10640 Results

Homestead Law Did Not Create A Vested Interest In Residence
April 25, 2025 - Bulletin Print Report
R owns property, (the "WP"). Two years after acquiring the WP, R and D, (the "Bs"),married. R owes the government...
Non-Resident Football Player's Signing Bonus Was Apportionable Income
April 25, 2025 - Bulletin Print Report
Petitioners, Darius Slay, ("DS"),and Jennifer Williams, filed a timely 2020 joint, non-resident PA-40 tax return. Petitioners requested a refund of "X.&quo...
No Bona Fide Debt Existed
April 25, 2025 - Bulletin Print Report
For tax year 2014, APP was the sole shareholder of BI, an 'S' corporation... SIS was a company in the business of developing and selling a legal case management softwar...
The Willens Deal Survey April 2025
April 25, 2025 - The Deal Survey: April 2025 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
Involuntary Conversion Gain Not "Wholly Exempt"
April 25, 2025 - Volume 19 Issue 78 Print Report
Petitioner, (P), was engaged in the business of the manufacture and sale of fertilizer. In August 1951, its plants were destroyed by fire. At the time of the fire, P held hazar...
Estate Was To Bear All Inheritance Taxes
April 24, 2025 - Bulletin Print Report
In 2023, decedent, EMA, a cousin of the petitioner, died. Petitioner instantly received by transfer two investment accounts. These accounts listed the petitioner as "trans...
Refurbished Tractors May Be Subject To Excise Tax
April 24, 2025 - Bulletin Print Report
Beginning in 1989, F built and sold "glider tractors" using repaired engines, repaired transmissions, and "glider kits."  ...
Taxpayer Successfully Changed Domicile
April 24, 2025 - Bulletin Print Report
Taxpayers are a husband and wife who were residents of Indiana until April 2021. Taxpayers then relocated to Michigan. The Department of Revenue determined that Taxpayers owed...
When Are Bonds "Substantially Identical?"
April 24, 2025 - Volume 19 Issue 77 Print Report
TP, an individual,sold Turnpike Revenue Bonds, 3.75%, offered on April 7, 1952 at 99 (to yield approximately 3.8%); and (within 30 days)bought Turnpike Re...
Political Subdivision Immune From Tort Liability
April 23, 2025 - Bulletin Print Report
M filed a complaint on October 20, 2023. She alleged that the County Auditor had incorrectly listed her as the owner of 101 Meek Avenue, Columbus, Ohio. According to M, she was...
Leaf Wraps Are Not Tobacco Products
April 23, 2025 - Bulletin Print Report
A wholesaler of various tobacco products, (the "Taxpayer"), seeks to offer "tobacco leaf wraps" for sale. Tobacco leaf...
Untimely Petition Leads To Dismissal "As A Matter Of Law"
April 23, 2025 - Bulletin Print Report
On December 29, 2023, the Department issued two Notices...to petitioners: one for tax year 2019...and one for tax years 2021 and 2022. On o...
Stock Owned By Residuary Beneficiary Is Attributable To Estate
April 23, 2025 - Volume 19 Issue 76 Print Report
B, an individual, died in 1954. His estate included 755 shares of a corporation's outstanding 757 shares of common stock. In 1957, the estate sold 89 shares of such stock t...
Charging Stations Do Not Provide "Electric Service"
April 22, 2025 - Bulletin Print Report
The question is whether the electricity sold at electric vehicle charging stations by entities other than electric utilities are subject to Colorado sales taxes. It is not....
Time Warner's Networks Are "Interstate Broadcasters"
April 22, 2025 - Bulletin Print Report
Plaintiff, ("P"), a Delaware corporation, is a media and entertainment company with four reportable segments: (1) Turner, (2) HBO, (3) Warner Brothers, and (4) Time,...
Energy Credits Can Be Passive Activity Credits
April 22, 2025 - Bulletin Print Report
SF is a partnership for federal income tax purposes. On September 11, 2016, S and K, the manager of SF, signed a Membership Agreement and a Membe...
Timing The Gain Or Loss From A Short Sale
April 22, 2025 - Volume 19 Issue 75 Print Report
1. In January of Year 1, T directs its broker to borrow 100 shares of XYZ stock and sell the shares in the market. On December 31st of Year 1, when the value of XYZ stock has i...
A State Cannot Be Sued For A Section 7434 Violation
April 21, 2025 - Bulletin Print Report
D alleges she attends Alabama A&M University, ("AM"), as a graduate student, and she worked for AM as a graduate assistant in June 2023. After a single day of emp...
Depreciation-Induced Losses Do Not Render An Activity A "Hobby"
April 21, 2025 - Bulletin Print Report
S worked as a crane operator for over forty years. Upon retirement, he purchased a snow removal business from a retiring operator. His business employed a range of equipment......
Three Party Transaction Yields Valuable Basis Step-Ups
April 21, 2025 - Bulletin Print Report
It is rare to encounter a transaction in which three parties participate, but a recent transaction announcement on the part ofeach of Global Payments, Inc., ("GPN&qu...
Taxpayer Had Ownership Interest In Principal Residence
April 21, 2025 - Volume 19 Issue 74 Print Report
On August 3, 1993, petitioner entered into a seller-financed "land contract" for a tract of land and a residence (the "property") with HS. Pursuant to the l...
Warrants And Common Stock Can Be "Substantially Identical"
April 17, 2025 - Volume 19 Issue 73 Print Report
Advice has been requested whether the "wash sale" provisions are applicable to a loss sustained (1) on the sale of common stock of a corporation where warrants of the...
A Tax Sale Was Properly Voided
April 17, 2025 - Bulletin Print Report
In 2006, EMH acquired "Lots 16 and 17..." In 2007, The Peoples Bank entered into a loan agreement with EMH, who used the lots as security. EMH eventually defaulted on...
Farming Did Not Increase Land Value
April 17, 2025 - Bulletin Print Report
HV is an 'S' corporation owned entirely by MRH. Through it, MRH operates a vineyard on 20 acres of exclusive-farm-use zoned land. I...
When Is Property Placed In Service?
April 17, 2025 - Bulletin Print Report
In 2015, petitioner, ("P"), incorporated PC to conduct a yacht-chartering business. The Ls elected to make this LLC a flow-through entity. &nbs...
Intel To "Deconsolidate" Altera
April 16, 2025 - Bulletin Print Report
Intel Corporation, ("IC"), to much fanfare, acquired AlteraCorporation, ("AC"),in June 2015 for the staggering sum of $16.7 billion. The acquisi...
Convertible Preferred and Common Stock Can Be "Substantially Identical"
April 16, 2025 - Volume 19 Issue 72 Print Report
The taxpayer, an individual, sold 57,200 shares of X corporation common stock at a loss, and on the same day purchased 26,000 shares of X corporation convertible preferred stoc...
Florist Not Subject To Virginia's "Litter Tax"
April 16, 2025 - Bulletin Print Report
The taxpayer, a florist that provides flower arrangements, plants, gifts, and delivery services, has filed litter tax returns since 1996. Litter tax returns were filed and paid...
Michigan Did Not Violate The Takings Clause
April 16, 2025 - Bulletin Print Report
H owned property in Macomb County, Michigan. By March 2020, she had fallen at least a year behind on her property taxes. That prompted Macomb County to begin the process of for...
Reasonable Cause Existed For Failure To Submit Qualified Appraisals
April 15, 2025 - Bulletin Print Report
Oscar Liu-Chen Tang, ("T"), is a prominent Chinese-born American businessman, investor, and philanthropist. For many years, he has been a generous supporter of the Me...
Refund Claim Was Not "Duly Filed"
April 15, 2025 - Bulletin Print Report
P's employer withheld $2,070 in estimated income taxes during the 2017 tax year. P filed her return for the 2017 tax year in November 2...
Another Taxable Shipping Spin-Off
April 15, 2025 - Bulletin Print Report
Costamare, Inc., ("CMRE"),organized in the Republic of the Marshall Islands and headquartered in Athens, Greece, is an owner and provider of container ships and...
Expenses Incurred In A Sec. 338 Transaction
April 15, 2025 - Volume 19 Issue 71 Print Report
Y is a wholly-owned subsidiary of X. On December 30, 1986, Y purchased all of the stock of the targets from A. Each purchase constituted a qualified stock purchase&nbs...
No Sales Tax Exemption For Marijuana Provisioning Centers
April 14, 2025 - Bulletin Print Report
In 2008, the voters of Michigan passed into law a ballot initiative now codified as the "MMMA." The MMMA defines a "primary...
A Utah "Spinco" Must Leave Its Net Operating Losses Behind
April 14, 2025 - Bulletin Print Report
The issue before the Utah State Tax Commission, in Petitioner v. Business Taxes and Discovery Division of the Utah State Tax Commission, Appeal No. 23-1208,...
Enfusion/Clearwater Deal Founders On "Continuity Of Interest" Shoals
April 14, 2025 - Bulletin Print Report
Earlier this year, Clearwater Analytics, Inc., ("CWAN"), and Enfusion, Inc., ("ENFN"), announced thatthey had entered into a definitive merger agreeme...
"Undoing" A Complete Liquidation
April 14, 2025 - Volume 19 Issue 70 Print Report
On Date A, P corporation, (P), acquired all of the outstanding common stock of S1 for cash and retired "$m" of S2's indebtedness in exchange for a note from S2 in...
"Premature" Action Dismissed For Lack Of Jurisdiction
April 11, 2025 - Bulletin Print Report
Plaintiff, ("P"), is a limited liability company owned by MW. P brings suit pursuant to 28 U.S.C. section 1346(a)(1) for the reco...
Membership Certificate Found To Be A Capital Asset
April 11, 2025 - Volume 19 Issue 69 Print Report
C is a not-for-profit corporation having 400 member-owners. Y purchased a membership certificate in C in September 1967 at a cost of $600; and sold the certificate in March 198...
NBC Universal Has Substantial Nexus With Oregon
April 11, 2025 - Bulletin Print Report
Plaintiff, ("P"), owned and operated a portfolio of news and entertainment television networks... P created programming content...which it provided to affiliate stati...
Duke Energy Entitled To Annual Investment Tax Credits
April 11, 2025 - Bulletin Print Report
Section 12-14-60(A)(1) of the South Carolina Codestates, "There is allowed an investment tax credit against the tax imposed... for any taxable year in w...
When Is "SAR" Income Includible In Gross Income?
April 10, 2025 - Volume 19 Issue 68 Print Report
A corporation adopted a plan under which key employees are granted stock appreciation rights ("SARs"). An SAR entitles the employee to a cash payment equal to the exc...
Farmhouse Was "Intended Or Suited" For Residential Use
April 10, 2025 - Bulletin Print Report
On November 19, 2018, plaintiff, ("P"), acquired title to property...consisting of approximately forty-six acres of land. The deed consideration was $4,703,160. Prior...
Taxpayer Failed To Substantiate Property's Depreciable Basis
April 10, 2025 - Bulletin Print Report
Petitioner's brother purchased and began using the rental property as his residence in 2002. The purchase was financed, at least in part, by a loan to petitioner's brot...
Regional Air Carriers Are Planning A Merger
April 10, 2025 - Bulletin Print Report
Republic Airways Holdings, Inc., ("R"), and Mesa Air Group, Inc., ("MESA"), announced that "they have entered into a definitive agreement to merge...in...
MSTR's Loss Cushioned By Deferred Tax Benefits
April 9, 2025 - Bulletin Print Report
Strategy, Inc., formerly known as Microstrategy, Inc., ("MSTR"), is among the largest, if not the largest, holder(s)of bitcoin. Historically, for financial acco...
Divisive Transaction Cannot Qualify As A Liquidation
April 9, 2025 - Volume 19 Issue 67 Print Report
For more than five years, X corporation, (XC), has been engaged in the active conduct of two businesses, Business 1 and Business 2. XC dist...
A Misleading Statement Is Not Necessarily False
April 9, 2025 - Bulletin Print Report
Between 2011 and 2014, T took out three loans from WFB, a savings bank. T first borrowed $110,000 in 2011 to make an equity contribution to a law firm. T then borrowed $20,000....
Captive Insurance Premiums Deductible For State Tax Purposes
April 9, 2025 - Bulletin Print Report
Plaintiff, ("P"), appeals Defendant's, ("D"), Notices of Assessment. D adjusted P's taxable income...based on federal audit reports that the I.R.S....
When Is Merger Consideration Valued?
April 8, 2025 - Bulletin Print Report
For a statutory merger to qualify as a reorganization, within the meaning of section 368(a)(1)(A) of the Code, certain non-statutory requirements must be met, not the least of...
Basis Of Property "Allocable" To Easement
April 8, 2025 - Volume 19 Issue 66 Print Report
TP purchased a 600-acre farm in 1928 for $60,000. In 1964, an electric power company purchased an easement along the southern boundary of the farm for the construction and main...
Proposed Constitutional Amendment Was Legally Presented To Voters
April 8, 2025 - Bulletin Print Report
In November 2024, the Louisiana Legislature, by Joint Resolution, proposed an amendment to revise Article VII of the Louisiana Constitution. A Joint Resolution is not law; the...
Residential Property Not Exempt From Taxation
April 8, 2025 - Bulletin Print Report
SC Concept House, LLC owns the property at issue. The limited liability company's membership is wholly composed of membership interests held by the non-profit corporation,...
Extension Of Time To Record A Tax Deed Not Granted
April 7, 2025 - Bulletin Print Report
G purchased three parcels of land at a tax sale. The trial court granted her request to issue tax deeds for the parcels, but she failed to complete the tax deed recording proce...
FLNA Was Not An "80/20" Company
April 7, 2025 - Bulletin Print Report
Frito-Lay North America, Inc., ("FLNA"), is PepsiCo's core domestic snack food line. Many of its employees were transferred to other subsidiaries.
MoneyLion, Inc. Will Engage In A "Closed" Transaction
April 7, 2025 - Bulletin Print Report
Late in 2024, MoneyLion, Inc., ("ML"), announced that it had entered into a definitive agreement for Gen Digital, Inc., ("GD"), "to acquire all outstan...
Target Can Deduct Amounts Paid By Acquirer To Target Employees
April 7, 2025 - Volume 19 Issue 65 Print Report
A commenced a tender offer for the shares in T. The tender offer was successful, and T was merged into either A or another subsidiary of P (A was a subsidiary of P)....
Gain From Sale Of Stock Was Compensatory
April 4, 2025 - Bulletin Print Report
AS develops and markets...solutions for institutional investors. AS was headquartered in Massachusetts. W formed AS as a Massachusetts corp...
Expenses In Defending Against Patent Infringement Claims Are Deductible
April 4, 2025 - Bulletin Print Report
Actavis, ("A"), filed "ANDAs" with the FDA seeking FDA approval to market and sell generic versions of branded drug products. The manufacturers of those bra...
"Utilities" Taxes Deductible In Computing New Jersey Entire Net Income
April 4, 2025 - Volume 19 Issue 64 Print Report
Duke Energy Corporation, (D), has business operations in New Jersey (NJ). D was subject to net corporate income taxes in both North Carolina (NC) and South Carolina (SC). In ad...
Ally Financial Is Required To Remit Lease Taxes To Chicago
April 4, 2025 - Bulletin Print Report
Ally Financial, Inc., ("A"), is an automotive financing company that takes assignments of motor vehicle leases from independent automobile dealers...and purchases the...
The "Plan" Requirement In Sec. 302(e)
April 3, 2025 - Volume 19 Issue 63 Print Report
R, a corporation whose stock is widely held, sold all of its operating properties and business in December 1954. After the sale, R had only cash and notes receivable....
Upset Tax Sale Could Not Be Set Aside
April 3, 2025 - Bulletin Print Report
H owned and resided at the Property. On September 12, 2022, the Property was exposed to an upset tax sale by the Bureau for delinquent real estate taxes. The successful bidder...
The I.R.S. Was The Distributee Of IRA Funds
April 3, 2025 - Bulletin Print Report
H, a pharmacist, owned and operated Rx... His company established an IRA on his behalf. H generated revenue illegally. The government indicted H on drug and money-laundering of...
The Copyright Act Requires Human Authors
April 3, 2025 - Bulletin Print Report
Can a non-human machine be the author under the Copyright Act of 1976?(the "Act"). The answer is no. T created a generative...
Working Capital Is Distributable In Partial Liquidation
April 2, 2025 - Volume 19 Issue 62 Print Report
A corporation was primarily engaged in the business of repairing equipment. It also had an inventory of equipment which it rented to contractors. The corporation owns the build...
Denial Of Application For Farmland Assessment Was Improper
April 2, 2025 - Bulletin Print Report
Lot 35.03...in the Township of West Deptford consists of 198.34 acres. Of this total, 163.89 acres is "actively devoted to agricultural use" under the Farmland Act......
Distribution Of "QSub" Terminates Its Election
April 2, 2025 - Bulletin Print Report
Distributing, ("DIS"), is a privately held State A corporation that has made an election under section 1362(a) to be treated as a subchapter S corporation. DIS has a...
A Lease Was Not A Conditional Sale
April 2, 2025 - Bulletin Print Report
On June 15, 2019, CA as Lessor and the original lessee entered into a motor vehicle lease agreement for a Vehicle. The original lessee had the option to purchase the Vehicle &q...
The "GCI" Distribution Is "Boot"
April 1, 2025 - Bulletin Print Report
The GCI Liberty, Inc., S-1 was published on March 31, 2025and, among other things, it confirms the fact that the parties are adhering to the views they initiallyexp...
Mr. Cooper Is Going Private
April 1, 2025 - Bulletin Print Report
Rocket Companies, Inc. ("RCI"), has been quite busy lately, at least as regards acquisition activity. It announced, recently, the acquisition of Redfin, in an all-stoc...
Abandoning A Partnership Interest Can Produce An Ordinary Loss
April 1, 2025 - Volume 19 Issue 61 Print Report
1. PRS is a general partnership in which A, B, and C were equal partners. During 1993, PRS became insolvent and C abandoned C's partnership interest. At the time C abandoned the interest, PRS&#...
Failure To Provide Timely Notice Rendered A Tax Sale Void
April 1, 2025 - Bulletin Print Report
RS&A Piping & Fabrication, Inc.,("RSA"), appeals the circuit court's order dismissing its action to set aside a tax sale conducted by the Marlboro C...
NOLs Of Foreign Corporations In Sec. 381 Transactions
March 31, 2025 - Volume 19 Issue 60 Print Report
S, a corporation organized under the laws of a foreign country, was completely liquidated into P, its domestic parent, in a transaction that qualified as a liquidation to which...
Real Property Tax Law Section 575-b Is Unconstitutional
March 31, 2025 - Bulletin Print Report
Petitioners commenced this hybrid CPLR Article 78 and declaratory judgment action seeking a judgment declaring Real Property Tax Law, ("RPTL"), section 575-b unconsti...
GEO Group In Not An Instrumentality Of The U.S. Or Texas
March 31, 2025 - Bulletin Print Report
The Geo Group, Inc., ("G"), is a corporation organized under the laws of Florida that owns and operated correctional facilities...for the detention of federal and sta...
Certain Scam Victims Are Entitled To Theft Loss Deductions
March 31, 2025 - Bulletin Print Report
Section 165(a) of the Code provides a deduction for losses actually sustained during the taxable year and not compensated for by insurance or otherwise. In the case of an indiv...
Responsible Person Assessment Was Timely
March 28, 2025 - Bulletin Print Report
U is a Mississippi, ("M"), corporation and MC is its sole shareholder. DOR audited U...which resulted in an assessment of...sales...
Rivian's Spin-Off Will Likely Be A Return Of Capital
March 28, 2025 - Bulletin Print Report
Rivian, ("RIVN") surprised everyone by its recent announcement that "it has spun out its micro-mobility business into a new company: Also, Inc."RIVN n...
Dividends Recharacterized As Wages For FICA Purposes
March 28, 2025 - Volume 19 Issue 59 Print Report
The Radtke corporation, (RC), was incorporated in 1979 to provide legal services in Milwaukee, Wisconsin. Mr. Joseph Radtke, (JR), is the sole shareholder of RC. The corporatio...
FBAR Penalties Were "Disproportionate" As To A Widow
March 28, 2025 - Bulletin Print Report
R was a U.S. citizen who died in November 2021. P is his widow. R maintained two foreign bank accounts with EFG in Switzerland for more tha...
Dollar Tree Will Dispose Of Family Dollar
March 27, 2025 - Bulletin Print Report
Dollar Tree, Inc., after a spirited bidding war, acquired Family Dollar, Inc. in 2015. The transaction was structured as a reverse triangular merger. A newly created subsidiary...
Date Of Sale Ascertained For Wash Sale Purposes
March 27, 2025 - Volume 19 Issue 58 Print Report
On July 1, 1958, the taxpayer purchased 100 shares of common stock. On October 1, 1958, the taxpayer entered into an agreement for the sale of this stock at a loss; and to deli...
Non-Payment Of Delinquent Taxes Foreclosed Right To Redeem
March 27, 2025 - Bulletin Print Report
In June 2022, the City of Baltimore issued a "Certificate of Tax Sale" in which it certified that appellee had purchased "at public auction property in...Baltimo...
Wheelchair Ramps Are Not "Medical Appliances"
March 27, 2025 - Bulletin Print Report
Are Applicant's sales and rentals of wheelchair accessibility ramps, stair lifts, and grab bars...exempt from sales and use tax? Applicant se...
Timely Sale Of Stock Avoids Application Of Sec. 332(a)
March 26, 2025 - Volume 19 Issue 57 Print Report
Prior to February 20, 1979, Z had outstanding 1,000 shares of voting common stock, all of which were owned by Y. On February 20, 1979, Y sold 333 shares of Z stock to an unrela...
Absence Of Qualified Appraisals Sinks Charitable Contribution Deduction
March 26, 2025 - Bulletin Print Report
Petitioner's Form 1040-X for 2019 reported a non-cash charitable contribution deduction of $284,553. The items fell into three categories: personal clothing items, granite...
Private Property Was Devoted To A Public Purpose
March 26, 2025 - Bulletin Print Report
The property in this case consists of four buildings located in a research and technology park owned the University of New Orleans Research and Technology Foundation, Inc., (&q...
Rental Activity Is "Per Se" Passive In Nature
March 26, 2025 - Bulletin Print Report
A and F, (the "Bs"), own a single-family home on almost half an acre on Bainbridge Island in the state of Washington, (the "BIP"). &n...
The Willens Deal Survey March 2025
March 25, 2025 - The Deal Survey: March 2025 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
JHX And AZEK To Engage In A Taxable Merger
March 25, 2025 - Bulletin Print Report
James Hardie Industries plc, ("JHX"), and The Azek Company, Inc., ("AZEK"), announced entry into a definitive agreement under which "JHX will acquire A...
What Is The "True" Cost Of The Boston Celtics?
March 25, 2025 - Bulletin Print Report
Just a few weeks ago, PepsiCo, Inc., ("PEP"), announced that it hadentered into a definitive agreement to acquire poppi, a "pre-biotic soda brand," fo...
The CVR Debate Continues Unabated
March 25, 2025 - Bulletin Print Report
It is a demonstrablefact that more and more acquisitions are featuring, as an integral part of the merger consideration, "contractual contingent value rights,"...
Same Line Of Business Narrowly Construed
March 25, 2025 - Volume 19 Issue 56 Print Report
T is a corporation engaged in the investment business since 1975. From its inception, T's investment practice has been to maintain approximately 1/3 of the value of its inv...
Wine Seller Doing Business In Colorado
March 24, 2025 - Volume 19 Issue 55 Print Report
C sells wine over the Internet. C acquires wine from wine cellars throughout the U.S., transports the wine to C's location (outside of Colorado), and sells the wine over th...
Dues And Fees Paid To A "Dining Club" Are Subject To Sales Tax
March 24, 2025 - Bulletin Print Report
TP has been doing business as a restaurant and lounge that has been open to the public. It is in the process of converting to a private din...
Only The Owner Of Property Can Secure A Casualty Loss Deduction
March 24, 2025 - Bulletin Print Report
The issue for decision is whether petitioner is entitled to a casualty loss deduction. In December 1992, petitioner and ET, his then spouse...
Gainfully Employed Renters Were Not Real Estate Professionals
March 24, 2025 - Bulletin Print Report
Petitioners filed a New York State resident income tax return for the year 2016. Attached to the return was federal schedule E...on which p...
Ignore Non-Voting Preferred Stock At Your Peril
March 21, 2025 - Bulletin Print Report
Assume a corporation has issued and outstandingboth voting common stock and non-voting preferred stock. The non-voting preferred stock, by value, represents a suitably sm...
Housing Provided To A Torah Reader Is Exempt From Taxation
March 21, 2025 - Bulletin Print Report
The petitioner, Harrison Orthodox Minyan, Inc., is a religious not-for-profit corporation which operates a modernOrthodox Jewish synagogue, (the "synagogue").&n...
Indirect Sales Between Related Persons
March 21, 2025 - Volume 19 Issue 54 Print Report
Petitioner owned 500 shares of WPE, Inc., (WPE), which she bought on October 2, 1947 for $8,853.20; and 610 shares of NYWS, Inc., (NYWS), which she bought on December...
E-Rate Reimbursement Requests Constitute "Claims"
March 21, 2025 - Bulletin Print Report
The "E-Rate" program subsidizes internet and other telecommunications services for schools and libraries across the U.S. The program disburses funds-- collected fr...
