4219 Results

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...
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...
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...
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...
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...
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...
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,...
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...
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...
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....
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...
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...
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...
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...
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...
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...
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...
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...
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...
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-...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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
  1. 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...
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...
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...
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...
Real Estate "Professional" Must "Materially Participate"
February 12, 2016 - Volume 10 Issue 29 Print Report
The petitioner, (AP), was self-employed in 2005 as a real estate loan agent and broker and reported her income and loss from her real estate businesson Schedule...
Qualified Performance-Based Compensation
February 11, 2016 - Volume 10 Issue 28 Print Report
X Corporation, (X), and Y Corporation, (Y), are publicly held corporations within the meaning of Sec. 162(m)(2). Both maintain plans under which participating employe...
Fortis To Acquire ITC Holdings
February 10, 2016 - Bulletin Print Report
Clearly, the benefits to be gained from a "cross border" merger are not the exclusive preserve of the pharmaceutical and tech industries. We now have one of the first...
Constructive Stock Dividends (on Preferred Stock) Are Taxable
February 10, 2016 - Volume 10 Issue 27 Print Report
X Corporation, (X), was merged with and into Y Corporation, (Y), in a reorganization qualifying under Sec. 368(a)(1)(A) of the Internal Revenue Code. The X shareholde...
The PFE/AGN Deal Is Not An "Inversion"
February 9, 2016 - Volume 10 Issue 26 Print Report
An acquisition by a foreign corporation of a domestic corporation is an "inversion" if, and only if, three conditions are each met: (i) the foreign corporat...
Revisiting Yahoo! Inc.'s Controversial Spin-Off
February 8, 2016 - Bulletin Print Report
Yahoo! Inc. (YHOO) is currently pursuing what it refers to as a "reverse spin-off," a transaction different from the "forward" spin-off it had been pursuing...
Not a "Meaningless Act"
February 8, 2016 - Volume 10 Issue 25 Print Report
Corporation C, (C),a foreign corporation, owned all of the stock of Corporation B, (B),also a foreign corporation. B, in turn, owned all of the outstandin...
SYMC To Pay A "Special Dividend"
February 5, 2016 - Bulletin Print Report
Symantec Corporation (SYMC) recently completed the sale of its information management business, known as Veritas, and will now, using among other sources the after-tax proceeds...
A RIC Cannot Make Disproportionate Designations
February 5, 2016 - Volume 10 Issue 24 Print Report
Fund qualifies as a regulated investment company, (RIC), under Sec. 851 of the Internal Revenue Code. Fund has issued two classes of stock, common and preferred....
Pre-Planned Gift of Stock Not Relevant For "Control" Test
February 4, 2016 - Volume 10 Issue 23 Print Report
The controversy is over the basis the petitioner is entitled to use in determining its gain or loss on the sale of real estate it made in 1937. It had acquired that p...
CenterPoint Energy--To Spin-Off Or Elect REIT Status Is The Question
February 3, 2016 - Bulletin Print Report
On February 1st, CenterPoint Energy, Inc., (CNP), announced that "it is evaluating strategic alternatives for the Company's investment in Enable Midstream Partners (En...
When Are a Parent and a Subsidiary "The Same Taxpayer?"
February 3, 2016 - Volume 10 Issue 22 Print Report
The I.R.S. audited the TY2 income tax returns of Corporation 1, (C1), and its former foreign parent, Corporation 2, (C2). As a result of the audits, the Service made...
Is Stock Of A Merger Partner Substantially Identical To Target Stock?
February 2, 2016 - Volume 10 Issue 21 Print Report
There are numerous shareholders of Shire plc, Allergan plc, ETE, Dow Corporation and DuPont, for example, which have unrealized losses in their holdings. Each of these companie...
Is Yahoo! Inc. An "Investment Company?"
February 2, 2016 - Bulletin Print Report
Adding to Yahoo! Inc.'s well-documented problems is a class-action lawsuit recently filed against it (and several of its officers and directors) by the UFCW Local 1500 Pens...
Spin-Off Coupled With "RIC" Election Passes Muster
February 1, 2016 - Bulletin Print Report
Through the years, for federal income tax purposes anyway, regulated investment companies (RICs) and real estate investment trusts (REITs) have been treated similarly. Now, how...
Partnership Found To Engage In A "Disguised Sale"
February 1, 2016 - Volume 10 Issue 20 Print Report
In May 2005, RH and JC formed Route 231, ("231"), a limited liability company registered in Virginia. 231 thereupon purchased two parcels of real property. Virginia C...
Deal Status Updates
January 29, 2016 - Bulletin Print Report
  1. Broadcom/Avago—The Avago stock can be received on a tax-free basis if the transaction satisfies the requirements of the “Helen of Troy” regulations. In order for an &ldquo...
Teaching Fellow Is Not a Scholarship Recipient
January 29, 2016 - Volume 10 Issue 19 Print Report
The taxpayer, H, was a graduate teaching fellow (GTF) at the University of Oregon (UO). Each GTF receives a monthly salary, and a tuition waiver for nine to 16 credit...
Baxter International Begins To Unload BXLT Stake/JCI Update
January 28, 2016 - Bulletin Print Report
When Baxter International, Inc. spun-off Baxalta, Inc. (BXLT) last July, it did not distribute all of its stock therein. It distributed only about 80 percent of such stock and...
When a RIC Is Also a PHC
January 28, 2016 - Volume 10 Issue 18 Print Report
X is a regulated investment company, (RIC), within the meaning of Sec. 851 of the Internal Revenue Code. X is also a personal holding company, (PHC), within the meani...
Purported Spin-Off Is Recast As a Shareholder Level Exchange
January 27, 2016 - Volume 10 Issue 17 Print Report
A, B, C, and D each own 25 percent of the stock of X Corporation, (X), and ofY Corporation, (Y). Each of X and Y is engaged in Business 1. AB, who are siblings,...
LMT Will Pursue An "RMT" Transaction
January 27, 2016 - Bulletin Print Report
Lockheed Martin (LMT) has come to the same decision that many others before it have reached regarding the divestiture of a business unit: it is infinitely better to spin-off th...
VEBAs Will Be Taxed On Investment Income
January 26, 2016 - Volume 10 Issue 16 Print Report
CNG is a Voluntary Employees' Beneficiary Association (VEBA) organized under Sec. 501(c)(9) of the Internal Revenue Code. It was established by Consolidated Natur...
WMB To Engage In An 'F' Reorganization
January 25, 2016 - Bulletin Print Report
The Williams Companies, Inc. ("WMB") and Energy Transfer Corp. L.P. ("ETC") have entered into a merger agreement which the parties, despite some restiveness...
TYC And JCI Announce The Latest "Cross Border" Deal
January 25, 2016 - Bulletin Print Report
Fresh off its settlement of "earnings stripping" disputes with the I.R.S., Tyco International plc, (TYC), is set to engage in another "tax oriented" transac...
Sec. 356 Requires A Reorganization
January 25, 2016 - Volume 10 Issue 15 Print Report
Petitioner owned all of the outstanding stock of International Dairy Supply Company ("I"). In 1952, petitioner transferred all of the I stock to Foremost Dairies, Inc...
Lack Of Profit Motive Does Not Bar "Productive Use"
January 22, 2016 - Volume 10 Issue 14 Print Report
Partnership P ("P") owns multiple aircraft which are leased to Partnership O ("O"). O is the primary business entity of the O group of entities, which inclu...
Calculating The "Attribute Reduction Amount"
January 21, 2016 - Volume 10 Issue 13 Print Report
In Year 1, S, a wholly owned subsidiary of P, the common parent of a consolidated group, acquired all of the stock of TP. Shortly before the end of Year 5, S sold the stock of...
"Backward" RMT (Merger Precedes Spin-Off) Passes Muster
January 20, 2016 - Volume 10 Issue 12 Print Report
Ordinarily, a "reverse Morris Trust" ("RMT") transaction follows a familiar pattern: A distributing corporation engaged in the active conduct of a trade or...
Tyco Settles "Earnings Stripping" Dispute
January 20, 2016 - Bulletin Print Report
A central strategy of any inversion is the shifting of income from the U.S. to a more favorable (from a tax rate perspective) foreign environment. Frequently, such shifting is...
WCN Pursues An Inversion
January 19, 2016 - Bulletin Print Report
Waste Connections, Inc., (WCN), a domestic corporation, and Progressive Waste Solutions Ltd., (BIN), a Canadian corporation, "have entered into a definitive agreement to m...
A Foreign Corporation Cannot Be a REIT
January 19, 2016 - Volume 10 Issue 11 Print Report
X is a corporation that was organized under the laws of Country A which meets the requirements of Sec. 856(a)(1), (a)(2) and (a)(4) through (a)(7). Sec. 856, 857, 858...
General Electric Makes Amends
January 18, 2016 - Bulletin Print Report
Last month, General Electric ("GE") engaged in a merger transaction in connection with which holders of GECC preferred stock were forced (subject to the exercise of a...
"Electing 1987 Partnership" Preserves Its Status
January 15, 2016 - Volume 10 Issue 10 Print Report
X is a publicly traded partnership that is "an electing 1987 partnership" under Sec. 7704(g). Since its inception, X has been engaged in the business of pro...
Broadcom/Avago: Election Deadline Rapidly Approaching
January 14, 2016 - Bulletin Print Report
It appears that the Broadcom Corp. ("B")/Avago Technologies Ltd. ("A") merger is very close to completion, which means that shareholders of B will soon be a...
Pension Fund Not Exempt From Australian Taxes
January 14, 2016 - Volume 10 Issue 9 Print Report
The LLC is a corporation with a single owner incorporated under U.S. state law. It is disregarded as an entity separate from its owner for U.S. tax purposes under Reg...
Assigning a Litigation Claim
January 13, 2016 - Volume 10 Issue 8 Print Report
A died on Date 11. B is the surviving spouse and claims an interest in the Estate under A's last will and testament. The primary asset of the Estate is the decede...
Baxalta Accepts Shire's Sweetened Offer
January 12, 2016 - Bulletin Print Report
Shire plc, (S), and Baxalta, Inc., (B), have entered into a definitive agreement and plan of merger pursuant to which B will become a wholly-owned subsidiary of S. &n...
California's "Double Weighted" Apportionment Formula Upheld
January 12, 2016 - Volume 10 Issue 7 Print Report
When a business earns income in multiple jurisdictions, apportionment is necessary. The California Legislature codified the provisions of the "UDITPA" in 1966. The st...
Ford Alters Its Method Of Accounting For Pensions
January 11, 2016 - Bulletin Print Report
On January 7, 2016, Ford Motor Company (F) announced that it had joined the growing list of companies which have decided to change the method by which they report certain aspec...
Media General And Nexstar Reach An Agreement
January 11, 2016 - Bulletin Print Report
Media General, Inc., (MEG), and Nexstar Broadcasting Group, Inc., (NXST), have reached an agreement pursuant to which NXST will acquire the stock of MEG. However, the agreement...
No Addition of a Substantial Line of Business
January 11, 2016 - Volume 10 Issue 6 Print Report
TP was organized in Year 1 as a corporation under the laws of Delaware. Shareholders, all foreign corporations, own the stock of TP. Since formation, all business act...
Foreign Currency Options Found To Be "Foreign Currency Contracts"
January 8, 2016 - Bulletin Print Report
For a small investment, TW and his wife, CW, (the Ws) sought to generate a very large tax deduction. They were successful. TW and CW implemented their plan through CA, a partne...
Transfer Restrictions Not Inconsistent With REIT Status
January 8, 2016 - Volume 10 Issue 5 Print Report
TP was incorporated in 1994 for the purpose of engaging in business as a Real Estate Investment Trust, (REIT). None of TP's shares initially will be publicly trad...
'S' Corporation Denied Ordinary Loss Deduction
January 7, 2016 - Volume 10 Issue 4 Print Report
TP is an 'S' corporation that owns Subsidiary, a qualified subchapter S subsidiary ("QSub"). A QSub is a disregarded entity that is not treated as a separate...
Spin-Off Does Not Run Afoul Of Sec. 355(b)(2)(C)
January 6, 2016 - Volume 10 Issue 3 Print Report
D is the common parent of a consolidated group. The stock of D consists of two classes of common stock, the Class A Stock and the Class B Stock....
FASB Proposes Changes To Accounting For Equity Securities
January 5, 2016 - Bulletin Print Report
In Accounting Standards Update ("ASU") No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, January 2016, the Financi...
Highlights From The "PATH" Act Of 2015
January 5, 2016 - Bulletin Print Report
A massive tax and spending bill was enacted by Congress in the waning days of 2015 and was almost immediately signed into law by President Obama. On the tax front, the bill, kn...
When Do "Trade Promotion Rebates" Accrue?
January 5, 2016 - Volume 10 Issue 2 Print Report
TP sells Products. TP has two primary lines of business: Business A and Business B. In its Business A sales agreements, customers agree to pay the list price of a Pro...
Stock Repurchases After A "Morris Trust" Transaction (And An Inversion)
January 4, 2016 - Bulletin Print Report
Distributing, ("D") is a publicly traded State A corporation and is the parent of an affiliated group that files a consolidated federal income tax return. Prior to Da...
An LLC Is Not a "Resident" of the United States
January 4, 2016 - Volume 10 Issue 1 Print Report
The LLC is a company with a single owner incorporated under U.S. state law. It is disregarded as an entity separate from its owner for U.S. federal tax purposes. The...
Blocks Of Stock Transferred In A Merger Are Treated Separately
December 31, 2015 - Volume 9 Issue 250 Print Report
Petitioner, (P), owned stock in USSI, a New Jersey corporation, which owned a majority interest in two limited liability companies operating under the laws of the Russian Feder...
Tax Attribute Reduction In California
December 31, 2015 - Bulletin Print Report
Sec. 61(a)(12) of the Internal Revenue Code provides that "gross income includes income from the discharge of indebtedness," which is another term for "COD incom...
Can an Entity Waive Attribution?
December 30, 2015 - Volume 9 Issue 249 Print Report
In Rev. Rul. 59-233, 1959-2 C.B. 106, all of the stock of a corporation, (X), was owned in equal proportions by an individual, (H), and a trust, (T). The sole benefic...
Law School Expenses are Never Deductible
December 29, 2015 - Volume 9 Issue 248 Print Report
Petitioner, (JW), received a B.S. degree in business with a major in accounting from Miami University of Ohio in 1964. Therea...
Alcoa's Spin-Off Will Undoubtedly Be Tax-Free
December 28, 2015 - Bulletin Print Report
Alcoa (AA), in September 2015, announced its intention to effect a separation of its businesses via a spin-off which is, as you might expect, intended to qualify as a tax-free...
Payments To Settle Fraudulent Conveyance Claims Not Deductible
December 28, 2015 - Bulletin Print Report
OC was in the "A business" through its subsidiary, Sub. Sub was also engaged in the "B business." Many of the products produced by Sub contained "Subst...
"Cost Savings" Can Be a Good Business Purpose for a Spin-Off
December 28, 2015 - Volume 9 Issue 247 Print Report
P Corporation, P, has engaged primarily in the design, manufacture, and marketing of computers and associated software. SCorporation, S, a wholly-owned subsidia...
When is a "Service" Liability Incurred?
December 24, 2015 - Volume 9 Issue 246 Print Report
X Corporation, (X), manufactures various consumer products, including product M. Retailers purchase product M from X for resale. &nb...
Can Shire Incorporate Cash Into Its Offer For Baxalta?
December 23, 2015 - Bulletin Print Report
Last August, when Shire plc (S) made its offer for Baxalta, Inc. (B), it took pains to acknowledge B's recent spin-off from Baxter. In fact, at the time, it stated that &qu...
Spin-Off Not Deterred By Recent Acquisition Of Control
December 23, 2015 - Volume 9 Issue 245 Print Report
Parent is a publicly traded State D corporation. Parent is the common parent of an affiliated group that files a consolidated federal income tax return, and is the common paren...
Estate Undervalues A Picasso
December 23, 2015 - Bulletin Print Report
Bernice Newberger (BN) died on July 28, 2009. Her Estate timely filed Form 709 on which it reported values relating to "the Picasso," "the Motherwell," and...
CF Alters Its Inversion Plan
December 22, 2015 - Bulletin Print Report
CF Industries Holdings, Inc. (CF) and OCI N.V. (OCI) had announced an inversion transaction prior to the issuance of Notice 2015-79, I.R.B. 2015-49, November 19, 2015. The tran...
"Treaty Shopping" Scheme Thwarted
December 22, 2015 - Volume 9 Issue 244 Print Report
DF Corporation, DF, a Canadian corporation, owned all of the stock of DH Corporation, DH. DH owned all of the stock of DC Corporation, DC, and the latter owned all of...
PFE/AGN: Just One Hurdle To Surmount
December 21, 2015 - Bulletin Print Report
The historic transaction in which Allergan plc (AGN) will acquire the stock of Pfizer, Inc. (PFE) is intended to avoid classification as an "inversion" and, therefore...
