Robert Willens

4742 Results

Reversing Pre-Redemption Transfer of Stock Does Not Invoke "(c)(2)(B)": February 15, 2019 - Volume 13 Issue 32 Print Report; X, ("X"), is a corporation engaged in an ongoing business whose shares of its sole class of common stock were held by A and byA's child, B. A owne...

Cell Phone Retailer Cannot Avoid Use Tax: February 15, 2019 - Bulletin Print Report; Plaintiff, ("P"), is a Michigan corporation engaged in the business of selling cell-phone service contracts, cell phones, and related equipment. P sold Verizon cell-p...

WCC's "Magnanimous" Tender Offer: February 14, 2019 - Bulletin Print Report; Westmoreland Coal Company Asset Corporation, ("TS"), a wholly owned subsidiary of Westmoreland Coal Company, ("WCC"), is offering to purchase all of the out...

Accounting For Disproportionate Liquidations: February 14, 2019 - Volume 13 Issue 31 Print Report; Mr. A formed X Corporation, (X), to engage in a business enterprise. X issued 70,000 shares of common stock to Mr. A at a price of $1 per share. Shortly thereafter, X...

Georgia Firm Has "Substantial Nexus" With Ohio: February 14, 2019 - Bulletin Print Report; G is a Georgia corporation. It does have any locations in Ohio; and does not employ any agents, representatives, or employees in the Buckeye State. G's primary customers ar...

Apportioning Income Of A "Transportation Broker": February 13, 2019 - Bulletin Print Report; BLX, Inc., ("BLX"), is incorporated in Iowa and headquartered in Cedar Rapids. The corporation has elected to file as an 'S' corporation. BLX describes itself...

Charitable Trust Does Not Hold Real Estate "Primary for Sale": February 13, 2019 - Volume 13 Issue 30 Print Report; TP is a charitable trust created under the will of N. TP educates large numbers of individuals annually. At the end of TP'...

Business Activities Are Needed For a "Contraction": February 12, 2019 - Volume 13 Issue 29 Print Report; X corporation, ("X"), owned two parcels of real property, each such parcel consisting of land and a building thereon. Both of the parcels, Parcel A and Parc...

Expectation Of Tax Deduction Not A "Quid Pro Quo": February 12, 2019 - Bulletin Print Report; In April 2011, the Ms purchased real property, (the "Property"),in Bethesda, Maryland. At the time the Ms purchased the Property, it included a remodeled coloni...

Investment Advisor Not A Sec. 382 "Entity": February 12, 2019 - Bulletin Print Report; LossCo, ("L") is a publicly traded State A corporation. L is a holding company whose major asset is the stock of Subsidiary, ("S"), a State B corporation. O...

Transfer Of Condominium Units Is A "Bulk Sale": February 12, 2019 - Bulletin Print Report; Pursuant to two separate contracts of sale, Unit 1 and Unit 2 (which are noncontiguous, separate units in the same residential building) are being sold by Seller, ("S"...

Double Taxation Not Enough To Invalidate VA's Apportionment Method: February 11, 2019 - Bulletin Print Report; The Corporate Executive Board Company, ("CEB"), is a corporation headquartered in Arlington, Virginia. Most of CEB's revenue comes from an annual fixed fee subscr...

The Tax Court Finds A "Genuine Contraction": February 11, 2019 - Volume 13 Issue 28 Print Report; WF was organized for the primary purpose of providing passenger and automobile ferry service across the Potomac River between Maryland and Virginia. From April 8, 195...

LLY Will "Split-Off" ELAN: February 11, 2019 - Bulletin Print Report; Eli Lilly and Company, ("LLY"), announced that it will initiate an "exchange offer" to divest its remaining interest in Elanco Animal Health, ("ELAN&qu...

Food Service Management Operator Taxed At Higher Rates: February 8, 2019 - Bulletin Print Report; From 2005 through 2014, Aramark Educational Services LLC, ("A"), contracted with schools to provide "dining services." At issue is the classification of A&#...

Fixing The Date of Debt Discharge: February 8, 2019 - Volume 13 Issue 27 Print Report; TP's shareholder relies on Gitlitz v. Commissioner , 531 U.S. 206 (2001), to claim additional basis in shares of 'S' corporation stock from exclud...

Physical Presence Necessary For "Nexus" Found: February 7, 2019 - Bulletin Print Report; TP is a foreign corporation with its principal place of business located outside of the State of Washington. TP sells sports apparel, equipment, and accessories to consumers th...

California Taxpayer Cannot Avoid NOL Suspension: February 7, 2019 - Volume 13 Issue 26 Print Report; On July 15, 2010, Appellant, (AP), filed a California Form 100 for the 2008 taxable year. AP reported thereona sale of land, equipment, and buildings. The sale...

Mortgage Lien Survived Non-Judicial Foreclosure Sale: February 7, 2019 - Bulletin Print Report; The Ks owned real property in Richlands, Virginia. The Ks executed a credit line deed of trust, (the "Deed of Trust"), on September 26, 2007 for the benefit of First...

The Execution of a Note Does Not Create Basis: February 6, 2019 - Volume 13 Issue 25 Print Report; On November 1, 1979, Mr. A, the owner of all of the outstanding stock of X corporation, ("X"), an electing small business corporation (an 'S' corpor...

POST Has The Ability To "Spin-Off" 8th Avenue: February 6, 2019 - Bulletin Print Report; Last fall, Post Holdings, Inc., ("POST), entered into an interesting transaction with Thomas H. Lee Partners, Inc., ("THL"), in which POST and THL formed a joint...

Liberty Expedia Holdings And Expedia Explore A "Downstream Merger": February 6, 2019 - Bulletin Print Report; Several years ago, Liberty Interactive, ("LI"), in a "split-off" transaction, distributed to its shareholders its stock inLiberty Expedia Holdings, In...

Inventor Entitled To Capital Gains Treatment: February 6, 2019 - Bulletin Print Report; AM began his career with American Express, eventually rising to the level of "project manager." In December 2001, he joined HIG as vice president of business developm...

Can A Partial Liquidation Be Non Pro Rata?: February 5, 2019 - Volume 13 Issue 24 Print Report; X corporation, ("X"), has outstanding 100 shares of a single class of votingcommon stock, 90 shares of which were owned by Mr. A and 10 shares of whic...

Pollution Control Equipment Exempt From Property Tax: February 5, 2019 - Bulletin Print Report; Personal property is generally exempt from taxation in Minnesota, ("M"). Personal property which is part a pipeline system transporting or distributing water, gas, cr...

Intercompany Payments Are Not "Taxes": February 5, 2019 - Bulletin Print Report; There are, generally, two types of corporation income tax reporting methods used by the States. Non-separate reporting permits a designated entity to file one tax return on beh...

Pension Plan Is Creditor Of "Remainco": February 5, 2019 - Bulletin Print Report; Distributing, ("D"), is a publicly traded corporation and is the common parent of a consolidated group engaged in each of Business A and Business B. D maintains two q...

Identifying The Accounting "Acquirer": February 4, 2019 - Bulletin Print Report; In most business combinations, it is obvious which of the parties is properly treated as the accounting "acquirer." The accounting acquirer applies "acquisition...

Coach Nick Saban Secures (Part Of) A Worthless Debt Deduction: February 4, 2019 - Bulletin Print Report; Mr. Joseph Spinoza, ("S"), is a successful real estate developer. S organized two companies, PR I and PR II, (collectively, "PR"), to acquire and develop tw...

ZAYO Comparable Will Earn "Rents From Real Property": February 4, 2019 - Bulletin Print Report; The taxpayer, ("TP"), a domestic corporation, elected to be taxed as a real estate investment trust, ("REIT"). TP leases systems composed of permanently aff...

Florida Publisher Denied Sales Tax Refund: February 4, 2019 - Volume 13 Issue 23 Print Report; The issue, in a recent State of Florida administrative tax proceeding, was whether the taxpayer, (TPC), showed, by a "preponderance of the evidence", that i...

Unambiguous Election Cannot Be Disavowed: February 1, 2019 - Bulletin Print Report; Appellants employed a tax professional toprepare their joint federal incometax returns. In 2013 and 2014, the preparer made significant errors affecting Appellants&...

State Court Judges Can Allocate Dependency Exemptions: February 1, 2019 - Volume 13 Issue 22 Print Report; I and H were married in 2004 and were separated in 2010. By a judgment of divorce dated April 27, 2011, I, the wife, was awarded physical custody of the children. The...

Wage And Salary Tax Not An "Income" Tax For FTC Purposes: January 31, 2019 - Bulletin Print Report; Petitioners, AF and RF, were residents of Guam in 2013. AF (the petitioner husband) had income from employment with a company based in the Commonwealth of the Northern Mariana...

The Long Reach of Sec. 83: January 31, 2019 - Volume 13 Issue 21 Print Report; GDC (the "company") was formed in 1970. A joined the company as vice-presidentfor finance and administration. The company agreed to sell A 40,000 shar...

Hotel "Consumables" Not Eligible For "Sale-For-Resale" Exemption: January 30, 2019 - Bulletin Print Report; Alamo Building Management L.P., ("A"), owns the Drury PlazaHotel San Antonio Riverwalk, ("DPH"), in San Antonio, Texas. A charges its customers for th...

Stock Subject To a Right of First Refusal Is Common Stock: January 30, 2019 - Volume 13 Issue 20 Print Report; X corporation, (X), issued shares of new voting common stock and shares of new nonvoting common stock pro rata to its shareholders in exchange for shares of its outst...

Government Proves Timely Existence And Mailing Of "90-Day Letter": January 29, 2019 - Bulletin Print Report; Mr. M failed to file timely federal income tax returns for tax years 2002 and 2009, and the Government levied tax assessments. Mr. M maintains that those assessments are invali...

REITs and Partnerships: January 29, 2019 - Volume 13 Issue 19 Print Report; TP is a Real Estate Investment Trust, (REIT). TP owns a portfolio of commercial properties on its own behalf as well as through joint ventures, each of which are trea...

Retail Copy Shops Are Not Manufacturers: January 29, 2019 - Bulletin Print Report; The taxpayer, ("TP"), provides equipment loans and leases to small businesses and middle market companies, including "retail copy shops." In most instances,...

Adjusting The Three-Factor Apportionment Formula Not Warranted: January 28, 2019 - Bulletin Print Report; TP is in the business of lending money to customers across the country, primarily through credit cards and other personal loan products. The vast majority of TP's activitie...

Contract Driver Not Taxpayer's Employee: January 28, 2019 - Bulletin Print Report; Q is a business that connects drivers with customers who need too-large-to towvehicles driven to them. Q contracted with D to pair him with customers needing this service...

"DSM" Expenditures Can Be Deducted: January 28, 2019 - Volume 13 Issue 18 Print Report; X corporation, (X), a public utility, is primarily engaged in generating and distributing electrical energy. In 1995, X provi...

G.E.'s Distribution Of Spinco's Stock Will Now Be Taxable: January 25, 2019 - Bulletin Print Report; WabtecCorporation, ("WAB"), and General Electric Company, ("GE"), announced today they have modified the terms of their merger agreement in a manner t...

Fertilizers Are Not "Propagative Material": January 25, 2019 - Bulletin Print Report; WE is a California limited liability company that sells fertilizers and pesticides to Arizona farmers. WE argues that the sales are exempt (from Arizona's "transaction...

Rate Increase Is Not "Insurance Or Otherwise": January 25, 2019 - Volume 13 Issue 17 Print Report; TP, a public utility, abandoned a partially completed nuclear generating plant. The state commission with rate-making authority over TP, in determining to grant TP a...

"Foreign" Corporation Subject To NYC Tax On Sale Of Passive Holding: January 24, 2019 - Bulletin Print Report; Petitioner, ("P"), is a Delaware corporation. P's stock is owned by two entities: 96.42 percent by OLP, and 3.58 percent by QPOLP, (collectively, "POE")...

Option Granted In Connection With The Performance Of Services: January 24, 2019 - Volume 13 Issue 16 Print Report; C is an 'S' corporation operating a very successful"pay-day" loan business. D is actively involved in C's operations. In 2001, when his fo...

Rights Distribution Excluded From Gross Income: January 23, 2019 - Volume 13 Issue 15 Print Report; X corporation, (X), believed to be AT&T,issued Rights to its shareholders. Upon exercise of 35 Rights and the payment of $100 in cash, the holder will recei...

Oil Tanks Are "Immovable" Property: January 23, 2019 - Bulletin Print Report; The Collector audited TP for sales and use tax for the periods beginning December 31, 2012 and ending October 31, 2015. As a result of this audit, the Collector issued a Notice...

Kentucky Affiliated Group Not Found: January 23, 2019 - Bulletin Print Report; WA is a South Carolina corporation. It owns all of the voting power and all of the ownership interest in WFK. WFK conducts business throughout the Commonwealth of Kentucky. WFK...

Can Mastercard, Inc. Deduct Its EC Fine?: January 23, 2019 - Bulletin Print Report; The European Commission, ("EC"), has fined "the card scheme" Mastercard, Inc., ("M") over 570 million euros "for limiting the possibility for...

A Rental Real Estate Enterprise Can Be A Trade Or Business: January 22, 2019 - Bulletin Print Report; Sec. 199A was enacted on December 22, 2017, as part of the Tax Cuts and Jobs Act, Public Law 115-97.Congress enacted Sec. 199Ato provide a deduction to non-corporat...

Tax-Withholding Transaction Does Not Invoke Sec. 16(b): January 22, 2019 - Bulletin Print Report; WPX Energy, Inc., ("WPX"), established an Incentive Plan, (the "Plan"), that allows officers and employees to acquire or increase their equity ownership in...

FDC Will Likely Undergo An "Ownership Change": January 22, 2019 - Bulletin Print Report; Fiserv, ("FISV"), and First Data Corporation, ("FDC"), announced that their boards of directors have unanimously approved "a definitive merger agreemen...

The Willens Deal Survey January 2019: January 22, 2019 - The Deal Survey: January 2019 Print Report; Welcome to our summary of deals for January 2019. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database. <...

Sec. 332 Gain Is Not "An Item of Income": January 22, 2019 - Volume 13 Issue 14 Print Report; TPs elected 'S' corporation status for P Corporation, (P). TPs contributed to P all of the shares of a C Corporation, (S), they owned. P filed an election to...

Sales "To The Public" Are Taxable: January 18, 2019 - Bulletin Print Report; MGC operates corporate cafeterias throughout the Kansas City metropolitan area. The Federal Reserve Bank of Kansas City, (the "Bank"), contracted with MGC to operate...

PCG's Potential Tax Deductions: January 18, 2019 - Bulletin Print Report; We have been asked whether some sort of "public policy" doctrine or rule would prevent Pacific Gas & Electric Co., ("PCG"), from securing tax deductions...

Absence of Consent Permits Theft Loss Deduction: January 18, 2019 - Volume 13 Issue 13 Print Report; The taxpayer, (H), had a stormy relationship with her boyfriend. The relationship was marked by intimidation and physical abuse. &nb...

I.R.S. To Waive Certain Underpayment (Of Estimated Tax) Penalties: January 17, 2019 - Bulletin Print Report; Sec. 6654 of the Internal Revenue Code provides that, in the case of an individual, estimated income tax is required to be paid in four installments and the amount of any requi...

Taxpayer Not First-Time Homebuyer: January 17, 2019 - Volume 13 Issue 12 Print Report; On January 1, 2008, petitioner ("P")requested a withdrawal of $20,000 from herMorgan Stanley retirement account. P listed the KC property as the...

Inherited IRA Found To Be Exempt From Attachment: January 16, 2019 - Bulletin Print Report; MA's mother, NA, owned an IRA, and MA was designated at the "Transfer on Death" recipient. After NA passed away, MA caused a trustee-to-trustee transfer to occur...

Accrued Dividends In Redemptions: January 16, 2019 - Volume 13 Issue 11 Print Report; Plaintiff is a wholly-owned subsidiary of CEC. Plaintiff ("C") serves as the sales outlet for its parent, operating through branches scattered across the co...

Can New Disney Spin-Off The RSNs?: January 16, 2019 - Bulletin Print Report; Apparently, the Justice Department will permit New Disney to divest the regional sports networks, ("RSNs"), it will be acquiring in the Fox acquisition by means of a...

CQH's Merger With LNG Constituted A Reorganization: January 15, 2019 - Bulletin Print Report; Cheniere Energy, Inc., ("LNG"), several years ago, created CheniereEnergy Partners LP Holdings, ("CQH"), as a vehicle through which institutional inve...

Newmont Mining Corporation "Gives Its Two Cents": January 15, 2019 - Bulletin Print Report; Newmont Mining Corporation, ("NEM"), a corporation existing under the laws of Delaware, and Goldcorp, Inc., ("GG"), a corporation existing under the laws of...

Gain Included In Sales Factor Ratio: January 15, 2019 - Bulletin Print Report; For 2011, Davis Lynch Holding Co. Inc., ("DL"), was a Texas corporation that did not conduct any direct business in the state of Louisiana, ("L"). DL owned...

Equity Method Income Included In Sales Factor Ratio: January 15, 2019 - Bulletin Print Report; Boyd Gaming Corporation, ("B"), is incorporated in Nevada. B owns two Louisiana, ("L"), subsidiaries, BK and BLR. BK owns and operates the Treasure Chest Ca...

"Time Phased Voting" Successfully Used In An "RMT" Transaction: January 15, 2019 - Volume 13 Issue 10 Print Report; Distributing, ("D"), conducts Business A and Business B. D has a single class of voting common stock outstanding. D also has two classes of preferred stock outstandin...

Maxar Technologies Has "Domesticated" To The U.S.: January 14, 2019 - Bulletin Print Report; Recently, MaxarTechnologies, Inc., ("MUS"), a newly-created Delaware corporation, became the ultimate parent corporation of MaxarTechnologies, Ltd., (&quo...

How Are Service Receipts Apportioned To Texas?: January 14, 2019 - Bulletin Print Report; TP provides an online service allowing customers to search, select, and reserve spaces at airport parking facilities in both the United States and Canada. A third-party web hos...

No Change In Domicile Without Physical Presence: January 14, 2019 - Volume 13 Issue 9 Print Report; Two classes of residents for Virginia income tax purposes are domiciliary residents and actual residents, as set forth in Virginia Code Sec. 58.1-302. ...

Sec. 505 Does Not Address Tax Liabilities Of A Non-Debtor: January 11, 2019 - Bulletin Print Report; AWA, ("Debtor," or "D"), filed a petition in bankruptcy pursuant to Chapter 11 of the Bankruptcy Code onMay 30, 2013. The case was later converted to...

New York "Decouples" From Tax Cuts And Jobs Act: January 11, 2019 - Bulletin Print Report; Since New York State's individual income tax return is based on federal taxable income, the changes made by the Tax Cuts and Jobs Act, ("TCJA"), "may affect...

Some Environmental Remediation Costs Must Be Capitalized: January 11, 2019 - Volume 13 Issue 8 Print Report; X corporation, (X), owns and operates a manufacturing plant that produces property that is inventory in X's hands. X's manufacturing operations discharge haza...

Congressional Staffer's "Tax Home" Was In Washington D.C.: January 10, 2019 - Bulletin Print Report; MS was a Deputy Chief of Staff for Congressman Chip Cravaack. In a typical month, she spent 12-15 working days in Washington D.C. and 6-10 in Minnesota. On Schedule A of the Fo...

Minor Children and the "548 Day Rule": January 10, 2019 - Volume 13 Issue 7 Print Report; P is a New York domiciliary who intends to live and work in a foreign country. P is married and has one minor child but hewill be legally separated from his spo...

Liquidation Of Sears Holdings Corporation Will Produce Capital Losses: January 9, 2019 - Bulletin Print Report; Apparently, the odds have substantially increased that Sears Holdings Corporation, ("SHC"), will not be reorganized but, instead, will be completely liquidated in a t...

Capital Loss Not "Sourced" In New York: January 9, 2019 - Volume 13 Issue 6 Print Report; Petitioner (P) was a resident of Colorado in 2005. He filed a New York State nonresident and part-year resident personal income tax return. &nbs...

Fox Corporation Files Form 10--Spin-Off Tax Treatment Remains Murky: January 8, 2019 - Bulletin Print Report; The Form 10 for Fox Corporation, ("New Fox"), was filed yesterday. The filing describes in detail the first part of the Walt Disney Co./Twenty-FirstCentury Fox,...

Voluntary Surrender Of Stock By A "Dominant" Shareholder: January 8, 2019 - Bulletin Print Report; On December 27, 2018, Mr. EddieLampert, of ESL Investments, Inc., "returned to Sears Holdings Corporation, ("SHC"), 1,327,137 shares of common stock of the...

Form and Substance in Sec. 332: January 8, 2019 - Volume 13 Issue 5 Print Report; Minority shareholders owned 25 percent of the stock of X Corporation, (X). The remaining 75 percent of the stock was owned by Y Corporation, (Y). Y desired to liquida...

Does Sec. 1234A Apply To CVRs?: January 7, 2019 - Bulletin Print Report; The transaction in which Bristol-Myers Squibb, Co.,("BMY"), will acquire all of the stock of CelgeneCorporation, ("CELG"), features, as an integ...

BMY Will Acquire CELG: January 7, 2019 - Bulletin Print Report; Bristol-Myers Squibb Co., ("BMY"), and Celgene Corporation, ("CELG"), announced that they have entered into a definitive merger agreement in connection with...

Dividends on Nonvoting Stock Carry Foreign Tax Credits: January 7, 2019 - Volume 13 Issue 4 Print Report; X is a domestic corporation. Y is a foreign corporation organized under the laws of Country Z. Y will have two classes of stock, voting and nonvoting. All shares of s...

Conversion Ratio Alterations Have Tax Consequences: January 4, 2019 - Bulletin Print Report; On August 9, 2018, Microchip Technology, Inc. declared a quarterly cash dividend to the holders of its common stock in the amount of $0.364 per share. As a result of the declar...

Malt Product Properly Taxed At "Wine" Rates: January 4, 2019 - Bulletin Print Report; P is a malt based beverage alcohol product which C1 manufactures in Illinois. In 2010, the Food and Drug Administration, ("FDA"), acknowledged that P is a "malt...

Sec. 269 Does Not Deny Statutory Benefits: January 4, 2019 - Volume 13 Issue 3 Print Report; Husband and Wife have operated a hog farm since 1949. On January 1, 1988, Husband, Wife, and Son (TPs)exchanged their dwellings, automobiles, crops and farming...

Farmer Not "Agent" Of The Federal Government: January 3, 2019 - Bulletin Print Report; APP purchased sheet metal for a feed barn that was constructed on its farmland. The feed barn will be employedby APP to feed meat producing cattle and store excrement for...

Has ESL Investments Given Up On Acquiring Sears' NOLs?: January 3, 2019 - Bulletin Print Report; On December 28, 2018, ESL Investments, Inc., the vehicle controlled by the legendary investor Eddie Lampert, floated a revised proposal for the acquisition of Sears Holdings Co...

Fiduciaries Can Execute "Triple Eye" Agreements: January 3, 2019 - Volume 13 Issue 2 Print Report; X corporation, (X), has outstanding a single class of commonstock 1/2 of which was owned by a father and the other 1/2 by his son. Under the constructive owners...

AMT Credits Will Provide Cash Infusions Beginning In 2019: January 2, 2019 - Bulletin Print Report; One of the lesser known elements of the Tax Cuts and Jobs Act, ("TCJA"), was the outright repeal, for corporate taxpayers, of the Alternative Minimum Tax for taxable&...

Wal-Mart.com Is A "Dealer" Responsible For Sales Tax: January 2, 2019 - Bulletin Print Report; Wal-Mart.com USA, LLC, ("W"), operates an online marketplace, (the "M"), where it, along with third-party retailers, sell their goods. W sells inventory it...

Qualified Plan Not a "Conduit" Entity: January 2, 2019 - Volume 13 Issue 1 Print Report; In 1990, L established a defined-benefit plan which he converted in 1996 into a profit-sharing plan, both of which were qualified plans under Sec. 401 of the Internal...

Payments To Local Governments May Be Deducted Under Sec. 162: December 31, 2018 - Bulletin Print Report; Sec. 162(a) of the Internal RevenueCode allows a deduction for all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade o...

Extinguishment Of "Forgivable" Loan Produces Ordinary Income: December 31, 2018 - Bulletin Print Report; Robert A. Connell, ("C"), has been a financial adviser since 1974. In 1980, C joined Smith Barney, remaining there until 2009. By 2009, C and his team had assets unde...

Dell Technologies Completes The "Class V" Transaction: December 31, 2018 - Bulletin Print Report; On December 28th, Dell Technologies, Inc., ("DTI") announced "the successful completion of the Class V transaction following approval of the transaction by its s...

Related Party Exchange Not Obscured by Presence of "QI": December 31, 2018 - Volume 12 Issue 250 Print Report; Dealer, (D), sells a certain type of equipment at retail. Taxpayer, (TP), leases that sametype of equipment to unrelated customers. TP and D are related parties...

Court Calculates "QEZE" Credits Of 'S' Corporation Shareholder: December 28, 2018 - Bulletin Print Report; PCC is an 'S' corporation. PCC constructs commercial buildings, primarily in New York and Virginia. It was certified as a qualified empire zone enterprise, ("QEZE&...

Taxpayer Denied Dependency Exemptions and Child Tax Credits: December 28, 2018 - Volume 12 Issue 249 Print Report; The taxpayer, (P), was married to MS until March 17, 2005. P and MS had two children, MMS and MAS, who were born in 2000 and 2002, respectively. On March 17, 2005, P...

Inventory Liquidation Proceeds Can Be Distributed in Partial Liquidation: December 27, 2018 - Volume 12 Issue 248 Print Report; X operated a full line department store which offered a comprehensive selection of brand merchandise and a number of services, and also offered a variety of credit ar...

New Jersey's "MLP Fee" Is Constitutional: December 27, 2018 - Bulletin Print Report; Under the Gross Income Tax ("GIT") Act, an entity classified as a partnership for federal income tax purposes is required to file an informational return showing all...

Wash Sale Considerations For Year-End Tax Loss Sellers: December 26, 2018 - Bulletin Print Report; The market's swoon has left many investors with unrealized losses that, if they were recognized, could shelter from taxation capital gains recognized earlier in the year. (...

New Jersey's Enlightened Approach To "GILTI" And "FDII": December 26, 2018 - Bulletin Print Report; The Tax Cuts and Jobs Act, ("TCJA"), (P.L. 115-97), was signed into law by President Trump on December 22, 2017. The TCJA added Sec. 951A and Sec. 250 to the Internal...

Express Scripts/Cigna...One More Thing: December 26, 2018 - Bulletin Print Report; New Cigna, (NC), recently completed its "double dummy" acquisition of the stock of Old Cigna, (OC), and Express Scripts, (ES). NC, through the mechanism of twin rever...

'S' Election Constitutes "Reasonably Equivalent Value" For a Transfer: December 26, 2018 - Volume 12 Issue 247 Print Report; N is a Georgia corporation that operated approximately 150 Waffle House restaurants in Georgia, Florida, and Virginia. On March 1, 1991, S, a shareholder of N, execut...

T-Mobile's "Outside Plant" Is Taxable Real Property: December 24, 2018 - Bulletin Print Report; T-Mobile, ("TM"), owns large cellular datatransmission equipment that it has installed on the exterior of buildings in Mount Vernon, New York. The installations...

Perrigo Co. plc Hit With Irish Tax Assessment: December 24, 2018 - Bulletin Print Report; EP, a subsidiary of Perrigo Co. plc, will file an appeal with the Irish Tax Appeals Commission regarding a Notice of Assessment issued to EP by "Irish Revenue." The N...

Training Costs Are Deductible: December 24, 2018 - Volume 12 Issue 246 Print Report; Sec. 162 and Reg. Sec. 1.162-1(a) allow a deduction for all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or b...

Express Scripts And Cigna Engage In A "Double Dummy" Transaction: December 21, 2018 - Bulletin Print Report; Cigna Corporation, ("CC"), has finally completed its businesscombination with Express Scripts Holding Co., ("ESH"), effective December 20, 2018. The t...

"Dormant" License Used In The Regular Course Of Business: December 21, 2018 - Bulletin Print Report; Y and Y's wholly-owned subsidiaries are telecommunications companies headquartered outside of the State of Michigan that provide "landline and wireless services."...

Personal Service Contracts and PHCs: December 21, 2018 - Volume 12 Issue 245 Print Report; M is engaged in the business of music recording. M has issued and outstanding 1,020 shares of common stock and each of M's six individual shareholders own 170 sha...

Foreign Partners Taxed On Disposition Of U.S. Partnership Interests: December 21, 2018 - Bulletin Print Report; The Tax Cuts and Jobs Act, ("TCJA"), added Sec. 864(c)(8) to the Internal Revenue Code. That section effectively overturns the taxpayer-friendly decision handed down...

Withholding Tax Should Not Be Imposed On The "New Fox" Distribution: December 20, 2018 - Bulletin Print Report; The Fox/Disney transaction features a substantial distribution, by Fox, to its shareholders with respect to its stock. The question has arisen whether, with respect to foreign...

Use Of Private Vehicles Permitted By P.L. 86-272: December 20, 2018 - Bulletin Print Report; Is delivery of tangible personal property via private vehicles, instead of a common carrier, considered a protected activity under P.L. 86-272? The answer is yes. P.L. 86-272 s...

Extracted Asset Not Part of the Consideration Received For Stock: December 20, 2018 - Volume 12 Issue 244 Print Report; For many years prior to December 20, 1955, petitioner (P) owned and controlled all of the 8,243 outstanding shares of stock of W-M....

The Willens Deal Survey December 2018: December 19, 2018 - The Deal Survey: December 2018 Print Report; Welcome to our summary of deals for December 2018. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database....

"MFP" Payments Are To Be Included In Gross Income: December 19, 2018 - Bulletin Print Report; The United States Department of Agriculture, ("USDA"), "Trade Aid Package" is a temporary assistance program designed to assist farmers who experience a fin...

"Sale-For-Resale" Exception Not Met: December 19, 2018 - Bulletin Print Report; P is a single-member limited liability company. P's sole member is M. The president of M is S. In December 2011, P purchased an aircraft from an Indiana-based vendor for $1...

Futures Contracts Generate RIC Qualifying Income: December 19, 2018 - Volume 12 Issue 243 Print Report; Fund, (F), intends to file an election to be taxed as a regulated investment company (RIC). F's objective is to achieve broad equity exposure while reducing risk...

DISC Commission Payments Are Not Constructive Dividends: December 18, 2018 - Bulletin Print Report; The tax code allows companies to avoid corporate tax on export income up to four percent of gross export receipts, by paying that amount as tax-deductible commissions to a DISC...

Gifts Deemed Made In Contemplation Of Death: December 18, 2018 - Bulletin Print Report; In 2001, C executed a last will and testament. In 2012, $5.1 million was transferred by her. A federal gift tax return was prepared for 2012. Almost all of the $5.1 million was...

Son's Purchase Does Not Cause Acquisition Of Prohibited Interest: December 18, 2018 - Volume 12 Issue 242 Print Report; A and his son, B, each owned 50 percent of the stock of a corporation since the date of its incorporation. The corporation re...

"RBIGs" Can Arise Even When The Asset Is Not Disposed Of: December 17, 2018 - Volume 12 Issue 241 Print Report; Sec. 382 of the Internal Revenue Code provides that, after an "ownership change," the amount of a loss corporation's taxable income for any post-change year that...

CVS Health Corp. Completes Its Acquisition Of Aetna, Inc.: December 17, 2018 - Bulletin Print Report; On November 28, 2018, CVS Health Corporation, ("CVS"), completed its historic acquisition of Aetna, Inc., ("AET"). The transaction was structured as a "...

The "Individual Mandate" Is Ruled To Be Unconstitutional: December 17, 2018 - Bulletin Print Report; The Affordable Care Act, ("ACA"), was signed intolaw by President Obamaon March 23, 2010. The ACA established a requirement to maintain "minimum esse...

Are AABA And BABA Substantially Identical?: December 14, 2018 - Bulletin Print Report; Investors who purchased shares in Alibaba Group Holding, Ltd., ("BABA"), within the last six months or so will probably have sustaineda "paper" loss w...

Taxable "Employment Service" Not Provided: December 14, 2018 - Bulletin Print Report; In a 2003 contract, S agreed to "furnish, manage and supervise" supplemental staffing to KK's parent company, a division of M. In October 2009, M and S entered in...

"Covered Transactions": December 14, 2018 - Volume 12 Issue 240 Print Report; On Date 5, the following steps were taken to effectuate the merger transaction (the "Transaction"): (1) C1 formed P, and P formed Sub 1 and Sub 2; (2) Sub 1...

Debtor's "Managed" I.R.A. Exempt From Creditors' Claims: December 13, 2018 - Bulletin Print Report; P was employed by Charles River Associates, ("CRA"), from July 22, 2015 to May 15, 2016. Upon termination of P's employment, CRA made a demand that P return a sum...

Dell Shareholders Overwhelmingly Approve The "Class V Transaction": December 13, 2018 - Bulletin Print Report; Dell Technologies, Inc., ("DTI"), has several classes of stock outstanding. It has 409.5 million Class A common shares outstanding; 136.9 million Class B common share...

Rents and Royalties Not Passive Investment Income: December 13, 2018 - Volume 12 Issue 239 Print Report; Company, (C), elected to be an 'S' corporation, effective on Date "B." C has C corporation earnings and profits. C owns and operates radio stations...

Out-Of-State Delivery Does Not Avoid Imposition Of Sales Tax: December 12, 2018 - Bulletin Print Report; R is an Indiana corporation that owns and operates an RV dealership. Many of its sales happen online. In typical online sales, once the parties agree on a price, R sent a purch...

Prohibited Transaction Ends IRA Deferral: December 12, 2018 - Volume 12 Issue 238 Print Report; In 2001, F identified AFS as an "attractive business opportunity." F and P engaged B to assist in structuring the purchase of AFS's assets. B presented...

Sec. 338(h)(10) Election Leads To Partial Liquidation: December 11, 2018 - Volume 12 Issue 237 Print Report; S is a closely-held corporation that has a single class of stock outstanding. S has directly engaged in a variety of businesses, and before 1996, Business C and Busin...

TVTY To Acquire NTRI: December 11, 2018 - Bulletin Print Report; Tivity Health, Inc., ("TVTY"), and Nutrisystem, Inc., ("NTRI"), announced that they have entered into a definitive agreement under which TVTY"wil...

Five-Factor Allocation Formula Cannot Be Justified: December 11, 2018 - Bulletin Print Report; Plaintiff, ("P"), is a financial services company headquartered in Mt. Laurel, New Jersey. It is a wholly-owned subsidiary of Canon U.S.A., Inc., ("CUSA"),...

Altria Group, Inc. To Invest In Cronos Group, Inc.: December 10, 2018 - Bulletin Print Report; Altria Group, Inc., ("AGI"), announced recently that it has entered into an agreement to acquire newly-issued shares in Cronos Group, Inc., ("CGI"), &...

Louisiana's Tax Credit System Is Unconstitutional: December 10, 2018 - Bulletin Print Report; TPs own an interest in several LLCsand 'S' corporations, (the "Pass-Through Entities"), that transact business in Texas, Arkansas, and Louisiana. TPs pa...

Electronic Version Of A Book Not QPP: December 10, 2018 - Volume 12 Issue 236 Print Report; TP is a publisher of books. TP's activities with respect to its books allow TP to create an electronic version of a book....

ESL Is Proposing A 'G' Reorganization For Sears: December 7, 2018 - Bulletin Print Report; Funds affiliated with ESL Investments, ("ESL"), not surprisingly, have made an "Indicative Bid" to extricate Sears Holdings Corporation, ("Sears")...

Adjustment of Option Terms Not a "Modification": December 7, 2018 - Volume 12 Issue 235 Print Report; Corporation, (C), owns approximately "X%" of the common limited partnership units of PS and also owns preferred units of PS. C elected to be taxed as a REIT...

Pell Grants Are "Nontaxable Scholarships": December 6, 2018 - Bulletin Print Report; In 2014, Charles and Anita Waters, ("W"), applied for, and eventually received, a property tax refund which was predicatedentirely upon the "household inco...

Notice of Deficiency Valid But Motion To Dismiss Granted: December 6, 2018 - Volume 12 Issue 234 Print Report; Petitioner, (P), was incorporated in California on April 2, 1986. The California Franchise Tax Board suspended the powers, rights, and privileges of P on March 1, 200...

Tribune Media Co. To Be Acquired By Nexstar Media Group, Inc.: December 5, 2018 - Bulletin Print Report; It appears that Tribune Media Company, ("TMC"), has now found a home. On November 30, 2018, TMCentered into an Agreement and Plan of Merger in connection with w...

Working Capital Can Be Distributed In Partial Liquidation: December 5, 2018 - Volume 12 Issue 233 Print Report; M corporation, (M), was actively engaged in conducting a wholesale appliance distributorship and an outlet for the retail sale of appliances for more than 30 years.

Charge Based On Energy Cost Savings Is "Qualifying" Rent: December 4, 2018 - Bulletin Print Report; TP has elected to be taxed as a real estate investment trust, ("REIT"), under Secs. 856 through 859.TP's activities primarily occur through Operating Partne...

Statute Of Limitations Withstands Constitutional Challenge: December 4, 2018 - Bulletin Print Report; MK worked for Entergyin New York, and he received stock options as part of his compensation. The Ks were relocated to Mississippi, ("M"), in May 2007. The Ks ti...

TESARO Will Have Undergone Multiple Ownership Changes: December 4, 2018 - Bulletin Print Report; GlaxoSmithKline, plc, ("GSK"), and TESARO, Inc., ("T"), have entered into a definitive agreement pursuant to which GSK(through a lower-tier subsidiary...

Divorced Father Not Entitled To Dependency Exemption Deductions: December 4, 2018 - Volume 12 Issue 232 Print Report; S was married to JP, and they had three minor children, M, W, and L. They divorced in 2003. The family court's "Judgment of Absolute Divorce" provided t...

U.S.'s Largest Marijuana Dispensary Denied Tax Deductions: December 3, 2018 - Bulletin Print Report; Under federal law, marijuana, ("M"), is a "Schedule I controlled substance." This means that, under federal law, the manufacture, distribution, dispensation...

CPLP Will Engage In The Partnership Version Of An "RMT" Transaction: December 3, 2018 - Bulletin Print Report; Capital Product Partners, L.P., (CPLP), and DSS Holdings L.P., ("DSS"), a privately held company...have entered into a definitive transaction agreement pursuant to wh...

No Need To Waive Family Attribution: December 3, 2018 - Volume 12 Issue 231 Print Report; X corporation, (X), has outstanding one class of stock consisting of 100 shares of votingcommon stock. Mr. A owned 30 shares and held positions as president and...

Pan American Silver's Plan Of Arrangement Will Be A Reorganization: November 30, 2018 - Bulletin Print Report; As previously reported, Pan American Silver Corporation, ("P"), and Tahoe Resources, Inc., ("T"), both Canadian corporations, have entered into a definitive...

Deemed Paid Foreign Tax Credits On Dividends From Lower-Tier Subs: November 30, 2018 - Volume 12 Issue 230 Print Report; A domestic corporation, P, owns all of the outstanding voting stock of foreign corporation, S1, which, in turn, owns 50 percent of the outstanding voting stock of for...

Retroactive Application Of Tax Law Amendments Was Constitutional: November 29, 2018 - Bulletin Print Report; Petitioner is a power producer that owns and operates power plants. Petitioner is the sole owner and sole member of OHP, LLC, the entity that owns and operates "the Plant....

Trust Found To Materially Participate In Loss Business: November 29, 2018 - Volume 12 Issue 229 Print Report; CT is a testamentary trust established in 1986 under the Last Will and Testament of MKC. F has been the trustee of CT since 1984. The Carter Ranch ("ranch")...

I.R.S. Unveils "Interest Disallowance" Regulations: November 28, 2018 - Bulletin Print Report; One of the signature elements of the Tax Cuts and Jobs Act was the replacement of relatively mild "earnings stripping" rules with a provision that would be much more...

Transfer of Warrants Not Governed By Sec. 83: November 28, 2018 - Volume 12 Issue 228 Print Report; MK is an investment banker and an 87 percent shareholder of ST. KP is a partnership. MK is the sole general partner with a one percent interest. The remaining interes...

UTX Will Separate Its Businesses Via Tax-Free Spin-Offs: November 27, 2018 - Bulletin Print Report; United Technologies Corporation, ("UTX"), announced the completion of the acquisition of Rockwell Collins, Inc., (COL), and, perhapsmore importantly, the compan...

Amusement Device Is An Inherently Permanent Structure: November 27, 2018 - Volume 12 Issue 227 Print Report; BI isa South Carolina corporation with its principal place of business in Virginia. BI is an 'S' corporation. I...

Massachusetts Follows Rev. Rul. 99-5: November 27, 2018 - Bulletin Print Report; In 2006, the appellant and a partner, ("P2"), utilized a lower-tier, disregarded entity, ("S"), to purchase a building located in Quincy, Massachusetts. S w...

Relocation Benefits Excluded From Taxable Compensation: November 26, 2018 - Bulletin Print Report; Railroads and their employees are not part of the Social Security system and do not participate in the FICA taxes that fund Social Security. Instead, Congress has established a...

United Technologies Poised To Complete Rockwell Collins Deal: November 26, 2018 - Bulletin Print Report; It appears that the last regulatory hurdle has now been cleared and the United Technologies/Rockwell Collins transaction will be consummated within the next few business days....

Sec. 351 Is Mandatory: November 26, 2018 - Volume 12 Issue 226 Print Report; Appellants, in 1971, were all shareholders in LC. Appellants B and C were also shareholders in W, each owning 44.44 percent of the stock of that corporation. <...

Settlement For "Lost Profits" Included In Nonresident's New York Income: November 23, 2018 - Bulletin Print Report; Petitioner was a member of RLLC, an insurance company that did business in New York. In 1999, he assigned his interest in RLLC to his wife, M. This assignment resulted in litig...

The Cincinnati Reds Are Not Liable For Use Tax On Bobbleheads: November 23, 2018 - Bulletin Print Report; Major league baseball "has experienced challenges in getting fans to attend games." One enticement is the opportunity to receive unique merchandise--such as bobblehea...

The "All E&P Amount": November 23, 2018 - Volume 12 Issue 225 Print Report; On Date D, ACQ contributed ACQ stock to S1. T1 and T2 were domestic corporations owned by P. T1 and T2 each transferred substantially all of their assets and liabilit...

Entity Engaged In Mortgage Servicing Is Not A "Financial Corporation": November 21, 2018 - Bulletin Print Report; The taxpayer, ("TP"), is a specialty financial services company focused on originating, purchasing, selling, and servicing U.S.residential mortgage loans. TP ac...

A "Rebate" Can Lead To a Forfeiture of RIC Status: November 21, 2018 - Volume 12 Issue 224 Print Report; R and S are eachregulated investment companies (RICs). During 1973, R entered into an investment advisory contract agreement with X, an investment adviser, unde...

The Willens Deal Survey November 2018: November 20, 2018 - The Deal Survey: November 2018 Print Report; Welcome to our summary of deals for November 2018. Full reports on some of these transactions can be found via the link in the description, or by searching the company...

Donation of Sec. 1250 Property: November 20, 2018 - Volume 12 Issue 223 Print Report; TP is a State 1 corporation. TP owns certain improved real property (the "B Property"). The B Property contains certain depreciable real property that is &q...

Kerosene Used In "Commercial Aviation" Is Taxed At Lower Rates: November 20, 2018 - Bulletin Print Report; The issue is whether kerosene used in a flight subject to tax under Sec. 4261 or Sec. 4271, ("air transportation taxes"), is taxed at the commercial or noncommercial...

Indiana "URT" Not Deductible In Massachusetts: November 20, 2018 - Bulletin Print Report; Appellant conducted a natural gas distribution operation in Massachusetts and was subject to the Massachusetts corporate excise. Two of the affiliates included in the appellant...

Colfax To Benefit From DJO Global's NOLs: November 20, 2018 - Bulletin Print Report; Colfax Corporation, ("CFX"), announced that it has entered into a definitive agreement to acquire DJO Global, Inc., ("DJO"), "from private equity funds...

I.R.S. Concessions Should Reduce Borrowing Costs: November 19, 2018 - Bulletin Print Report; A U.S. shareholder of a controlled foreign corporation, ("CFC"), is required to include in its gross income "the amount determined under Sec. 956" with resp...

AAPL's Sales Tax Deficiency Is Upheld: November 19, 2018 - Bulletin Print Report; In 2011, the MAC App Store, ("MAS"), was launched. In order to raise awareness of the MAS, Apple, Inc., ("P"), offered a Back to School, ("BTS"),...

PAAS To Issue CVRs To The TAHO Shareholders: November 19, 2018 - Bulletin Print Report; One of the more interesting deals we have encountered will involve two Canadian mining corporations who are seeking to join forces. Thus, Pan American Silver Corporation, (&quo...

Purchase of "Primary" Shares Does Not Spoil a 'B' Reorganization: November 19, 2018 - Volume 12 Issue 222 Print Report; X Corporation, (X), acquired all of the outstanding stock of unrelatedY Corporation, (Y), from the shareholders of Y, in exchange for voting stock of X. X was i...

Gift Of Option Not a "Disposition" Thereof: November 16, 2018 - Volume 12 Issue 221 Print Report; TP is employed by X Corporation, (X). In 1992, X adopted a stock ownership incentive plan (the "Plan"). Under the Plan, the compensation committee of the Bo...

Sec. 304 Will Rarely Turn A Capital Gain Into A Dividend: November 16, 2018 - Bulletin Print Report; Certain recent deals, including the landmark Disney/Fox transaction and the Takeda/Shire transaction, have been structured as acquisitions by the acquiring corporation of the s...

Dell Sweetens Its Offer For Its Class V Stock: November 16, 2018 - Bulletin Print Report; Some of the most prominent and successful investors in the country have exerted pressure on Dell Technologies, Inc., ("DTI") to sweeten the terms of its so-called &qu...

IPO And Mergers Produce "Global" Sec. 351 Transaction: November 15, 2018 - Volume 12 Issue 220 Print Report; ACQ was formed in Year 1 as a State A corporation. Its goal was to become "a leading consolidator and operator of Business 1 and Business 2." &nbs...

Taxpayer Did Not Conclusively Abandon His Virginia Domicile: November 15, 2018 - Bulletin Print Report; In the state of Virginia, as in most states, two classes of "residents" exist--a "domiciliary" resident and an "actual" (or statutory) resident, a...

Is Altaba Planning To Completely Liquidate?: November 15, 2018 - Bulletin Print Report; It is now, based on our informal survey, generally believed that Altaba, Inc., ("AABA"), is headed towards a complete liquidation; and that the possibility of engagin...

Permanent and Total Disability: November 14, 2018 - Volume 12 Issue 219 Print Report; Under certain circumstances, Virginia Code Sec. 58.1-322(C)(4)(b) provides an individual income tax subtraction for up to $20,000 of "disability income" as...

G.E. To Sell Down Its BHGE Stake: November 14, 2018 - Bulletin Print Report; Baker Hughes, a GE company, ("BHGE") announced that General Electric Company, ("GE"), BHGE's principal shareholder, has commenced a secondary offering o...

Deemed Repatriation Under Sec. 965 Excluded From Sales Factor: November 14, 2018 - Bulletin Print Report; The question presented is "can sales factor representation" be given to accumulated post-1986 deferred foreign income of foreign corporations included in federal taxa...

State Taxes Are Deductible In Kentucky (For Corporate Taxpayers): November 14, 2018 - Bulletin Print Report; The Kentucky Department of Revenue has issued a "technical advice memorandum" regarding the deductibility of "state" taxes. For the most part, with some not...

Sec. 351 Is Not Elective: November 13, 2018 - Volume 12 Issue 218 Print Report; G is an individual who for many yearshad been engaged in the typesetting and composition business. In April, 1950, several ofG's employees organized C...

Right To Receive "Brownfield" Credits Is A "Receivable": November 13, 2018 - Bulletin Print Report; The taxpayer, ("TP"), will elect to be taxed as a real estate investment trust, ("REIT"). TP is the sole member of Subsidiary, a disregarded entity. Charity...

Sales Of "Standardized" Software Are Subject To Sales Tax: November 13, 2018 - Bulletin Print Report; Citrix Systems, Inc., ("C"), is a publicly traded Delaware corporation that did business in Massachusetts, ("M"), during the periods at issue. The tax at is...

Takeda's Taxable Acquisition Of Shire: November 12, 2018 - Bulletin Print Report; Takeda has published the "scheme document" in connection with its acquisition of Shire. The acquisition is to be implemented by way of a Court-sanctioned "scheme...

A Parent And Its FSC Are Not "The Same Taxpayer": November 12, 2018 - Bulletin Print Report; Interest accrues at a higher rate on corporate taxpayers' underpayments than on their overpayments. In 1996, Congress enacted Sec. 6621(d)--"To the extent that, for an...

When Does a Redemption Occur?: November 12, 2018 - Volume 12 Issue 217 Print Report; B owned 37.5 of 50 outstanding shares of stock in A. Sometime during 1966, B representatives and the other A shareholder reached an agreement by which B would surrend...

WGP To "Roll Up" WES: November 12, 2018 - Bulletin Print Report; Western Gas Partners, L.P., ("WES"), and Western Gas Equity Partners, L.P., ("WGP"), announced that they have entered into a merger agreement pursuant to wh...

Disregarded Entity Found To Be A Member Of An Affiliated Group: November 9, 2018 - Bulletin Print Report; The taxpayer provided administrative services to insurersof extended service contracts. The taxpayer was a limited liability company, ("LLC"), and a "disre...

Metal Contracts Not Investment Capital: November 9, 2018 - Volume 12 Issue 216 Print Report; A was in the business of providing financial advisory services, including a newsletter, to its clients. A frequently invested for its own account in various securitie...

ZAYO To Engage In A "Taxable" Spin-Off: November 8, 2018 - Bulletin Print Report; ZayoGroup Holdings, Inc., ("ZAYO"), announced that it plans "to separate into two publicly traded corporations: one to focus on providing core communicatio...

Country Music Venue Not Operated For Profit: November 8, 2018 - Bulletin Print Report; JF, together with her husband, bought a music venue called Bell Cove, ("BC"), in 1986. They operated BC until JF's husband died in 1999. JF re-opened BC in 2008....

ESOP Fails To Meet Minimum Coverage Requirement: November 8, 2018 - Volume 12 Issue 215 Print Report; AZ was a surgeon and was the sole owner of GG. Aside from AZ, GG employed five other people. In late 1998, AZ acquired 100 percent of the stock of PSS, a new 'S' corpor...

LL.M. Expenses Not Deductible: November 7, 2018 - Bulletin Print Report; Petitioner, ("P"), earned his law degree from CU, in Spain, in September 2006. That same month he began working as a full-time associate at the Madrid office of PwC....

Taxpayer Not Bound By Form: November 7, 2018 - Volume 12 Issue 214 Print Report; Petitioner, (P), and his brother, W, each owned 50 percent of the outstanding stock in RBB and RIC (the "corporations"). &...

Income From Covered Call Options Is Business Income: November 6, 2018 - Volume 12 Issue 213 Print Report; Petitioner, an investment company, computed its New York State franchise tax report for the fiscal year ending February 28, 1981 on the basis of its allocated busines...

Qui Tam Action Founders On "Tax Bar": November 6, 2018 - Bulletin Print Report; Appellant initiated a qui tam action under the Minnesota False Claims Act, ("MFCA"), alleging that respondents have intentionally failed to pay fee...

Yoga Classes Constitute "Physical Fitness Services": November 6, 2018 - Bulletin Print Report; Taxpayer, ("TP"), runs three exercise gyms in downtown Seattle, Washington. TP reports all of its income from its "Fitness Classes" under the "service...

Sales Pursuant To Liquidation Plan Not "Prohibited Transactions": November 5, 2018 - Bulletin Print Report; The taxpayer, ("TP"), is a real estate investment trust, ("REIT"). JV holds "a%" of the stock of TP. TP owns PortfolioA. PortfolioA co...

Encana's Stock Will Be Taxable To Newfield's Shareholders: November 5, 2018 - Bulletin Print Report; Encana Corporation, ("ECA"), a Canadian corporation, and NewfieldExploration Company, ("NFX"), announced that they have entered into a definitive agre...

When Does A Trust "Materially Participate": November 5, 2018 - Volume 12 Issue 212 Print Report; Trust A and Trust B are complex trusts that were each created on Date 1. Each owned an interest in X, an 'S' corporation. A owns the remaining interests in X....