Sirius XM's Internet Radio Service Not Subject To Sales Tax
March 20, 2025 - Bulletin Print Report
Sirius XM, ("SXM") challenges the Department's determination that the retail sales tax applies to subscription internet radio service. The parties dispute whether...
Below Market Loan Was Not A Gift (In Whole Or In Part)
March 20, 2025 - Bulletin Print Report
BG died in Florida in 2016. Her son, S, a resident of New Jersey, is the executor of his mother's estate. The main issue in this motion...
Assumption Of Certain Reorganization Expenses Not "Other Property"
March 20, 2025 - Volume 19 Issue 53 Print Report
Mr. A owned all of the stock of X corporation, (X). Pursuant to a plan, Y corporation, (Y), acquired all of the assets of X in exchange for Y voting common stock and the assump...
Divorce Related Payments Were Not Alimony
March 20, 2025 - Bulletin Print Report
Before M's and R's divorce was finalized, the couple reached a settlement agreement concerning their marital property. The agreement provided that M would gain sole pos...
Sec. 354(a)(1) Applies To Securities Exchanges
March 19, 2025 - Volume 19 Issue 52 Print Report
X corporation, (X), acquires all of the stock of Y corporation, (Y), in exchange for voting stock of X. Y had an issue of six percent 15-year debentures outstanding. Pursuant t...
Taxpayer Relegated To Five-Year Carryover Of Excess Deductions
March 19, 2025 - Bulletin Print Report
During the 2008 tax year, APPs made a charitable contribution of a conservation easement. On October 15, 2016, APPs filed a 2015 California...
The Benefit Of The Services Was Received In California
March 19, 2025 - Bulletin Print Report
For the 2017 tax year, APP wrote computer codesfor DT. DT issued Forms 1099-MISC to APP reporting that it paid APP $37,857 of non-employee compensation for the 2017 tax y...
Late Payment Of Tax Obligation Not Explained By Reasonable Cause
March 19, 2025 - Bulletin Print Report
On March 14, 2022, RJ timely filed a 2021 Partnership Return of Income, reporting an annual tax of $800, a pass-through entity (PTE) elective tax of $19,397, and total payments...
Lions Gate Will Jettison Its Studios Business
March 18, 2025 - Bulletin Print Report
In February 2024, our bulletin,entitled Lions Gate Can Promptly Spin-Off Its Studio Business, made the case for why Lions Gate Entertainment Corporatio...
PEP To Reap The Benefits Of A "Cost" Basis
March 18, 2025 - Bulletin Print Report
PepsiCo, Inc., ("PEP"), recently announced it has entered into a definitive agreement to acquire poppi, a "pre-biotic soda brand," for $1.95 billion in cash...
Write Off Of Bad Debts Is Not "Charity"
March 18, 2025 - Volume 19 Issue 51 Print Report
Petitioner's property, for which it claimed tax exempt status, is an adult foster care facility. It has the capability to house up to six residents who are there for specia...
Refund Claims Barred By The "Substantial Variance" Doctrine
March 18, 2025 - Bulletin Print Report
Plaintiffs, ("Ps"), brought this action pursuant to section 7422 of the Code for a refund of federal income taxes. Section 199 al...
Endo, Inc. Will Engage In A "Zenz" Transaction
March 17, 2025 - Bulletin Print Report
Mallinckrodt plc, ("M"), a corporation organized under the laws of Ireland, and Endo, Inc., a domestic corporation,("E"), announced that they have ent...
What Is A Prohibited Interest In The Redeeming Corporation?
March 17, 2025 - Volume 19 Issue 50 Print Report
The holder of an automobile dealer franchise and his wife owned 255 shares of the stock of the corporation created to exercise that franchise. Their son owned all of the remain...
Capital Gains Taxes Should Not Be Deducted From Gross Proceeds
March 17, 2025 - Bulletin Print Report
As part of their divorce, E and J entered into a stipulated judgment. The stipulated judgment provided that: (1) E would pay J $2,300,000 to buy out his interest in five bakeri...
An LLC And Its Sole Member Were Not The Same Person
March 17, 2025 - Bulletin Print Report
On October 8, 2021, TP purchased a "Yukon" for $85,217.00...plus an extended warranty of $5,245.00 TP registered the Yukon in his sole name....
No Right of Offset
March 14, 2025 - Volume 19 Issue 49 Print Report
In 2002, 2003, and 2004, Mr. Brown sold shares of Citigroupstock and he derived capital gains from those sales. The Bro...
Private Equity Firm Had No Physical Presence In Indiana
March 14, 2025 - Bulletin Print Report
Taxpayer is a private equity firm located outside of the United States. Taxpayer makes money by investing in shares of companies not publicly traded or listed on a stock exchan...
Only "Final Orders" Can Be Appealed To The Minnesota Supreme Court
March 14, 2025 - Bulletin Print Report
H owned the H Golf Course...in Hennepin County. It was taxed under the Minnesota "Open Space Law." Property that qualifies under this law...is entitled to alternative...
Rebates Are Purchase Price Adjustments
March 14, 2025 - Bulletin Print Report
Taxpayer has elected to be an 'S' corporation under section 1361 of the Code. Taxpayer is a licensed life insurance agency and sells life insurance policies to individu...
Telecommunications Signals Are Not Tangible Personal Property
March 13, 2025 - Volume 19 Issue 48 Print Report
The plaintiffs are (1) electricity providers, and (2) telecommunications companies that purchase electricity from the electricity providers. Plaintiffs argued below that the pu...
Manufacturer Of Perishable Prepared Foods Exempt From Sales Tax
March 13, 2025 - Bulletin Print Report
Lotsa Pasta's business is located in Louisville, Kentucky. Its operations are spread across two buildings located next to each other. I...
"To The Same Extent" Was An Enabling Phrase; Not A Limiting One
March 13, 2025 - Bulletin Print Report
This case concerns the interpretation of section 19 of article XIII of the California Constitution. Ad valorem taxes in California are comp...
Nuclear Fuel Storage Cask Is Real Property
March 13, 2025 - Bulletin Print Report
EG and OC, ("Taxpayers"), challenge whether storage casks which house highly radioactive spent nuclear fuel are subject to taxation as real property. To be considered...
Canadian Giants Appear Headed Towards A 'B' Reorganization
March 12, 2025 - Bulletin Print Report
Whitecap Resources, Inc., ("W"), and Veren, Inc., ("V"), are each Canadian corporations. W and V have recently entered into a definitive business combinatio...
The Use Of Redemption Principles In Sec. 356(a)(2)
March 12, 2025 - Volume 19 Issue 47 Print Report
D is a corporation with 1,000 shares of a single class of common stock outstanding. Each share had a fair market value of $1x. A, one of five unrelated individual shareholders,...
Affiliates May Not Be Treated As A Single Entity
March 12, 2025 - Bulletin Print Report
The trademark dispute here is between two unrelated real estate companies with the word "Dewberry" in their names. DE owns a registered...
Hookah Tobacco Is "Loose Tobacco Suitable For Smoking"
March 12, 2025 - Bulletin Print Report
G is a distributor of hookah and its supplies and accessories. G has remitted to the "ABT" the "OTP" tax on its products sold in Florida. &n...
The Date Of Acquisition Of Property Is Excluded
March 11, 2025 - Volume 19 Issue 46 Print Report
Real estate located in Bedford Hills, New York was sold by the taxpayer on October 10, 1927. The real estate was acquired by the taxpayer on October 10, 1925. Respondent determ...
Tax Court's Finding Of Lack Of Profit Motive Upheld
March 11, 2025 - Bulletin Print Report
B ran a profitable salt mine--but he also engaged in purchasing, training, and racing thoroughbred horses as well as farming hay which he used to feed those horses, activities...
Eaton Denied Deemed Paid Foreign Tax Credits
March 11, 2025 - Bulletin Print Report
During 2007 and 2008, Eaton was the parent of an affiliated group of corporations, ("Eaton Group"), that filed consolidated returns. During these years, members of th...
Foreign-To-Foreign Merger Can Qualify As An 'A' Reorganization
March 11, 2025 - Bulletin Print Report
Saipem, ("S"), and Subsea7, ("S7"), each a leader in the engineering and construction fields of endeavor,announced that they have reached an agreement...
Foreign Shipping Companies Have A Penchant For "Taxable" Spin-Offs
March 10, 2025 - Bulletin Print Report
The board of directors of Euroseas Ltd. hasannounced the contribution of three of its vessel-owning subsidiaries to a new company, Euroholdings Ltd., in exchange for all...
Subsidiary's Purchase Of Parent Stock Not A Dividend
March 10, 2025 - Volume 19 Issue 45 Print Report
Petitioner, (P or CEC) is a wholly-owned subsidiary of CEI. P is a regulated public utility incorporated in New York State. CEI is a publicly traded holding company and is subj...
Taxpayer's "Failure To File" Conviction Was Overturned
March 10, 2025 - Bulletin Print Report
In July 2012, H was tried by jury on several charges, including the failure or refusal to file an income tax return for the tax year 2009 in violation of Code section 58.1-348....
Franchise Fee Found To Be An Illegal Tax
March 10, 2025 - Bulletin Print Report
The City is served by two electric utility providers--L and C. In June 2017, the City and L finalized their new franchise agreement, which...
Section 7433 Petitioners Had Not Exhausted Administrative Remedies
March 7, 2025 - Bulletin Print Report
Plaintiffs are attorneys who have represented taxpayers against the I.R.S. Plaintiffs allege they were targeted by the I.R.S. in retaliation for these legal representations.&nb...
WBA Is Going Private
March 7, 2025 - Bulletin Print Report
Walgreens Boots Alliance, Inc., ("WBA"), has entered into an Agreement and Plan of Merger with Parent, a newly formed limited liability company, and Merger Sub, a who...
Split-Off "Boot" Gain Is A Dividend
March 7, 2025 - Volume 19 Issue 44 Print Report
D owns all of the stock of C and also owns all of the stock of four other corporations. C conducts a real estate construction and development business. The other four subsidiar...
Collection Of Sales Tax Is Not "In The Conduct Of Trade Or Commerce"
March 7, 2025 - Bulletin Print Report
In late 2020, G purchased cloth face masks from several retail stores, (the "Retailers").The Retailers collected sales tax. G filed a class action complaint&nbs...
Mystery Surrounds PRMRF's Special Cash Distribution
March 6, 2025 - Bulletin Print Report
Paramount Resources Ltd, ("PRMRF"), a Canadian corporation,late last month, closed its previously announced disposition of its "Karr, Wapti, and Zama prope...
Retaining A Key Employee Justifies Split-Off
March 6, 2025 - Volume 19 Issue 43 Print Report
X corporation, (XC), operates through two divisions, Division I and Division II. Each division has been engaged in the active conduct of a trade or business for each of the pre...
Isolated Redemption Did Not Produce Section 305(c) Deemed Distribution
March 6, 2025 - Bulletin Print Report
Company is a privately held State A corporation with all its stock (consisting of Class A voting, Class B non-voting, and Class C non-voting) held by or for the benefit of memb...
bluebird bio, Inc. Will Live To Fight Another Day
March 6, 2025 - Bulletin Print Report
The gene therapy wunderkind, bluebird bio, Inc., ("BLUE"), has seen its stock price plummet by nearly 83 percent over the past twelve months. Its ability to continue...
9/11 Grants To Cantor Fitzgerald Were Not Contributions To Capital
March 5, 2025 - Bulletin Print Report
During 2007, petitioner, CF Headquarters Corporation, was wholly owned by Cantor Fitzgerald, L.P., ("Cantor Fitzgerald"), a domestic partnership. Cantor Fitzgerald wa...
New City Resident Taxed On Deferred Compensation
March 5, 2025 - Volume 19 Issue 42 Print Report
Mr. F was a resident of Corning, New York until September 1, 1996, at which time he enrolled his children in school in New York City. Mr. F spent a total of 200 nights and days...
Party Platters Are Prepared Foods On Which Sales Tax Must Be Assessed
March 5, 2025 - Bulletin Print Report
Petitioner is the owner of Tailgate Deli, ("TD"), located in Buffalo, New York. During the audit period, TD sold a variety of pre...
Online Tax Court Petitions Are Deemed To Have Been Signed
March 5, 2025 - Bulletin Print Report
The Commissioner mailed to the Ds a Notice of Deficiency dated July 22, 2024. The Notice of Deficiency stated that the last date to file a petition (with the tax court)wa...
Redemption Of Stock Held By QSST
March 4, 2025 - Volume 19 Issue 41 Print Report
Corporation, (CO), is a State X corporation. CO elected, in 1982, to be treated as an 'S' corporation. Trust owns 74 percent of the stock of CO; and 26 percent thereof...
Request For Alternative Rate Structure Denied
March 4, 2025 - Bulletin Print Report
Ohio's financial institutions tax, ("FIT"), is levied on banks and similar entities for the privilege of doing business in this state. &nbs...
Only Licensed Non-Profit Hospitals Are Eligible For Sales Tax Exemption
March 4, 2025 - Bulletin Print Report
Health Enterprises of Iowa, ("HE"), is a chapter 504 non-profit corporation providing group purchasing access and other shared services to Iowa hospitals. HE's me...
Designer's Sec. 179D Deductions Permanently Reduce Taxable Income
March 4, 2025 - Bulletin Print Report
This is a dispute over the proper procedure by which a designer of an energy efficient building may retroactively report a section 179D deduction on its tax return....
Tracking Stock Is Not The Exclusive Province Of The Liberty Companies
March 3, 2025 - Bulletin Print Report
While it cannot be denied that the Liberty family of companies is most closely identified with "tracking stock," they are not the exclusive issuers of this instrument...
Toro Corporation Will Engage In A "Taxable" Spin-Off
March 3, 2025 - Bulletin Print Report
Toro Corporation, ("TORO"), organized under the laws of the Marshall Islands, has formedRobin Energy Ltd., ("REL"), also so organized, to serve as the...
Property Was Not An Affordable Deed Restricted Property
March 3, 2025 - Bulletin Print Report
On January 1, 2022, APP was the owner of a parcel of land improved with a single-family home, (the "subject property"). EEvalued the subject property at $839,60...
Change Of Residence Accelerates Installment Gain
March 3, 2025 - Volume 19 Issue 40 Print Report
In April 1941, Decedent purchased a New York Stock Exchange "seat" for $29,000. On December 28, 1967, he sold the seat for $457,000 pursuant to an agreement which pro...
Government Can Foreclose On Non-Delinquent Party's Property
February 28, 2025 - Bulletin Print Report
Plaintiff seeks to collect...tax arrearagesowed by D, a dentist. The only visible assets of D...appears to be his dental practice, which he operates with V, in an LLC, an...
Reverse Acquisition Involving "Lonely" Corporation Is Found
February 28, 2025 - Volume 19 Issue 39 Print Report
P is a corporation organized on March 1, 1969 as a holding company, and S is a wholly-owned subsidiary of P organized on March 1, 1969. Z was not a member of an affiliated grou...
Failure To Exhaust Administrative Remedies Led To Dismissed Complaint
February 28, 2025 - Bulletin Print Report
On September 6, 2024, plaintiffs appealed the subject property's 2023-24 real market value ("RMV"). The subject property is a...
Combination Of Investment Entities Does Not Result In "Diversification"
February 28, 2025 - Bulletin Print Report
Mt. Logan Capital, Inc., ("MLC"), a Canadian corporation, announced that it has entered into a definitive agreement to combine with 180 Degree Capital Corporation, (&...
"QI" Was Found To Be The Taxpayer's Agent
February 27, 2025 - Bulletin Print Report
FOK was a limited partnership. FOK's business was the ownership and operation of rental real estate. FOK was the sole member of KP, a single member LLC that was disregarded...
Foreign Currency Gain Is "Good" REIT Income
February 27, 2025 - Volume 19 Issue 38 Print Report
R is a REIT. Some of the leases of the real estate that R owns provide for rents to be paid in euros. For some of these leases, R recognizes rental income for federal income ta...
Clear Channel Outdoor Was An "Advertising Host"
February 27, 2025 - Bulletin Print Report
Clear Channel, ("C"), owned and controlled at least 694 outdoor advertising displays in fiscal years 2019, 2020, and 2021, (the "Billboards")....
FedEx's Foreign Tax Credits Are Not Subject To "Haircut"
February 27, 2025 - Bulletin Print Report
The dispute between the parties is whether plaintiff is eligible to receive tax credits for foreign taxes paid on the "Offset Earnings" from its foreign subsidiaries....
Slot Machine Play Is A "Bet"
February 26, 2025 - Volume 19 Issue 37 Print Report
The Cs were not residents of Minnesota, (M), for 2005. During the year, the Cs played slot machines at casinos located both within and without M. The Cs did not file a 2005 M t...
Herc Holdings Comes Away With H&E Equipment Services
February 26, 2025 - Bulletin Print Report
HercHoldings, Inc., ("HE"), has executed a binding acquisition proposal to the board of directors of H&E Equipment Services, Inc., ("HEE"), pursua...
Tax Credits Are Allowed For Each Separate Solar System
February 26, 2025 - Bulletin Print Report
Petitioner filed a New York State resident income tax return...for tax year 2018. Included with petitioner's return was a form IT-255, claim for solar energy system equipme...
Untimely Filing Of Tax Court Petition Could Not Be Excused
February 26, 2025 - Bulletin Print Report
On November 13, 2024, petitioners electronically filed the Petition to commence this case, indicating thereon that they seek review with respect to notices of deficiency issued...
The Willens Deal Survey February 2025
February 25, 2025 - The Deal Survey: February 2025 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
Equitable Holdings Looks To Cement Its Control Of AllianceBernstein
February 25, 2025 - Bulletin Print Report
AllianceBernstein Holdings, L.P., ("ABH"), is a publicly-traded partnership. It is one of the last (and, in light of the fact that Cedar Fair, L.P. ("FUN"),...
Veteran Retained Sufficient Beneficial Ownership In Property
February 25, 2025 - Bulletin Print Report
APP is a decorated veteran of the U.S. armed forces. On March 16, 2017, APP and his wife purchased real property, ("domicile"), and took title to the domicile as tena...
Plan Of Liquidation Rescinded Before Gift Of Stock
February 25, 2025 - Volume 19 Issue 36 Print Report
Fund, (F), was established in 1957 as a non-profit corporation exempt from federal income tax under Sec. 501(c)(3) of the Code, and qualifying as a private foundation within th...
"Squeeze-Out" Merger Can Be An 'F' Reorganization
February 25, 2025 - Bulletin Print Report
Hyatt Hotels Corporation, (HHC), recently entered into a purchase agreement, (the "Purchase Agreement"), with PlayaHotels & Resorts N.V., (the "Company...
FBAR Penalty Assessment Was Timely
February 24, 2025 - Bulletin Print Report
Any person who willfully violates the reporting requirements of section 5314 is subject to a civil penalty. The Secretary may assess this penalty "at any time before the e...
To Which Partner Taxable Year Do Partnership Losses Flow?
February 24, 2025 - Bulletin Print Report
On April 13, 2022, Appellants (JD and BD)timely filed their original 2021 California Resident Income Tax Return. Appellants were calendar year taxpayers. &...
"Tax Asset" Reduces CELH's Effective Purchase Price For Alani Nutrition
February 24, 2025 - Bulletin Print Report
CelsiusHoldings, Inc., (CELH, has entered into a "Membership InterestPurchase Agreement" with the owners of Alani Nutrition, LLC., (the "Company"...
Interest Income Is "Qualifying" Income
February 24, 2025 - Volume 19 Issue 35 Print Report
PS is a publicly traded partnership (PTP). PS's sole asset is a limited partnership interest in OP, a limited partnership. OP owns W and X, corporations organized under the...
Chapter 13 Debtor's Tax Debts Could Not Be Discharged
February 21, 2025 - Bulletin Print Report
D filed a voluntary petition for relief under chapter 13 on June 21, 2014, (the "Petition Date"). A discharge was issued in D's case on July 11, 2019....
UPS Not Liable For New Jersey Penalties
February 21, 2025 - Volume 19 Issue 34 Print Report
The New Jersey Tax Court determined that the Division of Taxation (the Division) reasonably concluded that two categories of inter-company transfers of funds, conducted by plai...
Punitive Excise Tax On Employer Reversions Averted
February 21, 2025 - Bulletin Print Report
TP adopted the pension plans effective Date 1. Participation and accrued benefits were generally frozen for all participants of Plan A and Plan B effective Date 2....
Responsible Person Notice Was Timely Issued
February 21, 2025 - Bulletin Print Report
Plaintiff, ("P"), was the vice-president and sole shareholder of FR. P acknowledges that, under his direction, FR filed, albeit l...
Historic Shareholder Participation Not Needed To Find A Reorganization
February 20, 2025 - Bulletin Print Report
Shift4 Payments, Inc., ("S4"), and Global Blue Group Holding AG, ("GB"),announced that they have entered into a definitive agreement pursuant to which...
Only The "Acquiring Corporation" Can Assume Liabilities In A 'C'-- Part II
February 20, 2025 - Volume 19 Issue 33 Print Report
X owns all of the stock of Y. X proposed to acquire all of the properties of Z. X and Z entered into a plan and agreement that provided that X would acquire the pr...
Momentary Stock Ownership By Ineligible Entities Is Disregarded
February 20, 2025 - Bulletin Print Report
X elected to be treated as an 'S' corporation on Date 2. A owns a majority of the stock of X. In Year 1, X adopted an equity compen...
Potential ERTC Credits Cannot Defeat Notice Of Lien
February 20, 2025 - Bulletin Print Report
The I.R.S. sent petitioner a Final Notice of Intent to Levy dated February 28, 2023. The notice addressed petitioner's outstanding liability for the quarterly tax period th...
Anglo American plc's "De-Merger" Is Not Designed For Tax Efficiency
February 19, 2025 - Bulletin Print Report
Anglo American plc ("PLC") has made a series of recent announcements regarding the progress it is making towards its planned "de-merger" of its subsidiary,...
When Does A Bonus Accrue?
February 19, 2025 - Volume 19 Issue 32 Print Report
Petitioner, (P), received, as compensation, a salary of $x in 1990. In addition, P received a bonus of $y determined at the end of 1990, based on P's performance and the pr...
Due Process Does Not Demand An "Open-Ended" Search
February 19, 2025 - Bulletin Print Report
D acquired title to a residential condominium unit, (the "Property"), on June 29, 2018. It failed to pay the assessed taxes on the Property for the years 2018 through...
Home Dialysis Was Not Performed At An "Outpatient Facility"
February 19, 2025 - Bulletin Print Report
The New Mexico Taxation and Revenue Department, (the "Department"), maintains that the AHO erred by holding that TP qualified for the healthcare deduction under secti...
Sale By "DRE" Of Non-Profit College Is Subject To "RPTT"
February 18, 2025 - Bulletin Print Report
The LLC, which was the title holder of the Property prior to the date of the sale, is wholly owned by the "College." The College was granted section 501(c)(3) status....
Payment Of Assessment Necessary To Bring A Suit For Refund
February 18, 2025 - Bulletin Print Report
J and L, (the "Bs"), failed to timely file their joint tax return for 2017. In light of that failure, the I.R.S.--relying on data submitted by third parties--estimate...
"Raising Revenue"
February 18, 2025 - Volume 19 Issue 31 Print Report
SB 1246 is a bill concerning the modification of income tax rates in Oklahoma. Bills for raising revenue are required to originate in the House of Representa...
Certain Payments Are Not Gross Income For REIT Qualification Purposes
February 18, 2025 - Bulletin Print Report
TP elected to be treated as a real estate investment trust, ("REIT"). TP owns "b%" of Investment Partnership, ("IPS"). The remaining "a%"...
Partnership Can Use Installment Method Despite Sec. 754 Election
February 14, 2025 - Volume 19 Issue 30 Print Report
ABC, a partnership, sold a parcel of real property and wishes to report the gain under the installment method of accounting. Partnership gains and losses are shared equally by...
Freelance Writer Was Liable For Self-Employment Tax
February 14, 2025 - Bulletin Print Report
Since 1995, petitioner has been working as a freelance writer, writing movie reviews. Additionally, since at least 2019, petitioner has bought and sold movie-related memorabili...
Out-Of-State Income Of Non-Resident Spouse Was Community Property
February 14, 2025 - Bulletin Print Report
During 2018, husband lived and worked in Oregon. Appellants owned a home in Norwalk, California, where wife and their youngest daughter lived, and husband returned to Californi...
Sign Remained Tangible Personal Property Following Installation
February 14, 2025 - Bulletin Print Report
T manufactures and installs electric signs. T manufactured and installed a sign for a customer that operates a retail store. T charged the customer sales and use tax....
Land And Fixtures Did Not Constitute Replacement Property
February 13, 2025 - Bulletin Print Report
Plaintiffs are grape farmers with about 1,000 acres of grapevines. In 2002, they sprayed their vineyards with...chemicals their crop advisor recommended. These chemicals killed...
Stock Transferred Before Certificates Issued
February 13, 2025 - Volume 19 Issue 29 Print Report
A corporation granted an employee a restricted stock option to purchase a certain number of shares of its stock. The plan required that in order to exercise the option, written...
Notice Of Deficiency Was Mailed To The "Last Known Address"
February 13, 2025 - Bulletin Print Report
Petitioner, ("P"), filed Form 1065 for 2021 listing its address as "KM." The I.R.S. mailed anotice of transferee liability to P determining a deficien...