Reliance On Agent Not Reasonable Cause (For Late Filing And Payment)
December 21, 2015 - Volume 9 Issue 243 Print Report
Moe Vaughn (MV) was a major league baseball player (primarily for the Red Sox, Angels, and Mets) from 1991-2003. His biggest mistake, however, was hiring, in May 2004, RKM to m...
CCE's Shareholders Will Be Taxed On "Orange" Stock
December 18, 2015 - Bulletin Print Report
Coca-Cola Enterprises, Inc. (CCE) is in the process of "redomiciling" through a complex transaction that will culminate in CCE becoming a subsidiary of a newly-create...
S&L Can Retroactively Increase Its Bad Debt Deduction
December 18, 2015 - Volume 9 Issue 242 Print Report
Ambase Corporation, (AB), acquired Carteret Savings & Loan Association, (C), on December 4, 1992. The Office of Thrift Supervision, (OTS), seized C and placed it...
Analysis Of The GPN/HPY Merger
December 17, 2015 - Bulletin Print Report
Global Payments, Inc. (GPN) recently announced that it has entered into a definitive agreement to acquire Heartland Payment Systems, Inc. (HPY). GPN will be acquiring HPY "...
Online Travel Companies Must Collect And Remit Sales Tax
December 17, 2015 - Volume 9 Issue 241 Print Report
Petitioner, (P), is an Online Travel Company (OTC) that provides online travel information and secures reservations for travelers for lodging and car rental services in Montana...
Update On REIT Legislation
December 16, 2015 - Bulletin Print Report
It appears that the "extenders" legislation is very close to passage. In fact, the House of Representatives is said to be preparing to vote on the measure a...
Sumner Redstone Is Assessed A Gift Tax
December 16, 2015 - Volume 9 Issue 240 Print Report
National Amusements, Inc. (NAI), the holding company for Viacom and CBS, was incorporated on August 28, 1959. Mickey Redstone (M), Edward Redstone (E), and Sumner Redstone (S),...
NWL And JAH Will Combine In A Tax-Free Reorganization
December 15, 2015 - Bulletin Print Report
Newell Rubbermaid (NWL) and Jarden Corporation (JAH) have announced that they have entered into a definitive agreement "to combine the two companies."
Stock Received In A "Demutualization" Has A Zero Basis
December 15, 2015 - Volume 9 Issue 239 Print Report
The question is whether a life insurance policyholder has any basis in a mutual life insurance company's membership rights. The answer is no....
Adoption Of IFRS Will Not Terminate LIFO Election
December 14, 2015 - Volume 9 Issue 238 Print Report
U.S. corporations that (i) use the last-in, first-out ("LIFO") method of accounting, and (ii) are owned by a foreign parent corporation, had good reason to fear that...
Dow/DuPont: "MOE" To Be Followed By Spin-Offs
December 14, 2015 - Bulletin Print Report
DuPont (DD) and The Dow Chemical Company (DOW), longtime rivals, have announced board of director approval of a definitive agreement under which the companies will combine in a...
Dow And Corning To Part Ways
December 11, 2015 - Bulletin Print Report
The Dow Chemical Company (D) and Corning, Inc. (C), have developed a plan which will see D gain sole ownership of Dow Corning Corporation (DCC), a company that has, for quite s...
"Service" Partner Not Taxed On Receipt of Profits Interest
December 11, 2015 - Volume 9 Issue 237 Print Report
Mr. Campbell, (C), was employed by STG, a collection of business entities involved in the financing and syndication of limited partnerships. For his services, C recei...
The Limits of "Medical Care"
December 10, 2015 - Volume 9 Issue 236 Print Report
The taxpayer, WH, is a taxlawyer. During 2004 and 2005, he frequented variousprostitutes in New York. WH did not visit these prostitutes as part of a &quo...
YHOO Capitulates
December 9, 2015 - Bulletin Print Report
Yahoo! Inc., not unexpectedly in light of the mounting shareholder discomfort with its original plan, has now decided to "suspend" work on the "pending plan"...
Retention To Offset Lack Of Debt Assumption Approved
December 9, 2015 - Volume 9 Issue 235 Print Report
P corporation is a publicly-held corporation. P corporation owns all of the stock of a newly-formed subsidiary, Holdings. P corporation will own all of the common stock and all...
"Opco-Propco" Under Siege
December 8, 2015 - Bulletin Print Report
A bill introduced by Rep. Brady (R., Texas), the chairman of the House Ways & Means Committee, singles out spin-offs of the opco-propco variety for particularly h...
Graceful Exit From JV--Dow And Corning Take Heed
December 8, 2015 - Volume 9 Issue 234 Print Report
How can a corporate joint venturer withdraw from the joint venture on a tax-efficient basis? By precisely following the procedure outlined in LTR 200335032, April 25, 2003. Thi...
Percentage Rent Found To Be "Rents From Real Property"
December 7, 2015 - Bulletin Print Report
X is a publicly traded partnership (MLP). X derives income from leases of raw land and building rooftops (the Sites). It is rare to encounter a "real estate" MLP. Mos...
Amortizable Sec. 197 Intangible Assets
December 7, 2015 - Volume 9 Issue 233 Print Report
The taxpayer, TP, purchased a vineyard in the Location A viticultural area and in the Location B viticultural area. The TTB of the United StatesDepartment of th...
I.R.S.'s Benign Policy On Discharged Student Loans
December 4, 2015 - Bulletin Print Report
The Department of Education (ED) has begun a process for settling and discharging Federal student loans taken out to finance attendance at schools owned by Corinthian Colleges,...
Exchange Of GECC Preferred Stock For G.E. Preferred Stock Is Taxable
December 4, 2015 - Bulletin Print Report
In connection with its exit from the finance business, General Electric Company, (G.E.), will be retiring certain preferred stock issued by its subsidiary, GECC. &nbs...
Data Centers And Sales Taxes
December 4, 2015 - Volume 9 Issue 232 Print Report
Petitioner, (P), operates a facility that provides its customers IT operations for the operation of its customers' computer servers. P, in short, operates a "Data Cent...
When Is Debt Discharged?
December 3, 2015 - Volume 9 Issue 231 Print Report
On October 22, 1994, petitioner incurred a credit card obligation to MBNA. Petitioner defaulted on his obligation to MBNA at some time between October 22, 1994 and Se...
Should Yahoo! Inc. Emulate Seagate?
December 2, 2015 - Bulletin Print Report
Well over a decade ago, a company named Seagate was faced with a problem similar to that currently confronting Yahoo! Inc. Seagate owned a world class disk drive business and a...
Determining YHOO's Gain In A "Defective" Spin-Off
December 2, 2015 - Bulletin Print Report
If Yahoo! Inc. (YHOO) proceeds with its spin-off of Aabaco and the spin-off is found to not be in compliance with one or more of the requirements set forth in Sec. 355 of the C...
NOL Deduction Cap Is Unconstitutional
December 2, 2015 - Volume 9 Issue 230 Print Report
Nextel Communications of the Mid-Atlantic, Inc. (N), for Pennsylvania tax purposes, carried over net losses of $150 million in 2007. N earned $45 million of taxable income in 2...
Non-Voting Stock Found to be "Common Stock"
December 1, 2015 - Volume 9 Issue 229 Print Report
Prior to 1955, Corporation, (C), had outstanding 200 shares of common stock ("Old Common") held by Mr. A. In 1955,...
Delivery And Removal Of Fluids Gives Rise To "Qualifying" Income
November 30, 2015 - Bulletin Print Report
X is a limited liability company. X intends to form a publicly-traded partnership by effecting an initial public offering of units in Y. Y will be a limited partnership organiz...
An LLC Is Not an "Individual"
November 30, 2015 - Volume 9 Issue 228 Print Report
During 1973, petitioners, husband and wife, established a trust for their four children. When the youngestattained age 25 during 1995, the trust was terminated....
Microsemi Wins The Battle For PMC-Sierra
November 27, 2015 - Bulletin Print Report
Microsemi Corporation, (MC), has reached an agreement to acquire the stock of PMC-Sierra, Inc., (PMC). PMC, as a result, will be terminating an agreement it had previously reac...
An 'S' Corporation Is Not an "Individual"
November 27, 2015 - Volume 9 Issue 227 Print Report
Petitioners, husband and wife, are the only shareholders of SC, Inc., (SC), which owns and rents real properties in Missouri, Texas, and California. SC elected to be...
Can PFE Effect A Post-Merger Spinoff?
November 25, 2015 - Bulletin Print Report
There has been much discussion about the possibility of Pfizer plc (PFE) effecting a post-merger spin-off of a portion of its sprawling pharmaceutical business. In fact, PFE...
Do Consent Payments Result In "Significant Modification" Of Debt?
November 25, 2015 - Volume 9 Issue 226 Print Report
TP has "a" series of publicly traded common stock. S is wholly-owned by TP and is a disregarded entity. S has "b" series of publicly traded exchangeable deb...
S&P's Receipts Are "Receipts From Services"
November 24, 2015 - Volume 9 Issue 225 Print Report
The McGraw Hill Companies, Inc., (Petitioner), is a New York corporation having executive offices in New York City. Standard & Poors, (S&P), was an unincorporated divis...
FASB Simplifies The Presentation Of Deferred Tax Amounts
November 23, 2015 - Bulletin Print Report
The Financial Accounting Standards Board, ("FASB"), in its continuing effort to "reduce complexity in accounting standards," the so-called "Simplificat...
PFE And AGN Announce Their Deal
November 23, 2015 - Bulletin Print Report
One of the most significant deals of the recent past is now the subject of a definitive agreement, an agreement that is sure to elicit some criticism from politicians who belie...
Judge Posner Defines a "Unitary Business Group"
November 23, 2015 - Volume 9 Issue 224 Print Report
The Illinois income tax statute requires firms that constitute a "unitary business group" (UBG) to file a combined return. The term, UBG, signifies a group...
New Treasury Rules Will Not Derail PFE/AGN Deal
November 20, 2015 - Bulletin Print Report
Notice 2015-79, Treasury's latest salvo in the "war" on inversions, is not nearly as preclusive as we feared it might be. It seems clear to us that the Pfizer/All...
Cash Management Account Indicative of "Unitary Business Group"
November 20, 2015 - Volume 9 Issue 223 Print Report
In 1987, C Corporation, (C), created two new holding companies: (i) CCP which became the holding company for the packaging businesses, and (ii) CFP which became the h...
Parent Effects Qualified Stock Purchase of Former Subsidiary
November 19, 2015 - Volume 9 Issue 222 Print Report
Acquiring Corporation, (ACQ), a foreign corporation, owns all of the stock of Sub1. Sub 1 owns Sub 2 and Sub 2 owns all of the stock of Sub 3. Sub 3, in turn, owns al...
Liberty Global And Cable & Wireless To Embark On An 'A' Reorganization
November 18, 2015 - Bulletin Print Report
Liberty Global plc (LG) and Cable & Wireless Communications plc (CWC) are embarking on a complex transaction in which, ultimately, the two corporations will be consolidated...
"Circular" Flow of Dividends Disregarded
November 18, 2015 - Volume 9 Issue 221 Print Report
X is a corporation. Z is a limited partnership. X is the sole limited partner of Z and M, an individual,functions asthe sole general partner of Z....
New Jersey Rules On "Bitcoin"
November 17, 2015 - Volume 9 Issue 220 Print Report
Virtual currency is a form of "electric/digital money" that can be used as a medium of exchange or as a form of digitally stored value. Taxpayers, therefore, may use...
Pfizer/Allergan Will Do Wonders For Pfizer's Tax Accounting
November 17, 2015 - Bulletin Print Report
Pfizer, apparently contemplating a business combination with Allergan plc, reported, for the year ended December 31, 2014, approximately $12.24 billion in "pre-tax" i...
Starwood To Engage In Multiple Morris Trust Transactions
November 16, 2015 - Bulletin Print Report
Marriott International, Inc. (MAR) and Starwood Hotel & Resorts Worldwide, Inc. (HOT) today announced a definitive merger agreement pursuant to which MAR will acquire all o...
Liberty Media Comes To Dell's Rescue
November 16, 2015 - Bulletin Print Report
Last week, a widely-circulated article speculated that Denali Inc.'s plan to use "tracking stock" to partially finance the acquisition of EMC would create ruinous...
RadioShack's Refund Claim Was "Time-Barred"
November 16, 2015 - Volume 9 Issue 219 Print Report
In the latter part of the1990s, many telephone service providers transitioned to a "time-only" billing model for long-distance telephone usage such th...
Molson Coors' Tax Windfall
November 13, 2015 - Bulletin Print Report
One of the consequences of the historic Anheuser-Busch InBev SA/NV/SABMiller plc deal is the divestiture by the former of its 58 percent stake in a domestic joint venture named...
Fluid Handling Services Gives Rise To Qualifying Income
November 13, 2015 - Volume 9 Issue 218 Print Report
X is a limited partnership. Y is a publicly-traded corporation. Y is engaged in the acquisition, exploration, and development of natural gas and oil products. &...
Satisfying a "Forward" With Borrowed Property
November 12, 2015 - Volume 9 Issue 217 Print Report
P acquired "x" shares of C common stock. In Year 1, P entered into two transactions ("the contracts")with Bank, B, pursuant to which P agree...
ABI And SAB Reach An Agreement
November 11, 2015 - Bulletin Print Report
Anheuser-Busch InBev SA/NV (ABI) and SAB Miller plc (SAB), as widely expected, have reached an agreement pursuant to which ABI will acquire the stock of SAB from the latter'...
"Thin Capitalization" Does Not Convert Debt Into Equity
November 11, 2015 - Volume 9 Issue 216 Print Report
Prior to September 19, 1947, P was a West Virginia corporation engaged inthe business of selling leather products. The...
Darden Receives Its Spin-Off Ruling & Dell Update
November 10, 2015 - Bulletin Print Report
Darden Restaurants, Inc. (DRI), as expected, announced the successful completion of its "opco/propco" separation in which many of its real estate and restaurant asset...
Netflix Not Liable For Kentucky Taxes
November 10, 2015 - Volume 9 Issue 215 Print Report
In Kentucky, the Gross Receipts Tax is imposed on the provider's gross revenues "received for the provision of multichannel video programming services..." The Exc...
Towers Watson Runs Afoul Of "Helen Of Troy"
November 9, 2015 - Bulletin Print Report
Willis Group Holdings plc (WGH) and Towers Watson & Co. (TWC) are poised to effect a business combination that will be structured as a "reverse triangular merger."...
California Employee Creates Nexus for Out-of-State Corporation
November 9, 2015 - Volume 9 Issue 214 Print Report
WM is incorporated in Massachusetts and provides consulting services in the environmental sector. During 2006, WM did not maintain an office in California but employe...
Supreme Court Construes P.L. 86-272 Narrowly
November 6, 2015 - Volume 9 Issue 213 Print Report
Wrigley Co., (W), is the world's largest manufacturer of chewing gum. It sells gum nationwide through a system that divides the country into districts, regions, a...
EXPE And AWAY To Merge
November 5, 2015 - Bulletin Print Report
Expedia, Inc., (EXPE), has agreed to acquire HomeAway, Inc. (AWAY) "for an equity value of $3.9 billion in cash and common stock, representing a per share price for AWAY s...
Merger of Stock S&L into Mutual S&L Not a Reorganization
November 5, 2015 - Volume 9 Issue 212 Print Report
CO merged with andinto CI in 1976. Mr. HaroldPaulsen, (P), owned 17,549 shares of "guaranty stock" in CO. In exchange for that stock, P received...
ConAgra Foods And Activision Make Tax News
November 4, 2015 - Bulletin Print Report
ConAgra Foods, Inc., (CAG) recently announced that it has reached a definitive agreement to sell its private label operations (represented by the stock of CAG's subsidiary,...
Sec. 354 Takes Precedence Over Sec. 453B(a) (Sometimes)
November 4, 2015 - Volume 9 Issue 211 Print Report
T, a trust, holds notes ("Old Notes") payable by X Corporation, (X). T acquired the Old Notes in exchange for X stock on April 8, 1988, in a redemption that...
Rite-Aid's NOL Should Benefit Walgreen Boots Alliance
November 3, 2015 - Bulletin Print Report
Rite-Aid Corporation, (R), has agreed to be acquired by Walgreen Boots Alliance, Inc. (W) in a transaction that will be structured as a "reverse subsidiary cash merger.&qu...
Transfer To Settle A Dispute Not A Gift
November 3, 2015 - Volume 9 Issue 210 Print Report
National Amusements, Inc. (NAI) was incorporated on August 28, 1959. Upon NAI's incorporation, Mickey Redstone, (MR), Edward Redstone, (ER), and the legendary Sumner Redsto...
Preliminary Thoughts On Pfizer/Allergan
November 2, 2015 - Bulletin Print Report
The possibility of a Pfizer, Inc. (PFE) and Allergan plc (AGN) combination has, understandably, captured the imagination of investors who are wondering whether such a marriage...