The Mixture Credit Is Not A "Payment" Of Excise Tax: November 2, 2018 - Bulletin Print Report; Since 1932, the United States has imposed an excise tax on various types of fuel, including gasoline. Under Sec. 4081 of the Code, the United States imposes an excise tax on th...

Accounting For Franchise Termination Payments: November 2, 2018 - Volume 12 Issue 211 Print Report; TP is a U.S. corporation and a subsidiary of P. On Date 2, TP entered into a franchise agreement with PR, the predecessor in interest to F, whereby PR acquired exclus...

GameStop's Trade-Ins Not Excluded From Sales Tax: November 2, 2018 - Bulletin Print Report; GameStop Corporation, ("GS"), is a retailer of new and used video game software, hardware, and accessories.... GS offers its customers a trade-in program in which a c...

BHP Billiton's Historic Distribution: November 1, 2018 - Bulletin Print Report; BHP Billiton Limited, ("BHP"), recently disposed of its "Onshore US assets" in a transaction in which it realized net proceeds of approximately $10.4 billio...

I.R.S. Will Allow "Deemed" Dividends To Enjoy A DRD: November 1, 2018 - Bulletin Print Report; Before the Revenue Act of 1962, "U.S. shareholders" of controlled foreign corporations, ("CFCs"), were sitting pretty. They were not subject to U.S. tax on...

Debt of Corporation "To The Shareholder": November 1, 2018 - Volume 12 Issue 210 Print Report; ER is an electing "small business corporation" under Subchapter S of the Internal Revenue Code. TP owns 2/3 of the stock of ERfor which he paid $20,00...

Offer In Compromise Requires Forfeiture Of Loss Carryovers: November 1, 2018 - Bulletin Print Report; Petitioner, ("P"),and his wife submitted an "Offer in Compromise," ("OIC"), to the New York State Department of Taxation and Finance, (the &...

Intellectual Property Is Not Tangible Personal Property: October 31, 2018 - Bulletin Print Report; Sec. 7202 of the Pennsylvania Tax Reform Code of 1971, (the "Code"), provides--(a) There is hereby imposed upon each separate sale at retail of tangible personal prop...

CHK Will Acquire WRD: October 31, 2018 - Bulletin Print Report; Chesapeake Energy Corporation, ("CHK"), and WildHorse Resource Development Corporation, ("WRD"), announced that CHK"has entered into a definitive...

Fantasy Sports Contests Ruled Unconstitutional In New York: October 31, 2018 - Bulletin Print Report; A group of plaintiffs, "who have gambling disorders," brought an action in New York State's Supreme Court requesting that Chapter 237 of the Laws of 2016 of the S...

Sec. 1031 "Identification Letter" Not Timely Delivered: October 31, 2018 - Volume 12 Issue 209 Print Report; After selling certain property in 2003, the Ss purchased additional properties, including the MRP. The Ss claimedthat the transactions were part of a tax deferred exchang...

Taxation Of Benefits Flowing From A "Split-Dollar" Arrangement: October 30, 2018 - Bulletin Print Report; Petitioners, the Ms, were the sole shareholders of MI, an 'S' corporation. JM was also an employee of MI. In 2002, MI adopted the "Sterling Benefit Plan." Pur...

I.B.M./Red Hat--Accounting For Deferred Revenue: October 30, 2018 - Bulletin Print Report; International Business Machines Corporation, ("IBM"), and Red Hat, Inc., ("RHI"), have, as everyone is now aware, entered into a definitive agreement pursua...

Bank Denied An NOL Deduction: October 30, 2018 - Bulletin Print Report; In 2010, NBSC merged with CBT and was renamed SB, ("P"). CBT reported net operating losses ("NOLs") for 2009; NBSCreported NOLs for 2009 and 2010; and...

An "In-House" Qualified Stock Purchase: October 30, 2018 - Volume 12 Issue 208 Print Report; P is the common parent of a consolidated group that conducts a number of businesses, including Business A. S1 is a domestic corporation, 99 percent of the stock of wh...

Office Not A "Permanent Place Of Abode": October 29, 2018 - Bulletin Print Report; Petitioner, ("P"), and his wife are domiciled in Washington D.C. P is an executive with a New York-based investment management firm that maintains offices on Long Isl...

Incidental Revenue Included In The "TPT" Tax Base: October 29, 2018 - Bulletin Print Report; RTSwas engaged in the business of renting traffic control equipment for use at construction sites and other locations. At times, RTSalso provided traffic control pe...

Some Call Options (Received in a Reorganization) Constitute "Boot": October 29, 2018 - Volume 12 Issue 207 Print Report; M Corporation, (M), owned seven percent of the outstanding commonstock of Y Corporation, (Y). All of M's preferred stock, which was non-convertible (into co...

More "CVRs": October 26, 2018 - Bulletin Print Report; Another deal in the healthcare space is using "contingent value rights," ("CVRs"), to provide the selling shareholderswith additional consideration, b...

Invesco Will Acquire Oppenheimer From MMLIC: October 26, 2018 - Bulletin Print Report; Invesco, Ltd., ("IVZ"), has announced an agreement to acquire, from Massachusetts Mutual Life Insurance Company, ("MMLIC"), Oppenheimer Acquisition Corporat...

Abandoning a Partnership Interest--Is the Loss Capital or Ordinary?: October 26, 2018 - Volume 12 Issue 206 Print Report; PRS is a general partnership in which A, B, and C were equal partners. During 1993, PRS became insolvent, and C abandoned C's partnership interest. At the time C...

Corporation Not Disregarded: October 25, 2018 - Volume 12 Issue 205 Print Report; Petitioner, (P), was organized by UT in 1928 to be used as a "security device" in connection with certain Florida realty owned by him. UT conveyed the prope...

The Willens Deal Survey October 2018: October 24, 2018 - The Deal Survey: October 2018 Print Report; Welcome to our summary of deals for October 2018. Full reports on some of these transactions can be found via the link in the description, or by searching the company n...

Periodic Visits By Employees Does Not Constitute 'Doing Business': October 24, 2018 - Volume 12 Issue 204 Print Report; Petitioner X, (PX), is a corporation with its headquarters and principal place of business in Y. PX sells women's apparel, accessories, and footwear to customers...

ENLK Will "Roll-Up" Into ENLC: October 24, 2018 - Bulletin Print Report; The demise of MLPs, brought on by the reduction in the corporate tax rateand certain regulatory actions, continues apace. The latest MLP to be "rolled-up" into...

D.C. Taxes Due On Transfer Of Realty From Individual To LLC: October 24, 2018 - Bulletin Print Report; Appellant purchased real property in 2002 for $505,000 and recorded the deed in the name of...his sole proprietorship. Ten years later, in order to refinance a mortgage on the...

Grant Of An Option Found To Be A Gift: October 23, 2018 - Volume 12 Issue 203 Print Report; On January 2, 1978, A transferred to B, his son, an option to purchase real property located in State X and owned by A. B paid A $10 upon receipt of the option....

"Sale" Of "Carryout" Bags Not Subject To New York Sales Tax: October 23, 2018 - Bulletin Print Report; The Suffolk County (N.Y.) Legislature recentlyenacted Local Law No. 27-2016.... This Local Law took effect on January 1, 2018. The Local Law was passed to "encourage...

Personal Exemption Deductions And Sec. 36B: October 23, 2018 - Bulletin Print Report; Sec. 11041 of the Tax Cuts and Jobs Act, ("TCJA"), added Sec. 151(d)(5) to the Internal Revenue Code. Sec. 151(d)(5) reduces the amount of the personal exemption dedu...

No Deduction Under Sec. 166 For Debts Owed By "Political Parties": October 23, 2018 - Bulletin Print Report; An organization files a Return of Organization Exempt From Income Taxation, (Form 990), for each of the taxable years Year 1, Year 2, and Year 3 as an organization described in...

Drug Wholesaler Not Entitled To Preferential Tax Rate: October 22, 2018 - Bulletin Print Report; AventisPharmaceutic, Inc., a Delaware corporation, transferred all of its business activities and employees to Sanofi-AventisUS LLC, ("Sanofi), a Delaware limi...

DWDP Provides Information On Spin-Offs: October 22, 2018 - Bulletin Print Report; DowDuPont, (DWDP), is making progress on its promise to separate itself into three publicly traded corporations, each conducting a separate and distinctelement of DWDP...

Capital Gains Invested In "Opportunity Funds" Can Be Deferred: October 22, 2018 - Bulletin Print Report; One of the more intriguing provisions of the Tax Cuts and Jobs Act, ("TCJA"), is the one that permits certain taxpayers to avoid reporting gains from the sale or exch...

Purchase of Assets Not a "De facto Merger": October 22, 2018 - Volume 12 Issue 202 Print Report; Between 1999 and 2001, CL incurred a debt to CP of approximately $240,000 for services rendered by CP to CL. On February 7, 2001, A entered into an agreement with CL...

Corporation Denied Investment Tax Credits: October 19, 2018 - Bulletin Print Report; Taxpayer is a corporation and is an owner/member of a limited liability company, ("LLC"). The LLC has installed battery storage cells for storage of electricity. Taxp...

Club's Losses Cannot Offset Its Investment Income: October 19, 2018 - Bulletin Print Report; L is a private country club in Ohio operating as a Sec. 501(c)(7) tax-exempt organization. L derives income from several sources: membership dues and membe...

Repayment of Disallowed T&E Is Deductible: October 19, 2018 - Volume 12 Issue 201 Print Report; The taxpayer and his two brothers are officers and sole and equal shareholders of the Corporation, (C). During an audit of C&...

Inherited I.R.A. Not "Retirement Funds": October 18, 2018 - Volume 12 Issue 200 Print Report; 11 U.S.C. Sec. 522(b)(3)(C) and (d)(12) are identical. Each exempts from creditors' claims any retirement funds to the extent thatthose funds are i...

Accounts Received In A Property Settlement Are Not Exempt: October 17, 2018 - Bulletin Print Report; Mr. L retained S to represent him in his divorce proceeding.... The state court order dissolving the marriage...awarded Mr. L 1/2 of the value in his ex-wife's Wells Fargo...

Incorporation of Proprietorship Does Not Trigger LIFO "Recapture": October 17, 2018 - Volume 12 Issue 199 Print Report; A proprietorship, (P), manufactures and distributes the "B" brand of Products. P uses the LIFO inventory method and complies with the uniform capitalization...

Why Are There Limitations On HRS's Buyback Capacity?: October 17, 2018 - Bulletin Print Report; Harris Corporation, (HRS), and L3 Technologies, Inc., (LLL), have agreed to combine in an "all-stock merger of equals." After the merger is completed, the combined co...

What About SHLD's NOLs?: October 16, 2018 - Bulletin Print Report; Sears Holdings Corporation, ("SHLD"), as everyone is by now aware, has filed for bankruptcy protection. It does not appear that SHLDis headed for liquidation. I...

Redevelopment Grant Is Qualifying REIT Income: October 16, 2018 - Bulletin Print Report; The taxpayer, ("TP"), has elected to be a real estate investment trust, ("REIT"). TP owns "a%" of the interests in Operating Partnership, ("O...

Texas Still Requires Physical Presence: October 16, 2018 - Bulletin Print Report; The taxpayer, ("TP"), is a California-based company that operates an online platform through which third-party software developers, ("Developers"), make the...

Return of Excessive Compensation Is Deductible: October 16, 2018 - Volume 12 Issue 198 Print Report; V was thepresident and majority shareholderof E, a Pennsylvania corporation. His compensation from E for its fiscal year ended October 31, 1960,cons...

Can Dell Spin-Off (Or Split-Off) VMware?: October 15, 2018 - Bulletin Print Report; Dell Technologies, Inc., ("D"), has two groups of common stock, the DHI Group Common Stock; and the Class V Common Stock. The Class V Common Stock is intended to &quo...

Payments To Minister Found To Be Income: October 15, 2018 - Bulletin Print Report; In 2000, Reverend Wayne R. Felton, ("RF"), and his wife established the Holy Christian Church in West St. Paul, Minnesota. The church relies on contribution envelopes...

Lump Sum Payment Is "Retirement Income": October 15, 2018 - Volume 12 Issue 197 Print Report; Petitioner, (P), is anonresident of New York. In 2002, Washington Mutual Bank, (WMB), acquired Dime Savings Bank of New York, (D). D was a New York corporation...

New York City Follows Rev. Rul. 99-6 For "UBT" Purposes: October 12, 2018 - Bulletin Print Report; LLC is treated as a partnership for federal tax purposes. The members of LLC are selling their membership interests to PUR. The sale will bestructured as a merger of a wh...

Accounting For Pre-Need Burial Contracts: October 12, 2018 - Volume 12 Issue 196 Print Report; T operates approximately 30 cemeteries in 11 states. T sells burial rights on a both a current need and a pre-need basis. The...

Investment Activities Do Not Create A "Real Estate Professional": October 11, 2018 - Bulletin Print Report; During the years at issue, Husband, ("H"), was an engineer who worked full time for LKC. Wife, ("W"), held herself out as the property manager of petitioner...

Taxpayer Not Domiciled in Virginia: October 11, 2018 - Volume 12 Issue 195 Print Report; TP contends that she was not a "resident" of Virginia during the 2008 taxable year and should not be subject to Virginia's income tax. The Virginia Depa...

Assignment Of Lease Does Not Permit Refund Of Sales Tax: October 10, 2018 - Bulletin Print Report; On May 15, 2014, petitioner, a resident of New York State, entered into an agreement for the lease of an automobile with BMW Financial Services. The lease was a "36-month...

The Arm's Length Standard Is Alive And Well In Utah: October 10, 2018 - Bulletin Print Report; See's Candies, Inc. ("S"), and Columbia Insurance Company, ("C"), are each wholly owned subsidiaries of Berkshire Hathaway, Inc., ("BH"). In 1...

Income From Derivatives Is Qualifying Income: October 10, 2018 - Volume 12 Issue 194 Print Report; C is a publicly traded partnership (PTP or MLP). C engages in terminaling and storage services for petroleum products and by-products and natural gas services....

The Child Tax Credit Is Not A "Public Assistance Benefit": October 9, 2018 - Bulletin Print Report; Debtor was owed a federal tax refund as well as a State of Illinois tax refund. A portion of the federal tax refund was generated by a Child Tax Credit, ("CTC"), clai...

ESV And RDC Announce A Business Combination: October 9, 2018 - Bulletin Print Report; Ensco plc, ("ESV"), and Rowan Companies plc, ("RDC"), jointly announced, on October 8th, that "the companies have entered into a definitive transaction...

Net Assets New Hampshire Style: October 9, 2018 - Volume 12 Issue 193 Print Report; On April 11, 2011, the taxpayer filed an appeal with the City of Nashua, New Hampshire, (the City), for an "elderly exemption" for tax year 2011. The applic...

MSG Will Create A "Pure Play" Sports Company: October 8, 2018 - Bulletin Print Report; Not surprisingly, The Madison Square Garden Company, ("MSG"), has decided to actually pursue the spin-off transaction that the company had been studying over the past...

Rewritten Orders Eligible For Massachusetts Sales Tax "Holiday": October 8, 2018 - Bulletin Print Report; Appellant, ("A"), was a large furniture retailer based in New England. During the periods at issue, the Massachusetts Legislature passed legislation mandating that ve...

Stock Ownership Does Not Require Formal Certificates: October 8, 2018 - Volume 12 Issue 192 Print Report; The question is whether an affiliated group, within the meaning of Sec. 1504(a) of the Internal Revenue Code, exists under the following circumstances. The answer is...

Capital Gains Are Part Of "MAGI": October 5, 2018 - Bulletin Print Report; Petitioners are a widow and her deceased husband's estate. For simplicity, the court refers to O and L as petitioners. O and L filed a joint income tax return for 2014 and...

Attribution Waiver Not Thwarted by Pre-Redemption Gift: October 5, 2018 - Volume 12 Issue 191 Print Report; X Corporation, (X), has 120 shares of common stock outstanding, all of which are owned by Mr. A, X's President. Mr. A's son, B, has been employed by X for man...

SIR Announces Tax Profile Of Special Distribution: October 4, 2018 - Bulletin Print Report; Government Properties Income Trust, ("GOV"), and Select Income REIT, ("SIR"), have entered into a definitive merger agreement, (the "Merger"). The...

Ruling Requests Accepted For "Debt For Debt Swaps" In A Spin-Off: October 4, 2018 - Bulletin Print Report; In a "Divisive Reorganization," ("DR"), popularly known as a "spin-off" or "split-off," a corporation, ("D"), transfers proper...

Pledgor of Stock Loses Beneficial Ownership: October 4, 2018 - Volume 12 Issue 190 Print Report; X Corporation, (X), was incorporated on Date 1. Subsequent to the organization of X, M, N, O, and P were organized with majority ownership held by X. For the fiscal y...

Bunzl Cannot Escape California Taxes: October 3, 2018 - Bulletin Print Report; UDITPA, ("U"), provides that if the taxpayer is part of a unitary business, it is required to allocate and apportion its income (among the various states in which it...

Taxpayer Unable To Shift Incidence of Tax From Sale of Stock: October 3, 2018 - Volume 12 Issue 189 Print Report; In 1986, RV and TJ formed OSI, Inc., (OSI). In 1995, RV formed several limited liability companies (LLCs). The LLCs elected to be treated as partnerships for tax purp...

The "Shared Responsibility Payment" Is Not An Excise Tax: October 2, 2018 - Bulletin Print Report; The I.R.S. filed a proof of claim in thisChapter 13 case asserting that a portion of its claim is entitled to priority because it is for an "excise tax." Accord...

Voluntary Payments Not Alimony: October 2, 2018 - Volume 12 Issue 188 Print Report; P and R were married from March 12, 1975 through December 7, 2004. On December 7, 2004, a judgment of dissolution (JOD) was entered in the Superior Court of Californi...

Return Of "Excess" Funds Not A "Reversion": October 2, 2018 - Bulletin Print Report; The "Sponsor" established and maintained "the Plan" for certain of its employees. The Plan is a single-employer, tax-qualified, defined benefit pension plan...

Statutory Ambiguity Works In Favor Of Dish Network LLC: October 1, 2018 - Bulletin Print Report; The principal issue in this case is the extent to which (Connecticut) General Statutes Sec. 12-256(b)(2) imposes a tax on gross earnings from a satellite television operator...

Materials Used For The Construction Of "Lines" Are Taxable: October 1, 2018 - Bulletin Print Report; GTE Communications Systems Corporation, ("GTE"), is a "procurement" company. GTE purchased telephone cables, conduit, and telephone poles from third party v...

A REIT's "Required Distribution": October 1, 2018 - Volume 12 Issue 187 Print Report; REIT X (RX) holds a partnership interest in P1. P1's taxable year is the calendar year. RX's share of partnership items that RX would have taken into account...

Market Discount Not Affected By Sec. 451(b): September 28, 2018 - Bulletin Print Report; The Treasury Department and the I.R.S. intend to issue proposed regulations that will "address the applicability of Sec. 451(b) of the Code" to "market discount....

Distributor Of Yellow Pages Subject To New York "Use" Tax: September 28, 2018 - Bulletin Print Report; Petitioner, ("P"), is the purchaser of printed materials, known as the "yellow pages" telephone directories, that are printed outside of New York State. The...

Energy Drink (Not Red Bull) Exempt From NYS Sales Tax: September 28, 2018 - Volume 12 Issue 186 Print Report; The taxpayer, (TP), is a California corporation that makes and distributes a line of products that it describes and labels as "dietary supplements". The pro...

"VPFC" Found To Be A "Forward Contract": September 27, 2018 - Bulletin Print Report; A variable prepaid forward contract, ("VPFC"), is an agreement between a "short" party (usually the holder ofa highly appreciated stock position) and...

21CF To "Sell" Its Sky Shares To Comcast: September 27, 2018 - Bulletin Print Report; 21st Century Fox, ("21CF"), announced, on September 26, 2018,that "it intends to either accept the recommended revised cash offer by Comcast Corporation, (...

Property Not Held "Primarily For Sale To Customers": September 27, 2018 - Volume 12 Issue 185 Print Report; T is a real estate investment trust, (REIT). T derives interest income primarily from making construction and development loans that are secured by mortgages on real...

Dividends Received From A Foreign Corporation Were Not "QDI": September 26, 2018 - Volume 12 Issue 184 Print Report; Petitioners, ("Ps"), owned HUS, an 'S' corporation. From January 1995 until November 18, 2008, HUS was treated as owning all the stock of MHK. MHK was incorpo...

I.R.S. To Expand The Concept Of An "ATB": September 25, 2018 - Bulletin Print Report; For a spin-off to qualify for tax-free treatment under Sec. 355 of the Internal Revenue Code, numerous requirements must be satisfied. Perhaps the one requirement that is most...

Barrick Gold Announces Acquisition Of Randgold Resources: September 25, 2018 - Bulletin Print Report; The boards of directors of BarrickGold Corporation, ("B"), a Canadian corporation, and Randgold Resources, Ltd., ("R"), a Jersey corporation, announce...

SIRI To Acquire P: September 25, 2018 - Bulletin Print Report; Sirius XM Holdings, Inc., ("SIRI"), and Pandora Media, Inc., ("P"), have announced a definitive agreement under which SIRI"will acquire P in an a...

Asset Sale Is Not A Stock Sale: September 25, 2018 - Volume 12 Issue 183 Print Report; TP is a limited liability company formed to develop, own, and operate a private laboratory located in Colorado. In 2008, TP sold its assets. TP transferred all rights...

Termination Payment Found To Be Ordinary Income: September 24, 2018 - Bulletin Print Report; Mr. Jeff Potter, ("P"), began working with Green Country, ("GC"), in the early 1990s. In 1995, P entered into a written independent sales representative com...

The I.R.S.'s Views On "Blockage Discount"--AABA Take Note: September 24, 2018 - Bulletin Print Report; A publicly traded U.K. corporation owned all of the stock of a domestic corporation. It disposed of its ownership interest therein through a public stock offering and a second...

Medtronic Will "Roll-Up" Mazor Robotics: September 24, 2018 - Bulletin Print Report; Medtronic plc, ("MDT"), indirectly owns approximately 15 percent of the stock of Mazor Robotics Ltd., ("MZOR"), an Israeli company. The companies have now d...

"Pre-Partnership" Payments Constitute Ordinary Income: September 24, 2018 - Volume 12 Issue 182 Print Report; TP entered into an agreement on March 15, 1982 with X to form a limited partnership to develop and manage the Y building. For TP's promise to contribute the Y bui...

State Department Employee Not Eligible For Sec. 911 Benefits: September 21, 2018 - Bulletin Print Report; During 2014 and 2015, petitioner, ("P"), worked for the U.S. Department of State in Germany. He was hired in November 2013 as a "local hire civilian employee&quo...

Partnership Is An "Entity" For Purposes of Sec. 1504: September 21, 2018 - Volume 12 Issue 181 Print Report; X is a State A corporation that has made an 'S' corporation election. X actively conducts a venture capital, management and consulting business and is directl...

The Willens Deal Survey September 2018: September 20, 2018 - The Deal Survey: September 2018 Print Report; Welcome to our summary of deals for September 2018. Full reports on some of these transactions can be found via the link in the description, or by searching the company...

Court Restricts Bank's "New Markets Tax Credit": September 20, 2018 - Bulletin Print Report; Sec. 40-16-4, Ala. Code 1975, imposes a 6.5 percent tax, known as the "FIET," on the net income of every financial institution engaged in...business within this state...

Lowe's Not Entitled To State Tax Refunds: September 20, 2018 - Volume 12 Issue 180 Print Report; Between April 1, 2001 and December 31, 2009, Lowe's, ("L"), sold merchandise at its retail stores. Many customers paid for products using private label credit car...

UNVR To Acquire NXEO: September 20, 2018 - Bulletin Print Report; Univar Inc., ("UNVR"), and Nexeo Solutions, Inc., ("NXEO"), announced that they have entered into a definitive agreement for UNVR to acquire NXEO's stoc...

Obligation Did Not Rise To The Level Of A "Liability": September 18, 2018 - Bulletin Print Report; In 1980, J began working for the State of New York, ("S"), and was enrolled at that time as a "tier 3" participant in the New York State and Local Retiremen...

Transfer Of "QRP" To A Divorcing Spouse Is A Gift: September 18, 2018 - Volume 12 Issue 179 Print Report; The taxpayer, ("TP"), sold shares of stock in Company, ("C"), to C's employee stock ownership plan, ("ESOP"), for approximately "$C."...

GOV And SIR Will Join Forces: September 18, 2018 - Bulletin Print Report; Government Properties Income Trust, ("GOV"), a REIT, and Select Income REIT, ("SIR"), announced that they have entered into a definitive agreement to merge...

Group Trust Not A Single Qualified Trust: September 17, 2018 - Bulletin Print Report; The taxpayer, (TP), is a pension trust fund that invests in United States real estate. TP holds some of its real estate through real estate investment trusts, ("REITs"...

Allocating Fax Revenues To New Jersey: September 17, 2018 - Bulletin Print Report; Xpedite Systems, Inc., ("X"), is a Delaware-incorporated entity that is headquartered in New Jersey. Its stock is publicly traded. X delivers business advertisements/...

Calculating CODI Under Sec. 108(e)(4): September 17, 2018 - Volume 12 Issue 178 Print Report; On January 1, Year 1, P issued indebtedness that provides for monthly interest payments of $80,000 payable at the end of each month, and a principal payment of $10,00...

A REIT's "Imputed" Income Will Be "Qualifying" Income: September 14, 2018 - Bulletin Print Report; To qualify as a real estate investment trust, "(REIT"), a domestic corporation must, among other things, annually satisfy the "gross income requirements" of...

How To Apportion Earnings and Profits Among Distributions: September 14, 2018 - Volume 12 Issue 177 Print Report; X and Y each made distributions of $15,000 to their respective shareholders on July 1, 1971, and made no other distributions during the taxable year....

Hershey's "Bargain Purchase" Of Pirate Brands: September 13, 2018 - Bulletin Print Report; The Hershey Company and B&G Foods, Inc. announced that they have entered into a definitive agreement "for Hershey to acquire Pirate Brands" (from B&G), includ...

Differential Reporting For In-State And Out-Of-State Entities Upheld: September 13, 2018 - Volume 12 Issue 176 Print Report; Harley-Davidson and its subsidiaries, ("HD"), form a multistate enterprise with numerous functionally integrated subsidiary corporations. HD contends that defendant&#...

Health Insurance Purchaser Not An "Applicable Taxpayer": September 12, 2018 - Bulletin Print Report; In 2015, petitioner, ("P"), was enrolled in a health insurance plan offered through an "insurance exchange" created under the Patient Protection and Afforda...

Debt Not Worthless In The Year Claimed: September 12, 2018 - Volume 12 Issue 175 Print Report; From 2001 until June, 2006, Petitioner, (P), was thepresident of I. During the same period, P was also the president of N, a corporation whichI acquired i...

I.R.S. Approves "Back-To-Back" Spinoffs: September 11, 2018 - Bulletin Print Report; Foreign Parent owns all of the stock of FSub. FSub owns all of the stock of Distributing 2, a foreign corporation. Distributing 2 owns "a%" of the stock of Distributi...

"OTCs" Are Liable For Phoenix's Transaction Privilege Tax: September 11, 2018 - Bulletin Print Report; Online travel companies, ("OTCs"), operate websites that advertise travel services and allow customers to reserve and pay for hotel rooms. The OTCs do not operate any...

SAIC Will Acquire EGL (And Its Tax Assets): September 11, 2018 - Bulletin Print Report; Science Applications International Corporation, ("SAIC"), and Engility Holdings, Inc., ("EGL"), have entered into a definitive agreement in connection with...

Transitory Corporation Given Credence: September 11, 2018 - Volume 12 Issue 174 Print Report; X Corporation, (X), produces "h." Y Corporation, (Y), unrelated to X,also produces "h."X desires to sell J, an industrial business loc...

Liquidating Sales Not Prohibited Transactions: September 7, 2018 - Volume 12 Issue 173 Print Report; TP is a REIT. TP owns the stock of various qualified REIT subsidiaries (QRSs) and taxable REIT subsidiaries (TRSs). TP, directly or indirectly, owns interests in comm...

"Origin" Based Method Of Apportionment Nets Sirius XM A Refund: September 7, 2018 - Bulletin Print Report; During 2010 and 2011, Sirius XM Radio, Inc., ("SXM"), produced music, sports, news, talk, and entertainment programming, and delivered the programming to subscr...

Withholding Tax Will Be Imposed On TRI's Redemption Payments: September 6, 2018 - Bulletin Print Report; Thomson Reuters Corporation, ("TRI"), is offering to purchase a substantial proportion of its common shares, theaggregate purchase price forwhich is expec...

The Unhappy Plight of Commercial Fishermen: September 6, 2018 - Volume 12 Issue 172 Print Report; A taxpayer may deduct 100 percent of the expense for foodor beverages required by any Federal law to be provided to crew members of a commercial vessel.

Loblaw's "Spin-Out" Will Create Tax Issues For Its U.S. Shareholders: September 6, 2018 - Bulletin Print Report; Loblaw Companies Ltd., ("L"), announced a transaction that, in our experience, is unprecedented and, for that reason, the tax consequences flowing from it, at least f...

Transocean Ltd. To Acquire Ocean Rig UDW, Inc.: September 6, 2018 - Bulletin Print Report; TransoceanLtd., ("RIG"), and Ocean Rig UDW, Inc., ("ORIG"), announced that they have entered into a definitive merger agreement "under which RIG...

Resident Credit Denied For Foreign Tax On Income Allocated To N.J.: September 6, 2018 - Bulletin Print Report; The taxpayers are residents of New Jersey. Both own shares in a family business, DWCI, located in Philadelphia, Pennsylvania. The business is incorporated under the laws of the...

Retrospective "PFIC" Gains Are Not Included In Gross Income: September 5, 2018 - Bulletin Print Report; Respondent issued to petitioners a notice of deficiency determining deficiencies in their 2006, 2007, and 2008 income tax. Petitioners contend that assessment of the deficienci...

Walgreen Found Liable For Minnesota's "LDT": September 5, 2018 - Volume 12 Issue 171 Print Report; WSP is single-member limited liability company, organized under the laws of Delaware and having its headquarters in Florida. WSP is a wholly owned subsidiary of Walgreen Compan...

General Mills And Minnesota Clash Over R&D Credits: September 5, 2018 - Bulletin Print Report; During 2011, Sec. 41 of the Internal Revenue Code provided: The research credit shall be an amount equal to the sum of--(1) 20 percent of the excess of--(A) the qualified resea...

Whitbread PLC Will Not Be Taxed On The Sale Of Costa Ltd.: September 5, 2018 - Bulletin Print Report; Whitbread PLC, ("W"), has agreed to the sale of the capital stock of its wholly-owned subsidiary, Costa Ltd., ("CL"), to the Coca-Cola Company, ("KO&qu...

Investment Bank "Respected" As A Creditor Of "Remainco": September 4, 2018 - Bulletin Print Report; D is a publicly traded corporation and the parent of a group of affiliated corporations that file a consolidated Federal income tax return. D has a single class of voting commo...

Cost Of "Seismic Survey" Must Be Capitalized: September 4, 2018 - Bulletin Print Report; The taxpayer, ("TP"), is engaged in offshore oil and gas drilling and development activities within the United States. Through wholly-owned subsidiaries, TP owns a wo...

Tracking Ownership Changes With Respect To Unregistered Stock: September 4, 2018 - Volume 12 Issue 170 Print Report; Company, (C or TP), is in the business of producing X and Y. C and its subsidiaries filed for bankruptcy on Date 1, Year 3. A plan of reorganization was consummated o...

Payments To Former Spouse Are Not "Alimony Or Separate Maintenance": August 31, 2018 - Bulletin Print Report; Plaintiff, ("P"), and his former spouse, ("W"), were divorced in 2013. A Decree of Divorce, ("Decree"), was filed by a Washington state superior c...

Real Estate Assets Do Not Constitute Securities: August 31, 2018 - Volume 12 Issue 169 Print Report; TP is a REIT. TP's primary business activities are real estate lending, net leasing, and real estate investing. TP owns 100 percent of the outstanding equity of s...

I.R.S.'s Regulations Will Preserve The "Exemption Amount": August 30, 2018 - Bulletin Print Report; Sec. 151(a) of the Internal Revenue Code allows a taxpayer to claim deductions for exemptions for the taxpayer and his or her spouse and for any dep...

Partnership Interests Not Proven To Be Worthless: August 30, 2018 - Bulletin Print Report; Petitioner, ("P"), PDG, and other real estate professionals formed multiple partnerships, ("SPEs"), to acquire and develop real property. P was a minority p...

Trust Can Perform Certain Services: August 30, 2018 - Volume 12 Issue 168 Print Report; T is a REIT. T owns "x%" of Partnership, (PS), and is its managing general partner. PS owns and operates Class A office buildings in City A and inothe...

Combining 'S' Corporations: August 29, 2018 - Volume 12 Issue 167 Print Report; LLC 1 is an 'S' corporation. LLC 1 is a holding company whose principal asset is a "b%" membership interest in LLC 3, a partnership. LLC 2, another...

Legg Mason Runs Afoul Of Sec. 162(f): August 29, 2018 - Bulletin Print Report; On August 27, 2018, the S.E.C. announced that Legg Mason, Inc., ("LM"), will pay $34,502,494 to the S.E.C. (for transfer by the S.E.C. to the general fund of the Unit...

Particulate Filters Are "Parts" Or "Accessories": August 29, 2018 - Bulletin Print Report; T is a semi-truck dealership, whose principal offices are located in Cedar Rapids, Iowa. T sells trucks that are equipped with diesel particulate filters, ("filters")...

The "Nimble Dividend Rule": August 28, 2018 - Volume 12 Issue 166 Print Report; The issue is whether a cash distribution of $7,500 made by a corporation during its calendar year 1957 to its only shareholder, LM, constitutes a dividend to him, whe...

Non-Recognition Dispositions Do Not Trigger Sec. 1031(f)(1): August 28, 2018 - Bulletin Print Report; TP is a partnership for federal income tax purposes. LLC 1 and LLC 2 are each a single member limited liability company, wholly owned by TP, that is disregarded for federal inc...

Enbridge Will Take Spectra Private: August 28, 2018 - Bulletin Print Report; Spectra Energy Partners, LP, ("SEP"), is a "publicly-traded partnership" (popularly known as an "MLP") engaged in the transmission, storage, and g...

Gross Receipts From Hedging Included In Sales Factor: August 27, 2018 - Bulletin Print Report; Petitioner is a Delaware corporation engaged in transforming raw agricultural products into intermediate products such as corn syrup, crude vegetable oil, margarine, shortening...

Spin-Off Carried Out To Facilitate Equity Offering: August 27, 2018 - Bulletin Print Report; Distributing, ("D"), is a publicly-traded State A corporation that is the common parent of an affiliated group filing a consolidated income tax return. The capital st...

"Carved-Out" Leasehold Interest Is Property: August 27, 2018 - Volume 12 Issue 165 Print Report; M will be formed as a general partnership. M will have three general partners, O, a corporation, P, a general partnership consisting of three individuals, and Q, anot...

Treasury Moves To Insure "SALT" Deduction Restrictions Not Avoided: August 24, 2018 - Bulletin Print Report; Sec. 170(a)(1) of the Internal Revenue Code generally allows an itemized deduction for any charitable contribution paid within the taxable year. Sec. 170(c)...

Privilege Tax Based On Vehicle Sales Upheld: August 24, 2018 - Bulletin Print Report; The so-called "Sec. 90" tax is a privilege tax, and it is imposed on vehicle dealers "for the privilege of engaging in the business of selling taxable motor vehi...

Advances Constitute Disguised Wages: August 24, 2018 - Volume 12 Issue 164 Print Report; Plaintiff (the "Clinic")is a personal service corporation that provides medical treatment in a variety of specialties at locations in southwest Washin...

Illegal Gains Must Be Recognized: August 23, 2018 - Volume 12 Issue 163 Print Report; TPs sold certain property to Buyer, (B), in the year Y and B took possession and assumed the benefits and burden of ownership in that year. &nbs...

No Refund Of Sales Tax Paid On A Lease Warranted: August 23, 2018 - Bulletin Print Report; In February 2014, petitioner leased a 2014 Cadillac CTS automobile from a New York automobile dealership for a term of 39 months. At the time of the first payment due under the...

The Willens Deal Survey August 2018: August 22, 2018 - The Deal Survey: August 2018 Print Report; Welcome to our summary of deals for August 2018. Full reports on these transactions can be found via the link in the description, or by searching the company name in ou...

"Gross Receipts From Broadcasting": August 22, 2018 - Bulletin Print Report; Oregon's income-apportionment formula for interstate broadcasters has been based exclusively on the "sales factor." The sales factor is the fraction representing...

A Partnership Is An Aggregate For Purposes of Sec. 165(g)(3): August 22, 2018 - Volume 12 Issue 162 Print Report; X is the parent of a consolidated group of corporations. X owns "a%" of both Y and Z. X and its subsidiaries derive most of their combined receipts from the...

Retiring Debt In Conjunction With A Spin-Off: August 21, 2018 - Bulletin Print Report; Distributing, ("D"), is the common parent of an affiliated group that files a consolidated income tax return. D is engaged in Business A, Business B, Business C, and...

Replacement Of "PCs" With "UMBSs" Is Not An Exchange: August 21, 2018 - Bulletin Print Report; The Federal Home Loan Mortgage Corporation, ("FM"), acquires mortgages and participation interests in residential mortgage loans, ("Ms"), that were originat...

Employees Of Subsidiary May Join Parent's ESOP: August 21, 2018 - Volume 12 Issue 161 Print Report; Company A has elected to be taxed as an 'S' corporation. ESOP A is a qualified plan under Sec. 401(a) of the Code. ESOP A holds stock in Company A. ESOP A requires a pa...

Fertilizer Is A "Mineral Or Natural Resource": August 20, 2018 - Bulletin Print Report; X is a State law corporation. X intends to form a State law partnership, Y, the interests in which may be sold in an initial public offering or, perhaps, conveyed to an existin...

CMC To Acquire KMG In A Fully Taxable Transaction: August 20, 2018 - Bulletin Print Report; On August 14, 2018, Cabot Microelectronics Corporation, ("CMC"), entered into an Agreement and Plan of Merger with KMG Chemicals Corporation, ("KMG"), provi...

Golfer's Endorsement Income Taxed In Indiana: August 20, 2018 - Volume 12 Issue 160 Print Report; The taxpayer, ("TP"), is a professional golfer who resides in Texas. TP regularly participates in golf tournaments, such as the PGA tour, and similar events, in...

The I.R.S. Gets Another Crack At Medtronic, Inc.: August 17, 2018 - Bulletin Print Report; Medtronic, Inc., (M), is a medical device company that produces and markets class III devices, ("devices"), as well as other medical therapy devices, ("leads&quo...

Refund Claim Based On NOL Carryback Not Timely Filed: August 17, 2018 - Volume 12 Issue 159 Print Report; In 2011, TM elected to claim a deduction for foreign taxes (instead of claiming a credit) on its amended 2002 tax return, triggering a "daisy-chain of cascading adjustment...

Monsanto Should Be Able To Deduct "Roundup" Payments: August 16, 2018 - Bulletin Print Report; Monsanto has been ordered by a jury in San Francisco's Superior Court to pay $289 million in damages to an individual who contracted cancer as a result, the jury found, of...

Statute Supersedes Agency Regulation: August 16, 2018 - Bulletin Print Report; The taxpayer, ("TP"), is a commercial bank in Pennsylvania. It purchased the disputed items, i.e., computer hardware, canned software, and certain related services, f...

New Jersey Has A Message For "Remote Sellers": August 16, 2018 - Bulletin Print Report; On June 21, 2018, the United StatesSupreme Court handed down a decision entitled South Dakota v. Wayfair, Inc., et al. , 585 U.S._ (2018), in which the Court...

Exception To "Cash In Lieu" Test Not Dependent On Asset Identity: August 16, 2018 - Volume 12 Issue 158 Print Report; X, a publicly held corporation, has outstanding a single class of common stock. Y, also a publicly held corporation, has outstanding one class of common stock and one...

Taxation In Oregon Does Not Turn On Physical Presence: August 15, 2018 - Bulletin Print Report; Capital One Auto Finance, Inc., ("TP"), filed consolidated Oregon corporate excise tax returns as part of a group that included two corporate affiliates. The issue is...

Substantial New Line of Business Not Added: August 15, 2018 - Volume 12 Issue 157 Print Report; X is a publicly traded partnership (PTP or MLP). X is an "electing 1987 partnership" under Sec. 7704(g). X is engaged in the business of acquiring, owning,...

Maryland Catches Up With Staples, Inc.: August 14, 2018 - Bulletin Print Report; In 1998, the Staples family of businesses underwent an internal reorganization, which culminated in the creation of four entities: SI, SS, SE, and SCC. SS and SCC were wholly-o...

PRGO Can Finally Entertain A Spin-Off: August 14, 2018 - Bulletin Print Report; PerrigoCompany, plc, (PRGO), came into existence in late 2013 in connection with the business combination of PerrigoCompany and Elan Corporationplc. That tran...

Suspended 'S' Corporation Losses Always Absorb Available Basis: August 14, 2018 - Volume 12 Issue 156 Print Report; The Bs, husband and wife, held a partial ownership stake in an 'S' corporation called WR. Taxpayers, can deduct 'S' corporation losses when they have...

Tax Court Endorses ITW's Tax-Free Repatriation Strategy: August 13, 2018 - Bulletin Print Report; During 2006, petitioner, ("P"), a domestic corporation, was the sole shareholder of IH, a domestic corporation. IH was the sole shareholder of PAR, a domestic corpora...

Altaba Posts The Results Of Its Historic Tender Offer: August 13, 2018 - Bulletin Print Report; Altaba, Inc., ("AABA"), offered to purchase up to 195 million shares of its common stock (approximately 24 percent of its outstanding common stock) at a price equal t...

Employee Compensation Is Not Eligible For Sec. 1043 Deferral: August 13, 2018 - Volume 12 Issue 155 Print Report; H was formerly employed by Lockheed Martin, ("LM"), an aerospace and technology company. H had deferred compensation in the Lockheed Martin Deferred Management Incent...

Exxon Mobil Denied "Double Benefit": August 10, 2018 - Bulletin Print Report; From 2005 to 2011, Congress provided a tax incentive to gasoline producers that allowed a credit against the fuel excise tax imposed on the sale or removal of gasoline for each...

Tax Imposed By Sec. 1446 Is A "Partnership Item": August 10, 2018 - Bulletin Print Report; YA Global Investments, LP, ("YAG"), is a partnership for U.S. Federal income tax purposes. YA reports that it is an "investor" and is not engaged in an acti...

Trusts Not Minnesota Residents: August 10, 2018 - Volume 12 Issue 154 Print Report; This appeal relates to four trusts. Each of the trusts was created on June 25, 2009, by RM, then a Minnesota domiciliary, and each trust was formed with shares of nonvoting com...

Qualified REIT Dividends And PTP Income: August 9, 2018 - Bulletin Print Report; The Treasury Department and the Internal Revenue Service haveissued proposed regulations under Sec. 199Aof the Code, concerning the deduction, introduced in last ye...

Geography and the Active Business Test: August 9, 2018 - Volume 12 Issue 153 Print Report; Beginning in 1947, Lockwood, Inc., (L), a manufacturer and distributor of farm machinery which had historically confined its business activities to the western part o...

No Resident Tax Credit For Tax Imposed On "Pass-Through" Entity: August 8, 2018 - Bulletin Print Report; Mr. and Mrs. Goggin, ("G"), were residents ofMaine. GHKCompany, LLC, ("LLC"), is a limited liability company formed in New Hampshire in 1994 to...

Dell's Class V Transaction Is A Recapitalization: August 8, 2018 - Bulletin Print Report; The S-4 regarding Dell Technologies, Inc.'s, ("DTI"), so-called "Class VTransaction" has been issued, providing some helpful guidance regarding&nb...

Cancellation of a Partner's Loans: August 8, 2018 - Volume 12 Issue 152 Print Report; X is a limited liability company formed under the laws of State that is treated as a partnership for federal incometax purposes. The onlypartners of X are...

"Hypothecation" Loans Are Real Estate Assets: August 7, 2018 - Volume 12 Issue 151 Print Report; M, a real estate investment trust, (REIT), engages in lending activities, including the making of "hypothecation" loans to developers of commercial real est...

Bemis And Amcor To Create A "Jersey" Holding Company: August 7, 2018 - Bulletin Print Report; The boards of directors of each of Amcor Ltd., ("AMC"), and Bemis Company, Inc., ("BMS"), have unanimously approved a definitive agreement "under which...

A Sec. 457 Plan Is Not A "Public Pension": August 7, 2018 - Bulletin Print Report; In 2011, petitioner, ("P"), received a lump-sum distribution of $133,349 from a Sec. 457 deferred compensation plan, (the "457 plan") administered by F for...

Sec. 72(t) Early Withdrawal "Exactions" Are Penalties Not Taxes: August 7, 2018 - Bulletin Print Report; Mr. D made "early" withdrawals from a qualified retirement plan in each of 2012 and 2013. Pursuant to Sec. 72(t) of the Internal Revenue Code, Mr. D and his wife incu...

ETE Adopts A "Simplification" Plan For ETP: August 6, 2018 - Bulletin Print Report; Energy Transfer Partners, L.P., ("ETP"), and Energy Transfer Equity, L.P., ("ETE"), recently announced their execution of a definitive merger agreement purs...

Recovery Of Impaired Capital Is Excluded From Gross Income: August 6, 2018 - Bulletin Print Report; TP is a bankruptcy estate. TP was created in response to an unfavorable judgment against Insured, who fatally injured a party with an automobile. Insured was covered by an auto...

The "TEFA" Must Be Added Back In Calculating New Jersey "ENI": August 6, 2018 - Volume 12 Issue 150 Print Report; R is engaged in the retail distribution of electrical energy only in New Jersey. During the year in issue, R was subject to both the Corporation Business Tax, ("CBT")...

Service Will Not Refund Or Credit "Excess" Installment Payments: August 3, 2018 - Bulletin Print Report; Sec. 6402(a) of the Internal Revenue Code authorizes the Internal Revenue Service, (the "Service"), to apply "overpayments" as credits against outstanding t...

Philadelphia "Beverage" Tax Is Legally Imposed: August 3, 2018 - Volume 12 Issue 149 Print Report; A tax, the so-called "beverage tax," applies to the supply, acquisition, delivery, or transport of beverages. It is generally collected when beverages are transferred...

QCOM Launches A Dutch Auction Self-Tender Offer: August 2, 2018 - Bulletin Print Report; QUALCOMM, Inc., ("QCOM"), is authorized to repurchase as much as $30 billion in value of its common stock. It is kicking off the process with a massive Dutch Auction...

Brookfield Affiliate Will Acquire Forest City: August 2, 2018 - Bulletin Print Report; Brookfield Asset Management, Inc., ("BAM"), and Forest City Realty Trust, Inc., ("FC"), announced, as the market was expecting, that they have entered into...

Loss Of Control By Transferors Does Not Render Sec. 351 Inapplicable: August 2, 2018 - Volume 12 Issue 148 Print Report; Corporation, ("C"), is a publicly traded corporation and is the sole general partner of Partnership, ("PS"). As of Date A, C owned an approximate combined &...

Utah "Resident" Taxed on Capital Gains: August 1, 2018 - Volume 12 Issue 147 Print Report; The Benjamins originally established domicile in Utah around 1995 after moving from California and purchasing a home in Sandy,Utah. At that time, Mr. Benjamin,...

Indirect Payment Of Property Taxes Suffices For "QEZE" Credit Purposes: August 1, 2018 - Bulletin Print Report; AB is the sole shareholder of BR, and is the sole member of BM, a real estate management company, which is certified, in New York State, as a "qualified empire zone enterp...

NEE "Deconsolidates" NEP: August 1, 2018 - Bulletin Print Report; NextEra Energy, Inc., ("NEE"), has, since inception, owned a "majority voting interest" in NextEra Energy Partners, L.P., ("NEP"). NEE currently o...

"Divisive" Transactions Cannot Be 'C' Reorganizations: July 31, 2018 - Volume 12 Issue 146 Print Report; X and Y were unrelated corporations that, for many years, were activelyengaged in the hardware business. X operated two significant lines of business, a retail...

Verizon Cannot Escape California Sales Tax: July 31, 2018 - Bulletin Print Report; Verizon Services Corporation, ("V"), is a procurement and service company located in California. V purchased various telephone cables, conduit, and poles from third p...

Purchase of Windfarms Is An "Applicable Asset Acquisition": July 31, 2018 - Bulletin Print Report; Under Sec. 1603 of the American Recovery and Reinvestment Act, ("ARRA"), of 2009, each person who placed in service specified energy property during a designated peri...

Documentation Does Not Support Deduction Of "Success-Based" Fee: July 30, 2018 - Bulletin Print Report; The taxpayer, ("TP"), engaged Investment Banker, ("IB"), to explore a possible sale of TP and to indemnify potential buyers. The engagement letter provided...

Taxpayer's Educational Program Is Considered An "Amusement" Service: July 30, 2018 - Bulletin Print Report; Taxpayer, ("TP"), is a self-described "alternative" educational concept designed for use by children between the ages of four and fourteen. TP's staff p...

Treasury Bonds Ruled Substantially Identical: July 30, 2018 - Volume 12 Issue 145 Print Report; Advice has been requested whether or not a loss sustained by a taxpayer upon the sale on July 24, 1953 of U.S. Treasury 2 1/4 percent registered bonds of June 15, 195...

Most Termination Fees Are Deductible For Tax Purposes: July 27, 2018 - Bulletin Print Report; On October 27, 2016, an affiliate of QUALCOMM, Inc., ("QI"), entered into a Purchase Agreement, as subsequently amended, with NXP Semiconductors N.V., ("NXP"...

Who Are The "Transferors" of Property?: July 27, 2018 - Volume 12 Issue 144 Print Report; Z and a group of investors, pursuant to a binding agreement between them, transferred property to a newly organized corporation, N, in exchange for all of N's sto...

When Are Sales Taxes Paid?: July 26, 2018 - Bulletin Print Report; The taxpayer, ("TP"), manufactures specialty products for further processing by other manufacturers in the solar and electronics manufacturing industry. In 2015, TP r...

Related Parties Must Allocate Employee Stock Compensation Costs: July 26, 2018 - Bulletin Print Report; In this case, the court said, "we consider the validity of Reg. Sec. 1.482-7A(d)(2)" under which related entities must share the cost of employee stock compensation i...

Only Gains Enter Into Gross Income: July 26, 2018 - Volume 12 Issue 143 Print Report; TP is a management investment company registered under the Investment Company Act of 1940 that elected to be taxed as a regulated investment company (RIC). TP acquire...

Tenneco's Spin-Off Should Satisfy The Active Business Requirement: July 25, 2018 - Bulletin Print Report; Tenneco, Inc., ("T"), has reached an agreement to acquire, from AEP, Inc., an affiliate of IEP, all of the membership interests in a limited liability company, Federa...

Foreign Currency Not Securities: July 25, 2018 - Volume 12 Issue 142 Print Report; On June 1, 1973, the taxpayer purchased currency of foreign country M in a transaction which wasentered into for profit. On June 22, the taxpayer converted the...

DIS/FOX--Sec. 304 Is Not A Realistic Threat: July 24, 2018 - Bulletin Print Report; The acquisition of Twenty-First Century Fox, Inc., ("F"), by The Walt Disney Co., ("D"), will take the form of a so-called "horizontal double dummy.&qu...

"FBAR" Penalties Capped At $100,000: July 24, 2018 - Bulletin Print Report; W failed to file or filed inaccurate Forms TD F 90.22-1 (FBAR) for each of 2008, 2009, and 2010. As a consequence, the IRS assessed numerous penalties...many of which were flat...

"Networking" Club Is Not A Social Club: July 24, 2018 - Volume 12 Issue 141 Print Report; Petitioner, (P), was incorporated in 1935 as an incorporated association. The purpose of the association is to institute and maintain a method of exchanging and inter...

The Willens Deal Survey July 2018 (Inaugural Issue): July 23, 2018 - The Deal Survey: July 2018 Print Report; Welcome to our summary of deals for July 2018. Full reports on these transactions can be found by searching the company name in our database.

Sec. 165(g)(3) Applied To Worthless Stock Of A Holding Company: July 23, 2018 - Bulletin Print Report; TP, a State A corporation, is an indirect wholly owned subsidiary of P. P and its related entities sell "Brand" products. TP formed HC1 on Date 1. HC1 formed HC2, whi...