"NSO" And "RSU" Income Is Compensation For Services
February 13, 2025 - Bulletin Print Report
Appellants, ("APPs") were residents of California during the period between 2009 and 2013. APPs were residents of Hawaii in 2014. M was...
Short Sale Gain Not Accrued To Residence Period
February 12, 2025 - Volume 19 Issue 28 Print Report
An individual sells publicly traded stock short. While the short sale is still open, the individual moves outside of New York State. Tax La...
Errors In Valuation Judgment Cannot Be Corrected
February 12, 2025 - Bulletin Print Report
In 2015, plaintiffs added to the subject property's garage and master suite. Defendant made a mistake; a wall shown as 28feet long on the hand-drawn diagram prepared...
Untimely Refund Claim Had To Be Denied
February 12, 2025 - Bulletin Print Report
H served in the United Statesmilitary for over 29 years...concluding his service in 1995. On September 11, 2023, the Department of Ve...
Immediate Supervisor Approved Initial Penalty Determination
February 12, 2025 - Bulletin Print Report
PL is a limited liability company that is treated as a partnership for Federal income tax purposes. PL acquired a tract of land. PL granted...
Who Owns Stock Held By A Voting Trust?
February 11, 2025 - Volume 19 Issue 27 Print Report
Mr. A and his son, Mr. B, each owned 50 percent of the outstanding stock of a corporation. Mr. A and Mr. B established a voting trust, with a designated unrelated voting truste...
Appraisal Filing Requirement Was Not Subject Matter Jurisdictional
February 11, 2025 - Bulletin Print Report
The plaintiffs, each owners of properties located in Danbury, Connecticutthat had been assessed at more than one million dollars, appealed to the board. The board denied...
"Plant In Service" Cost Can Be Negative
February 11, 2025 - Bulletin Print Report
San Diego Gas & Electric, ("S"), owns an interstate electric transmission line. S's property in Arizona, ("AZ"), is subject to taxation by AZ and to...
Tax Lien Sale Could Not Be Set Aside
February 11, 2025 - Bulletin Print Report
On May 17, 2021, the plaintiff commenced this action pursuant to Real Property Tax Law, ("RPTL"),article 15 to quiet title to certain real property located in H...
Spin-Off To Facilitate IPO Approved By The Service
February 10, 2025 - Volume 19 Issue 26 Print Report
D is engaged in the E, F, and G businesses. D has outstanding 11,564,200 shares of common stock which are held in equal amounts by four voting trusts. The voting trusts have is...
Microstrategy's Embattled Preferred Stock Was Issued At A Discount
February 10, 2025 - Bulletin Print Report
Microstrategy, Inc.'s$250 million issue of eightpercent perpetual preferred stock has certain tax issues associated with it that, according to Barron's<...
Non-Voice Services Are Subject To Gross Receipts Tax
February 10, 2025 - Bulletin Print Report
Petitioner filed petitions with the BOA seeking a refund of the GRT it paid on the sale of "non-voice" services that it had reported in the "private line" c...
Export Warehouse Proprietor Must Have A Permit
February 10, 2025 - Bulletin Print Report
On December 29, 1992, the shares of Debtor (or "MH"), were held as follows: RLH: 80.4 percent; RHH: five percent; and EMH: 14.6 percent. On December 15, 2012, the sha...
President Trump Seeks To Terminate Sports "Tax Breaks"
February 7, 2025 - Bulletin Print Report
In addition to ending the favorable tax treatment afforded so-called"carried interest," President Trump has also targeted for extinctioncertain unspecifie...
Stock "Transferred" Upon Exercise Of Option
February 7, 2025 - Volume 19 Issue 25 Print Report
The deficiency asserted by the I.R.S. was based upon a determination that the taxpayer had disposed of stock he acquired from MMM upon the exercise of an option within six mont...
The "Uber Main Payment" Was Not Analogous To Insurance
February 7, 2025 - Bulletin Print Report
L is an engineer who was employed by Google between 2007-January 27, 2016. L helped found Google's autonomous driving project. While em...
"Freeze Act" Appeal Denied
February 7, 2025 - Bulletin Print Report
For tax year 2023, the Borough of Deal, ("B"), assessed plaintiff's property, ("Subject"), at $5,193,800. The entire amount was allocated to land (thus...
FBAR Penalties Are Fines For Eighth Amendment Purposes
February 7, 2025 - Bulletin Print Report
Each American citizen with interests in, or authority over, any foreign bank account with a balance exceeding $10,000 must file an annual "FBAR" with the I.R.S....
I.R.S. Amenable To "Elongated" Spin-Offs
February 6, 2025 - Bulletin Print Report
Over sixty years ago, AT&T owned approximately ninety percent of the outstanding stock of Pacific Telephone & Telegraph Company, one of its several Regional Bell Operat...
Research Was Not "Funded Research"
February 6, 2025 - Bulletin Print Report
S's expertise is in automotive coating designs and applications. S based its research credits on six different finishing systems it developed during 2016. &...
Transfer Of Stock To Grantor Trust Not An Acquisition Of An "Interest"
February 6, 2025 - Volume 19 Issue 24 Print Report
Mr. A and Mrs. B are husband and wife. Mrs. C is their daughter. Mr. D is Mrs. C's husband and the son-in-law of Mr. A and Mrs. B. In 1...
Refund Claim Was Six Days Late
February 6, 2025 - Bulletin Print Report
On February 10, 2021, petitioner filed a 2014 New York State amended resident income tax return, Form IT-201-X, in which he claimed a refund of $21,248.00. The refund claim was...
No "Established Duty" To Pay The Government
February 6, 2025 - Bulletin Print Report
R filed this qui tam action against H, alleging that H defrauded the United States when they applied for and secured visas for foreign employees...to work in...
Not All Mergers Qualify As 'A' Reorganizations
February 5, 2025 - Volume 19 Issue 23 Print Report
1. Target, (T), transfers some of its assets and liabilities to an acquiring corporation, retains the remainder and remains in existence. The T shareholders receive stock in th...
The "Preponderance" Standard Applies In FLSA Cases
February 5, 2025 - Bulletin Print Report
The Fair Labor Standards Act, ("FLSA"), of 1938 requires employers to pay their employees a minimum wage and overtime compensation. But the Act exempts many categorie...
Strict Compliance With Tax Sale Notice Provisions Is Required
February 5, 2025 - Bulletin Print Report
M owned the subject property. M failed to pay taxes on the property for the 2020 tax year and the property was ultimately sold to EW at an "upset tax sale" on Septemb...
FGU Complied With Foreclosure Notice Requirements
February 5, 2025 - Bulletin Print Report
R owned six properties in Detroit, but in 2019, 2020, and 2021, R failed to pay property taxes on the properties. As a result, P filed a petition for foreclosure....
Costs Of Assisted Reproductive Technologies Are Not Deductible
February 4, 2025 - Bulletin Print Report
Taxpayers, ("TPs"), are a heterosexual married couple legally married in State. TPA was diagnosed with "1" in Year 1... "1" requires TPA to take m...
Stock "Transferred" Too Late
February 4, 2025 - Volume 19 Issue 22 Print Report
GBB established on July 23, 1963, effective July 1, 1963, a restricted stock option plan. Petitioners timely exercised their respective options on April 30, 2014. On the date o...
The JEDZ Cannot Levy Taxes On Electric Companies
February 4, 2025 - Bulletin Print Report
GH and CT formed the joint economic development zone, (the "JEDZ"), in 2013 and enacted a resolution levying a net income tax on all businesses earning business incom...
Donor Substantially Complied With Appraisal Summary Requirements
February 4, 2025 - Bulletin Print Report
D is an Alabama limited liability company. D was classified as a partnership for federal income tax purposes. D timely filed its Form 1065...
I.R.S. Proposes Regulations On Separations And Reorganizations
February 3, 2025 - Bulletin Print Report
In the waning days of the Biden administration, the I.R.S. proposed regulations dealing with certain matters regarding corporate separations and reorganizations. The proposals...
Service Extends The Reach Of The Wash Sale Provisions
February 3, 2025 - Volume 19 Issue 21 Print Report
A, an individual, owns 100 shares of X corporation (X) stock with a basis of $1,000. On December 20, 2007, A sells the 100 shares for $600. On December 21, 2007, A causes an I....
The "Convenience" Test Applied To Employee Of Exempt Employer
February 3, 2025 - Bulletin Print Report
Petitioners, husband and wife, are longtime Pennsylvania residents. Petitioner-husband, ("PH"), was employed by Bank of Montreal,...
Supervisory Approval Of Penalties Was Found To Be Timely
February 3, 2025 - Bulletin Print Report
Respondent asserts that the I.R.S. complied with the supervisory approval requirements of section 6751(b) of the Codewith respect to the asserted penalties....
Service Finds A "Reverse Acquisition"
January 31, 2025 - Volume 19 Issue 20 Print Report
X is a State A corporation. It is the common parent of an affiliated group filing consolidated returns. X has issued and outstanding two shares of common stock, one of which wa...
Lack Of Profit Motive Eliminates Depreciation Deductions
January 31, 2025 - Bulletin Print Report
Plaintiffs owned two single-family residences...the "W" property and the "H" property. Plaintiffs reported the properties as rentals on their tax returns an...
Taxpayer Was Not A "State Employee"
January 31, 2025 - Bulletin Print Report
Taxpayers, a husband and a wife, filed a joint Virginia, ("VA"), resident individual income tax return for the 2022 taxable year, claiming a subtraction for salaries...
Deeds Were Not "Documents"
January 31, 2025 - Bulletin Print Report
On May 9, 2013, K was organized as a limited liability company. On January 24, 2018, K filed a "Statement of Division," which divided K into six limited liability com...
Will MSTR's Preferred Stock Distributions Be "Dividends?"
January 30, 2025 - Bulletin Print Report
Microstrategy, ("MSTR"), is on the verge of issuing some $250 million in stated amount of 8 percentconvertible preferred stock. There is some question about whe...
Gain From Sale Of Property Is New York Source Income
January 30, 2025 - Volume 19 Issue 19 Print Report
Until April 14, 1997, petitioners held title to a New York City cooperative unit. Not later than December 1996, petitioners became residents and domiciliaries of South Carolina...
Sourcing Receipts In "Drop Shipment" Transactions
January 30, 2025 - Bulletin Print Report
TP is a manufacturer that sells specialty products throughout the United States and the world. TP is required to sell its specialty products, (the "Products") using t...
"Zero-Turn Mowers" Are Exempt From Sales Tax
January 30, 2025 - Bulletin Print Report
Poultry farmers often purchase "zero-turn mowers." Under A.C.A. section 26-52-403, both new and used "farm equipment and mac...
Untimely Filed Refund Claim Deprived Court Of Jurisdiction
January 30, 2025 - Bulletin Print Report
Plaintiff, a U.S. citizen residing in Germany, filed this action on May 20, 2024, seeking a refund for her alleged overpayment of taxes for the 2016 tax year. At issue here is...
"Hovering Deficit" Can Only Offset Post-Transfer Earnings And Profits
January 29, 2025 - Bulletin Print Report
Parent is a domestic corporation...and is the common parent of an affiliated group...that files a consolidated return for Federal income tax purposes,(the "Parent Gr...
Conversion Into LLC Does Not Result In Significant Modification Of Debt
January 29, 2025 - Volume 19 Issue 18 Print Report
P has outstanding publicly traded debt, consisting of senior notes and exchangeable debentures (the "Debt"). The Debt is recourse to P. P proposes to restructure.&nbs...
New Jersey's "TSL" Violates The "Takings Clause" Of The Constitution
January 29, 2025 - Bulletin Print Report
R owned a mixed-use property. He failed to pay sewer tax bills and plaintiff purchased that debt pursuant to the New Jersey Tax Sale Law, ("TSL"). &nb...
CFC Was Not Acting As USP's Agent
January 29, 2025 - Bulletin Print Report
USP is a domestic corporation that provides a variety ofservices... The service agreements permit USP to enter into subcontracts with other parties in connection with the...
Proposed Italian Bank Combination Motivated By Accelerated "DTA" Use
January 28, 2025 - Bulletin Print Report
The Board of Directors of the world's oldest bank, founded in the 15th century, Banca Monte dei Paschi of Siena S.p.A., ("MPS"), has announced the launch of a &qu...
REIT's Stock Distributions Not "Preferential"
January 28, 2025 - Volume 19 Issue 17 Print Report
TP is a REIT. TP has one class of common stock outstanding which is publicly traded and listed on the Exchange. TP intends to make one or more distributions with respect to its...
Temporary Or Transitory Absence Did Not Defeat Residency
January 28, 2025 - Bulletin Print Report
APP was a resident of California, ("CA"), until at least October 1, 2008. During October 2007, APP's license to practice medicine was revoked. On December 10, 200...
Use Tax Due On The Purchase Of An Aircraft
January 28, 2025 - Bulletin Print Report
Appellant has been registered with the California Secretary of State as a non-profit religious corporation... On March 29, 2016, appellant execut...
LTRPA Will Cease To Exist
January 27, 2025 - Bulletin Print Report
Liberty TripAdvisor Holdings, Inc., ("LTRPA"), owns a 57 percent voting interest and a 21 percent economic interest in Tripadvisor, Inc., ("TI"). We have be...
Recovery Of Bad Debt
January 27, 2025 - Volume 19 Issue 16 Print Report
TP, an insurance company, claimed a partial worthlessness deduction under Sec. 166(a)(2) for "eligible securities" and accordingly adjusted the basis of such securiti...
Taxpayer Did Not Change His California Domicile
January 27, 2025 - Bulletin Print Report
Appellant, ("APP"), timely filed a 2018 California resident tax return, reporting a California subtraction adjustment of $49,423 for wages. &nb...
Only Gross Receipts Of "New Target" Are Counted For Sec. 165(g)(3)(B)
January 27, 2025 - Bulletin Print Report
Taxpayer, a domestic subchapter C corporation, acquiredall of the stock of Subsidiary, a foreign entity treated as a corporation for U.S. tax purposes, in a "qualifi...
Using Section 351 To "Seed" The New Crop Of "Tax Aware" ETFs
January 24, 2025 - Bulletin Print Report
Apparently, a large number of ETFs are preparing to make their debut in the coming weeks. These ETFs, which include Cambria Tax Aware ETF, ("TAX"),are different...
The Willens Deal Survey January 2025
January 24, 2025 - The Deal Survey: January 2025 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
Days Worked Outside Of New York
January 24, 2025 - Volume 19 Issue 15 Print Report
Petitioners filed New York State (NYS) non-resident tax returns for 1997 and 1998. For 1997, petitioner husband (PH) earned wages of $205,216 from his employment with P. For 19...
CMPO To Undertake A "Functional Division" Of A Single Business
January 24, 2025 - Bulletin Print Report
CompoSecure, Inc., ("CMPO"), announced its intention to spin-off a newly formed subsidiary corporation to be named Resolute Holdings Management, Inc., ("RHMI&quo...
What Is The "Trading" Status Of Unregistered Shares?
January 24, 2025 - Bulletin Print Report
Certain important tax considerations turn on whether stock is or is not considered "traded on an established securities market." In making this determination, it is o...
Self-Created Goodwill Is Classified As A Capital Asset
January 23, 2025 - Volume 19 Issue 14 Print Report
TP operated a "b" business consisting of three separate divisions, X, Y, and Z. TP decided to dispose of divisions X and Y. Each sale generated taxable gain. In each...
Section 1983 Claims Accrue When The Redemption Period Expires
January 23, 2025 - Bulletin Print Report
Plaintiffs are former property owners...who failed to pay property taxes. The counties retained the surpluses. Plaintiffs challenge the counties' retention. The Supreme Cou...
Building Was Not A "Certified Historic Structure"
January 23, 2025 - Bulletin Print Report
The Building, ("B"), is a three-story masonry building. In June 2000, the owner submitted an application to the NPS to determine the B's eligibility for listing o...
Pension Distributions To The Beneficiary Of A Deceased Public Employee
January 23, 2025 - Bulletin Print Report
Petitioner is the executor and a beneficiary of the estate of a New York City public school teacher. The decedent was 75 years old at the time of her death and had been taking...
FAT Brands To Remit An "In-Kind" Dividend
January 22, 2025 - Bulletin Print Report
FAT Brands, Inc., ("FAT"), announced that its Board of Directors has approved the distribution of a "special stock dividend" of shares of Class A Common Sto...
Transfer Of Interest In Mine Is A Lease
January 22, 2025 - Volume 19 Issue 13 Print Report
TP acquired Company A, (CA), on Date 1. Prior to its acquisition by TP, CA purchased an "a%" interest in Mine A. CA subsequently purchased additional interests in Min...
Bakery Was Operated "Exclusively And Purely" For Charitable Purposes
January 22, 2025 - Bulletin Print Report
The subject property is owned by N, a non-profit corporation. The purpose of N is to "rescue and restore women and children from the bondage of human trafficking and addic...
Pre-Tyler Takings Clause Actions Were "Ripe"
January 22, 2025 - Bulletin Print Report
Article 11 of New York State's Real Property Tax Law authorized the taxing authorities to retain the surplus proceeds from the sale of tax delinquent properties....
Illness Prevented Exercise Of "Ordinary Business Care And Prudence"
January 21, 2025 - Bulletin Print Report
APP has been diagnosed with severe disabling medical conditions, including chronic pain. He is primarily home-bound. APP did not timely fil...
Distributions From Qualified Plans Are Includible In Gross Income
January 21, 2025 - Bulletin Print Report
Petitioner was formerly employed by Rice University. In 2019, while she was still employed by Rice University, she participated in two of the university's retirement plans....
CWAN And ENFN Reach A Merger Agreement
January 21, 2025 - Bulletin Print Report
Clearwater Analytics, Inc., ("CWAN"), and Enfusion, Inc., ("ENFN"), recently announced they hadentered into a "definitive merger agreement"...
Retention Of More Than 50 Percent Of Stock Bars Exchange Treatment
January 21, 2025 - Volume 19 Issue 12 Print Report
X and Y are each incorporated in the country of "G." P owns "a" shares of X. P also owns "c%" convertible notes which are convertible into shares...
Overall Plan Of Rehabilitation Found
January 17, 2025 - Bulletin Print Report
S is listed on the National Register of Historic Places. Petitioners purchased S for $800,000 in October 1998, when it was in a general state of disrepair. During 1999 and 2000...
Mandatory Award Provisions Did Not Apply To Whistleblower's Claim
January 17, 2025 - Bulletin Print Report
E filed a Form 211...dated January 28, 2018. Therein, E alleged that she performed bookkeeping and accounting services for the target taxpayer. &n...
Payment Of Medical Expenses Not A Gift
January 17, 2025 - Volume 19 Issue 11 Print Report
S, D's adult son, was seriously injured in an automobile accident in 1982. During the period S was incapacitated in 1982, D paid S's medical expenses to the physician....
Ascertaining The "Current Fair Market Value" Of Residential Property
January 17, 2025 - Bulletin Print Report
For tax year 2021, the Assessor determined the Property's fair market value and taxable value to be $6,063,000 as of December 31, 2020. Petitioner's purchase of the Pro...
Sec. 304 Gives Rise To Dividend Treatment Of "Sales" Proceeds
January 16, 2025 - Volume 19 Issue 10 Print Report
The plaintiffs, husband and wife, owned 72 shares of NYTH, which had issued and outstanding 240 shares. NYTH owned all of the stock of T. P...
MSTR Warns Of CAMT Liabilities
January 16, 2025 - Bulletin Print Report
The Inflation Reduction Act introduced a corporate alternative minimum tax ("CAMT") that is calculated by reference to the corporation's "adjusted financial...
Dismissal Due To Failure To File An Appraisal Was Warranted
January 16, 2025 - Bulletin Print Report
The defendant has moved to dismiss the plaintiff's action due to the plaintiff's non-compliance with Conn. Gen. Stat. section 12-117a(b). The City claims that the plain...
The Shyft Group Expatriates (But Will Not Be An "Expatriated Entity")
January 16, 2025 - Bulletin Print Report
Certain impediments exist with respect to a domestic corporation that seeks to "expatriate," with that term encompassingthe case where the domestic corporation&...
Constellation Energy Gets No Basis Credit For Its $29 Billion Payment
January 15, 2025 - Bulletin Print Report
Just a few weeks ago, Constellation Energy Corporation, ("CEG"), entered into an Agreement and Plan of Merger with Calpine Corporation, ("CC") under which &...
What Constitutes "Substantially All" Of The Properties?
January 15, 2025 - Volume 19 Issue 9 Print Report
M and N were each engaged in the fabrication and sale of various items of steel products. N acquired most of N's business and operating assets. Under a plan of reorganizati...
A Notice Of Determination Must Be Sent To The "Last Known Address"
January 15, 2025 - Bulletin Print Report
The subject of the motion of the Division of Taxation, (the "Division"), is the timeliness of petitioner's protest of a notice of determination dated June 6, 2023...
Property Leased To The USPS Is Not Exempt From Property Taxation
January 15, 2025 - Bulletin Print Report
C purchased the property on March 12, 2019. C entered into a lease with the USPS for the subject property for a term of five years, with an annual rent of $3,600....
I.R.S. Proposes New Disclosure Rules For Spin-Off Participants
January 14, 2025 - Bulletin Print Report
The I.R.S., in conjunction with its proposal tooverhaulthe substantive rules governing spin-offs, a report on which will be issued later this week, has proposed new...
DIS And FUBO Will Create A Joint Venture
January 14, 2025 - Bulletin Print Report
fuboTV, Inc., ("FUBO"),and the Walt Disney Company, ("DIS"), announced that they have entered into a definitive agreement "for DIS to combine its...
Payment Of Pledge Is A Gift To The Obligor
January 14, 2025 - Volume 19 Issue 8 Print Report
In January 1977, A made a written pledge to contribute, before May 31, 1977, $10x to X, an organization described in Sec. 2522(a), contributions to which are deductible. Relyin...
A Sale Requires Consideration
January 14, 2025 - Bulletin Print Report
AEI is a North Carolina limited liability company, whose sole member is P, a Virginia corporation. AEI is a disregarded entity for federal and state income tax purposes....
Invalid Denial Notice Salvages Homestead Exemption
January 14, 2025 - Bulletin Print Report
In 1996, APPs applied for and received a homestead property tax exemption on their residential property. They continued receiving this exemption automatically for the next twen...
RHE's Preferred Stock Should Escape Section 306 Designation
January 13, 2025 - Bulletin Print Report
Regional Health Properties, Inc., ("RHE"), and SunLinkHealth Systems, Inc., ("SSY"), announced that they have entered into a definitive agreement and...
Interest Paid By A Foreign "DRE" Is Subject To Withholding
January 13, 2025 - Volume 19 Issue 7 Print Report
The foreign corporation payee in question is a controlled foreign corporation and the U.S. domestic corporation in question is a "U.S. shareholder" of that controlled...
Extended Period Within Which To File Petition Not Available
January 13, 2025 - Bulletin Print Report
On October 2, 2023, respondent mailed to petitioner by certified mail a notice of deficiency for tax year 2021. Petitioner was in the country when the notice was delivered, whi...
Appeal Dismissed For Lack Of Service
January 13, 2025 - Bulletin Print Report
MR filed a Notice of Appeal on May 7, 2024 in the District Court for St. Louis County, appealing from the Notice of Determination on Appeal, (The "Tax Order"), with n...
Grantor Did Not Dispose Of Installment Obligation
January 10, 2025 - Volume 19 Issue 6 Print Report
An individual sold a building in 1971. He reported the gain on the "installment method" of accounting. Shortly after the sale, he transferred the installment note to...
Landlord Misinterpreted New York City's Rent Stabilization Law
January 10, 2025 - Bulletin Print Report
The Rent Stabilization Law, ("RSL"), was enacted in 1969. DHCR administers the RSLby promulgating regulations for rent stabilization. Those regulations are codi...
A "529 Account" Is A Tax Deferred Asset
January 10, 2025 - Bulletin Print Report
Plaintiff sets forth that the parties set up three "529 accounts" during their marriage and Defendant opened those accounts. The parties have three daughters... The p...
No Good Deed Goes Unpunished
January 10, 2025 - Bulletin Print Report
Sales tax was assessed against petitioner as an officer/responsible person of 472 Glen Cove Corporation, (the "corporation"). Pet...
GETY And SSTK Announce A "Cash Option" Merger
January 8, 2025 - Bulletin Print Report
Getty Images Holdings, Inc., ("GETY"), and Shutterstock, Inc., ("SSTK"), announced that they have entered into a definitive merger agreement to combine in w...
Sec. 302(b)(2)(D) Plan Found To Be Present
January 8, 2025 - Volume 19 Issue 5 Print Report
As of December 29, 1977, CO had issued and outstanding 344 1/3 shares of common stock. A and B, (TPs), husband and wife, owned 330 1/3 shares, representing a 95.93 percent owne...
Stock Repurchases Count As A "Boot Purge"
January 8, 2025 - Bulletin Print Report
D is a publicly-traded domestic corporation and the common parent of a consolidated group, (the "D Group"). D owns DRE 1 and DRE 2. DRE2 owns Sub 1. DRE 2 also...
Nine Year Period Of Retroactivity Did Not Violate Due Process
January 8, 2025 - Bulletin Print Report
Paychex, Inc., ("P"), provides employment services, including...Professional Employer Organization ("PEO") services. As a PEO, P provides its clients with s...