MGM Will Create A "Captive" REIT
November 2, 2015 - Bulletin Print Report
MGM Resorts International (MGM) announced that it intends to create a "controlled real estate investment trust, (REIT), to be named MGM Growth Properties LLC (MGP)."...
InfraREIT's Letter Ruling Treat Its "Systems" As Real Property
November 2, 2015 - Volume 9 Issue 209 Print Report
TP, who we are confident is the predecessor to InfraREIT, Inc., intends to elect to be treated as a REIT. TP will own as its sole asset an interest in Operating Partnership (OP...
Production Of "Unit Doses" Is "MPGE"
October 30, 2015 - Volume 9 Issue 208 Print Report
Sec. 199 of the Code allows a taxpayer a deduction for a portion of its "qualified production activities income." Domestic production gross receipts means any sale of...
DMND Will Merge With And Into LNCE
October 29, 2015 - Bulletin Print Report
Snyder's-Lance, Inc., (LNCE), and Diamond Foods, Inc., (DMND), have announced an agreement under which "...LNCE will acquire all outstanding shares of DMND in a cash a...
I.R.A. Distribution Subject to "Additional" Tax
October 29, 2015 - Volume 9 Issue 207 Print Report
At age 56, Young Kim, (K), left his position as a partner in a law firm and enrolled in the London School of Economics, (LSE). Employees who depart at age 55 and up m...
Starwood Announces An "RMT" Transaction
October 28, 2015 - Bulletin Print Report
Starwood Hotels and Resorts Worldwide, Inc. (HOT) announced today its intention to spin-off its subsidiary, Vistana Signature Experiences, (V), and in connection with the spin-...
Service Rules On Leveraged RMT Transaction
October 28, 2015 - Volume 9 Issue 206 Print Report
D has outstanding a widely held single class of common stock, and shares of preferred stock. D has outstanding indebtedness, which includes "Distributing Debt." D for...
Broadcom Update
October 27, 2015 - Bulletin Print Report
The Broadcom Corporation/Avago Technologies deal features a so-called "Up-C" aspect that is designed to allow those shareholders of Broadcom who wish to achieve tax d...
The Parent is the "Acquiring Corporation" in a Sec. 338(h)(10) Case
October 27, 2015 - Volume 9 Issue 205 Print Report
ConAgra Foods, Inc., (CAF), sold the stock of three wholly-owned subsidiaries that operated in Louisiana, (L), to PP and UAP....
Internet Domain Names Are "Sec. 197 Intangibles"
October 26, 2015 - Bulletin Print Report
1. In 2013, a company purchases two internet domain names as part of an asset acquisition of a trade or business. One is a generic domain name and the other is a non-generic do...
"Limited and Preferred" As to Dividends
October 26, 2015 - Volume 9 Issue 204 Print Report
The term, affiliated group, means one or more chains of includible corporations connected through stock ownership with a common parent corporation which is an includi...
Depreciation and Earnings and Profits
October 23, 2015 - Volume 9 Issue 203 Print Report
On January 15, 1977, two unrelated corporations entered into an agreement. The corporations agreed to construct and become equal owners of a facility and sell a produ...
Darden Restaurants Announces Record Date For "Opco/Propco" Spin-Off
October 22, 2015 - Bulletin Print Report
Darden Restaurants, Inc. (DRI) is proceeding with its plan to separate its real estate from its operating business by means of a tax-free spin-off. This is the case even though...
Unwinding A Tracking Stock Arrangement
October 22, 2015 - Volume 9 Issue 202 Print Report
Now that tracking stock is squarely back in the news, thanks to the recent announcement by Dell, Inc. of its historic acquisition of EMC Corp., to be financed, in part, through...
Sec. 1031 Exchange Of Intangible Personal Property
October 21, 2015 - Volume 9 Issue 201 Print Report
TP is a State Z corporation. TP has two types of agreements: the Dual Activity Agreements (the DAAs) and the Single Activity Agreements (the SAAs).  ...
General Electric To "Split-Off" Synchrony Financial
October 20, 2015 - Bulletin Print Report
General Electric Company (GE) currently owns approximately 84.6 percent of the outstanding stock of Synchrony Financial (SF). It will divest that stock by means of a "spli...
Senior Independent Living Facility is a "Health Care Property"
October 20, 2015 - Volume 9 Issue 200 Print Report
TP is a Real Estate Investment Trust, (REIT). TP has acquired a number of Properties from unrelated third parties. TP intends...
Wife's "Autograph" Worth $906,000
October 19, 2015 - Bulletin Print Report
Petitioners, Mr. and Mrs. Reifler (Mr. Reifler is the founder of Pali Capital), have been married since 1988. Mr. Reifler signed the couple's original 2000 Federal income t...
Taxpayer's Activities Go Beyond Solicitation of Orders
October 19, 2015 - Volume 9 Issue 199 Print Report
Appellant, (AP), distributes wristwatches and jewelry to retail stores ("Retailers"). It is headquartered in Nevada.  ...
Business Bad Debts
October 16, 2015 - Volume 9 Issue 198 Print Report
In 1951 and 1952, Mr. Whipple, W, formed eight new corporations, one of which was MOB; bought the stock of MRB; and acquired an interest in a related vending machine...
Tax Issues Surrounding Ferrari N.V. Offering
October 15, 2015 - Bulletin Print Report
Ferrari N.V. will be engaging in an initial public offering of approximately 10 percent of its stock in the near future. The shares to be offered are all "secondary"...
The Size Of The Trade Or Business Is Immaterial
October 15, 2015 - Volume 9 Issue 197 Print Report
For a period in excess of five years, P has owned and actively conducted a clothing manufacturing business. P's wholly-owned subsidiary, S, has owned and actively conducted...
EMC/AB InBev Update
October 14, 2015 - Bulletin Print Report
EMC Update The merger agreement filed by Denali, Inc. reveals that Denali, Inc. will be acquiring the stock of EMC Corp. in exchange for a...
RV Parks Not "Lodging Facilities"
October 14, 2015 - Volume 9 Issue 196 Print Report
C is a Real Estate Investment Trust, (REIT). C owns an "x%" interest in OP, a State A limited partnership, which conducts substantially all of C's opera...
Independent Living Facilities Not "Health Care Facilities"
October 13, 2015 - Volume 9 Issue 195 Print Report
TP is a Real Estate Investment Trust, (REIT). TP is engaged in the acquisition, ownership, and management of hospital and senior care properties. &nbs...
Income From Marketing Fuel To End Users Is Qualifying Income
October 12, 2015 - Bulletin Print Report
X is a limited liability company and is classified as a partnership for federal tax purposes. X intends to sell interests in X in an initial public offering (IPO). After the IP...
Dell Will Use "Tracking" Stock To Finance The EMC Acquisition
October 12, 2015 - Bulletin Print Report
Dell, Inc. (D) and EMC Corporation, (EMC), a principal asset of which is a controlling stake in VMware Corp. (V), announced today a definitive agreement under which D...will ac...
A Short Sale Creates a "Liability"
October 12, 2015 - Volume 9 Issue 194 Print Report
P Corporation, P, owns all of the stock of S Corporation, S. P entered into a short sale of XYZ securities. P's broker takes shares on hand and sells them on P...
Sec. 351 Transaction Not Also a Reorganization
October 9, 2015 - Volume 9 Issue 193 Print Report
C Corporation, (C), is engaged in the commodity business, operating as an importer and dealer. As of September 15, 1979, C had outstanding 80 shares of common stock.<...
Stock Dividend Costs Are Capital Expenditures
October 8, 2015 - Volume 9 Issue 192 Print Report
General Bancshares, (GB), paid two percent stock dividends on its common stock in 1950, in October, 1955, in April, 1956, and in October, 1956, and one of six percent...
ABI's Proposal Appears To Address MO's Needs
October 7, 2015 - Bulletin Print Report
Anheuser-Busch InBev (ABI) made public its revised proposal to the Board of SABMiller plc (SAB) to combine the two companies "and build the first truly global beer company...
Short-Term Loans Not "Obligations" For Purposes of Sec. 956
October 7, 2015 - Volume 9 Issue 191 Print Report
X corporation, a domestic corporation, wholly owns Y corporation, a controlled foreign corporation (CFC). X corporation maintains a revolving line of credit with Outside Lender...
Asset Purchase Agreement Not An "Installment Sales Contract"
October 6, 2015 - Volume 9 Issue 190 Print Report
Pinnacle Entertainment, Inc., (P), is a Delaware corporation headquartered in Nevada. P owned and operated a horse racing facility and a card club in Inglewood, Californi...
Spin-Off Not The Only Route To "Opco/Propco"
October 5, 2015 - Bulletin Print Report
It is by now painfully clear that the I.R.S. has become quite "uncomfortable" with spin-off transactions in which one, but not both, of the entities involved in such...
Nordstrom's Special Dividend Appears To Be "Strippable"
October 5, 2015 - Bulletin Print Report
Nordstrom, Inc., (JWN), recently sold its credit card portfolio to TD Bank for approximately $2.2 billion. About $900 million of this windfall will be paid to shareholders as a...
Cellular Antenna Towers Are "Land Improvements"
October 5, 2015 - Volume 9 Issue 189 Print Report
TP is an owner and operator of communications sites for the wireless and broadcast industries. TP constructs and places in service cellular antenna tower...
Income From Joint Venture Is Business Income
October 2, 2015 - Volume 9 Issue 188 Print Report
In 2002 and 2003, ConAgra Foods, Inc., (appellant), sold its beef and pork operations and its chicken processing business in two separate taxable transactions. In the 2002 sale...
Sec. 351 and Business Purpose
October 1, 2015 - Volume 9 Issue 187 Print Report
Mr. A owned all of the stock of X Corporation, (X), and Y Corporation, (Y). Mr. A transferred all hisshares of X and Y to a new corporation, (Z), in exchange fo...
NJ Resident Denied Property Tax Deduction
September 30, 2015 - Volume 9 Issue 186 Print Report
Plaintiff, (P), is a resident of New Jersey. Prior to October 27, 2000, P owned two residential properties in Lakewood Township, 825 WD and 221 WS. On October 27, 200...
Transactions Ordinarily Considered Not To Have Been Used As A 'Device'
September 29, 2015 - Volume 9 Issue 185 Print Report
Sec. 355(a) provides that if a corporation distributes to a shareholder with respect to its stock...solely stock...of a corporation...which it controls immediately before the d...
Yahoo! Inc. Is Resolute
September 29, 2015 - Bulletin Print Report
Yahoo! Inc.'s latest 8-K should dispel all questions about its intentions regarding its previously announced spin-off. Pending the receipt of the "will"...
WMB To Combine With ETE
September 28, 2015 - Bulletin Print Report
Energy Transfer Equity, L.P. (ETE) and the Williams Companies, Inc. (WMB) announced a rather complex business combination which will see, once all the steps are completed, WMB&...
Altria's "Wish List"
September 28, 2015 - Bulletin Print Report
Altria Group, Inc. (MO) holds approximately 27 percent of the economic and voting interest of SABMiller plc, (SAB), which MO accounts for under the "equity method" of...
Deductions Allowed Before "Economic Performance" Occurs
September 28, 2015 - Volume 9 Issue 184 Print Report
TP, a pharmaceutical company, negotiates discounted prices with certain organizations that are administered by the wholesalers/distributors through a chargeback progr...
A "Mere Change" Is A Reorganization Under Sec. 368(a)(1)(F)
September 25, 2015 - Volume 9 Issue 183 Print Report
Sec. 368(a)(1) of the Code describes several types of transactions that constitute reorganizations . One of these, described in Sec. 368(a)(1)(F), is "a mere...
MetLife Runs Afoul Of "FIN 48"
September 24, 2015 - Bulletin Print Report
MetLife, Inc. (ML) recently announced that "it expects to record a non-cash charge to operating earnings and net income of $792 million, after-tax, or $0.70 per share, dur...
Processing Natural Gas Produces Qualifying Income
September 24, 2015 - Volume 9 Issue 182 Print Report
X is a publicly traded partnership. X will own "n1%" of the outstanding equity interests of Y, an LLC treated as a partnership for Federal tax purposes. Y owns all of...
Atmel Shareholders To Be Taxed On Dialog Stock
September 22, 2015 - Bulletin Print Report
Atmel Corporation (AT) and Dialog Semiconductor plc (DS) have announced a definitive agreement pursuant to which DS will acquire all of the stock of AT from the latter's sh...
Wind Project Eligible for Accelerated Depreciation
September 22, 2015 - Volume 9 Issue 181 Print Report
TP is a State LLC. TP has two members. A, a State corporation, is the managing member of TP. The other member is B, alsoa State corporation. Each of A and B is...
ABA Meeting--Good News For Yahoo! and Darden
September 21, 2015 - Bulletin Print Report
The news coming out of the ABA Meeting this weekend is quite encouraging. Most notably, Mr. Wellen, the driving force behind last week's Notice, stated, unequivoc...
Calculating Increases In Ownership For Purposes Of Sec. 355(e)
September 21, 2015 - Bulletin Print Report
D3 is the common parent of an affiliated group filing a consolidated tax return. D3 owns all of the stock of D2, which owns all of the stock of D1. D1 owns all of the interests...
Testing For Personal Holding Company Status
September 21, 2015 - Volume 9 Issue 180 Print Report
X Corporation, X, is a publicly-held corporation and has 1,000 shares outstanding. Mr. A owns 200 shares; Mr. A's child, F, owns 80 shares; Mr. A's sibling, B...
Will The I.R.S. Scrutinize PNK's "Morris Trust" Transaction?
September 18, 2015 - Bulletin Print Report
Last July, Gaming and Leisure Properties, Inc., (GLPI), (the "propco" in the well-known spin-off undertaken by Penn National Gaming) and Pinnacle Entertainment, Inc.,...
Bond Issuance Premium Is "Good" REIT Income
September 18, 2015 - Volume 9 Issue 179 Print Report
TP is a Real Estate Investment Trust, (REIT). TP's principal activity is to invest in mortgages and mortgage-backed securities....
EQIX's REIT Ruling Breaks Little New Ground
September 17, 2015 - Volume 9 Issue 178 Print Report
LTR 201537020, May 22, 2015, issued to Equinix, Inc. (EQIX), took 30 months to obtain: the ruling request was submitted in November 2012. It is a very favorable ruling but, as...
Synergetics Shareholders Will Receive "CVRs"
September 17, 2015 - Bulletin Print Report
BSC is offering to purchase all outstanding shares of common stock of Synergetics USA, Inc., (SY), at a price per share of $6.50 in cash plus one non-transferable contractual c...
Hubbell Confirms Recapitalization Tax Treatment Of Its Reclassification
September 16, 2015 - Bulletin Print Report
Hubbell, Inc. (H), is undertaking a "reclassification" of its common stock. Under the terms of the proposed reclassification, holders of Class A Common Stock will rec...
MLP Engaged In An "Intrinsic" Activity
September 16, 2015 - Bulletin Print Report
X intends to become a "publicly traded partnership." X intends to earn income principally by assessing fees for gathering, transporting, processing, treating, and dis...
Prompt Disposal of Target Stock Does Not Eliminate "QSP"
September 16, 2015 - Volume 9 Issue 177 Print Report
P owns all of the stock ofS1 and the latter owns all of the stock of each ofS2 and S3. P owns "a%" and S2 owns "b%" of S4.S1 thr...
When "Spinco" Becomes Obligor On "Remainco" Notes
September 15, 2015 - Bulletin Print Report
A recent ruling addresses a question that has arisen in connection with Yahoo's spin-off--what are the tax consequences arising from the indenture-induced substitution of t...
The I.R.S. Will Focus On The "Device" Test
September 15, 2015 - Bulletin Print Report
The most obscure of the requirements for a tax-free spin-off is the "device" test. Sec. 355 does not apply to a transaction "used principally as a device for the...
Sec. 357(b) Is Sparingly Applied
September 15, 2015 - Volume 9 Issue 176 Print Report
ISC, Industries, Inc., (ISC), is the successor to I. I was in the consumer finance business. The board of directors of I approved the purchase of 52.846 percent of the stock of...
Blackstone's Basis Step Up
September 11, 2015 - Bulletin Print Report
We have written on numerous occasions about how buyers of corporations seek to obtain a cost basis in the target's assets. However, this is a goal that is rarely achieved....
Expansion Doctrine Permits Satisfaction Of Active Business Requirement
September 11, 2015 - Volume 9 Issue 175 Print Report
This ruling is issued pursuant to Sec. 6.03 of Rev. Proc. 2014-1, 2014-1 I.R.B. 15, regarding one or more "significant issues" under Sec. 355. The I.R.S. no longer is...
Transaction Entered Into For Profit
September 10, 2015 - Volume 9 Issue 174 Print Report
Petitioner, (P), is an attorney actively engaged in the practice of law. "Incorporators", including P, agreed among themselves to take the requisite steps l...
Still Optimistic On Prospects For Yahoo! Spin-Off
September 9, 2015 - Bulletin Print Report
Yahoo! Inc.'s (Y) most recent 8-K discloses the following important facts: (1) On February 26th, Y submitted...a request for a private letter ruling---the ruling sought con...