Tax Warning In Debt Collection Letter Not Misleading: July 23, 2018 - Bulletin Print Report; In January 2016, K sent a letter to D seeking to collect a debt originally owed to a bank. The letter offered to settle the debt, but warned: "This settlement may have tax...

Floating Docks Are Tangible Personal Property: July 23, 2018 - Volume 12 Issue 140 Print Report; M and P were general partners in CYC (the "partnership"). The partnership's principal business activity is leasing docking facilities. &...

Unsigned Joint Return Still Valid: July 20, 2018 - Bulletin Print Report; A and P were married until P's death in 2011. On November 25, 2009, P filed joint tax returns for 2001 through 2006 on behalf of himself and A. On August 24, 2010, P filed...

Tax Court Determines Reasonable Compensation: July 20, 2018 - Volume 12 Issue 139 Print Report; Petitioner, (P), was a wholesale distributor of animal health products, lawn and garden products, farm hardware, pet supplies, and products for farm stores and relate...

GGP Sets Record Date For "Pre-Closing Dividend": July 19, 2018 - Bulletin Print Report; GGP, Inc., ("GGP"), and Brookfield Property Partners, L.P., ("BPY"), are nearing the finish line on their highly engineered transaction, which will culminat...

No-Fault Insurance: July 19, 2018 - Volume 12 Issue 138 Print Report; Taxpayer, (TP), serves as the court appointed guardian of his adult daughter, a legally incapacitated adult. TP's daughte...

Disregarded Entities Are Not Disregarded For All Purposes: July 18, 2018 - Bulletin Print Report; A business entity that is not classified as a corporation, (an "eligible entity"), can elect its classification for federal tax purposes . An eli...

Split-Off Carried Out For a Corporate Business Purpose: July 18, 2018 - Volume 12 Issue 137 Print Report; Y is engaged in the business of commercial printing and has been so engaged for the past five years. Its outstanding stock consists of shares of common stock of which...

Subpart F Inclusions Found To Be "Good" REIT Income: July 17, 2018 - Bulletin Print Report; TP intends to qualify and elect to be treated as a real estate investment trust, ("REIT"). TP's primary business is the acquisition, ownership, and leasing of ind...

Inherently Permanent Structures Are Real Estate Assets: July 17, 2018 - Volume 12 Issue 136 Print Report; A taxpayer owns a trailer park containing housetrailers of a permanent nature and also accommodates overnight parking of housetrailers for persons who are transient....

Rents Received From A Partnership Are "Rents From Real Property": July 16, 2018 - Bulletin Print Report; TP intends to qualify to be taxed as a real estate investment trust, ("REIT"). TP's primary business is the acquisition, ownership, and leasing of assisted living...

Banks Affected By Supreme Court's Pivot On "Nexus"?: July 16, 2018 - Bulletin Print Report; Wells Fargo & Company recently reported its earnings for the second quarter of 2018. One aspect of its report caught our eye. The company's Chief Financial Officer ackn...

Severance Payments Are Not Qualified Research Expenditures: July 16, 2018 - Volume 12 Issue 135 Print Report; The issue is whether severance payments paid by TP to certain salaried employees who voluntarily separated from the company pursuant to a Voluntary Separation Program...

First Mortgage Bonds Classified As "Securities": July 13, 2018 - Volume 12 Issue 134 Print Report; In 1957, a corporation, which had been in "severe financial difficulties" for several years, exchanged newly-issued common stock for all of its first mortga...

I.R.S. Finalizes Obama Era "Anti-Inversion" Regulations: July 13, 2018 - Bulletin Print Report; An "inversion" occurs when a foreign corporation becomes, with respect to an "expatriated entity," a "surrogate foreign corporation." A foreign co...

Minnesota Tax Avoidance Scheme Nipped In The Bud: July 12, 2018 - Bulletin Print Report; During 2007 and 2008, AB was a nationally-chartered bank headquartered in Wisconsin, operating as a wholly-owned subsidiary of ABC, a bank holding company. AB had banking locat...

Who Owns a Tax Refund?: July 12, 2018 - Volume 12 Issue 133 Print Report; In 2002, the petitioner, (JH), an individual, and her husband filed a joint Federal income tax return with the I.R.S. All of the income on the return was attributable...

DPSG Post-Mortem: July 11, 2018 - Bulletin Print Report; One of the more unusual deals we have encountered closed yesterday and, therefore, it seems appropriate to review its equally unusual tax consequences. In the transaction, a ne...

Stock Registration Costs Are Not Deductible: July 11, 2018 - Volume 12 Issue 132 Print Report; X Corporation, (XC), has been engaged in the manufacture of precision equipment for many years. In 1965, it was required to register its stock with the S.E.C. In conn...

Trust Not Eligible For Exemption From New York State's "RETT": July 10, 2018 - Bulletin Print Report; Petitioner, ("P"), is the executor the Estate of Phyllis Millstein, ("Estate"), and is the trustee of a trust, ("Trust"), established under the wi...

Lodging Facility Exempt From Property Tax: July 10, 2018 - Volume 12 Issue 131 Print Report; Petitioner, (P), anot-for-profit corporation engaged in the performing arts, seeks review of a city's determination that its properties are not tax-exempt p...

Disproportional Distributions Do Not Create A Second Class Of Stock: July 10, 2018 - Bulletin Print Report; Petitioner, ("P"), owned 49 percent of the shares of MR, and GM, P's brother, owned 51 percent thereof. MR is an 'S' corporation. P, GM, and MM, GM's...

"Risk Diminution" Prevents Enjoyment Of Intercorporate "DRD": July 9, 2018 - Volume 12 Issue 130 Print Report; Parent is the common parent of an affiliated group of corporations, (the "Group"). GMX is an equity-swap dealer. GMY is the Group's primary broker/dealer. GMX was...

NOL "Absorbed" In An Alternative Tax Year: July 9, 2018 - Bulletin Print Report; TD Holdings II, Inc., ("P"), was a banking corporation formed under the laws of Delaware with its principal place of business in New York City. P was subject to the b...

FOX/DIS: The Case For "Non-Device": July 9, 2018 - Bulletin Print Report; Tax counsel for Twenty-First Century Fox, ("21CF"), and The Walt Disney Company, ("DIS"), were unable to render an opinion "that the distribution (of t...

Government Grants Not Gross Income: July 6, 2018 - Volume 12 Issue 129 Print Report; During Year 1, TP accepted numerous grants from state and local governmental agencies to fund various railroad projects. A number of the grants were to make upgrades...

Another MLP Bites The Dust: July 6, 2018 - Bulletin Print Report; Recently, Boardwalk GP, LP, the General Partner of Boardwalk Pipeline Partners, LP, ("BWP"), and an indirect, wholly-owned subsidiary of Loews Corporation, ("L&q...

Insured Depository Institution Owned A Tax Refund: July 5, 2018 - Bulletin Print Report; This appeal concerns the ownership of a federal tax refund. The refund was issued to UWBI, a thrift holding company. The refund was the result, however, of net operating losses...

Will Visa And MasterCard Get Sec. 1341 Relief?: July 5, 2018 - Volume 12 Issue 128 Print Report; It has been reported in the Wall Street Journal and Bloomberg that Visa and MasterCard (as well as other defendants) "are close to settling an...

IPG's Basis Step Up Is "Worth" $300 Million: July 3, 2018 - Bulletin Print Report; Where a corporation purchases the stock of another corporation, the basis for the stock so acquired is the amount paid, i.e., a "cost" basis, but the acquired corpora...

AMEX's "Anti-Steering" Provisions Do Not Restrain Trade: July 3, 2018 - Volume 12 Issue 127 Print Report; American Express Company and American Express Travel Related Services Company, ("A"), provide credit card services to both merchants and cardholders. When a cardholde...

CVG/SNX Have Proposed A Tax-Free Reorganization: July 3, 2018 - Bulletin Print Report; Convergys Corporation, ("CVG"), has announced an agreement with SYNNEX Corporation, ("SNX"), pursuant to which SNX will acquire CVG "in a cash and stoc...

Footwear Designer And Marketer "Engaged In Manufacturing": July 2, 2018 - Bulletin Print Report; The appellant, "D," was a Delaware corporation whose principal place of business was in Goleta, California. D was founded as a footwear company in 1973. During the 19...

New Jersey Budget Agreement Is Hostile To Corporations: July 2, 2018 - Bulletin Print Report; Governor Murphy of New Jersey and the Senate President and Assembly Speaker announced an eleventh hour agreement on the State's Fiscal Year 2019 Budget that averts a govern...

Dell Will Retire Its "Tracking Stock": July 2, 2018 - Bulletin Print Report; The Special Committee of the Board of Directors of Dell Technologies, ("DTI"), "representing the holders of Dell's Class V Common Stock," i.e., Dell'...

Acquiring Basis During The "PTTP": July 2, 2018 - Volume 12 Issue 126 Print Report; X, an 'S' corporation, merges into Y, a C corporation, in a merger qualifying as a reorganization under Sec. 368(a)(1)(A). Prior to the merger, A, an individu...

Forced Divestiture Of FOX's "RSNs" Will Result In "Tax Leakage": June 29, 2018 - Bulletin Print Report; The Antitrust Division of the U.S. Department of Justice, ("DOJ"), has cleared the pending acquisition by The Walt Disney Company, ("DIS") of Twenty-First C...

Removal Of Spent Nuclear Fuel Is Not "Decommissioning": June 29, 2018 - Bulletin Print Report; NextEra Energy, Inc., ("NE"), operates nuclear power plants. Nuclear reactors are powered by "fuel assemblies" that contain rods of enriched uranium. Over t...

Paying "Shareholder" Expenses Produces Constructive Dividends: June 29, 2018 - Volume 12 Issue 125 Print Report; All of the stock of X Corporation, (X), was owned by A, an individual. Y Corporation, (Y), a widely held corporation, acquired all of the stock of X in exchange for i...

MSG Eyes Another Spin-Off: June 28, 2018 - Bulletin Print Report; The Madison Square Garden Company, ("MSG"), announced the other day that its board of directors has authorized management "to explore a possible spin-off that wo...

PF Shareholders Will Be Taxed On All Of The Merger Consideration: June 28, 2018 - Bulletin Print Report; Where the acquirer in a business combination uses its stock as part of the merger consideration, the determination of whether such stock can be received on a tax-free basis dep...

Wrongful Death Damages Not a Casualty Loss: June 28, 2018 - Volume 12 Issue 124 Print Report; On December 5, 2002, Mr. Pang, (P), was involved in an automobile accident inwhich hestruck a pedestrian with his vehicle. The pedestrian later died as a...

FOX/DIS Avoids Withholding By Adopting The "LaQuinta" Approach: June 27, 2018 - Bulletin Print Report; The revised S-4 Registration Statement for the historic business combination of Twenty-First Century Fox, Inc., ("FOX") and The Walt Disney Company, ("DIS")...

Taxpayer Not Required To Capitalize Commitment Fees: June 27, 2018 - Bulletin Print Report; The taxpayer, ("TP"), entered into a revolving credit agreement (the "Agreement"), with a consortium of lenders for a term of five years. Under the Agreemen...

Greystar To Achieve A Basis Step-Up: June 27, 2018 - Bulletin Print Report; An affiliate of Greystar Real Estate Partners, GSHGIF LTP, L.P., ("G"), has entered into an agreement to acquire Education Realty Trust, Inc., ("ERT"), a co...

Law Librarian Denied Law School Education Deductions: June 27, 2018 - Volume 12 Issue 123 Print Report; Petitioner, (P), has been an academic and court law librarian for 25 years. She is currently the Dakota County Law Library Manager. As the Law Library manager, P'...

Electricity Producer Not A "Qualified New York Manufacturer": June 26, 2018 - Bulletin Print Report; Petitioner, ("P"), provides wholesale electricity through its wholly-owned limited liability companies, R and C. R and C are each disregarded entities. R operates a g...

The S.E.C.'s Administrative Law Judges Are "Officers Of The U.S.": June 26, 2018 - Bulletin Print Report; The Securities and Exchange Commission, ("S.E.C."), has statutory authority to enforce the nation's securities laws. One way it can do so is by instituting an adm...

Membership Interests Constitute "Stock": June 26, 2018 - Volume 12 Issue 122 Print Report; P is a State A nonprofit corporation that is exempt from Federal income taxation under Sec. 501(c)(3) of the Internal Revenue Code. P represents that it is a "pu...

Nexus No Longer Dependent Upon Physical Presence: June 25, 2018 - Bulletin Print Report; South Dakota, ("SD"), has a sales tax. It taxes the retail sales of goods and services in the State. Sellers are required to collect and remit this tax to the Departm...

Can FOX Avoid Withholding Tax For Its Foreign Shareholders?: June 25, 2018 - Bulletin Print Report; The transaction in which Twenty-First Century Fox, Inc., ("FOX"), will be absorbed by The Walt Disney Company, ("DIS"), will be preceded by a spin-off of Ne...

Taxpayer Entitled To "Bonus" Depreciation: June 25, 2018 - Volume 12 Issue 121 Print Report; Mr. G, ("G"), purchased solar equipment situated on three "host" properties. Under the purchase agreement, G agreed to buy the solar equipment on host prope...

DIS And FOX Revise The Structure Of Their Deal: June 22, 2018 - Bulletin Print Report; The Walt Disney Company's revised offer for Twenty-First Century Fox, Inc., ("Parent and the "Company," respectively), also includes a change in the structur...

Stock Options Are Not "Monetary Remuneration": June 22, 2018 - Bulletin Print Report; Congress adopted the Railroad Retirement Tax Act, ("RRTA"), of 1937. That legislation federalized private railroad pension plans. Under the law's terms, private r...

"Mansion Tax" Found Applicable: June 22, 2018 - Volume 12 Issue 120 Print Report; On March 26, 2007, FJR, as buyer, entered into a Contract For Sale of Government Real Property for 34-44 Chestnut Hill Drive, Upper Brookville, New York with EG&G...

MCI Cannot Recoup Lost Depreciation Deductions: June 21, 2018 - Bulletin Print Report; In this appeal we are, the court said, asked to determine whether the New Jersey Corporation Business Tax Act, N.J.S.A. 54:10A-1 to -40 permits a corporate taxpayer to reduce i...

Sec. 1031 Applies to Swap of Water Rights for Farm Land: June 21, 2018 - Volume 12 Issue 119 Print Report; TP, an individual, is engaged in the business of farming. TP owns a right to pump ground waterfrom Aquifer for irrigation purposes. TP's water rights are li...

DIS Ups The Ante: June 20, 2018 - Bulletin Print Report; As expected, the Walt Disney Company, ("DIS"), in response to the overture made by Comcast, has signed an amended acquisition agreement with Twenty-First Century Fox,...

Parent's Contribution To "Troubled" Subsidiary Not Deductible: June 20, 2018 - Bulletin Print Report; BJP conducted fracking services in Russia through a Russian subsidiary, BJR. BJR agreed to provide pressure pumping services to TB in the Siberian oil fields. TB was a joint ve...

Retroactive "Volume Discounts" Do Not Reduce Sales Tax Liability: June 20, 2018 - Bulletin Print Report; Petitioner manufactured and sold asphalt to customers who picked up the material at petitioner's facility. Generally, the asphalt is sold at a "posted price" and...

Right To Have Stock Redeemed Is Not "Boot": June 20, 2018 - Volume 12 Issue 118 Print Report; Company, (C), is a domestic corporation engaged in the business of holding and developing real estate. C has outstanding one class of common stock of which 50 percent...

Tax Court Countenances Double Taxation: June 19, 2018 - Bulletin Print Report; Palisades Health Care IN, ("PA"), is an 'S' corporation organized under the laws of Colorado. Petitioners, ("Ps"), were the sole owners of PA. Color...

Determining the Basis of "Demutualized" Shares: June 19, 2018 - Volume 12 Issue 117 Print Report; Plaintiffs purchased life insurance policies with "the Companies" all of which were mutual insurance companies. Mutual insurance companies issue no stock an...

Leveraged Partnerships Are "Back On The Table": June 18, 2018 - Bulletin Print Report; One of the more popular techniques for divesting assets on a tax-advantaged basis was the so-called "leveraged partnership" strategy. The most well-known leveraged pa...

SUPERVALU Attempts To "Monetize" Its Capital Loss Carryover: June 18, 2018 - Bulletin Print Report; SUPERVALU, Inc., ("SU"), recently announced a complex transaction which, apparently, has as its aim (i) the eventual divestiture of its Retail operations, and (ii) th...

"Green" Couple Denied NYS Solar Energy System Equipment Credit: June 18, 2018 - Bulletin Print Report; Petitioners, New York State residents, claimed a tax credit for "qualified solar energy system equipment expenditures" on their 2012 New York State tax return. The ex...

Taxation Of Debt For Debt Exchanges: June 18, 2018 - Volume 12 Issue 116 Print Report; In 1973, a domestic corporation issued, at face value of $1,000x each, bonds, ("old bonds"), that were convertible into 30x shares of common stock at the election of...

Filing Status Choice Deprives Taxpayer Of "Insolvency Exception": June 15, 2018 - Bulletin Print Report; For 2012, the taxpayer, ("TP"), and her spouse, ("H"), elected "married filing separately" status to report their income for federal and Indiana i...

Fixed Obligation To Pay Interest Found: June 15, 2018 - Volume 12 Issue 115 Print Report; In accordance with a plan of reorganization,the taxpayerissued to creditors $2,836,400 16-year, five percent Cumulative Convertible Income Debentures (the...

AT&T And Time Warner Are Now Poised To Merge: June 14, 2018 - Bulletin Print Report; It looks as though the transformative AT&T, Inc., ("T"), acquisition of Time Warner, Inc., ("TWI"), can now proceed. We do not believe that there have b...

Corporation Cannot Transfer "Personal" Goodwill: June 14, 2018 - Volume 12 Issue 114 Print Report; On April 14, 1982, B, an individual, organized BT. B owned 100 percent of the stock of BT. B did not have an employment contract with BT; and he never signed a noncompete agree...

Telecom "Products" Found To Be "Services": June 13, 2018 - Bulletin Print Report; NTS Communications, Inc., ("NTS"), is a telecommunications provider based in Lubbock, Texas. It offers its customers Internet access, landline telephone service, and...

Lockheed Martin's Receipts From Sales Of F-16s Sourced To Texas: June 13, 2018 - Volume 12 Issue 113 Print Report; The Arms Export Control Act, ("AECA"), restricts sales of U.S.-made military goods and services to foreign nations "so as to ensure consistency with U.S. foreign...

Guaranteeing Exchange Treatment For AABA's Redemption: June 13, 2018 - Bulletin Print Report; Altaba, Inc., ("AABA"), as everyone is well aware, is offering to repurchase approximately 24 percent of its outstanding stock. Unlike a conventional self-tender offe...

North Carolina Cannot Tax The Income Of A "Foreign" Trust: June 12, 2018 - Bulletin Print Report; The Joseph Lee Rice, III Family 1992 Trust was created in New York in 1992 for the benefit of the children of Joseph Lee Rice. Mr. Rice, of course, is the legendary co-founder...

Hedge Fund Manager Denied Deduction For Legal And Professional Fees: June 12, 2018 - Bulletin Print Report; Mr. Sky M. Lucas, ("P"), formed Vicis Capital, LLC, ("V"), with two other partners in 2004; each such partner owned a one-third interest in V. V was an inve...

Tuition Waiver Benefit Included In Gross Income: June 12, 2018 - Volume 12 Issue 112 Print Report; Petitioner, ("P"), worked in the computer information services department of Tulane University, ("TU"), from February 8, 1985 to June 7, 1991. TU was forced...

I.R.S. Finalizes "May Department Store" Regulations: June 11, 2018 - Bulletin Print Report; Where a corporation distributes appreciated property to a shareholder in a distribution to which subpart A applies, the corporation must recognize gain as if the distributed pr...

AABA Still Positioned To Effect A "Tax Efficient" Transaction: June 11, 2018 - Bulletin Print Report; Although Altaba, Inc., ("AABA"), will be engaging in a taxable disposition of nearly 100 million shares of its Alibaba Group, ("BABA") stock, we are encoura...

Valuing a Covenant Not To Compete: June 11, 2018 - Volume 12 Issue 111 Print Report; CL owned and operated BDC, a wholesale beer distributorship in northern Minnesota. In 1992, CL sold BDC to BBL for $2,017,461. The parties allocated the purchase pric...

"Usufruct" Not Subject To Real Estate Taxation: June 8, 2018 - Bulletin Print Report; The City of Atlanta, which owns the Hartsfield-Jackson Atlanta International Airport, (the "Airport"), entered into two seven-year agreements, one with each plaintiff...

AABA Still Mulling A "RIC" Conversion: June 8, 2018 - Bulletin Print Report; Buried within Altiba, Inc.'s, ("AABA" or the "Fund"), tender offer document was the revelation that AABA, apparently, is still considering the possibili...

Foreign Owned U.S. Corporation Not Subject to "AET": June 8, 2018 - Volume 12 Issue 110 Print Report; C is a wholly-owned subsidiary of H. Each of C and H is a domestic corporation. C owns a 50 percent interest as general partner in a U.S. general partnership which owns and man...

Altaba Opts For "Tax Leakage": June 7, 2018 - Bulletin Print Report; Has Altaba, Inc., ("AABA"), given up the ghost as respects the "tax-efficient" monetization of its holdings in Alibaba Group Holding Ltd., ("BABA"...

Stock Offering Does Not Affect Qualification Of Spin-Off: June 7, 2018 - Volume 12 Issue 109 Print Report; Distributing, a Country entity, is widely held and publicly traded. Distributing, directly and indirectly, owns foreign and domestic entities, including Controlled, that are en...

Earn-Out Consideration Must Consist Primarily Of Voting Stock: June 6, 2018 - Volume 12 Issue 108 Print Report; Parent owns all of the stock of Merger Sub, ("M-S"), and C1. C1 owns all of the stock of C2. C2 owns all of the stock of C3. C3 owns all of the interests in LLC1 and...

Another MLP "Rollup" Planned: June 6, 2018 - Bulletin Print Report; One of the central themes of the Tax Cuts and Jobs Act, (the "Act"), has been the incorporation of MLPs, an event apparently precipitated by the large gap between cor...

When Does An Exchange Have "The Effect" of a Dividend?: June 5, 2018 - Volume 12 Issue 107 Print Report; The taxpayer, (TP), was the sole shareholder of Basin Corporation, (B). An agreement providing for a "forward triangular merger",in whichB would...

"Statement Respecting Financial Condition" Of Debtors: June 5, 2018 - Bulletin Print Report; Respondent, ("R"), hired Petitioner, ("P"), a law firm, to represent him in a business litigation. R fell far behind on his legal bills. R, however, told P...

Kinder Morgan To Sell Pipelines To The Canadian Government: June 5, 2018 - Bulletin Print Report; Kinder Morgan, Inc., ("KMI"), and Kinder Morgan Canada, Ltd., ("KML"), are affiliated, but in an unconventional way. KMI owns "special voting shares&qu...

KLXI Will Not Assert The "Integrated Transaction Doctrine": June 4, 2018 - Bulletin Print Report; KLX, Inc., ("KLX"), recently entered into a definitive merger agreement to be acquired by The Boeing Company, ("B"). A wholly-subsidiary of B will be newly...

DIS/FOXA Deal Hinges On "Skadden Opinion": June 4, 2018 - Bulletin Print Report; The proxy materials issued in connection with the historic "Morris Trust" transaction involving The Walt Disney Company, ("Disney"), and Twenty-First Centur...

"Statutory Employees" Can Use Schedule C: June 4, 2018 - Bulletin Print Report; In 2012, Mr. F worked as a consultant for Space Systems Loral, ("L"). He entered a contract to provide consulting services to L through WV, a temporary employment age...

Spinco Stock Not "Other Property Or Money": June 4, 2018 - Volume 12 Issue 106 Print Report; X corporation has been engaged in the active conduct of two separate and distinct businesses--(i) toy manufacturing; and (ii) hand tool manufacturing--for well in excess of fiv...

Truck Exempt From "Transaction Privilege Tax": June 1, 2018 - Bulletin Print Report; Empire Southwest LLC, ("E"), is an equipment retailer operating in Arizona. In 2014, E sold a truck, (the "Truck"), to the Pinto Valley Mine, (the "Min...

Ineligible Shareholder Terminates 'S' Corporation Status: June 1, 2018 - Volume 12 Issue 105 Print Report; KH died on January 30, 2000. KH was the grantor of the HLT, a revocable trust. Upon KH's death, the HLT became irrevocable and known as the HLT-AT ("AT"...

Supreme Court Upholds Federal Arbitration Act: May 31, 2018 - Volume 12 Issue 104 Print Report; Ernst & Young and one of its junior accountants, SM, entered into an agreement providing that they would arbitrate any dispute that may arise between them. After his employ...

Dealer's Motor Vehicles Subject To Massachusetts Corporate Excise: May 31, 2018 - Bulletin Print Report; Dealer is a "QSub." Dealer is a wholly owned subsidiary of Parent, which is an 'S' corporation for both federal and Massachusetts tax purposes. Parent is subj...

Broadcaster's Sale Was Under Threat Or Imminence Of Condemnation: May 31, 2018 - Bulletin Print Report; Company, ("C"), is a global media and entertainment company. TP, C's wholly owned subsidiary, is a member of an affiliated group filing a consolidated federal inc...

Private Equity Firm Not Doing Business In Detroit: May 30, 2018 - Bulletin Print Report; A private equity firm, Huron Capital Partners LLC, ("Huron"), solicited investors to acquire partnership interests in a limited partnership, The Huron Fund II, L.P.,...

Update On Renren Inc.'s Unusual Spin-Off: May 30, 2018 - Bulletin Print Report; Renren, Inc., ("RENN"), a Cayman Islands corporation, is preparing to distribute, to certain of its shareholders, the stock of a newly-created Cayman Islands subsidia...

California 'S' Corporation Cannot Avoid "Gains" Tax: May 30, 2018 - Volume 12 Issue 103 Print Report; In June, 1989, Golden West Health Plan, Inc. (GW) filed an election to be treated as an 'S' corporation. The income of an 'S' corporation is not taxed...

Plan To Avoid New York's "RETT" Thwarted: May 29, 2018 - Bulletin Print Report; Petitioner, ("P"), and SLG acquired real estate in New York City (located at 2 Herald Square in Manhattan) in 2007 as tenants-in-common. P held an undivided 45 percen...

What Disney Can Learn From The Shire/Baxalta Experience: May 29, 2018 - Bulletin Print Report; On July 1, 2015, Baxter International, Inc. distributed slightly more than 80 percent of the stock of Baxalta, Inc., ("B"), to its shareholders in a transaction inten...

Control Means Direct Ownership of Stock: May 29, 2018 - Volume 12 Issue 102 Print Report; X's common stock consists of shares of Class A stock and shares of Class B stock, evenly divided. These shares have equal voting and liquidation rights. They diff...

G.E.'s Morris Trust Transaction Bears A Close Resemblance To FOX's: May 25, 2018 - Bulletin Print Report; Westinghouse Air Brake Technologies Corporation, ("WAB"), has entered into a definitive agreement to combine with GE Transportation, ("SpinCo"), a unit of G...

"Bad" 'B' Reorganization Gives Rise To a QSP: May 25, 2018 - Volume 12 Issue 101 Print Report; ACQ is the common parent of an affiliated group of corporations that files a consolidated return (the "ACQ Group"). ACQS is a member of the ACQ Group....

Intercompany Interest Cannot Be Deducted In New Jersey: May 24, 2018 - Bulletin Print Report; Plaintiff, Kraft Foods Global, Inc., ("KG"), is a wholly owned subsidiary of Kraft Foods, Inc., ("KF"). Between 2001 and 2004, KF made no fewer than six pub...

Can Disney Offer Cash And Stock For Fox?: May 24, 2018 - Bulletin Print Report; The difference between the Disney offer and the rumored Comcast offer for Fox boils down to taxes. In each case, the preliminary spin-off, because it runs afoul of Sec. 355(e),...

Optionee Constructively Owns Stock Owned By Adoptive Relatives: May 24, 2018 - Volume 12 Issue 100 Print Report; This case presents the novel issue of whether or not a taxpayer who has received a stock option from a corporation should be considered as owning the stock held by an adoptive...

Fifth Third Bancorp Will Acquire MB Financial, Inc.: May 23, 2018 - Bulletin Print Report; Fifth Third Bancorp, ("FTB"), has entered into a plan and agreement pursuant to which it will acquire the properties (not the stock) of MB Financial, Inc., ("MBF...

Financial Counseling Fees Paid By Employer Are Gross Income: May 23, 2018 - Volume 12 Issue 99 Print Report; TP, an executive of a large corporation, was provided with financial counseling by a professional financial counseling firm that was engaged by the corporation for th...

Payment For Waiver Of Right Of First Offer Is "Good" REIT Income: May 22, 2018 - Bulletin Print Report; Taxpayer, ("TP"), intends to operate in a manner that qualifies as a real estate investment trust, ("REIT"). TP owns 100 percent of GP, a disregarded entity...

Depletion Requires an "Economic Interest" in Minerals In Place: May 22, 2018 - Volume 12 Issue 98 Print Report; The taxpayer, (TP), an individual, is employed by Company, (C). C has created a "Bonus Pool plan" fora number of itskey employees. &nb...

Wyndham Worldwide Corporation To Separate Its Businesses: May 21, 2018 - Bulletin Print Report; Wyndham Worldwide Corporation, ("D"), is engaged in the active conduct of two separate businesses, hotel franchising and management, and the development and marketing...

Spirit Realty Capital Will Be Engaging In A "Taxable" Spin-Off: May 21, 2018 - Bulletin Print Report; On May 31, 2018, Spirit Realty Capital, ("SRC"), a real estate investment trust, ("REIT"), will be distributing to its shareholders all of the stock of its...

Dramatic and Musical Arts Performances: May 21, 2018 - Volume 12 Issue 97 Print Report; Petitioner, (P), is a trapeze artist who performs "aerial skills" under the following circumstances-- --when hired as an independent contractor by...

Basis Denied A Guarantor Of 'S' Corporation's Debt: May 18, 2018 - Bulletin Print Report; S was a 50 percent shareholder in OA, an 'S' corporation specializing in real estate development. R, S's husband, was an employee of OA. OA obtained bank loans to f...

Barter Transactions: May 18, 2018 - Volume 12 Issue 96 Print Report; Company, (C), is engaged in the newspaper business in City. C plans to conducta "food drive." Canned and dried foods will be solicited from clubs, org...

NLY/MTGE To Engage In A "Cash-Option" Merger: May 17, 2018 - Bullletin Print Report; Annaly Capital Management, Inc., ("NLY"),, a REIT, and MTGE Investment Corporation, ("MTGE"), recently announced the signing of a definitive merger agreemen...

WMB And ENB To "Roll Up" Their MLPs: May 17, 2018 - Bulletin Print Report; Williams, (WMB), and Williams Partners, L.P., (WPZ), announced an agreement (similar to their May 2015 agreement that, because of the intervention of the ill-fated ETE transact...

"Enhanced" Delivery Services Produce "Physical Presence": May 17, 2018 - Bulletin Print Report; "Enhanced" delivery services...generally includes any activity that "significantly exceeds the basic delivery of goods to the buyer thereof." For example, a...

Fulfillment Services Exemption Not Applicable: May 17, 2018 - Volume 12 Issue 95 Print Report; P is a Virginia corporation with headquarters in Pennsylvania. P uses asales force of approximately 16 independent contractors located in New York State, (NYS)....

Manufacturer's Receipts "Sitused" To Ohio: May 16, 2018 - Bulletin Print Report; SMK Industries, Ltd., ("SMKI"), after an audit, was assessed a deficiency by the Ohio Department of Taxation for unpaid commercial activity taxes, ("CAT"),...

Exchanging Stock For Voting Trust Certificates: May 16, 2018 - Volume 12 Issue 94 Print Report; TP was one of the original organizers of M Corporation, (M), and received "6Y" shares of no par value common stock of M for services he rendered to M....

I.R.S. To Address "GILTI" Foreign Tax Credit Issue: May 15, 2018 - Bulletin Print Report; One of the provisions contained in the Tax Cuts and Jobs Act, which was specifically designed to arrest the "erosion of the U.S. tax base," was the aptly named "...

Flight Attendant's Reach Exceeded Her Grasp: May 15, 2018 - Volume 12 Issue 93 Print Report; Petitioner, (P), was a U.S. citizen and a bona fide resident of Hong Kong. She worked as a flight attendant for United Airlines, (UA), on international flights based...

Shire's Scheme Of Arrangement Will Not Qualify As A Reorganization: May 14, 2018 - Bulletin Print Report; Takeda Pharmaceutical Company, Ltd., ("TPC"), and Shire plc, ("SH"), have agreed to engage in a business combination that will see the former TPC shareholde...

Unsolicited Property Is Includible In Gross Income: May 14, 2018 - Volume 12 Issue 92 Print Report; Tserves on the Board of Supervisors of County. Among the duties of the Board of Supervisors is the supervision of a stadium owned by County. The principal tenan...

Massachusetts Follows Sec. 338(h)(10) Fiction: May 11, 2018 - Bulletin Print Report; P and T both manufacture "X." On Date 1, P acquired 100 percent of the stock of T. Prior to the transaction, T took Massachusetts economic opportunity area credits (&...

Redemption of Preferred Stock Is Equivalent To a Dividend: May 11, 2018 - Volume 12 Issue 91 Print Report; TP is an irrevocable trust and holds shares of C, a family owned corporation. As of November 2, 1995, C had three classes of stock outstanding; nonvoting common stock...

IFF's Stock Will Be Taxable: May 10, 2018 - Bulletin Print Report; International Flavors & Fragrances, Inc., ("IFF"), and Frutarom Industries Ltd., ("FRUT"), a company organized under the laws of Israel, have entered in...

Wife Denied Virginia Preservation Tax Credit: May 10, 2018 - Volume 12 Issue 90 Print Report; The Taxpayers, a husband and wife, claimed $100,000 of Virginia Land Preservation Tax Credit (the "Credit") on the joint 2009 Virginia income tax return. Th...

Bonus Depreciation Not A Factor In Determining "RBIGs": May 9, 2018 - Bulletin Print Report; Sec. 382 of the Internal Revenue Code addresses the problem of "trafficking" in losses. The section provides that, after an ownership change (withi...

Tax Implications Of A Comcast Deal For Twenty-First Century Fox: May 9, 2018 - Bulletin Print Report; The deal struck by Twenty-First Century Fox, Inc., ("FOX"), and The Walt Disney Company, ("DIS"), is relatively tax-efficient. It features a preliminary spi...

Prior Business Found To Have Been Discontinued: May 9, 2018 - Volume 12 Issue 89 Print Report; In 1945, SRC was formed to own and manage rental property, including a property called the WS property, in Milwaukee, Wisconsin. The father of petitioner, (P), owned...

Tax Profile Of Recently Announced Transactions: May 8, 2018 - Bulletin Print Report; 1. KLX, Inc./Boeing--KLX will spin-off "unwanted assets," i.e., the "ESG" business, and, as part of the overall plan, Boeing will acquire the stock of KLXI...

How Will Nestle And Starbucks Be Taxed?: May 8, 2018 - Bulletin Print Report; Nestle SA and Starbucks Corporation announced a momentous agreement which dramatically alters the business profile of each corporation. Nestle will be granted "perpetual r...

Direct Ownership Not Compromised By "SSA": May 8, 2018 - Volume 12 Issue 88 Print Report; USP is the common parent of an affiliated group of corporations that join in filing a consolidated income taxreturn. USP is a wholly owned subsidiary of Foreign...

Deferred Foreign Income Inclusion Does Not Terminate MLP Status: May 7, 2018 - Bulletin Print Report; X was organized on Date 1 as a limited partnership. X is a "publicly traded partnership," i.e., an "MLP." On Date 2, X acquired a substantial, but non-contr...

New York Expands The Definition Of "New York Source Income": May 7, 2018 - Bulletin Print Report; The definition of "New York source income" of a nonresident individual was recently expanded in two ways.* First, the definition was expanded to include the gain or l...

When A Debtor Merges Into Its Creditor: May 7, 2018 - Volume 12 Issue 87 Print Report; In a prior transaction unrelated to the present statutory merger, X purchased from certain banks, at a cost of $20,000, outstanding notes of Y in the unpaid face amou...

KKR Will Become A C Corporation: May 4, 2018 - Bulletin Print Report; The Tax Cuts & Jobs Act, (the "Act"), dramatically reduced corporate tax rates, from 35 percent to 21 percent. By contrast, individual tax rates, at the highest l...

Grantors and Fiduciaries and Sec. 267: May 4, 2018 - Volume 12 Issue 86 Print Report; P Corporation, (P), establisheda pension plan for its employeesas well as forthose of its affiliated corporations. The plan and the accompanying tru...

Walmart Will Realize A Loss On the "Sale" Of Asda Group: May 3, 2018 - Bulletin Print Report; Walmart, Inc., ("W"), owns all of the stock of Asda Group Ltd., ("AGL"). Recently, W announced its intention to dispose of its investment in AGL, but will d...

Pre-Spin Off Control Annexation Respected: May 3, 2018 - Volume 12 Issue 85 Print Report; X and Y were corporations engaged in manufacturing. A and B each own 50 percent of the X stock. A owned 25 percent of the Y stock, and X owned the remaining 75 percen...

ILG To Be Acquired Nearly Two Years After Its "RMT" Transaction: May 2, 2018 - Bulletin Print Report; On May 11, 2016, Starwood Hotel & Resorts Worldwide, Inc., ("Starwood"), spun off the stock of its subsidiary, Vistana Signature Experiences, Inc., ("Vistana...

KLXI To Undertake A "Cash" Morris Trust Transaction: May 2, 2018 - Bulletin Print Report; KLX, Inc., ("KLXI"), is selling its "ASG" business to The Boeing Company, ("B"). However, B has no interest in acquiring or operating KLXI's o...

Bulk Sale of Inventory Does Not Produce "Business Receipts": May 2, 2018 - Volume 12 Issue 84 Print Report; The petitioner, (P), a Rhode Island 'S' corporation, was a family-owned corporation engagedin the business of distributing products from its warehouse i...

Merger Agreement Discloses Unusual Format For S/TMUS Combination: May 1, 2018 - Bulletin Print Report; The historic combination of Sprint Corporation, ("S"), and T-Mobile US, Inc., ("TMUS"), will be accomplished in an unorthodox manner. It is the overriding o...

MPC And ANDV To Engage In A "Two-Step" Merger: May 1, 2018 - Bulletin Print Report; Marathon Petroleum Corporation, ("MPC"), and Andeavor, ("ANDV"), have entered into a definitive merger agreement "under which MPC will acquire all of A...

Who Is Entitled To A Tax Refund?: May 1, 2018 - Volume 12 Issue 83 Print Report; At the time the petition in bankruptcy was filed, the bankrupt was a wholly owned subsidiary of WDM and WDM was an unsecured creditor of the bankrupt in the sum of $4...

Is A "Cross-Border" RMT Transaction A Device?: April 30, 2018 - Bulletin Print Report; Distributing, ("D"), a publicly traded State A corporation, is the parent of a worldwide group of corporations. Prior to the Transaction, D and its subsidiaries were...

What Becomes Of Sprint's Net Operating Losses?: April 30, 2018 - Bulletin Print Report; As everyone knows by now, Sprint Corporation, ("S"), the parent of Sprint Communications, Inc., and T-Mobile US, Inc., ("TMUS"), have agreed to a merger (we...

"Untimely" Liquidation Qualified For Sec. 332 Non-Recognition: April 30, 2018 - Volume 12 Issue 82 Print Report; CB, Inc., (CB), owned all of the outstanding preference shares and 80 percent of the common shares of CB, Ltd., (CBL), an English corporation. &...

"CAT" Credit Unaffected By Excluded COD Income: April 27, 2018 - Bulletin Print Report; Ohio's 2005 tax reform provided for a phase out of the franchise tax and a phase in of its replacement, the commercial activity tax, ("CAT"). Because the CAT is a...

A Sale and Purchase Within 30 Days Is Not a Wash Sale: April 27, 2018 - Volume 12 Issue 81 Print Report; Advice has been requested from the I.R.S.whether the provisions of Sec. 1091 of the Internal Revenue Code, the so-called "wash sale rules," will opera...

Art Is Not Fungible: April 26, 2018 - Volume 12 Issue 80 Print Report; A fire occurred in the residence then occupied by the taxpayers. There was substantial damage visited upon an art collection maintained by the taxpayers consisting of 3,000 lit...

Takeda And Shire Are Headed To The Altar: April 25, 2018 - Bulletin Print Report; The board of Shire PLC received another revised proposal from Takeda Pharmaceutical Co. Ltd. regarding Takeda's desire to acquire Shire PLC. This latest proposal, unlike th...

VZW's Equipment Not Used In Providing Telecommunications Services: April 25, 2018 - Bulletin Print Report; Petitioner, Cellco Partnership d/b/a Verizon Wireless, provides wireless cellular telecommunications services to more than 100 million customers nationwide. Petitioner owns a &...

Income From A "Rabbi Trust" Is Not Business Income: April 25, 2018 - Volume 12 Issue 79 Print Report; M is a Mississippi corporation that is bothdomiciled and headquartered in Mississippi. M is a contractor whose primary focus is managing the U.S. Department of...

Refunds And Rebates Constitute "Good" REIT Assets And Income: April 24, 2018 - Bulletin Print Report; Taxpayer, ("TP"), is a real estate investment trust, ("REIT"), under Sec. 856 of the Code. TP owns "A%" of the interests in Partnership, ("PS...

Tax Refund Includible In Gross Income: April 24, 2018 - Volume 12 Issue 78 Print Report; Seller, (S), the common parent of a consolidated group, sold 100 percent of the stock of Sub 1 and Sub 2 to Buyer, (B). B is the common parent ofanother consoli...

HSIC To Engage In An "RMT" Transaction: April 23, 2018 - Bulletin Print Report; Henry Schein, Inc., ("HSIC"), and Direct Vet Marketing, Inc., ("DVM"), have announced their intention to engage in a "Reverse Morris Trust," (&quo...

Sale Made Under "Threat Or Imminence" Of Condemnation: April 23, 2018 - Bulletin Print Report; Taxpayer, ("TP"), is a wholly owned subsidiary of Parent, ("P"). P is a television broadcasting company. TP owns and operates "Station," a full-po...

WFC's Settlement Payment Is Not Tax-Deductible: April 23, 2018 - Bulletin Print Report; Wells Fargo & Company, ("WFC"), has signed another consent order, this time with the Consumer Financial Protection Bureau, ("CFPB"), and the Office of t...

New Insurance Policy Subject to Expense Disallowance Rule: April 23, 2018 - Volume 12 Issue 77 Print Report; On January 3, 2000, TP, a corporation, purchased a life insurance policy ("OP") covering the life of Mr. A, an employee of TP, as of that date. Mr. A was no...

Separate And Distinct Businesses Found: April 20, 2018 - Volume 12 Issue 76 Print Report; OP was organized on November 8, 1956, for the purpose of conducting a hospital business. A hospital business was actively conducted by OP in Stockton, California, ("S"...

Driver's License Key To Ascertaining "Domicile": April 19, 2018 - Bulletin Print Report; The taxpayer, ("TP"), filed a Virginia nonresident individual income tax return for 2014. The Virginia Department of Taxation, (the "Department") was not ha...

Sales Not "Thrown Back" To Indiana: April 19, 2018 - Volume 12 Issue 75 Print Report; Taxpayer, ("TP"), is a manufacturer, fabricator, and distributor of products and services for the rail, construction, energy, and utility markets. An audit conducted...

Non-Resident Alien Subject To Sec. 453A: April 18, 2018 - Volume 12 Issue 74 Print Report; TP is a nonresident. Partnership, (PS), develops Product. PS is headquartered in State, where strategic direction, inventory, distribution and marketing decisions are...

I.R.S. Provides Guidance For Fiscal '18 Corporate Taxpayers: April 17, 2018 - Bulletin Print Report; Sec. 11(a) of the Internal Revenue Code imposes a tax on the taxable income of every corporation, ("corporate tax"). Prior to the changes made by the Tax Cuts and Job...

Has Dell Technologies, Inc. Abandoned The "Reverse" Merger?: April 17, 2018 - Bulletin Print Report; It has been reported in both Bloomberg and Barron's that Dell Technologies, Inc., ("DTI"), the owner of the majority of the...

Series of Redemptions Yields Dividend Income: April 17, 2018 - Volume 12 Issue 73 Print Report; In 1963, petitioner incorporated a sole proprietorship naming the corporation OHL, Inc., ("L"). Upon incorporation, petitioner received 1,000 shares of L...

Grants Not Excluded From Gross Income: April 16, 2018 - Bulletin Print Report; Following "D," State undertook efforts to mitigate "C." TP was established pursuant to an agreement between Agency 1 and Agency 2, a public instrumentality...

Adopted "In This State": April 16, 2018 - Volume 12 Issue 72 Print Report; Taxpayers (TPs) adopted children from Country (C), with a C court issuing the adoption decree on June 24, 2008. Each of the children so adopted, it was agreed,m...

Distinguishing "Penalties" From "Taxes": April 13, 2018 - Bulletin Print Report; Petitioner, (P"), filed a voluntary petition for relief under chapter 7 of the Bankruptcy Code on May 7, 2017. On her 2016 Federal income tax return, P indicated that she...

Indiana Nexus Existed: April 13, 2018 - Volume 12 Issue 71 Print Report; Taxpayer, (TP), is an out-of-state business which made deliveries of its merchandise to its customers located in Indiana. As a result of an audit, the Indiana Department of...

Open Transaction Treatment Not Permitted: April 12, 2018 - Volume 12 Issue 70 Print Report; Plaintiff, (P), formerly owned 25 percent of the common stock of each of W and B. W and B were in the business of slaughtering cattle and processing beef for sale.

Paying The Seller For A Sec. 338(h)(10) Election: April 11, 2018 - Bulletin Print Report; Last month, Envision Healthcare Corporation, ("PC"), completed the previously announced disposition of its medical transportation business by disposing of the stock o...

Connecticut Addresses The Sec. 965 "Transition Tax": April 11, 2018 - Bulletin Print Report; One of the centerpieces of the Tax Cuts and Jobs Act is the provision, found in Sec. 965 of the Code, which says that, "in the case of the last taxable year of a deferred...

"Boot" Is Tolerated In A 'C' Reorganization: April 11, 2018 - Volume 12 Issue 69 Print Report; Acquiring Corporation, (AQ), is engaged in an ongoing business. As of July 31, 1978, AQ had outstanding 20,051,671 shares of $1 par value voting common stock held by...

LUK To Deconsolidate National Beef: April 10, 2018 - Bulletin Print Report; Leucadia National Corporation, ("LUK"), has announced "strategic transactions involving several of its investee companies; a proposal to change the name of the c...

Gain From Sale of Encumbered Building Is Not "UBTI": April 10, 2018 - Volume 12 Issue 68 Print Report; The taxpayer, (TP), is exempt from Federal incometax under Sec. 501(a) of the Internal Revenue Code as an organization described in Sec. 501(c)(3) of such Code....

NYS Tax Assessment Barred By ERISA "Preemption" Rule: April 9, 2018 - Bulletin Print Report; The activity that gave rise to a New York State notice of deficiency was the sale of real property, ("P"), located at 948 Second Avenue in Manhattan, for $5.5 million...

Inability To "Group" Activities Produces A "Passive" Loss: April 9, 2018 - Bulletin Print Report; Petitioner, ("P"), is a real estate developer. In 2005, P purchased, through one of his affiliates, a large property in Oakley, California, a community northeast of O...

Voting Stock Found To Be "Other Than Common Stock": April 9, 2018 - Volume 12 Issue 67 Print Report; X Corporation, (X), has outstanding 1,000 shares of common stock all of which were held by five related individuals. X issued...

Avoiding The Sec. 306 "Taint": April 6, 2018 - Volume 12 Issue 66 Print Report; A, B, and C owned all of the common stock of X Corporation, (X). X required funds for expansion and contemplated issuing stock for public sale. Underwriter, (U), advi...

SJM Will Reap Tax Benefits From Ainsworth Acquisition: April 5, 2018 - Bulletin Print Report; The J.M Smucker Company, ("SJM"), has announced the signing of a definitive agreement to acquire Ainsworth Pet Nutrition, LLC, ("A"), "in a transaction...

Doing Business In California: April 5, 2018 - Volume 12 Issue 65 Print Report; WK incorporated appellant (AP) in Delaware on May 20, 2003. According to AP's website, AP possesses a portfolio of approximately 30 "developing" brands...

Is The CBI/MDR Combination A Reorganization?: April 4, 2018 - Bulletin Print Report; McDermott International, Inc., ("MDR"), and Chicago Bridge & Iron Co. N.V., ("CBI"), are engaging in a business combination that features several steps...

A Fiduciary May Be Awarded a Tax Refund: April 4, 2018 - Volume 12 Issue 64 Print Report; TP is the common parent of an affiliated group of corporations filing a consolidated tax return (TPG). One of TP's subsidiaries is Subsidiary, (S). For the years...

I.R.S. Previews "Interest Disallowance" Regulations: April 3, 2018 - Bulletin Print Report; One of the more controversial provisions of the Tax Cuts and Jobs Act, (the "Act"), is the one which places a cap on the amount of "business interest" that...

Taxpayer Did Not Change His "Domicile": April 3, 2018 - Volume 12 Issue 63 Print Report; Oregon imposes an income tax on every resident and every non-resident with Oregon-source income. Oregon defines a resident as an individual who is domici...

Limiting The Amount Subject To Partial Liquidation Treatment: April 2, 2018 - Volume 12 Issue 62 Print Report; For over five years, P has owned all of the outstanding stock of S and each has been engaged in the active conduct of a trade or business during that period. For seve...

When Are Royalties "Subject To A Tax": April 2, 2018 - Bulletin Print Report; Kohl's Department Stores, Inc., ("K"), is a corporation organized under the laws of Delaware. K operates retail stores throughout the United States. Kohl's Il...

Government Grants Included In A Partnership's Gross Income: April 2, 2018 - Bulletin Print Report; U is a limited liability company...treated as a partnership for federal income tax purposes. U has two members, UNI and UQD. These members are both owned by 'S' corpora...

Is Tallgrass A "FERC Casualty?": March 29, 2018 - Bulletin Print Report; A few weeks ago, the Federal Energy Regulatory Commission, ("FERC"), announced its intention to alter the rate-setting process for certain of its "clients,"...

The Service Rejects Haft Trust: March 29, 2018 - Volume 12 Issue 61 Print Report; X Corporation, (X), had outstanding one class of common stock. The stock was owned by eight shareholders: A; B (A's brother); C (A's brother-in-law): Trust A;...

BPY To Acquire GGP: March 28, 2018 - Bulletin Print Report; Brookfield Property Partners L.P., ("BPY"), a publicly traded partnership, (i.e., an MLP), organized under the laws of Bermuda, and GGP, Inc., ("GGP"), have...

Discounted Options Are Subject to Sec. 409A: March 28, 2018 - Volume 12 Issue 60 Print Report; DS and MD (petitioners or plaintiffs)are employed by MSI. Petitioners are two of the three co-founders of Marvell Technology Group, Ltd. (MTGL), the parent of M...

Inherited IRA Can Be Reached By Creditors: March 27, 2018 - Bulletin Print Report; D's mother had two IRAs. D was a beneficiary of one such IRA. After D's mother passed away, D used the funds received from her mother to establish an "inherited IR...

Late Filing Penalties Cannot Be Waived: March 27, 2018 - Volume 12 Issue 59 Print Report; Labor unions do not have to pay income or other federal taxes. However, they do have to file informational returns detailing their income, disbursements, etc....

"Customary" Services May Be Rendered By A REIT: March 26, 2018 - Bulletin Print Report; Taxpayer, ("TP"), is a real estate investment trust, ("REIT"). TP owns three separate residential properties, Property A, Property B, and Property C (the &q...

"Last Resort" Test Satisfied: March 26, 2018 - Bulletin Print Report; Sec. 355 of the Internal Revenue Code applies to a spin-off (or split-off) only if, among several other requirements, "it is carried out for one or more corporate business...

Donating Common Stock: March 26, 2018 - Volume 12 Issue 58 Print Report; C is an 'S' corporation. Its stock is held by X and Y in almost equal proportions. Buy/sell agreements exist between X and C and between Y and C. &n...

Medical Facility Days and The 183-Day Rule: March 23, 2018 - Volume 12 Issue 57 Print Report; RFF was born in New York City. She has been domiciled in Florida since she was 15 years of age. She currently resides in Miami. She has owned property and maintained...

