subsidiary is merged with and into the acquiring parent, the merger will qualify as a reorganization under Sec. 368(a)(1)(A) if the stock...
PPL Corporation, (PPL),in 1997, owned an approximate 25 percent stake in a U.K. utility named SWEB. The latter was subjected to a "windfall" tax imp...
December 27, 2011 - Volume 5 Issue 248Print Report
The transactions at issue which generated the professionalfees at issue arose from the filing by X Corporation, (X), of Abbreviated New Drug Applications, (AN...
December 22, 2011 - Volume 5 Issue 246Print Report
Reg. Sec. 1.368-2(l)(1) provides that in a transaction qualifying as a reorganization under Sec. 368(a)(1)(D), a corporation must transfer all or part of its assets...
New York residents are taxed on theirincome from all sources, whereas non-residents, generally speaking, are taxed, in New York, only on their "New York...
On Friday, December 16th, 2011, United Rentals, Inc., (URI), and RSC Holdings, Inc., (RRR), announced that they had entered into a definitive merger agreement under...
December 20, 2011 - Volume 5 Issue 244Print Report
The taxpayer, (PF), is classified as a "private foundation" under Sec. 509(a) of the Internal Revenue Codeand is, therefore, exempt from Federal inc...
Lam Research Corp., (L), and Novellus Systems, Inc., (N), have entered into a definitive agreement pursuant to which L will acquire all of the stock of N from the s...
December 16, 2011 - Volume 5 Issue 242Print Report
During the tax year in issue, the taxpayer, Mr. Sean Hegarty, (SH), was employed full-time by Carteret Mortgage Corporation and his spouse, Ms. Kerry Hegarty, (KH),...
Ordinarily, when a corporation ceases to have a "controlling financial interest" (i.e., a majority voting interest) in another corporation, the parent is...
December 14, 2011 - Volume 5 Issue 240Print Report
TP is a Real Estate Investment Trust, (REIT). TP is the managing general partner of Partnership, (PS). TRSA is a wholly-owned subsidiary of PS. TP rents space on ou...
Martin Marietta Materials, Inc., (MMI), is offering to exchange each of the issued and outstanding shares of common stock of Vulcan Materials Company, (VM), for 0.5...
December 13, 2011 - Volume 5 Issue 239Print Report
AP, based in North Carolina, is one of the leading automotive retailers in the United States. As of January 31, 2010, AP owned 145 dealership franchises at 122 deal...
December 12, 2011 - Volume 5 Issue 238Print Report
The issue is whether amounts included in gross income under Sec. 951(a)(1)(B) constitute qualified dividend income (QDI) under Sec. 1(h)(11). The U.S. Tax...
The issue is whether I Corporation, (I), a Canadian corporation, in computing its income for income tax purposes, is entitled to deduct payments made to its own emp...
In June, 2000, SCV, Inc., (SCV), timely elected to be treated as an 'S' corporation. During the late 1990s, KPMG, the international accounting and auditing behemoth...
P Corporation, (P), is the common parent of an affiliated group that joins in the filing of a consolidated income tax return. P whollyowns Sub 1 and Sub 1 who...
Entergy Corporation, (ETR), and ITC Holdings Corporation, (ITC), have announced a transaction in which the electrictransmission business of ETR will be divest...
On March 4, 1946, the taxpayers, Mr. J and Mr. H, the owners of all of the stock JH, Inc.(JH), signed an agreement with unrelatedP Corporation (P) for t...
Reg. Sec. 1.1001-3 provides rules for determining whether a modification of the terms of a debt instrument results in an exchange for purposes of Reg. Sec....
On Date 1, TP becamea wholly-owned subsidiary of ABC and a member of the ABC consolidated group. ABC, in turn, is wholly-owned by Foreign Parent, (FP). FP rep...
Corporation, (C), provides public refrigerated warehouse space for customers to store perishable products. C provides services typically provided in both the cold a...
November 30, 2011 - Volume 5 Issue 230Print Report
During the years in issue, the petitioners owned 12,133 shares of common stock in SC, Inc., (SC). As of 1960, SC's operations consisted of receiving royalties paid...
November 29, 2011 - Volume 5 Issue 229Print Report
D is a multi-bank holding company. C, a wholly-owned subsidiary of D, is engaged in the business of banking in City X. P is a multi-bank holding company unrelated t...
November 28, 2011 - Volume 5 Issue 228Print Report
Sec. 382 of the Internal Revenue Code imposes a limitation on a corporation's use of net operating loss (NOL) carryovers (and recognized built-in losses)in th...
November 25, 2011 - Volume 5 Issue 227Print Report
B Corporation, (B), owned all of the stock of C Corporation, (C). The latter owned all of the stock of E Corporation, (E), and E owned all of the stock of F Corpora...
In 2000, the plaintiffs invested $655,500 with Bernard L. Madoff Investment Securities, (BLMIS). They invested an additional $40,000 in January, 2003....
November 22, 2011 - Volume 5 Issue 225Print Report
On February 24, 1953, the board of directors of the Hickok Company, (HC), adopted a plan of recapitalization involving the creation of $1 million face amou...
November 21, 2011 - Volume 5 Issue 224Print Report
D2 owns all of the stock of D1 and the latter owns all of the stock of C. Each corporation is engaged in the active conduct of at least one trade or business and ha...
November 18, 2011 - Volume 5 Issue 223Print Report
TP, a C corporation, manufactures food products and sells such products to wholesalers. TP regularly allows certain discounts, or "vendor allowances", to...
A debtor corporation that transfers stock to a creditor in satisfaction of its indebtedness will realize income in an amount equal to the excess of the adjusted iss...
November 17, 2011 - Volume 5 Issue 222Print Report
D, a Country C corporation, has outstanding a single class of common stock. SHA, D's principal shareholder, owns "a%" of the stock. SHB, a U.S. person,&nb...
November 16, 2011 - Volume 5 Issue 221Print Report
P Corporation, (P), was engaged, through its subsidiaries, in Business A and Business B. P was the common parent of an affiliated group of corporations filing a lif...
The S-4 issued with respect to the acquisition by Kinder Morgan, Inc., (KMI) of El Paso Corporation, (EP), indicates that no fewer than three mergers will be undert...
November 14, 2011 - Volume 5 Issue 219Print Report
Washington Imaging Services (WIS) operates medical imaging facilities. WIS generates the medical image and, because it does not have a medical license, contracts fo...
November 11, 2011 - Volume 5 Issue 218Print Report
X Corporation, (X), uses an accrual method of accounting for tax purposes. X pays bonuses to a group of employees pursuant to a program that defines the terms and c...
Marriott International, Inc., (MAR), is in the final stages of distributing to its shareholders the stock of a newly-created subsidiary, Marriott Vacations Worldwid...
November 10, 2011 - Volume 5 Issue 217Print Report
The taxpayer (TP) is taxable under Part II of Subchapter L of the Internal Revenue Code as a non-life insurance company. TP provides retiree medical benefits to its...
Customers bring their products to Multi-Pak Corporation, (MPC), which packages them according to the customers' specifications and returns them as finished goods wh...
Cubist Pharmaceuticals, Inc., (C), has commenced, through its newly-created and wholly-owned subsidiary, (S), a tender offer to acquire all shares of the issued and...
Capital One Financial Corporation, (CO),is a financial and bank holding company. Its principal subsidiaries, COB and FSB, provide consumer lending products an...
Deferred tax assets are required to be established by entities, like Ford Motor Company, (F), which have accumulated"deductible temporary differences&quo...
D2 Corporation, (D2), owns all of the stock of D1 Corporation, (D1). D1 is engaged in the active conduct ofBusiness A. D1 owns all of the stock of C Corporati...
Fund, (F), is a regulated investment company. There are two classes of F shares outstanding: common shares and a class of preferred shares comprised of (i) a single...
Senator Harkin, (D-IA), and Rep. De Fazio, (D-OR), introduced legislation in the Senate and House to place a tax on certain securitiestrading activities. The...
S is treated as a partnership for federal income tax purposes. CC, a Chinese quasi-governmental entity, contributed non-performing loans, (NPLs) to S. CC's basis in...
The "pooling of interests" method of accounting for a business combination has been defunct for 10 years. All such combinations are nowaccounted for...
The taxpayer, (N), became an employee of C Corporation, (C), a domestic 'C' corporation, before 2001. N received options to purchase C stock as compensation for ser...
The Wall Street Journal is reporting that Yahoo!, (Y), is seriously exploring a tax-efficient means of divesting its stakes in Yahoo Japan, (YJ), and Aliba...
Sec. 355(a) provides that, under certain circumstances, a corporation may distribute stock and securities in a corporation it controls (within the meaning of Sec. 3...
Representative Dave Camp, R-MI., the Chairman of the House Ways and Means Committee, has floated a proposal to dramatically reform the manner in which U.S. corporat...
Parent, (P), owned all of the stock of Sub1, (S1), and the latter owned all of themembership interestsof Sub 3, (S3). S3 is a State A, non-profit, non-s...
A hearing is scheduled on October 26th in federal bankruptcy court regarding, among other things, certain tax disputes existing between Ambac Financial Group (AFG)&...
Energy Transfer Partners, L.P., (ETP), and AmeriGas Partners, L.P., (AG), have entered into a complex "Contribution and Redemption" Agreement, the purpose...
UST (who we believe is NYSE Euronext) is a domestic corporation. UST's common stock is publicly-traded. As of Date C, the market capitalization of UST was approxima...
A transaction called for K Corporation, (K), to infuse unrelatedT-T Corporation, (T-T) with cash equal to a 50 percent equity position. At the same time, T-T'...
P is the common parent of an affiliated group of corporations that join in filing a consolidated income tax return. P seeks to carry back the "Year 2 consolida...
Kinder Morgan, Inc., (KMI), and El Paso Corporation, (EP), have announced a definitive agreement whereby KMI will acquire EP in a transaction that will create the f...
In 1998, the taxpayer, (W), an individual and the founding member of Summit Partners,entered into an agreement that undertook a transaction that the parties d...
JP Morgan Chase, JPM,reported third quarter earnings that included a familiar item from the days of the financial crisis. The bank reported "debit valuat...
P is a foreign corporation formed in Country. P owns X, a domestic corporation formed in State A. Y is a public corporation formed in State A. X is engaged in Busin...
Superior Energy Services, (SPN), has entered into a definitive merger agreement with Complete Production Services, (CPX), pursuant to which the former will acquire...
Sec. 6501(e)(1)(A) of the Internal Revenue Code provides that if a taxpayer omits from gross income an amount properly includible therein which is in exces...
Sen. Hagan (D-N.C.) and Sen. McCain (R-Az.) plan to introduce a bill that would provide for the tax-efficient repatriation of earnings accumulated outside of the U....
Oldco (O) will form Newco (H) and the latter will formSubsidiary (S). S will then merge with and into O. In the merger, the shareholders of O will receive sto...
In LTR 201029007, March 12, 2010, a corporation, (D), spun-off the stock of its controlled subsidiary, (C), to its shareholders. The distribution was ruled to be ta...
Taxpayer (TP) intends to elect to be treated as a Real Estate Investment Corporation (REIT). TP will conduct its operations through a "downstream" partner...
Sec. 1(h)(1) of the Internal Revenue Code provides that a taxpayer's "net capital gain" for any taxable year will be subject to a maximum tax rate of 15 p...
An on-line company ("the deal site") solicits customers to purchase vouchers through its Web site. The deal site collects the purchase price of the vouche...
The estimable Professor Briloff and his daughter penned an article for October 3rd edition of Barron's in which they found fault with the manner in which t...
September 30, 2011 - Volume 5 Issue 188Print Report
In 1994, thepetitioner, (L), organized New York Medical, Inc., (NYM). Later, NYM, whose success was attributable to the efforts of L and its employees,e...
Tronox, Inc., (T), which emerged from bankruptcy inearly 2011, recently announced a transformative transaction in which (i) it will acquire the mineral sands...
September 28, 2011 - Volume 5 Issue 187Print Report
The Ohio Constitution permits laws providing for bothexcise and franchise taxes except that no excise tax shall be levied or collected upon the sale...
The Form 10 for Post Holdings, Inc., (PHI), was filed last night and it fills in some of the crucialdetails surrounding the separation of PHI from Ralcorp Hol...
The Buckle, Inc., (BKE), has announced that its board of directors has authorized a $2.25/share special cash dividend to be paid to shareholders of record at the cl...
September 27, 2011 - Volume 5 Issue 186Print Report
Pursuant to an agreement, The Hays Corporation, (HC), transferred 5,800 shares of its previously authorized but unissued shares of voting common stock to the shareh...
Groupon Inc.'s S-1 (Registration Statement) discloses a restatement that is based on the realization, however belatedly, that its relationship with its suppliers is...
September 26, 2011 - Volume 5 Issue 185Print Report
Under Sec. 1058 of the Internal Revenue Code, when a taxpayer transfers securities under an agreement that meets certain requirements, no gain or loss shall be reco...
September 23, 2011 - Volume 5 Issue 184Print Report
D Corporation, (D), which is almost certainly Wendy's Inc., has a single class of voting common stock outstanding which is "widely-held and publicly-traded&quo...
Tyco International, (TI), a company organized under the laws of Switzerland, has announced its intention to undertake a spin-off in which TI will distribute to its...
September 22, 2011 - Volume 5 Issue 183Print Report
In Year 4, TP signed a purchase and sale agreement which provided that, on Date 2, it would sell its stock in various corporations to C1. TP received from C1&...