A High Likelihood Is Not The Same As A Certain Obligation
January 8, 2025 - Bulletin Print Report
Under the "all events test," a liability is incurred and can be recognized when "all events have occurred which determine the fact of liability and the amount&nb...
Banks Not Exempt From Wash Sale Rules
January 7, 2025 - Volume 19 Issue 4 Print Report
On March 8, 1935, Petitioner, (P), purchased $10,000 par or face value CRNJ General Mortgage Coupon Bonds bearing interest at the rate of 4 percent per annum and falling due Ju...
Division Of Marital Assets Is Not Alimony
January 7, 2025 - Bulletin Print Report
P and E were married on February 14, 2011. They were granted a divorce on November 9, 2016. Pursuant to Article 5 (titled "Support&quo...
Hawaiian Electric Industries Will Cease To Be A Bank Holding Company
January 7, 2025 - Bulletin Print Report
Hawaiian Electric Industries, Inc., ("HEI"), somewhat surprisingly, has long been engaged in the banking business through its indirect ownership of one hundred percen...
Judgment Liens Existing At Time Of Tax Sale Have Priority
January 7, 2025 - Bulletin Print Report
In 1980, G and M acquired a fee simple interest in the "Property." On February 10, 2003 FMCC obtained a default judgment against G...thus perfecting a judgment lien i...
Lack Of Sec. 754 Election Proves Costly
January 6, 2025 - Volume 19 Issue 3 Print Report
Petitioner, (P), was a resident of Colorado in 2005. He filed a New York State (NYS) nonresident and part-year resident return claiming a long-term capital loss in the amount o...
When Is Gain "Puerto Rico Source Income?"
January 6, 2025 - Bulletin Print Report
A citizen of the U.S., ("TP"), owns a portfolio of shares with built-in gain, ("Appreciated Stock"). TP also owns all the shares of stock of a domestic corp...
Hedging Opportunities For "ISO" Stock
January 6, 2025 - Bulletin Print Report
Stock options continue to be a popular method for compensating corporate officers. In fact, options are no longer reserved for a corporation's top executives; andhave...
Social Security Disability Income Constitutes "Household Income"
January 6, 2025 - Bulletin Print Report
Petitioner is a widow who owns a parcel of real property in Detroit, Michigan, (the "Property"). Respondent, the City of Detroit, assessed the Property's 2022 ass...
Section 965 Income is Not Taxable In New Jersey
January 3, 2025 - Bulletin Print Report
A is a direct shareholder in four controlled foreign corporations, ("CFC"). Both plaintiffs are indirect shareholders in two related CFCs. Thus, plaintiffs are direct...
"Bond Swap" Not Subject To "Wash Sale" Restrictions
January 3, 2025 - Volume 19 Issue 2 Print Report
The taxpayer, an individual, sold U.S. Treasury 6.375 percent bonds for a price which was below his adjusted basis in the bonds. He purchased, within 30 days of the sale, U.S....
"Public Right" Doctrine Of Standing Eliminated
January 3, 2025 - Bulletin Print Report
M owns rental property in, and pays taxes to, the City of Findlay, Ohio.He brought this mandamus action in the Third District against the Findlay Municipal Court...becaus...
Foreign Tax Credits Against The "NIIT" Are Allowed
January 3, 2025 - Bulletin Print Report
B was a resident of Canada and a citizen of the U.S. During 2015, he paid nearly $2 million in taxes to Canada, and claimed a foreign tax credit of $1,398,683 to offset the reg...
"Leveraged Spin-Offs" Come To Arkansas
January 2, 2025 - Bulletin Print Report
One of the most popular restructuring tools at a corporate management's disposal is the "spin-off." In a spin-off, a corporation distributes to its shareholders,...
Deferred Compensation Found To Be New York Source Income
January 2, 2025 - Bulletin Print Report
In 2017, petitioners were non-resident partners of AristeiaHoldings, L.P., ("A"). In 2017, A owned 100 percent of Aristeia Capital, LLC, ("AC"), a dis...
A "Sec. 302(d) Redemption" Of Stock Of An 'S' Corporation Addressed
January 2, 2025 - Volume 19 Issue 1 Print Report
A and A's child, B, owned all of the stock of X. X has a valid 'S' election in effect. X redeems a portion of A's stock. The redemption, which does not give ris...
Titling Error Did Not Preclude A "Sale For Resale"
January 2, 2025 - Bulletin Print Report
C is an LLC, owned by M, in the automobile resale business. It is a registered used car dealer. C purchased a 2022 Corvette from BNC on Dec...
What Is Property for Purposes of Sec. 1033?
December 31, 2024 - Volume 18 Issue 251 Print Report
M possessed a certain property interest in Y, a "y" facility, which M hadacquired in a joint venture with other similarly situated individuals, and wi...
Beneficiary Of Grantor Trust Did Not Acquire Prohibited Interest
December 31, 2024 - Volume 18 Issue 250 Print Report
On January 3, 1984, X redeemed all of its stock held by each of A, B, and C. Each such redemption qualified as a complete termination of the redeeming shareholder's interes...
Insurer's Affiliate Exempt From B&O Tax
December 31, 2024 - Bulletin Print Report
CC's two subsidiaries, E and COC, administer health insurance benefits to people in Washington under a contract with the State. COC collects premium payments from consumers...
No Limits Are Imposed On Export Credits Generated Each Year
December 31, 2024 - Bulletin Print Report
The Export Credit Statute allows cigarette manufacturers a tax credit based on the volume of cigarettes they manufactured in North Carolina for export each year. The Export Cre...
Member-Managed LLC Did Not Qualify For Penalty Relief
December 31, 2024 - Bulletin Print Report
APP is a California LLC with two members and is taxed as a partnership. On January 17, 2019, one of APP's members was involved in a veh...
News Corporation Deftly Disposes Of Foxtel Group
December 30, 2024 - Bulletin Print Report
News Corporation, ("NC"), recently announced that it hasentered into a definitive agreement for the sale of Foxtel Group, ("FG"), to DAZN Group, Ltd.,...
New York Did Not Adopt P.L. 117-2
December 30, 2024 - Bulletin Print Report
On March 31, 2021, EF electronically filed with the Division of Taxation, (the "Division"), Form IT-201, New York State resident income tax return for tax year 2020.<...
"ARB" Offset" Credits Are Includible In Gross Income
December 30, 2024 - Bulletin Print Report
The California Global Warming Solutions Act of 2006 authorizes the California Air Resources Board, ("CARB"), to promulgate rules and regulations on programs to limit...
LLCs Not "Exempt Payees"
December 27, 2024 - Volume 18 Issue 249 Print Report
The taxpayer is protesting certain adjustments made by the examining agent. The taxpayer argues that the agent should not include payments made to LLCs as "reportable paym...
Only A Timely Filing Can Procure Surplus Tax Sale Proceeds
December 27, 2024 - Bulletin Print Report
In 2020, the Michigan Supreme Court held that former owners of properties sold at tax-foreclosure sales for more than what was owed in taxes...had "a cognizable, vested pr...
"Customers Of Customers" May Be The Recipients Of Services
December 27, 2024 - Bulletin Print Report
M is a Kentucky corporation. M is a subsidiary of H. HPS, another H subsidiary, entered into an agreement with HIC, yet another H subsidiary, called the Pharmacy Benefits Manag...
Personal Enjoyment Is A Factor In The Section 162 Analysis
December 27, 2024 - Bulletin Print Report
JA has been a solo practitioner (of law) in Colorado since the 1980s. His practice has focused mostly on representing plaintiffs in personal injury cases. In 2002, JA married a...
Activities Exceed Solicitation Of Orders
December 26, 2024 - Volume 18 Issue 248 Print Report
Amgen, Inc., (A), develops, manufactures, and markets pharmaceutical products. During the years in question, A sold two products in the U.S. A manufactured those products exclu...
Gross Receipts From Dialysis Services Are "Sitused" To Ohio
December 26, 2024 - Bulletin Print Report
The commercial activity tax, ("CAT"), is levied...on each person with taxable gross receipts... "Gross receipts" is the total amount realized by a person, w...
Sale Of LLC Interest Lacked Economic Substance
December 26, 2024 - Bulletin Print Report
As of January 1, 2010, R owned one hundred percent of N. N was a disregarded entity. N owned an apartment complex located in Houston, Texas...
Sunoco's "Buy/Sell" Transactions Were Inventory Exchanges
December 26, 2024 - Bulletin Print Report
S was engaged in the business of petroleum refining and marketing. SP was the general partner of SL. SP hadthree corporate partners...each of which was included in S'...
The Willens Deal Survey December 2024
December 24, 2024 - The Deal Survey: December 2024 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
JWN Is Going Private
December 24, 2024 - Bulletin Print Report
Nordstrom, Inc., ("JWN"), has finally struck a deal which will enable the corporation to "go private," a statusthe corporation and the Nordstrom Famil...
State Law Limited Partners Were Not "Limited Partners As Such"
December 24, 2024 - Bulletin Print Report
Petitioner, ("P"), is the state law general partner of Denham, ("D"). D offers investment advisory and management services to affiliated private equity fund...
No Duplication Of QREs Permitted
December 24, 2024 - Volume 18 Issue 247 Print Report
P files a consolidated income tax return. Before it was acquired by P, T was a publicly traded corporation and the parent of a consolidated group....
Services Incidental To A Lease Of Tangible Personal Property Are Taxable
December 24, 2024 - Bulletin Print Report
Taxpayer, a provider of portable toilet rentals and services, was audited...and an assessment was issued. The Taxpayer filed an application for correction. &nb...
LEN Is Distributing An Aspiring REIT To Its Shareholders
December 23, 2024 - Bulletin Print Report
Lennar Corporation, ("LEN"), is undertaking a most unusual distribution to its shareholders. LEN recently announced that its newly-formed subsidiary, Millrose Propert...
Real Property Is Entitled To A Tax Exemption
December 23, 2024 - Volume 18 Issue 246 Print Report
M was incorporated as a not for profit corporation in 1972. M was formed for the purpose of...conducting year round programs in the performing arts for children, teenagers and...
Rev. Rul. 77-337 Is (Unconvincingly) Distinguished
December 23, 2024 - Bulletin Print Report
Taxpayer, ("TP"), is the beneficiary of a testamentary trust created by Decedent and established by Will. Upon Decedent's dea...
BlackRock's Latest Acquisition Has "Up-C" Overtones
December 23, 2024 - Bulletin Print Report
BlackRock, Inc., ("BLK"), has been on a buying spree. Its acquisitions, befitting its size and stature, are all of the multi-billion dollar variety. Its latest acquis...
Assumption Of A Deductible Liability
December 23, 2024 - Bulletin Print Report
P indirectly owns a% of the ownership interest in S. Entity 1 owns the remaining b% ownership interest in S. S is a partnership. DRE1 is a...
Absence Of Gross Receipts Does Not Bar Ordinary Loss Deduction
December 20, 2024 - Volume 18 Issue 245 Print Report
TP owned 100 percent of the stock of FS. As of December 31, Year 1, FS's balance sheet showed liabilities exceeding its total assets. FS's financial statements showed n...
I.R.S. Revokes A Fifteen-Year Old Private Letter Ruling
December 20, 2024 - Bulletin Print Report
LTR 200923001, February 26, 2009, addresses the case of "Entity A," a domestic corporation that elected to be taxed as a real estate investment trust, ("REIT&quo...
Taxpayer Was Not A "Marijuana Establishment"
December 20, 2024 - Bulletin Print Report
Respondent states that Petitioner, ("P"), is a retailer for both adult use and medical marijuana; and was licensed to sell adult use marijuana as of July 2020.<...
Providing Services As An Employee Does Not Constitute A Business
December 20, 2024 - Bulletin Print Report
TPs were in the insurance business. TPs formed RHCin 1977 to start their own insurance business. Later, TPs purchased BRI in 1979. TPs were the sole owners of RHC and BRI...
When Is Option Compensation Deductible?
December 19, 2024 - Volume 18 Issue 244 Print Report
1. On January 1, 2003, E began employment with M and is granted a nonstatutory option to purchase a number of shares of M common stock. The option is not exercisable until Janu...
Divorce Decree Could Not Be Altered
December 19, 2024 - Bulletin Print Report
G and B divorced on April 29, 2014. The final decree of divorce awarded G, as his sole and separate property, "all rights, title, and interest in and to the real property...
Only The "Taxpayer" Can Contest A Refund Denial
December 19, 2024 - Bulletin Print Report
Through certain purchases, O collected sales taxes and local surtaxes from its customers and remitted the collected taxes to the Department. It surfaced that O had collected bo...
Integrating An "Acquisition Merger" And An "Upstream Merger"
December 19, 2024 - Bulletin Print Report
In some circumstances, two transactions, particularly thoseoccurring in close time proximity, will be integrated and treated as single transaction, whereas in others, the...
Funds Rolled Over To An IRA Retain Their Character
December 18, 2024 - Bulletin Print Report
P retired from the I.R.S. on December 31, 2011. During P's service with the I.R.S., P participated in the Federal Employees' Retirement Service, ("FERS"). FER...
Holding Property For Investment Purposes Is Not An Active Business
December 18, 2024 - Volume 18 Issue 243 Print Report
X is a broker and dealer in stocks and bonds. Y, a wholly-owned subsidiary of X, is engaged in the ownership and management of an investment portfolio of stocks and bonds. ...
"QREs" Of A Former Member Included In Determining The "FBP"
December 18, 2024 - Bulletin Print Report
Pursuant to a Licensing Agreement, P acquired from A the right to develop, manufacture, and sell an inhaled insulin product... In 2004, P f...
A Coherent Definition Of "Processing" Proves Elusive
December 18, 2024 - Bulletin Print Report
Many states and localities will exempt from sales and use tax machinery and equipment purchased for deploymentin "production" or "manufacturing" activ...
Employee Disposed Of Option Stock Too Early
December 17, 2024 - Volume 18 Issue 242 Print Report
In 1993, S started working for EC. EC was a private company. Between 1993 and 2000, S received incentive stock options. In February 2000, ICG, a public company, agreed to acqui...
Taxpayer Was Properly Served Notice Of An "Upset Tax Sale"
December 17, 2024 - Bulletin Print Report
Taxpayer, ("TP"), is the owner of real property, (the "Property"). TP's address is..."MAM." The Property was sold to PUR at an "upset tax...
New Yorker's "Excess" Charitable Donations May Not Be Carried Over
December 17, 2024 - Bulletin Print Report
Petitioner and his wife are residents of New York State who filed a joint personal income tax return for 2019. Petitioner's FAGI was si...
Taxpayer And Ex-Spouse Are Not The Same "Consumer"
December 17, 2024 - Bulletin Print Report
Taxpayer, ("TP") and Ex-Spouse used to be married. While married, TP drove a 2020 Ford Expedition, ("OV"), that was titled in Ex-Spouse's name...
Crypto Accounting Changes On The Horizon
December 17, 2024 - Bulletin Print Report
Starting in 2025, the accounting for "crypto" assets will undergo a fundamental change. The company most associated with this asset is, of course, MSTR. Its financial...
Gen Digital, Inc.'s "Closed Transaction"
December 16, 2024 - Bulletin Print Report
Gen Digital, Inc., ("GEN"), recently announced that it has entered into a definitive agreement to acquire MoneyLion, Inc., ("ML"). The acquisition will take...
Right To Purchase Land Is A Capital Asset
December 16, 2024 - Volume 18 Issue 241 Print Report
From 1994 to 2006, L, as sole proprietor, owned and operated LOTC, Inc. (LOTC) which was created to design and build a condominium called the LOT on property owned by LORH.&nbs...
Section 7623 Does Not Create A Right To Money Damages
December 16, 2024 - Bulletin Print Report
On August 16, 2018, M submitted seven claims. At issue here is one of the FINRA awards, which the WBO adjudicated, resulting in a recovery of $179,672.20 for the Government.&nb...
Equipment Was Used To "Process" Electricity
December 16, 2024 - Bulletin Print Report
Potomac Edison, ("PE"), is a public utility. It purchases electricity generated at a power plant outside Maryland and uses its own equipment to carry the electricity...
CHTR's S-4 Confirms Treatment Of GCI Distribution As Merger "Boot"
December 13, 2024 - Bulletin Print Report
The Charter Communications, Inc. S-4, in which it describes the impending business combination to be undertaken with Liberty Broadband, Inc. confirms what we gleaned from the m...
Wash Sale Rule Applies To Exercise Of "Rights"
December 13, 2024 - Volume 18 Issue 240 Print Report
In 1969, the taxpayer purchased 14x shares of stock of a corporation. By virtue of such ownership, he became entitled to subscribe to an additional seven shares of substantiall...
New New York Resident Taxed On Vested "RSUs"
December 13, 2024 - Bulletin Print Report
Prior to October 2018, petitioner, ("P"), was domiciled and resided outside the U.S. and did not work in NYS or NYC. In October 2...
Business Ties Preclude Change Of Domicile
December 13, 2024 - Bulletin Print Report
Petitioners filed Form IT-203 for the year 2018. Petitioners also filed Form IT-203 for the year 2019. Petitioners reported that they were non-residents. Prior to the years at...
Management Agreement Was Not "Substantively A Lease"
December 13, 2024 - Bulletin Print Report
The City purchased the Tiger Point Golf and Country Club in 2012 and began operating it as a public golf course. Between 2012 and 2015, the...
"Boot Relaxation Rule" Applied
December 12, 2024 - Volume 18 Issue 239 Print Report
Y is a registered bank holding company. Y has outstanding 12,313,847 shares of voting common stock which is widely held and publicly traded. N is a corporation recently organiz...
Petition Improperly Brought As An Article 78 Claim
December 12, 2024 - Bulletin Print Report
Petitioner, ("P"), owns two billboards located at 1567 Broadway, New York, New York 10036in Times Square, (the "Properties"). The Properties are desig...
Property Taxes Attach To The Land Itself
December 12, 2024 - Bulletin Print Report
Petitioners, G and K, purchased the subject property...on February 27, 2024. Then, on April 30, 2024, petitioners filed a challenge to the assessment placed on the property for...
Assembly Charges Are Subject To Sales Tax
December 12, 2024 - Bulletin Print Report
Taxpayer, ("TP"), sells home furnishings in Virginia... In Virginia, TP operated twelve retail stores. In addition, TP sells furniture to Virginia customers through a...
"Premature" Gift Of ISO Stock
December 11, 2024 - Volume 18 Issue 238 Print Report
If, in connection with the performance of services, vested stock is acquired pursuant to the exercise of an option, the difference between the fair market value of the stock an...
Gain Deferral Upon Reinvestment Of Proceeds Sometimes Permitted
December 11, 2024 - Bulletin Print Report
Under section 1001(a) of the Internal Revenue Code, the gain from the sale or other disposition shall be the excess of the "amount realized" therefrom over the adjust...
Should Rupert Murdoch Take A Page From An Auto Dealer's Book?
December 11, 2024 - Bulletin Print Report
Rupert Murdoch was rebuffed in his attempt to alter the terms of his testamentary trust which, according to press reports,calls for his heirs to be bequeathed equal share...
Foreign Board Member's Fees Not Subject To N.Y. Withholding Tax
December 11, 2024 - Bulletin Print Report
Petitioner is a corporation with its principal place of business in New York. In 2021, petitioner appointed an Italian citizen and resident...
New Jersey Transit Is Not An "Arm" Of The State
December 11, 2024 - Bulletin Print Report
On February 9, 2017, a busowned and operated by New Jersey Transit, ("NJT"), struck and injured C in Manhattan.C commenced this action on September 18, 20...
Property Not Eligible For "CRA" Tax Exemption
December 10, 2024 - Bulletin Print Report
City Resolution No. 145-86 allows tax exemptions for improvements to real property located within the Community Reinvestment Area, ("CRA"). &nb...
Resident Partners Entitled To A "Subtraction Modification"
December 10, 2024 - Bulletin Print Report
Petitioner, ("P"), is a professional limited liability company, ("LLC"), taxed as a partnership... All of P's partners are New York resident individuals...
Requirements Of An Estoppel Claim Not Satisfied
December 10, 2024 - Bulletin Print Report
On or about February 25, 2022, a 2018 Cadillac Escalade, ("Vehicle A"), which was titled solely in Member's individual name, was sold to... On February 26, 2022,...
Travel Expenses Ruled Non-Deductible
December 10, 2024 - Volume 18 Issue 237 Print Report
The founder of a family-owned manufacturing company that made significant charitable donations was interested in finding the remains of a specific historical object &...
Distribution Resulted From A "Genuine Contraction" Of The Business
December 9, 2024 - Volume 18 Issue 236 Print Report
X operated a "full line" department store, which offered a comprehensive selection of brand merchandise and a number of services, and also offered a variety of credit...
Berry Global Group's Spin-Off Is Not In Jeopardy
December 9, 2024 - Bulletin Print Report
Berry Global Group, Inc., ("BGG"),has had an eventful fall. On November 4, 2024, BGG announced the successful completion of the merger between BGG's&q...
Dealers Must Have Customers
December 9, 2024 - Bulletin Print Report
Congress passed the Securities Exchange Act of 1934, (the "Exchange Act"). The Act required "dealers" to register with the Securities and Exchange Commissio...
The Tax Court Will Not Follow Farhy
December 9, 2024 - Bulletin Print Report
Between November 2001 and September 2005, petitioner created three foreign entities, including S, a foreign corporation. Petitioner did not timely file Forms 5471 from tax year...
Taxable Acquisition Of Control Prevents Spin-Off
December 6, 2024 - Volume 18 Issue 235 Print Report
R was incorporated in 1959. On December 31, 1986, R elected to become an 'S' corporation. S was incorporated in 1981. R and H, an individual, were the sole, equal share...
Sales Did Not "Terminate" In Illinois
December 6, 2024 - Bulletin Print Report
TP's headquarters and U.S. manufacturing facilities, including its inventory, are located in STATE. TP files an Illinois combined return that includes...COMPANY2, ("C2...
"Nextel" Decision Does Not Apply Retroactively
December 6, 2024 - Bulletin Print Report
In Nextel Communications of Mid-Atlantic, Inc. v. Pennsylvania Department of Revenue, 171 A.3d 682 (Pa. 2017), the Pennsylvania Supreme Court held that the 2...
Non-Use-Based Factors May Be Employed To Classify Real Property
December 6, 2024 - Bulletin Print Report
In 2014, the City (of Honolulu) created a new property tax classification under which residential properties that are valued over $1 million and do not have a home exemption (b...
Issuance Of Notice And Demand Found Improper
December 5, 2024 - Bulletin Print Report
In 2017, petitioner and her husband were indicted by a grand jury and charged with criminal tax fraud and failure to file personal income tax returns for the years 2010 through...
Condominium Owners Entitled To "Split Ticket" Classification
December 5, 2024 - Bulletin Print Report
L is a condominium building containing residential units, commercial units, and common elements. Petitioner Owners, ("POs"), are among the group of unit holders who d...
Arizona Lacked "Standing" To Pursue Injunctive Relief
December 5, 2024 - Bulletin Print Report
Arizona, ("AZ"), brings the following claims against the I.R.S.: unlawful denial of general welfare under section 61 of the Internal RevenueCode, and unlawful t...
Convertible Debentures Not "Options"
December 5, 2024 - Volume 18 Issue 234 Print Report
C has 1,337,114 shares of common stock outstanding, held by 227 shareholders. A owns 11.96 percent of the stock; B owns 12.76 percent; C owns 1.03 percent; D owns 1.31 percent;...
Financial Inability To Pay Is Grounds For Abating Negligence Penalties
December 4, 2024 - Bulletin Print Report
Respondent levied interest and a negligence penalty on Taxpayers for their untimely payment of their 2019 personal income taxes. Taxpayers filed a protest. The Administrative H...
I.R.S.'s Perfected Tax Lien Entitles It To "Unclaimed Funds"
December 4, 2024 - Bulletin Print Report
F filed this Chapter 13 bankruptcy petition on January 3, 2023. The I.R.S. timely filed its proof of claim, ("Claim") reflecting that F owed $372,978.51 in tax liabil...
Peanut Drying Trailers Were Not "Off-Highway Transportation Vehicles"
December 4, 2024 - Bulletin Print Report
An I.R.S. audit determined that R owed excise taxes on the sale of three peanut-drying trailers. The district court granted summary judgment in favor of R. The United States ap...
Litigation Awards Not Allocated To Sec. 199 Gross Income
December 4, 2024 - Volume 18 Issue 233 Print Report
P and S file a consolidated income tax return. S manufactured and sold both Product W and Product X in years preceding and after the enactment of Sec. 199, which is effective f...
Los Angeles "Mansion" Tax Is A "Tax" For Tax Injunction Act Purposes
December 3, 2024 - Bulletin Print Report
B appeals the district court's dismissal of his complaint alleging that a City of Los Angeles ordinance, adopted through a citizens' initiative, violated state and fede...
Corporate "Insider" Denied A Theft Loss Deduction
December 3, 2024 - Bulletin Print Report
In February 2014, S began investing in a company called "D." S also made several loans to D. The loans were never repaid. In Marc...
Exchange Prior To Split-Off Disregarded
December 3, 2024 - Volume 18 Issue 232 Print Report
Mr. A owned 1/2 of the capital stock of M corporation, (M), worth $10x, and he also owned 1/2 of the capital stock of O corporation, (O), worth $5x. &nbs...
Late Filed Property Tax Appeal Was Ruled Valid
December 3, 2024 - Bulletin Print Report
The County Board of Equalization's Decision...had been to deny an exclusive use property tax exemption for the parcel. As the Property Owner's appeal had not been filed...