When Does Stock Become Wholly Worthless?
September 9, 2015 - Volume 9 Issue 173 Print Report
TP Corporation, (TP), owned all of the stock of S Corporation, (S), and T Corporation, (T). Effective Date X, TP decided to discontinue the operation of S. S's li...
MEG And MDP Will Undertake A "Sec. 351" Transaction
September 8, 2015 - Bulletin Print Report
Media General, Inc. (MEG) and Meredith Corporation (MDP) have announced a definitive merger agreement under which MEG "will acquire all of the outstanding common stock of...
FTR And BGS Effect Asset Purchases
September 8, 2015 - Bulletin Print Report
Frontier Communications Corporation, (FTR), purchased the stock of a newly formed legal entity to which Verizon, the seller of such stock, contributed entities which own Verizo...
Shareholder Purpose Suffices For a "Recapitalization"
September 8, 2015 - Volume 9 Issue 172 Print Report
Company, (C), has issued and outstanding, exclusive of shares held as treasury stock, 755 shares of $5 par value voting common stock, all of which were held by TP, th...
Deducting Travel Expenses
September 4, 2015 - Volume 9 Issue 171 Print Report
During 2006, petitioner, (P), was employed by Lynn University, (LU), as an assistant professor. She was also pursuing her Ph.D. degree during that year.At the t...
"Standby" Fee Not Deductible (or Amortizable)
September 3, 2015 - Volume 9 Issue 170 Print Report
The common stock of petitioner, (P), traded over-the-counter until 1967, when it went on the American Stock Exchange. The common stock consisted of two classes of $1...
Aabaco's Assumption Of Yahoo's Convertibles Not Troublesome
September 2, 2015 - Bulletin Print Report
The latest rumor regarding the Yahoo! (Y) spin-off of its BABA stake is that Aabaco (Spinco) will have to assume Y's convertible debentures because the indenture calls for...
Baxter To Begin Divesting Its Baxalta Stake
September 2, 2015 - Bulletin Print Report
When Baxter, (B), spun-off Baxalta, (BX), on July 1st, 2015, it distributed only 80.5 percent of BX's stock to its shareholders and retained the other 19.5 percent of such...
Taxpayer Shifts "Burden of Production" to the I.R.S.
September 2, 2015 - Volume 9 Issue 169 Print Report
In 1983, the taxpayer, (Mr. L), and his wife, purchased a home in Newport, Kentucky. In 1999, they executed a mortgage on the property in favor of Home Equity Service...
Contingent Liabilities and Sec. 338(h)(10)
September 1, 2015 - Volume 9 Issue 168 Print Report
On Date A, Purchaser, (P), entered into a stock purchase agreement with Seller, (S). Pursuant to the stock purchase agreement, P agreed to purchase Target, (T), a&nbs...
I.R.S. Rules That "Active Business Size" Is Irrelevant
August 31, 2015 - Bulletin Print Report
We keep hearing that the "size" of the active trade or business on which a taxpayer relies to meet the active trade or business requirement is a key factor in determi...
"Cash Rich Split-Off" Not In Cards For Berkshire And Phillips 66
August 31, 2015 - Bulletin Print Report
Over the weekend, one of the most prominent financial news stories was the bold bet made by Berkshire Hathaway, Inc. on a recovery of energy prices through its investment in th...
When Is Debt Recourse?
August 31, 2015 - Volume 9 Issue 167 Print Report
TP is taxable as a partnership. TP has three Members: two individuals and an 'S' corporation. TP was organized to purchase real property and construct, market, and sell...
"Complex" Transaction Not Eligible For The Benefits Of Sec. 1031
August 28, 2015 - Volume 9 Issue 166 Print Report
BM sells equipment for manufacturers, primarily C. In 2002, BM formed NC to take over BM's rental and leasing operations. At issue in this case is NC's like kind exchan...
SLB Is Acquiring CAM
August 27, 2015 - Bulletin Print Report
Schlumberger Limited, (SLB), and Cameron International Corporation, (CAM), announced, on August 26th, a definitive merger agreement "in which the companies will combine in...
Seminar Expenses Not Deductible
August 27, 2015 - Volume 9 Issue 165 Print Report
Taxpayer, (TP), has a number of business interests including real property, a car wash, a laundry, and real estate held for investment purposes. In addition, TP owns...
Indemnity Payment is a Capital Expenditure
August 26, 2015 - Volume 9 Issue 164 Print Report
Prior to November 4, 1955, the taxpayer owned 94 percent of the stock of PPRP. This company owned mineral lands in Texas as well asthree ranches and an oil refi...
Hubbell To Effect A "Recapitalization"
August 25, 2015 - Bulletin Print Report
Hubbell, Inc., ("H"), has announced a plan to "reclassify" the company's common stock for the purpose of eliminating the company's existing dual-cla...
Satisfying Debt With Property
August 25, 2015 - Volume 9 Issue 163 Print Report
It is well-settled that the use of appreciated property to satisfy a liability is a taxable event. Thus, the debtor will recognize gain in an amount equ...
Does Navistar's Restatement "Correct An Error?"
August 24, 2015 - Volume 9 Issue 162 Print Report
The now-repealed State of Ohio corporation franchise tax used the corporation's federal taxable income, with certain Ohio adjustments, as the basis on which such tax was im...
"Carried Interest" Yields Capital Gain
August 24, 2015 - Bulletin Print Report
The income generated by a partnership retains its "character" when it is passed through to its partners. See Sec. 702(b) of the Code. Where that income constitutes &q...
Taxpayer is Found to be Louisiana "Resident"
August 21, 2015 - Volume 9 Issue 161 Print Report
Louisiana Revised Statutes 47:31(1) defines who is liable for individual income taxes: Resident individuals---Every person resident within the stat...
Texas Franchise Tax Is Not An "Income Tax"
August 20, 2015 - Volume 9 Issue 160 Print Report
Graphic Packaging Corporation, ("GPC"), is headquartered in Marietta, Georgia but operates its packaging business in multiple states. The amount of its Texas franchis...
Contingent Stock Constitutes Part of the Sales Price
August 19, 2015 - Volume 9 Issue 159 Print Report
In 1969, S, a wholly-owned subsidiary of P, acquired all the assets and assumed all the liabilities of T in a statutory merger that qualified as a reorganization unde...
Liberty Interactive Announces A "Reorganization"
August 18, 2015 - Bulletin Print Report
Liberty Interactive Corporation, (L), has announced an agreement pursuant to which it will acquire "the outstanding shares" of zulily, inc., (ZU), for a combination o...
No Continuity of Interest Requirement in Sec. 351
August 18, 2015 - Volume 9 Issue 158 Print Report
ACQ was formed in Year 1 as a State A corporation. ACQ sought to engage in a series of transactions whereby T1 and 11 other independent Business 1 and related corpora...
Terex's Shareholders Will Be Taxed On Receipt Of "Kappa" Stock
August 17, 2015 - Bulletin Print Report
Terex Corporation, (Theta) has decided to join forces with Konecranes Plc (Kappa) in a transaction that has an unquestioned business rationale. However, the structure of the tr...
New Jersey Entire Net Income Must Reflect "Attribute Reduction"
August 17, 2015 - Volume 9 Issue 157 Print Report
MCI Communications Services, Inc., (Plaintiff), was a wholly-owned subsidiary of MCI, Inc., (MCI). MCI is the successor to Worldcom, Inc., (W). W had filed a petition for reorg...
Warranty And Representation Obligations Not "Securities"
August 14, 2015 - Volume 9 Issue 156 Print Report
TP originates and sells mortgages. Purchasers were entitled to force the repurchase of the mortgages by TP and/or pursue other indemnification from TP to compensate for TP'...
Fund Must Record Deferred Tax Liabilities
August 13, 2015 - Volume 9 Issue 155 Print Report
Copley Fund, Inc., (CFI), is an open-end mutual fund. It is a registered investment company under the Investment Company Act of 1940. CFI,...
Intergovernmental Immunity
August 12, 2015 - Volume 9 Issue 154 Print Report
ASC is a New York corporation with offices in Westbury, N.Y. ASC, or petitioner, provides security guard services to corporations and entities, including Federal agen...
EFH Announces A Restructuring Plan
August 11, 2015 - Bulletin Print Report
Energy Futures Holdings, (EFH), the old TXU, has announced a plan which should enable it to emerge from its long bankruptcy, provided the plan is approved by the bankruptcy cou...
Google To Form Holding Company
August 11, 2015 - Bulletin Print Report
Google, Inc., (G), is doing something that many companies have done before it, forming a holding company whose sole function will be to own the stock of the operating companies...
The "Open Transaction" Approach Constitutes A Method Of Accounting
August 11, 2015 - Volume 9 Issue 153 Print Report
Prior to June 1, 2004, G was President of AB. Pursuant to a merger agreement effective June 1, 2004, AB became a wholly-owned indirect subsidiary of Boston Scientific Corporati...
9th Circuit Creates A Mortgage Interest "Marriage Penalty"
August 10, 2015 - Bulletin Print Report
Mr. V and Mr. S are domestic partners registered with the State of California. They are not married. They co-own two homes as joint tenants--one in Rancho Mirage, California, a...
Depreciating Precious Metals
August 10, 2015 - Volume 9 Issue 152 Print Report
A is a contract jeweler who fabricates jewelry to customers' specifications using gold supplied by the customers. A fabricates and maintains gold sample jewelry showing cur...
Inversion Thursday
August 7, 2015 - Bulletin Print Report
On Thursday, August 6, 2015, two large transactions with inversion characteristics, even though one of them, technically, is not a "Sec. 7874 inversion," were announc...
Multiple Transfers Culminate In A 'D' Reorganization
August 7, 2015 - Volume 9 Issue 151 Print Report
P, a domestic corporation, owns all of the interests in LLC, a domestic limited liability company that elected to be an association taxable as a corporation. P also owns all of...
Sec. 351 Transaction Accorded Independent Significance
August 6, 2015 - Volume 9 Issue 150 Print Report
P, a domestic corporation, owns all of the stock of each of S-1 and S-2, both of which are incorporated in foreign country R. S-2, a holding company, owns all of the stock of X...
Shire Offer Might Upend Baxter's Carefully Crafted Tax Plan
August 5, 2015 - Bulletin Print Report
Baxter's formation and separation of Baxalta, comprised of a contribution by Baxter of assets to Baxalta followed by a distribution by Baxter to its shareholders of approxi...
"Sideways" Attribution Does Not Prevent Complete Termination
August 5, 2015 - Volume 9 Issue 149 Print Report
The stock of Corporation, (C), is all held by Shareholder A and his two children, B and C, in the following proportions: 70.17 percent, 28.33 percent, and 1.5 percent...
Shire's "Tax Conscious" Offer For Baxalta
August 4, 2015 - Bulletin Print Report
Shire plc is offering to acquire all of the stock of Baxalta, Inc. Baxalta's shareholders would receive as consideration for each share solely 0.1687 of a Shire ADR. The do...
Medical Marijuana Seller Cannot Deduct Expenses
August 4, 2015 - Volume 9 Issue 148 Print Report
The "Vapor Room" (VR) provides its patrons a place where they can purchase medical marijuana (MM) and consume it using the VR's vaporizers. Petitioner, (P), purch...
Ruling Confirms That "Size" Unimportant For Active Business Test
August 3, 2015 - Bulletin Print Report
LTR 201531014, April 30, 2015, addresses the case of DP, a State A corporation, that is the parent of both a U.S. consolidated group and a worldwide group of corporations (the...
Claims Against the Estate
August 3, 2015 - Volume 9 Issue 147 Print Report
Mr. Marshall Naify, MN, created the Marshall Naify Revocable Trust, MNRT, on February 3, 1997. On December 18, 1998, MN formed M Corporation, M, a Delaware investment...
Education Qualified Taxpayer For a New Trade or Business
July 31, 2015 - Volume 9 Issue 146 Print Report
The issue is whether the expenses incurred by Taxpayers for tuition and education expenses are ordinary and necessary business expenses. They were not. See Myrup...
I.R.S. Declines To Issue A Sec. 367 Ruling To Broadcom
July 30, 2015 - Bulletin Print Report
The combination of Broadcom Corporation and Avago Technologies Limited is structured as a "global" Sec. 351 exchange. Thus, Holdco, a foreign corporation, will be for...
Lawmakers Unveil "Patent Box" Legislation
July 30, 2015 - Bulletin Print Report
Many foreign countries offer their residents tax incentives, in the form of lower tax rates, with respect to income derived, broadly, from "intellectual property." Fo...
Costs of "Converting" Slot Machines Not Capital Expenditures
July 30, 2015 - Volume 9 Issue 145 Print Report
TP operates casinos. TP offers two types of slot machines: reel machines and video machines. TP purchases all slot machines from third parties. TP characterizes its s...
"Disqualifying" Dispositions of Option Stock
July 29, 2015 - Volume 9 Issue 144 Print Report
On September 17, 1964, Mr. B was granted an option to purchase 3,000 shares of P Corporation, (P), stock at 9 7/8 per share pursuant to P's qualified stock option...
Stock Is Not "Debt Financed Portfolio Stock"
July 28, 2015 - Volume 9 Issue 143 Print Report
X Corporation, (X), is the parent of a consolidated group of corporations engaged in financial service activities. X is publicly held. &nb...
Two More Tax-Free Reorganizations
July 27, 2015 - Bulletin Print Report
The pace of mergers has not shown any sign of slowing down, even during the normally slow summer months. Over the last few days, two transformative business combinations were i...
Proposed Regulations Treat Allocations As Payments For Services
July 27, 2015 - Bulletin Print Report
Generally, an allocation or distribution between a partnership and a partner for the provision of services can be treated as: (i) a distributive share, (ii) a guaranteed paymen...
Interest-Free Loan is "Held for Investment"
July 27, 2015 - Volume 9 Issue 142 Print Report
As of January 1, 1988, the taxpayer, TP, had made interest-free demand loans to Foundation, F, with a total unpaid balance of $352x. During 1988, F repaid TP $121x, t...
A Group's "CNOL" Is Subject To Reduction Under Sec. 108(b)
July 24, 2015 - Volume 9 Issue 141 Print Report
On December 27, 1996, Marvel Entertainment Group, Inc., ("MEG") and certain of its subsidiaries filed petitions under chapter 11 of the Bankruptcy Code. At the time,...
Change in Classification Produces a Worthless Stock Deduction
July 23, 2015 - Volume 9 Issue 140 Print Report
Foreign Parent, FP, owns all of the stock of TP, a domestic corporation. TP owns all of the stock of Holding, H, a domestic corporation. TP acquired the stock of H se...
Contingent Payment Rights Characterized as Options
July 22, 2015 - Volume 9 Issue 139 Print Report
TP is a domestic corporation. On Date b, TP purchased "g" shares of T's common stock for "$h" per share. After the purchase, TP's consolid...
LMT Will Get A "Cost" Basis In Sikorsky's Assets
July 21, 2015 - Bulletin Print Report
Ordinarily, when a corporation purchases the stock of another corporation, the purchaser "inherits" the target's basis, which is inevitably small, in its assets....
What Is the "Nature" of "Repo" Income?
July 21, 2015 - Volume 9 Issue 138 Print Report
The respondent, (R), an individual taxpayer, owns securities in two mutual funds ("Trusts"). The Trusts earn a portion of their income by participating in r...
Yahoo! Files Information Statement For "Spinco"
July 20, 2015 - Bulletin Print Report
On Friday, July 17, 2015, Yahoo! (YHOO) filed the preliminary information statement for a corporation, named Aabaco Holdings, Inc. ("AHI" or "Spinco"), whic...
Executive's "Bargain" Conveyance of Stock Not Deductible
July 20, 2015 - Volume 9 Issue 137 Print Report
The taxpayer was the president and a member of the board of directors of M Corporation, (M), and he owned 12,015 shares of its common stock. The taxpayer had the righ...
I.R.S. Issues New Rules For "Sec. 83(b) Elections"
July 17, 2015 - Bulletin Print Report
Sec. 83(a) of the Code provides that if, in connection with the performance of services, property is transferred to any person...the excess of the fair market value of the prop...
ESOPs and 'S' Corporations
July 17, 2015 - Volume 9 Issue 136 Print Report
X, a calendar year 'S' corporation, maintains Plan Y, (Y),an Employee Stock Ownership Plan, (ESOP). Y holds 100 shares of X that it purchased on January...
Associate Attorneys Are Employees
July 16, 2015 - Volume 9 Issue 135 Print Report
The Firm appeals from the tax court's decision holding that three associate attorneys and one law clerk who worked at the Firm were employees. The appeal was unsu...
MPLX And MWE To Engage In Rare Partnership Merger
July 15, 2015 - Bulletin Print Report
MPLX LP, (MPLX), and Mark West Energy Partners, L.P., (MWE), recently announced the signing of a definitive merger agreement in connection with which MWE would become a "w...