September 21, 2011 - Volume 5 Issue 182Print Report
Uniroyal, Inc. (U) and Imperial Chemical Industries (ICI) each owned 50 percent of the stock of R Corporation (R). On December 28, 1981,R organized R2 Corpora...
September 20, 2011 - Volume 5 Issue 181Print Report
C is a publicly-traded corporation and the sole general partner of Partnership, (PS). As of Date A, C owned an approximate combined "a%" general and limit...
September 19, 2011 - Volume 5 Issue 180Print Report
Sec. 61 of the Internal Revenue Code defines gross income as "all income from whatever source derived". Sec. 61(a)(1) provides that gross income includes...
FASB, in ASU 2011-08, Testing Goodwill for Impairment , September, 2011, has introduced a subjective test (for goodwill impairment) that will allow entities...
Motorola Mobility, Inc., (MMI), was spun-offby Motorola Solutions, Inc., (M), on January 4, 2011. The spin-off was intended to qualify for tax-free treatment...
September 13, 2011 - Volume 5 Issue 176Print Report
The taxpayer, (TP), was organized as a Massachusetts business trust. It was formedfor the purpose ofinvesting in municipal obligations the interest ...
September 12, 2011 - Volume 5 Issue 175Print Report
Kenneth L. Lay, (L), was chairman of the board of directors and chief executive officer, (CEO),of Enron, Inc., (E), from 1986 until 2001. In February, 2001, L...
September 9, 2011 - Volume 5 Issue 174Print Report
The Financial Accounting Standards Board, (FASB), has issued Accounting Standards Update, (ASU), No. 2011-06 (July, 2011), in which it provides guidanceon how...
September 8, 2011 - Volume 5 Issue 173Print Report
On July 13, 1967, WWB-Cal, a wholly-owned subsidiary of WWB-NY which operated an advertising agency, acquired all of the stock of HSI, which alsooperated an a...
Toshiba Corporation, (TC), recently announced that the company will increase its ownership in Westinghouse Electric, (WE), by acquiring all shares (20 percent of th...
September 7, 2011 - Volume 5 Issue 172Print Report
In general, a six year limitations period (for assessing tax) is triggered when a taxpayer or partnership omits from gross income an amount properly includ...
September 6, 2011 - Volume 5 Issue 171Print Report
On July 8, 1957, CR was incorporated by four "principals", including Mr. M. On July 15, 1957, Mr. M, as nominee for CR, made a written offer to purchase a...
AIG is going to "monetize" its stake in International Lease Finance Corporation, (ILFC), by means of a public offering of the stock of a holding company,...
September 2, 2011 - Volume 5 Issue 170Print Report
The issue is whether the taxpayer, (AS), is entitled to the first-time homebuyer credit as provided in Sec. 36 of the Internal Revenue Code. AS was denied such cred...
September 1, 2011 - Volume 5 Issue 169Print Report
P was a profit-sharing plan, maintained by employer,which was qualified under Sec. 401(a) of the Internal Revenue Code. A credit facility was established with...
Cap Gemini, (CG), bought the information-technologyconsulting business of Ernst & Young, (EY), the international accounting and consulting firm,in 2...
Ach Corporation, (AC), hadoperated a dairy business in connection with the conduct of which substantial net operating losses (NOLs) were amassed. The stock of...
In 2004, Softbank Corporation (SC)announced that its U.S. subsidiary, SBA, had "financed" approximately $1.135 billion from Citibank, N.A. The loan,...
On June 30, 2011, Cablevision Systems Corporation, (CSC), completed the "leveraged" spin-off of AMC Networks, Inc., (AMC). Each of CSC's Class A and Class...
BP ProductsNorth America, Inc., (BP), a subsidiary of BP plc, was involved in exploration and production of oil and gas; transportation of its products throug...
Bank of America Corporation, (BAC),has announced that it reached an agreement to sell 50,000 shares of Cumulative Perpetual Preferred Stock, ("the Prefer...
On December 31, 1981, G Corporation, (G),transferred property to L Corporation, (L), valued at approximately $31.5 million in exchange for five percent of L's...
Approximately 10 years ago, Viacom, (P),had obtained a ruling from the I.R.S. regarding the tax consequences of a proposed split-off of Blockbuster. The rulin...
The taxpayer, (P), a California corporation, stores a digitized catalog of electronic books ("E-Books") available for sale to customers bothinside a...
The acquisition of Motorola Mobility, Inc., (MMI), by Google, Inc., (GOOG), is a seminal transaction for any number of different reasons, including taxation. It is...
Q Corporation, (Q), was a C corporation. Effective with its 1986 tax year, Q made an election to be treated as an 'S' corporation. Its shareholders consented to suc...
An 'S' corporation is, with certain importantexceptions, not subject to income taxes. A C corporation is so subject with respect to its taxable income and its...
The acquisition by Google, Inc.,(G), of the stock of Motorola Mobility, Inc., (MMI), should provide the former with tax benefits that MMI might not have been...
Reg. Sec. 1.1001-1(a) provides that gain or loss is recognized upon an exchange of property for other property differing materially eitherin kind or in ex...
Motorola Mobility Holdings, Inc., (MMI), just 7 1/2 months after being spun-off by Motorola, (MO), has entered into an agreementpursuant towhich Google,...
On or about April 25, 1997, the taxpayer, (JG), purchased an automotive service station, (AAC), located in Staten Island, N.Y. In 1993 or 1994, JG purchased the Old...
Dot Foods, Inc. (DF) sells food products to food service companies in the state of Washington. DF contracts with its wholly-owned subsidiary, DTI, to solicit the sa...
The taxpayer, (P), organized the single-member LLC, (PLLC), on July 13, 2000. P transferred $4.25 million of cash and marketable securities to PLLC on September 15,...
What is the tax outcome when a shareholder of a corporation (T) donates all or a portion of his or her T stock to a charity and, as expected, the charity promptly c...
Ralcorp Holdings, Inc., (RAH), has announced its entry into a definitive agreement to acquire the North American private brand refrigerated dough business of Sara L...
P Corporation, (P), is a foreign corporation which isengaged in Business A. In the United States, P conducts Business A through "U.S. Branch", (USB)...
Motorola Mobility, Inc., (MM), was spun-off from Motorola Solutions, Inc., (MS), on January 4, 2011. The spin-off was tax-free to both MS and the distributee shareh...
Mr. Brams, (B), owned 100 percent of the stock of L Corporation, (L), and T Corporation, (T). He also owned 31.6 percent of the stock of C Corporation, (C). His son...
D Corporation, (D), is engaged in the active conduct ofBusiness A and Business B. Acquiring Corporation, (ACQ), is engaged in the active conduct of Business C...
PAETECH Holding Corp., (P), has entered into an agreement pursuant to which it will be acquired by Windstream Corp., (W). The shareholders of P will receive, in exc...
RG, Inc., (RG), was an 'S' corporation. RG redeemed the stock of Mr. E, a holder of 23 percent of RG's stock, for a price of $255,908. In addition, Mr. E entered in...
Martin A. Sullivan penned an interesting article in this week's edition of Tax Notes in which he analyzes Apple, Inc.'s accounting for income taxes and cri...
IC Y and Z are each licensed and registered as insurance companies. Moreover, IC Y is an "insurance company" for Federal income tax purposes, subject to t...
Hormel Foods Corporation, (H), has its principal place of business and commercial domicile in Minnesota. H is engaged in business bothwithin and without Wisco...
Over the past few days, we have fielded numerous questions from investors regarding the issue of whether Williams (WMB) has, because of the pending spin-off of its...
P Corporation, (P), owns all of the outstanding common and preferred stock of S Corporation, (S). The preferred stock is non-voting preferredstock. S conducts...
The taxpayer, (T), is a domestic corporation which owns100 percentof the stock of each of three foreign corporations, FS1, FS2, and FS3. T's stock is bo...
TP, almost certainly American Tower Corporation, is a wireless and broadcast communication infrastructure company with over "a" communication sites, inclu...
Validus Holdings, Ltd., (V), has offered to acquire the stock of Transatlantic Holdings, Inc., (T) for a combination of stock and cash. This offer, it believes, is...
Mr. A and his son, C, own all of the stock of each of X Corporation, X, and Y Corporation, Y. In 1985, X redeemed all of Mr. A's stock for cash. In order for the re...
On October 31, 1966, Mr. K, (K),entered into a reorganization agreement with A Corporation, (A),to convey all the stock of H Corporation (H), of which K...
Express Scripts, Inc. and Medco Health Solutions, Inc. have announced one of the largest business combinations of the year. The acquisition by Express of the stock...
In some instances,the labels attached to financial instruments do not govern their characterization for tax purposes. Thus, it is well-known that instruments...
It is our view that, because Ralcorp has publicly-announced its intention to spin-off Post and such spin-off is to be carried out for corporate business purposes ot...
Ecolab, Inc., (E), and Nalco Holding Co., (N), have announced a merger that is intended to qualify as a tax-free reorganization under Sec. 368(a)(1)(A) (by reason o...
In July, 1998, Koch Industries, Inc.,(K), and the state of New Mexico entered into a contract regarding the expansion of State Highway 44. The contract was di...
Senator Levin (D-MI) has made the tax treatment of employee stock options one of his pet projects. He has once again introduced a bill, "Ending Excessive Corpo...
Sec. 951(a) of the Internal Revenue Codeprovides that if a foreign corporation is a controlled foreign corporation, (CFC), for an uninterrupted period of 30 d...
Ralcorp Holdings, Inc., (R), hasannounced its intention to spin-off its Post Foods business to shareholders in a transaction expected to qualify as a tax-free...
Where a partnership transforms itself into a corporation for the purpose of facilitating a public offering of ownership interests, the newly-formed corporation, in...
P Corporation, (P), owns all of the stock of S Corporation, (S). P will exchange its shares of S common stock for new shares of S common stock. The number of shares...
Charter Communications, Inc., (CCI), emerged from bankruptcy on November 30, 2009 with an impressive array of tax attributes that will likely keep the company free...
Mr. Robert Bergbauer, (RB), an Ernst & Young, (EY), consulting partner, received in exchange for his CGE&Y membership interest (in connection with the sale...
In Year 1 through Year 2, the taxpayer, (TP), acquired approximately "H" customers through a series of acquisitions ("the acquired customer relations...
Shortly after its formation, First M&F Corporation, (FMF), purchased approximately87 percent of the stock of Merchants and Farmer's Bank, (MFB). Thus, in...
The taxpayer, (TP), was the sole owner of a three-bedroom home in California, ("the cabin"). On his tax return, TP claimed $20,258 of Schedule E expenses...
B Corporation, (B), a U.K. corporation, owns (through a single-member LLC) 100 percent of the stock of D Corporation, (D), a U.S. corporation. B has directly owned...
The taxpayer, (TP), a Ccorporation, was engaged in Business A. During Year 1 through Year 3, it was engaged in "business development". In this perio...
Bank of America, (BAC), announced that it has reached anagreement to "resolve nearly all of the legacy Countrywide-issued first lien residential mortgage...
RBC Bank (USA), (Bank), the company whose stock will soonbe acquired by PNC, is a wholly-owned subsidiary of RBC USA Holdco, (Seller), and the latter is a who...
Retief Goosen, (G), a citizen of South Africa, resided in the United Kingdom at the time he filed his petition. G is a professional golfer. G automatically obtained...
Sears Holdings Corporation, (SHLD), has announced its intention to distribute to its shareholders its holdings in Orchard Supply Hardware Stores Corporation, (OS)....
Schering-Plough, Inc., (SP), now known as Merck, Inc., in the early 1990s, owned two foreign subsidiaries, S and L,which conducted substantial business activi...
The Taxpayer (TP) is a Real Estate Investment Trust (REIT) which acquires, develops, leases, and manages shopping centers. TP, in addition,is a partner in Com...
The taxpayer, ina case entitled Lelia G. Newhall Unitrust v. Commissioner , 105 F.3d 482 (9th Cir. 1997), is a charitable remainder unitrust (CRUT). O...
The Supreme Court was asked to decide whether Janus Capital Management, LLC, (JCM), a mutual fund investment adviser, can be held liable in a private action under S...
The PNC Financial Services Group, Inc., (PNC) announced an agreement to acquire from Royal Bank of Canada, (RY), RBC Bank (USA), the U.S. retail banking subsidiary...
Beginning in 1985, Franklin Savings Corporation, (FSC), and members of its affiliated group, including Franklin Savings Association, (FSA), and other subsidiaries,...
Jayco Corporation, (JC), an 'S' corporation organized under the laws of the state of Indiana, owns all of the stock of Jayco, Inc., (JI), Starcraft RV, Inc., (S), a...
The taxpayer, (TP), is a Real Estate Investment Trust, (REIT). Contractor, (C),is an independent construction services company that has provided various const...
Energy Transfer Equity, L.P., (ETE), and Southern Union Company, (SUG), have announced a definitive merger agreement pursuant to which ETE will be acquiring the sto...
W, a corporation, sued X, a corporation, for damages arising from X's alleged breach of contract with W to "sell it a computer system that would satisfy all of...
LTR 201123030, November 15, 2010, was issued to Cargill in connection with its split-off of Mosaic. The ruling depicts an exceedingly complex transaction that featu...
Where a taxpayer's indebtedness is discharged (or reduced) in the course of a "Title 11 case", the resulting cancellation of indebtedness (COD) income is...