FASB Updates Guidance On "Induced Conversions"
December 2, 2024 - Bulletin Print Report
The Financial Accounting Standards Board, ("FASB"), recently issued Accounting Standards Update, ("ASU"), No. 2024-04, November 2024, entitled "Induced...
New York City's Tax Classification Of Land Was Arbitrary And Capricious
December 2, 2024 - Bulletin Print Report
The premises is a vacant and unimproved land that is zoned as R6 (residential), with a C1-4 commercial overlay. The Department of Finance classified the property as Building Cl...
The "Badges" Of A Unitary Business Were Not Present
December 2, 2024 - Bulletin Print Report
Prior to filing for Chapter 11 bankruptcy in 2008, F's primary business was the operation of "Flying J" interstate travel centers. &...
NOL Sustained After Split-Off Can Be Freely Carried Back
December 2, 2024 - Volume 18 Issue 231 Print Report
On January 1, 1975, X effected a "split-off" of its Division B with the retention of its Division A. The transaction qualified as a reorganization under Sec. 368(a)(1...
PSTX Will Report Its Acquisition As An "Open" Transaction
November 29, 2024 - Bulletin Print Report
PoseidaTheraputics, Inc., ("PSTX"), announced it has entered into a merger agreement to be acquired by Roche Holdings, Inc., ("R"). &n...
Grand Canyon University Is A Non-Profit Institution
November 29, 2024 - Bulletin Print Report
GCU,a private university in Arizona, applied to the Department of Education, (the "Department"), to be recognized as a non-profit institution under the Higher E...
St. Louis County Is Not A "Local Government"
November 29, 2024 - Bulletin Print Report
In 2022, Missouri, ("MO"), voters amended the MO Constitution and legalized the recreational use and possession of marijuana. Eac...
Sec. 357(c) Does Not Apply To An Acquisitive Reorganization
November 29, 2024 - Volume 18 Issue 230 Print Report
A owned all the stock of X and Y. Y acquired the assets of X in exchange for an amount of Y stock constituting Sec. 368(c) control and the assumption by Y of X's liabilitie...
Petition Was Received Four Days Late
November 27, 2024 - Bulletin Print Report
For tax year 2021, petitioners claimed a Veterans Property Credit, (the "Credit"), in an amended return filed with the Department. For tax year 2022, petitioners clai...
Insufficient Acreage Devoted To Horticultural Uses
November 27, 2024 - Bulletin Print Report
Land which is classified under c. 61A receives a lower tax assessment. C. 61A provides a tax break for landowners who devote at least five acres of their property to agricultur...
OKE Announces Another MLP "Roll-Up"
November 27, 2024 - Bulletin Print Report
Question: When can a master limited partnership be a party to a reorganization? Answer: When the master limited partnership has "checked the box" and elected to be tr...
Investment Losses Reduce Amount Distributable In Partial Liquidation
November 27, 2024 - Volume 18 Issue 229 Print Report
In Rev. Rul. 71-250, 1971-1 C.B. 112, a corporation that owned and operated three TV stations sold one of the stations in July 1970 for $6,000x, realizing net proceeds of $4,50...
KODK Mulling The Termination Of Its Pension Plan
November 26, 2024 - Bulletin Print Report
Back in the '80s, leveraged buyout artists would frequently terminate their targets' defined benefit plans, thus providing a "source of funds" to help finance...
FDIC Special Assessments Are Deductible
November 26, 2024 - Bulletin Print Report
On November 29, 2023, the FDIC adopted the "Final Rule" to implement a special assessment to recover the loss to the Deposit Insurance Fund, ("DIF"), arisin...
Small Cap Merger Features An "Interim Financing Agreement"
November 26, 2024 - Bulletin Print Report
Rafael Holdings, Inc., ("RFL"), and Cyclo Therapeutics, Inc., ("CYTH"), recently announced that they have entered into a definitive merger agreement pursuan...
Combined Reports Not Required
November 26, 2024 - Volume 18 Issue 228 Print Report
AF is a publicly-held holding company for A. A is a federal savings and loan association and is principally engaged in taking deposits and making mortgage loans. <...
PEP In Line To Record A "Holding" Gain
November 25, 2024 - Bulletin Print Report
PepsiCo, Inc., ("PEP"), on November 22, 2024, announced its agreement to acquire the remaining fifty percent interest in Sabra Dipping Company, LLC, ("Sabra"...
Increase In Conversion Ratio Of Debentures Is A "Purge" Distribution
November 25, 2024 - Volume 18 Issue 227 Print Report
TP intends to elect to be treated as a REIT. In connection with the election, prior to the end of the First REIT Taxable Year, TP intends to distribute all of its earnings and...
Laundering Textiles Is Not "Processing"
November 25, 2024 - Bulletin Print Report
Each week A sanitizes more than 600,000 pounds of textiles and rents them to entities in the healthcare industry. Both new and used textiles are treated to remove bacteria, oil...
Remedial Actions Survive The Death Of The Plaintiff
November 25, 2024 - Bulletin Print Report
Y and C filed their amended complaint on October 5, 2023, which alleges that Defendants filed fraudulent tax forms leading to plaintiffs suffering increased tax liability, and...
AAA Does Not Survive Termination of 'S' Corporation Election
November 22, 2024 - Volume 18 Issue 226 Print Report
X was incorporated as a C corporation on Date 1. It operated as a C corporation until it made its first election to be treated as an S corporation effective Date 2. At that tim...
Severance Pay Found To Be New York Source Income
November 22, 2024 - Bulletin Print Report
Petitioner filed form IT-203, non-resident and part-year resident income tax return,for tax year 2020 on April 8, 2021, requesting a refund... Petitioner reported $111,68...
C.P.A.'s Settlement Payments Were "Non-Business Deductions"
November 22, 2024 - Bulletin Print Report
APPsreported a "business loss" of $5,373,969 on their original 2017 California Form 540 return. APPs filed an amended 2015...
Rebate Amounts Are Excluded From A Distributor's "Gross Revenues"
November 22, 2024 - Bulletin Print Report
D operates as a wholesale drug distributor selling "legend drugs"--including generic prescriptions ("generic Rx") and brand name prescriptions, ("brand...
Back-To-Back Loans Recast
November 21, 2024 - Volume 18 Issue 225 Print Report
TP is a "U.S. shareholder" within the meaning of Sec. 951(b) of CFC1, CFC2, Lower-Tier CFCs, and CFC 8. CFC1 wholly owns CFC2. CFC2 wholly owns CFC3 and CFC7. CFC1 an...
Election "Out Of" Installment Method Reporting Is Binding
November 21, 2024 - Bulletin Print Report
On August 22, 2016, APP sold property located in Beverly Hills, California, (the "Property"), for $10,650,000. APP received from the buyer a promissory note in the am...
Nixxy, Inc. To Undertake A "Disproportionate" Spin-Off
November 21, 2024 - Bulletin Print Report
One of the more unusual deals we have recently encounteredis being engineered by Nixxy, Inc. ("NIXX"). NIXX has announced it is moving forward with its previous...
Recreational Boats Were Subject To Use Tax
November 21, 2024 - Bulletin Print Report
The Department of Taxation audited LCS and L from April 1, 2011, through June 30, 2015, after a review of their filing history suggested that the appellants may be underreporti...
Is Berry Global Group's Spin-Off Safe?
November 20, 2024 - Bulletin Print Report
On November 4, 2024, Berry Global Group, Inc., (B), completed the spin-off of its health and hygiene business. The spin-off was (i) intended to be tax-free; and (ii) part of a...
Convertible Shares Not Considered A "Collectible"
November 20, 2024 - Volume 18 Issue 224 Print Report
Sponsor M (SM) established Trust T (TT). TT issues units ("Shares"), each representing an undivided interest in, and ownership of, TT's net assets. The Shares are...
Clerical Error Did Not Invalidate A Notice Of Deficiency
November 20, 2024 - Bulletin Print Report
Plaintiff, ("P"), is a Delaware limited partnership headquartered in Massachusetts. P has elected to be taxed as a 'C' corporation for U.S. federal income tax...
Section 1211(b) Does Not Provide A "Standalone" Capital Loss Deduction
November 20, 2024 - Bulletin Print Report
During 2002, MR and MRS (the "Ws") each owned 50 percent of CyberAdvice, ("CA"), a partnership for federal income tax purposes.  ...
Amusement Park Rides Were "Fixtures"
November 20, 2024 - Bulletin Print Report
TP operated a themed amusement park, (the "Park"). TP submitted a refund request for BTPP tax paid, contending that certain items of property...were in fact "fix...
What Will Become Of SAVE's NOLs?
November 19, 2024 - Bulletin Print Report
Spirit Airlines, Inc.,("SAVE"), not unexpectedly, in light ofthe rejection by the Justice Department of its proposed merger with JetBlue Airways Corporati...
Warrants And Options Constitute "Liabilities"
November 19, 2024 - Volume 18 Issue 223 Print Report
Pursuant to a plan of reorganization, X corporation, (XC), acquired all of the assets of Y corporation, (YC), in exchange for some shares of XC's voting common stock....
Illinois Use Tax Properly Imposed On Aircraft Lessor
November 19, 2024 - Bulletin Print Report
T is a limited liability company formed in Delaware in November 2015. T purchased "the aircraft" for $16.5 million. T took delivery of the aircraft in Connecticut. T...
XOM Properly Deducted The Interest Portion Of Production Payments
November 19, 2024 - Bulletin Print Report
On May 2, 2000, EMMEGML, an Exxon Mobil Corporation, ("EM"), subsidiary, and the Government of Qatar, ("Q"), entered into the "DPSA." The DPSA cre...
Foreign Tax Credits Were Not "Plan Assets"
November 19, 2024 - Bulletin Print Report
John Hancock, ("J"), is an insurance company. It provides investment and recordkeeping services to 401(k) retirement plans. One such plan is the "Romano Law Plan...
A REIT's "GAAP Intangible Assets" Are Treated As "Real Estate Assets"
November 18, 2024 - Bulletin Print Report
Section 856(a) of the Code provides, "For purposes of this title," the term, "real estate investment trust," ("REIT"), means a corporation, trust...
The Willens Deal Survey November 2024
November 18, 2024 - The Deal Survey: November 2024 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
Default On A Retirement Plan Loan Triggers Deemed Distribution
November 18, 2024 - Volume 18 Issue 222 Print Report
In December 2007, petitioner borrowed $29,700 from his Sec. 401(k) retirement plan. The proceeds of the loan were paid to him in a lump sum by check on December 24, 2007....
Outside Basis Reduced By Previously Allowed Losses
November 18, 2024 - Bulletin Print Report
From 2014 to 2017, S owned a majority interest in O. S deducted the "excess losses" (i.e., losses in excess of outside basis) on its 2014 and 2015 returns. For 2014,...
Advertising Services Are Not "Information Services"
November 18, 2024 - Bulletin Print Report
Petitioner anticipates establishing a web site that maintains a directory of persons who assist and represent claimants seeking social security disability benefits....
Texas Court Interprets The Phrase "Net Gain"
November 15, 2024 - Volume 18 Issue 221 Print Report
The Texas franchise tax is imposed on each taxable entity that does business in Texas or that is chartered or organized in Texas. The tax i...
The "Substantial Non-Exempt Purpose" Test Was Properly Applied
November 15, 2024 - Bulletin Print Report
M is a non-profit corporation. It has participated as an "accountable care organization," or "ACO," in the Medicare Shared Savings Program, (the "MSSP&...
Mere Interloper Lacked Standing To Challenge Tax Abatement Decision
November 15, 2024 - Bulletin Print Report
Plaintiff's complaint in lieu of prerogative writs challengeda tax abatement awarded by defendant, City of Newark, New Jersey, to defendant Weequahic Preservation, LL...
Defective Petition Led To Its Dismissal
November 15, 2024 - Bulletin Print Report
Petitioner, Cyclometrix, LLC, filed a petition with the Division of Tax Appeals (New York) on March 2, 2023. The petition so filed included...
Liberty Broadband Will Merge With And Into Charter Communications
November 14, 2024 - Bulletin Print Report
Liberty Broadband Corporation, ("LBC"), owns approximately 45.6 million common sharesofCharter Communications, Inc., ("CHTR"), a stake sufficien...
Liberty Media Will Split-Off Live Nation
November 14, 2024 - Bulletin Print Report
Liberty Media Corporation, ("LMC"), announced "it is pursuing a plan to 'split-off' the Liberty Live Group." Not surprisingly, the split-off is inte...
Warrants Not Indirect Non-Qualifying Consideration For Stock
November 14, 2024 - Volume 18 Issue 220 Print Report
X corporation, (X), acquired all of the stock of Y corporation, (Y), pursuant to a plan of reorganization. Under the plan, each share of Y voting common stock was exchanged for...
The "Permit" Was A Real Property License (Not Lease)
November 14, 2024 - Bulletin Print Report
S is a political subdivision of the State of Texas. S owns the fee interest in Park. S granted LT a "Commercial Limited Use Permit,&qu...
Are Vanguard's "Tax Indemnity Payments" Includible In Gross Income?
November 13, 2024 - Bulletin Print Report
Vanguard's popular target-date funds featuredtwo "tiers," an "institutional" tier, for retirement funds with in excess of $100 million in assets;&...
Owner-Lessor Becomes Owner-Operator Of Replacement Property
November 13, 2024 - Volume 18 Issue 219 Print Report
TP owned a resort hotel which was leased to, and operated by, another taxpayer under a "net lease" arrangement. In 1968, the hotel was completely destroyed by fire. T...
Debtor Did Not Act With The Intent To Hinder The Trustee
November 13, 2024 - Bulletin Print Report
By March 2020, the Ws' accountant had prepared their 2018 tax returns, which showed substantial over-payments. The Ws "elected to apply their 2018 over-payments to the...
Lessee's Departure Caused A Change In "Use" Of Property
November 13, 2024 - Bulletin Print Report
Plaintiff, ("P"), is a religious organization exempt from federal income taxation pursuant to section 501(a) and (c)(3) of the Code. P's property includes SH, (th...
Taxpayer's Substantial Compliance Arguments Fall On Deaf Ears
November 12, 2024 - Bulletin Print Report
During 2014, IQHwas a 'C' corporation owned entirely by G and his wife. IQH filed a consolidated return with its subsidiary, IQP. In 2014, IQP was an active manuf...
Assessment Of Sales Tax Found To Violate Commerce Clause
November 12, 2024 - Volume 18 Issue 218 Print Report
TP is a Florida corporation doing business as "1V.com." All of the company's sales were initiated online. TP specialized in the sale of flowers, gift baskets, and...
Energy Services To Residential Buildings Not Subject To Sales Tax
November 12, 2024 - Bulletin Print Report
Petitioner is the landlord of several residential apartment buildings located in New York State. Each building contains multiple units peti...
Resident Credit Limited To Tax Paid On Income Also Taxed In Wisconsin
November 12, 2024 - Bulletin Print Report
In 2021, petitioners sold a condominium in Colorado that resulted in a capital gain of $1,300,401. Petitioners paid $56,504 in non-resident income tax to Colorado on the capita...
Motel Not Similar Or Related In Service Or Use To Apartment Building
November 11, 2024 - Volume 18 Issue 217 Print Report
TP owned a three-unit, three-story apartment building. As the landlord, TP performed certain duties, such as listing and showing vacant apartments, arranging for repairs, and m...
Allocated Purchase Price Was The "Original Cost" Of Solar Equipment
November 11, 2024 - Bulletin Print Report
Plaintiff owns a solar energy generation facility in Maricopa County, Arizona, (the "Facility"). The Facility includes renewable energy equipment, (the "Equipmen...
Diverted Trust Fund Taxes Are Included In Gross Income
November 11, 2024 - Bulletin Print Report
When an individual diverts/appropriates ("diverts") trust fund taxes, does that individual have taxable income in the amount of the diverted taxes for the taxable yea...
Only "Incidental" Investment Income May Be Deducted
November 11, 2024 - Bulletin Print Report
Petitioners are a group of investment companies that buy and sell distressed debt instruments such as credit card debt. All of their income comes from owning and trading in the...
Loss Corporation Can Use Losses From Discontinued Business
November 8, 2024 - Volume 18 Issue 216 Print Report
M was organized in 1947 by three individuals who owned an equal number of shares of its stock. From the date of its incorporation until the early part of 1958, it was engaged i...
Taxpayer Was A "Speculative Builder"
November 8, 2024 - Bulletin Print Report
R purchased the nine properties at issue and sold them for more than two to three times their original purchase price. Six of the nine properties were demolished down to the fo...
Receipt And Delivery Of Vehicles Occurred In West Virginia
November 8, 2024 - Bulletin Print Report
The Department found that S was selling motor vehicles to Ohio buyers. The Department determined that S's sales of motor vehicles to Ohio purchasers were taxable gross rece...
Full-Time Employee Could Not Be A "Real Estate Professional"
November 8, 2024 - Bulletin Print Report
In 1994, G began renting out a California property he owned. In 2016, G bought a property in Hawaii. In 2017, he began renting out the Hawa...
Widower Denied Property Tax Exemption
November 7, 2024 - Volume 18 Issue 215 Print Report
The subject property (for which a property tax exemption is being sought) is located in Olympia, Washington. On June 4, 2012, the Owner applied for property tax assistance unde...
FBAR Penalties Are Not Taxes
November 7, 2024 - Bulletin Print Report
Petitioners were assessed FBAR penalties. The BFS informed JJ that the Treasury Offset Program, ("TOP"), would withhold funds from her monthly Social Security benefit...
Securing A Basis "Step Up" At A "Manageable" Cost
November 7, 2024 - Bulletin Print Report
Prominent among any buyer's objectives, from a tax point of view, when pursuing a taxable acquisition, is to achieve a "cost" basis in the target's assets. Su...
Device Used With "AID" System Is Exempt From Sales Tax
November 7, 2024 - Bulletin Print Report
C is a wholesaler and retailer of pharmaceutical equipment and supplies, including the "Device." The Device is intended for single patient use and is generally sold t...
Sec. 381 Does Not Apply To A "Divisive" Reorganization
November 6, 2024 - Volume 18 Issue 214 Print Report
A and B own all of the stock of M Corporation, a domestic corporation engaged in the business of farming. "Serious disputes" arose between A and B regarding operation...
"Mystery Rooms" Are Places Of Amusement
November 6, 2024 - Bulletin Print Report
P is a New York limited liability company located in New York City. P provides "mystery rooms" where groups of up to ten people are locked in a room and collectively...
Sales Of Installed Appliances Are Subject To Sales Tax
November 6, 2024 - Bulletin Print Report
L owns and operates a retail appliance store in Illinois. L's store is a direct competitor of Lowe's, ("LO"). In Illinois...
Taxpayer Did Not Purchase An Installation Service
November 6, 2024 - Bulletin Print Report
Petitioner is a full-service marina located on an inland basin. Petitioner has owned and maintained fixed wooden docks attached to wooden pilings embedded in the basin floor. P...
Assuming Contingent Obligations in a Reorganization
November 5, 2024 - Volume 18 Issue 213 Print Report
In the case of a reorganizationwhich involvesthe conveyance of the target's properties to the acquiring corporation, Sec. 381(a)(2) of the Internal Re...
Pre-Sale Notice Of Right To Proceeds Satisfies Due Process
November 5, 2024 - Bulletin Print Report
Petitioner foreclosed claimants' properties effective March 31, 2021. After foreclosure, petitioner mailed two letters to all claimants. The first informed former property...
A "Substitute For Return" Does Not Obviate Failure To File Penalties
November 5, 2024 - Bulletin Print Report
Advice has been requested whether a taxpayer who fails to file a tax return may be subjected to a penalty under section 6651(a)(1) of the Internal Revenue Code for "failur...
Form Over Substance Is Not The Law In Pennsylvania
November 5, 2024 - Bulletin Print Report
In Commissioner v. National Alfalfa Dehydrating & Milling Co., 417 U.S. 134 (1974), the United States Supreme Court famously stated, "While a taxpay...
Altria Group, Inc. Takes The Measure Of The I.R.S.
November 4, 2024 - Bulletin Print Report
Altria Group, Inc., ("MO"), has sometimes put its prodigious cash flow to work through investments that only occasionally relate to its principalbusiness of man...
The Limited Scope Of Sec. 269(b) Is Confirmed
November 4, 2024 - Volume 18 Issue 212 Print Report
As of the close of its taxable year ended August 31, 1985, X had net operating loss (NOL) carryovers. On December 31, 1985, X purchased all the stock of Y in exchange for 75,00...
Collection Of Proceeds Is Necessary For A Whistleblower's Award
November 4, 2024 - Bulletin Print Report
In 2010, petitioner commenced his whistle-blower claim by filing Form 211...alleging that target, an entertainment and hospitality provider, had repeatedly violated internal re...
Corrections Made To Federal Return Do Not Always Flow-Through
November 4, 2024 - Bulletin Print Report
In 2018, Plaintiff, ("P"), had a business selling merchandise over eBay. On their original Schedule C, Ps misstated their gross r...
Related Member Intangible Expenses Must Be Added Back
November 1, 2024 - Bulletin Print Report
TP filed Virginia, ("V"), corporate income tax returns...claiming a full exception to the add-back for intangible expenses paid to an affiliate on the basis that &quo...
Stock Received For Employment Contract Included In Gross Income
November 1, 2024 - Volume 18 Issue 211 Print Report
Mr. A owned all of the outstanding stock of X corporation, (X). X was engaged in the home construction business. Mr. A was the president of X and was actively involved in its b...
Claim For Surplus Foreclosure Proceeds Was Timely Submitted
November 1, 2024 - Bulletin Print Report
D failed to pay real estate taxes on the "Property" for fiscal year 2007. The Town executed a tax lien on the Property and...filed a petition to foreclose in 2013. Ni...
NQSOs And RSUs Yield Ordinary Compensation Income
November 1, 2024 - Bulletin Print Report
In 2010, S hired APP as its president and CEO pursuant to an Offer of Employment letter. The letter states, "In connection with your employment...you will be eligible to r...
Taxpayer Afforded The Non-Recognition Benefits Of Sec. 1033
October 31, 2024 - Volume 18 Issue 210 Print Report
R and E each owned 50 percent of petitioner's stock. Petitioner owned and operated a plant which was struck by lightning and destroyed by fire on July 30, 1957....
Realty Transfer Tax Abated On Substance Over Form Grounds
October 31, 2024 - Bulletin Print Report
ES, as Executor for the Estate of EAS, transferred property to D. Petitioners claimed an exemption from the Realty Transfer Tax ("RTT") on the basis that the property...
Taxpayer Was Engaged In The Transportation Business
October 31, 2024 - Bulletin Print Report
PacificCorp, ("PC"), is a regulated electric power company that conducts business in Wyoming via its Rocky Mountain Power business unit....
"CRSC" Is Not Included In "Disposable Income"
October 31, 2024 - Bulletin Print Report
O is a 100 percent disabled veteran. He has been receiving Combat Related Special Compensation, ("CRSC"), and does not receive military retirement pay. <...
Debt Financed Redemption Is Timely
October 30, 2024 - Volume 18 Issue 209 Print Report
The decedent, at the time of her death, owned stock in a closely-held family corporation comprising more than 35 percent of the adjusted gross estate. &n...
Non-Participating Royalty Interests Are Vested Real Property Interests
October 30, 2024 - Bulletin Print Report
In 1884, WM acquired 201 acres of land in fee simple ("parent tract"(, with no oil and/or gas or other reservations included within the conveyance. &n...
Range Balls Were Not Purchased For Resale
October 30, 2024 - Bulletin Print Report
During the period at issue, P operated a public golf course. P's facility included a golf course, driving range...and pro shop. P charg...
Dormant Corporation's REIT Election Was Effective
October 30, 2024 - Bulletin Print Report
In order to be eligible forcertain tax benefits or tax classifications, it is necessary to demonstrate that a specified percentage of an entity's gross receipts, gros...
Fund Payment Found To Be Similar To Insurance
October 29, 2024 - Volume 18 Issue 208 Print Report
LB (the decedent) died intestate on October 14, 1973. Petitioner retained an attorney, L, to represent her in the administration of the estate. L collected insurance proceeds o...
Spin-Off Of Bitcoin Miner Will Not Qualify Under Section 355
October 29, 2024 - Bulletin Print Report
OLB Group, Inc. will distribute "all of itsoutstanding shares of common stock of DMint, Inc. to holders of its common stock and Series A Preferred Stock on a pro rat...
Untimely Claim For Refund Not Honored
October 29, 2024 - Bulletin Print Report
Appellant passed away on February 8, 2010, before filing his 2009 and 2010 California personal income tax returns. Respondent sent appellan...
Community Blood Center Eligible For Ad Valorem Property Tax Exemption
October 29, 2024 - Bulletin Print Report
In 1973, Congress enacted a National Blood Policy recognizing the federal interest in establishing a community-based volunteer blood donor system across the U.S. The Policy has...
MSTR's Impairment Losses Lead To Deferred Tax Assets
October 28, 2024 - Bulletin Print Report
Microstrategy, Inc.'s most recent Form 10-K lists a deferred tax asset in the amount of $652,280,000 with the explanatory caption, "Digital Asset Impairment Losses.&qu...