Supreme Court Narrows The Scope Of The "Omnibus Clause": March 22, 2018 - Bulletin Print Report; Sec. 7212(a) of the Internal Revenue Code contains two substantive clauses. The first such clause forbids "corruptly or by force or threats of force...endeavoring to intim...

CRM To Acquire MULE: March 22, 2018 - Bulletin Print Report; Salesforce.com, Inc., ("CRM"), and MuleSoft, Inc., ("MULE"), have entered into a definitive agreement pursuant to which CRM will acquire all of the stock of...

Reinvestment Power Is Fatal To Trust Status: March 22, 2018 - Volume 12 Issue 56 Print Report; The trust, whose corpus consists of a portfolio of municipal bonds, was formed to provide its investors with tax-free income. The trust will terminate upon the maturi...

Allergan Spin-Off Impeded By Tax Considerations: March 21, 2018 - Bulletin Print Report; Allergan plc's stock has performed poorly of late, and this underperformance has prompted investors to call for a separation of some of Allergan's businesses in the hop...

Investment Trust Not an Association: March 21, 2018 - Volume 12 Issue 55 Print Report; A securities broker, as sponsor, formed an investment trust with a bank as trustee. The sponsor deposited in the trust certain tax-exempt bonds and contracts to purch...

Non-Compete Covenant Is Not A Prohibited Interest: March 20, 2018 - Volume 12 Issue 54 Print Report; C is engaged in an ongoing business. C has outstanding 400 shares of common stock all of which are held by A (380 shares) and by B (20 shares)....

"Shared-Loss" Payments From FDIC Not Exempt From Tax: March 19, 2018 - Bulletin Print Report; Taxpayers, ("TPs"), are affiliates that conduct the business of financial institutions. TPs file their Indiana tax returns on a combined basis. TPs deducted $53,558,9...

Partnership Not An "Investment Company": March 19, 2018 - Volume 12 Issue 53 Print Report; X is a publicly traded limited partnership, i.e., an MLP. LP owns limited partnership interests in X. GP, a disregarded indirect subsidiary of LP, is X's general partner. X...

TCI Fund Management Ltd. Proposes That AABA Liquidate: March 19, 2018 - Bulletin Print Report; TCI Fund Management Ltd., ("TCI"), an influential holder of a large (if not the largest) block of stock in AABA, has proposed a plan that it believes will substantial...

iHeartMedia May Spin-Off CCOH: March 16, 2018 - Bulletin Print Report; iHeartMedia, Inc., ("IH"), and certain of its subsidiaries, have entered into a plan of reorganization under chapter 11 of Title 11 of the United States Code, the ban...

Post-Death Merger Is Of No Help: March 16, 2018 - Volume 12 Issue 52 Print Report; As of the date of his death, A owned less than 20 percent of the stock of X and less than 20 percent of the stock of Y. The value of this stock was included in determ...

FERC Lowers The Boom On MLPs: March 15, 2018 - Bulletin Print Report; It took nearly two years, but the Federal Energy Regulatory Commission, ("FERC"), has now decided that its policy of permitting MLPs that operate interstate natural g...

"Short Sale" Of Dwelling Is A Single Transaction: March 15, 2018 - Bulletin Print Report; In 2005, Mr. and Mrs. Simonsen, ("S"), bought a townhouse in San Jose, California for just under $695,000. S signed an "Initial Interest Adjustable Rate Note.&qu...

Where Are Services "Rendered?": March 15, 2018 - Volume 12 Issue 51 Print Report; Petitioner, ("P"), is a law firm with a principal office in Detroit, but with additional offices located elsewhere. P represents clients both within and outside Detro...

Bank Must Capitalize "OREO" Expenses: March 14, 2018 - Volume 12 Issue 50 Print Report; XH is a publicly traded bank holding company. X, a subsidiary of XH, is a state chartered commercial bank in State. A significant portion of X's loan portfolio is...

CSX Not Exempt From Sales Tax: March 13, 2018 - Bulletin Print Report; CSX Transportation, Inc., ("CSX"), filed refund claims totaling $7,304,470.44, plus interest, reflecting CSX's belief that it had overpaid Kentucky sales taxes on...

Baltimore's "Billboard" Tax Does Not Suppress Free Speech: March 13, 2018 - Bulletin Print Report; Petitioner, ("P"), is an "outdoor media company" which owns and operates outdoor signs nationwide and throughout the city of Baltimore, Maryland. The Baltim...

Affiliate Loans Do Not Create Shareholder Basis: March 13, 2018 - Volume 12 Issue 49 Print Report; Petitioner, ("P"), incorporated and elected 'S' status for M in 2004. P obtained a personal loan from CNB. P transferred $4,985,035 of the loan proceeds to A,...

DAN Will Effect An "Inversion": March 12, 2018 - Bulletin Print Report; The Tax Cuts and Jobs Act, (the "Act"), reduced corporate tax rates from 35 percent to 21 percent; and instituted a "participation exemption" system which w...

CI And ESRX Will Use A "Double Dummy" Format: March 12, 2018 - Bulletin Print Report; Cigna Corporation, ("CI"), and Express Scripts Holding Company, ("ESRX"), have entered into a definitive agreement pursuant to which CI will acquire the sto...

Assignment of Income-Producing Property: March 12, 2018 - Volume 12 Issue 48 Print Report; Y has entered into an agreement with Publisher, (P), that Y will deliver a manuscript to P on or before a specified date. Y agreed to select the individual contributo...

Active Business Through a Partnership: March 9, 2018 - Volume 12 Issue 47 Print Report; D has elected to be treated as an 'S' corporation since its formation. D is owned by SHA and SHB. O is a State A limited liability company that was formed on...

DPSG Dividend Update: March 8, 2018 - Bulletin Print Report; Proxy materials were filed regarding the business combination to be undertaken by Dr. Pepper Snapple Group, ("DPSG"), and Maple Parent Holding, (MPH). The parties rem...

FTV Announces A "Reverse Morris Trust" Transaction: March 8, 2018 - Bulletin Print Report; Fortive Corporation, ("FTV"), has entered into a definitive agreement to combine, via a so-called "Reverse Morris Trust" ("RMT") transaction, busi...

Security Corporation's Charitable Donations Do Not Threaten Status: March 8, 2018 - Volume 12 Issue 46 Print Report; The taxpayer's business activities are limited to buying, selling, dealing in, and holding securities. The taxpayer is considering making a charitable contributio...

Punitive vs. Compensatory: March 7, 2018 - Volume 12 Issue 45 Print Report; In Year 1, the Attorney General (AG) of State initiated an investigation into "practices" engaged in by TP. On Date 1, TP and the AG entered into the Agreem...

HCR Manor Care's Ownership Change To Qualify Under Sec. 382(l)(5): March 6, 2018 - Bulletin Print Report; Quality Care Properties, Inc., ("QCP"), is a real estate investment trust, ("REIT"). One its tenants is HCR Manor ManorCare, Inc., ("HCR"). HCR ha...

Equitable Lien Is Trumped By Federal Tax Lien: March 6, 2018 - Volume 12 Issue 44 Print Report; In 2002, TC executed and delivered a deed of trust for the benefit of UPB to secure a loan to buy property located in Tennessee (T). The deed of trust was then assign...

Ancient Treaties Did Not Exclude Gravel Income From Taxation: March 5, 2018 - Bulletin Print Report; AP is a enrolled member of the Seneca Nation. AP and her husband (the "Ps") secured permission from the Seneca Nation's government to mine and sell gravel located...

DTI Rumored To Be Considering A "Reverse" Merger With VMW: March 5, 2018 - Bulletin Print Report; On September 7, 2016, Dell Technologies, Inc., ("DTI"), acquired all of the stock of EMC. (It appears that DTI has "checked the box" with respect to EMC. If...

Good Cause Does Not Excuse Untimely Filing: March 5, 2018 - Volume 12 Issue 43 Print Report; Petitioner, (P), filed an exception to the determination of the Administrative Law Judge (ALJ) issued on May 24, 2012. On August 1, 2012, the New York Tax Appeals Tri...

I.R.S. Will Eliminate Avenue For Avoidance Of "Carried Interest" Rule: March 2, 2018 - Bulletin Print Report; The Tax Cuts and Jobs Act imposed new restrictions on the ability of certain partners in "investment partnerships" to report the income therefrom as capital gains, i....

Consent Dividends Are Not Trust Income: March 2, 2018 - Volume 12 Issue 42 Print Report; Settlor, (S), created Trust, (T), on D1. T is intended to qualify as a charitable remainder unitrust (CRUT)under Sec. 664(d)(2). &nb...

Broadcom Ltd. Will Return To The United States: March 1, 2018 - Bulletin Print Report; The Broadcom/Avago transaction was one of the most well-known of the "expatriation" transactions that took place during the "inversion" era. In the transact...

I.R.S. Plugs Sec. 304 Loopholes: March 1, 2018 - Volume 12 Issue 41 Print Report; Sec. 304 applies where a corporation acquires stock of another corporation, in exchange for property, from a person or persons in control of each such corporation. In...

AABA Provides Guidance On Tax Cuts And Jobs Act: February 28, 2018 - Bulletin Print Report; Altaba's eagerly awaited conference call was held yesterday morning and there was some important information disseminated. Of necessity, however, the company was keeping it...

Foreign Ingredients Do Not Bar Biodiesel Fuels Credit: February 28, 2018 - Volume 12 Issue 40 Print Report; The taxpayer, (TP), produces biodiesel. TP is registered with the I.R.S. asa producer and importer of biodiesel and as a blender of diesel fuel. ...

Deferred Tuition Obligation Is An "Educational Loan": February 27, 2018 - Bulletin Print Report; Debtor, ("D"), enrolled at the University of Wisconsin--Stout, ("S"), in 2008. D signed a "Payment Plan Agreement," (the "Plan"), with S...

Attribution Is Inexorable: February 27, 2018 - Volume 12 Issue 39 Print Report; Corporation A, (A), had common stock outstanding of which 27 percent of the shares were owned by the estate of B; 48 percent was owned by the decedent's son; and...

HRG And SPB Will Combine: February 26, 2018 - Bulletin Print Report; HRG Group, Inc., ("HRG"), owns approximately 59 percent of the stock of Spectrum Brands Holdings, Inc., ("SPB"). The SPB stock owned by HRG is by far its pr...

Change In Purpose Yields Capital Gains: February 26, 2018 - Bulletin Print Report; S was established as a Texas limited liability company on February 27, 1998. It was formed to acquire tracts of land and develop that land into single-family residential buildi...

Supreme Court Clarifies Who Is A "Whistleblower": February 26, 2018 - Bulletin Print Report; Congress passed the Sarbanes-Oxley Act ("SOA") of 2002 and the 2010 Dodd-Frank Act ("DOA"). Both Acts shield "whistleblowers" from retaliation, bu...

Capitalized Interest Is Not "Paid": February 26, 2018 - Volume 12 Issue 38 Print Report; During the subject years, petitioner owned two properties: one in Michigan and the second in California. Each was heavily leveraged. ...

Worthless Stock Deduction Not Forfeited: February 23, 2018 - Volume 12 Issue 37 Print Report; TP is the parent of an affiliated group. S is a corporation engaged in the manufacture and sale of "x." S has incurred substantial operating losses in recen...

I.R.S. Announces That "Home Equity" Interest Can Still Be Deducted: February 22, 2018 - Bulletin Print Report; The Tax Cuts and Jobs Act was merciless in reducing and frequently eliminating many tax deductions individual taxpayers have enjoyed almost from the inception of the tax law. M...

EQT To Spin-Off "Midstream" Business: February 22, 2018 - Bulletin Print Report; EQT Corporation, ("EQT"), announced, on February 21, 2018, that its board of directors "has unanimously approved a plan to separate its upstream and midstream bu...

The Garden State Taxes "Awards": February 22, 2018 - Volume 12 Issue 36 Print Report; In 2004, plaintiff discovered what he believed to be "a pattern of fraudulent practice by certain hospitals." These hospitals, he determined, were routinely submittin...

Reliance On Generic Tax Opinions Was Not "Objectively Reasonable": February 21, 2018 - Bulletin Print Report; After exposing an illegitimate tax shelter scheme involving PCX, the I.R.S. invalidated the deductions and imposed a mandatory 40 percent tax penalty for the "gross missta...

RAD To Merge With Albertsons: February 21, 2018 - Bulletin Print Report; In conjunction with the sale of thousands of its stores to Walgreens Boots Alliance, ("WBA"), Rite Aid Corporation, ("RAD"), has entered into a "defini...

Funeral Expenses Not Deductible: February 21, 2018 - Volume 12 Issue 35 Print Report; OY died on April 29, 1955. The income tax return for the estate of OY was filed, for the taxable period April 30, 1955-December 31, 1955, on April 16, 1956.

Ares Management L.P. Will Become A Corporation: February 20, 2018 - Bulletin Print Report; The centerpiece of the Tax Cuts & Jobs Act is the reduction in corporate tax rates from 35 percent to 21 percent. Individual income tax rates, in the top bracket at least,...

The Tax Cuts And Jobs Act Impacts Net Operating Losses: February 20, 2018 - Bulletin Print Report; While many of the corporate provisions of the Tax Cuts and Jobs Act, (the "Act"), are clearly beneficial, most notably the provision reducing the tax rate imposed on...

When Is Stock Redeemed?: February 20, 2018 - Volume 12 Issue 34 Print Report; The principal shareholder of a corporation died in January, 1961 owning 72 shares of the corporation's common stock. The value of the corporation's stock incl...

SHLM's Shareholders Will Be Receiving "CVRs": February 16, 2018 - Bulletin Print Report; LyondellBassell, ("LYB"), and A. Schulman, Inc., ("SHLM"), announced that they have "entered into a definitive agreement under which LYB will acquire S...

Forfeited Purchase Money Deposit Taxed As Ordinary Income: February 16, 2018 - Bulletin Print Report; In 2005, CRIL, a partnership, paid $13.8 million to buy the Radisson Bay Harbor Hotel, ("RBHH"), in Tampa, Florida, along with the RBHH's restaurant, CB, and the...

Significant Services Convert Passive Income Into Active Income: February 16, 2018 - Volume 12 Issue 33 Print Report; D is a second-tier subsidiary within an affiliated group that files a consolidated return. P, the common parent, is primarily a holding company. ...

Taxpayer Granted Extension Of Time To File "Triple Eye" Agreement: February 15, 2018 - Volume 12 Issue 32 Print Report; Taxpayer, ("TP"), is a domestic individual. TP is treated as the owner of stock of C held by a grantor trust, ("TT"). Members of TP's family also direct...

The ACA "Individual Mandate" Is Not A "Tax": February 14, 2018 - Bulletin Print Report; On June 8, 2017, the debtor filed for relief under Chapter 13 of the Bankruptcy Code. The debtor's plan provides for $5,100.10 as the priority portion of the I.R.S. claim....

Performance Of Services At Cost Does Not Produce A Dividend: February 14, 2018 - Volume 12 Issue 31 Print Report; TWC is a construction company specializing in multifamily housing projects. For most jobs, TWC has profit margins of 6-7 percent. W is the sole shareholder of TWC. W and his wi...

Reduction of Stock Subscription Liability Does Not Produce Discharge Income: February 13, 2018 - Volume 12 Issue 30 Print Report; R and M (the "Ws") timely filed their joint federalincome tax return for 1976. On August 30, 1978, they executed a Power of Attorney authorizing EG to...

DPS Chooses A Dividend Rather Than Redemption Proceeds: February 12, 2018 - Bulletin Print Report; Dr. Pepper Snapple Group, Inc., ("DPS"), is, effectively, being acquired by "Maple Parent Holdings Corporation," ("MPH"), the owner of Keurig. How...

Ascertaining "Pre-Acquisition Losses": February 12, 2018 - Bulletin Print Report; ACQ is a holding company, the capital stock of which is both widely held and publicly traded. Target is a corporation unrelated to ACQ. Prior to the acquisition of Target, (the...

Cash Dividend Is Recast As Stock Dividend: February 12, 2018 - Volume 12 Issue 29 Print Report; X and Y, both of which are U.S. corporations, own all of the outstanding stock of Z, a business entity organized under the laws of M, as an M limited liability corpor...

How To Ascertain Sec. 311(b) Gain: February 9, 2018 - Volume 12 Issue 28 Print Report; TP is a State X corporation that manufactures and sells Product. On Date 1, TP formed "w" limited partnerships (the "Limited Partnerships"). The s...

Obligation To Refund "FTHBC" Is A "Debt": February 8, 2018 - Bulletin Print Report; Debtor, ("D"), purchased a home in 2008 and claimed a first-time buyer credit. She received, as a result of such purchase, a credit in the amount of $7,500, the maxim...

Shareholder Purpose Co-Extensive With a Corporate Business Purpose: February 8, 2018 - Volume 12 Issue 27 Print Report; X Corporation, (X), is a domestic corporation that has been engaged in the farming business for more than five years. The stock is owned 25 percent each by Father, ag...

Cash Dividend and Cross-Purchase Not Recast: February 7, 2018 - Volume 12 Issue 26 Print Report; In 1964, WD entered into an agreement with General Motors, (GM), to establish an auto dealership to be known as DPCI. GM required him to finance his operations throug...

Liquidation of Purchaser Does Not Preclude QSP: February 6, 2018 - Volume 12 Issue 25 Print Report; ACQ is a corporation formedby Parent, (P),on April 27, 1982. Target was a domestic corporation engaged in ongoing business activities. &nb...

XRX To Pay Special Dividend In Connection With The "FUJI" Agreement: February 6, 2018 - Bulletin Print Report; FUJIFILM Holdings Corporation, ("FH"), and Xerox Corporation, ("XC"), have entered into a definitive agreement "to combine XC and their longstanding......

Structures Are "Places Of Amusement": February 5, 2018 - Bulletin Print Report; Petitioner operates a "haunted attraction" called "Frightworld," ("FR"), in Buffalo, New York. FR's season of operation is quite short. It run...

Should MLPs Incorporate?: February 5, 2018 - Bulletin Print Report; The Tax Cuts and Jobs Act reduced income corporate tax rates from 35 percent to 21 percent. For individual taxpayers in the highest bracket, however, the reduction in tax rates...

Shareholder Purpose Co-Extensive With Corporate Business Purpose: February 5, 2018 - Volume 12 Issue 24 Print Report; X Corporation, (X), operated an auto dealership. Its franchise was in the name of A who managed X and owned 53 percent of its stock. A was 70 years of age. The balanc...

Eligible Independent Contractor: February 2, 2018 - Volume 12 Issue 23 Print Report; TP has elected to be taxed as a real estate investment trust, (REIT). M is a member of an affiliated group of corporations (the "M Group") with a common par...

Calculating GLG's New York City Tax Bill: February 1, 2018 - Volume 12 Issue 22 Print Report; Gerson Lehrman Group, Inc., ("GLG" or "P"), is a Delaware corporation with its headquarters and main sales office located in New York City, (the "City&...

DPS's Special Dividend Is Only Somewhat Tax-Friendly: January 31, 2018 - Bulletin Print Report; We were surprised to see that Dr Pepper Snapple, (“DPS”), is not structuring its transaction with Keurig in a way that would guarantee "return of cap...

Ownership of Stock Possessing "Voting Power": January 31, 2018 - Volume 12 Issue 21 Print Report; P Corporation, (P), owns 100 percent of the common stock of S Corporation, (S). The latter also has outstanding two additional classes of stock entitled to vote: &quo...

WRK And KS Will Effect A "Double Dummy" Transaction: January 31, 2018 - Bulletin Print Report; WestRock Company, ("WRK"), will acquire all of the outstanding stock of KeyStone Paper and Packaging Corporation, ("KS"), "for $35 per share...for a to...

Arrangements Involving Foreign Currency Risk Not "Insurance": January 30, 2018 - Volume 12 Issue 20 Print Report; Taxpayer Group, ("TPG"), includes a captive insurance company, ("C"). The members of TPG for which C provides insurance are each subsidiaries of Taxpayer, (...

Geothermal System Ineligible For Solar Energy Credit: January 30, 2018 - Bulletin Print Report; Petitioner, ("P"), a New York State resident, claimed a tax credit for "qualified solar energy system equipment expenditures." The Division of Taxation, (th...

Avoidance Of Accrual Requirements Will Benefit Effective Tax Rates: January 29, 2018 - Bulletin Print Report; In APB No. 11, the Accounting Principles Board, the predecessor of FASB, defined differences between taxable income and pre-tax accounting income as either "timing" d...

Bioverativ Needs (And Will Get) An Unqualified Opinion: January 29, 2018 - Bulletin Print Report; On February 1, 2017, Biogen distributed to its shareholders the stock of its subsidiary, Bioverativ. The distribution was intended to qualify for tax-free treatment under Sec....

What Might Dell Be Up To?: January 29, 2018 - Bulletin Print Report; Dell Technologies, Inc., ("DTI"), acquired EMC Corporation, ("EMC"), in September 2016 for a combination of cash and DTI common stock. EMC owned a substanti...

Corporation's "Commercial Domicile" Is Nevada: January 29, 2018 - Volume 12 Issue 19 Print Report; Defendant, (D), issued a Notice of Proposed Assessment with respect to Plaintiff's, (P), 1997 and 1998 tax returns. The assessments were based upon D's conclu...

Tissue Merchant Need Not Collect Sales Tax: January 26, 2018 - Bulletin Print Report; Petitioner, ("P"), operates a non-transplantable human tissue bank. P receives donated human bodies shortly after the time of death in order to provide its customers...

Gain From Sale of Realty Not UBTI: January 26, 2018 - Volume 12 Issue 18 Print Report; Y is a charitable trust. Y is exempt underSec. 501(a) as an organization described in Sec. 501(c)(3), and is recognized as a private foundation under Sec. 4940(...

The Reach of Sec. 306(b)(4): January 25, 2018 - Volume 12 Issue 17 Print Report; Sec. 306(a) concerns the treatment of the amount realized on the disposition or redemption of "Sec. 306 stock." Sec. 306(b)(4) provides that Sec. 306(a)

Service Provides Safe Harbor For Satisfying the "COI" Requirement: January 24, 2018 - Bulletin Print Report; The "continuity of interest" ("COI") requirement is one of a number of requirements (including the venerable "continuity of business enterprise" a...

FASB Provides Guidance On Certain Tax Act Matters: January 24, 2018 - Bulletin Print Report; FASB has provided, in a series of questions and answers, its views on certain tax accounting matters that arise as a result of the enactment of The Tax Cuts and Jobs Act (the &...

Taxes, Penalties, Interest Ruled Non-Deductible: January 24, 2018 - Volume 12 Issue 16 Print Report; H and W are married taxpayers ("Taxpayers")who use the cash method of accounting. They filed joint returns for calendar Year 1 through Year 5. H opera...

Unnecessary Guaranty Proves Disastrous: January 23, 2018 - Volume 12 Issue 15 Print Report; EC is an 'S' corporation. EC has the following shareholders: B, G, D, and Y. SIH was also an 'S' corporation. On or after March 31, 2007, B, G, D, and Y were th...

ARMK Effects "Asset" Acquisitions: January 23, 2018 - Bulletin Print Report; The Tax Cuts and Jobs Act makes transactions structured as "asset acquisitions" particularly attractive for the buyer. See The Willens Report,FASB Will Prevent Tax "Mismatches"; January 22, 2018 - Bulletin Print Report; Where there is a change in either tax laws or tax rates, ASC 740 requires deferred tax liabilities and deferred tax assets to be adjusted for the effects of the change. The Tax...

Landlord/Tenant Relationship Not a Prohibited Interest: January 22, 2018 - Volume 12 Issue 14 Print Report; Mr. A and his children own all of the stock of Corporation X, (X). Mr. A proposes to retire from X and all of the stock directly owned by Mr. A will be redeemed by X....

LQ To Engage In A "Bad" Morris Trust Transaction: January 19, 2018 - Bulletin Print Report; La Quinta Holdings, Inc., ("LQ"), and Wyndham Worldwide Corporation, ("WYN"), have entered into a definitive agreement "under which WYN will acquire LQ...

Voluntary Prepayment Not Deductible: January 19, 2018 - Volume 12 Issue 13 Print Report; NV's sole asset was a shopping center. In December 1963, NV entered into a contract with LR under which LR would manage the shopping center for a fee of $24,000 per year......

The Expansion Doctrine Allows A Tax-Free Split-Off: January 18, 2018 - Volume 12 Issue 12 Print Report; Petitioners owned 50 percent of the stock of A and the Bs owned the remaining 50 percent. A owned and operated a restaurant called "ASR." A incorporated a wholly owne...

Contribution Of Property By A Trust Limited To Basis: January 17, 2018 - Volume 12 Issue 11 Print Report; In December 1993, the Greens created the Trust. The Trust instrument named Mart Green as the initial trustee (the Trustee) of the Trust. GDT is a single-member limited liabilit...

Kering S.A. Plans A "Failing" Spin-Off: January 17, 2018 - Bulletin Print Report; While foreign corporations frequently engage in "separation" transactions, in which the stock of a subsidiary, either preexisting or newly formed, is distributed to i...

Tax Act Addresses "Trafficking" In "Excess" Interest Expense: January 17, 2018 - Bulletin Print Report; One of the more controversial provisions of the Tax Cuts and Jobs Act, (the "Act"), is the provision which places a cap on the amount of "business interest"...

"Orphan" Drug Credit Available For Post-Approval Expenditures: January 16, 2018 - Bulletin Print Report; Taxpayer, ("TP"), is the legal owner of "Drug." On Date 2, the FDA granted Drug "orphan drug" designation under Sec. 526 of the FDCA. On Date 3, C...

Leveraged Spin-Off Passes Muster: January 16, 2018 - Bulletin Print Report; Distributing, ("D"), is a publicly traded corporation and is the common parent of an affiliated group of corporations that file a consolidated federal income tax retu...

Bargain Spread On "ISOs" Reduces Earnings And Profits: January 16, 2018 - Volume 12 Issue 10 Print Report; During the taxable year, the legendary quarterback of Columbia University and the Chicago Bears, the great Sid Luckman, ("L"), owned 100,000 shares of R. In 1961, he...

Not Essentially Equivalent to a Dividend: January 12, 2018 - Volume 12 Issue 9 Print Report; Company, (C), had outstanding 926,155 shares of voting common stock, which are held by 125 shareholders. Mr. A, the seventh l...

Why Isn't CDI's Redemption A Partial Liquidation?: January 11, 2018 - Bulletin Print Report; Churchill Downs, Inc., ("CDI"), is offering to purchase common stock for cash up to an aggregate purchase price of $500 million, at a price not greater than $265 and...

FASB Addresses Deferred Tax Adjustments Resulting From "The Act": January 11, 2018 - Bulletin Print Report; It is by now quite well known that ASC 740, derived from SFAS No. 109, Accounting For Income Taxes , requires that deferred tax liabilities and deferred tax assets...

In-State Representative Created The Requisite "Nexus": January 11, 2018 - Bulletin Print Report; The taxpayer, ("TP"), handcrafts glassware and tableware for retail and wholesale sale across the U.S. It transacts all of its retail sales through the internet. TP a...

Active Participant Denied I.R.A. Deduction: January 11, 2018 - Volume 12 Issue 8 Print Report; Petitioner, (P),lost her job in 2008. She received, upon leaving, a distribution of the entirety of her 401(k) retirement account. Petitioner did not "roll...

Indemnity Payments Are Capital Expenditures: January 10, 2018 - Volume 12 Issue 7 Print Report; Before December 31, 2000, V Corporation, (V), owned 67 percent of the outstanding stock of AG Corporation, (AG). The remainder of the stock was owned by certain S fam...

Altice N.V. Will Effect A "Taxable" Spin-Off: January 10, 2018 - Bulletin Print Report; Altice N.V., ("ATC"), owns approximately 73 percent of the total outstanding capital stock, and approximately 98 percent of the total voting power of all classes of s...

Termination of Option Produces Ordinary Loss: January 9, 2018 - Volume 12 Issue 6 Print Report; In 1997, petitioner, (P), received an M.B.A. In 2003, he accepted employment as the general manager of G, a real estate development companylocatedin Calif...

Stock Buybacks Permitted After "RMT" Transaction: January 8, 2018 - Bulletin Print Report; Acquiring and Distributing are each publicly traded corporations. Controlled was formed to effectuate the Distribution and was wholly owned by Distributing until Date 2. Merger...

The Tax Cuts And Jobs Act Benefits Owners Of "Pass-Throughs": January 8, 2018 - Bulletin Print Report; The most scrutinized provision of the Tax Cuts and Jobs Act, (the "Act"), is, arguably, its most complex provision as well. The Act taxes "qualified business inc...

Spouse's Mortgage Payments Constitute Deductible "Alimony": January 8, 2018 - Volume 12 Issue 5 Print Report; On January 26, 1994, a husband, (C), and wife, (N), signed a mortgage note for a loan from a credit union, (CU), to purchase the CL residence. C and N later divorced....

Sec. 304 Gives Way To Step Transaction Doctrine: January 5, 2018 - Volume 12 Issue 4 Print Report; 1. P owns all of the stock of S and T. P, S, and T are members of a consolidated group. As part of an integrated plan, S purchases all the stock of T from P for cash...

Gross Receipts Reduced In Year In Which "Fuel Rewards" Are Earned: January 5, 2018 - Bulletin Print Report; The taxpayer, ("TP"), is a grocer. TP offers a "fuel reward" program to its customers. The money earned is electronically loaded to an enrolling customer...

Some Reduction of Proportionate Interest Is Necessary: January 4, 2018 - Volume 12 Issue 3 Print Report; X Corporation, (X), had 1,000,000 shares of voting common stock outstanding which are widely held and publicly traded. X offered to purchase 25,000 shares of its comm...

HRG/Spectrum--NOLs Needed To Shelter "GBA" Gain: January 4, 2018 - Bulletin Print Report; HRG Group, Inc., (HRG), owns approximately 60 percent of the stock of Spectrum Brands Holdings, Inc., (SPB). While the companies prepare consolidated financial statements (sinc...

Goldman Sachs Group Reports On Impact Of Tax Bill: January 3, 2018 - Bulletin Print Report; Goldman Sachs Group, Inc., ("Goldman"), like many other companies with (i) net deferred tax assets; and (ii) deferred foreign income, has disclosed the charges it wil...

Qualified Appraisal Lacking: January 3, 2018 - Volume 12 Issue 2 Print Report; HE owned shares in a corporation known as TCAI, (C). C's sole assets were two apartment buildings in Tucson, Arizona: SS and LS. ...

Withholding (Temporarily) Not Required On Purchase Of MLP Interests: January 2, 2018 - Bulletin Print Report; The Tax Cuts and Jobs Act introduced new Sec. 864(c)(8) into the Internal Revenue Code. That section provides that a nonresident alien individual's or foreign corporation&#...

Tax Act Makes MLPs Acquisition Targets: January 2, 2018 - Bulletin Print Report; The Tax Cuts and Jobs Act, (the "Act"), improves bonus depreciation in several ways. Most notably, in the case of "qualified property," the depreciation ded...

Contractual Arrangement Creates a Separate Entity: January 2, 2018 - Volume 12 Issue 1 Print Report; TP is a corporation organized under the laws of State, and is a wholly-owned subsidiary of Parent. Affiliate is an entity organized under the laws of Country A and is...

Prepaying Real Estate Taxes Mired In Controversy: December 29, 2017 - Bulletin Print Report; The Tax Cuts and Jobs Act substantially restricts an individual taxpayer's ability to claim a federal income tax deduction for state and local real property taxes, personal...

Coca-Cola's Mexican Taxes Were "Compulsory Levies": December 29, 2017 - Volume 11 Issue 250 Print Report; The Coca-Cola Company, ("P"), is the parent of a group of companies that manufacture, sell, and distribute beverages in more than 200 countries. To support its intern...

Accrual Of Tuition Reduction Not Permitted: December 28, 2017 - Volume 11 Issue 249 Print Report; The taxpayer, ("TP"), offers academic programs. Its educational institutions offer students the opportunity to earn undergraduate and graduate degrees. TP implemented...

"Intrinsic" Activities Generate MLP Qualifying Income: December 27, 2017 - Bulletin Print Report; X intends to form a publicly traded partnership ("P"). P will generate income from: (A) the supply and transportation of fluids...for use in fracturing and drilling o...

S.E.C. Provides Implementation Guidance On "Cuts And Jobs" Act: December 27, 2017 - Bulletin Print Report; The Securities And Exchange Commission, ("SEC"), has provided some useful guidance on exactly how harried corporate finance personnel will be expected to comply with...

Online University Not Taxable In Indiana: December 27, 2017 - Volume 11 Issue 248 Print Report; The University of Phoenix, Inc., (the "University"), a wholly owned subsidiary of Apollo Education Group, Inc., is headquartered in Phoenix, Arizona. The University s...

Carbon Emission "Units" Do Not Constitute Real Estate Assets: December 26, 2017 - Bulletin Print Report; The taxpayer, ("TP"), is a real estate investment trust, ("REIT"). TP is an international forest products company that is "primarily engaged in activit...

Tax Reform's Impact On Tax Assets And Liabilities: December 26, 2017 - Bulletin Print Report; President Trump's signing of the Tax Cuts and Jobs Act, (the "Act"), on December 22nd, about ten days earlier than expected, means that 2017 financial statements...

Walgreen Escapes Minnesota's "Legend Drug Tax": December 26, 2017 - Volume 11 Issue 247 Print Report; Walgreen Specialty Pharmacy, LLC, ("WSP"), is a single-member limited liability company organized under the laws of Delaware and headquartered in Florida. WSP w...

Fannie Mae Can Retain Some Of Its Earnings: December 22, 2017 - Bulletin Print Report; Thanks, apparently, to the new tax bill, Fannie Mae and the U.S. Department of the Treasury, (the "Department"), entered into a letter agreement that will have the ef...

Post-Divorce Payment Obligation Means No Alimony Deduction: December 22, 2017 - Volume 11 Issue 246 Print Report; Petitioner, ("P"), resided in the United Kingdom, ("U.K."), when his petition was filed. P and his ex-wife were divorced on January 24, 2006 pursuant to a d...

DDR's Spin-Off Will Be Taxable: December 21, 2017 - Bulletin Print Report; DDR Corporation, ("DDR"), is a real estate investment trust, (REIT), specializing in the leasing of shopping centers. It announced, on December 14, 2017, that its Boa...

Receipts Are Rents From Real Property: December 21, 2017 - Volume 11 Issue 245 Print Report; An unincorporated trust, otherwise qualifying as a real estate investment trust, (REIT), acquired the fee interest only in land, exclusive of any improvements thereon...

Qualified Creditors Own 50 Percent Of LossCorp's Stock: December 20, 2017 - Bulletin Print Report; LossCorp, ("LC"), was the parent of an affiliated group filing a consolidated income tax return. Prior to Date 5, members of the LossCorp Group, ("LCG"), op...

True Lease or Financing Agreement?: December 20, 2017 - Volume 11 Issue 244 Print Report; Petitioner, (P), leases equipment. After a customer has identified a piece of equipment itwishes to acquire, P purchases the equipment from the supplier thereof...

Butane Is Not An "Alternative Fuel": December 19, 2017 - Bulletin Print Report; Producer mixes gasoline and butane and sells it for use as a fuel. Producer claims the alternative fuel mixture credit for an open tax period ending on or before December 31, 2...

Escalator Provisions in Lease Agreements: December 19, 2017 - Volume 11 Issue 243 Print Report; The Trust, a real estate investment trust, owns a group of retail establishments leased to 23 tenants. The existing leases provide for monthly rental payments with th...

Fox's Failed Spin-Off Will Produce A Basis Step-Up: December 18, 2017 - Bulletin Print Report; Last week, FOX announced a transformative transaction in connection with which it will transfer a large part of its business to DIS while retaining the remainder. The transacti...

Tax Cut And Jobs Act--Selected Individual And Corporate Provisions: December 18, 2017 - Bulletin Print Report; A consolidated tax bill, The Tax Cut and Jobs Act, has been crafted and it seems certain to become law within the next two weeks or so. The synthesized bill skews heavily in fa...

Tax Cut And Jobs Act--International And Base Erosion Provisions: December 18, 2017 - Bulletin Print Report; The Tax Cut and Jobs Act devotes a great deal of attention to the taxation profile of multinational corporations. In particular, the bill introduces a "participation exemp...

Matching Purchases With Loss Sales: December 18, 2017 - Volume 11 Issue 242 Print Report; During 1967, the taxpayer, on each of three separate occasions, purchased 100 shares of stock in M Corporation. He paid $158 per share for the first block of stock; $...

"Family Office" Is Engaged In A Trade Or Business: December 15, 2017 - Bulletin Print Report; Lender Management LLC, ("LM"), elected to be treated as a partnership for Federal income tax purposes. Harry Lender, ("H"), founded Lender's Bagels. His...

"Moline Properties" Should Apply To 'S' Corporations: December 15, 2017 - Volume 11 Issue 241 Print Report; Moline Properties v. Commissioner , 63 S. Ct. 1132 (1943), is the case most often cited for the treatment of corporations as entities separate from their owners fo...

FOX/DIS Choose A "Failed" Morris Trust Structure: December 14, 2017 - Bulletin Print Report; The Walt Disney Company, ("DIS"), and Twenty-First Century Fox, Inc., ("FOX"), have entered into a definitive agreement for DIS to acquire FOX...for approxi...

'S' Corporation Status Not An Interest In Property: December 14, 2017 - Bulletin Print Report; HDL filed for protection under Chapter 11 of Title 11 of U.S. Code. On February 16, 2009, HDL filed an election to be classified as an 'S' corporation under Sec. 1362 o...

Solar Energy Equipment Credit: December 14, 2017 - Volume 11 Issue 240 Print Report; Petitioner, (P), proposes to install solar energy equipment at his principal residence in two stages. The first project stage will involve installing 10 pole-mounted...

Facebook To Change Tax Reporting Model: December 13, 2017 - Bulletin Print Report; Facebook, Inc., (FB), succumbing to the pressures being exerted on multinational U.S. based technology companies to pay higher taxes in the various countries in which they do b...

Feeder Organizations: December 13, 2017 - Volume 11 Issue 239 Print Report; Petitioner, (P), was organized under the laws of Nebraska on October 21, 1981, to raise funds for the furtherance of charitable groups, religious groups, and nonprofi...

State Tax Credit Not a "Return Benefit": December 12, 2017 - Volume 11 Issue 238 Print Report; Contributions of money or property to the "W Fund", maintained by State, qualify for a credit against State income tax. The amount of the credit is "a%...

Colorado Cannot Reach Oracle's $6 Billion Gain: December 11, 2017 - Bulletin Print Report; Oracle Corporation, ("O"), is a Delaware corporation with headquarters in California. O is the parent of a worldwide group of affiliated corporations. Oracle Corporat...

New Star Financial's "CVRs" Are A Casualty Of Tax Reform: December 11, 2017 - Bulletin Print Report; First Eagle Holdings, Inc., ("FE"), and New Star Financial, Inc., ("NS") have entered into a definitive agreement in connection with which FE is to acquire...

Taxpayer Fails To Qualify For Tax-Exempt Status: December 11, 2017 - Volume 11 Issue 237 Print Report; Petitioner, (P), was organized as a California nonprofit corporation in March, 2010. P's articles of incorporation state: The sole purpose of this corporation is...

Special Dividends Are Not "Preferential": December 8, 2017 - Volume 11 Issue 236 Print Report; TP is a real estate investment trust, (REIT). TP regularly distributes 100 percent of its taxable income for each taxable year. &nbs...

The "Next Day" Rule: December 7, 2017 - Volume 11 Issue 235 Print Report; ACQ is a calendar year taxpayer and the common parent of a consolidated group ("the ACQ Group"). On November 30, 20xx, a subsidiary in the ACQ Group merges...

CVS/Aetna Is Taxable And What Are Fox's Options?: December 6, 2017 - Bulletin Print Report; CVS Health Corporation and Aetna, Inc. have entered into a definitive agreement pursuant to which the former will acquire all of the stock of the latter. Structurally, CVS will...

Adversity Begets "Business Reality": December 6, 2017 - Volume 11 Issue 234 Print Report; In 1992, petitioners, Y and his spouse, S,purchased an empty lot (LP) for $27,000. Petitioners constructed a residential home on the property. Petitioners also...

Existence Of Local Office "Tainted" All "Inbound" Sales: December 5, 2017 - Volume 11 Issue 233 Print Report; Avent, Inc., ("AV"), is one of the largest distributors of electrical components, computer products, and embedded technology, serving customers globally. AV has an of...

New Jersey "ENI" Begins With Federal Taxable Income: December 5, 2017 - Bulletin Print Report; Plaintiff, ("I"), is headquartered and incorporated in India. It has 33 branches worldwide, including one in the United States. As a foreign corporation, I reported i...

Stock Repurchases After A Spin-Off Do Not Implicate Sec. 355(e): December 5, 2017 - Bulletin Print Report; Distributing 2, ("D2"), is the common parent of an affiliated group of corporations that join in the filing of a consolidated federal income tax return. D2 proposed t...

Senate Passes Tax Bill: December 4, 2017 - Bulletin Print Report; The full Senate has now passed the Senate Finance Committee's version of H.R. 1, with certain changes designed to placate the fiscal concerns of selected Republican senator...

Disgorgement Is "Punitive" And Not Deductible: December 4, 2017 - Bulletin Print Report; Does Sec. 162(f) prohibit a deduction under Sec. 162(a) for an amount paid as disgorgement for violating a federal securities law? Sec. 162(f) provides that...

Exchange of Insurance Contracts: December 4, 2017 - Volume 11 Issue 232 Print Report; On Date a, Old Issuer, (OI), a life insurance company, issued Old Policy, (OP), to A and B, husband and wife. On Date b, A and B established Old Trust, (OT), an irrev...

Consignment Sales Create Washington Nexus: December 1, 2017 - Bulletin Print Report; Taxpayer, ("TP"), is an out-of-state diamond and gold wholesaler. The state in question is Washington. When a customer of a retailer orders a custom piece of jewelry,...

Municipal Bond Interest Is Subpart F Income: December 1, 2017 - Volume 11 Issue 231 Print Report; TP is the sole U.S. shareholder of FC, a Cayman Islands corporation. During the years ended December 31, 1998, 1999, and 2000, FC was a controlled foreign corporation...

Price Reports Not Taxable Information Service: November 30, 2017 - Bulletin Print Report; Petitioner, ("P"), is a retail supermarket chain with approximately 50 locations throughout New York State. As part of its business operations, P monitors the retail...

Proceeds From Sale of Stock Ruled "Wages": November 30, 2017 - Volume 11 Issue 230 Print Report; In November, 1982, the Lane Companies, (LC), and their owners, the Lanes, filed for bankruptcy. In July, 1985, the Lanes relinquished all control over LC to the Lane...

Determining Whether a "U.S. Shareholder" is a PHC: November 29, 2017 - Volume 11 Issue 229 Print Report; C is a domestic corporation. There has been an increase in earnings invested in U.S. property by foreign corporations controlled by C, the investments consisting of U...

Taxpayer Denied Multiple Real Property Tax Exemptions: November 28, 2017 - Bulletin Print Report; Petitioner, ("P"), purchased an historic building in Buffalo, New York and promptly converted it into a mixed-use residential/commercial facility. P then applied to t...

Loss From "Indirect" Sales To Related Parties Disallowed: November 28, 2017 - Volume 11 Issue 228 Print Report; Petitioners, J and G, are husband and wife. G has "independent means," and the securities she owned on October 14, 1953 were not acquired by her directly or...

VMW's Spin-Off Prospects: November 27, 2017 - Bulletin Print Report; Effective September 7, 2016, Dell Technologies, Inc., ("DTI"), acquired all of the stock of EMC Corporation, ("EMC"), from the shareholders of EMC. As a con...

Selected Provisions Of The Senate Finance Committee's Tax Bill: November 27, 2017 - Bulletin Print Report; Later this week, the Senate will be taking up the version of the "Tax Cuts and Jobs Act" recently ratified by the Senate Finance Committee. It is by no means clear th...

Short Year Does Not Shorten Term Of "GRA": November 27, 2017 - Bulletin Print Report; UST owns all the stock of TFD, a foreign corporation. In an exchange to which Sec. 351 of the Code applies, UST transfers all the stock of TFD to TFC, a foreign corporation, so...

Eligible Replacement Property Did Not Lose Its Status: November 27, 2017 - Volume 11 Issue 227 Print Report; TP, a domestic corporation, is primarily engaged in the broadcasting business. In 1978, TP sold the assets of television station TV1. The sale was certified by the F....

Damage Due To "Defective" Concrete Constitutes A Casualty Loss: November 24, 2017 - Bulletin Print Report; Residents in the northeastern part of the U.S. have reported problems with certain residential concrete foundations. Investigators concluded that the deterioration of the concr...

Debt Financed Portfolio Stock: November 24, 2017 - Volume 11 Issue 226 Print Report; In January, 1983, X Corporation, (X), raised $8 million in a stock issuance. The funds were originally invested in various interest-bearing accounts. In 1984, a total...

Debt Did Not Run Directly To 'S' Corporation Shareholders: November 22, 2017 - Volume 11 Issue 225 Print Report; During 2012, CO sustained an ordinary loss of $1,425,709. Of that amount, $570,284 was passed through to each of M and K. Respondent reduced the amount of losses M and K could...

CAVM Shareholders Will Be Taxed On MRVL Stock: November 21, 2017 - Bulletin Print Report; Marvell Technology Group Ltd., a Bermuda exempted company, ("MRVL"), and Cavium, Inc., ("CAVM"), have announced a definitive agreement under which MRVL &quo...

Holding Property For Investment Purposes: November 21, 2017 - Volume 11 Issue 224 Print Report; A and B are the only officers and shareholders of P Corporation, (P). P has for more than five years held title to large tracts of farmland. Each tract is leased for...

Gainfully Employed Taxpayers Are Not "Real Estate Professionals": November 20, 2017 - Bulletin Print Report; Petitioners filed a New York nonresident and part-year resident personal income tax return (IT-203) for 2009. Petitioners claimed a deduction of $84,934.00 from rental real est...

Highlights Of H.R. 1 As Passed By The House Of Representatives: November 20, 2017 - Bulletin Print Report; Late last week, the House of Representatives passed, in record time, a comprehensive tax bill, known as "The Tax Cuts and Jobs Act," (the "Act"). Shortly th...

The "Zenz" Doctrine Applies to the "Cash-In-Lieu" Test: November 20, 2017 - Volume 11 Issue 223 Print Report; X Corporation, (X), has outstanding 100 shares of votingcommon stock all of which are owned by Mr. A. Pursuant to an in...

Deferred Gain Triggered Into Income When Taxpayer Ceases Business: November 17, 2017 - Volume 11 Issue 222 Print Report; Petitioner, ("P"), was formed on December 21, 1993. On that date, P purchased two parcels of property, (the Property), in New York City. On November 17, 2009, P sold...

Holding Company Excluded From Combined Report: November 16, 2017 - Bulletin Print Report; To calculate the taxable income of affiliated corporations attributable to Colorado, ("C"), the Department of Revenue, (the "Department"), applies the "...

SD/BCEI Deal Appears To Be Taxable: November 16, 2017 - Bulletin Print Report; SandRidge Energy, Inc., ("SD"), and Bonanza Creek Energy, Inc., ("BCEI"), have announced that the two companies have entered into a definitive merger agreem...

Sec. 1033 Not Applicable To Purchase of Stock of New Subsidiary: November 16, 2017 - Volume 11 Issue 221 Print Report; TP is engaged in the business of manufacturing. TP's manufacturing facilities and equipment in State K were destroyed by fire. The equipment was insured and TP re...

Interest Paid On Bonds Bought "Flat": November 15, 2017 - Volume 11 Issue 220 Print Report; STLPSC, as a result of reorganization proceedings under Sec. 77B of the Bankruptcy Act, issued in 1939 certain securities consisting of $15,865,000 25-year convertibl...

MNK Will Issue CVRs: November 14, 2017 - Bulletin Print Report; Mallinckrodt plc, ("MNK"), will be acquiring, through a subsidiary, the stock of Ocera Therapeutics, Inc., ("OTI"). The parties, however, are unable to agre...

Hewlett-Packard Denied Foreign Tax Credits: November 14, 2017 - Bulletin Print Report; The financial engineers at AIG created a Dutch company, ("FOP"), that would do little else than purchase contingent interest notes, ("CINs"), The entity'...

Sec. 1036 Exchange Not A Disposition of Option Stock: November 14, 2017 - Volume 11 Issue 219 Print Report; Company, (C), has extended incentive stock options, (ISOs), to its employees. Following the exercise by an employee of an ISO, the employee may enter into a Margin Ac...

Senate Sets Its Sights On The Cruise Industry: November 13, 2017 - Bulletin Print Report; Sec. 883(a)(1) of the Internal Revenue Code provides that the following items shall not be included in gross income of a foreign corporation and shall be exempt from taxation u...

The Tax Cuts & Jobs Act--The Senate's Proposal--Individual Provisions: November 13, 2017 - Bulletin Print Report; The Senate Finance Committee's version of the Tax Cuts & Jobs Act, (the "proposal"), parallels, in many respects, the House Ways & Means Committee's v...

No Assignment of Liquidation Proceeds: November 13, 2017 - Volume 11 Issue 218 Print Report; Company, (C), incorporated in 1947, has been primarily engaged in the business of manufacturing and selling products of a certain type but also ran its AAA division,...

The Tax Cuts & Jobs Act—The Senate's Proposal—Corporate Provisions: November 10, 2017 - Bulletin Print Report; The Senate’s version of the Tax Cuts and Jobs Act (the “proposal”) is similar in many respects to the House’s proposal but, predictably, also...

Sale of Assets Produces "Non-Business" Income: November 10, 2017 - Volume 11 Issue 217 Print Report; In 1962, Kimberly-Clark Corporation, (KC), purchased the "Coosa" properties. KC harvested the trees from the Coosa timberland to make pulp for use int...

Linde AG/Praxair Deal Passes Crucial Test: November 9, 2017 - Bulletin Print Report; Based on the “declarations of acceptance” received by the custodian banks for the Exchange Offer of Linde plc to the shareholders of Linde AG…the a...

Sec. 311(b) Gain Is "Apportionable" Income: November 9, 2017 - Volume 11 Issue 216 Print Report; TP is an out-of-state 'S' corporation that generates Virginia taxable income. On its 2010 nonresident income tax return, TP subtracted a gain resulting from t...

Option Does Not Spoil Non-Divisive 'D' Reorganization: November 8, 2017 - Volume 11 Issue 215 Print Report; Target (T) is activelyengaged in Business. T has outstanding two classes of common stock, Class A and Class B. Class A and Class B are identical except that (a)...

H.R. 1 Will Address "Carried Interest": November 7, 2017 - Bulletin Print Report; H.R. 1, the tax proposal introduced last week by the House Ways & Means Committee, did not, initially, address the controversial "carried interest" issue. That wa...

Shared-Loss Payments From The FDIC Not Exempt From State Tax: November 7, 2017 - Volume 11 Issue 214 Print Report; The taxpayers, ("TPs"), are affiliates that conduct the business of financial institutions. TPs file their Indiana tax returns, FIT-20 forms, on a combined basis. TPs...

How Would The House Tax Bill Affect AABA?: November 6, 2017 - Bulletin Print Report; Altaba, ("AABA"), owns 383.6 million ordinary shares of Alibaba Group Holding Ltd., ("BABA"), and 2.025 billion shares of common stock of Yahoo Japan Corpor...

Forming a Holding Company: November 6, 2017 - Volume 11 Issue 213 Print Report; P Corporation, (P), is engaged in the commercial banking business. P decided that its business activities could be expanded if its banking business were conducted by...

The Individual Provisions Of The Tax Cuts and Jobs Act: November 3, 2017 - Bulletin Print Report; In addition to the business tax provisions of the Tax Cuts and Jobs Act, (the "Act"), H.R. 1, which we wrote about earlier, the individual tax provisions are equally...

A Review Of The Provisions Of The Tax Cuts and Jobs Act (H.R. 1): November 3, 2017 - Bulletin Print Report; The Tax Cuts and Jobs Act, (the "Act"), H.R. 1, contains numerous provisions that profoundly affect the taxation of businesses and individuals. A review of, and where...

"IVF" Expenses Are Not Paid For "Medical Care": November 3, 2017 - Volume 11 Issue 212 Print Report; M is a homosexual man. M and his partner decided to try to have children through in vitro fertilization, ("IVF"), with M serving as the biological...