The "merger of equals" of Transatlantic Holdings, Inc., (TH), and Allied World Assurance Company Holdings, AG, (AW), a corporation organized under the law...
Wendy's/Arby's Group, Inc., (WEN) has announced a definitive agreement for the sale of Arby's Restaurant Group, Inc., (ARG), to a buyer, ARGIH, a subsidiary of ARG...
Fund, (F), is a closed-end management company that qualifies as a regulated investment company (RIC) under Sec. 851 of the Internal Revenue Code. F's common shares...
On January 19, 2011, each holder of AIG's common stock (other than the Treasury Department) received from the company, with respect to each share of stock, 0.533933...
TP, a corporation, has elected to be treated as a Real Estate Investment Trust (REIT). TP owns stock of several foreign subsidiaries for whichtaxable REIT sub...
The term, Real Estate Investment Trust, (REIT), means a corporation, trust, or association...which is not closely held . See Sec. 856(a)(6). This is one of...
On October 31, 1990, Mr. Goolsby, (G), purchased the W property for $270,000. The W property is a single-family residence owned by G as an investment property.
Recently, American Tower, Inc., (AMT) received a subpoena from the S.E.C. requesting certain documents from 2007 to the present "including, in particular, docu...
Sec. 61(a)(12) of the Internal Revenue Code provides that income from discharge of indebtedness is includible in gross income. However, such income may be excludibl...
Sec. 4975(e)(7) of the Internal Revenue Codedefines an Employee Stock Ownership Plan (ESOP) as a defined contribution plan which is a stock bonus plan which i...
In 1942, the taxpayer, (G), received a distribution, in the amount of $800,000, from SGS, Inc., (SGS), a corporation in which he owned100 percentof the...
D Corporation, (D), owned all of the stock of each of T Corporation, (T), and C Corporation, (C). On or about October 28, 1981, T merged with and into S1 Corporatio...
Liberty Global, Inc., (LGI), is offering to exchange cash and shares of LGI's Series A and Series C common stock for LGI's 4 1/2 percent convertible subordinated no...
TP, a State corporation, is engaged in Business. It has common stock outstanding which is traded on "a major exchange". SH, a State corporation, owned app...
Taxpayer (TP), a C corporation, was formed by Company 1 and Company 2 ("the companies") to allow them to jointly develop and commercialize inventions. Eac...
Liberty Media, (LM), is in the process of effecting a split-off in which tracking stock ina new entity, known as "Splitco", will be distributed to t...
Fund, (F), is a closed-end management investment company registered under the Investment Company Act of 1940. F qualified as a "regulated investment company&qu...
Mr. A, (A), and his spouse, (B), will donate to a private foundation some of A's units in a closely-held limited liability company, (LLC). A owns "xx" LLC...
Sony will be reporting a net loss for the fiscal year ended March 31, 2011, it revealed recently, primarily because of a massive charge of approximately 360 billion...
Liberty Media, (LM),is poised to effect a split-off in connection with which the stock of "Splitco" will be distributed to the holders of LCAPA, LCA...
Although net capital gains are generallytaxed at rates not exceeding 15 percent (at least through the end of 2012), a certain variety of capital gain income&n...
In the 1990s, Wellpoint, Inc.'s predecessor (Anthem, Inc.)acquired three companies. After the acquisitions, the attorneys general of the three states of the a...
D Corporation, D, an 'S' corporation, is engaged in the active conduct of Business 1. D owns all of the stock of C Corporation, C, and C owns all of the stock of CS...
Joy Global, Inc., (JGI), and Rowan Companies, Inc., (RCI), have entered into an agreement pursuant to which JG will purchase the stock of RCI's manufacturing subsid...
The I.R.S., ever vigilant regarding schemes to repatriate foreign earnings tax-efficiently, has issued regulations which render ineffective a technique that had bee...
The Ervin brothers realized substantial capital gains from the sale of their cable TV business and sought losses to shelter those gains from taxation. They entered...
Open-air parking structures typically provide multi-level parking accessed by a ramp system. These structures typically have hydraulic elevators, internal stairwell...
H&Q Life Sciences Investors, a "closed end fund", is offering to purchase for cash up to 35 percent of its outstanding stock at a price equal to 98 pe...
The taxpayer, TP, an employee of an investment counseling firm for some15 years, was diagnosed with multiple sclerosis, MS, in 1996. In 2002, symptoms from th...
TP intends to qualify as a Real Estate Investment Trust, (REIT). TP's shares of common stock will not be listed on a securities exchange. Stockholders of TP will,&n...
Hertz Global Holdings, Inc., (HGH), has substantiallyincreased its offer to acquire Dollar Thrifty Automotive Group, Inc., (DTAG). Whether this latest offer w...
The taxpayer, (TP), is a Real Estate Investment Trust (REIT). TP owns more than "a%" of the outstanding units of LP1, a limited partnership. LP1, in turn,...
The Vainisis own a holding company, HC,that owns all of the stock of First Forest Park National Bank and Trust Company, FF. In 1997, HC became an 'S' corporat...
Oak Park, Inc., (OP), was organized on November 8, 1956 for the purpose of conducting a hospital business. A hospital business was actively conducted by OP, in Stoc...
On Date 1, X Corporation, (X), and one of its subsidiaries, (XS), commenced voluntary cases under Chapter 11 of the Bankruptcy Code. On Date 2, the debtors filed a...
Johnson & Johnson, (JNJ), has entered into a plan and agreement for the acquisition of Synthes, Inc., (SY). The majority of the consideration to be paid by JNJ...
On April 16, 1948, the taxpayer, (FB), transferred 500 shares of stock she owned in WP, Inc. to her mother-in-law who paid, with her own funds, $7,688 for the block...
Treasury Inflation-Protected Securities, (TIPS), are securities issued by the Department of the Treasury. The principal amount is adjusted for any inflation or defl...
P Corporation, (P), owns all of the stock of S1 Corporation, (S1). The latter owns, through a series of LLCs, the stock of S2 Corporation, (S2). S2, in turn, owns a...
The taxpayer, (KS), was the president and sole owner of SM, Inc., (SMI)., a corporation which had no stock outstanding which was readily tradable on an established...
Energy East Corporation, (EE), acquired CMPG, CMP's parent, on September 1, 2000. On July 1, 2002, EE acquired RG&E's parent, RGSEG. CMP and RG&E each survi...
Mr. I, (I), owned all of the stock of H Corporation, (H), and the latter owned all of the stock of S1 Corporation, (S1), and S2 Corporation, (S2). I, S1, and S2 eac...
Recently, the number of observers calling for the separation of Caremark from CVS--the companies were joined in a merger that was completed at the end of March, 200...
Corporation A, (A), is the sole member of "Entity B", (EB), a single-member Limited Liability Company, (LLC),that is disregarded (as an entity separ...
Current accounting guidance requires an entity to test goodwill for impairment on a least an annual basis. The first step of the impairment test compa...
D1 Corporation, (D1), owns all of the stock of D2 Corporation, (D2). The latter owns a portion of the Class A stock of Controlled Corporation, (C). C was formerly a...
On March 19, 2002, the taxpayer, Mr. Thompson (T), formed MA, LLC (LLC)under the laws of the State of Texas. T directly held a 99 percent interest inLLC...
NASDAQ OMX, (NDAQ), and Intercontinental Exchange, (ICE), have filed their merger proposal pursuant to which the companies seek to carve up the assets of NYSE Euron...
On Date 2, Corporation A, (CA), entered into a Sub-License Agreement with Corporation B, (CB), that provided CA with patents, know-how, and the rights to develop an...
Silgan Holdings, Inc., (S), has entered into a merger agreement pursuant to which it will acquire Graham Packaging Company, Inc., (G). The merger is structured as a...
D was an unincorporated division of C Corporation. In 1975, D acquired a license from unrelated T Corporation to sell, and later manufacture and sell, robots.
Ms. A, (MA), participated in Plan X, a qualified retirement plan, sponsored by her employer,Company 1, (C1). A left C1's employ and found a job with Company 2...
Onex Corporation (O) was formed in 1999 for the purposeof designing and selling integrated circuits. Its efforts yielded the "OMNI chip". The produc...
Level 3 Communications, Inc., (L), has reached an agreement to acquire Global Crossing, Ltd., (G), in what is advertised as "a tax-free stock for stock exchang...
Sec. 263(a)(1) of the Internal Revenue Code and Reg. Sec. 1.263(a)-2(a) of the Income Tax Regulations provide that no deduction shall be allowed for any amount paid...
A corporation, (X), has outstanding both common stock and convertible preferred stock. A distribution is made with respect to the common stock and, to prevent dilut...
G, an individual, was an officer of AU Corporation, (AU), which marketed food products. AU made an initial public offering of 14.5 million registered shares of comm...
Trawick Construction Company, Inc., (T), was a closely-held Florida 'S' corporation. However, for Georgia state income tax purposes, T was a 'C' corporation which p...
For at least the third time, Procter & Gamble Company, (PG), has chosen a tax-efficient method for disposing of a non-core business: the method is popularly&nbs...
Under the rules of the state of Virginia, any person rehabilitating an historic property can seek state approval and certification of the project. Once the property...
P Corporation, (P), owned all of the stock of Corporation A, (CA). The latter owned all of the stock of S Corporation, (S), a controlled foreign corporation. CA als...
In 1994, Mr. Todd Dagres, (TD), met with Mr. William Schrader, (WS), who had co-founded PSINet, (PN). Because TD "made a favorable impression on WS", the...
X Corporation, (X), made an election to be treated as an 'S' corporation, effective Date 1. Y Corporation, (Y), is wholly-owned by X. Y was formed in Year 1 and mad...
M Corporation, (M), sponsors Plan X, a defined contribution plan. Plan X is qualified under Sec. 401(a) of the Internal Revenue Code and its accompanyingtrust...
Corporation provided funding to Bank to finance loans to Borrowers. Borrowers used the proceeds of the loans to finance Assets, and the Assets secured Borrowers' ob...
Surprisingly, what has clearly become the most heavily debated (and litigated) taxation issue is whether a basis overstatement constitutes an "omission" f...
The Internal Revenue Code provides for numerous elections that taxpayers can voluntarily make with respect to the myriad of items that go into the calculation of on...
During 2005, the taxable year in issue, the taxpayer, (CA), an individual, owned shares of stock in Castle Village Owners Corporation, (CV), a cooperative housing c...
Corporation, (C), is a State A corporation the stock of which is owned by Shareholder 1, (SH1), Shareholder 2, (SH2), and minority shareholders, (M). SH1 owns "...
Citigroup, Inc., (C), announced a 1-for-10 "reverse" stock split, (RSS), of its common stock. The RSS will be effective after the close of trading on May...
The taxpayer (TP), a domestic corporation, elected to be an 'S' corporation effective Date 1. TP's seventh year since electing to be an 'S' corporation ended on Dat...
P Corporation (P) directlyowned all of the stock of T Corporation (T) and all of the stock of S Corporation (S). S, in turn, directlyowned all of the st...
Universal American Corporation, (UAM), has agreed to sell its Medicare Part D business to CVS Caremark, (CVS). In lieu of an outright sale (and distribution of the...
Where a "loss corporation" (a corporation with net operating loss (NOL) carryovers or with net unrealized built-in losses) experiences an ownership ch...
On March 28, 1991, Vitro International, Inc., (VI), a wholly-owned U.S. subsidiary of Vitro, S.A., (VSA), a Mexican corporation, issued senior notes, in order to fi...
The taxpayer, (P), is a financial adviser. He began his careerat D.A. Davidson, (D). He left D, where he was the firm's "top producer", to work at M...
Sanofi-Aventis, (SA), has offered some guidance on how to account, for tax purposes, for the CVRs it will issue in connection with its acquisition of the stock of G...
During 2001-2003, the taxpayer, (N), owned all of the stockin M Corporation, (M), an 'S' corporation. M incurred losses that were deducted by N on his income...
American International Group, Inc., (AIG), has joined the long list of "loss corporations" which have taken affirmative steps, specifically the adoption o...
Microsoft Corporation, (MSFT), is organized under the laws of the State of Washington. For California tax purposes, MSFT and all of its domestic and foreign subsidi...
On November 5, 1981, Home Savings of America, FSB, (HS), submitted a proposal to acquire Southern Federal S&L, (S), Hamiltonian Federal S&L, (H), and Securi...
New Jersey's Business Tax Reform Act, (BTRA), enacted July 2, 2002, made numerous amendments and supplements to the Corporation Business Tax Act, (CBTA). Those amen...
On October 31, 2001, CMS Enterprises Company (CMS) and Marathon E.G. Holding Limited (M) executed a stock purchase agreement (SPA)in which M bought all the st...
In most cases, a spin-off (or split-off) is preceded by a transfer of assets from the distributing corporation (T) to the corporation (C)whose stock and secur...
Liberty Media, (LM), in its recently-filed Form 10-K, has disclosed a new tax benefit that should enable to avoid over $450 million in federal incometaxes it...
P Corporation, (P), is a savings and loan holding company. S, P's subsidiary, operated as a federally-chartered savings bank and previously was B, which was acquire...
On Schedule A of her Federal income tax returns for the years 2005-2008, the taxpayer, (AH), claimed deductions for "unreimbursed business expenses" of $2...
X is a limited partnership the interests in which are either (i)traded on an established securities market or (ii)readily tradable on a secondary market...
The taxpayers, who had participated in a "Son of Boss" tax shelter, argue that an overstatement of basis does not constitute an omission from gross income...