I.R.S. Rules On Berry Global Group/Glatfelter Corporation RMT
October 28, 2024 - Bulletin Print Report
ED (Berry Global Group) is the parent of a worldwide group of entities, (the "ED Group"). ED directly owns the stock of ID. ID di...
Advertising Costs Ruled Deductible
October 28, 2024 - Volume 18 Issue 207 Print Report
A is the sole general partner of B, a publicly-traded partnership (PTP) organized in 1987. B is engaged in providing investment management and advisory services....
Untimely Claim Prohibits Recovery Of Surplus Foreclosure Proceeds
October 28, 2024 - Bulletin Print Report
In response to Rafaeli, LLC v. Oakland Co, 505 Mich 429 (2020), the Michigan Legislature passed 2020 PA 255 and 2020 PA 256, which were given immediate effec...
Solely For Voting Stock Requirement Flunked
October 25, 2024 - Volume 18 Issue 206 Print Report
For valid business reasons, X corporation, (X), desired to acquire all of the stock of Y corporation, (Y). Mr. A owned all of the stock of X. X manufactured metal products; and...
Renal Disease Facilities Are Not Outpatient Facilities
October 25, 2024 - Bulletin Print Report
NMSA 1978,Section 7-9-93A provides, "Receipts of a 'health care practitioner' for commercial contract services or Medicare part C services paid by a managed care p...
The Party That Induced Importation Is Liable For Excise Tax
October 25, 2024 - Bulletin Print Report
T is a wholesaler and retailer of truck parts. From 2012 to 2017, T purchased tires wholesale from Chinese manufacturers, which shipped the tires to T in Houston. There is no s...
Optional Collision Damage Waiver Not Subject To Sales Tax
October 25, 2024 - Bulletin Print Report
The facts as presented in your letter ruling request are summarized as follows: Applicant is a rental car service whichspecializesin...
Sales Tax Is A "Destination" Tax
October 24, 2024 - Bulletin Print Report
Petitioner asks whether it must include sales tax for information technology services rendered to clients with shipping and postal addresses in New York State, but with out-of-...
10th Circuit Weighs In On Economic Substance
October 24, 2024 - Volume 18 Issue 205 Print Report
SCI, an 'S' corporation wholly-owned by Mr. Carlos E. Sala, (S), acquired, in 2000,long and short foreign currency options and contributed them to a par...
The Lessee's Use Of Governmental Property Precluded Exemption
October 24, 2024 - Bulletin Print Report
The State owns the "Hospital Property," ("HP"). The HP is "acquired institutional land" and is held for the benefit of Wyoming State Hospital.&nbs...
Devices And Appliances Were Not Exempt "Medicines"
October 24, 2024 - Bulletin Print Report
APP sells and leases prosthetics, orthotics, and other medical supplies. APP purchases durable medical equipment, ("DME"), ex-tax and sells or rents the DME to its cu...
Who Gets A Deduction For Cancelled Options?
October 23, 2024 - Volume 18 Issue 204 Print Report
X will form SH as a wholly-owned subsidiary. SH will then merge into Y, with Y as the surviving corporation. Former shareholders of Y shall become entitled to receive "$z&...
Fees Paid To A "Place Of Games" Is Subject To Sales Tax
October 23, 2024 - Bulletin Print Report
Applicant manages and oversees a baseball filed complex where they charge teams and organizations to use the fields for practices, games, and events. Applicant already charges...
An Identifiable Event Fixed The Date Of Debt Discharge
October 23, 2024 - Bulletin Print Report
In 2007, S purchased the Point Lookout property at issue. The contract sales price was $1,214,865, with $1,000,000 of the purchase price funded by a loan. S signed a note...
The "Attachment" Requirement For Powers Of Attorney Is Regulatory
October 23, 2024 - Bulletin Print Report
V is a professional-employer organization that provides other companies with services to outsource employee-management tasks. V withholds, reports, and pays employment-related...
The Willens Deal Survey October 2024
October 22, 2024 - The Deal Survey: October 2024 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
Section 280E (Once Again) Is Ruled To Be Constitutional
October 22, 2024 - Bulletin Print Report
Patients Mutual Assistance Collective Corporation, Inc., ("P"), is a corporation that operates a medical cannabis dispensary licensed by the State of California. Duri...
Successor Corporation Inherits Target's NOLs
October 22, 2024 - Volume 18 Issue 203 Print Report
A corporation required to file the Indiana corporate income tax return is entitled to a net operating loss (NOL) deduction. A corporation's Indiana net operating loss deduc...
Change In Tax Rolls Was Invalid
October 22, 2024 - Bulletin Print Report
Plaintiff, ("P"), owns a warehouse that it leased to S for use as a marijuana grow facility. Defendant, ("D"), establis...
Only The "20% Repatriation Amount" Is Included In MSFT's Sales Factor
October 22, 2024 - Bulletin Print Report
The requirement to add the "Federal Repatriation Amount" to income was a single, transitional provision of the 2017 Tax Cuts and Jobs Act. Oregon incorporated the fed...
Estate And Beneficiary Are Related Persons
October 21, 2024 - Volume 18 Issue 202 Print Report
BLM passed away on March 3, 2009, and in her will, devised real property ("the property") to her son, NCM, and her three grandchildren, JM, MM, and KM, in equal share...
Liens Held By The State Are Superior To Property Tax Liens
October 21, 2024 - Bulletin Print Report
CK failed to pay property taxes on a parcel of land...between 2008 and 2018. In May 2019, W purchased from the Treasurer the tax liens on CK's property by paying the unpaid...
Service Provider Was Not In The Business Of Mining
October 21, 2024 - Bulletin Print Report
Taxpayer, ("TP"), is an Indiana excavating company. The Department conducted an audit review of TP's business records. The Departme...
Propane Was Used For Residential Purposes
October 21, 2024 - Bulletin Print Report
Petitioner's primary residence is in St. Lawrence County (N.Y.). Petitioner has propane delivered by a supplier into four propane tanks on th...
Bankruptcy Filing Does Not Stay A Whistleblower Case
October 18, 2024 - Bulletin Print Report
During 2012, petitioner engaged in a transaction with the target. Petitioner filed a whistle-blowerclaim in May 2015 in which he asserted that the target incorrectly repo...
UGMA Stock Custodian Has Prohibited Interest in the Corporation
October 18, 2024 - Volume 18 Issue 201 Print Report
X Corporation, (X), has outstanding voting common stock all of whichwas owned by Mr. A, Mrs. B, and Mr. C. Mr. A and Mrs B were husband and wife and Mr. C was t...
Dance Studios Scholarships Did Not Render It A "Charitable Institution"
October 18, 2024 - Bulletin Print Report
The subject property is a facility with three distinct studios and common space. LE uses all of the subject property. LO also operates out of the subject property, "offeri...
Rental Real Estate Losses Were Properly Disallowed
October 18, 2024 - Bulletin Print Report
W organized WAL, LLC in 2015 to open an assisted living facility. To that end, W purchased a single-family home ("group home") in 2016. W began repairing the group ho...
Cosmetology School Not An "Educational Institution"
October 17, 2024 - Volume 18 Issue 200 Print Report
TPs operate private, for-profit cosmetology school franchises in Washington. The Department of Revenue (Department) determined that TPs had incorrectly taken deductions from gr...
Taxpayer Did Not Qualify As A "Rural Physician"
October 17, 2024 - Bulletin Print Report
Taxpayer, ("TP"), works as a physician at BMC in C and resides in B, 2.1 miles from the hospital. C has 2,200 residents, and B has 4,400 residents. Both C and B are i...
Housing Complex For Senior Residents Exempt From Property Tax
October 17, 2024 - Bulletin Print Report
H consisted of a four-building campus containing twenty-nine apartments. H operates as a housing complex for senior residents of Martha's Vineyard, ("MV").<...
Does The Five-Hour Energy Founder Have A Leg To Stand On?
October 17, 2024 - Bulletin Print Report
The Wall Street Journal, on October 16, 2024, in a page one profile of Mr. Manoj Bhargava, ("MB"), the brains behind the Five-Hour Energy phenomenon, spent a lot of t...
Utility's Loss Not Compensated For "By Insurance Or Otherwise"
October 16, 2024 - Volume 18 Issue 199 Print Report
TP, a public utility, engaged in the business of generating and distributing electricity, abandoned a partially completed nuclear generating plant.  ...
Medical Equipment Is Exempt From Sales And Compensating Use Tax
October 16, 2024 - Bulletin Print Report
Petitioner, ("P"), sells durable medical equipment... Among the products it sells to New York customers is the "Device," a portable electrotherapy device us...
I.R.S. Explores The "Specified Commodity" Exception
October 16, 2024 - Bulletin Print Report
In general, the effective rate of tax on a U.S. shareholder's section 965 inclusion amount varies based on the "cash position" of the U.S. shareholder's SFCs....
Assets Contributed To "FLP" Included In Gross Estate
October 16, 2024 - Bulletin Print Report
MR passed away in 1963, leaving MS with the family business. MI is MS's great nephew, in whom MS took a particular interest. On January...
Non-Resident's Sale Of Equity Interest Generated "Apportionable" Income
October 15, 2024 - Bulletin Print Report
The income at issue arose from the claimants selling 25 percent of their interest in the company. The company develops and sells skincare products throughout the country. The c...
Section 246(b) Operates To Restrict Certain Deductions
October 15, 2024 - Bulletin Print Report
1 DC has a GILTIinclusion under section 951A of 200x dollars, a gross up for deemed paid foreign tax credits under section 78 of 20x dollars attributable to its GILTI inc...
Indirect Sales Are Covered By Sec. 267
October 15, 2024 - Volume 18 Issue 198 Print Report
On March 18, 1955, the Hs purchased Golden State, (GS), a hospital, for $975,000. Mr. H borrowed money from his sister for which he gave her a note. The sister transferred the...
Purposefully Discriminatory Law Warranted A Permanent Injunction
October 15, 2024 - Bulletin Print Report
F sells coal produced in Illinois. Kentucky utilities are regulated by the Kentucky Public Service Commission, ("PSC"). While Kentucky imposes a 4.5 percent severance...
Flunking Sec. 351 Leads To Sec. 338(h)(10) Election
October 14, 2024 - Volume 18 Issue 197 Print Report
P is the parent of a consolidated group that included S. S was engaged in Business A. In Year 1, P decided to terminate its involvement in Business A. P and Group (G) entered i...
Taxpayer Did Not "Establish" Its Payments Constituted Restitution
October 14, 2024 - Bulletin Print Report
Pursuant to a court order, TP made "Payments" to a Government Agency; and TP's wholly-owned 'S' corporation forgave debt issued to TP's customers. TP...
Employees Of Motor Carriers Are Only Taxed In Their State Of Residence
October 14, 2024 - Bulletin Print Report
Taxpayer and his wife are residents of Kentucky. Taxpayer was employed by an Indiana freight transportation company and annually filed a reciprocal non-resident individual inco...
Pennsylvania Properly Taxed The Gain Realized On A Like Kind Exchange
October 14, 2024 - Bulletin Print Report
The Pennsylvania Tax Reform Code of 1971, (the "TRC"), taxed net gains...from the sale, exchange or other disposition of property as income. The gain is reco...
Downstream Merger Treated As A Redemption
October 11, 2024 - Volume 18 Issue 196 Print Report
C is a corporation engaged in Business. C is an 'S' corporation. The Continuing Shareholders own "a%" of the total shares of C. The Minority Shareholder owns...
Transfer Of Non-Controlling Economic Interest Not Subject To "RETT"
October 11, 2024 - Bulletin Print Report
G and GS are, and have been continuously, since no later than as of July 15, 1997, the sole members in GR, with each holding a fifty percent interest therein. For a period of a...
Assignee Of Motor Vehicle Lease Not Entitled To A Sales Tax Credit
October 11, 2024 - Bulletin Print Report
An individual leased a personal use motor vehicle from a dealership for a term of one year or more, and financed the lease through the dealership's finance/leasing company....
Misspelling Did Not Render Tax Sale Invalid
October 11, 2024 - Bulletin Print Report
R purchased 4.4 acres of land, ("Property"), from SK, Administrator of the Estate of K, ("Estate"), on September 25, 2020. &nb...
EchoStar To Jettison DISH TV And Sling TV In Exchange For Debt Relief
October 10, 2024 - Bulletin Print Report
Recently, DIRECTV, ("DTV"), and EchoStar Corporation, ("SATS"), longtime bitter rivals, announced that they have entered into a definitive agreement pursuan...
Accrued Interest Ruled Deductible
October 10, 2024 - Volume 18 Issue 195 Print Report
CA was incorporated in 1958 to build an office building. That intention was not realized and in 1960 or 1961 CA decided to build a hotel to be financed by an issue of capital s...
A Gutter Protection System Is A Capital Improvement
October 10, 2024 - Bulletin Print Report
Petitioner, ("P"), installs gutter protection systems, (the "system") for customers in New York State. The system is intended to be a permanent installation...
The Illinois Tax System Favors Non-Residents
October 10, 2024 - Bulletin Print Report
Petitioner, ("P"), an Illinois resident, paid his ex-spouse alimony during the tax periods involved. P also made contributions to a Health Savings Account,(&quo...
Interest Paid Out Of Loan Proceeds Not Deductible
October 9, 2024 - Volume 18 Issue 194 Print Report
Appellees are members of two limited partnerships, W and M. Each partnership obtained a loan from MM secured by real property. On November...
Candy And Confectionery Is Subject To Sales Tax
October 9, 2024 - Bulletin Print Report
Petitioner is a customer that occasionally purchases a certain chocolate-covered marshmallow twists product (the "product"). Petitioner describes the product as "...
Installer Of "EECBP" Is Not Eligible For Section 179D Tax Deductions
October 9, 2024 - Bulletin Print Report
O owned 100 percent of the stock of BEI, an 'S' corporation. In 2016, BEI filed an amended 2013 Form 1120-S claiming energy efficient commercial building deductions und...
Closing Agreement Was Valid And Enforceable
October 9, 2024 - Bulletin Print Report
B, a United States citizen, moved to Australia in 1995 to begin employment with a United States Department of Defense contractor at Joint Defense Facility Pine Gap....
Taxpayer Did Not "Process" Produce
October 8, 2024 - Bulletin Print Report
Petitioner, Procacci Brothers Sales Corporation, is headquartered in Philadelphia, Pennsylvania. Petitioner contends it is engaged in the processing of fruits and vegetables an...
Loss From Sale To Shareholders Denied
October 8, 2024 - Volume 18 Issue 193 Print Report
The petitioner is a corporation doing business in Georgia. The petitioner sold, on December 15, 1941, 20 shares of BMC stock to HWH for $1,000. Its basis for gain or loss on th...
Taxpayer Was Not A "Marketplace Facilitator"
October 8, 2024 - Bulletin Print Report
TP provides an advertising exchange that uses software to auction the advertising space of third-party publishers, ("Publishers"), usually mobile-app developers and w...
MCL 211.78t Is The Exclusive Method For Claiming Surplus Proceeds
October 8, 2024 - Bulletin Print Report
M owned real property and fell behind on her 2018 property taxes. M died on February 7, 2021. Ten days later, petitioner obtained a judgment of foreclosure against M's prop...
Absence Of Gross Income And Assets Does Not Preclude REIT Election
October 7, 2024 - Bulletin Print Report
TP was formed on Date 1. TP indirectly owns...multi-family properties. P, a partnership, owns "x%" of the common interests in TP. Each of "y" individual sha...
VSTO Will Reward Its Shareholders
October 7, 2024 - Bulletin Print Report
Vista Outdoor, Inc., ("VSTO"), has turned a bidding war for the company into a veritable bonanza for its shareholders. The company conducts two businesses, one of whi...
A Non-Lawyer May File An Appeal With The Board Of Tax Appeals
October 7, 2024 - Bulletin Print Report
L appeals a decision of the Board of Revision, (the "BOR") valuing the subject property for tax year 2023. The county appellees h...
Dissolution Of Insolvent Subsidiary
October 7, 2024 - Volume 18 Issue 192 Print Report
H files a consolidated return. H has a wholly-owned subsidiary, CX, which has a wholly-owned subsidiary, CY, that is used as a European holding company....
Sterling Bancorp Adopts A Plan Of Complete Liquidation
October 7, 2024 - Bulletin Print Report
Sterling Bancorp, Inc., ("SBT" or the "Company"), the holding company of Sterling Bank and Trust, F.S.B., (the "Bank"), announced that the Company...
Foreign Corporations Are Increasingly Engaging In Spin-Off Transactions
October 4, 2024 - Bulletin Print Report
In the recent past, what had been primarily a domestic corporation phenomenon has begun to be embraced by foreign corporations as well. We are referring tospin-offs. For...
Each Block Of Stock Transferred Treated Separately
October 4, 2024 - Volume 18 Issue 191 Print Report
In 1975, the taxpayer was the president of X corporation and owned more than 50 percent (by value) of its stock, the remainder of the stock being owned by members of the taxpay...
Jury Will Decide Whether Failure To File FBARs Was Willful
October 4, 2024 - Bulletin Print Report
In a summary judgment order, the court stated..."Section 5321(a)(5) does not define willfulness, nor has the Ninth Circuit addressed willfulness in the FBAR context."...
Accountant May Have Committed Breach Of Contract And Malpractice
October 4, 2024 - Bulletin Print Report
V is an online retailer specializing in seed and flower bulbs. In 2017, V engaged JPS to provide various accounting and bookkeeping related services. "Consistent with JPS&...
Section 338 Is The Exclusive Route To Asset Purchase Treatment
October 2, 2024 - Bulletin Print Report
TowneBank, ("TOWN"), and Village Bank & Trust Financial Corporation, ("VBFC"), recently announced a definitive agreement and plan of reorganization purs...
Loss On Sale To Foundation Disallowed
October 2, 2024 - Volume 18 Issue 190 Print Report
Sec. 267(a) provides that no deduction shall be allowed in respect of losses from sales or exchanges of property directly or indirectly between the persons specified within any...
Packaging Does Not Qualify As Manufacturing
October 2, 2024 - Bulletin Print Report
TP has a manufacturing facility in "X" that manufactures vitamins. These products are subsequently delivered to a separate warehouse in "Y" that packs and d...
No Withholding Tax Imposed On A Section 355 Distribution
October 2, 2024 - Bulletin Print Report
D is a domestic corporation that operates Business A. Prior to Date 1, D also operated Business B which currently is operated by C. D has one class of stock issued and outstand...
Jacobs Solutions, Inc. Will Engineer An "RMT" Transaction
October 1, 2024 - Bulletin Print Report
Jacobs Solutions, Inc., ("J"), is on the verge of completing a so-called "Reverse Morris Trust" ("RMT") transaction. In general, an RMT transactio...
Debt Cancellation With Economic Significance Disregarded
October 1, 2024 - Volume 18 Issue 189 Print Report
P is the common parent of a consolidated group. P owns S1. S1 owns 80 percent of S2. S2 owns S3. S1 was the lender on an intercompany indebtedness with S3. S3's liabilities...
Frivolous Appeal Penalties Not Imposed
October 1, 2024 - Bulletin Print Report
Plaintiffsappealed Defendant's offset of their 2023 state income tax refund to pay a delinquent account with the Department of Consumer & Business Services, (&quo...
Transfer Of Realty Between Ex-Spouses Is Subject To "REET"
October 1, 2024 - Bulletin Print Report
In 1994, TP and W were married. In 2005, the couple purchased real property, (the "Property"). The couple separated in 2011, leading to a later amicable dissolution o...
Creation Of Website Constitutes Expansion Of Existing Business
September 30, 2024 - Volume 18 Issue 188 Print Report
D operated a retail shoe store business, under the name "D," since Year 1. D's business enjoys favorable name recognition, customer loyalty, and other elements of...
FBAR Penalties Not Extinguished By Death Of Violator
September 30, 2024 - Bulletin Print Report
B was a United States citizen. During the seven calendar years 2004 through 2010, he had a financial interest or signature authority over nine bank accounts in Israel. B did no...
The Origin Of Legal Fees Stemmed From Business Activity
September 30, 2024 - Bulletin Print Report
Petitioners were members of Home of Christ 4 Church, ("HOC4"). Petitioners were appointed directors of HOCA, Inc. HOCA, Inc. was granted tax-exempt status under secti...
Lessee Lacked "Standing" To Bring A Tax Appeal
September 30, 2024 - Bulletin Print Report
On April 10, 2016, appellantpurchased a 598-square-foot dwelling, (the "subject dwelling"). The subject dwelling is situated within and on an 83-acre community...
Washington "Nexus" Found
September 27, 2024 - Volume 18 Issue 187 Print Report
TP is an out-of-state (vis a vis Washington) corporation that sells "X" supplies by mail order catalog. TP is a wholly-owned subsidiary of P. There are thre...
New Jersey "Mansion" Tax Refund Claim Was Not Timely Filed
September 27, 2024 - Bulletin Print Report
On or about December 7, 2018, plaintiffs purchased the single-family residential condominium...at 1 Shore Lane, Jersey City, Hudson County New Jersey, (the "subject proper...
Owner Lacked The Right To Redeem Delinquent Property
September 27, 2024 - Bulletin Print Report
B is the record owner of property. The property is improved with a residential brick building. That building is a duplex with the adjoining property...owned by a different enti...
Better Business Bureau's Membership Dues Were Taxable
September 27, 2024 - Bulletin Print Report
The Better Business Bureau Great West and the Pacific, ("B"), is a non-profit corporation that provides businesses and consumers...services to promote the "creat...
Distribution By Trust Of Qualified Replacement Property Not A Disposition
September 26, 2024 - Volume 18 Issue 186 Print Report
Trust (T) was established pursuant to a trust agreement dated October 1, 1969, between the Grantor (G) and the Trustee. G made one contribution of property to T at the time it...
Part-Year Resident Denied Badger State Tax Credits
September 26, 2024 - Bulletin Print Report
RI was born in 1985 in the Congo. In 1996, she moved to Tanzania. While residing in Tanzania, she gave birth to four children. On or about...
VA Employee Is Not Serving In The Armed Forces
September 26, 2024 - Bulletin Print Report
Plaintiff lives in Washington, and works at the Portland, Oregon VA hospital as "a Federal civilian employee engaged in Title 38 service as a Respiratory Therapist."&...
PIMCO's CIO Denied California "OSTCs" For Taxes Paid To New York
September 26, 2024 - Bulletin Print Report
H was a partial owner and member of two California limited liability companies, (LLCs), that were classified as partnerships for both federal and California income tax purposes...
The Willens Deal Survey September 2024
September 25, 2024 - The Deal Survey: September 2024 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
SITE Centers' Spin-Off Will Be Taxable
September 25, 2024 - Bulletin Print Report
SITE Centers, ("S"), is a real estate investment trust, ("REIT"). S has declared the distribution of all of the common stock of a newly-created subsidiary n...
Capitalized Interest Is Not "Paid"
September 25, 2024 - Volume 18 Issue 185 Print Report
In 1991, petitioners purchased a residential property in California for $334,000. They financed this purchase with a $300,000 mortgage loan secured by the property....
Water Is Tangible Personal Property
September 25, 2024 - Bulletin Print Report
Taxpayer, ("TP"),operates a hotel. TP's hotel utilizes a "closed loop" HVAC system. The system contains a fixed volume of treated water t...
Tampa Bay Downs Eligible For Lower Tax Rate On "Handle"
September 25, 2024 - Bulletin Print Report
FL. Stat. section 550.0951 governs the payment of daily license fees and taxes by applicable pari-mutuel facilities such as those operated by APP."Each permit holder...
Liberty Broadband And Charter Communications Trade Merger Proposals
September 24, 2024 - Bulletin Print Report
The persistent (and substantial) discount to net asset value at which the sharesof Liberty Broadband Corporation, ("LBRDK"),trades appears to be, much to...
The Convenience Of The Employer Test Is Impregnable
September 24, 2024 - Bulletin Print Report
Petitioners filed form IT-203 New York State non-resident and part-year resident income tax return,for the tax year 2020. The Division recomputed petitioners' return...
Subscription Agreement Provides "Ownership Interest"
September 24, 2024 - Volume 18 Issue 184 Print Report
A credit is provided to Utah taxpayers when capital gains are expended to purchase qualifying stock in a Utah small business. Utah Code 59-10-1022 provides for a tax credit if...
Documentary Evidence Did Not Support "REET" Exemption
September 24, 2024 - Bulletin Print Report
TP, an LLC, owned Property in Washington, ("W"). TP's membership, ("Members"), was comprised of numerous private individuals with varying percentage int...
Former Hoosier Successfully Changed Domicile
September 24, 2024 - Bulletin Print Report
In late 2020, TP and his wife moved from Indiana to Nebraska, through TP remained an employee of an Indiana company, ("Employer"). For tax year 2021, TP and his wife...
Insurance "Expirations" Are Capital Assets
September 23, 2024 - Volume 18 Issue 183 Print Report
Petitioner (P) was employed as an insurance agent by L. The employment contract between P and L provided that P was to receive 1/2 of the total commissions on the new insurance...
Philadelphia Satisfied Original Service Of Process Requirements
September 23, 2024 - Bulletin Print Report
APP acquired real property, ("Property"), at a sheriff's sale conducted on September 23, 2004. Later, real estate taxes and sewer fees went unpaid. <...
School Board May Appeal A Property Valuation To The BTA
September 23, 2024 - Bulletin Print Report
On May 3, 2022, the school board filed a counter-complaint regarding the tax valuation of certain property. On August 4, 2022, the board of revision determined that the school...