Claim For Refund Is Untimely: November 2, 2017 - Volume 11 Issue 211 Print Report; In tax years 1995, 1997, and 2002, Plaintiff, ("P"), paid taxes to foreign countries and claimed a foreign tax credit on its tax returns pursuant to Sec. 901 of the C...

Chicago Real Estate Transfer Tax Does Not Violate Supremacy Clause: November 1, 2017 - Bulletin Print Report; FNMA and FHLMC, ("FM"), are federally chartered privately owned corporations. They carry out their mission by purchasing mortgages from third party lenders.... When a...

Founder Of Chiron Corporation Denied A Bad Debt Deduction: November 1, 2017 - Volume 11 Issue 210 Print Report; Petitioner, ("P"), is a world-renowned scientist in the field of biotechnology. P formed Chiron Corporation, one of the first publicly held biotechnology companies. I...

LEN And CAA To Form Housing Giant: October 31, 2017 - Bulletin Print Report; Lennar Corporation, ("LEN"), and CalAtlantic Group, Inc., ("CAA"), have entered into a definitive Agreement and Plan of Merger that will result in the creat...

LBO Gives Rise To A "Qualified Stock Purchase": October 31, 2017 - Volume 11 Issue 209 Print Report; H is a newly-formed State X corporation. T is also a State X corporation engaged in the manufacture and marketing of a variety of products. T was a publicly-held corporation. A...

Nextel's "Pyrrhic Victory" In The Pennsylvania Supreme Court: October 30, 2017 - Volume 11 Issue 208 Print Report; In 2007, Nextel Communications, ("N"), earned $45,053,282 in taxable income on its business activities in the Commonwealth of Pennsylvania. Under the "net loss c...

Erroneous Prior Return Does Not Prevent Later Joint Return: October 30, 2017 - Bulletin Print Report; Petitioner, ("P"), and her husband, GLK, were married throughout 2014. They lived separately during that year, but were not "legally separated...under a decree o...

Deposit Plus "Dependent" Loan Recast As Direct Loan: October 27, 2017 - Volume 11 Issue 207 Print Report; FP is a corporation organized in Country X, a country that does not have in effect an income tax convention with the U.S. DS...

Education Expenses Of Doctoral Students Are Never Deductible: October 26, 2017 - Volume 11 Issue 206 Print Report; In 1994, plaintiff earned a Bachelor's of Science degree in engineering from WPI. Thereafter, plaintiff earned a Master's degree in applied mathematics from UR in 1995....

I.R.S. Relegated To "Plan" Rate On Bankrupt's Tax Deficiency: October 26, 2017 - Bulletin Print Report; The "Reorganized Debtors," ("RDs"), and the Internal Revenue Service have a dispute over the interest rate payable on a tax deficiency in 1998. Should the d...

Common Law Son Is Not A "Stepson": October 25, 2017 - Bulletin Print Report; Petitioner, ("P"), has been residing with G for approximately 20 years. They never got married. P owned the residence in which she and G lived. G is the biological fa...

Transaction Recast As "Seller Redemption": October 25, 2017 - Volume 11 Issue 205 Print Report; C is a State W corporation engaged in the business of processing, selling, and trucking bark and sawdust. C has outstanding 10,000 shares of voting common stock. Prio...

LIN And PX Revise Certain Terms Of Their Deal: October 25, 2017 - Bulletin Print Report; The combination of Linde AG, ("LIN"), and Praxair, Inc., ("PX"), features, most prominently, the creation of a new corporation, ("New Holdco"), or...

The Tax Advantages Of Acquiring A Sports Franchise: October 24, 2017 - Volume 11 Issue 204 Print Report; Buyers of businesses always strive to obtain a "cost" basis in the acquired assets. Securing such a cost basis can enhance the buyer's tax deductions in periods a...

DEL Will Engage In A "Conversion Transaction": October 24, 2017 - Bulletin Print Report; Potlatch Corporation, ("PCH"), for the last 10 years a REIT in good standing, and Deltic Timber Corporation, ("DEL"), a C corporation, announced that they h...

"Solar Incentive Payment" Is Qualifying REIT Income: October 23, 2017 - Bulletin Print Report; Taxpayer, ("TP"), is a real estate investment trust, ("REIT"). TP, R2, and R3 wholly own Partnership, ("PS"). PS owns a mixed-use shopping center,...

New Inversion Disavows Any Tax Motivation: October 23, 2017 - Bulletin Print Report; Assurant, Inc., ("AIZ"), and The Warranty Group recently announced "a definitive agreement to combine operations, with AIZ shareholders retaining majority owners...

Waiving Dividends On "Hook" Stock--Part II: October 23, 2017 - Volume 11 Issue 203 Print Report; Parent, ("P), is an insurance holding company. Subsidiary, ("S"), is a life insurance company. P owns all of the common stock of S. P has elected under Sec. 1504...

Assets Of Special Purchase Vehicle Not Available To The I.R.S.: October 20, 2017 - Volume 11 Issue 202 Print Report; Edward J. Holland, ("H"), is a prolific songwriter who wrote several classic Motown compositions, including "Baby Love," "Stop In the Name of Love,&quo...

Activities In Maryland Substantially Exceed "Mere Solicitation Of Orders": October 19, 2017 - Bulletin Print Report; Petitioner, Blue Buffalo Company, ("P"), a Delaware corporation headquartered and domiciled in Connecticut, contends that it is immune from income taxation in Marylan...

Sideways Attribution Barred: October 19, 2017 - Volume 11 Issue 201 Print Report; TP is a corporation that intends to elect to be treated as a real estate investment trust, (REIT), effective January 1, 2008....

"Facts And Circumstances" Include The "Step Transaction Doctrine": October 18, 2017 - Volume 11 Issue 200 Print Report; On April 9, 2007, petitioner acquired a 45 percent tenant-in-common interest in real property, while SLG (an unrelated party) acquired the remaining 55 percent interest therein...

DXC To Engage In An "RMT" Transaction: October 18, 2017 - Bulletin Print Report; DXC Technology, ("DXC"), was formed on April 1, 2017. DXC is comprised of the old CSC and the Enterprise Services business of Hewlett Packard Enterprise. That busines...

When Is Property Placed in Service?: October 17, 2017 - Volume 11 Issue 199 Print Report; TP is the parent of Subsidiary, (S), a regulated public utility in State. S is developing a wind power generating facility ("the Project") that will be loca...

I.R.S. To Reassess Its Ruling Policy On Certain Issues: October 17, 2017 - Bulletin Print Report; In an unexpected announcement, the Internal Revenue Service has decided "to reconsider its views regarding certain issues as to which it has provided favorable private let...

MLP With "REIT" Income Escapes Corporate Classification: October 16, 2017 - Bulletin Print Report; Y is a limited liability company wholly owned by X, a State law corporation. Y will sell "Product A," a nitrogen-based fertilizer...to customers operating in agricult...

Lessor Of Telecommunications Infrastructure Earns Qualifying Rents: October 16, 2017 - Bulletin Print Report; Taxpayer, ("TP"), intends to elect to be treated as a real estate investment trust, ("REIT"). TP owns land and cellular communications towers and has acquir...

Abandonment Of Claim Not A Prerequisite To A Theft Loss Deduction: October 16, 2017 - Volume 11 Issue 198 Print Report; Beginning in 1997, the As began investing in securities via Donald & Company, ("D"), primarily through its employee, OK. It was later discovered that D was operat...

Cable One Is Not A "Transmission" Company: October 13, 2017 - Bulletin Print Report; Cable One, Inc., ("CO") is a Delaware corporation authorized to do business in Oklahoma as a cable television company offering cable television, internet access, and...

On-Site Sales: October 13, 2017 - Volume 11 Issue 197 Print Report; Retailer sells goods to retail customers from Sales Facility, its physical store. While physically present at Sales Facility, retail customers may select, inspect, pu...

I.R.S. Plans To Ease Requirements For Valid Sec. 754 Election: October 12, 2017 - Bulletin Print Report; Sec. 754 of the Internal Revenue Code provides that if a partnership files an election "in accordance with regulations prescribed by the Secretary," the basis of part...

Excluding "Combat Pay" From Gross Income: October 12, 2017 - Volume 11 Issue 196 Print Report; The taxpayer, H, an individual, was engaged in performing "dangerous security services" in Iraq in 2005. H was hired and paid by Blackwater Security Consult...

Interest Assessed From Date Of Revocation Of Tax-Exempt Status: October 11, 2017 - Bulletin Print Report; Petitioner, ("P), was incorporated in Florida in 1991 as a nonprofit corporation engaged principally in credit counseling. In December 1993, the I.R.S. issued P a favorabl...

Property "To Be Held" For Investment: October 11, 2017 - Volume 11 Issue 195 Print Report; In 1963, A bought a house in San Francisco for $26,000. He and his family lived in the house until 1979, when they moved to Rohnert Park, California. Shortly after mo...

Deferred Compensation Plan Found To Constitute A "Pension": October 10, 2017 - Bulletin Print Report; Mr. William E. McDonald III, ("M"), retired from National City Corporation, ("NCC"), in 2006. As one of the bank's most senior executives, M was entitle...

COD Income Is Not Subpart F Income: October 10, 2017 - Volume 11 Issue 194 Print Report; CA is the domestic parent of a group of foreign and domestic subsidiaries engaged in Business P and Business Q. CA owns CB, a...

Dow/DuPont's I.R.S. Ruling Applies The "Overlapping Ownership" Rule: October 9, 2017 - Bulletin Print Report; LTR 201740015, February 14, 2017, is the private letter ruling that was issued to Dow and DuPont in connection with their historic business combination and the spin-offs or spl...

Pipeline And Dehydrator Are "Real Estate Assets" For REIT Purposes: October 9, 2017 - Bulletin Print Report; Taxpayer, ("TP") is a real estate investment trust, ("REIT"). TP invests in assets of certain pipeline transmission systems, ("PTSs"), by either o...

Patent Licensor Not Doing Business in Tennessee: October 9, 2017 - Volume 11 Issue 193 Print Report; CA is a non-Tennessee corporation that is primarily engaged in the business of holding, maintaining, and licensing certain patents. CA has no office or employees in T...

Gain From Sale of Property Is Not "Income in Respect of a Decedent": October 6, 2017 - Volume 11 Issue 192 Print Report; TP entered into a contract to sell a plot of real property on Date 1, with an intended closing date of Date 2. Before Date 2, however, a gas pipeline was discovered u...

A Minor's Signing Bonus Is Taxable To Him: October 5, 2017 - Volume 11 Issue 191 Print Report; In the spring of 1960, petitioner, the great Richie (later known as Dick) Allen, was living with his mother, EA. A contract to play for the Philadelphia Phillies was signed by...

Treasury Report On Burdensome Regulations Not What We Hoped For: October 5, 2017 - Bulletin Print Report; The Treasury Department (the "Treasury") just issued its much anticipated "second report" in which it recommends actions "to eliminate and in other cas...

Taxpayers Should Have Reported "Excess" Tax Credits: October 4, 2017 - Volume 11 Issue 190 Print Report; The Ms applied for and received benefits under the Affordable Care Act, ("ACA"). On the basis of their household income, Covered California, ("CC"), a healt...

"Serial Acquisition" Regulations Were Unlawfully Issued: October 3, 2017 - Bulletin Print Report; In April 2016, the Internal Revenue Service and the Treasury Department, (the "Agencies"), issued a rule identifying stock of foreign acquiring corporations that is t...

No Nexus Without Physical Presence: October 3, 2017 - Bulletin Print Report; LI, a Nevada corporation, has since 1997 sold cosmetic products to Illinois customers via an internet website. LC is a limited liability company that, since 2004, sells cosmeti...

Incentive Payments Includible in Gross Income: October 3, 2017 - Volume 11 Issue 189 Print Report; State A has in effect a number of programs designed to attract health care professionals to perform services in underserved areas of the State....

MNK's Deferred Tax Liabilities: October 2, 2017 - Bulletin Print Report; Some investors have noticed Mallinckrodt plc's rather substantial deferred tax liabilities. In fact, as of September 30, 2016, the company had "an aggregate of $1.884...

"PFE/AGN" Regulations Set Aside: October 2, 2017 - Bulletin Print Report; The U.S. District Court for the Western District of Texas has ruled that the so-called "serial acquirer" regulations, the very regulations that rendered the...

RENN To Undertake A Most Unusual Spin-Off: October 2, 2017 - Bulletin Print Report; Renren, Inc., ("RENN" or "the Company"), "a leading real-name social networking internet platform in China," announced on September 30th that it i...

Acquisition of Control Undertaken for Good Business Reasons: October 2, 2017 - Volume 11 Issue 188 Print Report; X Corporation, (X), engaged in the sale and servicing of new and used automobiles, owned 40 percent of the outstanding stock of Z Corporation, (Z), an underwriter of...

Greenhill Will Undertake A "Leveraged Recapitalization": September 29, 2017 - Bulletin Print Report; Greenhill & Co., Inc., ("GCI"), the firm founded by the legendary mergers and acquisitions banker, Robert Greenhill, is set to undertake a transaction that was mu...

"PIK" Interest Income Found To Be "Nonbusiness" Income: September 29, 2017 - Volume 11 Issue 187 Print Report; ConAgra Foods, Inc., ("CAF"), is a well-known packaged food company with headquarters in Omaha, Nebraska. ConAgra Foods Food Ingredient Company, Inc., ("TP"...

Observations On The "Unified Framework" For "Fixing" The Tax Code: September 28, 2017 - Bulletin Print Report; President Trump and Congressional leaders have published a broad outline, which they refer to as "The Unified Framework For Fixing Our Broken Tax Code," for tax refor...

"Transferee" Liability Is Not A "Tax" Liability: September 28, 2017 - Bulletin Print Report; From 2003-2007, D was an employee and a minority shareholder of FECP. During that period, despite generating in excess of $450 million in revenues, FECP paid no income taxes. A...

CCE's Alabama NOLs Are Not "SRLY" Limited: September 28, 2017 - Volume 11 Issue 186 Print Report; Coca-Cola Enterprises, ("CCE"), a Delaware corporation, did business in Alabama. Roddy, ("R"), a Tennessee corporation, operated a soft-drink bottling and d...

Will AVEVA's "Return Of Value" Be Taxed As A Dividend?: September 27, 2017 - Bulletin Print Report; AVEVA Group Plc, ("AV"), and Schneider Electric SE, ("SC"), have entered into an unusual agreement that will culminate in AV becoming a controlled subsidiar...

I.B.M.'s "Extraterritorial Income" Not Taxable in New Jersey: September 27, 2017 - Volume 11 Issue 185 Print Report; The New Jersey Tax Court was asked to consider the question of whether, during the period at issue, a corporation's entire net income (ENI) for New Jerse...

Whole Foods Must File Combined Return With "Trademark" Sub: September 26, 2017 - Bulletin Print Report; WFMG distributed and sold natural and organic food products at its retail stores. WFMIP, a limited partnership, owned various trademarks, trade names, and other intangible asse...

Prize Winnings Are Payments In Return For Services Rendered: September 26, 2017 - Volume 11 Issue 184 Print Report; Petitioners have several children, including C.P., who was born in 1999. At approximately nine years of age, C.P. began competing in beauty pageants "in furtherance of a p...

Executive Did Not "Willfully" Violate "FBAR": September 25, 2017 - Bulletin Print Report; In 1973, B, who engaged in a substantial amount of international business travel, decided to open a savings account with UBS. In 2005, UBS approached B with a loan proposal tha...

Nestle S.A. Need Not Pay Tax On Disposing Of Its L'Oreal Holdings: September 25, 2017 - Bulletin Print Report; Speculation has been rampant that Nestle S.A. may, in light of the recent passing of Lilian Bettencourt, the heiress of L'Oreal founder Eugene Schueller, decide to dispose...

Interest Income Treated As "Real Estate" Income: September 25, 2017 - Volume 11 Issue 183 Print Report; Taxpayer, ("TP"), is a real estate investment trust, ("REIT"). TP is the sole owner of LLC, a disregarded entity. LLC, in turn, is the owner of Property loc...

CSFB Must "Add Back" Related Party Interest Expense: September 22, 2017 - Bulletin Print Report; The Alabama Department of Revenue, (the Department), assessed Credit Suisse First Boston U.S.A., Inc., ("TP"), for Alabama business income tax for 2006. The assessmen...

Warrior Met Coal Gets Good News Regarding Its NOLs: September 22, 2017 - Bulletin Print Report; Warrior Met Coal, ("HCC"), recently reported that the Internal Revenue Service "had issued a Private Letter Ruling" to the company. Prior to the Private Let...

Contractual Right Characterized As Stock: September 22, 2017 - Volume 11 Issue 182 Print Report; Petitioners appeal the tax court's decision assessing deficiencies in income tax due for taxable years 2008-2010. In 2008, newly formed MBA Real Estate, Inc., ("MBA&qu...

Aristea Capital Calls For Spin-Off Of Weibo By Sina: September 20, 2017 - Bulletin Print Report; In a situation that is all too reminiscent of Altaba and Alibaba/Yahoo Japan, Sina Corporation, (SC), owns, among numerous other assets, a large stake in Weibo Corporation, (WC...

Taxpayers Not Eligible For "Premium Tax Credit": September 20, 2017 - Volume 11 Issue 181 Print Report; Petitioners enrolled in health insurance for 2014 through CC, a health insurance "Marketplace" (or "Exchange"). Petitioners were enrolled in a health insura...

Wells Fargo Denied A Deduction For Foreign Taxes Actually Paid: September 19, 2017 - Bulletin Print Report; "Structured Trust Advantaged Repackaged Securities," ("STARS"), sounds suspiciously like a tax shelter and indeed it was. STARS was a transaction that Wells...

Potential Tax Liabilities Impair Stock Value: September 19, 2017 - Volume 11 Issue 180 Print Report; Irene Eisenberg (IE) owns all 100 outstanding shares of Corporation, (C), a 'C' corporation. C's only asset was a commercial building which was leased to...

Hedge Fund's Losses Are Disallowed: September 18, 2017 - Bulletin Print Report; A, through A's "Hedge Account," and Hedge Fund, ("HF"), transferred publicly traded securities to "Trading Account." Both A and HF reported th...

South Dakota Supreme Court Adheres To "Quill": September 18, 2017 - Bulletin Print Report; South Dakota, (SD), relies on sales and use taxes for much of its revenue. Sales tax is generally collected by sellers selling merchandise in this state at the point of sale......

Mailing a Notice of Deficiency Is an "Act": September 18, 2017 - Volume 11 Issue 179 Print Report; Prior to the expiration of the time prescribed in Sec. 6501(a) for the assessment of tax due from petitioners for the taxable year 1978, petitioners and the Commissio...

Boot and Sec. 306 Stock: September 15, 2017 - Volume 11 Issue 178 Print Report; X has outstanding 4,000 shares of common stock and 400 shares of nonvoting preferred stock. The preferred stock, when originally issued, was "Sec. 306 stock.&quo...

Observations on D.E. Shaw's Recommendation for EQT: September 14, 2017 - Bulletin Print Report; EQT Corporation, (EQT), this morning, announced that, upon closing the Rice Energy transaction, it will form a committee to deliberate the question of how, and if, EQT's we...

Pennsylvania Court Affirms Rejection Of State's NOL Limitation Provisions: September 14, 2017 - Bulletin Print Report; Taxpayer, ("TP"), alleged that it owed no Pennsylvania ("PA") corporate net income tax ("CNIT") on a nearly $30 million capital gain profit result...

"Checking the Box" and Worthless Stock Deductions: September 14, 2017 - Volume 11 Issue 177 Print Report; P is a domestic corporation. FS is an entity that is organized under the laws of Country X. FS has only one class of equity interests outstanding, all of which is own...

An "Act" Is a Procedural Step: September 13, 2017 - Volume 11 Issue 176 Print Report; X has outstanding voting stock all of which is owned by A and A's child, B. On January 17, 1973, X redeemed all of its stock held by B. B filed the agreement spec...

Pro Forma Return Starts The Running Of The Period Of Limitations: September 12, 2017 - Bulletin Print Report; On December 4, 2002, CFI, ("OC") merged with and into a "shell" corporation, NCF, ("NC"). The merger was designed and intended to be a tax-free re...

Options Can Spoil a 'B' Reorganization: September 12, 2017 - Volume 11 Issue 175 Print Report; The shareholders of X Corporation, (XC), entered into an agreement to exchange their shares of XC stock for voting convertible preferred stock of unrelated Y Corporat...

The Tax Aspects Of A UTX Post-Acquisition Spin-Off: September 11, 2017 - Bulletin Print Report; Similar to the model pioneered by Dow Chemical and DuPont in connection with their historic merger, it has been speculated that United Technologies Corporation, ("UTX"...

Investment Advisor May Deduct Payments Made To Induce Merger: September 11, 2017 - Bulletin Print Report; TP serves as an investment advisor to ACQ. TP manages ACQ pursuant to an investment management agreement, ("IMA"). Under the IMA, ACQ agrees to pay TP a basic managem...

Pre-Arranged Sale Of Stock Of D Does Not Invoke "Device" Clause: September 11, 2017 - Volume 11 Issue 174 Print Report; Distributing, ("D"), a Country A corporation, has outstanding a single class of common stock. D has decided that it must separate Business A from Business B. The foll...

No "Push-Down" Accounting For Tax Purposes: September 8, 2017 - Volume 11 Issue 173 Print Report; TP and its wholly owned subsidiaries, S1, S2, and S3, are engaged in the business of mining coal. Prior to date a, TP was a wholly owned subsidiary of CX, which had m...

UTX And ROC Forgo "Double Dummy" Format: September 7, 2017 - Bulletin Print Report; United Technologies Corporation, ("UTX"), and Rockwell Collins, Inc. ("ROC"), have entered into an agreement pursuant to which the former will acquire all o...

Replacement Cost Method Of Valuation Rejected: September 7, 2017 - Volume 11 Issue 172 Print Report; Petitioner, ("P"), has been an ardent hunter from an early age. P preserved the remains of the animals he shot in a "trophy room" in his house. In his troph...

Kohl's Dept. Stores Cannot Deduct Intercompany Royalties In Va.: September 6, 2017 - Bulletin Print Report; Kohl's Department Stores, Inc., ("K"), is organized under the laws of Delaware. It operates retail stores throughout the United States, including in Virginia. KI,...

THC Moves To "Protect" Its NOLs: September 6, 2017 - Bulletin Print Report; Tenet Healthcare Corporation, ("THC"), had accumulated, as of December 31, 2016, approximately $1.7 billion of Federal net operating loss, ("NOL") deduction...

Sinclair Broadcast Group Can Use Its Minnesota NOLs: September 6, 2017 - Volume 11 Issue 171 Print Report; Sinclair Broadcast Group, ("S"), is the parent of a multistate, diversified, television broadcasting operation. Sinclair Television Group, Inc., ("T"), was...

Entity Found To Be A "Political Subdivision": September 5, 2017 - Bulletin Print Report; The a-county City metropolitan area ("Metro Area") public transportation needs are served by Authority and its "b" divisions, each of which have separate re...

What Is The University Of Phoenix's "Income Producing Activity?": September 5, 2017 - Bulletin Print Report; The University of Phoenix, (the "university"), offered degree programs focusing on the market for "nontraditional students." The university implemented what...

Payments Measured By Sales Are Dividends: September 5, 2017 - Volume 11 Issue 170 Print Report; X Corporation, (X), is engaged in the business of selling the products of its shareholders to various customers. X does not qualify as a cooperative under subchapter...

Losses Sustained In A Reorganization Cannot Be Recognized: September 1, 2017 - Volume 11 Issue 169 Print Report; T owned 75 percent of the stock of U. The remaining 25 percent of such stock was owned by a company named ACC. U's business involved owning and operating two Russian LLCs t...

The District Of Columbia Is A "State": August 31, 2017 - Bulletin Print Report; Petitioner, ("P"), was a New York resident. P owned District of Columbia Tobacco Settlement Revenue Bonds ("DC bonds") and received interest therefrom. ...

Redemption Amounts Are Not "Applicable Dividends": August 31, 2017 - Volume 11 Issue 168 Print Report; Corporation A, (CA), has a single class of voting common stock outstanding. CA maintains an employee stock ownership plan (ESOP) which holds stock of CA. &n...

The Cost Of Purchased Minerals Is A "Non-Mining" Cost: August 30, 2017 - Volume 11 Issue 167 Print Report; Petitioner, ("P"), is a Delaware corporation. MMC owns 67 percent of P. P's primary business activity centers around the production of cement. Most of P's sal...

ABCO To Divest Its Health Care And Education Businesses: August 29, 2017 - Bulletin Print Report; Where a corporation conducting diverse businesses seeks to sell itself, it is unlikely that a single buyer, willing to acquire each of its businesses, will appear. Instead, the...

Tax Levied On Export Goods In Transit Found To Be Unconstitutional: August 29, 2017 - Bulletin Print Report; Dulles Duty Free, LLC, ("DF"), is a retailer of duty free merchandise at Dulles Airport, in Loudon County, Virginia, where it operates several stores. For domestic tr...

COD Income Is "Investment Income": August 29, 2017 - Volume 11 Issue 166 Print Report; TP purchased "f" shares of SC, representing an "f%" interest in the company, on October 20, 1986. The financing for the purchase was supplied by a...

I.R.S. Issues Rare "Device" Ruling: August 28, 2017 - Bulletin Print Report; Parent is a State A entity that is exempt from Federal income tax under Sec. 501(c)(3) of the Code. Parent is the parent entity to a group of corporations, (the Parent Group)....

Sec. 6041's Reporting Obligation Is Premised on "Gross Income": August 28, 2017 - Volume 11 Issue 165 Print Report; TP, a political subdivision of State, owns and operates a C. TP wascreated by Stateto abate D. During major storms with significant rainfall, TP occasiona...

PHH Corporation Appears To Be "Partially Liquidating": August 25, 2017 - Bulletin Print Report; PHH Corporation, ("PHH"), is offering to purchase a substantial amount of its common stock through a "Dutch Auction" tender offer procedure. It will spend a...

The Limits of a Joint Return: August 25, 2017 - Volume 11 Issue 164 Print Report; RC and MC, husband and wife, are residents of Wilmington, Delaware. They filed joint income tax returns for the years 1956 and 1957. RC and MC were married on Novembe...

Market Discount Income Does Not Constitute Interest: August 24, 2017 - Bulletin Print Report; Fidelity Bank, ("FB"), is a wholly owned subsidiary of FBI. FB acquired U.S. government bonds at a discount to face value and held those bonds until maturity, thereby...

Usual or Customary Services - Part II: August 24, 2017 - Volume 11 Issue 163 Print Report; Company, (C), has elected to be treated as a real estate investment trust, (REIT). C conducts its operations through OP, a State B limited partnership. Thus, C is an...

Maersk And Nacco Announce Transformative Transactions: August 23, 2017 - Bulletin Print Report; A.P. Moller-Maersk A/S, ("M"), recently signed an agreement to sell the stock of its subsidiary, Maersk Oil, to Total S.A. for a total of $7.45 billion. M is a Danish...

How Does a Creditor Treat a Debt Restructuring?: August 23, 2017 - Volume 11 Issue 162 Print Report; X Corporation, (X), a commercial bank, holds a U.S. dollar denominated sovereign debt of Foreign Country, (FC). The obligation evidences a loan in the principal amoun...

Underwriters' Commissions Were Capital Expenditures: August 22, 2017 - Volume 11 Issue 161 Print Report; H was the Chief Financial Officer of W. On January 29, 2009, W granted H 65,574 stock options. The exercise price was $64.96 per share, later decreased to $56.64 per share. W i...

New York Expands The Incidence Of Sales And Use Taxes: August 22, 2017 - Bulletin Print Report; Generally, tangible personal property that a purchaser intends to sell in the regular course of business is considered to be "purchased for resale" and is not subject...

Herbalife Ltd. Will Distribute "CVRs" In Its Stock Buyback: August 22, 2017 - Bulletin Print Report; Herbalife, Ltd., ("H" or the "Company") is offering to purchase a portion of its outstanding stock...for an aggregate cash purchase price of up to $600 mill...

Lawsuit Alleging Harm From Medtronic's Inversion Can Proceed: August 21, 2017 - Bulletin Print Report; This appeal, to the Supreme Court of Minnesota, requires that the court decide whether claims that respondent asserts in a class-action challenge to a merger were properly dism...

Microsoft's Royalties From "OEMs" Are Not Sourced To Wisconsin: August 21, 2017 - Bulletin Print Report; Microsoft Corporation, ("M"), is organized under the laws of Washington, and has its worldwide headquarters in that state. M, of course, was actively engaged in the b...

No Substantial Compliance With Sec. 170 Substantiation Rules Found: August 21, 2017 - Volume 11 Issue 160 Print Report; I, the owner of land and a web hosting facility in H, (the "HP"), entered into an industrial lease agreement under which it leased the HP to AT&T ("T")....

Hewlett Packard Runs Afoul Of "Anti-Pfizer" Obama-Era Rule: August 18, 2017 - Bulletin Print Report; The "reverse Morris Trust," ("RMT"), transaction involving Hewlett Packard Enterprise Co., ("HPE"), and Micro Focus International plc, ("MFI&...

Taxpayer Found to Be Domiciled in Virginia: August 18, 2017 - Volume 11 Issue 159 Print Report; In Virginia, there are two classes of residents, a domiciliary resident and an actual resident. See Virginia Code Sec. 58.1-302. &nb...

Massachusetts "Drop Shipment" Rule Upheld: August 17, 2017 - Bulletin Print Report; This case evaluates a transaction in which a Massachusetts consumer finds a product online, and purchases it from an out-of-state retailer who then orders the product from a Ma...

Lawful Seizure Not a Theft: August 17, 2017 - Volume 11 Issue 158 Print Report; In 1982, NCM immigrated to the United States from Thailand. In 2006, or inearly 2007, NCM and her husband (petitioners)delivered items of property to the...

Country Club Found To Have "UBTI": August 16, 2017 - Bulletin Print Report; Petitioner is a Sec. 501(c)(7) "social club" incorporated in Ohio. Its facilities include an 18-hole golf course, a swimming pool, tennis courts, dining facilities......

A Jarring Pronouncement on "Tips": August 16, 2017 - Volume 11 Issue 157 Print Report; Company (C) is engaged in retail sales of "Product" and related items for which customers often provide additional cash amounts as compensation to those ser...

Merger Of "UPREITS" Announced: August 15, 2017 - Bulletin Print Report; Invitation Homes, Inc., ("INVH"), and Starwood Waypoint Homes, ("SFR"), recently announced the signing of a definitive agreement "to combine in a 100 p...

First-Time Homebuyer Did Not "Purchase" Principal Residence: August 15, 2017 - Volume 11 Issue 156 Print Report; On September 24, 2008, petitioner's mother died leaving a will. In the will, petitioner's mother appointed petitioner and his brother as co-executors of her e...

MLP Found To Engage In "Intrinsic" Activities: August 14, 2017 - Bulletin Print Report; X, a limited partnership, intends to become a publicly traded partnership, i.e., an "MLP." X will provide a broad range of services to working interest owners who are...

I.R.S. Issues Guidelines For RIC And REIT Stock Dividends: August 14, 2017 - Bulletin Print Report; Regulated investment companies, ("RICs"), and real estate investment trusts, ("REITs"), get a tax deduction for the "dividends" they remit to thei...

Debt Cancellation Not Purchase Price Adjustment: August 14, 2017 - Volume 11 Issue 155 Print Report; Before the year in issue, petitioners intended to take advantage of adeferred interest financing arrangement offered by a credit card company in connection with...

Foreign "DRE" Included In Minnesota Combined Return: August 11, 2017 - Bulletin Print Report; Ashland, Inc., ("AI"), is a Kentucky corporation that does business in Minnesota. In November 2008, AI acquired Hercules, ("H"). H owned 100 percent of a Lu...

When Is California's "Functional" Test Applied?: August 11, 2017 - Volume 11 Issue 154 Print Report; On April 26, 2004, Fidelity National Information Service, Inc., ("F"), acquired 29 percent of the common stock of Covansys, ("C"). F also agreed, under a &q...

St. Louis Rams Were Required To Pay Sales Tax on "ELT": August 10, 2017 - Volume 11 Issue 153 Print Report; The St. Louis Rams, now the Los Angeles Rams, sold tickets for the exhibition of NFL football games played in St. Louis. The city imposed upon the Rams an "entertainment l...

Vantiv And Worldpay Forgo An "Inversion": August 10, 2017 - Bulletin Print Report; Vantiv, Inc., ("V"), and Worldpay Group plc, ("W), have finalized the terms of their previously announced business combination and, surprisingly, at least to som...

Securing Extension of a Regulatory Election: August 9, 2017 - Volume 11 Issue 152 Print Report; TP and its shareholders began the process of trying to sell itself in Year 1. TP was successful, and entered into a stock purchase agreement on Date A. On Date B, the...

TEPPCO's Website Deprives It Of "Wholesaler" Tax Rate: August 9, 2017 - Bulletin Print Report; On October 26, 2009, TEPPCO Partners, L.P., ("petitioner"), was merged with "Company B." Petitioner was audited for Texas franchise tax compliance for 2008-...

Using "Tax Credit Certificates" To Pay State Taxes: August 8, 2017 - Volume 11 Issue 151 Print Report; N is a partnership which isauthorized to make investments inprivate venture capital funds. N, at present,has four partners: Q (the general partner);...

I.R.S. Allows "Remainco" To Retain "Spinco" Stock Despite "Overlap": August 7, 2017 - Bulletin Print Report; Taxpayer, ("TP"), is a publicly traded State corporation. TP is the common parent of a business group that includes corporations, disregarded entities, and partnershi...

"Spinco's" Low Vote Stock Used To Defray "Remainco" Debt: August 7, 2017 - Bulletin Print Report; D1, who we believe to be Huntsman Corporation, is a publicly traded State corporation. The D1 Group is engaged in "Business." The Group's operations are divided i...

Tenants of a Cooperative Can Deduct "Defaulted" Interest: August 7, 2017 - Volume 11 Issue 150 Print Report; X qualified as a cooperative housing corporation, (CHC), under Sec. 216(b)(1). Premises consists of "a" rental apartments located in "b" apartment...

Real Estate Merely A "Component" Of A Service Business: August 4, 2017 - Volume 11 Issue 149 Print Report; C has elected to be taxed as a real estate investment trust, (REIT). C owns, acquires, develops, constructs, and franchises miniwarehouse self-storage facilities (&qu...

Commodities Trader Subject To Ohio's "CAT" Tax: August 3, 2017 - Bulletin Print Report; Appellant appeals a final determination of the Tax Commissioner of Ohio affirming a commercial activity tax, ("CAT") assessed against it.... The court noted that &quo...

CFCs Found To Have Invested In "U.S. Property": August 3, 2017 - Volume 11 Issue 148 Print Report; Petitioner, ("P"), is C corporation incorporated in Delaware. It had its principal place of business in New Jersey at the time it filed its petition. P is the parent...

"Money Remuneration" Does Not Include Stock: August 2, 2017 - Bulletin Print Report; Rail carriers and their employees are not subject to "FICA" taxation; instead, the carriers pay a somewhat different tax under the Railroad Retirement Tax Act, ("...

What If Yahoo! Inc. Became A "RIC"--Part 3: August 2, 2017 - Bulletin Print Report; Altaba, Inc., ("AABA"), published its unaudited opening balance sheet recently in the format reserved for registered investment companies. It does not reveal a great...

"Security Agreement" Does Not Break "Affiliation": August 2, 2017 - Volume 11 Issue 147 Print Report; USP is the common parent of an affiliated group of corporations that join in thefiling ofa consolidated income tax return. USP is a wholly-owned subsidiar...

Supreme Court Moves To Curtail "Forum Shopping": August 1, 2017 - Bulletin Print Report; Bristol-Myers Squibb Company, ("BMS"), a large pharmaceuticals company, in incorporated in Delaware and is headquartered in New York. It maintains substantial operati...

Discovery To Acquire Scripps For "Mixed" Consideration: August 1, 2017 - Bulletin Print Report; Discovery Communications, Inc., ("DISC"), and Scripps Networks Interactive, Inc., ("SNI"), announced, on July 31st, a definitive agreement "for DISC to...

Indiana Cannot Tax DuPont's $4 Billion Gain From The Sale Of DPC: August 1, 2017 - Volume 11 Issue 146 Print Report; In 1991, DuPont, ("DP"), and Merck Pharmaceutical Company, ("MPC"), formed DMPC. DP and MPC each owned equal 50 percent interests in DMPC. DMPC "operat...

Spin-Off Of "Born To Die" Corporation Respected: July 31, 2017 - Bulletin Print Report; P is the common parent of a consolidated group. P's stock is both publicly traded and widely held. P owns LLC 1, a disregarded entity. LLC 1 owns Sub 1. Sub 1 owns D2, LLC...

I.R.S. Delays Effective Date Of Portion Of "Debt/Equity" Regulations: July 31, 2017 - Bulletin Print Report; Last year, the I.R.S. and the Treasury Department issued so-called "debt/equity" regulations, the principal purpose of which was to curtail, if not entirely eliminate...

"Swaps" Constitute "Securities" For Purposes of Sec. 851(b)(2): July 31, 2017 - Volume 11 Issue 145 Print Report; "Funds" invest in equity securities. Funds intend to enter into "swaps" on securities or securities indices. Funds also planto enter into ce...

Rep. Levin Renews His Attack On Inversions: July 28, 2017 - Bulletin Print Report; House Ways & Means Committee member Sander M. Levin, D-Mich., has made inversions his signature issue. During the height of the inversion craze, it is safe to say that he w...

Payments To Charity Deductible Under Sec. 162: July 28, 2017 - Volume 11 Issue 144 Print Report; TP is a corporation engaged in a stock brokerage business. In order to promote business in the neighborhood in which its office is located, and in order to compete su...

A Beneficiary's "Proportionate Interest" In An Estate: July 27, 2017 - Volume 11 Issue 143 Print Report; In determining the applicability of Sec. 302(b)(2)--which provides that a distribution in redemption meeting its terms is a distribution in "part or full payment...

Noncustodial Parent Not Entitled To A Dependency Exemption: July 26, 2017 - Volume 11 Issue 142 Print Report; Petitioner and JH, his former spouse, are the parents of ZH, who was born in 1996. On September 11, 1998, in anticipation that the Iowa district court would grant the...

Sec. 108 Does Not Permit Exclusion of Gain Realized: July 25, 2017 - Volume 11 Issue 141 Print Report; The taxpayers, who are debtors in a case under Chapter 13 of the Bankruptcy Code, owned and occupied a residence that had a fair market value substantially below the...

Does The "Predecessor" Rule Threaten EQT's Potential Spin-Off?: July 24, 2017 - Bulletin Print Report; EQT Corporation, ("EQT"), and Rice Energy, Inc., ("RE"), have entered into a definitive merger agreement. The agreement envisions a merger of RE with and in...

What If Yahoo! Inc. Became A "RIC"---Part 2: July 24, 2017 - Bulletin Print Report; One "self-help" tactic that Altaba (formerly known as Yahoo! Inc.) might pursue is to transform itself into a "regulated investment company," ("RIC&quo...

Gift of Family Partnership Interests Recast: July 24, 2017 - Volume 11 Issue 140 Print Report; In November, 2002, Mr. WilliamLinton (WL) formed a "family partnership", WFLB, LLC. On January 22, 2003, WL gave his wife (SL) 50 percent of his perce...

MKC Will Acquire Reckitt Benckiser's Food "Division": July 21, 2017 - Bulletin Print Report; McCormick & Company, Inc., ("MKC"), has caused quite a stir with its announcement of a definitive agreement to acquire the "Food Division" of Reckitt Be...

Change In Lifestyle Confirms Change Of "Domicile": July 21, 2017 - Volume 11 Issue 139 Print Report; In 1982, petitioner, a West Point graduate, started working for Colgate-Palmolive Company, ("CP"), in its New York City, ("NYC") headquarters. He and his wi...

CCI Will Be Acquiring "Real Property": July 20, 2017 - Bulletin Print Report; Crown Castle International Corp., ("CCI"), recently announced that it has entered into a definitive agreement to acquire LTS Group Holdings LLC, ("L"), a pr...

Capital Contributions Not Part of a Tax Avoidance Plan: July 20, 2017 - Volume 11 Issue 138 Print Report; P is the common parent of an affiliated group of corporations. P has, since its incorporation, incurred a net operating loss (NOL) every year. The P group experienced...

"Work" Tax Credits Depend on Certification: July 19, 2017 - Volume 11 Issue 137 Print Report; The taxpayer, (TP), a domesticcorporation, argues that the Commissioner improperly refused tax credits, some $3.4 million thereof, under the WOTC and WtW tax cr...

Payment To Hedge Fund Employee Taxable In Year Received: July 18, 2017 - Volume 11 Issue 136 Print Report; In January 2005, H joined Paulson & Co., Inc., (PCI), as a senior analyst in PCI's New York City office. PCI is an 'S' corporation. H received a base salary of...

Foreign Partner's Redemption Gain Not Effectively Connected Income: July 17, 2017 - Volume 11 Issue 135 Print Report; GMM was established in 1959 and was organized under the laws of Greece. GMM had no office, employees, or business operation in the United States. P is a limited liability compa...

Removing NGLs From Natural Gas Constitutes "Processing": July 17, 2017 - Bulletin Print Report; X is a limited partnership organized under the laws of State. X is a publicly traded partnership within the meaning of Sec. 7704(b) of the Internal Revenue Code. X is engaged i...

Will PNC Dispose Of Its $13 Billion BlackRock Stake?: July 17, 2017 - Bulletin Print Report; In a recent earnings call, the C.E.O. of PNC Financial Services Group, Inc., ("PNC"), as he always is, was asked about the bank's large stake in BlackRock. In par...

IEG Holdings Mounts A Most Unusual Tender Offer: July 14, 2017 - Bulletin Print Report; IEG Holdings Corporation, ("IGH"), is offering to exchange four shares of its authorized but unissued common stock for each share of common stock of LendingClub Corpo...

Taxpayer Assessed "Early Withdrawal" Tax: July 14, 2017 - Volume 11 Issue 134 Print Report; The taxpayer, (PR), retired from Southwestern Bell Telephone (SBT)in 2003, when he was 52 years of age, and received almost $1 million of lump-sum distributions...

"Carryovers" Means Carryforwards Not Carrybacks: July 13, 2017 - Volume 11 Issue 133 Print Report; Metro One Telecommunications, (M), operated call centers throughout the U.S. For the 2002 tax year, M was subject to the Alternative Minimum Tax, (AMT). In 2004, M cl...

Vantiv, Inc./Worldpay Group plc Update: July 12, 2017 - Bulletin Print Report; The announcement that Vantiv, Inc., ("VI"), and Worldpay Group plc, ("WG"), had reached an agreement to combine their operations strongly suggested that the...

Government Grants Are Includible in Gross Income: July 12, 2017 - Volume 11 Issue 132 Print Report; A State enacted "Program" in Year 2. The Program, which is administered by Entity, (E), offers a "$x" grant to P who purchase a B. P must either p...

"Burdensome" Regulations Likely To Be Eliminated: July 11, 2017 - Bulletin Print Report; Executive Order #13789, issued by President Donald J. Trump, on April 21, 2017, instructed the Secretary of the Treasury to review all "significant tax regulations" i...

Joint Returns and the "Insolvency" Exclusion (Of COD Income): July 11, 2017 - Volume 11 Issue 131 Print Report; During the 1986 tax year the taxpayer was discharged from indebtedness in the amount of "$x" and, at the time of the discharge of indebtedness, the taxpayer...

Affiliate's Activities Did Not Create "Nexus" For Online Retailer: July 10, 2017 - Bulletin Print Report; TP was an out-of-state online retailer of apparel...via its website. TP's affiliate was a wholesaler of the same products. TP's sales to Washington residents were made...

No Reasonable Cause For Late Filing of Estate Tax Return: July 10, 2017 - Volume 11 Issue 130 Print Report; NY died on August 14, 2008, and her son, AY, became theexecutor of her estate. The Estate's tax return was due by November 14, 2009, and the Estate's ta...

Liberty/HSN: A "Creeping" 'B' Reorganization: July 7, 2017 - Bulletin Print Report; Liberty Interactive Corporation, (LIC), and HSN, Inc., (HSN), announced that they have entered into an agreement whereby LIC will acquire the stock of HSN it does not already o...

Allocating Impermissible Tenant Service Income: July 7, 2017 - Volume 11 Issue 129 Print Report; Company, (C), has elected to be treated as a real estate investment trust, (REIT). C has an "a%" interest in OP, a State B limited partnership which owns co...

Will Vantiv Stock Be Taxable To Domestic Shareholders of Worldpay?: July 6, 2017 - Bulletin Print Report; The Boards of Worldpay Group plc, (WG), and Vantiv, Inc., (VI), "have reached an agreement in principle on the key terms of a potential merger (the &quo...

Royalties Are Not "Rents From Real Property": July 6, 2017 - Volume 11 Issue 128 Print Report; The X trust owns the fee to certain iron-ore bearing lands, or undivided interests in such lands, which are subject to outstanding leases running to various lessees.<...

Can EQT Effect A Spin-Off After Acquiring Rice Energy?: July 5, 2017 - Bulletin Print Report; The Wall Street Journal is reporting, see "Jana Takes Roughly 5% Stake In Energy Conpany EQT," DJ, July 3, 2017, that the estimable Jana Partners LLC has taken a more...

Data Center Operator Exempt From Sales Tax: July 5, 2017 - Volume 11 Issue 127 Print Report; Petitioner owns a condominium interest in a high-rise building in Manhattan (NYC) and plans to develop the property exclusively for use as an Internet data center fac...

Supreme Court Rules That "Statute Of Repose" Cannot Be Tolled: July 3, 2017 - Bulletin Print Report; The Securities Act of 1933 "protects investors by ensuring that companies issuing securities...make a full and fair disclosure of information relevant to a public offering...

An Obligation Subject To A Condition Subsequent Is "Unconditional": July 3, 2017 - Bulletin Print Report; On April 23, 2009, CMC and petitioner entered into an agreement pursuant to a document titled "PRA" that consisted of five documents including a document titled "...

Sprint Is Not A "Utility": July 3, 2017 - Bulletin Print Report; New York City Administrative Code Sec. 11-1102(a) provides that every utility and every vendor of utility services shall pay an excise tax based upon a percentage of its gross...

PA. Board Of Finance Denies Sony A Loss Deduction: July 3, 2017 - Volume 11 Issue 126 Print Report; Petitioner, Sony Corporation of America (formerly known as Sony USA Inc.), a New York corporation, filed a Pennsylvania Corporate Tax Report (RCT-101) in which it reported Penn...

RAD And WBA Enter Into An Asset Purchase Agreement: June 30, 2017 - Bulletin Print Report; Rite Aid Corporation, ("RAD"), and Walgreen Boots Alliance Inc., ("WBA"), have decided to call off the merger, which had been announced on October 27, 2015...

Sec. 368(a)(1)(F) Takes Precedence in the Case of an Overlap: June 30, 2017 - Volume 11 Issue 125 Print Report; The instant situations involve two existing corporations each ofwhich wasreincorporated under the laws of a state other than that of their original incorp...

Hockey Team Permitted A Deduction For Full Cost Of Pregame Meals: June 29, 2017 - Bulletin Print Report; Petitioners own the Boston Bruins, a National Hockey League, ("NHL"), franchise based in Boston, Massachusetts, through three "pass-through" entities, D, MH...

Sale Of Franchise Yields Capital Gains: June 29, 2017 - Volume 11 Issue 124 Print Report; GT, a partnership, was formed in 1997 to bid on a "request for proposal," ("RFP"), from TC and CRB, a county and a city, respectively, "to take care of...

Intercompany Royalties Deductible For New Jersey CBT Purposes: June 28, 2017 - Volume 11 Issue 123 Print Report; Parent is headquartered in Texas, but does business in New Jersey, ("NJ"). Its primary business is to "create and develop computer software programs," which...

CVRs Will Be Used In Miramar Acquisition And CM Bags PVTB: June 27, 2017 - Bulletin Print Report; Sientra, Inc., ("Parent"), has formed DAC, ("Purchaser"), for the purpose of acquiring all of the stock of Miramar Labs, Inc., ("Company"). Purcha...

Personal Use Of Dwelling Unit Bars Deduction Of Expenses: June 27, 2017 - Volume 11 Issue 122 Print Report; Petitioner, ("P"), owns a 50 percent membership interest in Legend of French Lick, LLC, ("FL"), a limited liability company that elected to be taxed as a pa...

Recent Developments Surrounding HAIN, AAL, And EXC: June 26, 2017 - Bulletin Print Report; Hain Celestial, ("HAIN"), finally completed its study of various accounting errors the company was accused of making, and with the completion of the study was able to...

Interests In Real Property Or Royalty Interests?: June 26, 2017 - Volume 11 Issue 121 Print Report; TP has elected to be treated as a real estate investment trust, (REIT). TP owns an approximately"a%" interest in Partnership, (PS). PS owns an approxi...

"Termination Income" Is "Qualifying" Income: June 23, 2017 - Volume 11 Issue 120 Print Report; X is a publicly traded partnership, an "MLP." X is engaged in the transportation, storage, and distribution of refined petroleum products and crude oil. X anticipates...

Taxpayer Never Abandoned His NYC "Domicile": June 22, 2017 - Volume 11 Issue 119 Print Report; For the year 2007, petitioner filed a New York nonresident and part year resident tax return...indicating his address as South Flagler Drive, West Palm Beach, Florida. No New Y...

EQT Corporation And Rice Energy, Inc. To Pursue "Triangular Merger": June 21, 2017 - Bulletin Print Report; EQT Corporation, ("E"), and Rice Energy, Inc., ("R"), have entered into a definitive agreement pursuant to which the former will acquire all of the assets,...

Substantial Intercorporate Transactions Require A Combined Return: June 21, 2017 - Volume 11 Issue 118 Print Report; Petitioner, HMC-New York, Inc., was incorporated on November 1, 2001 as a wholly-owned subsidiary of Harbert Management Corporation, ("HMC"). HMC sponsored public equ...

Can Sprint's Net Operating Loss Shelter Yahoo! Inc.'s Gains?: June 20, 2017 - Bulletin Print Report; Now that Yahoo! Inc. (YHOO or Altaba) has finally divested its core business, attention has once again turned to the question of whether a tax-efficient method exists for YHOO...

The Merchant Cannot Be Asked To Refund Contested Sales Tax: June 20, 2017 - Volume 11 Issue 117 Print Report; Plaintiffs filed this putative class action against defendants (Dunkin' Brands, Inc. et al.)...alleging that plaintiffs were unlawfully charged sales tax...when purchasing...

Verizon's Earnings Will Be Penalized By Yahoo Restructuring Costs: June 19, 2017 - Bulletin Print Report; On June 13, 2017, to everyone's immense relief, Verizon Communications, Inc. completed its acquisition of Yahoo! Inc.'s "operating business." Verizon expects...

An 'S' Corporation And Its Shareholders Are Related Persons: June 19, 2017 - Volume 11 Issue 116 Print Report; Petersen, ("P"), was incorporated in Utah in 1980 and filed a subchapter S election in 1989. In August 2001, the company formed an employee stock ownership plan, (&qu...

Vesting Of Whole Foods' Options Will Produce Massive Deductions: June 19, 2017 - Bulletin Print Report; On June 15, 2017, Amazon.com, Inc., ("A"), entered into an Agreement and Plan of Merger with Whole Foods Market, Inc., ("W"). In the merger, a newly-created...

Repayment Of Foreign Taxes Is A "Refund" Thereof: June 16, 2017 - Volume 11 Issue 115 Print Report; Petitioner, ("P"), is a U.S. citizen who lived and worked in the U.K. On her federal income tax returns for 2003-2005, she claimed foreign tax credits based upon the...

FHN To Acquire CBF In A "Back-To-Back" Merger: June 15, 2017 - Bulletin Print Report; First Horizon National Corporation, ("FHN"), and Capital Bank Financial Corporation, ("CBF"), have entered into a definitive agreement "that will creat...

Selling Expenses Are Not Deductible Under Sec. 212: June 15, 2017 - Volume 11 Issue 114 Print Report; The petitioner, (D), an individual, owned 168,936 shares of W Corporation, (W), in 1937. To enable him to sell, through a group ofunderwriters, 60,000 of those...

What If Yahoo! Inc. Became A "RIC?": June 14, 2017 - Bulletin Print Report; The question has arisen, on numerous occasions, whether Yahoo! Inc., soon to be renamed Altaba, Inc., could solve its "tax problem," without any assistance from Aliba...