P Corporation, (P), owned 100 percent of the stock of D Corporation, (D). D, in turn, owned all of the stock of C Corporation, (C). D will distribute its C stock to...
Foreign Parent, (FP), owned all of the stock of United States Parent, (USP), and the latter owned all of the stock of Distributing Corporation, (D). D, in turn, own...
Sanofi-aventis, (SNY), and Genzyme Corporation, (GENZ), at long last, announced a defintive agreement under which SNY will acquire the stock of GENZ for $74.00 per...
TP is a bank holding company. T is also a bank holding company and wholly-owns S, a bank. S is an accrual method taxpayer, does not use the "reserve method&quo...
Deutsche Boerse AG, (DBI), and NYSE Euronext, (NYX), announced that they have entered into a business combination agreement following the receipt of approval...
Lamtec Corporation, (LC), manufactures its products at its facility in New Jersey and has no permanent facilities, office, address, phone number, or employees in th...
Kindred Healthcare, Inc., (K), and RehabCare Group, Inc., (R), have announced the adoption of a merger agreement in which R will be merged with and into K. The merg...
The Redlarks (Rs) operated an unincorporated business. When the I.R.S. examined the Rs' Federal income tax returns, it determined that "extensive adjustments&q...
Sara Lee Corporation, (SLE), has terminated negotiations with respect to the sale of the company and has decided, instead, to pursue a restructuring plan the center...
The taxpayers argue that the six-year statute of limitations is inapplicable because HC's overstated basis did not constitute an omission from gross income. The tax...
In a "Son of Boss" transaction, an individual uses a short sale mechanism to artificially increase his basis in a partnership interest prior to selling th...
Retail Ventures, Inc., (RVI), isa holding company whose principal asset is a 62 percent stake in DSW, Inc., (DSW). RVI's largest shareholder is Schottenstein...
The petitioners, Mr. and Mrs. Barker, were Connecticut domiciliaries during the years in issue. Mr. Barker was an investment manager for Neuberger Berman in New Yor...
Trust, (T),entered into three "variable forward contracts" with Bank, (B), with respect to shares of common stock owned by T. Upon executing the for...
Ensco plc, (ESV), and Pride International, Inc., (PDE), have announced the signing ofa merger agreement pursuant to which the latter will become an indirect,...
FSI Corporation, (FSI), owned, directly and indirectly, 100 percent of the stock of Holdings III Corporation, (HIII), Holdings II Corporation, (HII), Allied Corpora...
B Corporation, (B), a health insurance entity which wasformerly exempt from taxes, became a taxable entity on January 1, 1987. In that regard, B became subjec...
Newmont Mining Corporation, (NEM), and Frontier Gold Gold, Inc., a Canadian corporation, (FRG), have entered into an agreement pursuant to which NEM will acquire al...
D Corporation, (D), a C corporation,was engaged in the active conduct of each of Business A and Business B. 50 percent of D's single class ofstock was o...
Alpha Natural Resources, Inc., (ANR), has reached an agreement with Massey Energy Company, (MEE), with respect to the acquisition by the former of all of the latter...
Recently, severalnotable spin-off transactions have been announced by companies as diverse as Fortune Brands, Sara Lee, and IT&T. Questions have arisen re...
X is a securities broker-dealer and investment adviser. X offers IRAs and Roth IRAs to its clients. X was approved as a "non-bank custodian for IRAs.
<...
T Corporation, (T), is a foreign corporation. Its stock is owned by X Corporation, (X), and Y Corporation, (Y), each of which is a foreign corporation. The stock of...
Smurfit Stone Container Corp., (SSC), only recently emerged from bankruptcy, has agreed to be acquired by Rock-Tenn Co., (RT), in a transaction which will be struct...
Illinois, in addition to imposing substantial increases in its personal and corporateincome tax rates, is also taking steps to require that out-of-state retai...
General Electric, (GE), has consistently enjoyed a rather low effective tax rate. By the company's own admission, this phenomenon can be traced to the fact that a s...
A distribution by a corporation in redemption of its stock will qualify, under Sec. 302(a), as a distribution "in part in full payment in exchange for the stoc...
Mr. Daniel L. Gordon (G) was hired, in 1998, by Merrill Lynch (ML), to start an energy trading division called GEM. In 2000, G became president of GEM....
An issue that reached the Supreme Court is whether doctors who serve as medical residents are properly viewed as students whose service Congress hase...
The "issue price" of a debt instrument is determined under Sec. 1273(b) or Sec. 1274 of the Internal Revenue Code. The issue price has important tax conse...
Cargill, (CG),a privately-held corporation, owns 64 percent of the stock of Mosaic Company, (MOS). CG, in order to assuage its shareholders' desire for liquid...
To qualify as a Real Estate Investment Trust (REIT), and thussecure the ability to deduct from taxable income dividends paid to shareholders, at least 95 perc...
On July 31, 1971, in accordance with an agreement and plan of reorganization with M Corporation, (M), and the shareholders of M, L Corporation, (L), acquired all of...
P Corporation, (P), is the common parent of a consolidated group engaged in Business A. On Date 1, P and Entity X, a disregarded entity of Sub Y, filed for bankrupt...
AT&T, (T), following the lead of Honeywell, has announced a dramatic change in the manner in which it will account for certain aspects of its pension and post-r...
In Month 1, the taxpayer, (PS), a domestic partnership, entered into an agreement to sell its business and certain assets ("the acquired assets") to B. Th...
It is extremely unusual for the I.R.S. to actually issue an adverse ruling to a taxpayer who requested a private letter ruling regarding the tax consequences of a p...
T Corporation (T) issued, at face value, $X million of "a%" convertible debentures. At the option of the holder, each $Y of debt principal was convertible...
On December 1, 2005, AI took out a $103,500 loan for the purchase of property in Springfield, Massachusetts, secured by a mortgage to the lender, RM. Several days l...
American International Group, Inc., (AIG), announced that its Board of Directors has conditionally declared a distribution of approximately 75 million warrants to p...
CLEO, a wholly-owned subsidiary of Clark Equipment Company (CE), issued $15 million principal amount of debentures on March 1, 1966. The debentures, known as "...
Programs that make stock of foreign issuers available in domestic markets are known as "ADR programs". In an ADR program, an issuer's stock is placed with...
In order tospur capital spending, the tax code has, for the past several years, allowed for enhanced depreciation deductions with respect to certain property,...
In KFC Corporation v. Iowa Department of Revenue , No. 09-1032 (Sup. Ct. IA 2010), the Iowa Supreme Court was called upon to decide whether the State of Iow...
Bank of America, (BAC),announced that it has reached an agreement with each of Freddie Mac and Fannie Mae with respect to repurchase claims involving resident...
The taxpayers own a controlling interest in a number of "pass-through" entities that eachown and operate rental properties. In particular, the taxpa...
Rovi Corporation, (R), has entered into a plan and agreement with Sonic Solutions, (SS), pursuant to which the former will acquire the latter in exchangefor a...
Massachusetts law imposes a corporate excise tax on bothforeign and domestic corporations which areengaged in business in the Commonwealth. In addition,...
December 31, 2010 - Volume 4 Issue 254Print Report
A trading practice governing failed deliveries of Treasury securities was published in 2008 by the Trading Market Practices Group (TMPG) and the Securities Industry...
December 30, 2010 - Volume 4 Issue 253Print Report
On September 16, 1992, 21st Securities, acting on behalf of Compaq Computer, (CC), purchased 10 million Royal Dutch Shell ADRs from the "designated seller"...
December 29, 2010 - Volume 4 Issue 252Print Report
F Corporation (F) is a State A corporation registered as a business development company (BDC)under the Investment Company Act of 1940. F is a regulated invest...
December 28, 2010 - Volume 4 Issue 251Print Report
The taxpayer (TP) is a partnership which owns interests in several Limited Liability Companies (LLCs) each of which is treated as a "disregarded entity" f...
December 27, 2010 - Volume 4 Issue 250Print Report
The Form F-4 filed by Alcon, Inc., (AL),in connection with its merger with and into Novartis A.G., (NOV), discusses the tax consequences of the transaction, i...
December 23, 2010 - Volume 4 Issue 249Print Report
The petitioners, in Rice v. Commissioner , T.C. Memo. 2009-142, lived and worked in Texas where they have a business that designs and administers 401(k) pla...
Bank of Montreal, BMO, has agreed to acquire the properties of Marshall & Ilsley Corp., MI, in a transaction that the parties intend will qualify, for U.S. tax...
December 22, 2010 - Volume 4 Issue 248Print Report
The notorious "son-of-boss" tax shelter has been given a uniformlyrude reception by the courts that have considered its efficacy. In the latest taxp...
Certain recentActs of Congress, overhauling the nation's health care system, among other things,impose an annual fee on the pharmaceutical manufacturing...
December 20, 2010 - Volume 4 Issue 246Print Report
Mr. C (C), owned 41 percent of the stock of PL Corporation (PL) and Mr. J (J) owned 36 percent thereof. Upon the creation of PL, C had owned 51 percent of its stock...
Novartis AG, (N), owns approximately 77 percent of the stock of Alcon, Inc., (AL). Apparently, N acquired its stake in AL in two tranches: 25 percent of such stock...
December 16, 2010 - Volume 4 Issue 244Print Report
The "Plan" in question is an unfunded contractual agreement between the petitioner and his former employer under which the petitioner provided services to...
December 15, 2010 - Volume 4 Issue 243Print Report
Corporation A (A) owns all of the stock of U.S. Subsidiary (US). US recently acquired, for cash, all of the stock of Target Corporation (T), adomestic corpora...
December 14, 2010 - Volume 4 Issue 242Print Report
When a corporation completelyliquidates, and distributes its assets (subject to its liabilities)to its shareholders in complete cancellation and redempt...
Tenet Healthcare Corporation, THC, received a proposal from Community Health Systems, Inc., CYH, to acquire all of THC's stock for $6.00 per share. The purchase pri...
December 13, 2010 - Volume 4 Issue 241Print Report
Where a "loss corporation" experiences an ownership change, within the meaning of Sec. 382(g) of the Internal Revenue Code, the amount of taxable income f...
December 10, 2010 - Volume 4 Issue 240Print Report
Fortune Brands, Inc., (FO), has announced that its Board of Directors has approved a planpursuant towhich its three consumer businesses--distilled spiri...
P Corporation (P) owned 100 percent of the stock of T Corporation (T). T is a software development corporation. T had developed a proprietary software technology ca...
AGL Resources, Inc., (AGL), and Nicor, Inc., (N), have announced a merger whichwill, the agreement reveals,be structured with the intention of qualifyin...
In order for an acquisitive transaction to qualify as a reorganization, it must satisfy the continuity of interest requirement. This is true, moreover, even when th...
Mr. A (A) owns 100 percent of the stock of each of W Corporation (W) and X Corporation (X). A is the debtor on three notes: Y Corporation (Y) holds two of the notes...
Sycamore Networks, Inc., (SCMR), has announced a substantial special dividend the timing of which suggests a keen awareness that the concept of qualified divide...
In a case entitled Neil v. Zell et al , _F.Supp.2d_ (N.D. Ill. 2010), the transaction at issue is the Tribune Corporation's ESOP's purchase from Tribune (TR...
Liberty Media Corporation, LM, announced that it has exchanged its entire equity stake in IAC for a combination of operating assets and cash "in a transaction...
Sec. 179(a) of the Internal Revenue Code provides that a taxpayer may elect to treat the cost of "Sec. 179 property", for the taxable year in whichs...
Partnership interests were marketed to investors who were interested in (i) rehabilitating historic structures in Virginia and (ii) earning State rehabilitation tax...
On May 30, 1986, Mrs. McGowen (M) purchased a single-premium variable life insurance policy, on her own life, for $500,000. The death benefits with respect to the p...
November 30, 2010 - Volume 4 Issue 232Print Report
We have found, through the years, that one of the most elusive concepts contained in the Internal Revenue Code is the notion of "research". Nevertheless,...
Scotiabank, (S), has agreed to acquire the stock in Dundee Wealth, Inc., (DWI), which it does not already own. S currently owns 18 percent of the stock of DWI; Dund...
Loral Space & Communications, Inc., (LOR), owns 64 percent, by value,of the stock of Telesat Holdco, (TH). Such stock represents only 33 1/3 percent of th...
November 29, 2010 - Volume 4 Issue 231Print Report
An "antique" wash sale case produced an exceedingly taxpayer friendly result and the question has recentlyarisen whether the decision can still be r...
November 26, 2010 - Volume 4 Issue 230Print Report
The rules for calculating the all-important and closelyfollowed earnings per share (EPS) figuresare found in Statement of Financial Accounting Standards...
November 24, 2010 - Volume 4 Issue 229Print Report
A so-called"basis bump" transaction was designed to provide a U.S. taxpayer with a stepped-up basis in assets (a basis in excess of the value of suc...
November 23, 2010 - Volume 4 Issue 228Print Report
Washington Mutual, Inc., (WMI) is poised to emerge from bankruptcy. Will it emerge with taxattributes that will enable it to shelter income it hopes to earn i...
Limited Brands, Inc., (LTD), has joined the growingparade of companies who are remitting special dividends in advance of next year's scheduled increase in tax...
Cablevision Systems Corporation, CVC, recently announced its intention to pursue a "leveraged spin-off" of its Rainbow Holdings LLC business to its shareh...
Omnicare, Inc., (O), is offering to purchase up to $525 million in aggregate principal amount of its 3.25% convertible subordinated debentures, due 2035. The amount...