BKH's Acquisition Will Produce Tax Benefits
July 15, 2015 - Bulletin Print Report
Black Hills Corporation, (BKH), recently announced it has entered into a definitive agreement to acquire SourceGas Holdings LLC from certain investment funds, including a unit...
Risk Diminution and the Dividends Received Deduction
July 15, 2015 - Volume 9 Issue 134 Print Report
TP is a domestic corporation. Issuer is a newly-formed corporation and isa subsidiary of Newco. Issuer Subsidiary, (IS), is a newly-formed subsidiary of Issuer....
"Proportionate" Debt Not Recharacterized as Equity
July 14, 2015 - Volume 9 Issue 133 Print Report
A and B each owned 50 percent of the stock of W,X, Y, and Z. On January 1, 1975, they transferred all of their stock in those corporations to a newly-formed corporati...
AET And HUM: Two Mergers Produce A Reorganization
July 13, 2015 - Bulletin Print Report
Aetna (AET) and Humana, Inc., (HUM) have entered into a definitive agreement in connection with which AET will acquire HUM for consideration valued at a staggering $37 billion....
Windstream's "Opco/Propco" Ruling Is Published
July 13, 2015 - Bulletin Print Report
It appears that LTR 201528006, July 16, 2014, is the ruling issued to Windstream with respect to its spin-off of "Distribution Assets" and concurrent REIT election fo...
Excess "Parachute" Payments Are Subject to an Excise Tax
July 13, 2015 - Volume 9 Issue 132 Print Report
Sec. 280G of the Internal Revenue Code defines a parachute payment as a payment to a corporate officer that is contingent on a change in the control or owner...
"Basket Option Contracts" Are "Listed" Transactions
July 10, 2015 - Volume 9 Issue 131 Print Report
The "basket option contract," in the I.R.S.'s estimation, is a tax avoidance transaction. Notice 2015-47, issued on July 8, 2015, identifies it as a "listed&...
Roth I.R.A. Not an Eligible Shareholder of an 'S' Corporation
July 9, 2015 - Volume 9 issue 130 Print Report
Qualifying small business corporations may elect 'S' corporation status. Eligibility turns on three characteristics: (i) thenumber of shareholders, (ii)...
Can Hewlett Packard Enterprise Co. and EMC Be Combined?
July 9, 2015 - Bulletin Print Report
Now that Hewlett Packard Co. has made certain SEC filings regarding the separation of its businesses via a tax free spin-off, the question of whether the spun-off corporation,...
PG Reprises Its Favorite Structure
July 9, 2015 - Bulletin Print Report
The Procter & Gamble Company (PG) is once again doing, from a financial engineering point of view, something it has become expert in: divesting a business in a tax-efficien...
The OSG Saga Continues
July 8, 2015 - Bulletin Print Report
Overseas Shipholding Group, Inc., (OSG), is in the business of transporting bulk crude oil and refined petroleum products throughout the world. OSG owns, among other subsidiari...
ACE's Stock Will Be Taxable To CB Shareholders
July 8, 2015 - Bulletin Print Report
The business combination recently announced by ACE Limited (ACE) and The Chubb Corporation (CB), one of the largest deals of this or any other year, will be structured in such...
Interest On Intercompany Debt Ruled Deductible
July 8, 2015 - Volume 9 Issue 129 Print Report
Massachusetts Mutual Life Insurance Company, (MMLIC), is a mutual insurance company owned by its policy holders. For Massachusetts tax purposes, MMLIC is required to file on a...
Luring Coveted Chief Executive is a Corporate Business Purpose
July 7, 2015 - Volume 9 Issue 128 Print Report
X Corporation, (X), a large widely held and publicly traded corporation, owns all of the stock of Y Corporation, (Y), and has owned such stock for more than five year...
Centene's Two Step Acquisition Of Health Net
July 6, 2015 - Bulletin Print Report
Centene Corporation, (CC), and Health Net, Inc., (HNI), have entered into an agreement and plan of merger pursuant to which CC will be acquiring HNI. The agreement and plan of...
NOLs in Split-Offs--Part II
July 6, 2015 - Volume 9 Issue 127 Print Report
On January 1, 1975, X Corporation, (X), effected a split-off of its Division B with the retention of Division A. The transaction qualified as a reorganization under S...
Spouse Had Zero Basis In Shares Sold
July 2, 2015 - Volume 9 Issue 126 Print Report
During 2000 and 2001, VH was a citizen of the U.K. During 2000 and 2001, IH, her husband, was a U.S. citizen. Both became U.S. residents on January 16, 2001. IH was employed by...
Debt Discharge Occurred In "A Title 11 Case"
July 1, 2015 - Volume 9 Issue 125 Print Report
P is a domestic corporation and is the wholly-owned subsidiary of CA, a Country Z corporation. P is the parent corporation of a U.S. affiliated group made up of Corp. B, Corp....
Inverted Companies Can Make "Return Of Capital" Distributions
June 30, 2015 - Volume 9 Issue 124 Print Report
On May 29, 2015, Medtronic plc, (MDT), filed Form 8937, "Report of Organizational Actions Affecting Basis of Securities," with the I.R.S. The Form noted that the comp...
Willis Group To Annex Towers Watson
June 30, 2015 - Bulletin Print Report
Willis Group Holdings plc (WSH) and Towers Watson & Co. (TW) have announced the signing of a definitive merger agreement under which "the companies will combine in an...
Tax Credits Available From Federal And State Exchanges
June 29, 2015 - Bulletin Print Report
The Patient Protection and Affordable Care Act (the ACA) adopts a series of reforms designed to expand coverage in the individual health insurance market. In addition to those...
BAC's "TARP" Warrants
June 29, 2015 - Bulletin Print Report
This week's Barron's extols the virtues of Bank of America's "TARP" Warrants suggesting that an investment in such Warrants would be mo...
Restructuring Not A 'G' Reorganization
June 29, 2015 - Volume 9 Issue 123 Print Report
The issue is whether the restructuring of a debtor corporation ("DC") constituted a reorganization within the meaning of Sec. 368(a)(1)(G) of the Internal Revenue Cod...
Taxpayer Denied Partial Liquidation Treatment
June 26, 2015 - Volume 9 Issue 122 Print Report
On July 1, 1953, Mr. M and Mr. S incorporated M&S Corporation, (MSC), which was continuously engaged in the active business of road construction. MSC was also eng...
"Foreign To Foreign" Merger Can Be A Reorganization
June 25, 2015 - Bulletin Print Report
Delhaize Group and Royal Ahold N.V. have announced their intention to pursue a business combination of the two supermarket giants. The announcement has elicited a large amount...
Salvaging a Sec. 338(h)(10) Election
June 25, 2015 - Volume 9 Issue 121 Print Report
Corporation, (C), is a State A corporation engaged in Business and has had a valid election to be treated as an 'S' corporation since Date 1. Before Date 2, S...
Martha Stewart To Engage In A "Global" Sec. 351 Transaction
June 24, 2015 - Bulletin Print Report
Martha Stewart Living Omnimedia, Inc. (MSLO) and Sequential Brand Group, Inc. (SBG) have announced a business combination that will result in each of MSLO and SBG becoming subs...
Option Stock Not Worthless
June 24, 2015 - Volume 9 Issue 120 Print Report
PCFC operated as a Real Estate Investment Trust, (REIT), from May, 2004 until at least March, 2007, when it filed a petition for chapter 11 bankruptcy. Throughout tha...
Darden To Engage In An "Opco/Propco" Spin-Off
June 23, 2015 - Bulletin Print Report
Darden Restaurants, Inc., (DRI), has announced the adoption of a "strategic real estate plan," the centerpiece of which is a spin-off (or perhaps a split-off) of the...
An Abandonment of Encumbered Property Is a "Sale" Thereof
June 23, 2015 - Volume 9 Issue 119 Print Report
The taxpayers owned and occupied a residence that had a fair market value substantially less than the amount of the first and second recourse mortgag...
When Is a Loss on a Liquidation Sustained?
June 22, 2015 - Volume 9 Issue 118 Print Report
The issue in Commissioner v. Beekman Winthrop , 98 F.2d 74 (2d Cir. 1938), was whether a capital loss was sustained by Mr. Winthrop in 1932 or in1934. T...
"Informal" Plan Suffices for "Partial Liquidation" Purposes
June 19, 2015 - Volume 9 Issue 117 Print Report
A distribution qualifies as a distribution in part or full payment in exchange for stock (rather than as a distribution of property to which Sec. 301 applies) if (i)...
Court Sides With FDIC With Respect To NOL Carryback Refund
June 18, 2015 - Bulletin Print Report
Ordinarily, the common parent functions as the "agent" for the consolidated group which it heads up and, accordingly, among other things, any refunds due the group, f...
A House Is Not a Home
June 18, 2015 - Volume 9 Issue 116 Print Report
The Strommes purchased the "EA house" as an investment in April, 2001. They chose to develop the EA house as a "group home" for developmentally di...
"Boot" Purge Accomplished With Substituted Assets
June 17, 2015 - Volume 9 Issue 115 Print Report
Distributing, a publicly traded State A corporation, is the common parent of an affiliated group of corporations that files a consolidated income tax return. &n...
I.R.S. Issues "May Department Store" Regulations
June 16, 2015 - Volume 9 Issue 114 Print Report
Under current law, which reflects the repeal of the "General Utilities" doctrine (under which assets could "move" out of corporate solution on a tax-free ba...
Sec. 1031 Counterparty Need Not Have Title to Replacement Property
June 15, 2015 - Volume 9 Issue 113 Print Report
X and Y are unrelated persons. On May 14, 1989, X and Y entered into a contract that requires X to transfer B to Y and requiresY to transfer to X property of a...
What Is "Interest?" - Part II
June 12, 2015 - Volume 9 Issue 112 Print Report
Sub, which is wholly-owned by TP, and Bank 1 entered into an interest rate swap and a "collar agreement" on Date 1. On Date 2, the parties entered into a &q...
"CAT" Credit Reduced By Adjustments To NOLs
June 11, 2015 - Volume 9 Issue 111 Print Report
For many businesses the Commercial Activity Tax (CAT) served to replace the tax imposed on the privilege of exercising a corporate franchise in Ohio. Businesses not having posi...
Sale of Professional Sports Team Not an Involuntary Conversion
June 10, 2015 - Volume 9 Issue 110 Print Report
Team, (T), is a professional sports franchise (we believe T is the New England Patriots) located in City. For many years, T has played its home game in Stadium, also...
Build America Bonds Are Not "Tax-Exempt" Bonds
June 9, 2015 - Volume 9 Issue 109 Print Report
In July 2009, a local government ("I") issued taxable direct pay Build America Bonds (BABs) with an interest rate of six percent. Subsequent to issuance, I applied fo...
FASB Proposes To Simplify The Equity Method Of Accounting
June 8, 2015 - Bulletin Print Report
The equity method of accounting best enables investors in corporate joint ventures "to reflect the underlying nature of their investment in those ventures." In additi...
"Hedging" Income Is Qualifying MLP Income
June 8, 2015 - Bulletin Print Report
C is a publicly-traded partnership (PTP or MLP). C is not engaged in a "financial or insurance business." C periodically issues both fixed rate and floating rate debt...
Payment for Renewable Energy Credits Not a "Subsidy"
June 8, 2015 - Volume 9 Issue 108 Print Report
Taxpayer, (TP), is a resident of State. TP contracted with X to purchase and install a residential alternative renewable energy system at TP's residence. See LTR...
Non-Resident Of Connecticut Taxed On Exercise Of Options
June 5, 2015 - Volume 9 Issue 107 Print Report
A was employed by TC from 1990 through 2001. During that period of time, the plaintiffs (A and his wife) were residents of Connecticut (CT). A was also a CT resident while he w...
I.R.S. Reaffirms "Bright Line" Test For Substantial Business Activities
June 4, 2015 - Bulletin Print Report
A foreign corporation will be treated as a "surrogate foreign corporation" (making the domestic corporation which it acquires an "expatriated entity" subjec...
Designating Replacement Property
June 4, 2015 - Volume 9 Issue 106 Print Report
Company, (CO), is engaged in the business of providing highly specialized technological services to clients worldwide. The services CO provides require the use of &qu...
Trian Group Seeks "Exchange" Treatment For Wendy's Buyback
June 3, 2015 - Bulletin Print Report
The Wendy's Company (TWC) is offering to purchase shares of its common stock pursuant to (i) "auction tenders," at prices, within a defined band, specified by the...
Dissolution vs. Merger
June 3, 2015 - Volume 9 Issue 105 Print Report
A corporation, (U), incurred organizational expenses before 1954 in the amount of $607,601. In July, 1964, U and C Corporation, (C), entered into a merger agreement....
Sec. 332 is Elective--Part II
June 2, 2015 - Volume 9 Issue 104 Print Report
A and B (collectively, C) owned "E" shares of X Corporation, (X),and A, in his individual capacity, owned the remaining "F" shares of X. X o...
Amounts Received From Multiple Tenants Are "Good" REIT Income
June 1, 2015 - Bulletin Print Report
TP is a REIT. TP is the general partnership of Partnership (PS) and owns approximately "A%" of the outstanding common units of PS. Thus, TP is an "UPREIT."&...
Broadcom, Time Warner Cable, And Equinix Update
June 1, 2015 - Bulletin Print Report
Last week three significant transactions were announced, and each such transaction featured interesting tax angles. Our preliminary observations contained in our previous Bulle...
'S' Corporation Wins Battle But Loses War
June 1, 2015 - Volume 9 Issue 103 Print Report
TP is an accrual basis 'S' corporation with a fiscal year ending March 31. Prior to the end of its Year X taxable year, TP's Board of Directors authorized...
COD vs. "Purchase Price Adjustment?"
May 29, 2015 - Volume 9 Issue 102 Print Report
Y, a newly-formed corporation, purchased all of the stock of X from Mr. A for cash and debt, including a subordinated debenture. Shortly after the acquisition of X...
BRCM Shareholders To Be Offered A Choice Of Consideration
May 29, 2015 - Bulletin Print Report
Avago Technologies Limited, (AVGO), and Broadcom Corporation, (BRCM), announced a definitive agreement pursuant to which "AVGO will acquire BRCM" in a cash and stock...
Preferred Stock Is Not "Money"
May 28, 2015 - Volume 9 Issue 101 Print Report
P Corporation, (P), owns all of the stock of S Corporation, (S). S sold all of the stock of three of its subsidiaries to unrelated Z Corporation, (Z), in exchange&nbs...
Maryland's Tax Scheme Ruled Unconstitutional
May 27, 2015 - Bulletin Print Report
The income tax that the State of Maryland (M) imposes upon its residents has two parts: a "state" income tax and a "county" income tax. If M residents pay i...
Tax Consequences Of Time Warner Cable/Charter Transaction
May 27, 2015 - Bulletin Print Report
Although the merger agreement has not yet been published, we have, we believe, sufficient information to intelligently discuss the likely tax consequences flowing from the land...
Loss Of Control Does Not Spoil Sec. 351 Transaction
May 27, 2015 - Volume 9 Issue 100 Print Report
Partnership A, ("PSA"), was formed on Date X and various Branded Insurers and their subsidiaries became partners of PSA on Date Y. The purpose of PSA was to provide a...
Treasury Department Sets Its Sights On "Earnings Stripping"
May 26, 2015 - Bulletin Print Report
"Earnings stripping" includes the practice by which a U.S. corporation pays interest on indebtedness owed to a related foreign person. The interest paid (or incurred)...
Yahoo's Spin-Off--Where Does It Stand?
May 26, 2015 - Volume 9 Issue 99 Print Report
Yahoo! has announced an historic, but not unprecedented, spin-off in which it will distribute to its shareholders the stock of a new corporation (Spinco) whose assets will cons...
Merger Of Insolvent Corporation Constitutes A Reorganization
May 22, 2015 - Volume 9 Issue 98 Print Report
NS and his wife, JS, owned approximately 99 percent of the stock of P, C, and RO. All three corporations were engaged in the sale and servicing of automobiles....
ENR Adopts A "Rights" Plan
May 22, 2015 - Bulletin Print Report
Energizer Holdings, Inc. (ENR) is only a month away from completing, via a tax-free spin-off, the separation of its Personal Care business from its Household Products business....
FASB To Simplify The Accounting For "Measurement Period Adjustments"
May 22, 2015 - Bulletin Print Report
Under current guidance, in the case of a "business combination," if the initial accounting for the combination is incomplete by the end of the reporting period in whi...
How To Distribute The Stock Of A Recently Purchased Subsidiary
May 21, 2015 - Volume 9 Issue 97 Print Report
Rev. Rul. 73-44, 1973-1 C.B. 182, finds that a distribution by X corporation (X) of the stock of Y corporation (Y) qualifies under Sec. 355(a) of the Code with the result that...
Exchange For Stock And Boot Not A "Disposition"
May 20, 2015 - Volume 9 Issue 96 Print Report
X corporation (X) and Y corporation (Y) are unrelated corporations. On July 1, 2011, X grants a stock option to A, an employee of X since January 4, 2011, entitling A to purcha...