Services Rendered To A Government Can Produce "FDDEI"
September 23, 2024 - Bulletin Print Report
DC, a domestic corporation, is hired by the U.S. Department of Defense, ("DoD"), to provide consulting services. DC provides these services to employees of the DoD&nb...
Is Redemption Part Of the Plan Of Complete Liquidation?
September 20, 2024 - Volume 18 Issue 182 Print Report
P is a closely-held corporation which was incorporated in 1977. P is engaged principally in the business of providing printing services, primarily menus for restaurants.<...
"All Taxes" Includes Interest
September 20, 2024 - Bulletin Print Report
Petitioner, ("P"), contested a determination by the South Carolina Department of Revenue finding it liable for admissions taxes arising out of parasailing rides for w...
Bankruptcy Petition Did Not Terminate A Valid 'S' Election
September 20, 2024 - Bulletin Print Report
K married V in 1990. The couple started a business, "A," in 2000. They elected to make it an 'S' corporation. V and K each owned one hundred shares of the bus...
Right To Hearing Specifically Denied By Statute
September 20, 2024 - Bulletin Print Report
T, a holding company and New York State 'S' corporation, elected to participate in the "PTET" program for 2021. On...
Sec. 483 Does Not Apply To Escrowed Stock Arrangements
September 19, 2024 - Volume 18 Issue 181 Print Report
Under an agreement and plan of merger, the shareholders of X corporation exchanged each outstanding share of their common stock for a specified number of sharesof voting...
Taxpayer's Sales Cannot Be Sourced To Location Of "Subsequent Buyers"
September 19, 2024 - Bulletin Print Report
TP operates its principal place of business outside of Tennessee, ("TN"). TP manufactures its products, (the "Product"), through an affiliated entity, which...
Allocating Proceeds From Sale Of Over-Encumbered Property
September 19, 2024 - Bulletin Print Report
In 2013, the I.R.S. recorded a federal tax lien against Ds' real property, located in Connecticut, for unpaid taxes from fiscal year 2009. Ds filed for Chapter 7 bankruptcy...
Dissolution Of Spousal Partnership Worked A "Transfer Of Ownership"
September 19, 2024 - Bulletin Print Report
F owns the parcel of property at issue, (the "real property"). F is a limited liability company owned by the revocable trust of DP. &nbs...
Reverse Triangular Merger Is A 'B' Reorganization
September 18, 2024 - Volume 18 Issue 180 Print Report
T is a publicly traded domestic corporation which had been formed on Date A. T owns TS1, TS2, and TS3. TS1 owns T4. TS2 and TS3 together wholly own LP. &...
Surplus Foreclosure Proceeds Are Unavailable To Untimely Filers
September 18, 2024 - Bulletin Print Report
Claimants, ("Cs") owned properties for which back property taxes were owed. Petitioner, ("P"), acting as the foreclosing governmental unit, ("FGU"...
Petition To Set Aside "Upset Tax Sale" Was Granted
September 18, 2024 - Bulletin Print Report
G acquired title to the Property in 2014. Both the Deed and the filed Property Registration Form listed G's address...as Brooklyn, New York 11212. Since she obtained title...
"And" Rather Than "Or" Implies Multiple Requirements (Not Alternatives)
September 18, 2024 - Bulletin Print Report
Harris County sued M, alleging that he had failed to file, or timely file, numerous monthly "Dealer's Motor Vehicle Inventory Tax Statements" as required by Tax C...
Are All FBAR Failures Willful?
September 17, 2024 - Bulletin Print Report
N is a dual citizen of the United States and Croatia. N is the founder and CEO of Unique Sports Products, Inc., ("U"), a global sporting goods business. N holds thirt...
Contingent Beneficiaries Denied Loss Deductions
September 17, 2024 - Volume 18 Issue 179 Print Report
On May 28, 1970, the parents of the taxpayers, CW Jr. and SW, executed the instruments necessary to create two trusts for the benefit of their minor grandchildren, the children...
Section 78 Dividends Found Eligible For The Section 245A Deduction
September 17, 2024 - Bulletin Print Report
The Tax Cuts and Jobs Act, ("TCJA"), added to the Code new section 245A, which allows a domestic corporation a deduction for certain dividends received from foreign s...
Tax Court Cannot Issue Advisory Opinions In Moot Cases
September 17, 2024 - Bulletin Print Report
The Cs are U.S. citizens and Maryland taxpayers. In 2014 and 2015, they lived and worked in the United Kingdom. The Cs excluded income they earned in the United Kingdom from th...
Section 965 Inclusions Are Not Dividends "Deemed To Be Received"
September 16, 2024 - Bulletin Print Report
The Tax Cuts and Jobs Act, (the "TCJA"),created a new, one-time tax. Section 965(a) generally provides that for the 2017 tax year, "the subpart F income of...
Liberty Media And Sirius XM Holdings Finally Part Company
September 16, 2024 - Bulletin Print Report
On September 9, 2024, a transaction that was years in the making was finally consummated. Thus, Liberty Media Corporation, ("LMC"), and its 83 percent owned subsidiar...
When Can "North/South" Transactions Be Integrated?
September 16, 2024 - Volume 18 Issue 178 Print Report
On Date 1, TP established C as a division of TP. On Date 2, S was incorporated and "a" shares of voting common stock were issued to TP. On Date 4, TP transferred the...
Notice Of Levy Not Posted In A "Conspicuous Place"
September 16, 2024 - Bulletin Print Report
In 1997, M inherited a 2.54 acre tract of undeveloped land...in Clarendon County, South Carolina.M paid all taxes related to the property through 2015, but she failed to...
Mark-To-Market Gains Will Be Excluded From "AFSI"
September 13, 2024 - Bulletin Print Report
The Inflation Reduction Act introduced a corporate minimum tax that is calculated by reference to the corporation's "adjusted financial statement income," ("...
Taxpayer Not Equitable Owner Of Her Brother's House
September 13, 2024 - Volume 18 Issue 177 Print Report
In 2002, petitioner's brother, B, bought a house in South San Francisco. B made the required downpayment and financed the balance of the purchase price with a mortgag...
Failure To Pay Determination Precludes Judicial Review
September 13, 2024 - Bulletin Print Report
Appellant, ("APP"),is a corporation that offers tours across the southwest United States. Some of these tours take passengers from Nevada to destinations outsid...
HoldCo And OpCo Mergers Are Deemed To Occur Simultaneously
September 13, 2024 - Bulletin Print Report
When bank holding companies are combined, frequently by means of a statutory merger or consolidation, it is a virtual certainty that the banking subsidiaries of such holding co...
AU And Centamin plc To Embark On A Scheme Of Arrangement
September 12, 2024 - Bulletin Print Report
Anglo Gold Ashanti plc, ("AU"), and Centaminplc, ("C") announced that they have agreed to the terms of a recommended acquisition of C on the part of A...
Elis S.A.'s Acquisition Of VSTS Would Not Jeopardize Its Spin-Off
September 12, 2024 - Bulletin Print Report
A situation eerily similar to the Mars/Kellanovatransaction has recently cropped up and, as we concluded then, we also believe that the tax-free spin-off of Vestis Corpor...
Embedded Warrants Constitute "Other Property"
September 12, 2024 - Volume 18 Issue 176 Print Report
The shareholders of X corporation entered into an agreement to exchange their shares of stock for voting convertible preferred stock of Y corporation in a transaction which was...
Over-The-Counter Items Were Not Prosthetic Devices
September 12, 2024 - Bulletin Print Report
Plaintiff, ("P"), makes sales of medical items. P's "SUW" returns reflected tax-exempt sales of "prescription medical devices." Defendant dete...
OID Accounting Will Create A Cash Squeeze For RC
September 11, 2024 - Bulletin Print Report
(This report was prepared by Uri Walfish, a research associate...
Holding Period Of Assets Formerly Owned By Partnership
September 11, 2024 - Volume 18 Issue 175 Print Report
In 1946, EM and his brother, WM, formed a partnership to engage in the floral business. WM died on March 7, 1959. After WM's death, the business was conducted by petitioner...
Taxpayer Never Abandoned His "Historic" Domicile
September 11, 2024 - Bulletin Print Report
TP argues that he resided and was domiciled in Tennesseein 2018 and thus was not subject to Alabamaincome tax in that year. TP...
"Loper Bright" Was Not A Change In Law Warranting Reconsideration
September 11, 2024 - Bulletin Print Report
In our November 15, 2023 Opinion, we held that YA Global Investments, L.P., ("Y"), was engaged in a U.S. trade or business and, consequently, owed withholding tax und...
Equipment Used For Quality Control And Testing Is Exempt From Sales Tax
September 10, 2024 - Bulletin Print Report
TP, a manufacturer of electronic components used primarily in telecommunications, filed for a refund of sales tax paid on purchases of property it believes is exempt because it...
Decision To Liquidate Constitutes An "Identifiable Event"
September 10, 2024 - Volume 18 Issue 174 Print Report
TP is a holding company. TP owns domestic subsidiaries S and T which provide hazardous waste management services. TP retained an investment banking firm to advise management ab...
The Form Of A Sale/Leaseback Controlled
September 10, 2024 - Bulletin Print Report
CM is an insurance company. CU, a subsidiary of CM, is also an insurance company. On December 19, 2011, petitioners entered into an "Aircraft Lease" with PNC Finance,...
FBAR Penalties Are "Fines" Subject To Eighth Amendment Scrutiny
September 10, 2024 - Bulletin Print Report
Each American citizen with interests in, or authority over, any foreign bank account with a balance exceeding $10,000 must file an annual FBAR. &n...
Controlled Foreign Corporations Are Not Allowed A Section 245A DRD
September 9, 2024 - Bulletin Print Report
USP is a domestic corporation, and FC1 and FC2 are foreign corporations. USP wholly owns FC1. FC1 is a controlled foreign corporation, ("CFC"). FC1 owns 45 percent of...
Apportioning Earnings and Profits To Multiple Distributions
September 9, 2024 - Volume 18 Issue 173 Print Report
M is a domestic corporation. On July 1, 1973, M redeemed 25 percent of its stock in a transaction that qualified under Sec. 302(a). As of January 1, 1973, M had earnings and pr...
Goodwill Industries Does Not Compete With For-Profit Retailers
September 9, 2024 - Bulletin Print Report
G is a non-profit corporation that, since 1968, has been exempt from taxation under section 501(c)(3) of the Internal Revenue Code. In May of 2020, G purchased the building on...
Tax Benefit Rule Requires A Prior Deduction
September 9, 2024 - Bulletin Print Report
Plaintiff, Michigan Bell Telephone Company, ("P"), is a telecommunications service provider. P purchased telecommunications machineryand equipment during the ye...
Transitory Steps Are Disregarded
September 6, 2024 - Volume 18 Issue 172 Print Report
X, a state chartered banking corporation, had outstanding 2,000x shares of common stock which were publicly held. X decided that its stock should be owned directly by a corpora...
GATO To Engage In An "Outbound" Reorganization
September 6, 2024 - Bulletin Print Report
First Majestic Silver Corporation, ("AG"), a Canadian corporation, and Gatos Silver, Inc., ("GATO"), a U.S. corporation, announced that they have entered in...
Property Was Not Occupied And Used As A Homestead
September 6, 2024 - Bulletin Print Report
In 2004, V bought the property at issue. V and her son lived there and were granted a homestead classification. In 2014, V bought a residential property in the town of Biscay w...
Stock Sale Gain Cannot Be Apportioned
September 6, 2024 - Bulletin Print Report
In support of its argument that mortgages should be viewed as services rather than intangible assets, U.S. Bank, ("U"), asserts thatmortgages do not fit within...
MODG Will Separate Its Business Lines
September 5, 2024 - Bulletin Print Report
On March 8, 2021, Callaway Golf Co. completed its acquisition of Topgolf International, Inc. Callaway, which already owned approximately 14 percent of Topgolf's stock, acqu...
Financial Institutions May Claim Massachusetts Research Credits
September 5, 2024 - Bulletin Print Report
APP is registered with the Federal Reserve as a bank holding company pursuant to the Bank Holding Company Act of 1956. Consequently, APP and its subsidiaries come within the de...
Distribution In Proportion To Business Transacted Is A Dividend
September 5, 2024 - Volume 18 Issue 171 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...
Leased Land Not Eligible For Property Tax Exemption
September 5, 2024 - Bulletin Print Report
The Subject Properties are 16 parcels located in Scotts Bluff County, Nebraska. The Board determined that the Subject Properties were exempt for tax year 2020. The Department a...
I.R.S. Filed Suit After The Statute Of Limitations Had Expired
September 5, 2024 - Bulletin Print Report
This case involves outstanding tax liability related to the estate of Gladys R. Dill, (the "Estate"), and a 160-acre property owned by the Family Trust that was sold...
A Spin-Off Of REA Suddenly Makes More Sense
September 4, 2024 - Bulletin Print Report
News Corporation, ("NWSA"), currently owns approximately 61 percent of the issued and outstanding capital stock of REA Group Ltd., ("REA"). REA is the flags...
Interest On Tax Deficiencies Is "Personal Interest"
September 4, 2024 - Volume 18 Issue 170 Print Report
Between 1979 and 1985, the Rs operated an unincorporated business, CC, that installed telephone equipment. When the Internal Revenue Service examined the Rs' income tax ret...
A Service Business Does Not Have "COGS"
September 4, 2024 - Bulletin Print Report
A creates and manages online advertising campaigns for auto dealerships. A testified that he paid Google, Inc. and Craigslist, Inc. directly for advertising space as part of th...
Both Knowing And Reckless Violations Are "Willful"
September 4, 2024 - Bulletin Print Report
Under the Bank Secrecy Act, (the "BSA"), U.S. citizens must file annual reports. This annual report is known as "FBAR." The penalty for a non-willful violat...
"Hook Stock" Surrendered In Internal Split-Off
September 3, 2024 - Volume 18 Issue 169 Print Report
P owns Sub 1 which owns Sub 2. Sub 2 wholly owns Sub 3. Sub 3 owns all of the stock of Sub 4. The latter is engaged in Business A. P also owns LLC1, a disregarded entity. LLC1...
The Commissioner's Settlement Of A Claim Cannot Be Appealed
September 3, 2024 - Bulletin Print Report
This case involves the valuation of a pipeline that runs through 13 Ohio counties. After the Ohio Tax Commissioner, (the "Commissioner"), established a valuation for...
A County May Require Demolition As A Condition Of A Public Sale
September 3, 2024 - Bulletin Print Report
In May 2017, the county board, ("board"), authorized a public sale of the K property, a tax-forfeited parcel. The K property included a single-family home. The condit...
Tax Court "Harmonizes" Sections 1042(e) And 453(a)
September 3, 2024 - Bulletin Print Report
In 2002, petitioners each sold stock to an employee stock ownership plan, ("ESOP"), for $4,150,000 in which they had bases of $27,428. Thus, the sale gave rise to&nbs...
Will Carrier's Stock Repurchases Be Distributions In Partial Liquidation?
August 30, 2024 - Bulletin Print Report
Carrier Global Corporation, ("CARR"), has embarked upon what it is referring to as a"transformational journey" to become a focused, agile, higher-grow...
Taxpayer Found To Be A Professional Gambler
August 30, 2024 - Volume 18 Issue 168 Print Report
D testified that she was a "professional gambler" until October 2012 and that gambling was her full-time occupation. The State of Michigan disputed that designation b...
Untimely Petition For Review Leads To Dismissal Of The Action
August 30, 2024 - Bulletin Print Report
On January 1, 2021, the appellants were the assessed owners of three condominium units located on Quincy Street...and land improved with a multi-family building in Dorchester,&...
Motion Filed After Bankruptcy Petition Is Void Ab Initio
August 30, 2024 - Bulletin Print Report
P's business was delinquent on over $1 million in employee payroll taxes. As a result, the Internal Revenue Serviceheld him personally liable for these taxes under se...
Integrated Transaction Qualifies As An 'F' Reorganization
August 29, 2024 - Bulletin Print Report
Parent is the common parent of an affiliated group of corporations that operate in a variety of industries and join in filing a consolidated U.S. federal income tax return. Par...
I.R.S. Liberalizes The Sec. 6166(g)(1)(B) Exclusion
August 29, 2024 - Volume 18 Issue 167 Print Report
D died in April 1977. D's gross estate included an interest in X corporation that comprised more than 65 percent of the adjusted gross estate. The interest qualified as a c...
I.R.S. Requires That "Business Assets" Comprise 80% Of Total Assets
August 29, 2024 - Bulletin Print Report
D is the common parent of an affiliated group of corporations, consisting of D, C, and C1, that files a consolidated federal income tax return. &n...
Foundation Was An Institution Of Purely Public Charity
August 29, 2024 - Bulletin Print Report
Foundation, ("F"), requests an exemption from sales and use tax as a "purely public charity." The Department concluded that F did not benefit "a substa...
Deemed Sale Gain Is Not Business Income In Pennsylvania
August 28, 2024 - Volume 18 Issue 166 Print Report
During the relevant tax period, C was a wholly-owned subsidiary of V. V was a wholly-owned subsidiary of H and H was a wholly-owned subsidiary of F. In June 1994, H sold the st...
Tax Court Lacked Jurisdiction Over Whistleblower's "OVDI" Claim
August 28, 2024 - Bulletin Print Report
The I.R.S. rewards individuals who provide information to the agency that results in the collection of tax proceeds. Whistleblowers, ("W"), who provide information to...
Good Faith Belief The Business Began Allows For Avoidance Of Penalties
August 28, 2024 - Bulletin Print Report
At the start of 2016, petitioners owned two residential properties. One was held for rent and rented out during that year, and the other was sold on June 28, 2016....
Repair And Cleaning Services Were Subject To Sales Tax
August 28, 2024 - Bulletin Print Report
M is a shipping and transportation company. M hired SSA to inspect, clean, provide an estimate, and, if approved, repair its shipping containers and electrical motor generators...
Accrued Interest On Tax-Exempt Bonds
August 27, 2024 - Volume 18 Issue 165 Print Report
X, a dealer in municipal bonds, purchased certain municipal bonds on September 1, 1972. On September 15, 1972, X agreed to sell the bonds, and delivered a written confirmation...
All Elements Required For Abatement Of Penalty Were Present
August 27, 2024 - Bulletin Print Report
Respondent levied a civil penalty and interest on Ps for their untimely payment of their 2019 personal income taxes. An administrative hearing officer, ("AHO"), abate...
Section 1031's "Exchange" Requirement Was Not Satisfied
August 27, 2024 - Bulletin Print Report
S was organized in 1998 by CV and JV, (appellant-brothers). Through S, appellant-brothers each held a 50 percent tenancy-in-common interest in a hotel, (subject property). In M...
No Bona-Fide Loans Existed Between Shareholder And His 'S' Corporation
August 27, 2024 - Bulletin Print Report
In 2008, APP was the sole shareholder of AAV, an 'S' corporation. APP also owned a 95-percent limited partnership interest in OT; and a 95-percent limited partnership i...
Accrued Interest Taxable To Donor Of Bonds
August 26, 2024 - Volume 18 Issue 164 Print Report
An individual who computes his taxable income using the cash receipts and disbursements method of accounting established a trust and transferred certain corporate bonds to the...
FBAR Penalties Were Timely Assessed
August 26, 2024 - Bulletin Print Report
The Bank Secrecy Act requires U.S. taxpayers to report "any financial interests they have in any...financial accounts in a foreign country" to the I.R.S. on an annual...
Used Vehicle Was Sold To "Another Individual"
August 26, 2024 - Bulletin Print Report
Taxpayer purchased a 2023 Tesla Model 3, ("Tesla"), on October 14, 2023. Taxpayerfiled a claim for sales tax refund...based on the sale of a used 2020 Jeep Comp...
Reasonable Expectation Of Receipt Warrants Accrual Of Interest Income
August 26, 2024 - Bulletin Print Report
YA Global provided funding to portfolio companies in the form of convertible debentures, "SEDAs," and other securities. YA Global was found to be engaged in the condu...
District Court Sets Aside FTC's "Non-Compete" Rule
August 23, 2024 - Bulletin Print Report
In 1914, Congress enacted the Federal Trade Commission Act, (the "Act"), to protect consumers and promote competition. Since the...
A New Roof Is "New Construction"
August 23, 2024 - Bulletin Print Report
K owns real property consisting of an office building. In 2021, K hired a contractor to replace the roof on the building. The cost of the project was $70,053. In 2021, the prop...
Franchisor Is An "Operating Company"
August 23, 2024 - Volume 18 Issue 163 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. &...
Use Of Property Did Not Violate Zoning Laws
August 23, 2024 - Bulletin Print Report
P owns and operates a Methodist Church in Queens County (N.Y.). In 2018, P purchased an approximately 70-acre parcel of land in the Town of Callicoon, ("C"). In 2021,...
Debt Subordinated Only To Secured Debt Is Not "CAI"
August 22, 2024 - Volume 18 Issue 162 Print Report
Corporation A, (A),serves asthe common parent of an affiliated group of corporationswhich files a consolidated income tax return. As of Date 1, Corp...
Profit Generation Is Not A Charitable Use Of Property
August 22, 2024 - Bulletin Print Report
SM is a research and testing laboratory that specializes in detecting performance-enhancing substances in bodily fluids and consumer products. SM's articles of incorporatio...
Transfer Of Encumbered Property Is Subject To Realty Transfer Tax
August 22, 2024 - Bulletin Print Report
The Estate of RCA transferred real property located in Wayne County, Pennsylvania, to petitioner, SB, the Executrix of the Estate. Petitioner claimed an exemption from the real...
ARCH And CEIX Will Engage In A "Merger Of Equals" Transaction
August 22, 2024 - Bulletin Print Report
Arch Resources, Inc., ("ARCH"), and CONSOL Energy, Inc., ("CEIX"), have announced that they have entered into a definitive agreement to combine in an "...
The Willens Deal Survey August 2024
August 21, 2024 - The Deal Survey: August 2024 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
Refunded Bonds Are "Government Securities"
August 21, 2024 - Volume 18 Issue 161 Print Report
R is registered under the Investment Company Act of 1940 ('40 Act) as a diversified management company and elects to be treated as a regulated investment company (RIC). R i...
Expanded Version: Enstar Group Ltd. Agrees To A Leveraged Buyout
August 21, 2024 - Expanded Bulletin Print Report
Enstar Group Ltd., ("ESGR"), one of the legion ofinsurers and re-insurersorganized under the laws of Bermuda, recently announced that it has entered into...
Market Research Went Beyond Mere Solicitation Of Orders
August 21, 2024 - Bulletin Print Report
U is a Wisconsin-based corporation that sells industrial and packaging products. U employs sales representatives who regularly call and visit customers in Minnesota, ("M&q...
Disproportionate Distributions Did Not Create A Second Class Of Stock
August 20, 2024 - Bulletin Print Report
SEG was an 'S' corporation. There were 10,000 shares of SEG stock. M and S each owned half, and the shares were denoted as "common shares." Under Cal...
A Deemed Exchange Constitutes A Recapitalization
August 20, 2024 - Volume 18 Issue 160 Print Report
The corporation had outstanding 20x shares of $10 par value preferred stock; and 100x shares of $1 par value common stock. The outstanding stock was owned by three individuals,...
Processing Water To Make Snow Is A Taxable Sale Of "TPP"
August 20, 2024 - Bulletin Print Report
APP is a Delaware corporation with headquarters in New Jersey. Use tax applies to the storage, use, or other consumption in California of tangible personal property, ("TPP...
Expanded Bulletin: National Bank Of Canada To Acquire Canadian Western Bank
August 20, 2024 - Expanded Bulletin Print Report
National Bank of Canada, ("NA"), of Quebecand Alberta'sCanadian Western Bank, ("CWB"), announced that they have entered into a definitive ag...
U.S./U.K. Treaty Residency Requires More Than "Full Taxation"
August 19, 2024 - Bulletin Print Report
General Electric Financial Investments, ("GEFI"), a U.K. incorporated company, is part of General Electric group, the ultimate parent of which is General Electric Com...
The Purposes Of Sec. 355(d) Not Violated
August 19, 2024 - Volume 18 Issue 159 Print Report
P is the parent of an affiliated group of corporations filing a consolidated income tax return. P acquired Sub 1 on Date A (less than five years from...
Rental Activity Not Engaged In For Profit
August 19, 2024 - Bulletin Print Report
APP is a real estate investor who holds interests in pass-through entities, including DCI. In 2012, APP received a distributive share of $15,217,391 from the gain DCIAV, an aff...
Oil And Gas Lease Did Not Preclude Exemption For Public Property
August 19, 2024 - Bulletin Print Report
The subject property consists of 127 acres and is known as Astorhurst Park, ("AP"). Cleveland Metroparks, ("CM"), acquired the property in 2018. It is a pub...
Dividends On Vested Stock Are Not New York Source Income
August 16, 2024 - Bulletin Print Report
Petitioner, ("P"), successfully changed his domicile from New York to Connecticut on November 1, 2013. In 2018, he moved to Nashville, Tennessee. &nbs...
Non-Resident's COVID-19 Era Wages Were Derived From NY Sources
August 16, 2024 - Bulletin Print Report
P filed a New York non-resident and part-year resident income tax return, form IT-203, for 2020. On his return, P reported 66 days worked i...