November 22, 2010 - Volume 4 Issue 227Print Report
On October 1, 1974, Mr. Maxwell J.Estroff (E) sold 7,486 shares of FR stock, over-the-counter, to Mr. Fink (F), his "close personal friend and business a...
November 19, 2010 - Volume 4 Issue 226Print Report
When the Fossetts (F) bought a car in 2001, they entered into a "purchase money security agreement" which was eventuallyassigned to Amtrust Bank (AB...
Honeywell, Inc., (HON), announced that it is changing its policy for recognizing pension expense from its current accounting that amortizes deferred gains and losse...
November 18, 2010 - Volume 4 Issue 225Print Report
In January of Year 1, the taxpayer, (TP), directed its broker to borrow 100 shares of XYZ Corporation (XYZ) stock and sell the shares in the market. Thus, TP execut...
Tanger Factory Outlet Centers, Inc., (SKT), recently announced that it will call for redemption all of its Class C Preferred Shares. The redemption date is set for...
November 17, 2010 - Volume 4 Issue 224Print Report
A professionalsports club (C) employs "Player" (P). In Year T, P was transferred to C. Prior to that, P had been employed by A. P had entered into a...
November 15, 2010 - Volume 4 Issue 222Print Report
Mr. A entered into an agreement to purchase the assets of CC Corporation (CC). Mr. A assigned the purchase rights to a corporation (WCM) of which he was the sole sh...
The National Commission on Fiscal Responsibility and Recovery has come up with some provocative recommendations for reforming the U.S. tax code. One of the alternat...
November 11, 2010 - Volume 4 Issue 220Print Report
D Corporation, (D), is a publicly-traded corporation that conducts a pharmaceutical business. C Corporation, (C), a wholly-owned subsidiary of D, conducts a cosmeti...
Ambac Financial Group, Inc., (ABK), has filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code. The company will continue to operate its busi...
November 10, 2010 - Volume 4 Issue 219Print Report
Sec. 1042(a) of the Internal Revenue Code provides that if a taxpayer elects the "application of this section" with respect to any sale of qualified s...
Chevron Corporation, (CVX), and Atlas Energy, Inc., (ATLS), announced today that CVX would acquire ATLS for cash of $3.2 billion and the assumption of net debt in t...
In what is becoming a very pleasant annual ritual, Wynn Resorts, Ltd., (WYNN), recently announced a "special distribution" amounting, this time, to some $...
X is a publicly-tradedpartnership formed to invest in fixed income assets held by structured finance entities which are commonly known as "CDO" issu...
In a recently-decided court case, the issue was the constitutionality of a recent amendment to the New York Tax Law intended to force on-line retailers to collect a...
Sec. 305(a) of the Internal Revenue Codeprovides that gross income does not include distributions of stock of the distributing corporation with respect to tha...
Sec. 421(a) of the Internal Revenue Code provides that if a share of stock is transferred to an individual in a transfer "in respect of which the requirements...
The shareholders of an 'S' corporation are permitted to record their pro-ratashares of the corporation's losses on their personal income tax returns and, in t...
M&T Bank Corporation, (MTB), has entered into a definitive agreement to acquire the stock of Wilmington Trust Corporation, (WL). The acquisition will be effecte...
On August 12, 2005, the taxpayer (TP) purchased a Ford F-350 pickup truck for $40,210.65. On October 28, 2005, TP attended a gathering at a friend's home. After ret...
Weyerhaeuser Company, (WY), recentlyreported third quarter earnings of $1.116 billion. However, substantially all of those earnings can be traced to an "...
The taxpayers (TP) were partners in an agricultural partnership that generated large "farming" expense deductions for its partners. After an audit and in...
The Goldman Sachs Group, Inc., (GS), recently issued senior notes that, while callable beginning five years after issuance, have a maturity date that is some5...
In 1995, Mr. K incorporated his consulting business as a C corporation, KCG. K did not have an employment agreement with KCG nor did he have a non-competit...
In or before 2000, the petitioner, MSI, issued 5,197,176 shares of Series A preferred stock and 231,389 shares of Series B preferred stock to "the Series A inv...
The taxpayer (TP) is organized as an umbrella partnership REIT(an UPREIT) which conducts its operations through a subsidiary operating partnership, OP....
The Progressive Corporation, (PGR), pays annual dividends to its shareholders the amount of which is directly tied to the corporation's performance. The dividend is...
A Real Estate Investment Trust (REIT) owned "a%" of a limited partnership (LP). Unrelated parties owned the remaining interests therein.LP, in turn,...
During calendar year 2009, the taxpayer, TP, owned all of the stock of S Corporation, S, a pulp mill located in the United States that uses the "semi-chemical&...
The taxpayer (TP)is a regulated electric utility. TP's subsidiary, SA, is taking steps to obtain approvals that would permit the construction andoperati...
In June, 1946, T Corporation (T) acquired substantially all of the assets of PG Corporation (PG). 4,920 shares of T's voting common stock were issued to PG in excha...
The taxpayer (S-C) earned a bachelor of science degree in nursing (BSN) from New York University in 1984. She became a registered nurse (RN)and for the next 2...
St. Jude Medical, STJ, and AGA Medical Holdings, AGAM, have announced an agreement pursuant to which STJ will acquirethe stock of AGAM. The consideration to b...
On May 24, 2010, Sun Healthcare Group, Inc.,(SH), announced its intention to restructure its business bydividing its real estate assets and its operatin...
The House of Representatives recently passed a bill, "The Regulated Investment Company Modernization Act of 2010", H.R. 4337, which is strongly supported...
On Date 1, Seller, (S), filed bankruptcy petitions under Chapter 11 of the Bankruptcy Code. On Date 2, Taxpayer, (TP), filed with the court an "asset purchase...
Well-publicized problems haveoccurred with respect to certain imported drywallinstalled in homes between 2001 and 2008. Homeowners have reported blacken...
It is entirely possible that the concept of qualified dividend income (QDI) will expire at the close of the year. Under current law, QDI is analogized to c...
Spirit Airlines, Inc., SA, is an "ultra low-cost, low-fare, airline" based in Fort Lauderdale, Florida. It is presently owned by Oaktree and Indigo Partne...
AF Corporation (AF) is a regulated investment company (RIC) as is TF Corporation (TF). AF invests primarily in common stocks and other equity securities of "Y&...
Coca-Cola Enterprises, OldCCE, has completed its restructuring. The transaction involved a distribution of the stock of New CCE (the assets of which are compr...
The Chinese government owned all of the stock of GITIC Corporation (GITIC) and GITIC owned all of the stock of GXE Corporation (GXE) and owned50 percent of th...
Cancellation of indebtedness income ("COD income") is ordinarily included in gross income. See Sec. 61(a)(12). However, if the COD income is realized in c...
On January 16, 2009, the I.R.S. concluded that a taxpayer (TP), a corporation, may not take a deduction, under Sec. 162, for compensation paid to an employee (E) be...
American International Group, Inc., AIG, announced a comprehensive recapitalization plan today the principal features of which, from our point of view, are--...
September 30, 2010 - Volume 4 Issue 190Print Report
For at least five years prior to October 15, 1955, Boiler Corporation (B) had been actively engaged in (i) the boiler business, (ii) the fabrication business, and (...
It is unusual for a shareholder of a target corporation who receives solely "paper" (stock and securities) of the acquiring corporation to be taxed on the...
Southwest Airlines, LUV, has announced its intention to acquire the properties ofAirTran Holdings, Inc., AAI, the parent of AirTran Airways, in a two-step tra...
September 28, 2010 - Volume 4 Issue 188Print Report
B was a closely-held corporation activelyengaged in the business of selling and servicing automobiles under a franchise granted by General Motors Corporation...
September 27, 2010 - Volume 4 Issue 187Print Report
X Corporation (X) manufactured Product A from 1996 through 2004 and manufactured Product B from 2005 through 2008. Product B is the "next generation" of P...
Certain corporations with audited financial statements must file Schedule UTP (Uncertain Tax Positions) beginning with the 2010 tax year. In Announcement 2010-75, t...
September 24, 2010 - Volume 4 Issue 186Print Report
The taxpayer (TP) is a family limited partnership. The original assets of TP were shares of stock in A Corporation (A). Later, B Corporation (B), a publicly-held co...
September 23, 2010 - Volume 4 Issue 185Print Report
Reg. Sec. 1.61-9(c) provides that "...when stock is sold after the declaration of a dividend, and after the date as of which the seller becomes entitled to the...
September 22, 2010 - Volume 4 Issue 184Print Report
One of the most litigated areas of the tax law is thequestion of whether a financial instrument, particularly one issued by a closely-held corporation, is ind...
Royal Dutch Shell plc, RDS, has announced the introduction of a "Scrip Dividend Program". A scrip dividend program is a program that allows shareholders t...
September 21, 2010 - Volume 4 Issue 183Print Report
Mr. Langley (L) owned all of the stock of Bishop Group, Inc. (BG). L sought to sell his stock in BG. The most likely acquirer, Midcoast (M), preferred to purchase B...
Cardinal Health, CH, on August 31, 2009, distributed to its shareholders 81 percent of the stock of CareFusion, CF, the entity CH formed to conduct its clinical and...
September 20, 2010 - Volume 4 Issue 182Print Report
Mr. Wetzler (W) began working at the Illinois C.P.A. Society in 1984 and participated in theSociety's Retirement Income Plan (the Plan)throughout his em...
September 17, 2010 - Volume 4 Issue 181Print Report
The taxpayer (TP) is a Real Estate Investment Trust (REIT). Through its interest in a limited partnership (LP), TP owns a portfolio of rental real estate.
<...
September 16, 2010 - Volume 4 Issue 180Print Report
One of the most enduring, and intractable, tax disputes is the status of a financial instrument as debt or equity. In most cases, it is preferable that the instrume...
September 15, 2010 - Volume 4 Issue 179Print Report
The state of Florida's "homestead tax exemption" enables taxpayers who maintain a permanent residence in Florida to substantially reduce their property ta...
Sec. 1409 of the Health Care and Education Reconciliation Act of 2010, Public Law No. 111-152, among many other things, added Sec. 7701(o) to the Internal Revenue C...
September 14, 2010 - Volume 4 Issue 178Print Report
AmerGen Energy Co., LLC, (AG), purchased three nuclear power plants and took over their operation in 1998-1999. A dispute arose with the I.R.S. Such dispute concern...
September 13, 2010 - Volume 4 Issue 177Print Report
One of the principalbenefits of structuring a deal as an acquisition of assets, rather than stock, is that the purchaser only assumes those liabilities of the...
September 10, 2010 - Volume 4 Issue 176Print Report
P Corporation, (P), owned all of the stock of DSub1, (D1), and the latter owned all of the stock of FSub1, (F1). P also owned all of the stock of FSub4, (F4), FSub5...
September 9, 2010 - Volume 4 Issue 175Print Report
A member of a consolidated tax return group realized income from the discharge of indebtedness (COD). Sec. 61(a)(12) requires a taxpayer to include in gross income...
Since 1973, 80.1 percent of the stock of Wesco Financial Corporation, WSC, has been owned by BCS, a wholly-owned subsidiary of Berkshire Hathaway, Inc., BRK. WSC is...
September 8, 2010 - Volume 4 Issue 174Print Report
A group of corporations ("the corporations") were created under the laws of Nevada or Delaware. The corporations manage investments in various legal entit...
September 7, 2010 - Volume 4 Issue 173Print Report
Upon the death of Mother, a valuable parcel of "Farmland" (F) was transferred to her three children, T, B, and C, in equal shares as "tenants in comm...
September 3, 2010 - Volume 4 Issue 172Print Report
Pall Corporation (P) sells blood and drug filters to medical and biopharmaceutical markets worldwidethrough various subsidiaries. A lawsuit wasinstitute...
September 1, 2010 - Volume 4 Issue 170Print Report
On January 1, 2009, X is organized in "State" as an unincorporated entity that is classified as a partnership. X elects, under Reg. Sec. 301.7701-3(c)(1)(...
Pursuant to Sec. 51 of the Internal Revenue Code, employers are entitled to tax credits if certain conditions are fufilled regarding their hiring of specified categ...
Coca-Cola Enterprises, CCE,is in the final stages of effecting a split-off in which its shareholders, other than Coca-Cola, KO, will receive, in exchange for&...
On April 25, 1994, MORI, Inc., a wholly-owned subsidiary of Marriott International (MI), established a short position in five-year Treasury securities with a face a...
The Financial Accounting Standards Board, FASB, has issued an Exposure Draft addressing the manner in which certain fees, newly levied on pharmaceutical manufacture...
TP Corporation, (TP), owns all of the stock of Sub 1 and Sub 2. TP is a holding company which does not directly engage in the conduct of a trade or business....
In Murfam Farms LLC v. United States , _F.3d_ (Fed. Cl. 2010), the issue was whethercertain users of the well-known tax shelter, known as COBRA, were...
The Financial Accounting Standards Board, FASB, and the International Accounting Standards Board, IASB, have jointlyissued an exposure draft (ED)that, i...
In the largest bank merger since the onset of the financial crisis, First Niagra Financial Group, Inc., (FNFG), will acquire New Alliance Bankshares, Inc., (NAL), i...
In Russell Hoff et al. v. Popular, Inc. et al. , _F.Supp.2d_ (DC P.R. 2010), the plaintiffs, in this class suit, purchased or acquiredPopular, Inc.,&n...