I.R.S. Announces "Active Business" Ruling Pause
May 19, 2015 - Bulletin Print Report
According to Tax Notes , (see I.R.S. Announces Spinoff Ruling Pause; Yahoo Implicated , by Amy Elliott)the I.R.S. will announce that it "may hol...
ASNA And ANN To Merge
May 19, 2015 - Bulletin Print Report
ascena retail group, inc. (ASNA) and ANN INC. (ANN) announced yesterday that they have entered into a definitive merger agreement in connection with which ASNA will acquire all...
An "Affiliate" Must Have Gross Receipts
May 19, 2015 - Volume 9 Issue 95 Print Report
Corporation A, (A), owned Corporation B, (B), a pureholding company. The sole asset of B was an "X%" interest in Corporation C, (C), an operating comp...
Sec. 501(c)(4) Organization Has "UBTI"
May 18, 2015 - Volume 9 Issue 94 Print Report
Ocean Pines Association, ("the Association"), is non-stock corporation organized and incorporated in Maryland. It oversees a subdivision of more than 3,500...
Redeemable Securities Are Equity
May 15, 2015 - Volume 9 Issue 93 Print Report
Each of Fund 1 and Fund 2 is a closed-end management company that qualifies as a Regulated Investment Company (RIC). Each Fun...
Danaher Announces An Acquisition And Spin-off
May 14, 2015 - Bulletin Print Report
Danaher Corporation, (DHR), on May 13th, announced both a massive acquisition and, concurrently, an intention to separate the company into two "independent publicly traded...
Identifying the "Acquiring" Corporation
May 14, 2015 - Volume 9 Issue 92 Print Report
In 1983, the regulators examined M, a State X bank, and determined it had "substantial financial problems." The regulators began negotiations with another S...
WMB Will "Roll Up" WPZ
May 13, 2015 - Bulletin Print Report
Williams, ("WMB"), and Williams Partners L.P., ("WPZ"), announced an agreement under which WMB will acquire all of the common units in WPZ it does not alrea...
Taxpayer Found to Be "Equitable" Owner of Mortgaged Property
May 13, 2015 - Volume 9 Issue 91 Print Report
On October 5, 2005, the parents (E) of petitioner (P) purchased a $2,150,000 house in Oakland, California ("the property"). E and P considered the property...
Freescale's Shareholders Will Be Taxed On Receipt Of NXPI Stock
May 12, 2015 - Bulletin Print Report
NXP Semiconductors NV (NXPI) and Freescale Semiconductors Ltd. (FSL) have entered into a plan and agreement pursuant to which NXPI will acquire all of the stock of FSL for a mi...
Lehman Brothers Denied Foreign Tax Credits
May 12, 2015 - Bulletin Print Report
Between April 6, 1999 and December 31, 2000, Lehman Brothers, Inc. (LBI), a U.S. subsidiary of Lehman Brothers Holdings, Inc. (L), entered into hundreds of "stock loan tra...
"QREs" Cannot Be Counted Twice
May 12, 2015 - Volume 9 Issue 90 Print Report
On Date B, P Corporation, (P), acquired the stock of T Corporation, (T), in exchange for Pstock and cash in a transaction that did not constitute a "revers...
Goodwill Gain Is "Qualifying Income"
May 11, 2015 - Volume 9 Issue 89 Print Report
The taxpayer, (TP), is a Real Estate Investment Trust, (REIT). TP focuses on the ownership and management of "B" properties leased to "B" operator...
TRS Cannot Manage or Operate a Lodging Facility
May 8, 2015 - Volume 9 Issue 88 Print Report
TP is a Real Estate Investment Trust, (REIT). TP is the managing general partner of OP and owns approximately "a%" of the outstanding common units of OP. OP...
ALXN Is Planning A Tax-Free Reorganization
May 7, 2015 - Bulletin Print Report
Alexion Pharmaceuticals, Inc., (ALXN) made headlines yesterday as a result of the magnitude of the premium it is offering in connection with its planned $8.4 billion acquisitio...
Donation of Film Library
May 7, 2015 - Volume 9 Issue 87 Print Report
C is a broadcasting company. C donated its film library to a charity described in Sec. 170(c) of the Internal Revenue Code. C's adjustedbasis in the library...
Proposed Regulations Narrow Permissible MLP Activities
May 6, 2015 - Bulletin Print Report
The I.R.S. issued proposed regulations yesterday which, for the first time, provide a comprehensive definition of "qualifying income" to be employed by entities organ...
When Are Guaranteed Dividends Deductible?
May 6, 2015 - Volume 9 Issue 86 Print Report
MM is a mutual life insurance company. Sec. 808(c) of the Code permits life insurance companies to deduct an amount equal to the policyholder dividends "paid or accrued&qu...
Warehouse and Refrigeration System Are Real Estate Assets
May 5, 2015 - Volume 9 Issue 85 Print Report
TP intends to elect to be treated as a Real Estate Investment Trust, (REIT). TP's only assets willconsist ofwarehouses and central refrigeration syste...
Cleveland's "Games Played" Method Of Allocation Rejected
May 4, 2015 - Bulletin Print Report
Hunter T. Hillenmeyer, (HTH), a former linebacker for the Chicago Bears, challenges the method by which the city of Cleveland's municipal income tax was imposed on his earn...
Bonus Depreciation Has Unintended (And Negative) State Tax Effects
May 4, 2015 - Bulletin Print Report
Petitioner, (P), is a Pennsylvania corporation authorized to do business in New York State. For each of the three taxable years in issue, P reported New York State income and o...
Plan Loans Are "Deemed" Distributions
May 4, 2015 - Volume 9 Issue 84 Print Report
The taxpayer, (KO), was employed with the New York State Department of Insurance. In 1993, KO commenced participation in the New York State and Local Retirement Syste...
Federal "DRE" Recognized for State Tax Purposes
May 1, 2015 - Volume 9 Issue 83 Print Report
KMPS was a limited liability company (LLC) formed in Michigan and wholly-owned by its single member,Kmart Corporation (Kmart). KMPS filed a Michigan single busi...
Investment Banker's New York Taxes Not Creditable In Illinois
April 30, 2015 - Volume 9 Issue 82 Print Report
Taxpayers, (TPs), were full-time residents of the State of Illinois during 2011. TPs therefore reported the entire amount of their wages and other taxable income on Form IL-104...
Sec. 332 Is Elective--Part I
April 29, 2015 - Volume 9 Issue 81 Print Report
Individual, (I), owned H, a domestic corporation. H owned S1 and S2. I, S1, and S2 collectively owned 100 percent of S3, a Country X corporation; S1 owned more than 8...
DUI Citation Not a Bar to Casualty Loss Deduction
April 28, 2015 - Volume 9 Issue 80 Print Report
On August 12, 2005, the taxpayer, (R), purchased a 2006 Ford F-350 pickup truck for $40,210.65. On October 28, 2005, he attended a "gathering" at a friend&#...
Earnings Stripping With Convertible Debentures
April 27, 2015 - Bulletin Print Report
P owns C1. Both are incorporated in Country 1. C1 owns TP and TP owns C2. TP and C2 are each incorporated in the United States. TP owes P Dollar Amount 1, and C2 owes P Dollar...
Purported Reorganization Carried Out For A Corporate Business Purpose
April 27, 2015 - Volume 9 Issue 79 Print Report
TP is a Country A corporation which from 1977 through 1983 was owned 75 percent by X and 25 percent by Y. X and Y are Country B corporations controlled by Family....
The Active Conduct Of An Insurance Business
April 24, 2015 - Bulletin Print Report
The Treasury Department and the I.R.S. "are aware of situations in which a hedge fund establishes a purported foreign reinsurance company in order to defer and reduce the...
Reading Income Tax Footnotes
April 24, 2015 - Volume 9 Issue 78 Print Report
What makes for a low effective tax rate? Permanent differences—income that’s reported for financial accounting purposes but is not includible in gross inc...
ARRIS Group To Engage In "Old School" Inversion
April 23, 2015 - Bulletin Print Report
ARRIS Group, Inc., (AG), has entered into a plan and agreement with Pace plc (P) which will lead to each of AG and P becoming subsidiaries of "New ARRIS," (NA), a cor...
Mississippi Statute Ruled Unconstitutional
April 23, 2015 - Volume 9 Issue 77 Print Report
Mississippi Code Ann. Sec. 27-7-15(4)(i) permits a recipient of an intercorporate dividend to exclude that dividend from gross income if the distributing corporation is doing b...
Expenses Incurred In Obtaining An "APA" Are Deductible
April 22, 2015 - Volume 9 Issue 76 Print Report
During its Year 5 tax year, the taxpayer, (TP), a corporation, filed an application for an "advance pricing agreement" (APA), pursuant to Rev. Proc. 91-22,...
A Sale Of Veritas Compares Unfavorably To Its Spin-Off
April 22, 2015 - Bulletin Print Report
In October 2014, Symantec Corporation, (S), announced its intention to separate into a security business and an information management business. Such separation was to be accom...
Remote and Contingent Beneficiary Denied Loss Deduction
April 21, 2015 - Volume 9 Issue 75 Print Report
On May 25, 1970, the parents of the taxpayers, CJW and SEW, executed the instruments necessary to create two trusts for the benefit of their grandchildren. The primar...
Just One 60-Day Debt Obligation Taints All Debt Obligations
April 20, 2015 - Bulletin Print Report
USP wholly owns CFC A, a controlled foreign corporation with unremitted earnings. During Year 1, CFC A made several loans to USP pursuant to a line of credit. &...
No Deduction For Donation of "Sec. 306" Stock
April 20, 2015 - Volume 9 Issue 74 Print Report
Prior to August, 1978, Corporation, (C), had outstanding a single class of voting common stock, of which fully88 percent was held by TP. &...
'S' Corporation Redemptions Are Painless
April 17, 2015 - Volume 9 Issue 73 Print Report
X Corporation, (X), elected to be treated as an 'S' corporation effective Date 2. Prior to Date 2, X was taxed as a C corporation.  ...
Is Nokia Planning A 'B' Reorganization?
April 16, 2015 - Bulletin Print Report
Nokia's understanding with Alcatel-Lucent is couched in unusual terms. Apparently, Nokia has to structure the acquisition as a "public exchange offer" (to be file...
A "Firm and Fixed" Plan For Redemption Lacking
April 16, 2015 - Volume 9 Issue 72 Print Report
On August 13, 1973, the taxpayer, (MAJ), and "Buddy" Schoellkopf, (B), were divorced after 31 years of marriage. In the property settlement, MAJ received 1,...
"Buy-Out" Payments Are Not NY Source Income
April 15, 2015 - Volume 9 Issue 71 Print Report
The taxpayer (TP) is a "professional sports player", almost certainly a professional hockey player.He carries a foreign passport,is a domiciliar...
Kraft's Special Dividend Is Merger "Boot"
April 14, 2015 - Bulletin Print Report
If the landmark Kraft/Heinz merger is completed, each outstanding share of Kraft common stock...will be converted into the right to receive one share of common stock of the mer...
The CFC/PFIC "Overlap" Rule
April 14, 2015 - Volume 9 Issue 70 Print Report
C Corporation (C) is a country J corporation. X is a Country J partnership; public investors own an "s%" limited partnership interest in X, a Country J part...
Ventas To Pursue Tax-Free Spin-Off
April 13, 2015 - Bulletin Print Report
Ventas, Inc., a REIT, has announced its intention to spin off "most of its post-acute/skilled nursing facility (SNF) portfolio into an independent, publicly traded REIT (S...
Business Purpose "Trumps" Device Factor
April 13, 2015 - Volume 9 Issue 69 Print Report
For more than five years, P, a domestic corporation, owned all of the outstanding stock of S1, incorporated under the laws of country X. S1...
Capital Gain Is Not Apportionable Business Income
April 10, 2015 - Volume 9 Issue 68 Print Report
During the period 2000-2006, EBI was a corporation domiciled and headquartered in Connecticut. During the period 2000-2006, EBI owned 100 percent of the stock of AFB,...
Waiver of Family Attribution Denied
April 9, 2015 - Volume 9 Issue 67 Print Report
Mr. A owns 50 percent of the stock in Y Corporation, (Y). As a result of "family attribution" (from his children), Mr. A is considered to own approximately...
FASB Addresses "Debt Issuance Costs"
April 8, 2015 - Bulletin Print Report
Bonds that are issued for more than, or less than, their stated redemption price at maturity, are said to have been issued at a "premium" or "discount," res...
Government Publications Are Not Capital Assets
April 8, 2015 - Volume 9 Issue 66 Print Report
TP is a physicist who worked on the Manhattan Project to develop the atomic bomb during World War II. He also served as a civilian adviseron one of the flights...
MLP Found To Generate "Qualifying Income"
April 7, 2015 - Volume 9 Issue 65 Print Report
C is a "publicly traded partnership" (PTP or MLP). C is primarily engaged in the transportation, storage, and distribution of refined petroleum products.
New Jersey's Take On Virtual Currency
April 6, 2015 - Bulletin Print Report
Virtual currency is a form of "electronic/digital money" that can be used as a medium of exchange or as a form of digitally stored value. Taxpayers may deploy it to p...
TRS Can Furnish or Render "Non-Customary" Services
April 6, 2015 - Volume 9 Issue 64 Print Report
T, which has elected to be treated as a Real Estate Investment Trust, (REIT), owns approximately "a%" of the common units and is the general partner of Limi...
"Boot" vs. "Special Dividend"
April 2, 2015 - Bulletin Print Report
The issue that arose in connection with Kraft's merger with Heinz has come up once again with respect to a much smaller deal involving two Bermuda insurers, Montpelier Re H...
Sears Will Create "Opco/Propco"
April 2, 2015 - Bulletin Print Report
Sears Holdings Corporation, (SHC), will, in an unusual manner, divide itself into an "opco/propco," with propco (Seritage Growth Properties or SGP) scheduled to acqui...
REIT's "NOL Pill" Not Fatal
April 2, 2015 - Volume 9 Issue 63 Print Report
T was established as a C corporation on Date 1 and elected to be treated as a REIT for its first taxable year ended Date 2. Since its inception, T's operations ha...
CHTR To Accelerate The Use Of Its NOLs
April 1, 2015 - Bulletin Print Report
Charter Communications, Inc. (CHTR) has accumulated approximately $9.5 billion in Federal net operating losses (NOLs). Some $5.3 billion of these NOLs are "unrestricted,&q...
CFC Avoids "Subpart F" Income
April 1, 2015 - Volume 9 Issue 62 Print Report
TP is a publicly traded multinational corporation and a "leading global provider of Products." TP wholly owns all of the shares of certain controlled foreig...
Reasonable Prospect of Recovery Prevents Theft Loss Deduction
March 31, 2015 - Volume 9 Issue 61 Print Report
From 1999 through 2001, Mr. Vincentini (V) was an investor in Anderson Ark & Associates (AA), an international fraud scheme that marketed phony investment program...
Madison Square Garden Will Undergo Another Renovation
March 30, 2015 - Bulletin Print Report
Following a study in which the notion of separating the businesses of Madison Square Garden Company (MSG) was carefully considered, the company has decided to proceed with such...
Only Domestic Entities Can Be REITs
March 30, 2015 - Volume 9 Issue 60 Print Report
X is a corporation that was organized under the laws of Country A which meets the requirements of Sec. 856(a)(1), (a)(2), and (a)(4) through (a)(7) of the Internal Re...
Dow Chemical To Engage In "Reverse Morris Trust" Transaction
March 27, 2015 - Bulletin Print Report
The Dow Chemical Company (DOW) and Olin Corporation (OLN) have announced a definitive agreement pursuant to which "a significant portion of DOW's chlorine value chain&...
"Parsonage Allowance" Only Covers One Home
March 27, 2015 - Volume 9 Issue 59 Print Report
From 1996 to 1999, PD and LD, husband and wife, owned more than one residence, a principal residence and a lake house. PD, an ordained minister, worked for PDM, Inc.,...
Analyzing Kraft's "Special Dividend"
March 26, 2015 - Bulletin Print Report
H.J. Heinz Holding Corporation (HJH) and Kraft Foods Group, Inc. (K) have entered into a definitive merger agreement for the purpose of creating "The Kraft Heinz Company,&...
"Rebates" Reduce Basis
March 26, 2015 - Volume 9 Issue 58 Print Report
Funds are organized as portfolios of series funds under the laws of State A and State B. Each qualifies as a "regulated investment company" (RIC).
Attribution to Trusts
March 25, 2015 - Volume 9 Issue 57 Print Report
A trust and one of its beneficiaries, Mr. A, owned all of the stock in X Corporation, (X). None of the stock owned by Mr. A is constructively owned by the other benef...
Tenet's "Staged" Acquisition Of USPI Group
March 24, 2015 - Bulletin Print Report
Press reports last Sunday strongly suggested that Tenet Healthcare Corporation, (T), was on the verge of acquiring USPI Group Holdings, Inc. (USPI). In fact, although such an a...