A Creditor's Interest Is Not a QFOBI: June 14, 2017 - Volume 11 Issue 113 Print Report; At M's death, in 2001, PP Corporation, (PP), had 5,000 Class A and 50,000 Class B shares outstanding. M held 862 Class B shares. In addition, M owned 50 percent o...

Can Pandora Media, Inc. Deduct Its "Termination" Payments To KKR?: June 13, 2017 - Bulletin Print Report; A subsidiary of Sirius XM recently announced an agreement with Pandora Media, Inc., ("P"), pursuant to which such subsidiary will purchase $480 million in newly issue...

Partnerships and Subpart F Income: June 13, 2017 - Volume 11 Issue 112 Print Report; P is engaged in the business of manufacturing machines in the U.S. PRS, an entity classified as a partnership for U.S. tax purposes, is organized under the laws of Co...

SINA Corporation Distributes "Property" Dividends: June 12, 2017 - Bulletin Print Report; SINA Corporation, ("SINA"), describes itself as "a leading online media company serving China..." SINA recently announced the details of its proposed distri...

Pandora Media, Inc. Receives A "PIPE": June 12, 2017 - Bulletin Print Report; As of December 31, 2016, Pandora Media, Inc., ("P"), was in possession of federal net operating loss carryforwards of approximately $818,500,000. Thus, it seems unlik...

An FSC And Its Owner Are Not "The Same Taxpayer": June 12, 2017 - Volume 11 Issue 111 Print Report; Ford Motor Company, ("F"), made an overpayment to the I.R.S. for the taxes it owed in 1992, while Ford Export Services, B.V., ("E"), a former Foreign Sales...

iHeart Communications Seeks To Retire Debt Tax Efficiently: June 9, 2017 - Bulletin Print Report; iHeartMedia, Inc., ("IHM"), owns all of the stock of iHeartCommunications, Inc., ("IHC"). IHC, in turn, owns all of the stock of CCO Outdoor Holdings, Inc.,...

CFCs and Partnerships: June 9, 2017 - Volume 11 Issue 110 Print Report; S, a wholly owned Country X subsidiary of P, a domestic corporation, is a controlled foreign corporation, (CFC). S is not engaged in any U.S. business activity and do...

Disgorgement Is A "Penalty": June 8, 2017 - Bulletin Print Report; Initially, the only statutory remedy available to the S.E.C. in an enforcement action was to seek an injunction.... In the absence of statutory authorization for monetary remed...

Forced Sale of Stock Not An Involuntary Conversion: June 8, 2017 - Volume 11 Issue 109 Print Report; TP owned shares of common stock of X Corporation, (X). X had been taken over by Y Corporation, (Y), through a merger between Z Corporation, (Z), an indirect wholly ow...

Who Is An "Active Participant?": June 7, 2017 - Volume 11 Issue 108 Print Report; On their 2008 joint Federal income tax return, petitioner and his wife each claimed a $6,000 I.R.A. deduction. Respondent disallowed petitioner's deduction. The d...

World Point Terminals, Inc. To "Roll Up" World Point Terminals, LP: June 6, 2017 - Bulletin Print Report; The latest "MLP Rollup" by its general partner involves World Point Terminals, Inc., (WPTI), and its "captive" limited partnership, World Point Terminals, L...

Financing The Construction Of The L.A. Rams New Stadium: June 6, 2017 - Volume 11 Issue 107 Print Report; The National Football League (the "League") recently approved the relocation of "Team" (which we believe to be the Los Angeles Rams) to "City A."...

Taking For Public Use: June 5, 2017 - Volume 11 Issue 106 Print Report; M Corporation, (M), was ordered by a U.S. District Court to dispose of its stock interest in N Corporation, (N), on the ground that M's ownership of such stock vi...

CBS Radio To Engage In "Split-Off RMT" Transaction: June 5, 2017 - Bulletin Print Report; CBS Corporation's plan to divest itself of its radio operations is rapidly nearing completion. In what the company accurately refers to as a "split-off," CBS Corp...

REITS Spin-Offs Are Not Entirely Extinct: June 5, 2017 - Bulletin Print Report; The so-called "PATH" Act, enacted on December 7, 2015, had as one of its central tenets the virtual elimination of spin-offs in which a real estate investment trust (...

LIN And PX Finally Tie The Knot: June 2, 2017 - Bulletin Print Report; Linde AG, ("LIN"), and Praxair, Inc., ("PX"), announced that the companies have entered into "a definitive business combination agreement to come toget...

Deducting Contributions to a Welfare Benefit Fund: June 2, 2017 - Volume 11 Issue 105 Print Report; Pursuant to a settlement agreement, Company, (C), became obligated to contribute Note to Trust to provide for Trust's payments of employees' post-retirement m...

CBRL's Special Dividend Is Not "Extraordinary": June 1, 2017 - Bulletin Print Report; Cracker Barrel Old Country Store, Inc., ("CBRL"), has announced an increase in its quarterly dividend to $1.20 per share, a 4.3 percent increase over the company'...

Carbon Credits Constitute "Good" REIT Income: June 1, 2017 - Volume 11 Issue 104 Print Report; Taxpayer, ("TP"), is a real estate investment trust, ("REIT"). TP owns and manages "A" acres of commercial forestland. TP owns S, a foreign corpor...

Illinois Targets Investment Managers/ESV Will Acquire ATW: May 31, 2017 - Bulletin Print Report; The Illinois Senate passed a piece of legislation last week (on May 23rd) that is, to say the least, troubling. It is a punitive bill that targets investment managers by subjec...

When Does Underpayment Interest Begin To Run?: May 31, 2017 - Volume 11 Issue 103 Print Report; In Year 1, TP made a gift of an undividend 1/2 interest in real property to X. The gift's value was Amount 1. During those years, the unified credit, (UC), agains...

Supreme Court Defines "Residence" For Patent Infringement Actions: May 30, 2017 - Bulletin Print Report; Petitioner, ("P"), which is organized under Indiana law, manufactures fruit drink mixes. Respondent, ("R"), which is organized under Delaware law, is a comp...

"Downstream" 'C' Reorganization With "Boot": May 30, 2017 - Bulletin Print Report; Parent/Target, (P/T), is owned by two individuals, SH1 and SH2. SH1 and SH2 are husband and wife. P/T owns greater than 80 percent of the stock of Corp 1; and also owns greater...

"RMT" Transaction With "Overlapping Ownership" And "Hook Stock": May 30, 2017 - Volume 11 Issue 102 Print Report; More than "a%" of Distributing's stock is publicly-traded and widely held, and less than "b%" of Distributing's stock is owned by "Owner A"...

No Withholding on Capital Gain Dividends: May 26, 2017 - Volume 11 Issue 101 Print Report; Sec. 1441 of the Internal Revenue Code provides that all persons having the control, receipt, custody, disposal, or payment of dividends...or other "fixed or det...

Bobbleheads Are Not "Sold" To Baseball Fans: May 25, 2017 - Bulletin Print Report; Pursuant to R.C. 5739.02, an excise ("sales") tax is levied upon all "retail sales" made in the state of Ohio. By virtue of R.C. 5741.02, a corresponding ta...

"Representatives" Create Nexus: May 25, 2017 - Volume 11 Issue 100 Print Report; Scholastic Books Clubs, Inc., ("SBC"), is incorporated under the laws of Missouri. SBC sells books and other educational materials by mail order and via the Internet...

HRG Will Sell FGL: May 24, 2017 - Bulletin Print Report; The long-awaited sale of Fidelity & Guaranty Life, ("FGL"), a majority-owned subsidiary of HRG Group, Inc., ("HRG"), was announced on May 24, 2017. Pres...

I.R.S. Addresses Permissible Services For a REIT: May 24, 2017 - Volume 11 Issue 99 Print Report; Company, (C), intends to make an election to be taxed as a real estate investment trust, (REIT), for its taxable year beginning January 1, 1992. C's portfolio con...

'B' Reorganization Denied Due To Liability Assumption: May 23, 2017 - Volume 11 Issue 98 Print Report; Sixty percent of the stock of Y Corporation, (Y), is owned by Z Corporation, (Z). X Corporation, (X), proposes to acquire 100 percent of the stock of Y. &nb...

PFE Denied Over $8 Million In Refund Interest: May 22, 2017 - Bulletin Print Report; On September 11, 2009, Pfizer, Inc., ("PFE"), timely filed its 2008 income tax return. The tax return so filed showed what must be a record overpayment in the amount...

HRG/Spectrum--Downstream Merger Is The Best Outcome: May 22, 2017 - Bulletin Print Report; HRG Group, Inc., (HRG), owns approximately 60 percent of the stock of Spectrum Brands Holdings, Inc., (SPB). HRG, it seems safe to say, has a very large unrealized gain with re...

HUN's Reasons For "Changing Course" Become Apparent: May 22, 2017 - Bulletin Print Report; Huntsman Corporation, ("HUN"), was going to spin-off its pigments and additives business, to be operated by a new subsidiary named Venator Materials Corporation, in a...

Delayed Conversion Ratio Setting Not a Deemed Distribution of Stock: May 22, 2017 - Volume 11 Issue 97 Print Report; Company, (C), has two classes of stock outstanding. The first class is common stock which iswidely held and publicly traded on a national exchange. The second c...

Refund Claim Filed After Deadline Had Passed: May 19, 2017 - Volume 11 Issue 96 Print Report; Under Sec. 6511(a) of the Internal Revenue Code, a claim for a tax refund "shall be filed...within three years from the time the return was filed or two years from the tim...

TEGNA's Spin-Off Meets The Active Business Requirement: May 18, 2017 - Bulletin Print Report; TEGNA, Inc., the broadcasting giant, is spinning off the stock of its subsidiary, Cars.com. The spin-off is intended to be tax-free. Cars.com, of course, is a well-known "...

Usual or Customary Services: May 18, 2017 - Volume 11 Issue 95 Print Report; The university is exempt from federal income tax under Sec. 501(c)(3) and has been classified as an educational organization described in Sec. 170(b)(1)(A)(ii)....

No Real And Meaningful Likelihood Of Participating In Growth: May 17, 2017 - Volume 11 Issue 94 Print Report; P owns Sub 1. P acquired the stock of Sub 2. A few years later, P contributed the stock of Sub 2 to Sub 1 in exchange for shares of Sub 1 Class A stock, Class B stock, and Sub...

Huntsman Changes Course: May 16, 2017 - Bulletin Print Report; Huntsman Corporation, ("HUN"), was going to separate its pigments and additives business by means of a spin-off. In fact, it received an I.R.S. ruling concluding that...

Is ILG, Inc. Free To Engage In “Capital” Transactions: May 16, 2017 - Bulletin Print Report; ILG, Inc., (“ILG”), was incorporated in May 2008 in connection with a spin-off by its former owner, IAC. At that time, ILG became an independent pub...

YHOO's Unusual Repurchase Offer: May 16, 2017 - Bulletin Print Report; Once Yahoo!, Inc., ("YHOO"), completes the sale of its "core business" to Verizon, (the "Sale Transaction"), it will be classified as a "regi...

Change In Conversion Ratio Not A Deemed Distribution Of Stock: May 16, 2017 - Volume 11 Issue 93 Print Report; Company, (C), has outstanding "x" shares of common stock and "y" shares of preferred stock. The preferred stock pays a per share dividendsub...

Spin-Off "Trends": May 15, 2017 - Bulletin Print Report; There have been several recent developments in the world of spin-offs that bear watching. Not only has the I.R.S. issued several recent pronouncements regarding these transacti...

New York Resident Must Amortize Premium On "Foreign" Bonds: May 15, 2017 - Bulletin Print Report; Petitioner, a New York resident, purchased, at a premium, municipal bonds issued by a state other than New York. Petitioner does not buy or sell municipal bonds in a trade or b...

Modification of Options: May 15, 2017 - Volume 11 Issue 92 Print Report; On Date T, CA, a holding company completed the sale of "v" of its shares to the public for "$w" per share. The net cash proceeds of the sale were...

Verizon Will Pay Handsomely For Straight Path: May 12, 2017 - Bulletin Print Report; After reaching an agreement to be acquired by AT&T, Straight Path Communications, Inc., ("SP"), abruptly terminated that agreement and promptly entered into a muc...

Plan To Avoid Sec. 83 Was Unsuccessful: May 12, 2017 - Volume 11 Issue 91 Print Report; Through the "UMLIC" entities, petitioners acquired and serviced portfolios of distressed debt.... In December 1998, petitioners organized and elected 'S' corp...

Members Of PLLC Are Not "Limited Partners": May 11, 2017 - Volume 11 Issue 90 Print Report; C, B, and M are practicing attorneys in Mississippi. On July 12, 2001, they reorganized their law firm as a professional limited liability company, ("PLLC"). C, B, an...

I.R.S. Will Rule Again On "Leveraged" Spin-Offs: May 10, 2017 - Bulletin Print Report; Currently, the most popular variety of spin-off is the so-called "leveraged spin-off." In a leveraged spin-off, which is inevitably part of a 'D' reorganizati...

Redemption Did Not Precipitate Taxable Stock Dividend: May 10, 2017 - Volume 11 Issue 89 Print Report; C is a holding company whose subsidiaries are engaged in banking, leasing, and computer service. C's common stock is publicly held and traded over-the-counter.

Sinclair Stock Will Be Taxable To Tribune Media Shareholders: May 9, 2017 - Bulletin Print Report; Sinclair Broadcast Group, Inc., (SB), announced an agreement pursuant to which it will acquire 100 percent "of the shares" of Tribune Media Co., (TM). The trans...

Basis Cannot Arise Without An "Actual Economic Outlay": May 9, 2017 - Volume 11 Issue 88 Print Report; Olson & Associates of NW Florida, Inc., ("O")), was a Florida corporation organized in 2001 (and dissolved in 2011). Throughout its existence, O was an electing s...

Amounts Transferred To A "QSF" Are Deductible: May 8, 2017 - Bulletin Print Report; Parent, ("P"), designs, develops, manufactures, and markets...industrial products. P owns Sub 1. Sub 2 and Sub 3 are wholly-owned subsidiaries of Sub 1. Sub 4 is a wh...

YHOO's "Subpart F" Problem: May 8, 2017 - Bulletin Print Report; President Trump's tax plan calls for the institution of what is popularly known as a "territorial" tax system. Under such a taxation system, foreign earnings coul...

Redemption Not Inconsistent With a 'B' Reorganization: May 8, 2017 - Volume 11 Issue 87 Print Report; P is a State X corporation which is actively engaged in business. It is authorized to issue 400 shares of $100 par value Class A common stock, of which none is curren...

Step Transaction Doctrine Disregards Intermediate Steps: May 5, 2017 - Volume 11 Issue 86 Print Report; MP is a citizen and resident of Peru. On February 5, 1997, MP incorporated petitioner, (P), under the laws of Florida. VI, a corporation organized under the laws of P...

I.R.S. Addresses The Tax Treatment Of "Unconventional" Spin-Offs: May 4, 2017 - Bulletin Print Report; 1. P corporation, ("P"), owns all of the stock of D corporation, ("D"), which, in turn, owns all of the stock of C corporation, ("C"). The fair ma...

Not All Cash Purchases of Stock Taint a 'B' Reorganization: May 4, 2017 - Volume 11 Issue 85 Print Report; An individual owned 90 percent of the outstanding stock of X Corporation, (X). In June, 1968, he purchased, for cash, 50 percent of the outstanding stock of Y Corpora...

Using Appreciated Property As Merger Consideration: May 3, 2017 - Bulletin Print Report; An interesting deal is unfolding in Europe in connection with which some very well known companies will be solidifying their relationship. In particular, the Arnault Family Gro...

How Not To Conduct a Workout: May 3, 2017 - Volume 11 Issue 84 Print Report; In 1981, B was organized as a limited partnership. B acquired a parcel of land and constructed a 12-story office building on it. B borrowed $21,600,000 from IF, a ban...

Liquidation Of Phantom Stock Produced Capital Gains: May 2, 2017 - Volume 11 Issue 83 Print Report; HI-2, a partnership, was created to hold "phantom stock" in HOC. Phantom stock is not actual stock, but a form of deferred compensation that HOC gave to its employees...

ANGI To Undergo A Transformation: May 2, 2017 - Bulletin Print Report; IAC and Angie's List, (ANGI), announced an intricate transaction which will result in the combination of ANGI and IAC's "HomeAdvisor" unit "into a new pu...

Software Systems Designer Cannot Deduct "EMBA" Expenses: May 1, 2017 - Bulletin Print Report; Petitioner wife, ("PW"), has a bachelor of science degree in computer sciences from the University of Washington; and a master of sciences degree in computer engineer...

Online Travel Companies Best Chicago In Tax Battle: May 1, 2017 - Bulletin Print Report; The City of Chicago, (the "City"), enacted the "CHAT" ordinance in 1973, well before the invention of the Internet and the resulting appearance of online tr...

Modification of Terms of Installment Note Not a Disposition: May 1, 2017 - Volume 11 Issue 82 Print Report; In Year 1, Company, (C), completed a transaction ("the Original Transaction") in which: (i) C adopted an employee stock ownership plan, (ESOP); (ii) C facil...

Is CIT’s Stock Buyback A Partial Liquidation?: April 28, 2017 - Bulletin Print Report; CIT Group, Inc., (“CIT”), is flush with cash. As a result, it is offering to purchase shares of its common stock for cash, up to an aggregate purchase pri...

"Warranty Work" Subjects Foreign Corporation To State Taxation: April 28, 2017 - Volume 11 Issue 81 Print Report; Plaintiff, Cheng Shin Rubber USA, is a Georgia-based wholesale tire distributor that sells tires to Les Schwab, ("LS"), in Oregon. Plaintiff ships the tires from a po...

Observations On President Trump's Tax Reform Proposal: April 27, 2017 - Bulletin Print Report; To much fanfare, President Trump released, in very broad terms, his vision for reforming the U.S. tax system. The proposals incorporate many of the ideas he espoused on the cam...

Debenture Exchange Does Not Taint a 'B' Reorganization: April 27, 2017 - Volume 11 Issue 80 Print Report; X Corporation, (X), acquired all of the stock of Y Corporation, (Y), in exchange for voting stock of X. Prior to the exchange, Y had an issue of six percent, 10-year...

COST's Latest Special Dividend: April 26, 2017 - Bulletin Print Report; Costco Wholesale Corporation, ("COST"), announced that its Board of Directors, for the second time in the last 26 months, has declared a "special cash dividend&q...

New Jersey Uses The McKesson Decision To Its Advantage: April 26, 2017 - Volume 11 Issue 79 Print Report; "The Corporation" is a New Jersey corporation that, in 1997, elected to be taxed as an 'S' corporation. Until February 2010, Mr. P, a non-resident of the Gard...

BDX To Acquire BCR In A Fully Taxable Transaction: April 25, 2017 - Bulletin Print Report; Becton, Dickinson and Company, ("BDX"), and C.R. Bard, Inc., (BCR), have entered into a definitive agreement pursuant to which "BDX will acquire BCR for $317 per...

Incidental Future Benefit: April 25, 2017 - Volume 11 Issue 78 Print Report; TP is a railroad that transports coal throughout various central and southern states. In 1981, Competitor, (CO), joined with others to construct a pipeline thro...

Extension Of Settlement Date Of VPFC Not A Realization Event: April 24, 2017 - Bulletin Print Report; Respondent determined a deficiency in decedent's 2008 Federal income tax in the amount of $41,257,103. Decedent was the founder and CEO of Monster Worldwide, Inc., ("M...

"Percentage" Rents Are Not "Rents From Real Property": April 24, 2017 - Bulletin Print Report; Pursuant to a bankruptcy plan to be approved by the Bankruptcy Court, the taxpayer, ("TP"), will engage in a reorganization whereby one of its subsidiaries, Distribut...

Settlement of Nonrecourse Debt Produces Gain And COD Income: April 24, 2017 - Volume 11 Issue 77 Print Report; Mr. Y acquired eight rental real estate properties secured by nonrecourse mortgages held by X. X later became insolvent and its assets were taken over by Y1. Mr. Y had defaulte...

Not All Redemption Premiums Are "Deemed Distributions": April 21, 2017 - Volume 11 Issue 76 Print Report; Mr. A, Mr. B, and Mr. C owned all of the stock of T. T's sole asset was a contract to provide a fixed quantity of Product M to one customer at a fixed price. Ther...

Goldman Sachs Group Benefits From "Trump" Market: April 20, 2017 - Bulletin Print Report; While the first quarter earnings presented by Goldman Sachs Group, (GS), were, in many ways, disappointing to investors, the one area in which GS excelled was with respect to i...

Backup Generators Are "Real Property": April 20, 2017 - Volume 11 Issue 75 Print Report; The property at issue is backup power equipment situated on leased premises around Manhattan and emergency backup generators, each capable of generating between 400 a...

What Is a Principal Residence?: April 19, 2017 - Volume 11 Issue 74 Print Report; During 2000, husband, (H), moved into a St. Louis, (STL), residence owned by CB. On August 10, 2000, CB executed a quitclaim deed in favor of H and herself for the ST...

Payments To Asbestos Trust Fund Not Deductible: April 18, 2017 - Volume 11 Issue 73 Print Report; In its 2008 franchise tax reporting period...Owens Corning, ("OC"), made a one-time payment of $2,195,316,694 into an asbestos trust fund. It included the payment as...

Florida's Tax On Satellite Companies Is Not Unconstitutional: April 17, 2017 - Bulletin Print Report; Enacted in 2001 by the Florida Legislature, the Communications Service Tax, ("CST"), imposed a 6.8 tax rate on cable service and a 10.8 percent tax rate on satellite...

Swift/Knight--Reverse Acquisition?: April 17, 2017 - Bulletin Print Report; Swift Transportation Company, (STC), and Knight Transportation, Inc., (KTI), recently announced a business combination which will, in form, constitute an acquisition by STC of...

Applying the Origin of the Claim Doctrine: April 17, 2017 - Volume 11 Issue 72 Print Report; TP's stock is owned by P. TP is in the financial services business. One of the services TP provides is an escrow account....

Qualcomm To Refund Royalty Overpayments: April 13, 2017 - Bulletin Print Report; BlackBerry Limited, (BBRY), announced a "binding interim arbitration decision" awarding BBRY a staggering $814,868,350.00 in "royalty overpayments" made to...

"Bearer Share" Regulations Found To Be Valid: April 13, 2017 - Volume 11 Issue 71 Print Report; In the case of a foreign corporation, Sec. 887(a) of the Internal Revenue Code imposes for each taxable year a tax equal to four percent of the foreign corporation's U.S. s...

ELA Regulations Are Valid: April 12, 2017 - Volume 11 Issue 70 Print Report; On April 26, 1965, petitioner acquired all of W's outstanding stock for $5. As of that date, W changed its name to I. As of December 31, 1966, I owed petitioner $...

When To Measure The Debt/Equity Ratio: April 11, 2017 - Volume 11 Issue 69 Print Report; M Corporation, (M), owned 50 percent of the stock of N Corporation, (N). Unrelated foreignindividuals owned the remaining 50 percent. M sought to acquire the 50...

The Case For Choosing A Limited Liability Company Format: April 10, 2017 - Bulletin Print Report; Commerce Clearing House, ("CCH"), an important source of tax information, does a wonderful job of laying out the myriad considerations new business owners should take...

"Drop Down" Of Property To MLP Not A "Disguised Sale": April 10, 2017 - Bulletin Print Report; C is a joint venture among affiliates of X corporation and Y corporation that is currently engaged in "Business." C and its subsidiaries hold all of the general partn...

Acquiring Mutual Fund Acquires "Substantially All" of the Properties: April 10, 2017 - Volume 11 Issue 68 Print Report; The Trust is a State A business trust organized on Date 1 and registered as an open-end management investment company with the S.E.C. &nbs...

Programming Delivered Via Satellite Is Tangible Personal Property: April 7, 2017 - Volume 11 Issue 67 Print Report; Petitioner is an Iowa corporation engaged in publishing and television broadcasting. The portion of its "entire net income" allocated to New York was determ...

Investment Manager's Income Is Apportioned To Washington: April 6, 2017 - Bulletin Print Report; Taxpayer, ("TP"), is (vis a vis the state of Washington) an out-of-state company that provides investment advisory and management services. TP has but one customer, t...

Dividends Are Reported Only When Received: April 6, 2017 - Volume 11 Issue 66 Print Report; TP, a domestic corporation, owns shares in another corporation. Such other corporation declared a cashdividend payable on January 2, 1937 to shareholders of rec...

Withdrawals Constitute Deemed Distributions: April 5, 2017 - Volume 11 Issue 65 Print Report; X is a closely-held corporation with three equal shareholders, A, B, and C, who are physicians and employees of X. On August...

Liberty Interactive To "Split-Off" GCI Liberty Tax-Efficiently: April 4, 2017 - Bulletin Print Report; Liberty Interactive Corporation, ("LIC"), we had previously written, was going to face some challenges effecting tax-free spin-offs or split-offs, because the company...

Delaware Court Upholds ETE's Right To Terminate WMB Merger: April 4, 2017 - Volume 11 Issue 64 Print Report; This action arises from a well-known merger agreement (the Agreement), which was never consummated, under which ETE, a Delaware limited partnership, agreed to acquire the asset...

Cruise Ship Taxation Might Be Addressed As Part Of Tax Reform: April 4, 2017 - Bulletin Print Report; For as long as I can remember, the manner in which cruise ship operators are taxed has been a favorite topic of politicians and pundits criticizing the inequities in the U.S. t...

Not All Transaction Costs Are "Facilitative": April 3, 2017 - Bulletin Print Report; Taxpayer, ("TP"), is a holding company. Its subsidiaries include regulated C companies engaged in "D." In Year 1, TP and Company E, ("CE"), negoti...

"Holds Substantially All" (Part 2): April 3, 2017 - Volume 11 Issue 63 Print Report; T Corporation, (T), owned all of the stock of X Corporation, (X), Y Corporation, (Y), and W Corporation, (W). T formed a new corporation, P, and the latter formed a t...

Fees Paid To Department Of Energy Are Not "Decommissioning" Costs: March 31, 2017 - Volume 11 Issue 62 Print Report; Nextera Energy, Inc., (NEI), owns several Florida power companies. These companies operate nuclear power plants. Nuclear power plants utilize fuel in the form of rods of enrich...

Would G.M.'s "Dividend Stock" Be "Sec. 306" Stock?: March 31, 2017 - Bulletin Print Report; Greenlight Capital, (Greenlight), has, to much fanfare, proposed that General Motors, (GM), should distribute "a second class of common stock," what Greenlight refers...

FASB Alters Accounting For Callable Debt Securities: March 31, 2017 - Bulletin Print Report; The Financial Accounting Standards Board, ("FASB"), has altered the manner in which one accounts for the premium at which callable debt securities are purchased. It d...

Virginia Couple Denied FTHBC: March 30, 2017 - Volume 11 Issue 61 Print Report; On October 31, 2003, WC purchased certain property ("Vp") on VC in Dumfries, Virginia, ("D"), moved into the house ("Vh") on that proper...

Court Finds Intragroup Royalty Payments Are Deductible: March 29, 2017 - Volume 11 Issue 60 Print Report; See's Candies, Inc., ("S"), is a California corporation selling candy in Utah. It has had a physical presence in Utah through its stores. It also sells candy by c...

Remedy Of "Reformation" Is Hard To Come By: March 29, 2017 - Bulletin Print Report; In a recent case, the judge was decidedly unsympathetic to the entreaties of taxpayers who asked the court to ignore the form of their transactions that (i) they had agreed to,...

Neighborhood Land Rule Protects Church From UBTI: March 28, 2017 - Volume 11 Issue 59 Print Report; Y was incorporated as a church. Y purchased three parcels of land. The properties are contiguous to Y's current location....

Amazon.com Scores Major "Transfer Pricing" Victory In Tax Court: March 27, 2017 - Bulletin Print Report; The Internal Revenue Service determined deficiencies in Amazon.com's ("ACI") Federal income taxes of $8,380,790 and $225,653,149 for 2005 and 2006, respectively....

A YHOO "Liquidation" Is Not In The Cards: March 27, 2017 - Bulletin Print Report; Now that the sale of Yahoo! Inc.'s "core" business is nearing completion, attention is once again focused on the company's "investment" assets and t...

Summer Employees Not "Away From Home": March 27, 2017 - Volume 11 Issue 58 Print Report; The Summer Work Travel Program, ("SWTP"), is administered by the U.S. Department of State. RL was a citizen of Finland. He entered the U.S. on May 21, 2012, and depar...

Producer of "Blister Packs" Is Engaged In "MPGE": March 24, 2017 - Volume 11 Issue 57 Print Report; TP is a provider of pharmaceutical products for senior citizens in healthcare facilities. The medications at issue are those provided in "blister packs."

YHOO's Proxy Materials Shed Little Light On The $15 Billion Tax Question: March 23, 2017 - Bulletin Print Report; Yahoo's recently filed proxy materials provide an update on the company's progress in divesting its business operations and on the nature and scope of the company's...

Corporation Without Employees Is "Active": March 23, 2017 - Volume 11 Issue 56 Print Report; The stock of P is owned by four individuals. For over five years, P has owned all of the stock of X and Y. P is a pureholding company. X has been engaged in the...

"Blank Check" Company To "Invert": March 22, 2017 - Bulletin Print Report; The parent company of Cision, and another corporation, Capital Acquisition Corp. III, ("CLAC"), recently announced the execution of a definitive agreement "in wh...

Public Law 86-272 Narrowly Construed in Illinois: March 22, 2017 - Volume 11 Issue 55 Print Report; Client, (C), is a C Corporation that is incorporated in the state of Connecticut. C is a managing general underwriter, specializing in the marketing, underwriting, pr...

Deutsche Bank's Rights Offering: March 21, 2017 - Bulletin Print Report; Deutsche Bank A.G., ("DB"), is planning an unusual rights offering which will, it hopes, raise approximately 8 billion euros to shore up its capital base. The offerin...

"Solely" Leaves No Leeway: March 21, 2017 - Volume 11 Issue 54 Print Report; R, an individual, is the sole proprietor of each ofIG and RD. R's home consists of 7,272 square feet of living space, which includes the garage. R's two...

Passive Income "Inclusions" Constitute Qualifying REIT Income: March 20, 2017 - Volume 11 Issue 53 Print Report; TP is a real estate investment trust, (REIT). TP owns stock of several foreign subsidiaries that are classified as associations and for which elections have been made...

Donnelley To "Monetize" LKSD Stock: March 17, 2017 - Bulletin Print Report; In October 2016, R.R. Donnelley & Sons Company & Subsidiaries, ("RRD"), distributed, in a tax-free transaction, 80.75 percent of the stock of its subsidiaries...

When Is Property "Condemned": March 17, 2017 - Volume 11 Issue 52 Print Report; TP owns and manages rental properties, consisting of trailers, cabins, cottages, and rooming houses. Due to local slum cleara...

Bonuses Deductible Only In Year Paid: March 16, 2017 - Volume 11 Issue 51 Print Report; TP pays bonuses to its eligible employees under its incentive compensation plan ("ICP"). The aggregate amount of bonuses accrued for book purposes is finali...

Actelion's Spin-Off Is Definitively Taxable: March 15, 2017 - Bulletin Print Report; Information released by Actelion in advance of its general shareholders' meeting establishes, conclusively, that the "demerger" to be undertaken in connection wit...

Prepaid Bonus Deductible in Year Paid: March 15, 2017 - Volume 11 Issue 50 Print Report; W, an individual, failed to report his income from BFC, an 'S' corporation, consistent with the Form K-1 that BFC prepared for him. W calculated his share of...

Intel/Mobileye--Israeli Withholding Tax: March 14, 2017 - Bulletin Print Report; A subsidiary of Intel Corporation, (INTC), will commence a tender offer to acquire all of the issued and outstanding shares of Mobileye N.V., (MBLY) for $63.54 in cash. Will tax...

"SILO" Assets Excluded From N.J. Property Fraction: March 14, 2017 - Volume 11 Issue 49 Print Report; Plaintiff is a wholly-owned, indirect subsidiary of Altria Group, Inc., ("MO"). Plaintiff is organized under the laws of Delaware and has its principal place of...

FFH Will Deliver Sufficient Stock For A Reorganization: March 14, 2017 - Bulletin Print Report; It had been unclear whether the acquisition by Fairfax Financial Holdings Limited, ("FFH"), of Allied World Assurance Company Holdings, AG, ("AWH"), would q...

FASB Changes The Reporting Of Pension Cost: March 13, 2017 - Bulletin Print Report; The Financial Accounting Standards Board, ("FASB"), has decided that the financial statement reporting of "net periodic pension cost" is due for an overhaul...

Health Care Reform Also Has Tax Implications: March 13, 2017 - Bulletin Print Report; The legislation designed to "Repeal and Replace The Patient Protection and Affordable Care Act" contains numerous tax provisions. Some of the most unpopular tax levie...

Is Stock Sale Gain Passive Income?: March 13, 2017 - Volume 11 Issue 48 Print Report; A, a U.S. corporation, is a wholly-owned, indirect subsidiary of B, a publicly traded Country M corporation that is the common parent of a global group of companies e...

HUN's Spin-Off Features A "High Vote/Low Vote" Format: March 10, 2017 - Bulletin Print Report; Huntsman Corporation, (HUN), is in the final stages of effecting a spin-off of its pigments and additives business. A new corporation, Venator Materials Corporation, (VMC), has...

Integrating a Redemption and Share Issuance: March 10, 2017 - Volume 11 Issue 47 Print Report; NL, Inc., (NL), was organized and incorporated in Delaware in 1938. 500 shares were authorized of which 100 were issued and outstanding. The petitioner, (N), owned 48...

MCK Eyes A "Reverse Morris Trust" Transaction: March 9, 2017 - Bulletin Print Report; McKesson Corporation, ("MCK") and Change Healthcare Holdings, Inc., ("CHC"), recently announced their intention to form a joint venture, which will be treat...

When Is Property Involuntarily Converted?: March 9, 2017 - Volume 11 Issue 46 Print Report; A domestic corporation owned 100 shares of stock in a foreign corporation. In the current year, two subscription rights were awarded with respect to each share in the...

Executing a Contract to Purchase Is Not a Purchase: March 8, 2017 - Volume 11 Issue 45 Print Report; FH and DD were organized for the purpose of constructing and operating rental housing projects. They leased a tract of land on which they constructed residential unit...

South Dakota Circuit Court Rejects The Notion Of "Economic Nexus": March 7, 2017 - Bulletin Print Report; The South Dakota legislature recently enacted, and the Governor signed into law, a bill that would impose sales tax collection obligations on certain purveyors of goods and ser...

Redeemed Shareholder Found to Acquire a Prohibited Interest: March 7, 2017 - Volume 11 Issue 44 Print Report; In Rev. Rul. 72-380, 1972-2 C.B. 201, two brothers and their father owned all of the stock of X Corporation, (X). In 1966, X...

Payment Of Irish "Wealth" Tax Does Not Create "Resident" Status: March 6, 2017 - Bulletin Print Report; Mr. John P. McManus, ("M"), filed a refund claim with the I.R.S. His refund claim arises in connection with a three-day backgammon match that took place in the U.S. F...

Will Morgan Stanley's Payments Run Afoul Of Old Colony Trust?: March 6, 2017 - Bulletin Print Report; It was widely reported last week that, due to "operational issues" the firm has identified, Morgan Stanley conveyed to several million of its clients "incorrect&...

Who Can Replace Converted Property - The Sequel: March 6, 2017 - Volume 11 Issue 43 Print Report; The deceased and his wife owned undivided 1/2 interests as tenants in common in certain improved real property ("the CS property"). The CS property was leas...

Medical Expense Deduction Allowed For "Alternative Medical Treatment": March 3, 2017 - Bulletin Print Report; The issue is whether petitioner, ("P"), is entitled to deduct, as medical expenses, amounts paid for treatment not routinely or universally recognized. P suffers from...

Fiduciary Can File "Triple-Eye" Agreement: March 3, 2017 - Volume 11 Issue 42 Print Report; X Corporation, (X), has outstanding a single class of commonstock, 1/2 of which was owned by a father and the other 1/2 of which was owned by his son. Under the...

Perrigo Will "Monetize" A Royalty Stream: March 2, 2017 - Volume 11 Issue 41 Print Report; Perrigo Company plc, ("PRGO"), an "inverted" entity, has signed a definitive agreement to divest its rights to the "royalty stream" for the global...

Warren Buffett Loves Dividends: March 1, 2017 - Bulletin Print Report; This year's eagerly awaited version of the "Warren Buffett letter" contained, surprisingly, an excellent tutorial on the taxation of intercorporate dividends, and...

Stock Of Investment Adviser Is Worthless: March 1, 2017 - Volume 11 Issue 40 Print Report; TP was incorporated in Year 1 and is a wholly owned subsidiary of P1, itself a wholly owned subsidiary of P2. In Year 2, TP acquired 100 percent of the issued and outstanding e...

Random House Is A Manufacturing Corporation: February 28, 2017 - Volume 11 Issue 39 Print Report; Random House, (RH), and its publishing groups published works of fiction and non-fiction in various formats. During the years at issue, sales of printed books account...

DGI And MDA To Engage In A "Cross-Border" Business Combination: February 27, 2017 - Bulletin Print Report; MacDonald, Dettwiler and Associates, Ltd., (MDA), a Canadian corporation, and DigitalGlobe, Inc., (DGI), a domestic corporation, have entered into a definitive merger agreement...

When Does Accrual Cease?: February 27, 2017 - Volume 11 Issue 38 Print Report; M, a domestic corporation, uses the accrual method of accounting. M made a secured loan to A in 1975. During 1975 and through...

Reorganizations That Are Part of a Larger Sec. 351 Transaction: February 24, 2017 - Volume 11 Issue 37 Print Report; On Date 1, Corporation B, (CB), incorporated Corporation A, (CA). CB agreed that, until CB contributed assets to CA, CA would remain a "shell" corporation w...

M.B.A. Expense Primer: February 23, 2017 - Bulletin Print Report; Education expenses are deductible (as miscellaneous itemized deductions in the case of an employee) if the general requirements of Sec. 162 of the Code, and the speci...

The Alter Ego Doctrine: February 23, 2017 - Volume 11 Issue 36 Print Report; W was the sole shareholder of WC. W also operated a soleproprietorship. During the taxable years 1974-1976, the corporation incurred $114,472.91 in federal tax...

B. Riley Financial, Inc. Will Acquire FBR & Co.: February 22, 2017 - Bulletin Print Report; B. Riley Financial, Inc., (BRF), recently signed a "stock for stock merger agreement" to acquire FBR & Co., (FBR)...in "a transaction valued at $160.1 millio...

Guaranteed Payments Attract Self-Employment Tax: February 22, 2017 - Volume 11 Issue 35 Print Report; In September, 1999, petitioners, husband, (H), and wife, (W), and HB formed a California limited liability company named I. I is a medical technology company that pro...

REIT Dividend Eligible For The Dividends Received Deduction: February 21, 2017 - Volume 11 Issue 34 Print Report; For the tax years ended December 31, 1999 through February 10, 2006, the taxpayer, ("TP"), was an Alabama banking corporation known as "SB." Effective as of...

Sixth Circuit Endorses Roth IRA/DISC Strategy: February 21, 2017 - Bulletin Print Report; Summa Holdings, Inc., ("SH"), is the parent corporation of a group of companies that manufacture a variety of industrial products. JBJ, an individual, owned 23.18 per...

"IVF" Expenses Not Deductible: February 17, 2017 - Volume 11 Issue 33 Print Report; Plaintiff, ("P"), is a homosexual male. P and his partner decided to attempt to have a child through an in vitro fertilization, ("IVF"),...

SoftBank Stakes Its Claim: February 16, 2017 - Bulletin Print Report; As is by now well-known, SoftBank Group Corp., ("SB"), and Fortress Investment Group LLC, ("FIG") have entered into a definitive merger agreement pursuant t...

Partnership Assets Cannot Be Attached: February 16, 2017 - Volume 11 Issue 32 Print Report; Following service of a notice of levy on a bank covering unpaid income tax due from a taxpayer, it was discovered that the bank was not in possession of any property,...

Arconic "Monetizes" Large Portion Of Alcoa Stake: February 15, 2017 - Bulletin Print Report; Arconic, Inc., (ARNC), in connection with its spin-off of the company now known as Alcoa Corporation, did not engage in a total separation but, instead, retained some 19.9 perc...

Man's Best Friend: Movement Of Dog Establishes Change Of Domicile: February 15, 2017 - Volume 11 Issue 31 Print Report; Petitioner, ("P"), filed Form IT-203 (New York State Nonresident and Part-Year Resident Income Tax Return) for each of the years 2009 and 2010. The Division of Taxati...

Tax Issues Surrounding An Investment In "PFICs": February 14, 2017 - Bulletin Print Report; In this week's edition of Barron's, the estimable Andrew Bary authored an article in which the merits of investing with the likes of Bill Ackman and Dan Loeb was discus...

Stock Not Subject To A "Substantial Risk Of Forfeiture": February 14, 2017 - Volume 11 Issue 30 Print Report; In March 2002, H, an individual, formed THI. THI was an 'S' corporation. On December 6, 2002, H filed articles of amendment changing the name of the corporation to DTRI...

"Expansion" Business Deemed Conducted For Five Years: February 13, 2017 - Bulletin Print Report; D is engaged in Business X that includes Segment A and Segment B. Each of Segment A and Segment B is engaged in Operation A and Operation B. D wholly owns DO. DO wholly owns DU...

Towers And Cables Are "Like Kind" Property: February 13, 2017 - Bulletin Print Report; Taxpayer, ("TP") is a communications services provider.... TP owns fee simple or long-term leasehold interests in multiple wireless communications tower sites across...

Sec. 212 Is a Remedial Section: February 13, 2017 - Volume 11 Issue 29 Print Report; The taxpayer, (JS), purchased 4,000 shares of Montgomery Ward & Co., (MW), stock in 1954 and 1955 at a total cost of $296,870.20. &nbs...

Interest In Pension Plan Not An "Asset" For Insolvency Purposes: February 10, 2017 - Bulletin Print Report; This case involves the tax treatment of a canceled debt. Sec. 61(a)(12) of the Internal Revenue Code defines "gross income" to include income from cancellation of deb...

Genentech Is A "Manufacturing Corporation": February 10, 2017 - Volume 11 Issue 28 Print Report; Genentech, Inc., ("G"), is a Delaware corporation with a principal place of business in California. G earns business income in the Commonwealth of Massachusetts. G is...

Fee and Expense Allocations Do Not Produce "Preferential Dividends": February 9, 2017 - Volume 11 Issue 27 Print Report; TP elected to be taxed as a real estate investment trust (REIT) for its taxable year ended Date 1. Previously, shares of a single class of common stock of TP were iss...

How Will PFE Fare Under Tax Reform?: February 8, 2017 - Bulletin Print Report; Pfizer, Inc., (“PFE”), in 2015, generated approximately $21.7 billion in “U.S. Revenue” and approximately $27.1 billion in “Internationa...

Intangible Property Did Not Have a "Business Situs" in Alabama: February 8, 2017 - Volume 11 Issue 26 Print Report; Mr. G, (G), was a resident of Florida. On March 17, 1997, O, an 'S' corporation, sold its assets to AARC, a Florida corporation and an affiliate of JFF, an Al...

A Non-Resident's Stock Option Income Is Taxed in New York: February 7, 2017 - Volume 11 Issue 25 Print Report; Petitioner was a resident of Connecticut. Petitioner was employed by American Airlines, Inc., (AA), for many years until his retirement on April 30, 2005. While so em...

The Gap, Inc. — A “Victim” Of Tax Reform?: February 6, 2017 - Bulletin Print Report; It is by now well-known that the centerpiece of the House Republicans’ vision for tax reform is the replacement of our current, income based, approach to taxati...

Altria Group's Relationship With AB InBev Clarified: February 6, 2017 - Bulletin Print Report; Altria Group, Inc., ("MO"), at one time, owned 430 million shares of SAB Miller, an approximate 27 percent stake therein. At that level of ownership, there was no que...

Chronological Order Controls In Allocation of Accumulated E&P: February 6, 2017 - Volume 11 Issue 24 Print Report; Corporation, (C), has outstanding three classes of preferred stock and one class of common stock. The classes of preferred stock are: First Preferred Series, Other Pr...

OKE Eyes A Basis Step-Up: February 3, 2017 - Bulletin Print Report; ONEOK, Inc., (OKE), and ONEOK Partners, L.P., (OKS), have reached a definitive agreement which envisions the "roll-up" of OKS, thus terminating its existence as a pub...

Taxpayer's Driver's License Made Him a Resident of Virginia: February 3, 2017 - Volume 11 Issue 23 Print Report; Two classes of residents, a domiciliary resident and an actual resident, are set forth in Virginia Code Sec. 58.1-302. The do...

Johnson & Johnson/Actelion Update: February 2, 2017 - Bulletin Print Report; We have been fielding quite a few questions regarding how an Actelion shareholder will be taxed on his or her receipt of the package of consideration being offered (b...

LLC's Activities Not Imputed To Member Thereof: February 2, 2017 - Volume 11 Issue 22 Print Report; California's franchise tax is imposed on every corporation that is "doing business" within California.... The phrase, doing business, means "actively engaged...

Suit To Enjoin JCI/TYC Merger Fails: February 1, 2017 - Bulletin Print Report; In January 2016, Johnson Controls, ("JC"), announced that it was going to merge with an Irish company named Tyco, ("TYC"). The merger t...

Parent Denied Worthless Stock Deduction: February 1, 2017 - Volume 11 Issue 21 Print Report; P is the common parent of a consolidated group that owns Asset 1 (basis $10, value $10) and all the stock of S1 (basis $5, value $5). &nbs...

Tesco And Booker Group To Effect A "Scheme Of Arrangement": January 31, 2017 - Bulletin Print Report; The boards of each of Tesco PLC, ("T"), and Booker Group plc, ("BG"), have reached an agreement on the terms of a recommended "share and cash merger.&q...

What Is LQ Up To?: January 31, 2017 - Bulletin Print Report; Recently, La Quinta Holdings, Inc., ("LQ"), announced plans "to propose the separation of LQ's real estate business from its franchise and management busines...

Does Basis Disappear In a Dividend Equivalent Redemption?: January 31, 2017 - Volume 11 Issue 20 Print Report; C is a domestic corporation engaged in manufacturing. C has one class of voting stock outstanding of which approximately 36.7 percent is held directly and constructiv...

Goodwill Impairment Test Is Simplified: January 30, 2017 - Bulletin Print Report; The Financial Accounting Standards Board, ("FASB"), has taken additional steps to simplify the procedures for determining whether, and the extent to which, an entity&...

Distributing More Than "Net Contraction Proceeds": January 30, 2017 - Volume 11 Issue 19 Print Report; X is a corporation principally engaged in the service station business in two different localities: the "d" locality and the "e" locality. X also...

Rents and Royalties Not "Passive" Income: January 27, 2017 - Volume 11 Issue 18 Print Report; D is a second-tier subsidiary within an affiliated group that files a consolidated tax return. P, the common parent of the group, is a holding company. &nbs...

JNJ To Acquire ATLN: January 26, 2017 - Bulletin Print Report; Johnson & Johnson, ("JNJ"), and Actelion Ltd., ("ATLN"), have entered into a definitive agreement pursuant to which JNJ "will launch an all-cash te...

'S' Corporation Dividends Constitute Nonbusiness Income: January 26, 2017 - Volume 11 Issue 17 Print Report; One of the more complicated determinations the tax code demands is the proper classification of distributions made by electing small business corporations, i.e., 'S' co...

SXCP Faces An Uncertain Future: January 25, 2017 - Bulletin Print Report; SunCoke Energy Partners, L.P., (SXCP), has been a master limited partnership, (MLP), and, accordingly, its taxable income has not been subjected to entity level taxation. Inste...

"Economic Presence" Alone Justifies Imposition Of Tax: January 25, 2017 - Volume 11 Issue 16 Print Report; Capital One Financial Corporation ("COFC") and its subsidiaries were incorporated, headquartered and domiciled outside of Oregon. One of COFC's subsidiaries, Capi...

Attempt To Assign Income To A Corporation Fails Miserably: January 24, 2017 - Volume 11 Issue 15 Print Report; Petitioner, ("P"), is a financial consultant developing investment portfolios for clients. P started his career with Waddell & Reed, Inc. The clients of Waddell &...

How To "Shift" Debt In A Spin-Off: January 23, 2017 - Bulletin Print Report; Over the last few years, one of the most common characteristics of spin-offs has been the wholesale "shifting" of debt from the distributing corporation to the distri...

I.R.S. Finalizes Regulations Regarding An MLP's "Qualifying Income": January 23, 2017 - Volume 11 Issue 14 Print Report; In what may be the last set of regulations we may see for quite some time, the I.R.S. finalized regulations addressing the question of when the income earned by a publicly trad...

Excise Tax or Non-Pecuniary Loss Penalty?: January 20, 2017 - Volume 11 Issue 13 Print Report; In 1989, JS Corporation, (JS), separated its pension plan into two separate plans: one for retired employees and one for active employees. JS then liquidated the reti...

Preliminary Purchase Of Active Business Does Not Spoil Spin-Off: January 19, 2017 - Volume 11 Issue 12 Print Report; Distributing, ("D"), is a State A corporation, the stock of which is both publicly traded and widely held. D owns 100 percent of the stock of Sub 1. Sub 1 conducts Bu...

I.R.S. Shortens A Converted REIT's "Recognition Period": January 18, 2017 - Bulletin Print Report; In order to shore up the repeal of the General Utilities doctrine, in the The Tax Reform Act of 1986, Congress enacted certain rules that subject an 'S' corporation, as...

Tax Consequences Of Reynolds American And Clayton Williams Deals: January 18, 2017 - Bulletin Print Report; On January 17th, two business combinations were announced. One involves the acquisition by British American Tobacco, p.l.c., (BATS), of the stock of Reynolds American, Inc., (R...

Community Activist Cannot Deduct Legal Fees: January 18, 2017 - Volume 11 Issue 11 Print Report; GF or petitioner was an adjunct professor of English at both Barnard College and Columbia University. Petitioner filed a New York State resident income tax return for 2009 wher...

IEG Seeks To Play David To One Main's Goliath: January 17, 2017 - Bulletin Print Report; In one of the stranger transactions we have encountered, IEG Holdings Corporation, ("IEG"), is attempting to acquire a company substantially larger than itself. In pa...

Sale Of "Spectrum" Constitutes An "Involuntary Conversion": January 17, 2017 - Bulletin Print Report; Taxpayer, ("TP"), owns and operates a television station...that operates in the "upper 600 MHz band." TP's station operates pursuant to licenses and per...

Involuntary Sales Are Covered By Sec. 267: January 17, 2017 - Volume 11 Issue 10 Print Report; On August 2, 1960, a "notice of levy" was served on JM, an individual, for the purpose of seizing and selling his shares of NW, Inc., (NW),stock and a...

Video Game Producer Is an "Eligible Production Company": January 13, 2017 - Volume 11 Issue 9 Print Report; Plaintiff was created for the sole purpose of producing a "Man vs. Wild" video game based on the Discovery Channel's "Man vs. Wild" television...

FASB Proposes Changes To Classification Of Indebtedness: January 12, 2017 - Bulletin Print Report; The Financial Accounting Standards Board, ("FASB"), as part of its wide-ranging simplification initiative, has now tackled the issue of how indebtedness should be cla...

Stanley Black & Decker To Purchase Assets: January 12, 2017 - Bulletin Print Report; At the risk of oversimplification, there are, essentially, two ways to acquire a "business;" (i) a purchase of the assets of the business, or (ii) a purchase of the s...

Foreign Taxes Imposed on Exempt Income Are Creditable: January 12, 2017 - Volume 11 Issue 8 Print Report; P is a U.S. corporation. S is a German limited liability company. P owns all of S's stock. S's capital was increased; a portion of the increase represented a...

SCAI Will Be Acquired By UNH In A "Reorganization": January 11, 2017 - Bulletin Print Report; UnitedHealth Group, Inc., ("UNH"), and Surgical Care Affiliates, Inc., ("SCAI"), have announced a plan and agreement which envisions a tender offer on the p...

Crossing the "Super-Control" Line: January 11, 2017 - Volume 11 Issue 7 Print Report; X has outstanding one class of stock consisting of 1,000 shares of voting common stock. A owned 900 shares and B owned the remaining 100 shares. ...

"Correcting" a Prohibited Transaction: January 10, 2017 - Volume 11 Issue 6 Print Report; On May 20, 1981, the Zs, husband and wife, incorporated their farming operation under the name of ZFI ("the Corporation"). Each received 670 shares of stock...