General Motors Corporation, (GM), has announced an IPO in connection with which the Treasury Department, (TD),will be selling an undisclosed portion of its ap...
The tax law allows taxpayers to deduct interest on two categories of indebtedness secured by their residences. The first category is acquisition indebtedness
Bank of America, BAC, in connection with its acquisition of Merrill Lynch, acquired a substantial position in BlackRock, BLK, which, according to press reports, it...
During each of its taxable years ended October 31, 1997 through October 31, 2001, Deere & Co. (D) received income from operations conducted through unincorporat...
A U.S. taxpayer is allowed to claim a credit against its U.S. tax liability for the foreign income taxes that it pays. Notably, a domestic corporation that owns, di...
The stock of B Corporation (B) was owned by mother (249 shares); son (149 shares); daughter1 (51 shares); and daughter2 (51 shares). B redeemed the mother's shares...
Sec. 108(i) of the Internal Revenue Code was enacted as part of the American Recovery and Reinvestment Tax Act of 2009, Public Law 111-5, the so-called "stimul...
WEBMD Health Corporation, (WBMD), is offering to purchase three million of its common shares, representing approximately 5.1 percent of its outstanding stock, at a...
P Corporation, (P), launches a tender offer for the stock of T Corporation, (T). P successfully acquires, for cash, 91 percent of T's stock. The remaining nine perc...
P Corporation (P) owned all of the stock of Sub1 (S1)and Former Sub (FS). During Month 1 of Year 2, P's equity interest in FS was cancelled after FS emerged f...
One of the more popular techniques for divesting assets on a tax-deferred basis has been the so-called"leveraged partnership". In fact, Tribune Corp...
P1 Corporation, (P1), owned all of the stock of each ofSub1, Sub2, and Sub3. The corporations joined in the filing of a consolidated income tax return....
Cerberus APB Investor, LLC, (CA), which we assume is treated as a partnership for tax purposes, is an affiliate of Cerberus, LP, (CL). CA owns 55.39 percent of the...
M Corporation, (M), owned all of the stock of L Corporation, (L). Mr. S owned 42 percent of the stock of M; the public owned 35 percent of such stock; and B Corpora...
A foreign person is taxable on its taxable income which is "effectively connected" with the conduct of its trade or business within the U.S. For non-effec...
Mr. Caruth (C) owned 75 percent of the Class A voting common stock of NP Corp. (NP). He also owned 75 percent of NP's Class B non-voting common stock and 100 percen...
Warner Chilcott plc, (WCRX), intends to incur some $2.25 billion in new indebtedness, both senior secured and unsecured indebtedness, for the express purpose of fun...
On February 15, 2004, Mr. Woody (W) started investigating the real estate market so he could acquire real estate "for investment or rental". As the year u...
Avis Budget Group, Inc., (ABG), is attempting to derail the merger agreement involving Hertz Global Holdings, Inc., (H), and Dollar Thrifty Automotive Group, Inc.,...
On February 1, 2010, X, an individual, acquired a qualified equity investment, (QEI), in a qualified community development entity, (CDE). A "new markets tax cr...
M.D.C. Holdings, Inc. (MDC) was engaged, in Arizona and elsewhere, in the construction, sale, and financing of housing. HomeAmerican Mortgage Company, (HA), a wholl...
On July 26, 1993, General Electric Capital Corporation, (GECC), a subsidiary of General Electric Company, (GE), through three wholly-ownedsubsidiaries, TIFD I...
Employers gainedneeded time to fund their defined benefit (pension) plans with the recent enactment of H.R. 3962, "The Preservation of Access to Care for...
Mr. Philip Anschutz, (PA), owned all of the stock of Anschutz Corporation, (AC). AC elected, effective August 1, 1999, to be an 'S' corporation. AC owned all of the...
With tax rates imposed on dividend incomepoised to increase from today's level of 15 percent to as high as 39.6 percent,attention should shift to compan...
Relief from international double taxation is generally accomplished by means ofthe foreign tax credit rules. Thus, in general, a U.S. taxpayer may of...
The ex-dividend date with respect to Weyerhaeuser's special dividend has been set for today, July 20. The record date for such special dividend is July 22. (Despite...
On December 14, 1984, Mr. G purchased the "SR property" for $150,000. The SR property included an 880 square-foot two-story building with a study on the s...
Personal Selling Power, Inc. (PSP) is incorporated in Virginia. PSP publishes a magazine entitled Selling Power ; issues a monthly audio magazinenamed...
The Final Judgment to which Goldman, Sachs & Co., (GS), and the S.E.C. are parties orders GS to pay (i) "disgorgement" in the amount of $15 million an...
On August 9, 2001, the taxpayer, (C), instructed First Union Securities to transfer 990 shares of IBM stock to Morgan Keegan and to credit Derivium's account accord...
WY has provided some additional information on the tax consequences of its record-breaking special dividend, and other topics, that bears mentioning.
&...
In many instances, residents of one state or other jurisdiction are taxed on income earned in states or other jurisdictionswith respect towhich they are...
Aon Corporation, (AC), and Hewitt Associates, Inc., (HA), have announced their intention to effect a merger. It is intended, and in fact is a condition to closing,...
Celgene Corporation, (C), and Abraxis BioScience, Inc., (AB), recentlyannounced a merger agreement in connection withwhich a newly-created and wholly-ow...
The board of directors of Weyerhaeuser, (WY), has declared a special dividend in the amount of $5.6 billion . This dividend includes the regular quarterly dividen...
The I.R.S. had alreadyconcluded, in CCA 200941011, June 3, 2009,that black liquor, (BL), is a liquid fuel derived from biomass and is therefore eligible...
The purpose of the Blistex Bracken Limited Partnership (BBLP) is to acquire, own, manage, and maintain certain trademarks, including the well-known* BLISTE...
On January 18, 2000, Fresenius Medical Care Holdings, Inc., (FR), and the United States signed a "Global Agreement" resolving a series of suits against FR...
C Corporation, (C), owned all of the stock of Sub1 Corporation, (S1), and FSub Corporation, (FS), a foreign corporation. C also owned all of the interests in LLC1 w...
Fidelity National Information Services, Inc., (FIS), is offering to purchase for cash up to 86,206,896 of its common stock pursuant to tenders at prices specified b...
An individual, (B), applied for a patent. His application sought patent protection for a claimed invention that explains how buyers and sellers of commodities, in t...
A case decided by the Delaware Court of Chancery, Selectica, Inc. v. Versata Enterprises, Inc. , C.A. No. 4241-VCN (Ct. Chan. DE 2010) was, in the court's o...
Scholastic Book Clubs, Inc. (SBC) is a wholly-owned subsidiary of Scholastic, Inc. SBC is a Missouri corporation with headquarters in Jefferson City, Mo. SBC distri...
General Mills is a unitary group of corporations operating both within and outside of California. Accordingly, the percentage of its income that is subject to Calif...
The merger agreement filed by Valeant, (V),and Biovail, (B),discloses that the transaction will be structured as a merger of a newly-created second-tier...
DuPont (DD) organized a French subsidiary (SA) to manufacture urea herbicide in France. DD granted SA a royalty-free, non-exclusive, license to "make, use, and...
The Financial Accounting Standards Board (FASB) has determined that the accounting for revenues arising from contracts with customers can use an overhaul and it has...
LTR 200916014, January 9, 2009, addresses the case of a taxpayer (TP)which has elected to be taxed as a Real Estate Investment Trust (REIT). TP's principal as...
Liberty Media Corporation, (L), recently announced its intention to place the assets currently attributed to the Starz Group and the Capital Group into a new corpor...
Foreign Parent (FP) owned all of the common stock of Parent (P). P's preferred stock was owned by two funds. P, a loss corporation, formed Subsidiary (S) by contrib...
On Date 1, Sub1, a subsidiary of Taxpayer (TP), entered into a fixed price contract with B for Sub1 to design, test, and fabricate C1. Sub1 consistently treated the...
Valeant, (VRX),and Biovail, (BVF), announced that each company's Board has approved a merger agreement in which VRX would be merged with and into BVF (or an a...
Can BP America, Inc., (BPA), secure tax deductions for the amounts it will be "voluntarily" paying to compensate the parties adversely affected by its act...
The Senate is drafting its own version of the "extenders" bill (the House has already passed its version thereof). While each such version contains a prov...
The taxpayer, TP, a corporation, owns and licenses artistic and literary intellectual property. TP licenses this property (most of which is copyrighted or trademark...
In LTR 200852002, September 25, 2008, the taxpayer (T) is a public electric utility. T owned LX and unrelated buyer (B) agreed to purchase, from T, Unit 1 and Unit...
A buyer's objective, in the case of a taxable acquisition, is to secure a "cost basis" in the target's assets. This is so because depreciation and amortiz...
D Corporation, (D), a holding company, owns 97.6 percent of the voting common stock of C Corporation, (C): there are 3,692 Cshares outstanding of which D owns...
It certainly appears that Congress is poised to pass legislation (that President Obama is sure to sign) that will increase, rather dramatically, the tax rate imposed on t...
The stock of T Corporation (T) is owned by Trustee (EE). The taxpayer (TP) and EE are equal partners in three partnerships, PS1, PS2, and PS3. TP and EE each hold a...
The taxpayer, (TP), a U.S. corporation, owns all of the stock of CFC1 and CFC2. CFC1 and CFC2 are equal partners in a domestic partnership, (PS), which owns all of...
Allscripts, (MDRX), has announced a plan pursuant to which it will acquire Eclipsys, (ECLP), in a merger transaction intended to qualify as a reorganization, and re...
South Beach Securities, Inc., (SBS), filed a petition under Chapter 11 of the Bankruptcy Code and submitted a plan of reorganization. The bankruptcy judge refused t...
Several years ago, the consulting partners of Ernst & Young (EY) received shares in Capgemini, S.A.(CG) in exchange for their partnership interests. The shares...
T Corporation (T) has outstanding two classes of common stock, Class A Common Stock and Class B Common Stock. The Class A Common Stock has lesser voting rights than...
Last week's proposal, in which FASB is seeking to expand the types of assets and liabilities that must be marked to market, also contains a rather radicalalte...
The Financial Accounting Standards Board (FASB) has published a proposal which will alter, in a fairly dramatic way, the manner in which financial instruments* are...
Mr. and Mrs. Kerzner each owned 50 percent of the interests in a partnership, HCA, and 50 percent of the outstanding stock of an 'S' corporation, HCI. HCA borrowed...
Clarus Corporation, (CL), was formerly in the e-commerce solutions business. That business, however, was unsuccessful and CL has since discontinued its involvement...
The Form S-4 regarding Coca-Cola Enterprise's (Old CCE) split-off was recently issued and it confirms the tax treatment for the cash element of the consideration th...
While much of the "extenders" bill, the passage of which is expected shortly, raises taxes on businesses and holders of investment services partnership in...
U.S. taxpayers may, in order to prevent international double taxation, claim tax credits, known as foreign tax credits, against the U.S. tax otherwise payable with...
On Date 1, the taxpayer, (T), a domestic corporation, engaged Consultant to provide advice with respect to "restructuring". From Date 1 to Date 2, T inves...
Mr. E, (E), owned 23 percent of the stock of RG, Inc., (RG). An agreement between E and RG called for RG to pay E a total of $805,363.33, $400,000 of which was for...
It looks as though the taxation of so-called "carried interests" will, after years of discussion, finally be altered. The vehicle for this alteration is t...
The American Jobs and Closing Tax Loopholes Act of 2010, H.R. 4213, ("the extenders bill"), seems headed for passage now that Congressional tax writers ha...
W Corporation, (W), owned all of the stock of S Corporation, (S). The Board of Directors of W decided to distribute to its shareholders warrants to purchase S stock...
Taxpayer (TP) is a publicly-traded domestic corporation with a single class of common stock and multiple classes of preferred stock outstanding, including Series X...
CIT recently emerged from bankruptcy with a revamped, and presumably sustainable, capital structure. In connection with its reorganization, substantial amounts of d...
SOP 03-3 (now Subtopic 310-30) applies to entities that acquire loans, but not just any loans. It applies to a loan with evidence of deterioration of credit quality...
D Corporation, (D),is actively engaged in the conduct of Business M and has been so engagedfor well in excess of five years. Within the past five years,...
Validus Holdings, Ltd., (VH), a Bermuda corporation indirectly engaged in the insurance business, is offering torepurchase some $300 million of its stock. The...
C&F Packing Co., Inc., (CF), was an 'S corporation engaged in the business of supplying uncooked sausage (and other meats) to pizza vendors, including Pizza Hut...
Prior to Date 1, P Corporation, a "loss corporation", had outstanding a single class of common stock and multiple classes of preferred stock described in...
Comtech Telecommunications Corporation, (CMTL), and CPI International, Inc., (CPII), have entered into a definitive merger agreement in connection with which CMTL w...
Statement of Financial Accounting Standards No. 94, Consolidation of All Minority-Owned Subsidiaries , provides that consolidation is appropriate when one e...
When HCA, Inc., (H), was "taken private" several years ago, the sponsors formed an LLC, (HHII), which in turn formed a transitory acquisition company whic...
Stubhub, Inc. (SH),as every sports fan knows, is a venue which third parties use to buy and sell tickets. SH collects the purchase price from the buyer of the...
A tax of 30 percent is imposed on U.S. source dividend income received by a non-resident alien individual. This tax, the rate of which may be reduced by the terms o...