When Are "Decommissioning" Liabilities "Incurred?"
March 24, 2015 - Volume 9 Issue 56 Print Report
In 1999 and 2000, AG purchased three nuclear power plants. AG paid $93 million for those plants. AG was subject to regulations promulgated by the NRC, including the obligation...
Interest On Exchangeable Debentures Must Be Capitalized
March 23, 2015 - Bulletin Print Report
On Date 1, the Issuer privately placed Amount 1 of exchangeable debentures ("X Debentures"). The Issuer characterized the X Debentures as contingent payment debt inst...
Distribution of Real Estate Gives Rise To a "Contraction"
March 23, 2015 - Volume 9 Issue 55 Print Report
The issue is whether a distribution of real property to two of a corporation's shareholders in redemption of their stock constituted a distribution in partial...
"Sourcing" Interest and OID
March 20, 2015 - Volume 9 Issue 54 Print Report
TP provides commercial banking and credit card services. It is the parent of Sub 1 and Sub 2. TP, throughthe subsidiaries, issued credit cards to (i) U.S. citiz...
Leases and Installment Sales Are Not "Investment Capital"
March 19, 2015 - Volume 9 Issue 53 Print Report
During the years at issue, some 75 to 80 percent of Xerox's equipment sales were financed by Xerox itself. The income &qu...
Why Is PNK's Spin-Off Taxable?
March 18, 2015 - Bulletin Print Report
GLPI's proposal regarding Pinnacle Entertainment (PNK) envisions a spin-off of an "opco" followed immediately by a merger of the remaining company (propco) with a...
Proper Treatment Of Dividends With Unorthodox "Ex-Dates"--Nathan's
March 18, 2015 - Bulletin Print Report
Nathan's Famous, Inc. (NATH) recently declared a mammoth cash dividend in the amount of $25 per share. This represents over 1/3 of NATH's stock price immediately prior...
No Itemized Deductions If No Tax Return Is Filed
March 18, 2015 - Volume 9 Issue 52 Print Report
Mr. Jahn did not file an income tax return for several years, including 2004. The I.R.S. eventuallycaught up with him and the Commissioner executed a return for...
Can "Investigatory" Expenses Be Deducted?
March 17, 2015 - Volume 9 Issue 51 Print Report
Plaintiffs deducted $16,218 for the purchase and erection of an MET tower: a piece of technologicalequipment that, along with associated peripherals, is used to...
Backdated Accounts Receivable Not "Related Party Indebtedness"
March 17, 2015 - Bulletin Print Report
Sec. 965, the so-called "repatriation holiday" provision, states: In the case of a corporation which is a U.S. shareholder and for which the election...is in effect.....
Timely Distribution Of "Boot" Eliminates Gain Recognition
March 16, 2015 - Bulletin Print Report
Although the I.R.S. is no longer, and has not been since 2013, issuing spin-off rulings, it will rule on "significant issues" associated with spin-offs. LTR 201511001...
Crop Share Payments Are "Rents From Real Property"
March 16, 2015 - Volume 9 Issue 50 Print Report
The Lodge is a corporation organized under the laws of Iowa and is exempt from taxation pursuant to Sec. 501(c)(8) of the Internal Revenue Code.  ...
Refundable State Credits Includible In Gross Income
March 13, 2015 - Bulletin Print Report
In New York State, (NY), certified "EZ" businesses qualify for certain EZ tax credits. A certified EZ business that meets specific employment tests may become a "...
A Former Mother-In-Law's Wrath Should Not Be Minimized
March 13, 2015 - Volume 9 Issue 49 Print Report
Mr. Robert F.Cavuto (RC) was married to the daughter of Mary Lou Hayes (MLH). During the time they were married, MLHpermitted the couple to have their own...
Too Much Income Eliminates I.R.A. Deduction
March 12, 2015 - Volume 9 Issue 48 Print Report
During 2008, Mr. X, (X), was an "active participant" in a retirement plan maintained by his employer. X contributed $5,000 to his I.R.A. account for 2008.
Real Estate Rental Is a "Passive" Activity
March 11, 2015 - Volume 9 Issue 47 Print Report
During 2006 and 2007, LB was a licensed real estate agent. She worked full-time for Snyder & Snyder Real Estate, Inc. (S&S).  ...
Massachusetts Excise Tax Not Discriminatory In Effect Or Purpose
March 10, 2015 - Volume 9 Issue 46 Print Report
The service that permits customers to view a variety of video channels on their television sets is known as "multi-channel video programming." The satellite companies...
GLPI's Bold Proposal For PNK
March 9, 2015 - Bulletin Print Report
Gaming and Leisure Properties, Inc. (GLPI), the company that was spun-off from Penn National Gaming in a landmark transaction that became the model for "opco/propco"...
Sec. 7701(g) Applies To Sec. 475 & PLR Update
March 9, 2015 - Volume 9 Issue 45 Print Report
Partnership X (PSX) served as a traditional holding company for Partnership Y (PSY) and held a majority interest in Partnership Z (PSZ). Historically, PSY and PSZ engaged in th...
AbbVie and Pharmacyclics--The Signs Point To A Reorganization
March 6, 2015 - Bulletin Print Report
On March 4th, AbbVie Inc. (A) and Pharmacyclics, Inc. (P), each a Delaware corporation, entered into an Agreement and Plan of Reorganization, by and among A, P, Oxford Amherst...
Transfer of Property to a Pension Plan Is a "Sale or Exchange"
March 6, 2015 - Volume 9 Issue 44 Print Report
During its taxable years ended June 30, 1983 through June 30, 1988, KCI, Inc., (KCI), maintained several defined benefit pension plans. These plans were subject to mi...
No "Hardship" Exception to Early Withdrawal Penalty
March 5, 2015 - Volume 9 Issue 43 Print Report
The taxpayer, Mr. Venet, (V), worked for 22 years before being laid off in September, 2001. He was unable to find suitable work again until 2005. During this time, V...
Springleaf To Enjoy A "Basis Step-Up"
March 4, 2015 - Bulletin Print Report
Springleaf Holdings, Inc. (LEAF) has agreed to purchase from CitiFinancial Credit Co. (CF) all of the shares of One Main Financial Holdings, Inc. (OM), a wholly-owned subsidiar...
Refund Claim Not Timely Filed
March 4, 2015 - Volume 9 Issue 42 Print Report
TP acquired a "Consolidated Filing Group", (CFG). TP converted CFG into an LLC on Date 2. TP filed amended returns for CFG for the calendar year 2 through 3...
Lack of "Risk Shifting" Prevents a Finding of "Insurance"
March 3, 2015 - Volume 9 Issue 41 Print Report
FW is a temporary personnel agency based in Houston, Texas. It purchased two insurance policies from AH, each covering both workers compensation and employers liabili...
Visteon Will Distribute The Proceeds From The Halla Sale
March 2, 2015 - Bulletin Print Report
Late in 2014, Visteon Corporation signed an agreement to sell its approximately 70 percent stake in Halla Visteon Climate Control (HVCC) to multiple purchasers. Visteon expects...
Tax Sharing Agreement Created A Debtor/Creditor Relationship
March 2, 2015 - Volume 9 Issue 40 Print Report
Downey Financial Corporation (DFC) and its subsidiaries, including Downey Bank (DB), entered into a tax-sharing agreement, (TSA), which provided for the filing of consolidated...
Rare Inversion Sighting
February 27, 2015 - Bulletin Print Report
What used to be quite common has now become exceedingly rare; an acquisition by a foreign corporation of the stock of a U.S. corporation in what is now widely known as an "...
Rents From Real Property
February 27, 2015 - Volume 9 Issue 39 Print Report
TP is a domestic corporation that intends to elect to be treated as a Real Estate Investment Trust, (REIT). TP owns all of the stock in S. S is a domestic corporation...
Abandonment Loss Is Ordinary In Character
February 26, 2015 - Bulletin Print Report
In 1998, GK sold a business to SS. In connection with the sale, GK purchased Securities issued by SS for $98.6 million. Later, GK's Board of Directors decided to "aban...
Built-In Gain Allocated to Contributing Partner
February 26, 2015 - Volume 9 Issue 38 Print Report
During 2005,appellant was a member of each ofKJAC and MJAC, limited liability companies treated as partnerships for tax purposes. During 2005, each such p...
Loss On Sale of Property To Plan Trustee Not Deductible & MLP Ruling Update
February 25, 2015 - Volume 9 Issue 37 Print Report
On or before October 25, 1949, petitioner adopted a profit-sharing plan ("Plan"). The I.R.S. determined that the Trust established pursuant to the Plan was...
FNF To Redeem Shares Of "Tracking" Stock
February 24, 2015 - Bulletin Print Report
On June 30, 2014, Fidelity National Financial, Inc. (FNF) completed the recapitalization of its common stock into two "tracking" stocks; FNF Group common stock and FN...
Claims for Refund: Timing is Everything
February 24, 2015 - Volume 9 Issue 36 Print Report
C-I, an individual, did not file her 2002 federal income tax return before March 12, 2008; nor did she file her 2003 federal income tax return before that date....
New York State Legislator Targets Luxury Condos And Coops
February 23, 2015 - Bulletin Print Report
The New York Times recently published a series of articles in which it was revealed that many luxury condominiums and cooperative apartments in New York City are owned by wealt...
Contributing Appreciated Property to a Pension Trust
February 23, 2015 - Volume 9 Issue 35 Print Report
On December 1, 1952, the plaintiff adopted for its full-time employees a pension plan. The pension plan and trust met the requirements of Sec. 401(a) of the Internal...
Sec. 988 Gain Is Qualifying REIT Income
February 20, 2015 - Volume 9 Issue 34 Print Report
R is a Real Estate Investment Trust, (REIT). R invests in real property from which it derives rental income and in debt instruments that are secured by mortgages on r...
Sec. 951 Inclusions Increase Earnings And Profits
February 19, 2015 - Volume 9 Issue 33 Print Report
USP is a domestic corporation that wholly owns FS. FS is a controlled foreign corporation (CFC), and USP is a "U.S. shareholder of FS. FS earns "subpart F income"...
Partnership Profit Distributions Include A Compensation Element
February 18, 2015 - Volume 9 Issue 32 Print Report
In 1970, the voters of San Francisco approved a Payroll Expense Tax Ordinance. In the general election of 2008, the voters approved "Proposition Q." Proposition Q cre...
Expedia's Receipts Were From Performance Of Services
February 17, 2015 - Bulletin Print Report
Petitioner, (P), is a Washington corporation. It operated a travel reservation facilitation business. Its parent also owned TripAdvisor (TA). P assisted the reservation of hote...
NetJets Not Liable For Additional Transportation Taxes
February 17, 2015 - Volume 9 Issue 31 Print Report
NetJets' flight programs allow customers to gain use of airplanes. To participate, the customer pays NetJets an amount equal to the cost of a portion of a single airplane o...
Bankruptcy Arrangement Avoids Sec. 368(a)(1)(G) And Sec. 351
February 13, 2015 - Volume 9 Issue 30 Print Report
On Date 1, Corporation A ("A") and certain of its subsidiaries filed a voluntary petition under Chapter 11 of the Bankruptcy Code. The Plan was confirmed on Date 3--&...
"Excluded" Acquisitions Preserve Tax-Free Spin-Off
February 12, 2015 - Volume 9 Issue 29 Print Report
D2 is a holding company whose primary asset is the stock of D1. D1 is also a holding company whose primary asset is the stock of several operating subsidiaries, including the s...
Spin-off Trends
February 11, 2015 - Volume 9 Issue 28 Print Report
Spin-off requirements: "control" requirement: immediately before the distribution, T (the distributing corporation) must control the corporation whose stock...
Sears Denied Reimbursement of Sales Tax
February 10, 2015 - Volume 9 Issue 27 Print Report
Sears is registered with the Massachusetts Commissioner of Revenue ("the Commissioner") as a vendor and as such is required to collect and remit sales tax t...
HRS To Acquire XLS/Actavis Update
February 9, 2015 - Bulletin Print Report
Harris Corporation, (HRS), and Exelis, Inc., (XLS) have jointly announced a definitive agreement under which the former will acquire the stock of the latter "in a cash and...
Fannie Mae's Tax Exempt Status Continues To Be Upheld
February 9, 2015 - Volume 9 Issue 26 Print Report
Congress created Fannie Mae (FM) to "foster" the secondary market for home mortgages. FM's statutory charter exempts it from all state and local taxation, except...
FTR Will Achieve A "Cost" Basis In VZ's Assets
February 6, 2015 - Bulletin Print Report
While the "headline" cost of Verizon's wireline assets that will be acquired by Frontier Communications Corporation (FTR) is $10.54 billion, the "effective&q...
Non-Resident Partner Subjected To NYS Tax
February 6, 2015 - Volume 9 Issue 25 Print Report
The taxpayer, (TP), an attorney, is a resident of New Jersey who practiced law exclusively in New Jersey on behalf of a law firm, (WEMED), during the years in issue,...
Marking the Beginning of the "Testing Period"
February 5, 2015 - Volume 9 Issue 24 Print Report
TP began incurring losses and generated a Net Operating Loss, (NOL), in its tax year ending Year 1. On Date 1, TP filed a vol...
Staples To Acquire Office Depot
February 5, 2015 - Bulletin Print Report
Staples, Inc. (S) and Office Depot, Inc., (ODP), have announced the execution of an Agreement and Plan of Merger "by and among S, Staples AMS, Inc., and ODP, pursuant to w...
Single Sale or Separate Sales?
February 4, 2015 - Volume 9 Issue 23 Print Report
Petitioner, (P),is a personal holding company. In 1941, Mrs. Morris, (MM), owned 91.87 percent of its outstanding capital stock. &nb...
The President Proposes To Radically Alter The Taxation Of Multinationals
February 3, 2015 - Bulletin Print Report
While President Obama's budget package, at least on the revenue side, reiterates many of the proposals he has advanced in each of his previous budget submissions, a new pro...
Determining When A "Stock Unification" Spoils A Spin-Off
February 3, 2015 - Bulletin Print Report
Distributing (D) has two classes of stock outstanding, Class A and Class B. The Class A stock is "high vote" stock that is not publicly traded; and the Class B stock...
"Arrowsmith" Renders Settlement Proceeds Ordinary Income
February 3, 2015 - Volume 9 Issue 22 Print Report
B Corporation, (B), was an 'S' corporation. The petitioners owned 39 percent of the stock of B. On its 1964 income tax return, B reported a net operating loss...
Costco's "Strippable" Dividend
February 2, 2015 - Bulletin Print Report
Costco Wholesale Corporation's Board of Directors has declared a "special" cash dividend in the amount of $5 per share, payable February 27, 2015, to shareholders...
A "Retention" Is Not Part of a Tax-Avoidance Plan
February 2, 2015 - Volume 9 Issue 21 Print Report
D Corporation, (D), has outstanding "g" shares of common stock. D also has outstanding one class of convertible preferred stock which will be converted into...
Retention To Pay Down Debt Allowed
January 30, 2015 - Volume 9 Issue 20 Print Report
Although the I.R.S. no longer issues rulings under Sec. 355, it will entertain requests for rulings with respect to "significant issues" associated with these transac...
Taxpayer Did Not Change Its Accounting Method
January 29, 2015 - Volume 9 Issue 19 Print Report
TP is jointly owned, indirectly, by foreign entities. For the taxable years ended "Y", TP viewed the foreign entity from which it had received loans as a re...
Yahoo's Plan For Alibaba Stake Revealed
January 28, 2015 - Bulletin Print Report
Yahoo! Inc. (Y) has announced its plan to divest, "tax-efficiently," its Alibaba (BABA) stake and, not surprisingly, the plan employs the spin-off provisions of the t...
The Benefits Of A "Reverse" Spin-Off
January 28, 2015 - Volume 9 Issue 18 Print Report
P owns all of the stock of OS, which operates Business A and Business B. OS has been actively engaged in Business A for more than five years, through its wholly-owned subsidiar...
Ford To Deconsolidate Venezuelan Subsidiary
January 27, 2015 - Bulletin Print Report
Ford Motor Company, (F), has reported that "Venezuelan exchange control regulations have resulted in an other-than-temporary lack of exchangeability between the Venezuelan...
"Zenz" and Sec. 302(b)(2)
January 27, 2015 - Volume 9 Issue 17 Print Report
C is a public corporation which isengaged in Business. As of the close of business on Date 3, C had "a" outstanding shares of voting common stock (&qu...
RKT And MWV To Merge: Spin-Off To Follow
January 26, 2015 - Bulletin Print Report
Rock-Tenn Company (RKT) and MeadWestvaco Corporation (MWV) today announced an agreement pursuant to which each of RKT and MWV will becomes subsidiaries of a new corporation (&q...
Bargained-For Payments For Personal Physical Injuries Not Excludible
January 26, 2015 - Volume 9 Issue 16 Print Report
The Donor Source (TDS) is one of about 30 egg donor agencies in California. Petitioner, (P), signed one contract with TDS in February 2009. The contract plainly provides that i...