FASB Clarifies The Definition Of A "Business": January 9, 2017 - Bulletin Print Report; The Financial Accounting Standards Board, ("FASB"), recently issued Accounting Standards Update, ("ASU"), No. 217-01, entitled "Clarifying the Definiti...

A Tax Benefit Provision is Not a Contract or Agreement: January 9, 2017 - Volume 11 Issue 5 Print Report; Plaintiff seeks to rescind its participation in New York City's "J-51" tax incentives program following the Court of Appeals decision in Roberts v....

New York REIT Will Liquidate: January 6, 2017 - Bulletin Print Report; Since the repeal of the "General Utilities" doctrine (the 30th anniversary of which occurred last October), a corporate liquidation has been an expensive proposition....

Plan's Loan to Partnership is a Prohibited Transaction: January 6, 2017 - Volume 11 Issue 4 Print Report; LVD and FJD are married. LVD is a general partner and owner of a 1/3 interest in the capital and profits of FJDMAS, a Maryland general partnership. FJD is likewise a...

Connecticut Properly Taxed Option Income Of A Non-Resident: January 5, 2017 - Volume 11 Issue 3 Print Report; From 1990 to 2001, JA served as president and chief financial officer of Tosco, Inc., ("T"). During that period, JA was domiciled in and performed services solely wit...

M.B.A. Merely "Refined" Existing Skills: January 4, 2017 - Volume 11 Issue 2 Print Report; Petitioner, (P), holds a B.S. degree in electrical engineering from CT; and an M.S. degree in electrical engineering from UI. From March 2005 to May 2011, P worked for BC. BC i...

Lack Of Liquidity Does Not Bar Accumulated Earnings Tax: January 3, 2017 - Bulletin Print Report; Taxpayer, ("TP"), was incorporated by Shareholder, ("SH"). SH transferred to TP his entire interest in several partnerships, PS 1 through 8. TP duly reporte...

Retained Stock Used To Defray Debt Tax-Efficiently: January 3, 2017 - Volume 11 Issue 1 Print Report; D is a State A corporation the stock of which is publicly traded and widely held. The D Worldwide Group conducts Business B and Business C. D has decided to separate Business C...

Capitalizing Interest Costs: December 30, 2016 - Volume 10 Issue 250 Print Report; Under certain conditions, for financial accounting purposes, interest is capitalized as part of the acquisitioncost of an asset. Capitalization of interest is r...

QCOM Incurs What Appears To Be A Non-Deductible "Fine": December 29, 2016 - Bulletin Print Report; Qualcomm Incorporated, ("QCOM"), announced that the Korea Fair Trade Commission, (the Commission), has reached a decision in its investigation of the company. The Com...

"Allocated" Income Is An "Amount Received": December 29, 2016 - Volume 10 Issue 249 Print Report; During 1990, the petitioner, (C), a Mexican corporation, rented a fleet of tractors and trailers to another Mexican corporation, H. H did not pay rent for the use of...

Investment Bank Is Bona Fide Creditor of Distributing Corporation: December 28, 2016 - Volume 10 Issue 248 Print Report; D is directly and indirectly engaged in Business A, Business B, and Business C through its domestic and foreign subsidiaries. D will engage in certain internal restructurings....

Are The Liberty Companies Capable Of Effecting Spin-Offs?: December 27, 2016 - Bulletin Print Report; Through the years, the various and sundry Liberty companies have consistently engaged in separation transactions in which the stock of "mature" subsidiaries of the co...

REIT's Sec. 481(a) Adjustments Do Not Constitute "Gross Income": December 27, 2016 - Bulletin Print Report; Taxpayer, ("TP"), is a real estate investment trust, ("REIT"). In Month 1 of Year 1, TP acquired the stock of an affiliated group that files a consolidated...

Debentures Issued in LBO Treated as Indebtedness: December 27, 2016 - Volume 10 Issue 247 Print Report; The company is a bank holding company which was formed in 1979. The primarypurpose for itsformation was to purchase a controlling interest in a bank....

Taxpayer Failed to Change His "Domicile": December 23, 2016 - Volume 10 Issue 246 Print Report; Mr. Gorski, (G), moved to Oregon in 1991. G worked as an "on-demand" airline pilot from 2004-2007. G became unemployed in 2004. He moved to Texas in March,...

Merger Termination Fee Ruled To Be Apportionable Business Income: December 22, 2016 - Volume 10 Issue 245 Print Report; The state of California imposes a franchise tax on multistate corporations doing business within the state on the corporation's net income derived from...California employi...

Linde And Praxair Are Planning A "Merger Of Equals": December 22, 2016 - Bulletin Print Report; Linde A.G., (L), and Praxair, Inc., (P), have announced that "the companies intend to combine in a merger of equals under a new holding company through an all-stock transa...

Is TRCO's "Special Dividend" A Distribution In "Partial Liquidation?": December 21, 2016 - Bulletin Print Report; Tribune Media Company, (TRCO), recently announced that "it has agreed to sell substantially all of its Digital and Data business (D and D business) operations...to the Nie...

Tax Status Of Fairfax/Allied World Deal Uncertain: December 21, 2016 - Bulletin Print Report; Fairfax Financial Holdings Limited, (FF), and Allied World Assurance Co. Holdings, A.G., (AW), each a foreign corporation, have entered into a definitive merger agreement. ...

Gamblers and Sec. 212: December 21, 2016 - Volume 10 Issue 244 Print Report; Since his graduation from college in 1957, petitioner's principal occupation has been that of an electrical engineer. Dur...

"Self-Inverter" Remains A Domestic Corporation: December 20, 2016 - Bulletin Print Report; Very few rulings have been issued interpreting the provisions of Sec. 7874, the Code section that addresses "inversion" transactions. A recent Chief Counsel Advice Me...

Debt Issuance Costs Not Deductible Upon Conversion Into Equity: December 20, 2016 - Bulletin Print Report; In Year 1, TP issued convertible debentures due in Year 2, (Debentures). At issuance, TP incurred debt issuance costs which it duly capitalized and amortized over the term of t...

Determining E&P For Purposes of the REIT "Purge" Rule: December 20, 2016 - Volume 10 Issue 243 Print Report; TP is a C corporation. TP is a real estate finance corporation. TP also conducts an investment management business through S. S intends to be treated as a taxable REI...

Internal "TLAC" Will Be "Respected" As Indebtedness: December 19, 2016 - Bulletin Print Report; The current framework for bank capital is commonly known as "Basel III." In addition to the enhanced capital required by Basel III, regulators have sought to minimize...

Will Gilead Get To Deduct Its Patent Infringement Judgment?: December 19, 2016 - Bulletin Print Report; Gilead Sciences, Inc., (G), was instructed by a federal jury to pay $2.54 billion to Merck & Co., (M), for using a patented invention as the basis for its drugs for hepatit...

Can Timber Cutting Rights Be Exchanged Tax-Free?: December 19, 2016 - Volume 10 Issue 242 Print Report; TPs agreed to exchange standing timber owned by them for three tracts of timberland to be acquired from AC. On or about June...

Basis Recovery In a Contingent Payment Installment Sale: December 16, 2016 - Volume 10 Issue 241 Print Report; TP is an 'S' corporation. TP entered into an asset purchase agreement, (APA), that was structured as an installment sale. The agreement provided that, in exch...

Dell Stock Repurchase: December 15, 2016 - Bulletin Print Report; Many investors have been patiently waiting for Dell Technologies, Inc., (DTI), (formerly known as "Denali") to take steps to "capture" the discount at which...

Senior Living Facilities Are Qualified Health Care Properties: December 15, 2016 - Volume 10 Issue 240 Print Report; Taxpayer, ("TP") is a real estate investment trust, ("REIT"). TP has recently acquired two "senior housing communities," the "Properties.&quo...

Gain Can Sometimes Be Deferred Through Reinvestment: December 14, 2016 - Bulletin Print Report; Sec. 1001(a) of the Internal Revenue Code provides that "the gain from the sale or other disposition of property shall be the excess of the amount realized over the adjust...

N.J. Taxpayer Denied Capital Gain Exclusion: December 14, 2016 - Volume 10 Issue 239 Print Report; Plaintiff owned 16,970 shares of common stock in VR. In June, 2008, Plaintiff sold the shares to AI. Plaintiff filed a federal income tax return for 2008 reporting th...

Death Is Not A "Fundamentally Inconsistent Event": December 13, 2016 - Volume 10 Issue 238 Print Report; JB married SB on October 7, 1977. Until his death, SB was a farmer who conducted his farming business as a sole proprietor. SB passed away on March 13, 2011. SB incurred certai...

Overview Of Tax Reform Proposals: December 12, 2016 - Bulletin Print Report; Individual Proposals Under current law, there are no fewer than seven different regular tax brackets with a top tax rate of 39.6 percent. The House Republican Tax Pla...

Liquidation Conclusively Fixes Worthless Stock Loss: December 12, 2016 - Bulletin Print Report; TP is the common parent of a consolidated group. TP is wholly owned by FP. FP also owns all of the stock of FS. TP owns the stock of S. Prior to its acquisition, S was publicly...

Distribution of Property Recast as a Distribution of Money: December 12, 2016 - Volume 10 Issue 237 Print Report; Due to ongoing disagreements among the partners, most of the partners in PS, including TP, liquidated their interests in PS, leaving A and A's immediate family in...

Loss Corporation Stock Issued To "Qualified Creditors": December 9, 2016 - Volume 10 Issue 236 Print Report; Parent, ("P") is a holding company that wholly owns LossCo, ("LC"), which is engaged in Business A. P filed for title 11 bankruptcy on Date 1, and on Date 3...

FNF To "Split-Off" FNFV: December 8, 2016 - Bulletin Print Report; Fidelity National Financial, Inc., ("FNF"), is one of the few corporations that have wholeheartedly embraced tracking stock , the Liberty companies being...

Supreme Court Defines "Personal Benefit" In Insider Trading Cases: December 8, 2016 - Bulletin Print Report; Sec. 10(b) of the Securities Exchange Act of 1934 and the SEC's Rule 10b-5 prohibit undisclosed trading on inside...information by individuals who are under a duty of trust...

Contributions of Partial Interests In Property Not Deductible: December 8, 2016 - Volume 10 Issue 235 Print Report; A, an individual, is a shareholder of X. A contributes 100 shares of A's voting commonstock to Y, an organization described in Sec. 170(c). A retains the ri...

YHOO And Tax Reform: December 7, 2016 - Bulletin Print Report; In its latest Form 10-Q, Yahoo!, Inc., ("YHOO"), reported that the "cost basis" of its investment in Alibaba Group, ("AG"), was $2,713,483,000; an...

Debt Not Worthless: December 7, 2016 - Volume 10 Issue 234 Print Report; Petitioner was employed by GI, Inc., (GI), owned by G. G alsoowned various other companies or businesses ("GCs"). &n...

Direct And Indirect Investments In MLPs: An Appraisal: December 6, 2016 - Bulletin Print Report; There would appear to be two principal ways of "gaining exposure" to MLPs: a direct investment and an indirect investment therein. While a direct investment means, si...

Partner's "Distributive Share" Subject To Self-Employment Tax: December 6, 2016 - Volume 10 Issue 233 Print Report; In Year 1, F purchased franchise restaurants in the area of City and contributed the restaurants to Partnership (PS). F owns the majority of PS. F is PS's Operating Manager...

Treasury Department Frowns On "Tax-Free Repatriation": December 5, 2016 - Bulletin Print Report; Even in the waning days of their tenure, the Treasury Department and the I.R.S. are "on the job." They have identified a transaction that they believe needs to be cur...

Modification of an Installment Obligation: December 5, 2016 - Volume 10 Issue 232 Print Report; TP sold property to a corporation in November, 1980 and received a note of the corporation. The note had a face value of $1,000x and provided that the corporation wou...

Variable Annuity Exempt From Creditors' Claims: December 2, 2016 - Volume 10 Issue 231 Print Report; D filed for relief under Chapter 7 on March 27, 2012. On Schedule B she listed "Annuity Prudential Variable Investment Plan" with a value of $12,188.23. On...

MoneyGram May Be A Bank After All: December 1, 2016 - Volume 10 Issue 230 Print Report; Sec. 582(c) of the Code provides that in the case of a bank ...the sale or exchange of a bond, debenture, note or certificate or other evidence of indebtedness sha...

Ohio's "CAT" Survives A Commerce Clause Challenge: November 30, 2016 - Volume 10 Issue 229 Print Report; Crutchfield Corporation, ("CC"), "does business" in Ohio. The business it carries on consists solely of selling goods from outside the state to its consumer...

Discharge Of "Qualified Principal Residence Indebtedness": November 29, 2016 - Bulletin Print Report; To help distressed borrower/homeowners lower their monthly mortgage payments, FHFA directed each of Fannie Mae and Freddie Mac to implement the Principal Reduction Mortgage Pro...

Equalizing Values Tax-Efficiently: November 29, 2016 - Volume 10 Issue 228 Print Report; D Corporation, (D), is an 'S' corporation. Its stock is owned in equal proportions by SH1, SH2, and SH3, all of whom are unrelated to one another. D is engage...

Avnet's "Inbound" Sales Are Subject To Washington Tax: November 28, 2016 - Bulletin Print Report; Avnet, Inc., ("AV"), is a New York corporation with headquarters in Arizona. AV sells products through its headquarters in Arizona and through its many regional sales...

Repurchase Premium Paid In Stock Is Deductible: November 28, 2016 - Volume 10 Issue 227 Print Report; TP filed a voluntary petition on Date 1 to reorganize under Chapter 11 of Bankruptcy Code. Under the Plan, which was approved by the court,certain classes of im...

Deferred Exchange Runs Afoul Of Sec. 1031(f)(4): November 25, 2016 - Volume 10 Issue 226 Print Report; MG was engaged in leasing commercial real estate in various States. MG filed consolidated income tax returns with its wholly owned subsidiary, MBL. MG also owned 69.97 percent...

Alcohol Fuel Mixture Credit Reduces "Cost Of Goods Sold": November 25, 2016 - Bulletin Print Report; In the years at issue, Sunoco, Inc., (SUN), blended ethanol into its fuel and thereby qualified for a certain tax credit, the Alcohol Fuel Mixture Credit, ("Mixture Credit...

"Cash For Keys" Payment Is Part Of "Amount Realized": November 23, 2016 - Volume 10 Issue 225 Print Report; In 2008, petitioners owned their primary residence in California ("California house") but worked in management positions requiring frequent trips to North Carolina. F...

New Spin-Off Restrictions Do Not Impact Elliott's Plan For Marathon: November 22, 2016 - Bulletin Print Report; Elliott Management, ("Elliott"), has set its sights on Marathon Petroleum Corporation, ("MPC"), and has come up with some recommendations that it would like...

SXL And ETP To Engage In Rare "Partnership Merger": November 22, 2016 - Bulletin Print Report; While corporate mergers and other forms of business combinations are quite common, it is not often that MLPs engage in such transactions. However, now, we have a partnership me...

Rooftop Antennas Are "Real Property": November 22, 2016 - Volume 10 Issue 224 Print Report; T-M is a provider of cellular radio telephone services. As part of its cellular network, T-M maintains antennas and other cellular radio equipment housed, among other places, o...

HRG Inches Closer To Curing A Market "Anomaly": November 21, 2016 - Bulletin Print Report; HRG Group, Inc., ("HRG"), is a "pure" holding company. It owns stock in entities engaged in the insurance business, the energy business, the asset managemen...

Tesoro Should Not Need To Effect A "Second" Merger: November 21, 2016 - Bulletin Print Report; Tesoro Corporation, ("TC"), and Western Refining, Inc., ("WR"), have entered into a plan and agreement pursuant to which TC will acquire all of the stock of...

Options and Tax Liens: November 21, 2016 - Volume 10 Issue 223 Print Report; A taxpayer (TP) was granted options, both non-qualified options (NQOs) and Incentive Stock Options (ISOs), by his employer, A Corporation (A). Transferability of the...

WebMD Executive Will Secure "Exchange" Treatment In Latest Buyback: November 18, 2016 - Bulletin Print Report; WebMD Health Corporation, ("WMD"), generates a large amount of cash from its business and periodically uses that "surplus" cash to repurchase its stock.&nbs...

Reasonable Prospect of Recovery Bars Loss Deduction: November 18, 2016 - Volume 10 Issue 222 Print Report; BM, from 1998 until 2002 made various investments totaling $325,000 with CPR, a corporation that relied on private investors to conduct its business of buying and sel...

COD Income Can Arise From Cancellation of Shareholder's Debt: November 17, 2016 - Volume 10 Issue 221 Print Report; P, a foreign corporation, owned all the stock of S, a domestic corporation. S conducted Business A. In its business, S maintained an inventory of component parts. At...

No Basis Step-Up For Regency Centers: November 16, 2016 - Bulletin Print Report; Regency Centers Corporation, ("RCC"), and Equity One, Inc., ("EOI"), each a real estate investment trust, ("REIT"), have announced a definitive me...

Deemed Election Under Sec. 1033: November 16, 2016 - Volume 10 Issue 220 Print Report; On or about Date 1, TP's old principal residence ("Old") was involuntarily converted as it was destroyed in a presidentially declared disaster. On Date...

A Partner Has A Single Basis In A Partnership Interest: November 15, 2016 - Volume 10 Issue 219 Print Report; In 1978, Y was formed as a limited partnership for the purpose of investing and trading in stocks and securities. A contributed $50 to Y in exchange for a general par...

Subscription Packages Are Not "Qualified Films": November 14, 2016 - Bulletin Print Report; Taxpayer, ("TP"), is a multichannel video programming distributor, (MVPD"), regulated by the Federal Communications Commission, ("FCC"), as a telecommu...

Financial Statement Implications Of Tax Rate Reductions: November 14, 2016 - Bulletin Print Report; President-elect Trump is on record as favoring a broad array of tax rate reductions. In particular, he has consistently advocated a dramatic reduction of the U.S. corporation i...

Was the Payment Primarily Motivated by Generosity?: November 14, 2016 - Volume 10 Issue 218 Print Report; During 1985, Mr. EarlVoyles retired from SCSC, Inc., (SCSC), after 46 years of loyalservice. "In consideration of his years of service," Mr. Voy...

"Investment in the Contract": November 11, 2016 - Volume 10 Issue 217 Print Report; Petitioner owned several medical practice entities. In 2000, he organized YC, an 'S' corporation, to manage these entities. YC sponsored an employee stock own...

The Trump Tax Proposal Has Something For Everyone: November 10, 2016 - Bulletin Print Report; Reports about a President-elect's tax plan, assuming he or she has one, are quite common in the days following an election. Therefore, we would be remiss if we did not offe...

Purchaser Of Wind Facilities Did Not Acquire "Goodwill": November 10, 2016 - Volume 10 Issue 216 Print Report; Plaintiffs are the owners of six wind farms...near Los Angeles, California. They are alleging that the Government underpaid them by over $206 million when it made a grant to th...

Is a Payment to an Employee a Gift or Compensation?: November 9, 2016 - Volume 10 Issue 215 Print Report; HP was theC.E.O. of LC, Inc., (LC). JY was hissecretary there from 1958 through hisretirement in1984. JY handled all ofHP's personal...

Who Generates GLG's Gross Receipts?: November 8, 2016 - Volume 10 Issue 214 Print Report; During the years at issue...Gerson Lehrman Group, Inc., ("GLG" or "petitioner"), provided consulting services to its clients. It employed experts, ("co...

Merger Of AXL And MPG Is Not A Reorganization: November 7, 2016 - Bulletin Print Report; American Axle & Manufacturing Holdings, Inc., ("AXL"), and Metaldyne Performance Group, Inc., ("MPG"), recently entered into a definitive merger agreeme...

"Square Corners Doctrine" Bars Taxation Of N.J. Lottery Winnings: November 7, 2016 - Volume 10 Issue 213 Print Report; In June 2000, M purchased a Big Game Lottery ticket. M held the winning ticket for the June 9, 2000 drawing entitling him to a prize of $46,000,000. M decided that the annuity...

CenturyLink/Level 3: "RBIGs" To The Rescue: November 4, 2016 - Bulletin Print Report; With the publication of the merger agreement, we now have clarity on the manner in which the business combination involving CenturyLink, Inc., (CTL), and Level 3 Communications...

Characterizing Termination Fee Income: November 4, 2016 - Volume 10 Issue 212 Print Report; On Date 1, TP and B entered into an agreement, ("Agreement 1")...to use "their best efforts" to take a series of steps...designed to lead to TP's acquis...

Assumption of New Debt Not Governed by Sec. 357(b): November 3, 2016 - Volume 10 Issue 211 Print Report; P has been actively engaged in two separate businesses for more than five years. P transferred the assets of one of its businesses to a newly-formed subsidiary, S, so...

SXC Proposes To "Roll UP" SXCP: November 3, 2016 - Bulletin Print Report; SunCoke Energy Partners, L.P., (SXCP or the Partnership), is a publicly traded partnership (PTP). A PTP will be treated as a corporation unless at least 90 percent of its gross...

Resident Beneficiary Not Sufficient To Tax A Foreign Trust: November 2, 2016 - Volume 10 Issue 210 Print Report; In 1992, an inter vivos trust ("original trust") was established by JLR. The location or situs of the original trust was New Yor...

G.E./BHI Bears More Than A Passing Resemblance To WMB/ETE: November 1, 2016 - Bulletin Print Report; The transaction in which General Electric Company, ("GE"), and Baker Hughes, Inc., ("BHI"), will combine their oil and gas activities bears some resemblance...

Classifying Depreciable Property: November 1, 2016 - Volume 10 Issue 209 Print Report; Petitioner is engaged in the banking andfinancial services business. During 1987-1989, petitioner placed in service $57,526,417 of furniture and fixtures at its...

EFH's Spin-Off Is Part Of A 'G' Reorganization: October 31, 2016 - Volume 10 Issue 208 Print Report; EFH (the old "TXU") is the common parent of an affiliated group of corporations that join in the filing of a consolidated federal income tax return. "SH" ow...

CenturyLink/Level 3: The Potential For A Sec. 338 Election: October 31, 2016 - Bulletin Print Report; Rumors are circulating with respect to a possible business combination involving CenturyLink, Inc., (CL), and Level 3 Communications, Inc., (L3). Of particular interest is the...

Ascertaining The "Subject Matter" Of A Home Construction Contract: October 28, 2016 - Volume 10 Issue 207 Print Report; Taxpayers ("TPs") are builders and developers of planned communities. Their primary source of revenue was from the sale of houses. ...

CenturyLink/Level 3: October 27, 2016 - Bulletin Print Report; Apparently, CenturyLink (CL) and Level 3 Communications (L3) are discussing a business combination. Questions have arisen regarding the impact, if any, the business c...

BEAV Shareholders Will Be Taxed On Receipt Of COL Shares: October 27, 2016 - Bulletin Print Report; The proposed Time Warner and AT&T merger and the one announced, on the same day, by B/E Aerospace, Inc., ("BEAV"), and Rockwell Collins, Inc., ("COL"),...

Sec. 304 Acquisition Can Be a Qualified Stock Purchase: October 27, 2016 - Volume 10 Issue 206 Print Report; A, B, and C own 40 percent, 20 percent, and 40 percent of the stock of X, respectively. B, D, and E own 45 percent, 30 percent, and 25 percent of the stock of Y, resp...

Right of First Refusal Not an "Option": October 26, 2016 - Volume 10 Issue 205 Print Report; A is a domestic corporation. A plans to enter into a joint venture with B, an unrelated Country X corporation, to manufacture the "Y" in Country X. <...

FASB Rules On "Intra-Entity" Asset Transfers: October 25, 2016 - Bulletin Print Report; Current Generally Accepted Accounting Principles, ("GAAP"), prohibits, for unknown reasons, the recognition of current and deferred taxes for a so-called "intra-...

AMTD's "Bargain" Purchase Of Scottrade Financial Services, Inc.: October 25, 2016 - Bulletin Print Report; Scottrade Financial Services, Inc., (SFS), has two businesses only one of which is of interest to its suitor, TD Ameritrade Holding Corporation, (AMTD). This is not an uncommon...

"Three-Party" 'F' Reorganizations Not Permitted: October 25, 2016 - Volume 10 Issue 204 Print Report; P Corporation, (P), owned 99 percent of the outstanding stock of S, an operating subsidiary. P created, in order to "squeeze out" the minority shareholders...

T And TWX Are Planning A "Reorganization": October 24, 2016 - Bulletin Print Report; AT&T, Inc., (T), and Time Warner, Inc., (TWX), in case you haven't heard, announced a merger agreement over the weekend which contemplates the acquisition by T of the a...

"Expansion Doctrine" Permits Spin-Off Of Recently Purchased Business: October 24, 2016 - Volume 10 Issue 203 Print Report; In order for Sec. 355(a) of the Code to apply to a "spin-off" or a "split-off," among other conditions, the most fundamental requirement that has to be comp...

Supplier Of Fluids For Fracturing Operations Earns Qualifying Income: October 21, 2016 - Volume 10 Issue 202 Print Report; X is a limited liability company. As part of an initial public offering (IPO) for a to-be-formed partnership, (PS), X intends to contribute assets related to its fluid handling...

Location Of Card Holder Governs "Sourcing" Of Card Issuer's Receipts: October 20, 2016 - Volume 10 Issue 201 Print Report; The taxpayers are in the credit card account business. The taxpayers' receipts are derived from interest, "interchange," and service fees. The issue is how the re...

SUPERVALU Changes Direction With Respect Save-A-Lot: October 19, 2016 - Bulletin Print Report; SUPERVALU, (SU), was poised to dispose of its Sav-A-Lot, (SAL), operation in a highly unorthodox manner. SU was going to secure an infusion of capital, in the form of non-votin...

Deal Status Updates--October 2016: October 19, 2016 - Bulletin Print Report; ABI/SAB Miller The transaction has closed. The “partial share alternative” was heavily subscribed for with the result that Altria and Bevco received fewer shares...

Temporary Investment of Loan Proceeds In Muni Bonds: October 19, 2016 - Volume 10 Issue 200 Print Report; A "sharp growth" in sales volume and rapidly increasing demands on thetaxpayer's manufacturing facilities, as well as a material increase in its w...

Royalty Income Earned After 2006 Not Exempt: October 18, 2016 - Volume 10 Issue 199 Print Report; From the 1970s to the 2000s, Congress provided tax exemptions for domestic corporations...that sold products abroad. The tax exemptions were challenged by the World Trade Organ...

Silgan Holdings Launches A Self-Tender Offer: October 18, 2016 - Bulletin Print Report; Silgan Holdings, Inc., (SHI), is engaging in a Dutch Auction self-tender offer, its second in the past two years. In this year's iteration, SHI is offering to purchase up t...

"Debt-Equity" Regulations Focus On "Earnings Stripping": October 17, 2016 - Volume 10 Issue 198 Print Report; One of the hallmarks of an "inversion" transaction (a transaction in which the stock of a domestic corporation is acquired by a foreign corporation) is the practice o...

Gain Or Loss From Termination Fee Is Calculated: October 17, 2016 - Bulletin Print Report; A domestic corporation ("ACQ") enters into an agreement (the Contract) with another corporation (T) pursuant to which the parties agree to undertake a series of steps...

Pregnancy Is An "Unforeseen Circumstance": October 14, 2016 - Volume 10 Issue 197 Print Report; The taxpayers were married and had one child, a daughter, when they purchased Residence 1 on Date 1. Residence 1, a condominium, contained two small bedrooms and two baths.&nbs...

Altria Will Use The Equity Method With Respect To Its AB Stake: October 13, 2016 - Bulletin Print Report; Altria Group, Inc., (MO), recently disclosed that it fared very well in the aftermath of the business combination involving AB InBev, (AB), and SABMiller. ...

Contingent Liabilities and Insolvency: October 13, 2016 - Volume 10 Issue 196 Print Report; Mr. Dudley B.Merkel, (M), owned 25 percent of HMH, a partnership. On September 1, 1991, Great Western Bank granted forgiveness to HMH of a $1,439,000 non-recour...

Is The EpiPen Settlement Payment Tax Deductible?: October 11, 2016 - Bulletin Print Report; Mylan N.V., ("MYL"), announced, on October 7, 2016, that its domestic subsidiary, Mylan, Inc., ("MI"),* has agreed to the terms of a $465 settlement with th...

What Must Be Distributed in Partial Liquidation?: October 11, 2016 - Volume 10 Issue 195 Print Report; X Corporation, (X), has been in the poultry processing business since 1965. In 1968, X went into the chicken farming business as a separate and distinct operation.

CBS/Viacom Merger Should Not Derail Radio Split-Off: October 10, 2016 - Bulletin Print Report; CBS announced plans to divest its subsidiary, CBS Radio, Inc., ("Radio"), by means of a combination transaction involving (i) an initial public offering of a portion...

Fantasy Sports Contest Entry Fee Is Not Subject To N.J. Sales Tax: October 10, 2016 - Bulletin Print Report; The taxpayer, ("TP"), is incorporated in Delaware; and is headquartered in Texas. TP operates an online daily fantasy sports website that allows Users to enter daily...

OTC Bulletin Board Not an Established Securities Market: October 10, 2016 - Volume 10 Issue 194 Print Report; Corporation A, (A), maintains Plan X, a defined contribution plan which is qualified under Sec. 401(a) of the Internal Revenue Code. Plan X is not an employee stock o...

Met Life To Spin Its Retail Life Insurance & Annuity Operations: October 7, 2016 - Bulletin Print Report; Met Life, Inc. is in the process separating its massive retail life insurance and annuity business (which will be housed in a corporation to be formed by Met Life, known as Bri...

Taxpayer Retires "Embedded Stock" Tax Efficiently: October 7, 2016 - Volume 10 Issue 193 Print Report; P corporation, ("P"), owns S1, which owns all of the stock of S2. S2, in turn, owns all of the stock of S3; and the latter owns all of the stock of S4. S4 is, and has...

What Is the "Source" of Vacation Pay?: October 6, 2016 - Volume 10 Issue 192 Print Report; JB is a non-resident of Oregon. He began working for the U.S. Postal Service in Oregon in 1978. He worked in that office for approximately 14 years, and then moved to...

SBAC Will Elect To Become A REIT: October 5, 2016 - Bulletin Print Report; SBA Communications Corporation, ("SBAC"), recently announced its intention "to take all necessary steps for it to qualify as real estate investment trust, ("...

Business Purpose Does Not "Count" For Purposes of Sec. 302(b)(1): October 5, 2016 - Volume 10 Issue 191 Print Report; S and E owned 60 percent and 40 percent, respectively, of the stock ofEN, Inc., (EN), and ofBA, Inc., (BA). EN ag...

Allergan To Issue "CVRs" In The Acquisition Of TBRA: October 4, 2016 - Bulletin Print Report; Allergan plc, through one of its U.S. affiliates, "Holdco," has entered into an agreement to acquire the stock of Tobira Therapeutics, Inc., ("TBRA"), in a...

JNS To Engage In A "Cross-Border" Merger: October 4, 2016 - Bulletin Print Report; Janus Capital Group, Inc., ("JNS"), and its foreign rival, Henderson Group plc, ("HGG"), have announced plans to merge in a transaction in which JNS, a dome...

Propane Is a Favored Asset: October 4, 2016 - Volume 10 Issue 190 Print Report; X is a publicly traded partnership (PTP or MLP). X is engaged in the retail and wholesale supply, marketing, and distribution of propane. X's business consists pr...

Estate's Loss "Arose From" A Theft: September 30, 2016 - Volume 10 Issue 189 Print Report; JH, a resident of New York, died testate on January 31, 2008. At that time, he owned a 99 percent interest in JHF, LLC ("JHF"). JH's daughter and son each held a...

Can "Merger Consideration" Emanate From A Third Party?: September 29, 2016 - Bulletin Print Report; One of the more interesting business combinations we have encountered is the acquisition by Ares Capital Corporation, ("ARCC"), of American Capital, Ltd., ("ACAS...

Repos Are Real Estate Assets: September 29, 2016 - Volume 10 Issue 188 Print Report; TP is a real estate investment trust, (REIT). TP's principal activity is to acquire and hold mortgage loans secured by mortgages and deeds of trust and mortgage b...

Intrafamily Transfers Can Constitute Bona Fide Debt: September 28, 2016 - Volume 10 Issue 187 Print Report; Appellants, (As), are the parents of K. K is a general contractor and the sole owner of KC, a Minnesota 'S' corporation. &nb...

CFC And PFIC Inclusions Can Only Be "Dividends" For A RIC: September 28, 2016 - Bulletin Print Report; The I.R.S. has issued proposed regulations clarifying certain requirements a corporation must adhere to in order to qualify as a "regulated investment company" ("...

Connecticut's Token Gesture: September 27, 2016 - Bulletin Print Report; A Connecticut "resident" is defined as an individual who is domiciled in Connecticut...or who is not domiciled in Connecticut, but who maintains a...

Damages Received "On Account Of" Physical Injuries of Sickness: September 27, 2016 - Volume 10 Issue 186 Print Report; Petitioner was employed by PACE. During 1996, before her employment with PACE commenced, petitioner was diagnosed with MS. Pe...

Amortizing Premium On Callable Debt Securities: September 26, 2016 - Bulletin Print Report; The Financial Accounting Standards Board, ("FASB"), has issued (on September 22, 2016) a proposed Accounting Standard Update, ("ASU"), entitled "Premiu...

Distributing a Note In Connection With a Partial Liquidation: September 26, 2016 - Volume 10 Issue 185 Print Report; C is a domestic corporation incorporated in State M. B is a new corporation incorporated in State M. C has conducted its business operations in separate divisions: D1...

The Acquisition Of WCI Should Qualify As A Reorganization: September 23, 2016 - Bulletin Print Report; Lennar Corporation, (L), and WCI Communities, Inc., (WCI), have announced that they have entered into a definitive merger agreement under which "Lennar will acquire all of...

Sears Not Entitled to a Bad Debt Sales Tax Credit: September 23, 2016 - Volume 10 Issue 184 Print Report; For the period in question, Sears, (S), paid the full amount of sales tax due on goods sold from its retail stores in Maine. S had a financing agreement with a third-...

Sec. 1231 Property Is Not A Capital Asset: September 22, 2016 - Volume 10 Issue 183 Print Report; On February 25, 2005, CL, a partnership, acquired, for $13.8 million, the RBH Hotel in Tampa, Florida. The property consisted of land and improvements thereon....

Tech Data Secures A Basis Step Up: September 21, 2016 - Bulletin Print Report; There are different ways in which a business (or other group of assets) can be acquired. Thus, an acquirer can acquire the assets used in the business directly from the seller,...

Maryland's Policy Regarding Federal Obligation Interest Is Unconstitutional: September 21, 2016 - Volume 10 Issue 182 Print Report; Between 1999 and 2008, B's federal taxable income, as reported on its Maryland returns, ranged from $109 million to $1.288 billion. B was a North Carolina state chartered c...

State Law Dissolution Does Not Terminate 'S' Corporation Status: September 20, 2016 - Volume 10 Issue 181 Print Report; X incorporated under State law on Date 1. X elected to be treated as an 'S' corporation effective for Year 1. In Year...

Will Berkshire Hathaway Exit Wells Fargo?: September 19, 2016 - Bulletin Print Report; Forbes' corporate finance columnist, the estimable Antoine Gara, on September 15, 2016, wrote a very interesting article speculating on whether, and how, in light of the We...

Tribune Media Company Settles "Newsday" Dispute: September 19, 2016 - Bulletin Print Report; One of the more interesting transactions we have encountered was Tribune's attempted "tax-efficient" divestiture of Newsday. This transaction was structured to av...

Receipts Constitute Non-Taxable Gratuities: September 19, 2016 - Volume 10 Issue 180 Print Report; The Taxation and Revenue Department of New Mexico (the Department) assessed TP for gross receipts tax, penalties, and interest. TP (also re...

Assumed Debt Not Part of Basis: September 16, 2016 - Volume 10 Issue 179 Print Report; An 'S' corporation liquidates, distributing all its assets to its shareholders. One or more suchshareholders form a new entity, either a single member d...

Endesa Americas Merger Should Qualify As A Reorganization: September 15, 2016 - Bulletin Print Report; Eneris Americas, (ENE), owns some 59.98 percent of the stock of Endesa Americas, (END). Each such corporation is a foreign corporation. ENE is interested in acquiring all of EN...

Tax Accounting for Loan Origination Fees: September 15, 2016 - Volume 10 Issue 178 Print Report; On Date 2, Y Corporation, Y, and Z Corporation, Z, were merged in a transaction to which Sec. 381 of the Internal Revenue Code applies. Z merged into Y in a transacti...

Reaction To Comments Made By Mr. Joseph Tsai Regarding YHOO and BABA: September 14, 2016 - Bulletin Print Report; At a hedge fund conference yesterday, Mr. Joseph Tsai, Vice-Chairman of Alibaba Group, made some widely-circulated comments that strongly suggested that Alibaba Group sees no pa...

Formula One Is Not An "Active" Business: September 14, 2016 - Bulletin Print Report; Some investors are hoping that Liberty Media Corporation, (LM), will spin-off Braves Holdings, (AB), the owner and operator of the Atlanta Braves National League baseball club....

"Checked" LLC Not a Corporation in Maryland: September 14, 2016 - Volume 10 Issue 177 Print Report; On August 1, 2011, SC, a District of Columbia corporation, made two filing with the Maryland State Department of Taxation and Assessments, (SDAT). The first filing wa...

"Break" Fee Treated As A Capital Loss: September 13, 2016 - Bulletin Print Report; TP, who is almost certainly AbbVie, announced, in a press release, the combination of TP and T (who is almost certainly Shire plc), a foreign corporation. ...

YHOO Issues Proxy Materials Regarding Core Business Sale: September 13, 2016 - Bulletin Print Report; Yahoo! Inc. (YHOO) has issued preliminary proxy materials with respect to the shareholder votes it is seeking in order to proceed with the sale of its "core business"...

The S.E.C. Prefers "Pushdown" Accounting: September 13, 2016 - Volume 10 Issue 176 Print Report; In Staff Accounting Bulletin, (SAB), No. 54, Application of "Pushdown" Basis of Accounting in Financial Statements of Subsidiaries Acquired by Purchase<...

Is Taxpayer "Multistate?": September 12, 2016 - Volume 10 Issue 175 Print Report; TP is a manufacturer of equipment whose headquarters and sole production facility are located in Virginia. A majority of TP's equipment is sold to the U.S. govern...

"Holds Substantially All": September 9, 2016 - Volume 10 Issue 174 Print Report; P Corporation, (P), is a manufacturing corporation organized under the laws of State A. T Corporation, (T), is also a manufacturing corporation organized under the la...

HPE To Engage In A Second "RMT" Transaction: September 8, 2016 - Bulletin Print Report; Hewlett Packard Enterprise, ("HPE"), it seems safe to say, is, when it comes to divesting "extraneous" parts of its business, partial to Reverse Morris Trus...

Nonowner Of Mineral Interests Incurred "G&G" Expenses: September 8, 2016 - Volume 10 Issue 173 Print Report; Company ("C") conducted marine surveys of the outer continental shelf in the Gulf of Mexico. The surveys involved the use of geophysical techniques that detected or s...

CF Industries Adopts An NOL "Rights" Plan: September 7, 2016 - Bulletin Print Report; CF Industries Holdings, Inc., (CFI), announced that its board of directors has done what many other boards faced with similar circumstances have opted to do: CFI's board of...

Finessing NQPS Status: September 7, 2016 - Volume 10 Issue 172 Print Report; Corporation 1, (C1), is a State X professional corporation engaged in Business A. C1 has "u" shareholders, each of whom owns "v" shares.

Final Regulations Define "Real Estate Assets" For REIT Purposes: September 6, 2016 - Volume 10 Issue 171 Print Report; Sec. 856(c) of the Internal Revenue Code defines a real estate investment trust ("REIT") by setting forth various requirements. One such requirement, perhaps the one...

PFE's DTL Non-Disclosure Does Not Justify "Inspection" Request: September 6, 2016 - Bulletin Print Report; A trust, ("T"), owns 500 shares of common stock of Pfizer, Inc. ("PFE"). The trustees of T seek to "inspect" books and records of PFE for the purp...

Yum! Brands Will Spin-Off Its Chinese Operations: September 6, 2016 - Bulletin Print Report; Yum! Brands, Inc. (Y) is on the verge of completing its long-awaited separation of its business and operations in China. Such separation will be effected by means of a spin-off...

ENB And SE Will Effect A "Cross-Border" Acquisition: September 6, 2016 - Bulletin Print Report; Enbridge, Inc., (ENB), a Canadian corporation, and Spectra Energy Corp., (SE), have entered into a merger agreement "under which ENB and SE will combine in a stock-for-sto...

Examining AAPL's Effective Tax Rate: September 2, 2016 - Bulletin Print Report; Clearly, the last week in August's news cycle, at least as far as the business pages are concerned, has been thoroughly dominated by commentary regarding Apple Inc.'s (...

How Do Deferred Offering Costs Affect the Asset Test for REITs?: September 2, 2016 - Volume 10 Issue 170 Print Report; TP intends to acquire multifamily properties in selected markets throughout the U.S. TP intends to make an election to be treated as a real estate investment trust (R...

Non-Refundable Portion of CTC Is Not a "Payment": September 1, 2016 - Volume 10 Issue 169 Print Report; On January 28, 2010, BZ and AZ filed a voluntary petition for relief under Chapter 7 of the Bankruptcy Code. R was appointed as Trustee. &...

Real Estate Professionals Must "Materially Participate": August 31, 2016 - Volume 10 Issue 168 Print Report; The Tax Reform Act of 1986 rendered losses from rental activity per se passive. Congress subsequently enacted Sec. 469(c)(7) to create an exception to the per se bar on deducti...

Step Doctrine Prevents Application Of The "Mere Change" Exemption: August 30, 2016 - Volume 10 Issue 167 Print Report; Petitioner, ("P"), is a Delaware limited liability company. SLG is also a Delaware limited liability company. Under an Agreement of Sale dated April 9, 2007, P and SL...

I.R.S. Willing To Rule On "Business Purpose" And "Device": August 29, 2016 - Bulletin Print Report; At one time, the I.R.S. issued "comprehensive" private letter rulings with respect to spin-offs and split-offs. Beginning in 2003, it reduced the aspects of a spin-of...

FASB Answers "Cash Flow" Classification Questions: August 29, 2016 - Bulletin Print Report; Investors pay a great deal of attention to an entity's Statement of Cash Flows and give more "credit" to cash inflows and outflows from operating activities than...

New York "Ties" Prevent An Effective Change Of Domicile: August 29, 2016 - Volume 10 Issue 166 Print Report; In 1979, petitioner purchased a condominium apartment in the Bronx, New York (Douglas Avenue apartment). Petitioner's wife continues to reside in the Douglas Avenue apartme...

ABI And SAB Transaction Still Looks Tax Efficient: August 26, 2016 - Bulletin Print Report; The business combination between Anheuser-Busch InBev SA/NV (ABI) and SABMiller plc (SAB) appears to have undergone some changes, both structurally and in terms of the amount o...

Accruing "Contested" Liabilities: August 26, 2016 - Volume 10 Issue 165 Print Report; A, an 'S' corporation, and B entered into a written agreement relating to A's purchase of "c", to be part of the inventory of A, in July, 19x3....

Split-Off Not Used As A "Device": August 25, 2016 - Bulletin Print Report; A distribution of the stock of a controlled corporation will not qualify under Sec. 355(a) of the Code where it is found to have been used principally as "a device" f...

Accounts Receivable Are Corporate Property: August 25, 2016 - Volume 10 Issue 164 Print Report; Dr. S, Dr. J, Dr. R, and Dr. P are medical doctors. On June 1, 1970, the four doctors incorporated a personal service corporation, C,under the laws of the Commo...

"Part of a Larger Straddle": August 24, 2016 - Volume 10 Issue 163 Print Report; On August 1, 2002, A purchases 100 shares of X stock for $100 per share, writes a 12-month call option on 100 shares of X stock with a strike price of $110, and purch...

Structure Classified as "Real Property": August 23, 2016 - Volume 10 Issue 162 Print Report; Plaintiffs owned and operated Crescent Towing in Crescent, Oregon. Among the items of property Plaintiffs owned in 2007 and used in their business was a "large s...

Can Liberty Media Make SIRIUS XM An "Active Business": August 22, 2016 - Bulletin Print Report; Liberty Media Corporation, ("L") owns Braves Holdings LLC, ("AB"), the owner and operator of the Atlanta Braves baseball team. L has owned AB for more than...

Exchange of Stock in One Corporation For Stock in Another is Taxable: August 22, 2016 - Volume 10 Issue 161 Print Report; TP, the owner of shares in Coca Cola Company, (CCC), exchanged such shares with another individual for shares of Coca Cola International, (CCI). The value of the shar...

Delayed Transfer "Relates Back": August 19, 2016 - Volume 10 Issue 160 Print Report; D corporation ("D") is the parent of a worldwide group of entities. Mr. A owns "a%" of the stock of D and directly participates in the management or operati...

AIG And Arch Will Execute A Joint "(h)(10)" Election: August 18, 2016 - Bulletin Print Report; American International Group, Inc., ("AIG") and Arch Capital Group Ltd. ("Arch") recently announced a transaction which entails a sale by AIG, and a concurr...

Residential Rental Property: August 18, 2016 - Volume 10 Issue 159 Print Report; The taxpayer, TP, owns and operates out of his house an "adult home care" business. The residents live full-time in TP's house. TP provides 24-hour supe...

Social Club Will Avoid UBIT: August 17, 2016 - Volume 10 Issue 158 Print Report; TP is an exempt organization under Sec. 501(c)(7) of the Internal Revenue Code. TP is a social and recreational club located in Town formed for the purpose of outdoor...

"Expansion" Doctrine Permits Spin-Off Of Recently Purchased Assets: August 16, 2016 - Bulletin Print Report; The taxpayer is a State corporation which had been formed on Date 1. Since its incorporation more than five years ago, the taxpayer has engaged in "Business."...

Pension Plan Merger Free of Tax Consequences: August 16, 2016 - Volume 10 Issue 157 Print Report; TP is a corporation engaged in the business of manufacturing "X." TP's Plan is a substantially overfunded defined benefit (pension)plan.

Reincorporations Do Not Spoil Complete Liquidations: August 15, 2016 - Bulletin Print Report; D is a State L corporation. The D Group is engaged in several lines of business, including the "Transferred Business." D owns the stock of C, SA, SB, SC, and SD, each...

ETC's "Sec. 721" Ruling Is Small Solace: August 15, 2016 - Bulletin Print Report; The merger of The Williams Companies, (WMB), with and into ETC, a corporation created by Energy Transfer Equity L.P., (ETE), was terminated because a condition to closing, the...

Interest-Free Loan Is "Property Held for Investment": August 15, 2016 - Volume 10 Issue 156 Print Report; As of January 1, 1988, TPs had made interest-free demand loans to Foundation, (F), with a total unpaid balance of $352x. The average loan balance owed to TPs by F dur...

Poor Records Render Florida Domiciliary A New York Resident: August 12, 2016 - Volume 10 Issue 155 Print Report; Petitioner, a Florida domiciliary, is an executive in the magazine publishing industry. He serves as the Chairman of Universal Media. During 2007, petitioner maintained a "...

Tax Imposed Despite Lack Of "Transactional Nexus": August 11, 2016 - Volume 10 Issue 154 Print Report; Irwin Naturals, ("I"), is in the business of developing, marketing, and selling nutritional products. From 2002 through 2009, I made wholesale sales to retailers and...

Reducing "Purchase Money" Debt: August 10, 2016 - Volume 10 Issue 153 Print Report; Y, a newly-formed corporation, purchased all of the stock of X Corporation, X, from Mr. A for cash and debt, including a subordinated debenture. ...

MTN Acquisition Will Feature "Exchangeable Shares": August 9, 2016 - Bulletin Print Report; Vail Resorts, Inc., (MTN), has reached an agreement for the acquisition of its Canadian rival, Whistler Blackcomb Holdings, Inc., (WB). As with most acquisitions of Canadian co...

PokerStars Is Not A "Bank": August 9, 2016 - Volume 10 Issue 152 Print Report; Mr. Hom failed to file a tax form known as the "FBAR" for three accounts he held in 2006 and one account he held in 2007. Mr. H was assessed a total penalty of $40,00...

"Sequestered" Minimum Tax Credit Has Been "Allowed": August 8, 2016 - Bulletin Print Report; An entity organized as a corporation reported a refundable credit for a prior year minimum tax on its Form 1120, "U.S. Corporation Income Tax Return." The Internal Re...

Rumors Swirling Around HPE: August 8, 2016 - Bulletin Print Report; In May, Hewlett Packard Enterprises, ("HPE"), announced a spin-off of its IT Services business. The spin-off, part of a so-called Reverse Morris Trust (RMT) transacti...

Indefinite Physical Presence Creates Domicile: August 8, 2016 - Volume 10 Issue 151 Print Report; Mr. D, (D), accepted employment in Boston and began work on August 17, 1998. During a visit to Boston on August 9, 1998, D made a deposit toward the purchase of a con...

Lawsuit Seeks To Overturn "Serial Acquisition" Anti-Inversion Rule: August 5, 2016 - Bulletin Print Report; A lawsuit instituted by the Chamber of Commerce of the United States and its Texas counterpart seeks to overturn the most controversial element of the April 2016 anti-inversion...

The "Heritage Transactions" Were Not "Tax Shelters": August 5, 2016 - Volume 10 Issue 150 Print Report; The issue is whether Mr. William R. Canada ("C") is liable for $40,346,167.87 in penalties . The "Heritage Transactions" ("HTs&quo...

Executive MBA Expenses Ruled Deductible: August 4, 2016 - Bulletin Print Report; In June 2006, petitioner accepted a position as "senior assistant controller" for the Marriott hotel in Los Angeles International Airport ("ML")....

Taxable Worker's Compensation Benefits: August 4, 2016 - Volume 10 Issue 149 Print Report; Sec. 104(a)(1) of the Internal Revenue Codegenerally provides that gross income does not include "amounts received under workmen's compensation acts as...

German Lawyer Could Not Deduct Law School Expenses: August 3, 2016 - Volume 10 Issue 148 Print Report; Educational expenses are deductible if the expenses maintain or improve skills required by the individual in his employment or other trade or business. Expenses are not deducti...

Linear Shareholders Will Be Taxed On Analog Stock: August 2, 2016 - Bulletin Print Report; Shareholders of acquired corporations generally do not pay tax on the portion of the consideration they receive that consists of stock in the acquiring corporation. However, th...

Bankrupt Taxpayer Permitted to Adjust Pension Plan: August 2, 2016 - Volume 10 Issue 147 Print Report; TP is a manufacturer, supplier, and recycler of paper and corrugatedpackaging products. On January 26, 2009, TP filed a voluntary petition under Chapter 11 of t...

Bankruptcy Primer: August 2, 2016 - Bulletin Print Report; “COD” Income Gross income means income from whatever source derived, unless specifically excluded. Gross income includes “income from discharge of indebtedness” (&...

SUPERVALU's Unusual Distribution: August 1, 2016 - Bulletin Print Report; SUPERVALU, Inc., (SU), owns all of the stock of Save-A-Lot, Inc., (SAL). For valid business reasons, SU has decided to separate SAL from itself (the "Separation"). Or...

Is NEE Aiming For A 'G' Reorganization?: August 1, 2016 - Bulletin Print Report; EFH is in bankruptcy. It conducts two businesses, a "regulated" business and a "competitive" business. Most of EFH's activities are conducted by disrega...

FASB Proposes "Robust" Income Tax Disclosures: August 1, 2016 - Volume 10 Issue 146 Print Report; The adequacy of income tax disclosures has recently been called into question by investors and analysts. This focus on a company's tax situation has been precipitated by a...

Whole Foods Hit With New York Deficiency: July 29, 2016 - Volume 10 Issue 145 Print Report; Whole Foods Market Group, Inc., ("WFMG"), a Delaware corporation, distributed and sold natural and organic food products at its retail stores throughout the United St...

SAB Miller Update: July 29, 2016 - Bulletin Print Report; We understand that the format for the ABI/SAB business combination might (will?) have to be altered. Apparently, what had been envisioned as a "scheme of arrangement"...

Lawsuit Alleges Eaton's Spin-Off Disclosures Were False And Misleading: July 28, 2016 - Bulletin Print Report; Eaton Corporation engaged in one of the early "inversion" transactions, in 2012, with Cooper Industries plc as its counterparty. The parties formed a new holding comp...

Vineyards Constitute Sec. 179 Property: July 28, 2016 - Volume 10 Issue 144 Print Report; TPs are individuals who attached Schedule F to their tax return, claiming to operate a vineyard business activity. In 2005, T...