New York State Department of Taxation and Finance Advisory Opinion No. TSB-A-09(8)S, February 2, 2009, addresses the case of X the "products" of which are...
On July 13, 2000, the taxpayer, (T/P), an individual,organized the single-member "PLLC". Importantly, T/P did not elect to treat PLLC as a corporati...
The State of Ohio's tax statutes, specifically R.C. 5739.121, authorize a vendor to reduce its "taxable receipts" (for sales tax purposes) for a current s...
Retail Ventures, Inc., (RVI), is a holding company whose principal asset is 62 percent of the stock of an operating company, DSW Inc., (DSW). In light of the fact t...
Synovus Financial Corp., (SVN), is a loss corporation. Accordingly, it would like to avoid the occurrence of an "ownership change". Where a loss corporati...
Textron, Inc., (TEX), a publicly-traded corporation, is required to have public financial statements certified by an independent auditor. In order to prepare such f...
Corporation A, (A), a domestic subsidiary of Corporation T, (T), a domestic corporation, proposes to issue Notes which will be issuedin registered form. Most...
Parent, (P), owns all of the stock of Corporation 1, (C1), and the latter owns100 percentof the stock of Seller Corporation, (S). S, in turn, owns all o...
Synovus Financial Corp., (SNV), has adopted a "shareholder rights" plan which is designed to insure that SNV's favorable tax attributes (primarily its &qu...
Mr. and Mrs. KennethBeard (B) owned 76 percent of the stock of two 'S' corporations, MMCD and MMSD. B was persuaded to engage in a "son-of-boss" tra...
Hertz Global Holdings, Inc., HTZ, and Dollar Thrifty Automotive Group, DTG, have entered intoan agreement pursuant to which HTZ will acquire all of the stock...
In some instances, a taxpayer will fail to strictly adhere to statutory and/or regulatory requirements imposedfor securing a deduction or, perhaps, for making...
The taxpayer, Mr. Jones (J), was the lead defense counsel for Timothy McVeigh in the "Oklahoma City Bombing" trial. During the course of J's representatio...
CenturyLink, (CTL), and Qwest Communications International, Inc., (Q), announced that their respective boards have approved a definitive merger agreement pursuant t...
On July 11, 1996, United Dominion Industries, UDI,commenced an unsolicited tender offer to purchase all of the common stock of Commercial Intertech Corporatio...
The I.R.S., in an effort to increase its audit efficiency,will require corporations to disclose more information about what the Service refers to as the corpo...
The taxpayers were non-residents of New York Stateduring 2001. They were, during 2001, shareholders of SBS, Inc. (SBS). During the fiscal year ended August 31...
P Corporation, (P), owns all of the stock of S1 Corporation, (S1), and S1 owns at least80 percent of the stock of S2 Corporation, (S2). S2, in turn, owns all...
The taxpayers were stockholders of Klauer Manufacturing Co., (KM), an 'S' corporation principallyengaged in the manufacture and sale of a variety of sheet met...
Sec. 1211 of"The American Recovery and Reinvestment Tax Act of 2009" (Div. B of P.L. 111-5, Stat. 115, February 17, 2009) amends Sec. 172(b)(1)(H) o...
A corporate taxpayer (T)issued convertible subordinated debenturesfeaturing a 20 year term. The debentures were convertible, at any time, at the holder'...
Mirant Corporation, MIR, and RRI Energy, Inc., RRI, announced that they have entered into a definitive agreement to create GenOn Energy. The transactionwill b...
A corporation (C) is engaged in the sale of health and personal care products. Customers of C can order these products via mail-order, internet, telephone, or facsi...
Ordinarily, no gain or loss is recognized on the transfer of property by a partner to a partnership in exchange for an interest in such partnership. See Sec. 721(a)...
On March 17, 2010, Starr International, SI, Mr.Maurice Greenberg's investment vehicle, entered into the final agreement for a "VPF" (variable prepai...
Each member of the Murphy family, through his or her single-member LLC, purchased and sold long and short foreign currency put options. These option positions were...
A taxpayer (T) was a resident of Connecticut and an employee of Merrill Lynch Pierce Fenner & Smith(M) in its New York City office until March 31, 2005. T...
SandRidge Energy, Inc., (SD), and Arena Resources, Inc., (ARD), announced that they have entered into a definitive merger agreement under which ARD's shareholders w...
The Investment Company Act of 1940, (ICA), regulates investment companies, including mutual funds. In most cases, an "investment adviser" will create a mu...
The Heckermans wished to make a gift to their children but only if the gift taxes imposed with respect to the transfer could be minimized or entirely eliminated. Th...
E*TRADE Financial Corporation and E*TRADE Bank, (E*TRADE), sued Deutsche Bank AG, (DB),for breach of a stock purchase agreement by which E*TRADE acquired the...
Xilinx, Inc., (X), researches, develops, manufactures, and markets integrated circuit devices and related development software systems. With a view towards expandin...
The U.S. Department of the Treasury has announced its intention to "fully dispose" of its approximately 7.7 billion shares of Citigroup, Inc., C, common s...
Assume the existence of a family corporation the stock of which is owned, largely, by the founders of the corporation who are, increasingly, curtailing their involv...
The Patient Protection and Affordable Care Act, recently signed into law by President Obama, codifies the venerable "economic substance" doctrine. Thus, f...
The shareholders of an 'S' corporation made loans to the corporation. The corporation sustained losses which were passed through to the shareholders. The passed-thr...
In many leveraged buyouts (LBOs), a holding company is formed by the "sponsors" of the LBOto acquire the stock of one or more operating companies. T...
The widely-heralded health care bill that the House of Representatives passed last weekend contains a few tax surprises that can hardly be described as pleasant sur...
It is axiomatic that expenses incurred in connection with a reorganization are non-deductible capital expenditures. Can these capitalized expenditures ever give ris...
Weyerhaeuser Company, WY, seems to be inching closer to implementing a plan to convert the corporation into a Real Estate Investment Trust (REIT). Its recently rele...
McKesson Parent (MP) owned 100 percent of the stock of McKesson Water (MW). MW was incorporated in Delaware and its principal place of business was California.
Under Sec. 7805(e)(2) of the Internal Revenue Code, temporary regulations expire three years after issuance, if not earlier withdrawn. Accordingly, Reg. Sec. 1.368-...
Congress is poised to codify a judge-made doctrine of tax law, the amorphous "economic substance" doctrine. It is doing so, ostensibly, because the courts...
WebMD Health Corporation, (WMD), is embarking on another share repurchase in which it is seeking to retire approximately 11 percent of its outstanding stock, some 5...
Taxpayer (T) operates a leasing business; T purchases vehicles for lease and sells the vehicles as the lease terminates. The vehicleswhich populateT's f...
Often, in the case of a reverse Morris Trust (RMT) transaction, in which a corporation, (D),distributes the stock of a controlled corporation, (C),to it...
The National Football League (NFL)is an unincorporated association of 32 separately owned and operated teams that collectively produce an annualseries o...
Black liquor, a by-product of the paper milling process in craft mills, is a liquid fuel derived from biomass. The producer of black liquor adds a small amount of d...
Several years ago, Home Depot, Inc. (HD) began providing its many customers the option of purchasing merchandise though a "private label" credit card. Som...
Citigroup Capital XII, a grantor trust created by Citigroup, (C), for the purpose of issuing capital securities, has issued "Fixed Rate/Floating Rate Trust Pre...
Where a loss corporation undergoes an ownership change, within the meaning of Sec. 382(g), limits are imposed on the amount of taxable income for any taxable year e...
In 1959, Mr. Cummings, the Chief Executive Officer of Consolidated Food, Inc., purchased 51,500 shares of MGM, Inc. for approximately $1,030,000. He was promptly el...
Conopco, Inc. (a subsidiary of Unilever USA and the successor-in-interest to Bestfoods, Inc. and CPC International, Inc.) created an Employee Stock Ownership Plan (...
The Bank of America, (BAC),warrants sold by the Treasury Department to the public recently embody some unusual attributes that, as you might expect, engender...
X Corporation (X) is an 'S' corporation--Accordingly, its income is not subject to entity level taxation. Such income, instead,is "passed-through" t...
Volvo (V) entered into an April 18, 1980 contract with Sajac Company, Inc. (S)---Manufacturers,such asV, would transfer their excess parts to S for &quo...
P Corporation, (P), owned100 percentof the stock of S1 Corporation, (S1), and S2 Corporation, (S2), and owned all of the membership interests in LLC, an...
Homebuilders recently achieved a majortax victory by securing the ability to carry back certain losses, referred to as "applicable NOLs", for five y...
MSCI, Inc., (MXB), and RiskMetrics Group, Inc., (RISK), announced that they have entered into a definitive merger agreement whereby MXB will acquire RISK "in a...
Mr. BA (BA) was the majority shareholder of OA Corporation (OA) and owned 50 percent of the stock of each of L Corporation (L) andA Corporation (A). OA owned...
Although the details are sparse, it appears that Coca-Cola Enterprises, Inc., (CCE), will be engineering a split-off which will be accompanied by a cash payment; a...
Insilco Corporation, (IC), owned 66 percent of the stock of Times Fiber Communication, Inc., (TFC), and the public owned the balance of such stock. Pursuant to an i...
R.H. Donnelley Corporation, (RHD), filed a consolidated income tax return for the year ending December 31, 1994. The I.R.S. examined this return and did not determi...
10. An increase in the conversion ratio of convertible debt (or convertible preferred stock) does not have immediate tax consequences.
In fact, such an increase is...
Schlumberger, Ltd. (SLB) and Smith International, Inc. (SII) announced a merger agreement in which the shareholders of SII will, in exchange for each SII share, rec...
S1 Corporation, (S1), a foreign corporation,was owned by Shareholders 1, 2, and 3. In addition, these sameindividuals owned all of the stock of Corporat...
Expenses are deductible, in computing taxable income, if the expenses constitute ordinary and necessary expenses that are paid or incurred during the taxable year i...
The widely-anticipated sale of the stock of American Life Insurance Co. (ALICO) by AIG to MetLife (ML) is, apparently, being held upby a tax issue that ML's a...
The taxpayer, (RO), was born a genetic male. However, "she" was uncomfortable in the male gender role from childhood and first wore women's clothing secre...
X Corporation (X) is an 'S' corporation. The stock of X is owned, in equal proportions, by Individual 1 (I1) and Individual 2 (I2). I1 will transfer his shares in X...
In March, 1978 the taxpayers (M) purchased a residence for $36,639. The property was, at the time of purchase,encumbered by a mortgage payable to P Bank. ...
Many important taxation determinations turn on whether an entity or an individual is merely holding property for investment purposes or is, with respect to...
The shareholders of Open Joint Stock Company VimpelCom (OJSC) have been asked to exchange their stock therein for stock in a newly-formed corporation, VimpelCom Ltd...
Recently, LaCrosse Footwear, Inc., (BOOT), announced that its board of directors had approved a special cash dividend of $1.00 per share and a quarterly cash divide...
The taxpayer (TP)had been a highly successful "day trader" of stocks and securities. He became the branch manager of A Corporation's (A) office in A...
In 1996, FedEx (F) identified a need for a new computer system with "better revenue controls" to insure timely and accurate billing and to eliminate reven...
Ambac Financial Group, Inc., (ABK), has joined the growing legion of companies which have adopted a shareholder "rights plan" for the express purpose of p...
PDL BioPharma, Inc. (PDLI) recently announced the tax "profile" of the distributions it made to its shareholders during 2009. In 2009, PDLI made two cash...
S Corporation, (S),a subsidiary of Talley Industries, Inc. (TI),manufactured ejection seats for military aircraft. S's primary customer was the Navy Dep...
On December 22, 2008, the Debtors filed voluntary petitions under Chapter 11 of the Bankruptcy Code. Certain of the Debtors and non-debtor affiliates ("the Fly...
LTR 201004001, October 22, 2009, appears to address the tax consequences of Liberty Media's split-off of Liberty Entertainment, Inc.; the latter's merger with Direc...
In order for a spin-off or split-off to qualify for tax-free treatment it cannot be found to have been used principally as a device for the distribution of...
The taxpayer, (TP), a domestic corporation, in connection with the exploration of its strategic alternatives,hired each ofCorporation X, (X), and Invest...
Where a corporation's principal asset is stock in another corporation, and the corporation determines that such stock should properlyreside with its sharehold...
Under FASB Interpretation No. 48 (FIN 48), Accounting for Uncertainties in Income Taxes, an Interpretation of SFAS No. 109 , (ASC subtopic 740-10), an enter...
The spin-off by Cablevision (C) of the stock of its subsidiary, Madison Square Garden, Inc. (MSG) will occur on February 9, 2010. On that date holders of C's Class...
Shiseido Co. Ltd. (P), through a U.S. affiliate, is offering to purchase the stock of Bare Escentuals, Inc. (BE) for $18.20 per share in cash. Once the tender offer...
The State of Illinois estate tax law, at Sec. 3(a), provided an estate tax to be imposed on "every taxable transfer involving transferred property having a tax...
Company, (C), a closely-heldState X corporation, has two classes of common stock outstanding; Class A common stockand Class B common stock. The classes...
P Corporation (P) owned all of the stock of H Corporation (H). H, in turn, owned all of the stock of S1 Corporation (S1) and S2 Corporation (S2). S1 was incorporate...
Kraft Foods (K) and Cadbury (C) have reached an agreement pursuant to which the former will acquire the stock of the latter in exchange for a combination of K commo...