CYN's Merger With RY Will Constitute A Reorganization
January 26, 2015 - Bulletin Print Report
City National Corporation (CYN) and Royal Bank of Canada (RY) have reached an agreement pursuant to which CYN will be merged with and into RBC USA Holdco, (RBC), a direct wholl...
Returning Escrowed Shares
January 23, 2015 - Volume 9 Issue 15 Print Report
P Corporation, (P), formed Subsidiary, (Sub). T Corporation, (T),a holding company, owns all of the stock of R Corporation, (R), and S Corporation, (S). P's...
Installment Method Unavailable For "Unrealized Receivables"
January 22, 2015 - Volume 9 Issue 14 Print Report
M was a partner in the consulting business of PWC until 2002, when PWC sold its consulting business to IBM. PWC transferred its consulting business to PWCC, a partnership. Amon...
"Dispositions" Of Installment Obligations Clarified
January 21, 2015 - Volume 9 Issue 13 Print Report
Sec. 453B replaces and provides generally the same rules as former Sec. 453(d). Under Sec. 453B(a), gain or loss is recognized upon the satisfaction of an installment obligatio...
Discharge Of Debt Of A "Disregarded Entity"
January 20, 2015 - Bulletin Print Report
Many high profile debtors, such as EFH and Caesars, operate through single-member limited liability companies which are treated, for tax purposes, as "disregarded entities...
Iron Mountain's "Racking" Is a Real Estate Asset
January 20, 2015 - Volume 9 Issue 12 Print Report
Iron Mountain, Inc. filed its ruling request with the I.R.S. on July 18, 2012. The ruling was finally issued, nearly two years later, on July 9, 2014. It is unclear, given the...
President Obama Will Seek To Tax Transfers At Death
January 18, 2015 - Bulletin Print Report
President Obama, in his State of the Union address, will propose to radically alter the tax rules regarding the transfer of appreciated assets in transactions that have not, hi...
Convertible Virtual Currency And Sales Tax
January 16, 2015 - Volume 9 Issue 11 Print Report
Convertible virtual currency is virtual currency that has an equivalent value in "real" currency, or that acts as a substitute for real currency. Virtual currency is...
Liquidating Distributions and Constructive Receipt--Part II
January 15, 2015 - Volume 9 Issue 10 Print Report
In July, 1982, P Corporation, (P), adopted an incentive stock option (ISO) plan. Certain employees of Pexercised options granted under the plan on February 9, 1...
Allocating Mortgage Interest Deductions
January 14, 2015 - Volume 9 Issue 9 Print Report
1. TPs are a married couple and are jointly and severally liable on a mortgage, but one spouse is deceased at the end of the taxable year and the bank issues a Form 1098 under...
Estates Are Not Tax Avoidance Vehicles
January 13, 2015 - Volume 9 Issue 8 Print Report
The decedent died on August 18, 1972, leaving the residue and remainder of her estate for the support, maintenance, and education of her grandchildren. To carry out t...
FASB Eliminates "Extraordinary" Items
January 12, 2015 - Bulletin Print Report
The Financial Accounting Standards Board ("FASB") recently issued an ASU as part of its laudable initiative "to reduce complexity in accounting standards."&...
Agreements And Substantial Negotiations Prior To A Spin-Off
January 12, 2015 - Volume 9 Issue 7 Print Report
A transaction that meets all of the requirements of Sec. 355 can nevertheless be rendered taxable (at the level of the distributing corporation, but not with respect to its sha...
MWV Will Spin-Off Its Specialty Chemicals Business
January 9, 2015 - Bulletin Print Report
MeadWestvaco Corporation, (MWV), announced its intention to "separate" its Specialty Chemicals business from the rest of the company. The separation is expected to be...
Accounting For Litigation Reserves
January 9, 2015 - Volume 9 Issue 6 Print Report
By its very nature, the accounting for contingencies, in particular loss contingencies, is fraught with uncertainty. The accounting rules are premised on judgments and predicti...
MoneyGram Is Not A "Bank"
January 8, 2015 - Bulletin Print Report
MoneyGram International, Inc., ("MG"), sells money orders and money transfer services to consumers through "agents." These agents include banks, credit unio...
Estate Planning Technique Goes Awry
January 8, 2015 - Volume 9 Issue 5 Print Report
In December 2012, the federal estate and gift tax laws allowed a unified $5 million credit that, without prompt and decisive Congressional action, was scheduled to be reduced t...
Sons of Deceased Parents Not Family Members
January 7, 2015 - Volume 9 Issue 4 Print Report
At the beginning of Year 1, C's principal shareholders, X and Y, owned approximately "a%" and "b%", respectively, of C's stock. Other fami...
Corporations Can Report Non-Taxable Gains
January 6, 2015 - Volume 9 Issue 3 Print Report
There are, in many cases, substantial differences between the manner in which a transaction is reported for financial accounting purposes and the way in which it is reported fo...
Foreign Lender And Underwriter Engaged In A U.S. Trade Or Business
January 5, 2015 - Volume 9 issue 2 Print Report
Fund, ("F"), a State A limited partnership, was formed on Date A. In Year 2, F converted to a Country X exempted limited partnership. F was treated as a partnership f...
Dividends on Stock Do Not "Accrue"
January 2, 2015 - Volume 9 Issue 1 Print Report
In 2006 and 2007, Mr. George E.Ham, (H), purchased shares in four mutual funds managed by Janus Capital Group, (J), a regulated investment company (mutual fund)...
The Prospects For An Acquisition Of Time, Inc.
December 31, 2014 - Bulletin Print Report
The New York Post is reporting that "Time, Inc. can merge or be bought as soon as this month without jeopardizing the tax-free stock swap that created t...
Assumption of "Incidental Guarantee" Not Boot
December 31, 2014 - Volume 8 Issue 251 Print Report
T Corporation, (T), isa regulated public utility. T has outstanding 29,500 shares of voting common stock, all of which were held by Mr. A. ACQ is also a regulat...
Shareholder's Proportionate Interest "Meaningfully" Reduced
December 30, 2014 - Volume 8 Issue 250 Print Report
X is a corporation whose 20 shares of its sole class of common stock is held by Mr. A. In order to provide an equity interest in the business toindividuals B, C...
C Corporation Converting To REIT Avoids Depreciation Recapture
December 29, 2014 - Bulletin Print Report
One of the downsides of converting from C corporation designation to REIT status is "depreciation recapture." Frequently, the property owned by the converting corpora...
Similar or Related In Service or Use
December 29, 2014 - Volume 8 Issue 249 Print Report
TP owned a 25-story, steel frame office building located at 1819 Broadway, Manhattan, New York. The building was, on November 17, 1953, rented to 82 commercial tenant...
Private Companies Get "Accounting Alternative" For Mergers
December 26, 2014 - Bulletin Print Report
The Financial Accounting Standards Board ("FASB") has issued new rules that will simplify the accounting for business combinations, at least in the case of private co...
"TARP" Status Is A Sec. 381 "Tax Attribute"
December 26, 2014 - Volume 8 Issue 248 Print Report
T merged with and into TP in a transaction to which Sec. 381 applied. TP is the common parent of an affiliated group which files a consolidated income tax return....
Allergan Shareholders Will Be Taxed On Receipt Of Actavis Stock
December 24, 2014 - Bulletin Print Report
The recently issued S-4 with respect to the combination of Allergan, Inc. (AGN) and Actavis plc (ACT) discloses that the transaction will be structured as a "reverse trian...
Stock Sale Recast as a Liquidation
December 24, 2014 - Volume 8 Issue 247 Print Report
From its incorporation until May, 2002, Woodside Ranch Resort, Inc., (WRI), owned and operated a dude ranch resort. On May 17, 2002, the operating assets and business...
Employee Can Deduct Unemployment Insurance Premiums
December 23, 2014 - Volume 8 Issue 246 Print Report
TP is an employee of Employer in State X. Employer provides certain employees with an opportunity to voluntarily purchase supplemental unemployment insurance. TP will...
Oil And Gas Gatherer Found To Earn "Good" MLP Income
December 22, 2014 - Bulletin Print Report
X is a limited partnership. X is contemplating an initial public offering (IPO) of limited partner interests, following which it would become a "publicly traded partnershi...
"Reprehensible" Payments are Deductible
December 22, 2014 - Volume 8 Issue 245 Print Report
The issue is whether, in Canada, court ordered damages for breach of contract are deductible as an expense "for the purpose of gaining or producing income from a...
NYS Casts a Wide Taxation Net
December 19, 2014 - Volume 8 Issue 244 Print Report
The taxpayer, (TP), is a corporation that sells testing equipment used by research and development departments of corporations, governments, and universities. It soug...
Damages Treated as a "Return of Capital"
December 18, 2014 - Volume 8 Issue 243 Print Report
In Year 0, T, a unit investment trust, decided to sell its assets and invited bids from prospective buyers. In Month a of Year 1, TP entered into a binding agreement...
Congress Passes A "Watered Down" (But Welcome) Extenders Bill
December 17, 2014 - Bulletin Print Report
Congress has just approved the Tax Increase Prevention Act of 2014 (HR 5771). President Obama has promised to sign the bill, which should therefore become law in a matter of da...
Taxpayer Denied Sec. 1033 Relief
December 17, 2014 - Volume 8 Issue 242 Print Report
X isa holding company and operates retail stores through its subsidiaries. In Year 2, X opened a warehouse and distribution center ("the Distribution Cente...
Electric Sign Structures Are "Outdoor Advertising Displays"
December 16, 2014 - Bulletin Print Report
Taxpayer, ("TP") is a REIT. TP proposes to construct and affix "electric sign structures" to several of its existing outdoor steel sign structures that are...
Premium "Rebates" Constitute Gross Income
December 16, 2014 - Volume 8 Issue 241 Print Report
In 2001, Mr. and Mrs. Rickard, (R), purchased three life insurance policies through the same broker, LTS. In each instance, LTS, through his corporation, E, issued a...
Components Of Cellular Telephone Systems Constitute "Real Property"
December 15, 2014 - Bulletin Print Report
Taxpayer ("TP") intends to elect to be treated as a REIT. A segment of TP's overall business involves the leasing of "Systems" to wireless communication...
Spin-Off To Facilitate Stock Offering
December 15, 2014 - Volume 8 Issue 240 Print Report
D is a State X corporation engaged in Business A and Business B. D has outstanding "n" shares of common stock held by "o" shareholders. There are three shar...
Sales To Other Than The "Threatening Authority"
December 12, 2014 - Volume 8 Issue 239 Print Report
TP, an individual taxpayer, owned 40 acres of land in City M on which he farmed and raised cattle. TP learned, through a report in a local newspaper, that City M inte...
Morgan Stanley Successfully "Strips" N.J. Earnings
December 11, 2014 - Volume 8 Issue 238 Print Report
Morgan Stanley, (MS), wholly owned MSC. MSC transacted business in New Jersey, (NJ). MSC entered into a number of financial transactions with MS and/or MS' subsidiaries and...
Temporary Taking Not an Involuntary Conversion
December 10, 2014 - Volume 8 Issue 237 Print Report
X is the owner of Y acres of land. X constructed an office building on the land and entered into a lease thereof with Z. City...
Rents or Royalties?
December 9, 2014 - Volume 8 Issue 236 Print Report
TP is a Real Estate Investment Trust, (REIT). TP owns an "a%" limited partnership interest in F, a State 1 limited partnership. F owns the sole membership i...
S.E.C. Sanctions Bank For Overstating Deferred Tax Assets
December 8, 2014 - Bulletin Print Report
Hampton Roads Bankshares, Inc., (H), is a bank holding company. H's stock was listed on the NASDAQ Global Select Market. Not surprisingly, the performance of H's subsid...
Consent Required for Change of Accounting Method
December 8, 2014 - Volume 8 Issue 235 Print Report
TP provides goods, services, and other items under an agreement known as a "Multiple Deliverable Contract", (MDC), which requires TP to provide bundled prod...
Recently Purchased Business Is an Active Business
December 5, 2014 - Volume 8 Issue 234 Print Report
D Corporation, (D), is a publicly-traded Country A corporation. D has outstanding two classes of stock, publicly traded ordinary shares of a single class ("D Com...
HEI To Engage In A "Bad" Morris Trust Transaction
December 4, 2014 - Bulletin Print Report
Hawaiian Electric Industries, Inc. (HEI), and NextEra Energy, Inc., (NEE), have announced one of the more interesting transactions we have recently encountered. At the end of t...
Retroactive Tax Legislation Violated Taxpayer's Due Process Rights
December 4, 2014 - Volume 8 Issue 233 Print Report
Petitioners were nonresidents of New York State (NYS) during 2008. Prior to 2008, L (the husband) owned 100 percent of the stock of PWC, a corporation doing business partially...
CODE's And CY's NOLs May Be Affected By Merger
December 4, 2014 - Bulletin Print Report
Recently, Cypress Semiconductor Corporation, (CY), and Spansion, Inc., (CODE), announced a "merger of equals" transaction the details of which are disclosed in the me...
Barnes Group Runs Afoul Of The Step Transaction Doctrine
December 3, 2014 - Volume 8 Issue 232 Print Report
Barnes Group, (B), owns the stock of ASA, a foreign subsidiary flush with cash. To access that cash without U.S. tax consequences, B devised the following plan-- --B...
Is Loral On The Block?
December 2, 2014 - Bulletin Print Report
Bloomberg is reporting that Loral Space & Communications, Inc., (L), is once again "on the block" and is nearing an agreement to dispose of its assets to Canadian...
AFMCs May Offset Sec. 4081 Liabilities
December 2, 2014 - Volume 8 Issue 231 Print Report
C, a position holder of taxable fuel, is liable for tax under Sec. 4081 for rack removals of taxable fuel. C also produces alternative fuel mixtures as defined in Sec. 6426(e)(...
OXY's "Partial" Spin-Off Of CRC
December 1, 2014 - Bulletin Print Report
Occidental Petroleum Corporation, (OXY), is poised to distribute to its shareholders, on a pro rata basis, approximately 80.1 percent of the stock of its wholly-owned subsidiar...
Parental Guaranty Does Not Prevent "Risk Shifting"
December 1, 2014 - Volume 8 Issue 230 Print Report
SHI is the parent corporation of an affiliated group of U.S. corporations. In 1999, SHI acquired P. It later acquired B. The SHI Group provided guarding services, alarm system...
Form Of Inversion Leads To Injunction
November 28, 2014 - Bulletin Print Report
A pending "inversion" transaction was enjoined by a Delaware Chancery Court judge recently because of a "disconnect" between the manner in which the transac...
The Service Will Follow "Bobrow" With Respect To I.R.A. Rollovers
November 28, 2014 - Volume 8 Issue 229 Print Report
Sec. 408(d)(3)(A)(i) of the Code provides that any amount distributed from an I.R.A. will not be included in the gross income of the distributee to the extent the amount is pai...
Affiliation Denied Until Sufficient Shares Have Been Purchased
November 26, 2014 - Volume 8 Issue 228 Print Report
Pursuant to a Stock Purchase Agreement (SPA) executed on Date 1, P agreed to acquire 100 percent of the stock of T from its shareholders (Ss) over the course of several purchas...
PTP: Dividend Or Part Of Purchase Price?
November 25, 2014 - Bulletin Print Report
One of the more difficult questions that arises in connection with acquisitions is whether a "pre-sale dividend" remitted by the acquired corporation is properly trea...
The Device Test and Morris Trust Transactions
November 25, 2014 - Volume 8 Issue 227 Print Report
P Corporation, (P), owned all of the stock of S Corporation, (S), for over five years. Both P and Shave eachbeen engaged in the active conduct of a trade...
Medtronic Deal Still On Track
November 24, 2014 - Bulletin Print Report
After reviewing the latest amendment to the Form S-4 filed by Medtronic Holdings, Limited ("New Medtronic"), we remain optimistic that the transaction involving New M...
I.R.S. Revamps "Attribute Inheritance" Rules
November 24, 2014 - Volume 8 Issue 226 Print Report
Do earnings and profits "travel" to the transferee when assets are transferred thereto by the transferor? The answer is only when the asset movement is of a type spec...
When Is Option Stock "Transferred"?
November 21, 2014 - Volume 8 Issue 225 Print Report
X Corporation, (X), granted non-qualified options to certain of its key employees. Under the terms of the options, the employees had an unconditional right to receive...
Hedge Fund Cannot Defer Hedging Gains
November 20, 2014 - Volume 8 Issue 224 Print Report
TP is an investment advisor who provides investment services to its related hedge fund entities through management agreements. TP is compensated for its services through manage...
How Will A Baker Hughes Shareholder Be Taxed?
November 19, 2014 - Bulletin Print Report
In one of the largest business combinations of the year, Baker Hughes, Inc., (BHI), will be merging with and into a limited liability company, (RTLLC), to be created by Hallibu...
No Interest Element In Deferred Option Premium Payments
November 19, 2014 - Volume 8 Issue 223 Print Report
S, an insurer, wrote variable annuity