Micron Technology, Inc. Moves To "Protect" Its NOLs: July 27, 2016 - Bulletin Print Report; Micron Technology, Inc., (MTI), on July 20th, became the latest in a long list of companies which have, with a view towards protecting one of their most valuable assets, their...

Stock Issuance Expenses Cannot Be Amortized: July 27, 2016 - Volume 10 Issue 143 Print Report; Petitioner is a mining company organized under the laws of the state of Colorado in 1926 with a fixed period of existence of 20 years from its incorporation. <...

YHOO Will Sell Its "Core Business" To Verizon: July 26, 2016 - Bulletin Print Report; Not surprisingly, Yahoo! Inc., (YHOO), announced that it had reached an agreement with Verizon Communications, Inc., (VZ), which envisions the sale of YHOO's "core bus...

Pre-Arranged Transfer Does Not Violate Sec. 351's Control Test: July 26, 2016 - Volume 10 Issue 142 Print Report; W Corporation, (W), engages in businesses A, B, and C. UnrelatedX Corporation, (X), also engages in business A through its wholly-owned subsidiary, Y Corporatio...

"Deferred Revenue" Is Not A "Built-In" Item: July 25, 2016 - Volume 10 Issue 141 Print Report; On "Change Date," Taxpayer, ("TP"), through Buyer, its wholly owned subsidiary, acquired all of the stock of "Lossco." The transaction was structu...

Exxon Mobil and InterOil To Undertake An 'A' Reorganization: July 25, 2016 - Bulletin Print Report; Exxon Mobil Corporation ("XOM") has topped a rival's bid for InterOil Corporation ("IOC") and the latter is now enthusiastically endorsing XOM's off...

Expanding the Business Does Not Toll the Five-Year Waiting Period: July 22, 2016 - Volume 10 Issue 140 Print Report; As of the first day of Year 1, LLC, a partnership for tax purposes, owns several commercial office buildings that it leases to unrelated third parties. &nbs...

Donation of a Sec. 1256 Contract Is a "Realization" Event: July 21, 2016 - Volume 10 Issue 139 Print Report; A taxcontroversy concerned the Greenes' donation of the long-term capital gain portion of certain futures contracts they owned to a tax-exempt private found...

Wisconsin Lawmaker Seeks To Codify "Quill": July 20, 2016 - Bulletin Print Report; One of the most significant pieces of tax jurisprudence over the last half-century is the Supreme Court's decision in Quill Corporation v. North Dakota , 504 U...

"Purchase" of House Occurs Before Transfer of Deed: July 20, 2016 - Volume 10 Issue 138 Print Report; On February 21, 2007, petitioner and R, as buyers, and Js, as sellers, executed a contract. Pursuant to the contract, the Js agreed to sell and petitioner and R agree...

Ignoring Certain Stock Leads to "Good" Forward Triangular Merger: July 19, 2016 - Volume 10 Issue 137 Print Report; Target Corporation, (TC), sought to create a holding company structure in the most tax unobtrusive way possible. Step 1saw the formation by TC of a new domestic...

The I.R.S. Is Finalizing Rules On Conversion Ratio Adjustments: July 19, 2016 - Bulletin Print Report; The Wall Street Journal is reporting that the Treasury Department and the I.R.S. are in the process of finalizing rules that will make it clear that certain conversion ratio ad...

I.R.S. Will Not Challenge Certain "Control Gathering" Transactions: July 18, 2016 - Bulletin Print Report; The most fundamental of the spin-off requirements is the so-called "control" requirement. Sec. 355(a)(1)(A) of the Code provides that, for a distribution to qualify f...

Sen. Wyden Sets His Sights On "Prison REITs": July 18, 2016 - Bulletin Print Report; Sen. Wyden, D-OR, the ranking member of the Senate Finance Committee, has introduced a bill that would make it more difficult, but by no means impossible, for a corporation tha...

Post-Merger Loss Carrybacks: July 18, 2016 - Volume 10 Issue 136 Print Report; BI was incorporated in 1965. In 1968, BE established a subsidiary shell corporation, BM. On April 23, 1970, BI was merged with andinto BM which then changed its...

What Would A "Financial Transactions" Tax Look Like?: July 15, 2016 - Bulletin Print Report; A "financial transactions tax" has been talked about on or off for the last several years. In an attempt to make a tax an issue in this year's Presidential electi...

Who Is Liable For 'S' Corporation "BIG" Tax?: July 15, 2016 - Volume 10 Issue 135 Print Report; Oldco, a C corporation, made an election on Date 1 to be treated as an 'S' corporation as of Date 0. P, a State Y LLC, owned Holdco, and Holdco owned Newco, a...

I.R.S. Proposed Regulations Strengthen The "Device" Test: July 14, 2016 - Bulletin Print Report; Ahead of schedule, the I.R.S. issued, on July 14, 2016, proposed regulations designed to address "abuses" that had cropped up in the world of spin-offs. It is not a s...

Liquidation Does Not Trigger Deferred Installment Gain: July 14, 2016 - Volume 10 Issue 134 Print Report; Taxpayer, TP, a C corporation, owned all of the stock of Corporation A, CA. In Year 1, CA sold approximately "x" acres of land and other real and personal p...

A Redemption Can Produce a Constructive Distribution: July 13, 2016 - Volume 10 Issue 133 Print Report; Where a corporation redeems stock from a retiring shareholder the fact that the corporation, in purchasing the stock, satisfies the continuing shareholder's execu...

Private Bancorp Will Meet Its "Merger Condition": July 12, 2016 - Bulletin Print Report; Private Bancorp, Inc., (PBI), and Canadian Imperial Bank of Commerce, (CIBC), have entered into an agreement and plan of merger pursuant to which the former will be acquired by...

Parent Precluded From Taking A Worthless Stock Deduction: July 12, 2016 - Volume 10 Issue 132 Print Report; Triad Guaranty Inc., ("Debtor"), is the parent of Triad Guaranty Insurance Corp. ("TGIC"). TGIC, in turn, is the parent of Triad Guaranty Assurance Corp (&q...

Will "Hook" Stock Prevent A YHOO/BABA Business Combination?: July 12, 2016 - Bulletin Print Report; If all goes according to plan, Yahoo! Inc. (YHOO) will soon dispose of its "core" business, most likely in a taxable transaction, and distribute the proceeds derived...

Recent Tax and Accounting Developments

July 11, 2016 - Bulletin Print Report

ASU 2016-09. When a corporation grants an “NQO” to an employee…it recognizes compensation expense and records a tax benefit equal to the product of (i) t...

Pinnacle's Dockside Barges And Riverboats Are "Real Property": July 11, 2016 - Bulletin Print Report; Taxpayer, (TP), is a widely held, publicly traded State A corporation. It seems clear that TP is Pinnacle Entertainment, Inc. TP is an owner, operator, and developer of casinos...

Real Property Held For Sale Is Not Used In A Trade Or Business: July 11, 2016 - Volume 10 Issue 131 Print Report; 1. C is a sole proprietor engaged in the business of developing and leasing real property. In 2016, C obtains a loan of $10 million from a bank and uses the proceeds to constru...

MSC Industrial Direct Co. Embarks On An Unusual Redemption Plan: July 8, 2016 - Bulletin Print Report; MSC Industrial Direct Company, Inc. ("MSC") has surplus funds that it wishes to "return to shareholders." To this end, MSC is offering to purchase for cash...

"Domestic Operating Corporation": July 8, 2016 - Volume 10 Issue 130 Print Report; Corporation A, (CA), is a domestic C corporation with one class of common stock outstanding. CA has not had any stock outstanding that was readily tradable on an esta...

Futures Trader Denied "60/40" Treatment: July 7, 2016 - Volume 10 Issue 129 Print Report; The petitioner, (SE), trades electricity futures contracts on "exchanges". Among those exchanges are four operated by "ISOs" regulated by the Fede...

Merger Constituents Are The "Same Taxpayer" Under Sec. 6621(d): July 6, 2016 - Volume 10 Issue 128 Print Report; Sec. 6621(d) of the Internal Revenue Code reads: "To the extent that, for any period, interest is payable under subchapter A and allowable under subchapter B on equivalent...

Accounting Changes For Stock Compensation Will Improve Earnings: July 5, 2016 - Bulletin Print Report; McKesson Corporation, ("MCK"), recently announced that, with respect to its fiscal year ending March 31, 2017, "the company has updated its previous (earnings) g...

Lions Gate Agrees To Acquire Starz: July 5, 2016 - Bulletin Print Report; The much anticipated combination of Lions Gate Entertainment Corporation, (LGE), a Canadian corporation, and Starz, (ST), a U.S. corporation, has now been set into motion with...

When Are Investment Properties "Similar or Related?": July 5, 2016 - Volume 10 Issue 127 Print Report; TP is an Ohio corporation engaged solely in the business of investing in real estate. It owned a six-story industrial warehouse building in Cincinnati, which was leas...

PVTB To Engage In A Reorganization: July 1, 2016 - Bulletin Print Report; PrivateBancorp, Inc. (PVTB) and Canadian Imperial Bank of Commerce (CIBC) announced the execution of a definitive agreement and plan of merger pursuant to which PVTB will be me...

Substantial Compliance Carries the Day: July 1, 2016 - Volume 10 Issue 126 Print Report; Company, (C), maintains an employee stock ownership plan, (ESOP). In 1987, TP sold, at a substantial gain, "X" shares of C stock to the ESOP in a sale that...

Alcoa Divulges Its Separation Plan: June 30, 2016 - Bulletin Print Report; Alcoa, Inc. has provided some detail, in a recently filed Form 10, with respect to its ambitious plan to separate its "upstream" business from its so-called "val...

Corporate Partner Respected As Such: June 30, 2016 - Volume 10 Issue 125 Print Report; Oregon may tax nonresident partners of multistate partnerships to the extent their partnership income has an Oregon source. If, however, the nonresident is not a part...

MCK To Form A Joint Venture: June 29, 2016 - Bulletin Print Report; McKesson Corporation, (MCK), announced a rather complicated transaction in which it will join forces with Change Healthcare Holdings, Inc. (CHCI), a private entity, with respec...

Income From Storing Natural Gas Is "Good" MLP Income: June 29, 2016 - Volume 10 Issue 124 Print Report; X is the common parent of a consolidated group of corporations. PRS is a limited partnership. PRS's sole general partner is Y, a member of X's consolidated gr...

Working Interest Owner Subject To Self-Employment Tax: June 28, 2016 - Bulletin Print Report; Mr. M owns "working interests" of two to three percent in various oil and gas ventures. Mr. M, as is customary, entered into both a purchase agreement and an operatin...

The Limited Scope of Sec. 246(c)(1)(B): June 28, 2016 - Volume 10 Issue 123 Print Report; In 1973, X corporation, (X), entered into employment agreements with two employees pursuant to which X transferred to each shares of common stock of four corporations...

ETE Scores An Improbable Victory: June 27, 2016 - Volume 10 Issue 122 Print Report; Against all odds, the Delaware Chancery Court ruled on Friday, June 24th, that Energy Transfer Equity, L.P. ("ETE" or the "Partnership"), in connection with...

NSAM Update: June 27, 2016 - Bulletin Print Report; In early June, the Treasury Department issued regulations designed to "discourage" REIT conversions on the part of C corporations that had participated in tax-free sp...

Nonresidents Cannot Be Taxed On "Retirement Income": June 27, 2016 - Bulletin Print Report; Petitioner participated in several nonqualified deferred compensation plans during his employment in New York. These plans provided retirement, disability and termination benef...

"Processing" a Natural Resource: June 24, 2016 - Volume 10 Issue 121 Print Report; X, a publicly-traded partnership, (MLP or PTP), owns and operates an aluminum smelter. The production of aluminum involves three steps, the last of which happens to b...

Calculating The Sec. 108(c) Exclusion Amount: June 23, 2016 - Volume 10 Issue 120 Print Report; TP owns two items of real property used in a trade or business, Property A and Property B. At the time of the debt forgiveness, Property A had a fair market value of "$a&q...

Amortizable Sec. 197 Intangibles: June 22, 2016 - Volume 10 Issue 119 Print Report; A, married individuals, began operating a cardroom and entertainment business as a partnership. Eventually, A incorporated the business, operating a restaurant and ca...

Latham & Watkins Will Not Be Deterred: June 21, 2016 - Bulletin Print Report; Apparently, yesterday, at the hearing conducted in Delaware Chancery Court regarding the WMB/ETE deal, we had a rare "Court Holding Company" sighting. This...

Pennsylvania's "Sec. 382 Limitation" Is Unconstitutional: June 21, 2016 - Volume 10 Issue 118 Print Report; Taxpayer ("TP") is a Delaware corporation with headquarters in New York. TP was wholly owned by R corporation, and R corporation, in turn, was wholly owned by RBA cor...

Equipment Not Used To "Process" Tangible Personal Property: June 20, 2016 - Bulletin Print Report; SRI is an oil and gas exploration and production company. It purchased and paid sales tax on equipment, materials, and associated services related to its oil and gas production...

"Seller's Option" and the DRD: June 20, 2016 - Volume 10 Issue 117 Print Report; TP is a life insurance company. TP derives its income primarily through the collection of premiums from its policyholders and the investment of those premiums in stoc...

FASB To Eliminate Deferred Tax Exception: June 17, 2016 - Bulletin Print Report; Transactions between members of a consolidated group are not recognized for financial accounting purposes. The gains and losses arising from such transactions are "elimina...

Direct Taxation vs. Excise Taxation: June 17, 2016 - Volume 10 Issue 116 Print Report; Congress enacted the Housing Act of 1937 which was designed to stimulate local financing of housing projects by empowering state and local housing authorities to issu...

Estate's Beneficiaries Denied Capital Loss Deduction: June 16, 2016 - Volume 10 Issue 115 Print Report; Decedent, D, died on Date 1. D's will provided that D's spouse received the entire residuary estate in trust for life, with the residue divided equally among...

Forfeiture Of Insider Trading Profits Is A Fine Or Similar Penalty: June 15, 2016 - Volume 10 Issue 114 Print Report; From 1997 to 2001, Joseph P. Nacchio, ("N"), served as the high-profile CEO of Qwest Communications International, Inc., ("Q"). In April 2001, N exercised o...

Energy Future Holdings (EFH) Discloses A Tax Problem: June 14, 2016 - Bulletin Print Report; One of the more complicated bankruptcies in U.S. history, fittingly, involves the subject of one of the largest LBOs in U.S. history, the LBO and bankruptcy of Energy Future Hol...

Assignment of Litigation Claim Does Not Result In Income: June 14, 2016 - Volume 10 Issue 113 Print Report; Y and CO hold "w" and "x" percent beneficial interests, respectively, in a trust ("the Trust") created under the will of C. &n...

Liberty Interactive Will Effect A "Split-Off" Of Liberty Expedia Holdings: June 13, 2016 - Bulletin Print Report; Liberty Interactive has announced that it is proceeding with its plan to separate its stake its Expedia, Inc., but will do so by means of a "split-off" (in which shar...

Deemed Asset Acquisition Not A "Covered" Transaction: June 13, 2016 - Bulletin Print Report; On December 31, 2012, the shareholders of T, an 'S' corporation, sold all their stock to ACQ for "$x" (the "Transaction"). T and ACQ jointly elected...

Discharged Debt Of A "Disregarded Entity": June 13, 2016 - Volume 10 Issue 112 Print Report; Sec. 61(a)(12) of the Internal Revenue Code provides that "income from discharge of indebtedness" (popularly known as "COD" income) is includible in gross i...

Good News On NSAM: June 10, 2016 - Bulletin Print Report; The other day we reported that the Treasury Department had issued temporary regulations designed to penalize certain "conversion transactions" (i.e., transa...

T-Mobile Will Issue Stock To Its Customers: June 10, 2016 - Bulletin Print Report; T-Mobile US, Inc. (TMUS) will be issuing shares of its common stock to certain of its customers to reward them both for their loyalty and for their assistance in signing up new...

Valuing Consideration For "COI" Purposes: June 10, 2016 - Volume 10 Issue 111 Print Report; For a merger to qualify as a reorganization, it must, among other requirements, satisfy the "continuity of interest" ("COI") test. COI requires that a subst...

Income From Sale of "RINs" Is Qualifying Income: June 9, 2016 - Volume 10 Issue 110 Print Report; Company, (C),is a publicly-traded limited partnership (PTP or MLP). C is engaged in a substantial pipeline operations business involving approximately "a&q...

TROW Will Make A Voluntary Payment To Certain Of Its Funds: June 8, 2016 - Bulletin Print Report; T. Rowe Price Group, Inc., (TROW) announced that it will be paying nearly $200 million "to compensate certain clients for a proxy voting error the firm made in connection...

Apportioning DISH's Subscription Receipts: June 8, 2016 - Volume 10 Issue 109 Print Report; Petitioner is a multistate taxpayer organized under the laws of the State of Nevada with principal executive offices located in Englewood, Colorado. Petitioner provides direct...

Treasury Attacks "Conversion Transactions" Following Spin-Offs: June 8, 2016 - Bulletin Print Report; The Treasury Department feels that Congress's efforts to discourage REIT spin-offs were too timid. Accordingly, the Department has issued temporary regulations that it beli...

New REIT Spin-off Regulations: June 7, 2016 - Bulletin Print Report; The Treasury Department has issued regulations that make it untenable for a corporation that participated in a tax-free spin-off to merge with an existing REIT. While...

Intangible Property Holding Companies and Nexus: June 7, 2016 - Volume 10 Issue 108 Print Report; In The Classics Chicago, Inc. v. Maryland Comptroller of the Treasury , Md. Ct. Spec. App., No. 2047, January 4, 2010, the issue was whether The...

The Last "Opco/Propco" Spin-Off?: June 6, 2016 - Bulletin Print Report; Hilton Worldwide Holdings, Inc., (Hilton Parent), has filed a Form 10 with respect to the company's imminent spin-off of each of Park Hotels & Resorts, Inc., (PK), and...

FINRA Is An Agency Or Instrumentality Of The U.S. Government: June 6, 2016 - Bulletin Print Report; The issue is whether the Financial Industry Regulatory Authority ("FINRA") is a "corporation or other entity serving as an agency or instrumentality" of the...

Item of Property: June 6, 2016 - Volume 10 Issue 107 Print Report; V is the sole owner of JVT. JVT was a C corporation during 2005 but has subsequently elected 'S' corporation status. V "materially participated" in...

Termination of Contract Precipitates Partial Liquidation: June 3, 2016 - Volume 10 Issue 106 Print Report; X was engaged in the business of purchasing steel from foreign steel mills for resale to customers in the U.S. All of the stock of X was owned by its president and hi...

Should YHOO "Monetize" Its BABA Stake?: June 2, 2016 - Bulletin Print Report; SoftBank Group Corp. ("SBG") has announced a plan, which has by now been widely publicized, to divest a significant amount of its stock in Alibaba Group Holding...

Cell Phone Providers Not "Telephone Companies": June 2, 2016 - Volume 10 Issue 105 Print Report; Petitioners are engaged in the business of providing wireless communication services, or "cell phone" services, via radio waves within South Carolina....

BHI Should Enjoy Tax Benefits From Redemption Of KHC Preferred Stock: June 1, 2016 - Bulletin Print Report; Berkshire Hathaway, Inc. (BHI) has a very large investment in the Series A preferred stock of Kraft Heinz Company (KHC). The stated value of such preferred stock is $8 billion....

Determining Ownership For Withholding Purposes: June 1, 2016 - Volume 10 Issue 104 Print Report; TP is a domestic bank that acts as a stock transfer/dividend paying agent for various U.S. corporations, including DC. TP is responsible for withholding U.S. taxes on...

Anatomy Of A "Reverse Morris Trust" Transaction: May 31, 2016 - Bulletin Print Report; The recently announced transaction involving Computer Sciences Corp. (Chicago) and Hewlett Packard Enterprise Company (Houston) is a "textbook" reverse Morris Trust (...

No FTHBC For Purchase of Remaining Interest in Residence: May 31, 2016 - Volume 10 Issue 103 Print Report; In 1954, petitioner's parents purchased a residence (FR). In the 1970s, petitioner's parents paid off the mortgage on the FR. In 1993, petitioner moved back i...

Identifying The "Income Producing Activity": May 27, 2016 - Volume 10 Issue 102 Print Report; AT&T, (T), for the years 1996-1999, paid Massachusetts, (M), corporation franchise taxes in the amount of $7,706,624. In October, 2005, T filed an application for...

Education Expense Regulations Are Valid: May 26, 2016 - Volume 10 Issue 101 Print Report; S earned a bachelor's degree in accounting. In 1990, he began working as a tax-return preparer. In 1995, he became an "enrolled agent," a person authorized to rep...

Advance Payments Must Be Included In Gross Income: May 25, 2016 - Volume 10 Issue 100 Print Report; On May 1, 2015, T, a corporation, received $120x as an "advance payment" for a two-year contract to provide services. For federal income tax purposes, T uses the Defe...

HPE And CSC Choose A Reverse Morris Trust Transaction: May 25, 2016 - Bulletin Print Report; Hewlett Packard Enterprise ("HPE") will spin-off its Enterprise Services business ("spinco") to its shareholders. Immediately thereafter, and as part of the...

Alexza Pharmaceuticals Acquisition To Feature "CVRs": May 24, 2016 - Bulletin Print Report; Grupo Ferrer Internacional S.A., through a newly-created U.S. subsidiary, Ferrer Pharma, Inc., (FPI), has reached an agreement to acquire the stock of Alexza Pharmaceuticals, I...

Taxpayer Successfully Changed His Domicile to Florida: May 24, 2016 - Volume 10 Issue 99 Print Report; Mr. K has owned a home in Pennsylvania, (P), for the past 46 years, and in 1982 he bought a home in Florida. Since 1982, it has been his practice to spend part of the...

I.R.S. Readies Rules Expanding Repeal Of The "GU" Doctrine: May 23, 2016 - Bulletin Print Report; We learned last week that the I.R.S. is preparing to issue guidance that will, apparently, change the ground rules with respect to spin-offs of corporations that, in addition t...

Closed Year Deductions Can Be the Subject of a Sec. 481 Adjustment: May 23, 2016 - Volume 10 Issue 98 Print Report; Beginning in J, TP initiated a legal action against A and B. The litigation continued until TP and A executed a settlement agreement on Date 1, Taxable Year L, resolv...

Spin-Offs Of Foreign Subsidiaries Entail Some “Tax Leakage”: May 20, 2016 - Volume 10 Issue 97 Print Report; Johnson Controls’ announcement of its plan to spin-off Adient plc, a U.K. subsidiary of Johnson Controls, has touched off speculation that the next chapter of t...

FTI And TEC Will Decamp To The U.K.: May 19, 2016 - Bulletin Print Report; Technip S.A. (TEC) and FMC Technologies, Inc. (FTI) have announced a business combination that will result in FTI becoming a subsidiary of a newly-formed U.K corporation, FMC T...

Reorganization Primer: May 19, 2016 - Volume 10 Issue 96 Print Report; Where one corporation acquires the stock or assets of another corporation, and the transaction qualifies as a "reorganization" within the meaning of Sec. 368(a)(1...

Tax Court Finds Compensation To "Concrete" Executives Reasonable: May 18, 2016 - Volume 10 Issue 95 Print Report; Petitioner operated a concrete contracting business throughout the state of Arizona. Petitioner, a C corporation, was incorporated in 1974 by HWJ and MJ, husband and wife. B an...

Terex Changes Course: May 17, 2016 - Bulletin Print Report; One of the more low-key, under the radar, inversions from this modern era of cross-border transactions was the combination involving Terex Corporation (T) and Konecranes plc (K...

"Unilateral" Contract Satisfies "All Events" Test: May 17, 2016 - Volume 10 Issue 94 Print Report; Giant Eagle ("GE") operates a chain of supermarkets...gas stations.... GE uses the accrual method of accounting. Under the "fuelperks" promotion, for every...

How Will TWC's Shareholders Be Taxed?: May 16, 2016 - Bulletin Print Report; Now that the historic combination of Time Warner Cable, Inc. (TWC) and Charter Communications, Inc. (CCI) appears to be nearing completion, questions have arisen regarding how...

Sale of Partnership Interest Gives Rise To Capital Gain or Loss: May 16, 2016 - Volume 10 Issue 93 Print Report; Petitioner is a management consultant who was associated full-time with a large New York City consulting firm. Although he was employed full time, petitioner sought a...

A Conversion Is a Recapitalization: May 13, 2016 - Volume 10 Issue 92 Print Report; X Corporation, (X), has shares of voting common stock and non-voting preferred stock outstanding. All of the common stock is owned by employees. ...

FASB Proposes To Simplify The Goodwill "Impairment" Test: May 13, 2016 - Bulletin Print Report; Goodwill (and other indefinite lived intangible assets) acquired in a business combination shall not be amortized. Instead, in lieu of amortization, goodwill is required to be...

Facebook To Pay Stock Dividend: May 12, 2016 - Bulletin Print Report; Facebook, Inc., (FB), has two classes of stock outstanding, a "high vote" class (Class B common stock); and a "low vote" class (Class A common stock). The f...

Miller Brewing Taxed on Sales to Hoosier Customers: May 12, 2016 - Volume 10 Issue 91 Print Report; Miller Brewing Company, (MB), is a Wisconsin corporation engaged in the production and sale of malt beverage products. Under...

Ohio Cannot Tax Nonresident Capital Gains: May 11, 2016 - Volume 10 Issue 90 Print Report; In 2000, Mr. Patton R. Corrigan, ("C"), a resident of Connecticut, acted in concert with business associates to acquire the assets of Mansfield Plumbing, ("MP&qu...

ILG Allays "FIRPTA" Concerns: May 10, 2016 - Bulletin Print Report; It had recently been concluded that a foreign person's gain from the exchange of Vistana stock for that of ILG in the upcoming merger would have to be "taken...

CFC Did Not Generate "FBCSI": May 10, 2016 - Volume 10 Issue 89 Print Report; TP is a domestic corporation. TP is a leading global provider of Products. TP owns all of the shares of certain controlled foreign corporations, (CFCs), including X,...

SEC Disgorgement Payment Not Deductible: May 9, 2016 - Bulletin Print Report; In 1977, the Foreign Corrupt Practices Act ("FCPA") was enacted. The FCPA contains both anti-bribery and accounting provisions. The Department of Justice (DOJ) and th...

Qualifying Income Arises From "Non-Ag" Sales Of Fertilizers: May 9, 2016 - Bulletin Print Report; The I.R.S., after a lengthy pause which produced controversial proposed regulations, has begun issuing private letter rulings regarding an entity's qualification for the ex...

Payments to Former Spouse Not "Alimony": May 9, 2016 - Volume 10 Issue 88 Print Report; In June, 1992, petitioner married his former spouse, and had two children with her during their marriage. In January, 2008, petitioner and his former spouse separated...

The "Cost Of Capital" Is A Deductible Cost: May 6, 2016 - Volume 10 Issue 87 Print Report; Colorado levies a tax on income generated from the extraction of nonrenewable natural resources, such as natural gas, from within the state, the so-called "severance"...

REIT Tender Offer And Merger Should Qualify As A Reorganization: May 6, 2016 - Bulletin Print Report; Annaly Corp. Management, Inc. (ACM), through its wholly-owned subsidiary, RMS, is offering to exchange, for each outstanding shares of common stock of Hatteras Financial Corpor...

A Distribution By YHOO Should Be "Tax Advantaged": May 5, 2016 - Bulletin Print Report; As YHOO inches closer to a disposition of its "core" business, we have been asked on several occasions what the tax consequences of a distribution by YHOO of the proc...

Downstairs Business Combination Is A 'C' Reorganization: May 5, 2016 - Volume 10 Issue 86 Print Report; Target is a State A corporation that is engaged in Business A. Target has one class of voting common stock outstanding. Shareholder, ("SH"), owns all of the outstandi...

ETE Shows Its Hand: May 4, 2016 - Bulletin Print Report; An S-4 filing released today clarifies the nature of the dispute between ETE and WMB regarding the now infamous "Sec. 721(a) opinion" that (i) is a condition of the d...

N.J. "Interest Add-Back" Not Unreasonable: May 4, 2016 - Volume 10 Issue 85 Print Report; The Treasury Department recently issued proposed regulations which, under a broad range of circumstances, would classify intercompany indebtedness as stock, thus denying the pu...

IP Secures A "Basis Step-Up": May 3, 2016 - Bulletin Print Report; Buyers of assets and businesses always seek, whenever possible, to secure a "cost" basis in the target's assets. Such a cost basis maximizes the buyer's "...

Status of Popular Deals: May 3, 2016 - Bulletin Print Report; Williams/ETE Lawyers for ETE are currently unable to render a "Sec. 721(a)" opinion with respect to the transfer of assets from ETC to ETE. Why not? S...

Successor Can Deduct Option Cancellation Payments: May 3, 2016 - Volume 10 Issue 84 Print Report; Employees, (E), were employees of A Corporation, (A), and B Corporation, (B). A and B granted nonstatutory options to E to purchase common stock in those corporations...

Brocade Will Cause "A Ruckus": May 2, 2016 - Bulletin Print Report; Brocade Communications Systems, Inc. (BCS) has entered into a plan and agreement pursuant to which it will acquire all of the stock of Ruckus Wireless, Inc. (RWI). Although a s...

ROVI To Acquire TIVO And "Protect" Its NOLs: May 2, 2016 - Bulletin Print Report; Rovi Corporation (ROVI) and TiVo, Inc. (TIVO) announced that the former will acquire the latter "for $10.70 in cash and stock for total consideration of approximately $1.1...

Inherited IRAs: May 2, 2016 - Volume 10 Issue 83 Print Report; Petitioner's mother, CM, had maintainedan I.R.A. with Morgan Stanley. CM died in 2005. On July 7, 2006, Morgan Stanley distributed the remaining balance fro...

Abbott's Acquisition of St. Jude Should Qualify As A "Reorganization": April 29, 2016 - Bulletin Print Report; Abbott Laboratories (AL) and St. Jude Medical, Inc. (SJM) have announced a plan and agreement calling for the acquisition of the latter by the former. The transaction will be s...

Functional Use Determines Asset Class: April 29, 2016 - Volume 10 issue 82 Print Report; TP is an energy service company that has two primary businesses: Utility, an integrated electric utility, and Wholesale, a wholesale energy business....

Adient plc Should Not Be A "Surrogate Foreign Corporation": April 28, 2016 - Bulletin Print Report; In conjunction with its acquisition by Tyco, Johnson Controls, Inc., (JCI) will be distributing the stock of a corporation, Adient plc, (A), which will conduct JCI's "...

CATM To Engage In A "Self-Inversion": April 28, 2016 - Bulletin Print Report; Cardtronics, Inc. (CATM), "the world's largest ATM owner/operator," announced a "plan of redomicile" to change its parent's location of incorporatio...

Can A Financial Instrument Be Both Debt and Equity?: April 28, 2016 - Volume 10 Issue 81 Print Report; Ordinarily, the characterization of an instrument for tax purposes is an all-or-nothing proposition: the instrument is either debt or equity, but not both. The fact t...

Spouse Did Not Inherit Decedent's Minimum Tax Credits: April 27, 2016 - Volume 10 Issue 80 Print Report; Petitioner was married to WV from September 1, 2002 until his death on August 21, 2004. Before their marriage, WV was married to MV until their marriage ended in divorce in Jan...

Other Tax Attributes Can Fall Victim To An Ownership Change: April 26, 2016 - Bulletin Print Report; Where a loss corporation experiences an "ownership change," certain limits are imposed on the amount of taxable income, for any taxable year ending after the change d...

Reverse Acquisition Not Found: April 26, 2016 - Volume 10 Issue 79 Print Report; P and T areeach thecommon parents of separateaffiliated groups, which have filed consolidated income tax returns for the years immediately preceding...

Natural Gas Gathering Pipeline Systems Are Seven Year Property: April 25, 2016 - Volume 10 Issue 78 Print Report; Natural gas production is a multi-step process. These stepsinclude extraction of the gas from the earth, processing to make it marketable, and transportation to...

Retroactive Tax Increase Not Unconstitutional: April 22, 2016 - Volume 10 Issue 77 Print Report; Mr. SK died on March 22, 2002. At the time of his death, Mr. SK's taxable estate was valued at $5,394,851 with $438,182 due in New Jersey estate tax, which was du...

Installment Reporting Allowed Despite Receipt of CDs: April 21, 2016 - Volume 10 Issue 76 Print Report; In 1982, the Silvermans (S) owned 29,162 shares of stock in Olympic Savings and Loan Association (O). Coast Savings and Loan Association (C), a mutual savings and loa...

Vistana Is A "U.S. Real Property Holding Corporation": April 20, 2016 - Bulletin Print Report; The "break-up" of Starwood is one of the more complex transactions we have encountered. It involves, in total, a spin-off (or perhaps a split-off) and two mergers, in...

A True Bargain Purchase: April 20, 2016 - Volume 10 Issue 75 Print Report; Immediately prior to November 28, 1973, all ofthe outstanding stock of C was held by husband, (H), and wife, (W). On No...

What Does Sec. 721 Entail?: April 19, 2016 - Bulletin Print Report; In the Williams/ETE transaction, Williams is slated to merge with and into a new corporation, ETC, and the latter will issue in exchange for Williams’ shares a...

Guarantee Does Not Create Recourse Liability: April 19, 2016 - Volume 10 Issue 74 Print Report; If a partner's guarantee of a partnership's nonrecourse obligation is conditioned on the occurrence of certain "nonrecourse carve out events," does the guaran...

A Brief History Of Inversions: April 19, 2016 - Bulletin Print Report; Because foreign source income of foreign corporations is not subject to U.S. tax, many U.S. corporations find it advantageous to “segregate” their foreign...

A Director Is Carrying on a Trade or Business: April 18, 2016 - Volume 10 Issue 73 Print Report; X was the investment advisor to the various Z mutual funds. X merged with and into a wholly-owned subsidiary of Y, XX. The X shareholders received Y stock in exchange...

Political Campaign Expenditures Not Deductible: April 18, 2016 - Bulletin Print Report; TP, a corporation, is prohibited by the Federal Election Campaign Act ("FECA") from contributing to federal election campaigns. TP established "PAC," which...

Inversions Are Not Dead: April 15, 2016 - Bulletin Print Report; The theory that the Treasury Department regulations have effectively killed inversion transactions is being sorely tested by a deal announced today that, from what we can glean...

Pre-Planned Sale of Stock Does Not Affect "Control" Requirement: April 15, 2016 - Volume 10 Issue 72 Print Report; H Corporation (H) owned all of the stock of P Corporation (P). Some 88 percent ofH's single class of commonstock was owned by the members of a family...

Delphi Scores Impressive Victory Over I.R.S.: April 14, 2016 - Bulletin Print Report; The I.R.S. had been pursuing Delphi Automotive plc, (DAP), the parent of Delphi Automotive LLP, (DAL), for additional taxes growing out of its assertion that DAL was a "su...

Acquisition Of Stock Not A "Purchase": April 14, 2016 - Volume 10 Issue 71 Print Report; P owns all the stock of Sub 1, Sub 2, and Sub 3. P has owned Sub 1 and Sub 2 for over five years. P acquired the stock of Sub 3 in a taxable transaction on Date 1....

I.R.S. Updates Rules Regarding "Deemed" Stock Distributions: April 13, 2016 - Bulletin Print Report; Sec. 305(a) of the Internal Revenue Code provides that gross income does not include distributions of stock by the distributing corporation with respect to that corporation'...

Sec. 338(h)(10) Election Does Not Justify New Apportionment Formula: April 13, 2016 - Volume 10 Issue 70 Print Report; The stock of TP, a wholly-owned subsidiary of X, was sold to Y. The stock sale was treated as a deemed asset sale under Sec. 338(h)(10) of the Internal Revenue Code....

Benefits From Privately Funded Sources: April 12, 2016 - Volume 10 Issue 69 Print Report; The applicant is a public university (probably the University of Missouri)that was created by the laws of the State of Missouri. The applicant pays benefits fro...

Treasury Proposes Sweeping Overhaul Of Debt/Equity Determinations: April 11, 2016 - Bulletin Print Report; The question of whether a financial instrument is properly characterized as indebtedness or equity has been debated, with no definitive resolution, since the inception of the t...

"Qui Tam" Award Is Ordinary Income: April 11, 2016 - Volume 10 Issue 68 Print Report; Mr. JA, (JA),was the C.F.O. of NV Hospital in Montana. In 1990, Q, an affiliate of HCA, began managing the hospital. Q...

Reimbursements of "Advancements" Not Gross Income: April 8, 2016 - Volume 10 Issue 67 Print Report; The taxpayer, TP, is a regulated investment company, RIC,under Subchapter M of the Internal Revenue Code. TP established S Corporation, S, a wholly-owned subsid...

Temporary Regulations Impact Baxalta/Shire Deal: April 7, 2016 - Bulletin Print Report; While most of the attention, from a tax viewpoint, paid to the Baxalta, Inc./Shire plc transaction has focused on whether Shire's acquisition of the stock of Baxalta could...

UBTI and Partnerships: April 7, 2016 - Volume 10 Issue 66 Print Report; Early in 1996, TP's I.R.A. purchased a limited partnership interest in P, a nonpublicly traded partnership. P serves independent tire retailers through volume pur...

Resident Alien's NOL Can Be Carried to NRA Years: April 6, 2016 - Volume 10 Issue 65 Print Report; TP, a Country A national, is a resident alien. LLC is a State limited liability company wholly owned by TP. LLC is engaged in Business X within and without the United...

Temporary Regulations Turn PFE Into An "Expatriated Entity": April 5, 2016 - Bulletin Print Report; While we are having a hard time discerning precisely where the "authority" for Treasury's latest pronouncement comes from, the fact remains that this guidance has...

Sale and Repurchase Does Not Produce Bona Fide Loss: April 5, 2016 - Volume 10 Issue 64 Print Report; Mr. HRF, (HRF), created two trusts for his two sons and in 1969 the trustsenjoyed large capital gains from the sale of certain stock. To offset these gains, the...

FASB Proposes Major Changes For Stock Compensation Arrangements: April 4, 2016 - Bulletin Print Report; The accounting for stock based compensation arrangements has always been controversial and at times contentious. The latest battle is over whether it is proper to exclude stock...

Starwood Will Undertake Multiple "Morris Trust" Transactions: April 4, 2016 - Bulletin Print Report; Now that Anbang has withdrawn its offer for Starwood (HOT), the stage is set for HOT to be acquired by Marriott International, Inc. (MII). However, before such acquisition take...

Father's Redemption Is a Complete Termination of Interest: April 4, 2016 - Volume 10 Issue 63 Print Report; Company, (C), was incorporated under the laws of State on Date 1. C has one class of common stock issued and outstanding, all owned by Father, (F). &n...

Gain From Sale of "Carbon Credits" Is Not FPHCI: April 1, 2016 - Volume 10 Issue 62 Print Report; TP is a real estate investment trust, (REIT). TP owns all of the stock of FC. FC is a controlled foreign corporation, (CFC)....

When Is COD Income Measured?: March 31, 2016 - Volume 10 Issue 61 Print Report; As of Date 1, the TP Group, (TPG), had a consolidated Net Operating Loss (CNOL). On Date 2, and periodically thereafter, TP and "a" of its affiliates commen...

Continued Employment Taints Redemption: March 30, 2016 - Volume 10 Issue 60 Print Report; A corporation's stock was owned entirely by a father, (F), and his son, (S). The corporation redeemedF's entire stock interest. &n...

Bank's Exchange Of Parent's Debt For Sub's Securities Respected: March 29, 2016 - Bulletin Print Report; P is the common parent of an affiliated group of domestic corporations (the D Group). D is a wholly-owned subsidiary of P and is the issuer of all the "external" debt...

Can Liberty Interactive's Deferred Tax Liabilities Be Mitigated?: March 29, 2016 - Volume 10 Issue 59 Print Report; Liberty Interactive Corporation, ("LIC"), has recorded on its books a deferred tax liability captioned "Discount on Exchangeable Debentures." The amount of...

Pinnacle Will Pay A "Property Dividend": March 28, 2016 - Bulletin Print Report; Pinnacle Entertainment, Inc. (PINN) has been pursuing an "opco/propco" transaction for quite some time. It appears that the transaction is now on the verge of being c...

Emotional Distress Does Not Warrant Exclusion From Gross Income: March 28, 2016 - Volume 10 Issue 58 Print Report; Before January 3, 2008, petitioner worked for Siemens, (S), as a trainer assigned to S's client, hospital. Petitioner's job duties included training hospital...

Has LinnCo Made An Offer You Cannot Refuse?: March 24, 2016 - Bulletin Print Report; LinnCo, LLC, (LNCO), has elected to be treated as a corporation for federal income tax purposes. LNCO's only assets are limited partnership interests in its affiliate, Linn...

Sec. 1033 Requires "Continuity of Business Enterprise": March 24, 2016 - Volume 10 Issue 57 Print Report; From 1938 until December 7, 1941, when hostilities commenced between the United States and Japan, petitioner operated a sole proprietorship engaged in the general imp...

Marriott Sweetens Its Offer: March 23, 2016 - Bulletin Print Report; Marriott International, Inc., (M), has come back with a higher offer for Starwood Hotels & Resorts Worldwide, Inc., (S), which the latter has found acceptable. Accordingly,...

Sale Of Minority Equity Stake Produces "Business Income": March 23, 2016 - Volume 10 Issue 56 Print Report; Fidelity National Financial (FNF) owned 75 percent of the stock of Fidelity National Information Services (FIS) through 2006. After 2006, FNF distributed its FIS stock to its s...

Incorporation Generates Constructive Distribution: March 22, 2016 - Volume 10 Issue 55 Print Report; Company, (C), is a holding company. C has outstanding 438 shares of Series A common stock and 437 shares of Series B common stock, all of which are owned by P....

I.R.S. Finally Releases Baxter's Spin-Off Ruling: March 21, 2016 - Bulletin Print Report; Baxter International, Inc. received an I.R.S. ruling with respect to the spin-off of Baxalta on April 1, 2015. The spin-off occurred several months later. Ordinarily, the rulin...

IHS Narrowly Avoids "Inversion" Status For Cross Border Deal: March 21, 2016 - Bulletin Print Report; In the face of seemingly heightened attention being paid to cross border deals, what with articles in Tax Notes by learned professors and a flurry of legislative proposals, IHS...

No Taxable Income Generated by Redemption "Discount": March 21, 2016 - Volume 10 Issue 54 Print Report; Fund, (F), is an open-end diversified management investment company. It is the intention of F to qualify for and elect tax treatmentas a regulated investment co...

"Dealer Cash" Is Includible in Gross Income: March 18, 2016 - Volume 10 Issue 53 Print Report; Klein Honda, (KH), is an automobile dealership conducting business in the state of Washington. KH and other Honda dealers must purchase vehicles from Honda.

FASB Simplifies The Equity Method Of Accounting: March 17, 2016 - Bulletin Print Report; Under the venerable equity method of accounting, an investor recognizes its proportionate share of the earnings or losses of the equity method "investee..." In additi...

The 21 Club Is Liable for Sales Tax: March 17, 2016 - Volume 10 Issue 52 Print Report; The taxpayer, the famed 21 Club, Inc. (21),operates a restaurant and catering business that offers the use of audiovisual (AV) equipment to its catering custome...

Standing Timber is Real Property: March 16, 2016 - Volume 10 Issue 51 Print Report; C is a State A limited partnership whose units have been traded on the New York Stock Exchange since Year 1. C is Plum Creek Timber, L.P. C is engaged in growing and...

Making a Loan Is Not the Performance of a Service: March 15, 2016 - Volume 10 Issue 50 Print Report; In Month A, Owner, (O), acquired all of the stock of Company, (C). In Month B, C filed for Chapter 11 bankruptcy. On Date D,...

Senators Propose Anti-Inversion Legislation: March 14, 2016 - Bulletin Print Report; Democratic Senators, just last week, proposed "anti-inversion" legislation that they must know has no chance of passage, at least by the present Congress. Presumably,...

Income From "Flowback" Is MLP Qualifying Income: March 14, 2016 - Volume 10 Issue 49 Print Report; X is a corporation which wasorganized under the laws of State. X intends to form Y under the laws of State and cause Y to become a publicly traded partnership (...

Bob Evans' Spin-Off Fears Seem Unfounded: March 11, 2016 - Bulletin Print Report; Today's Wall Street Journal contains an article describing a dispute between Sandell Asset Management Corporation and the board of directors of Bob Evans Farms, Inc. (BEFI)...

TARP Recipient Status Is A Sec. 381 Item: March 11, 2016 - Volume 10 Issue 48 Print Report; FP owns all of the stock of TP. TP is the common parent of a consolidated group. On Date 2, FP acquired all the stock of T. Immediately after FP acquired T, FP caused T to merg...

"Dual" Use Property And Sec. 1031: March 10, 2016 - Volume 10 Issue 47 Print Report; Mr. A, an individual, owns aircraft through a single-member LLC. Mr. A and Mr. A's LLC have some business and investment needs for the aircraft. &nbs...

"Bargain Purchase": March 9, 2016 - Bulletin Print Report; One of the more unusual deals we have ever encountered is currently unfolding in the real estate space. ARMOUR Residential REIT, Inc., (ARMOUR), through a newly-created subsidi...

Damages Can Be "Wages": March 9, 2016 - Volume 10 Issue 46 Print Report; W was an employee of X Corporation, (X), from 1972 until May 21, 1979. Upon termination if his services,W filed a complaint against X requesting damages in the...

"Timely" Determination Of True "STI" Not Required In Sec. 482 Cases: March 8, 2016 - Volume 10 Issue 45 Print Report; Guidant Corporation (GC) is a U.S. corporation that from 2001 through 2006 was the parent of an affiliated group that included CPI, CTS, GSC, ACS, and EVT (the Guidant group)....

Endo Secures A "Worthless Stock" Deduction: March 7, 2016 - Bulletin Print Report; Endo International plc, an Irish corporation, was formed to facilitate the "inversion" of Endo Health Solutions, Inc., a domestic corporation. It is important to note...

Debt or Deferred Income?: March 7, 2016 - Volume 10 Issue 44 Print Report; Mr. Z and Mrs. Z each owned 50 percent of petitioner's common stock. P's principal business has been the ownership and operation of two gasoline stations/conv...

Can HRG "Unlock" The Value In Spectrum Brands?: March 4, 2016 - Bulletin Print Report; HRG Group, Inc. (HRG) owns 57.9 percent of the stock of Spectrum Brands Holdings, Inc. (SBH). It also owns stock in FGL which is on the verge of being sold by HRG for what appe...

Momentary Ownership of Securities Does Not Terminate REIT Status: March 4, 2016 - Volume 10 Issue 43 Print Report; TP is a real estate investment trust, (REIT). TP is in the business of owning or leasing the Properties, which are primarily leased to, and operated by, Lessee, (L).<...

Investment Assets Generate "Nonbusiness Income": March 3, 2016 - Volume 10 Issue 42 Print Report; Plaintiff acquired a 40 percent interest in S in 2006. Plaintiff entered into a Management Agreement with S. Plaintiff sold approximately 1/5 of its interest in S in 2008. Plai...

Cuba "Recognized" For Certain U.S. Income Tax Purposes: March 2, 2016 - Bulletin Print Report; Sec. 901, Sec. 902, and Sec. 960 of the Internal Revenue Code generally allow United States taxpayers to claim a "foreign tax credit" with respect to income, war prof...

Theft Loss Not Yet "Sustained": March 2, 2016 - Volume 10 Issue 41 Print Report; Donald & Co. Securities, Inc. ("D") was a broker-dealer of securities registered with the SEC and the National Association of Securities Dealers (NASD). Unbeknown...

Hilton Will Create A REIT: March 1, 2016 - Bulletin Print Report; Hilton Worldwide Holdings, Inc. ("H") accurately describes itself as "one of the leading hospitality companies in the world," with a total of 4,610 hotels,...

Tax Issues For Investors In Foreign Stocks--A Primer: March 1, 2016 - Volume 10 Issue 40 Print Report; Most investors who diversify their portfolios with foreign stocks do so by means of American Depository Receipts ("ADRs"), as opposed to a direct purchase of the &quo...

REIT's Property Not Held "Primarily For Sale To Customers": February 29, 2016 - Bulletin Print Report; TP has elected to be taxed as a real estate investment trust (REIT). TP owns and leases residential real estate to third parties. LP owns all of TP's voting common stock. T...

Forbearance Payments Ruled Deductible: February 29, 2016 - Volume 10 Issue 39 Print Report; On Date 1, C and B entered into a Purchase and Sale Agreement ("Agreement") for the sale of C's subsidiaries, X and Y, to B. B included the two corporat...

New Jersey Rules On "Add Back" Of Related Member Interest Expense: February 26, 2016 - Bulletin Print Report; N.J.S.A. 54:10A-4(k)(2)(I) requires corporations to add back (i.e., refrain from deducting) interest expenses that were deducted as an expense and paid to a "related membe...

E-Books Are Not "Information Services": February 26, 2016 - Volume 10 Issue 38 Print Report; The taxpayer, (P), a California corporation, stores a digitized catalog of electronic books ("E-Books") available for sale to customers bothinside and...

Stock Sale Gain Is Foreign Personal Holding Company Income: February 25, 2016 - Volume 10 Issue 37 Print Report; Petitioner is the successor-in-interest to CUS, a Delaware corporation. CM, a third-tier wholly-owned Malaysian subsidiary of CUS manufactured disk drives in Malaysia...

Temporary Investment of New Capital Is a Real Estate Asset: February 24, 2016 - Volume 10 Issue 36 Print Report; In Month X, Trust, (T), completed a private offering of subscriptions for "$a" worth of shares of its common stock and "$b" worth of itsconv...

New Earnings Stripping Legislation: February 23, 2016 - Bulletin Print Report; Rep. Levin, one of the most determined foes of cross border merger transactions, has introduced, yet again, legislation in the House of Representatives that would ren...

Sec. 212 Expenses Must Be "Ordinary and Necessary": February 23, 2016 - Volume 10 Issue 35 Print Report; The managing officers and controlling shareholders of a corporation induced taxpayer to sell her stock to them by fraud. Taxpayer brought suit and recovered judgment...

Reflections on Professor Shay's Tax Notes' Article: February 22, 2016 - Bulletin Print Report; Professor Shay and several colleagues have come up with additional proposals, which he hopes will be adopted by the Treasury Department (either in the regulations Tre...

Forgiveness Of MLP Debt: February 22, 2016 - Bulletin Print Report; The precipitous decline in oil prices may eventually lead to a widespread restructuring of debt burdens with respect to those master limited partnerships ("MLPs") who...

"Deemed" Dividends are Taxable: February 22, 2016 - Volume 10 Issue 34 Print Report; TP is considering electing 'S' corporation status. Because TP has accumulated earnings and profits (E&P), there is a possibility that the 'S' elec...

Hybrid Instrument Characterized as Equity: February 19, 2016 - Volume 10 Issue 33 Print Report; Each of Fund 1 through Fund 32 is a closed-end management investment company registered under the Investment Company Act of 1940. Each Fund has elected to be treated...

Delayed Conversion Ratio Setting Not a Deemed Distribution: February 18, 2016 - Volume 10 Issue 32 Print Report; Corporation, (C), has two classes of stock outstanding. The first class is common stock which is widely-held and publicly traded on a national exchange. The second cl...

Dell/EMC Transaction Depends On Legal Opinion: February 17, 2016 - Bulletin Print Report; The proxy materials describing the landmark transaction between Dell Computer and EMC Corporation indicate that the consummation of the transaction is conditioned on, among oth...

Accuracy-Related Penalty Imposed On Law Firm: February 17, 2016 - Volume 10 Issue 31 Print Report; Petitioner is a law firm organized as a C corporation. It computes its taxable income using the cash receipts and disbursements method of accounting. Petitioner's sharehold...

Darden's Ruling Confirms That "Size" (Of Active Business) Is Irrelevant: February 16, 2016 - Bulletin Print Report; LTR 201607003, November 5, 2015, appears to be the ruling that Darden Restaurants, Inc. requested with respect to its "opco/propco" formation. The ruling was requeste...

FASB Proposes Changes In Classification Of Certain Cash Flows: February 16, 2016 - Bulletin Print Report; In a Proposed Accounting Standards Update recently released for "exposure," FASB has determined to standardize how certain cash outflows and inflows should be classif...

Merger Characterized as a Theft: February 16, 2016 - Volume 10 Issue 30 Print Report; A and B, while shareholders of U and V which were retail companies, entered into an agreement and plan of reorganization with W, a publicly traded corporation. The tr...

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