Mr. Robert Abodeely (RA) worked for Pfizer, Inc., in New York State, from August 7, 1988 until his retirement on January 14, 1999. At all times during his employmen...
Tyco International Ltd. (TYC) and Brink's Home Security Holdings, Inc. (CFL) announced an agreement pursuant to which CFL will be merged with and into a newly-creat...
McDermott International, Inc. (MDR), a Panamanian corporation, owns all of the stock of The Babcock & Wilcox Company (BW), a U.S. corporation, and J. Ray McDerm...
HomeStreet, Inc. (HS)is a residential mortgage lender that services certain of the loans that it sells or securitizes. For loans sold on a "service-retai...
On Thursday, January 14, 2010,two "levies" were introduced by President Obama on the one hand and members of the House of Representatives on the oth...
The State of Pennsylvania imposes a so-called"Shares Tax" on the taxable amount of a banking institution's shares of capital stock. The tax is based...
Taxpayer (TP) isa widely-held and publicly-tradedreal estate investment trust (REIT). TP conducts its business through a limited partnership (LP) of whi...
In 1991, three individuals, including L and S, won the Ohio State Lotto Jackpotamounting to$20 million. Each winner was entitled to receive 26 annual pa...
Many REITs, and certain regulated investment companies (RICs), in order to (i) conserve cash, yet (ii)satisfy their dividend payment obligations, have resorte...
Wells Fargo & Company(WF) claimed $115,174,203 in depreciation, interest, and transaction cost deductions for 2002. These deductions stemmed from WF's par...
The Federalestate tax has been repealed with respect to decedents dying during 2010. Congress has threatened to reinstate the tax for 2010, even with respect...
A New York Supreme Court Justice recently ruled that Discover Financial Services(D) could not escape its obligation underan agreement with Morgan Stanle...
Mr. Mintz (M) was a resident of Florida and a non-resident of New York. ESG, Inc. (ESG) was an New York 'S' corporation. M owned 27 percent of the stock of ESG. On...
Sec. 304(a)(1) of the Internal Revenue Code provides that, for purposes of Sec. 302 and Sec. 303, if one or more persons are in control of each of two corporations,...
In connection with the merger of Marvel Entertainment (MVL) with and into Disney (DIS), the MVL shareholders will receive, in exchange for each MVL share, $30.00 in...
Where property is the subject of an "involuntary conversion", the gain from the transaction can be deferred if, within a specified period, the taxpayer re...
Not unexpectedly, Novartis A.G. (NVS) announced its intention to acquire full ownership of Alcon, Inc. (ACL) in a two-step transaction. The first step will see NVS...
Under Sec. 163(e)(5) of the Internal Revenue Code, in the case of an Applicable High Yield Discount Obligation (AHYDO) as defined in Sec. 163(i), a corporation is n...
December 31, 2009 - Volume 3 Issue 254Print Report
"...The hallmark of a constructive distribution is value passing from...the corporation to the shareholder, for which the shareholder does not give equivalent...
December 30, 2009 - Volume 3 Issue 253Print Report
Sec. 857(a)(1) of the Internal Revenue Codeprovides that the provisions of part II of subchapter M of Chapter 1 of the Internal Revenue Code(relating to...
December 29, 2009 - Volume 3 Issue 252Print Report
In general, payments made for the principal purpose of protecting an entity's goodwill and reputationare deductible even though such payments may also provide...
On August 20, 2009, the I.R.S. filed a "proof of claim" in which it asserted an unsecured priority claim against Nortel Networks, Inc. (NNI) for the taxab...
December 28, 2009 - Volume 3 Issue 251Print Report
One of the issues surrounding the use of convertible debentures as a financing vehicle is the potential earnings per share dilution thatmight arisewhen...
December 24, 2009 - Volume 3 Issue 250Print Report
Michigan Bell Telephone Co. (MBT) filed its Michigan "single business tax" returns and included monies received from customers as "late payment fees&...
CIT Group, Inc. (CIT) has emerged from bankruptcy with its stock in the hands of its creditors and with its debt substantially diminished. The reduction of its debt...
December 23, 2009 - Volume 3 Issue 249Print Report
D Corporation (D) was owned by SH Corporation (SH), a foreign corporation. Dhad beenengaged for more than five years in the active conduct of each of&nb...
December 22, 2009 - Volume 3 Issue 248Print Report
On February 12, 1990, GAF Chemicals Corporation (GAF) and Rhone-Poulenc (RP) entered into a partnership agreement, forming RPSSLP, with GAF as a limited partner and...
December 21, 2009 - Volume 3 Issue 247Print Report
Through the years, Congress has, increasingly,"cracked-down" on non-qualified deferred compensation arrangements. This vigilance has culminated with...
PDL BioPharma, Inc. (PDL) paid a "special dividend" in the amount of $1.67/share last Tuesday, December 15, 2009. Thus, for the year ended December 31, 20...
December 18, 2009 - Volume 3 Issue 246Print Report
The Commerce Clause of the United States Constitution provides that "The Congress shall have the Power...To regulate Commerce...among the several States...&quo...
December 17, 2009 - Volume 3 Issue 245Print Report
Veritas Software Corporation (VUS) is in the business of developing, manufacturing, marketing, and selling software products. On July 2, 2005, VUS was purchased by...
It has finally happened. Weyerhaeuser Company (WY) announced that its board of directors "has determined that conversion to a REIT would best support the compa...
December 16, 2009 - Volume 3 Issue 244Print Report
Where a corporation (X) owns an appreciatedequity stake in another corporation (Y), but not a controlling interest therein, the market will rarely give X full...
December 15, 2009 - Volume 3 Issue 243Print Report
The "wash sale" rule denies a taxpayer a deduction for a loss sustained from certain sales or other dispositions of stock or securities. Thus, under Sec....
December 11, 2009 - Volume 3 Issue 241Print Report
Statement of Financial Accounting Standards No. 109 , Accounting for Income Taxes , requires an entity to recognize a deferred tax liability (DTL) or deferre...
The "Extenders" bill passed the House, largely along party lines, on Wednesday, December 9. It faces an uncertain fate in the Senate. One of the more cont...
December 10, 2009 - Volume 3 Issue 240Print Report
P Corporation (P) is a foreign corporation engaged, directly and indirectly, in the activeconduct of several businesses. P owns all of the stock of D Corporat...
Kraft Foods, Inc. (KFT) is offering to acquire all of the "ordinary" shares of Cadbury, plc (C), including those ordinary shares represented by ADSs. (Eac...
On December 7, Rep. Rangel (D-NY), the Chairman of the House Ways & Means Committee, introduced legislation, "The Tax Extenders Act of 2009" (H.R. 421...
Standard Pacific Corporation (SFC), one of the homebuilders hard hit by the economic crisis, has accumulated substantial "deferred tax assets". The princi...
One of the most widely-used strategies marketed by accounting firms as a way to reduce tax liabilities was the so-called "son-of-boss" technique. This str...
The taxpayer (TP) issues "participating" life insurance policies that entitle policyholders to receive two types of dividends: annual dividends and termin...
LTR 200850027, August 28, 2008, addresses the case of a corporation (T)that holds a "residual interest" in a Real Estate Mortgage Investment Conduit...
Members (there are at least 15 co-sponsors)of the House of Representatives, led by Congressman DeFazio, proposed legislation ominously entitled "Let Wall...
The Obama Administration's tax proposals, focused heavily on altering the manner in which U.S.-basedmultinational corporations are taxed, has once again raise...
On March 31, 1998, representatives of C Corporation (C) and J Corporation (J) executed an "asset purchase agreement" which provided that C would acquire a...
O Corporation (O) was in the business of developing, owning, and managing commercialreal estate. The stock of O was owned by a father (F) and his sons (S1 and...
Berkshire Hathaway, Inc. (BHI), in connection with its planned acquisition of Burlington Northern Santa Fe Corporation (BNSF), has filed a preliminary proxy stateme...
November 30, 2009 - Volume 3 Issue 232Print Report
WebMD Health Corporation (WBMD) has been an activepurchaser of its stock for quite some time. In fact, its buybacks have been so extensive that they caused th...
November 27, 2009 - Volume 3 Issue 231Print Report
In 1989, Textron, Inc. (T) acquired substantially all of the stock of Avdel (A), a U.K. corporation. The FTC, however, intervened. The agency believed there might b...
November 25, 2009 - Volume 3 Issue 230Print Report
The taxpayer, TG Missouri Corporation (TGM), is in the business of manufacturing injection-molded products (steering wheels, air bags) for customers in the automoti...
Zions Bancorporation (ZION) recently announced its intention to engage in certain "financial" transactions that will have the effect of shoring up the com...
November 24, 2009 - Volume 3 Issue 229Print Report
Berkshire Hathaway, Inc. (BHI) currentlyowns approximately 22 percent of the stock of the stock of Burlington Northern Sante Fe Corporation (BNSF). The compan...
People's United Financial, Inc. (PBCT), the holding company for People's United Bank, hasannounced a definitive agreement to acquire Financial Federal Corpora...
November 23, 2009 - Volume 3 Issue 228Print Report
In Rev. Rul. 2002-31, 2002-1 C.B. 1023, the I.R.S. bestowed itsstamp of approvalon a variety of debt instrument the issuance of which would provide the...
November 20, 2009 - Volume 3 Issue 227Print Report
In Rev. Rul. 90-95, 1990-2 C.B. 67, P Corporation (P) formed S Corporation (S) and the latter merged with and into unrelated T Corporation (T). In the merger, the s...
E*TRADE Financial Corporation (ETFC) has disclosed that, during the third quarter, it exchanged some $1.76 billion principal amount of "interest-bearing debt&q...
November 19, 2009 - Volume 3 Issue 226Print Report
A partnership (PS) operated the Sheraton Cleveland Airport Hotel. The Hotelwas owned by the City of Cleveland, Ohio. The Sixth "Supplement to Lease"...
Peet's Coffee & Tea, Inc. (PEET) is in the process of acquiring Diedrich Coffee, Inc. (DDRX) in a two-step transaction that entails a tender offer, launched on...
November 18, 2009 - Volume 3 Issue 225Print Report
P Corporation (P) owned all of the stock of S Corporation (S); the latter was engaged in Business A. P desired to exit Business A and, to accomplish its objective,...
November 17, 2009 - Volume 3 Issue 224Print Report
In Trinity Industries and Subsidiaries v. Commissioner , 132 T.C. No. 2 (2009), Trinity Industries (T) had entered into a series of contracts (the first con...
Bristol-Myers Squibb Company (BMY) has announced its intention to effect a "split-off" of its holdings in Mead Johnson Nutrition Company (MJN). Such a spl...
November 16, 2009 - Volume 3 Issue 223Print Report
On December 31, 1980, New England Mutual (later acquired by MetLife) issued a life insurance policy insuring the life of Mr. HarveyBarr's mother. The policy s...
November 12, 2009 - Volume 3 Issue 221Print Report
It is reasonable toexpect that many regulated investment companies (RICs) racked up substantial capital losses in 2008. These losses will be carried forward t...
A taxpayer's representative asked the Department of Labor (DOL)for advice on whether a transaction the taxpayer was contemplating would give rise to a pro...
November 10, 2009 - Volume 3 Issue 219Print Report
Congress has passed, and the President has signed, legislation extending the period to which Net Operating Losses (NOLs) sustained in 2008 or 2009 may be carried. T...
Overseas Shipholding Group, Inc. (OSG), through its subsidiary, OSG Bulkships, Inc. (OSB), is seeking to acquire all of the partnership interests in OSG America, LP...
Corporation1 (C1) acquired the stock of Target Corporation (T). T granted incentive stock options (ISOs) and offered a Sec. 423 Employee Stock Purchase Plan (ESPP)...
C is a limited partnershipthe interests in which arepublicly-traded. C is engaged in the transportation, storage, and marketing of natural gas and propa...
The issue confronting Mr. Julian H. Robertson, the legendary founder and Chairmanof Tiger Management,and his spouse, Ms. Josephine Robertson, was whethe...
Itseems clear that the acquisition of Burlington Northern Santa Fe Corporation (BNI) by Berkshire Hathaway, Inc. (BRK) will be structured as a forward merger....
LTR 200903079, October 8, 2008 (a Technical Advice Memorandum ) addresses the case of a taxpayer (T) who enters into contracts with the U.S. Government...
Invesco, Ltd. (I), a Bermuda corporation, has entered into an agreement to acquire the "Van Kampen" businesses from Morgan Stanley, Inc. (MS). The conside...
If a taxpayer's directly-owned stock is redeemed by the corporation, and if the taxpayer's only indirectownership of stock immediately after the redemption is...
Congress seems to be moving closer to implementing a lengthening of the period to which Net Operating Losses (at least those that are sustained in 2008 and 2009) ma...
Although 'S' corporations are ordinarily not subject to tax, an 'S' corporation that was formerly a 'C' corporation can incur tax liability if it has "net reco...
In Robinson Knife Manufacturing Co., Inc. v. Commissioner , T.C. Memo. 2009-9, the taxpayer (R) was activelyengaged in the business of designing, deve...
The ruling the I.R.S. issued to Liberty Media, with respect to its split-off of Liberty Entertainment, Inc. (LEI), will not be published for public consumption unti...
The Foreign Account Tax Compliance Act of 2009 (the Act)introduced on October 27, 2009 by Rep. Charles Rangel (D-NY) and Senator Max Baucus (D-Mont.), the cha...