I.R.S. Tax Lien Extinguished On Death Of Joint Tenant
August 16, 2024 - Volume 18 Issue 158 Print Report
Pursuant to a warranty deed recorded April 1, 2005, C and W were the owners as joint tenants with right of survivorship of the real property described as P1C (the "Propert...
Income From A "PPA" May Be Considered Under The "Income Approach"
August 16, 2024 - Bulletin Print Report
M owns the Mesquite Power Plant, (the "MPP"). Through a Power Purchase Agreement, (the "PPA"), between M and a group of buyers, (the "Buyers"), M...
Arizona Cardinals Must Pay Transaction Privilege Tax On Facility Use Fees
August 15, 2024 - Bulletin Print Report
The Arizona Sports and Tourism Authority, (the "Authority"), was created to construct, finance, maintain, operate, own, and promote State Farm Stadium, (the "Fac...
Prearranged Sale Breaks Sec. 351 Control
August 15, 2024 - Volume 18 Issue 157 Print Report
X transferred property to Newco in exchange for all of the stock of Newco. Pursuant to a prearranged binding agreement, X promptly sold some 40 percent of its Newco stock to Y,...
Failure To "Verify" Complaint Warranted Dismissal Thereof
August 15, 2024 - Bulletin Print Report
E designs, constructs, and repairs exhibit sets for convention center displays. Although E remitted sales tax on certain of the exhibits it constructed and sold to its customer...
Determining A Seasonal Employee's Tax Home
August 15, 2024 - Bulletin Print Report
Plaintiffs, a married couple, earn their income from two different locations each calendar year. May through September, plaintiffs reside in Alaska to run their fishing busines...
Scotiabank Will Gain An "Associate"
August 14, 2024 - Bulletin Print Report
Scotiabank announced that it has entered into an agreement to acquire "an approximate 14.9 percent pro-forma ownership stake" in KeyCorp, through an issuance of commo...
The Two-Year Myth Regarding Acquisitions Of "Spincos" Is Laid To Rest
August 14, 2024 - Bulletin Print Report
On October 2, 2023, Kellogg Company completed the separationof its cereal business through a spin-off of W.K. Kellogg, (KLG). Such spin-off wasintended to...
Franchise Fee Is Deductible As A Loss
August 14, 2024 - Volume 18 Issue 156 Print Report
TP entered into a franchise agreement in March 1986 with the primary intention of making a profit. The agreement provides that the franchisor conditionally grants the franchise...
Cases Upholding Constitutional Rights Are Retroactive
August 14, 2024 - Bulletin Print Report
Plaintiffs S and H had their homes foreclosed in Kent County in 2017. Kent County retained the surplus proceeds. On December 14, 2020, plaintiffs filed claims...seeking to obta...
AMGN's Motion To Exclude "HCR" Fees From Gross Income Is Denied
August 14, 2024 - Bulletin Print Report
Amgen, Inc., ("AI"), is the parent of a multinational group... Immunex Corporation, ("I"), is a wholly-owned subsidiary of AI. ATL, a Bermuda corporation, i...
Spin-Off Avoids The Penalties Of Sec. 355(d)
August 13, 2024 - Volume 18 Issue 155 Print Report
CP acquired all the stock of Sub 1 on Date A. The acquisition qualified as a reorganization under Sec. 368(a)(1)(A)/Sec. 368(a)(2)(E) and Sec. 368(a)(1)(B). &nb...
Lawsuit Challenging Special Assessment Was Time-Barred
August 13, 2024 - Bulletin Print Report
In 1998, the Missouri legislature adopted the "CID" Act. A CID is authorized to levy special assessments and taxes on real property within the district boundaries. On...
NOLs Do Not Enter Into A Bank's "Entire Net Income"
August 13, 2024 - Bulletin Print Report
In 2010, NB and CBT merged. The merged company was renamed S. These entities operated as banks. On its amended return for the 2011 tax year, S applied substantial losses from 2...
Erroneous Refund Of Interest Was Not A "Rebate"
August 13, 2024 - Bulletin Print Report
The Commissioner issued a refund. The refund consisted of section 6601 interest (interest on underpayments) and section 6611 interest (interest on overpayments) for the years i...
Period Of Limitations For Assessment Had Not Expired
August 12, 2024 - Bulletin Print Report
In 2015, G was finishing a medical residency program and looking for a job as a physician. Petitioner worked for Merck & Co., Inc. He worked remotely. Sometimes petitioner...
Where Distributions Exceed Available E&P
August 12, 2024 - Volume 18 Issue 154 Print Report
The value of the 1,000 shares of TMI stock on November 9, 1937 (which were distributed by GTC to its shareholders) was $225,000. The term, dividend, means any distribution made...
Writer/Researcher Activities Not Engaged In For Profit
August 12, 2024 - Bulletin Print Report
During the tax years at issue, the Ms filed Schedules C for "Writer/Researcher" activities. The court cannot conclude that MS offered her books for sale in the tax ye...
Challenge To Retroactive Tax Assessments Barred By The "TIA"
August 12, 2024 - Bulletin Print Report
C is a Colorado non-profit corporation acting on behalf of its members, who are all non-operating fractional interest owners in the "Unit." The Unit is a large deposi...
Polo Expenses Ruled Not Deductible
August 9, 2024 - Volume 18 Issue 153 Print Report
In 1973, petitioner engaged in the construction business through his wholly-owned corporation, SCI, and as a sole proprietor. Petitioner was also in the mobile home b...
Fuel Cells Are Exempt From Ad Valorem Tax
August 9, 2024 - Bulletin Print Report
F constructs, operates, and manufactures molten carbonate fuel cells. The property primarily provides electricity to the P campus. It also converts waste heat with an HRSG to h...
California Proposition 22 Does Not Conflict With The State's Constitution
August 9, 2024 - Bulletin Print Report
Under section 7451 of the Business and Professions Code, a driver for an app-based transportation or delivery company, such as Uber, Lyft, or Door Dash, is an independent contr...
A Certificate Of Merger Qualified As A "Deed"
August 9, 2024 - Bulletin Print Report
In 2006, MS, a wholly owned subsidiary of V, attempted to purchase a property. To qualify for a tax benefit, MS arranged for a third party to set up a separate LLC, "E,&qu...
Activities Rise To The Level Of A "Transaction"
August 8, 2024 - Volume 18 Issue 152 Print Report
P is an attorney. A meeting was held on April 3, 1963. At this meeting, the 13 participants agreed to take the requisite steps leading to the incorporation of a savings and loa...
Spin-Off Of Recently Purchased Business Qualified Under Section 355
August 8, 2024 - Bulletin Print Report
D, a publicly traded State A corpo...
WBO Award Percentage Was Not Arbitrary Or Capricious
August 8, 2024 - Bulletin Print Report
While in the employ of an investme...
Chippewa Lawyer Not Exempt From Self-Employment Tax
August 8, 2024 - Bulletin Print Report
B is an enrolled member of the Minnesota Chippewa Tribe. For the 2016 and 2017 tax years, B earned self-employment income from his law practice. B reported a large net operatin...
The Service Refuses To Follow "John Richard"
August 7, 2024 - Volume 18 Issue 151 Print Report
In John Richard Corp. v. Commissioner , 46 T.C. 41 (1966), nonacq ., 1974-2 C.B. 5, the taxpayer's property was involuntarily converted and in ord...
Claim For Sale Tax Was Properly Dismissed
August 7, 2024 - Bulletin Print Report
CT purchased personal automobile insurance coverage from RIC, and it issued her a policy. The policy contains two relevant provisions: "Limit of liability:" "Our...
Defeasance Costs Were "Loan Interest Costs"
August 7, 2024 - Bulletin Print Report
E is a New York limited liability company. F is a Delaware limited partnership. FR is F's general partner. In 2005, E acquired an option to purchase property, the "Guc...
Leased Hangars Used Exclusively For Public Purposes
August 7, 2024 - Bulletin Print Report
The subject property comprises a portion of the MiddletownRegional Airport. Each parcel contains an air aircraft hangar. Middletown leases the hangars to private individu...
Debenture Exchange Is A "Reshuffling Of The Capital Structure"
August 6, 2024 - Volume 18 Issue 150 Print Report
In 1937, the taxpayers, the trustees of a trust created under the last will and testament of a decedent, exchanged their holdings of 20 year six percent debentures of PP for a...
Documentary Evidence Trumped Testimony And Affidavits As To The "PRE"
August 6, 2024 - Bulletin Print Report
This dispute concerns petitioner's ownership and occupancy of a parcel of real property, (the "Barnes Street property"). Respondent denied petitioner's reques...
"CPACE" Assets Are "Qualified Mortgages"
August 6, 2024 - Bulletin Print Report
S is a limited liability company. S has issued several limited liability company interests, one of which is C. C holds "CPACEAssets" and intends to make one or...
Untimely Service Of Summons Warranted Dismissal
August 6, 2024 - Bulletin Print Report
W owns real property that is improved with ethanol production facilities. W protested the valuations set by the assessor on this property. The Board denied these protests and a...
KO On The Brink Of An Historic Deficiency
August 5, 2024 - Bulletin Print Report
On July 31, 2024, the United StatesTax Court issued a "decision and order" in which it was confirmed that Coca-Cola Co., ("KO"), owes the I.R.S. appro...
Non-Resident's Covid-Era Income Derived From Massachusetts
August 5, 2024 - Bulletin Print Report
APP was a resident of New Hampshire and worked asan attorney-advisor with NOAA, a federal agency within the Department of Commerce. APP's office was located in Massac...
Uniti Group And Windstream Propose A Complex Business Combination
August 5, 2024 - Bulletin Print Report
Uniti Group, Inc., ("UNIT"), is a real estate investment trust, ("REIT"). UNIT recently announced that it has entered into a definitive agreement to "m...
Inversion Qualifies Under Sec. 351
August 5, 2024 - Volume 18 Issue 149 Print Report
P is a regulated, Country X utility corporation primarily engaged in Business A. P has two classes of stock outstanding: common stock and preferred stock. H is a Country X corp...
Unemployment Compensation Is Includible In NYS Adjusted Gross Income
August 2, 2024 - Bulletin Print Report
On April 12, 2021, petitioner filed form IT-201. Petitioner's form IT-201 reported Federal and New York State adjusted gross income of $8,191.00. The Division issued petiti...
A Cell Tower Was Not A "Fixture"
August 2, 2024 - Bulletin Print Report
W was formerly the owner of a parcel of real property upon which a commercial building is situated, ("P1"). It also owned another parcel, "P2," upon which a...
Pipelines Are Not "Industrial Plants"
August 2, 2024 - Bulletin Print Report
The constitutional provision exempts from property tax "all facilities or equipment of industrial plants which are designed for the elimination...of wat...
Emerson's Challenge To South Carolina's Tax System Rebuffed
August 2, 2024 - Volume 18 Issue 148 Print Report
Emerson Electric, (E), and its subsidiariestimely filed consolidated income tax returns for South Carolina in fiscal years 1999 through 2002. E properly exclude...
Seat Selection And Online Booking Fees Are Paid For Transportation
August 1, 2024 - Bulletin Print Report
1. Passenger purchases an economy ticket for a domestic flight on Airline. Before the flight, Passenger pays a separate amount or a higher fare to select a particular seat on t...
Canadian Retirement Savings Plan Not Exempt From Bankruptcy Estate
August 1, 2024 - Bulletin Print Report
G filed for Chapter 7 bankruptcy on May 11, 2021. His petition listed the "Sun Life Income Fund,"(the "SL Fund"), a Registered Retirement Savings Plan...
Liability For Damaged Goods Is Incurred When Paid
August 1, 2024 - Volume 18 Issue 147 Print Report
TP is a professional moving company. When a customer engages TP to provide moving services, TP and the customer execute a bill of lading, or contract, providing the level of TP...
A Section 6695A Penalty Is A "Tax" For Purposes Of The AIA
August 1, 2024 - Bulletin Print Report
This suit concerns conservation easements and the tax deductions that property owners receive for them. Congress included a provision allowing the I.R.S. to impose penalties on...
Tax Deed Not Timely Recorded Is Invalid
July 31, 2024 - Bulletin Print Report
The source deed for the property is dated October 24, 1823, conveying it from HHBto AH. AH died intestate in 1832, survived by his wife, AN, and six children. Sixty years...
Worthless Stock Loss Not A Product Liability Loss
July 31, 2024 - Volume 18 Issue 146 Print Report
TP, Sub 1, and Sub 1's subsidiaries were members of an affiliated group of which P was the common parent. They joined P in the filing of a consolidated income tax return.&n...
Basis Includes Valid Liabilities Incurred In Acquiring Property
July 31, 2024 - Bulletin Print Report
From May to September, MR and MRS fished commercially out of Alaska. The rest of the year MR ran a boat fabrication business in Oregon. MR owns his fishing vessel. He bought it...
A "PSTO" Is Not A "Public Auction"
July 31, 2024 - Bulletin Print Report
R applied for homeowner insurance from Nationwide Mutual Insurance Company, ("NMIC"). NMIC issued the policy, but after a fire damaged the insured house, refused to p...
ESGR Agrees To A Leveraged Buyout
July 30, 2024 - Bulletin Print Report
Enstar Group Ltd., ("ESGR"), organized under the laws of Bermuda, recently announced that it has entered into a definitive merger agreement pursuant to which Sixth St...
Incyte Corporation Will Engage In A "Series Of Redemptions"
July 30, 2024 - Bulletin Print Report
Incyte Corporation, ("INCY"), is offering to purchase, using theso-called "Dutch Auction" mechanism, up to $1.672 billion in value of its common stock...
Delivery Of Stock To Agent Is Not A Disposition Thereof
July 30, 2024 - Volume 18 Issue 145 Print Report
The taxpayer was a corporate executive who had acquired stock of his employer by virtue of the exercise of a "qualified" or "statutory" stock option granted...
Leased Property Is Considered "Acquired"
July 30, 2024 - Bulletin Print Report
Plaintiff, ("P"), is a general hospital licensed by the department. It is a registered public charity. P is a wholly owned subsidiary of BHC, which is a corporate ent...
IGT's Partial Liquidation Prospects
July 29, 2024 - Bulletin Print Report
International Game Technology PLC, ("IGT"), and Everi Holdings, Inc., ("EHI"), recently announced that they have entered into a definitive agreement "w...
Option Stock Disposed Of Too Early
July 29, 2024 - Volume 18 Issue 144 Print Report
The taxpayer was a corporate executive and acquired stock in the corporation pursuant to his exercise of a qualified stock option. A few months after his acquisition of this st...
Rental Real Estate Losses Were Found To Be Strictly "Passive"
July 29, 2024 - Bulletin Print Report
Petitioners claimed a deduction in the amount of $16,426.00 for losses from rental real estate activities for three rental properties located in Brooklyn, New York. The Divisio...
Devisee's Interest In Real Property Vests At Time Of Death
July 29, 2024 - Bulletin Print Report
The real property at issue was owned by B-H who died on December 13, 2019. B-H's will devised her real and personalproperty to L, her niece. At some point before B-H&...
Standard General Moves To Annex Control Of Bally's Corporation
July 26, 2024 - Bulletin Print Report
Bally's Corporation, ("BALY"), recently announced that it has entered into a definitive merger agreement pursuant to which Standard General, L.P., ("Standard...
Prearranged Sale Breaks Control
July 26, 2024 - Volume 18 Issue 143 Print Report
X and Y are engaged in business A. S is a wholly-owned subsidiary of X. X, S, and Y formed N. X and Y each received 10,000 shares of N voting common stock and 40,000 shares of...
Control Sufficient For Imposition Of Use Tax Found
July 26, 2024 - Bulletin Print Report
Plaintiff, ("P"), is a life insurance company headquartered in Michigan. P sells three products. P conducts thirteen mail advertisement campaigns each year. Since 199...
Sale Of Property And A Service Not A Taxable "Bundled" Transaction
July 26, 2024 - Bulletin Print Report
Company is an online provider of ancestral and health history reports to individual customers. The reports are generated from Company's analysis of the customers' DNA (...
The Willens Deal Survey July 2024
July 25, 2024 - The Deal Survey: July 2024 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
Preferred Stock Not Classified As Indebtedness
July 25, 2024 - Volume 18 Issue 142 Print Report
P accounts for its income on the accrual basis. P owns S. S sold the stock of three subsidiaries, S-1, S-2, and S-3, in 1979 to Z for cash, an interest-bearing note, and $100 p...
Untimely Appeal Not Due To Non-Negligent Circumstances
July 25, 2024 - Bulletin Print Report
On August 23, 2022, the City of Philadelphia issued a Notice of Decision, (the "Notice"), denying APP's "Nunc Pro Tunc Market Value Appeal" related to r...
Non-Resident's Aircraft Lease Subjected It To Use Tax In Illinois
July 25, 2024 - Bulletin Print Report
T has never had Illinois, ("I"), offices or I-based employees. On December 18, 2015, T purchased the "Aircraft" in Connecticut. T was listed as the purchase...
Full-Time Employee Was Not A "Real Estate Professional"
July 25, 2024 - Bulletin Print Report
Petitioners claimed a rental real estate loss deduction of $22,376 in 2020.MS worked approximately forty hours a week as a full-time employee, as did MR. During 2020, whi...
Section 751 "Inventory Gain" Is Not Gain From The Sale Of Inventory
July 24, 2024 - Bulletin Print Report
Gain on the sale of a partnership interest is taxed as a capital gain, except that it is taxed as ordinary income to the extent the gain is attributable to section 751(a) prope...
Accrual Method Taxpayer Reports Face Amount Of Notes Received
July 24, 2024 - Volume 18 Issue 141 Print Report
TP is an 'S' corporation employing the accrual method of accounting. O owns all the stock of TP. TP operates an automobile dealership. TP sells new and used automobiles...
Failure To Request Alternative Apportionment Leads To Dismissal Of Case
July 24, 2024 - Bulletin Print Report
Plaintiff, MGM Grand Detroit, Inc., is the designated member of a Michigan unitary business group, ("UBG"). In 2018, a UBG member, MES, sold its fifty percent interes...
Decedent Did Not Complete A Pension Plan's Beneficiary Election Process
July 24, 2024 - Bulletin Print Report
S is the surviving sister of decedent Y. The Plan is a pension plan organized under ERISA. K is the administrator and named fiduciary. Y was a participant in the Plan. After Y&...
Does It Pay To Pay For NOLs?
July 23, 2024 - Bulletin Print Report
A net operating loss, ("NOL"), is undoubtedly a valuable asset. An NOL can be used to offset otherwise taxable income. With federal corporate tax rates currently set...
"IRD" Requires A "Right" To Income
July 23, 2024 - Volume 18 Issue 140 Print Report
The issue is this appeal is whether the trial court erred in holding that the gain realized on the sale of corporate stock was taxable as "income in respect of a decedent&...
An Assessment May Be Made Against A Bulk Sale Purchaser's "RP"
July 23, 2024 - Bulletin Print Report
Petitioner, ("P"), is the sole owner and managing member of BW, P, and GF. In 2008, the assets of two restaurants owned and operated by CF were transferred to BW. The...
Statutory Ambiguity Not Resolved In Taxpayer's Favor
July 23, 2024 - Bulletin Print Report
E produces oil and gas from wells in North Dakota, ("ND"). E purchased and paid ND sales tax on oilfield equipment, including separators, for several facilities. E ap...
Contractor Not Eligible For "Direct Use" Exemption From Use Tax
July 22, 2024 - Bulletin Print Report
The separate business activities at issue in this appeal are (1) utility construction for municipalities and PSDs, and (2) the production, processing, and storage of limestone...
Dominion Energy, Inc. Is Offering To Redeem Its Preferred Stock
July 22, 2024 - Bulletin Print Report
Dominion Energy, Inc., ("D"), has launched a self-tender offer in connection with which it is offering to purchase for cash "any and all of its outstanding 4.65...
District Court Cannot Restrain Assessment Of Local Property Tax
July 22, 2024 - Bulletin Print Report
Plaintiff, ("P"), owns real property in Anchorage, Alaska. P alleges that an MOA employee entered the property without written consent...in order to gather informatio...
Florida Recognizes Sec. 338(h)(10)
July 22, 2024 - Volume 18 Issue 139 Print Report
TP is a wholly-owned subsidiary of P. TP is negotiating with an unrelated corporation, B, to sell the stock of its subsidiary, S, for cash. TP and B will make a joint election...
Illinois Taxpayer Not Denied "Equal Protection"
July 19, 2024 - Volume 18 Issue 138 Print Report
A, a corporation, simultaneously pursued an IPO and also a "private transaction." The shareholders ultimately elected the private transaction. In the private transact...
Fees To Procure Use Of A Recreational Facility Are Subject To Sales Tax
July 19, 2024 - Bulletin Print Report
Petitioner owns and operates a...franchise "primarily dedicated to offering classes...to its members." Petitioner provides all equipment necessary for the classes. Pe...
Enhanced FBAR Penalties Were Properly Assessed
July 19, 2024 - Bulletin Print Report
V opened a Swiss bank account and, from 2006 to 2011, failed to report the account's existence to the United States. The United States seeks to impose a penalty on V for hi...
Personal Services Not Subject To Massachusetts Sales Tax
July 19, 2024 - Bulletin Print Report
Company, ("C"), is in the business of providing DNA testing and analysis, including ancestral and health history reports, to individual customers located throughout t...
Stock Acquisition And "Upstream" Merger Treated As Single Transaction
July 18, 2024 - Volume 18 Issue 137 Print Report
X organizes Y, a newly-formed wholly-owned subsidiary. Pursuant to an integrated plan, X acquires all of the stock of T in a statutory merger of Y into T, with T surviving. In...
Mortgage Recording Tax Apportioned On The Basis Of Assessed Value
July 18, 2024 - Bulletin Print Report
On March 18, 2020, petitioner executed a mortgage in favor of CO in the original principal amount of $10 million, covering three parcels located in Nassau County and three parc...
Rhode Island Claim For Refund Or Credit Not Timely Filed
July 18, 2024 - Bulletin Print Report
TP's 2019 non-resident Rhode Island, ("RI"), income tax return was due on July 15, 2020 rather than the usualApril 15, 2020 because of the COVID-19 pandemic...
The "548 Day" Exclusion Was Inapplicable
July 18, 2024 - Bulletin Print Report
On January 13, 2020, petitioners each filed non-resident and part-year resident income tax returns for 2015 as married filing separate returns. MR reported federal adjusted gro...
VSTO Poised To Close CSG Deal
July 17, 2024 - Bulletin Print Report
VSTO is only days awayfrom conveninga Special Meeting of Shareholders in which the company hopes to gain approval for the acquisition by CSG of VSTO's suddenly...
LLC With Two Members Is Disregarded
July 17, 2024 - Volume 18 Issue 136 Print Report
A is the sole owner of property (Property) part of which is rented to unrelated third persons for residential use, and the remainder of which is used by A himself for residenti...
Transfer Of Interest In A "Real Estate Company" Not Subject To Tax
July 17, 2024 - Bulletin Print Report
In 1994, S purchased real property ("Real Property"). S is a limited liability partnership and is a "real estate company" as that term is defined in section...
Failure To File Information Leads To Dismissal Of Petition
July 17, 2024 - Bulletin Print Report
On April 28, 2023, K failed a petition challenging the market value of the subject property. The subject property contains 54 rental units and operated as an apartment building...
Horse Boarding Activity Engaged In For Profit
July 16, 2024 - Bulletin Print Report
H operated a horse boarding activity from plaintiff's residential property. H reported losses from the activity from 2015 through 2022. He reported a profit for the first t...
"Cohan Rule" Used To Determine Basis In A Principal Residence
July 16, 2024 - Bulletin Print Report
Appellants, ("APPs"),purchased the Residence in 1982 for $375,000. After substantial remodeling, repairing, and new construction, the size of the Residence incr...
SSD Benefits Are Not "Damages"
July 16, 2024 - Bulletin Print Report
Petitioner worked as a practicing physician in California for Southern California Permanente Medical Group, ("Medical Group"), until March 2009, when she suffered a p...
"Purge" Sale To A Shareholder Permitted
July 16, 2024 - Volume 18 Issue 135 Print Report
X is a corporation engaged in the business of banking. Y is a corporation engaged in business as a holding company. Y holds "d%" of the stock of X....
Are D-I Athletes Eligible For The Protections Of The FSLA?
July 15, 2024 - Bulletin Print Report
The issue raised by this interlocutory appeal is not whether the athletes before us are owed the protection of the Fair Labor Standards Act, (the "FSLA"), but, rather...
Sec. 1248(b) Applies To 'S' Corporation Shareholder
July 15, 2024 - Volume 18 Issue 134 Print Report
A owns "D%" of the stock of B and has held it in excess of one year. B is an 'S' corporation. B's sole asset is "E%" of the shares of C, a F cor...
Interest Income Was "Sourced" To The Location Of The Borrowers
July 15, 2024 - Bulletin Print Report
U.S. Bank, ("USB"), is a national bank and a wholly owned subsidiary of U.S. Bancorp. USB is headquartered in Minnesota; and is engaged in the banking business in Sou...
Purchased Reagents Were Not "Dispensed" To Specific Patients
July 15, 2024 - Bulletin Print Report
A and L are subsidiaries of Q. Each conducts clinical laboratory testing operations. The appellants, ("A"), perform tests on human specimens (tissue) and samples (flu...
Income From Short Sale Is Not Regarded As "UBTI"
July 12, 2024 - Volume 18 Issue 133 Print Report
Q is an organization exempt from Federal income tax under Sec. 501(a) of the Code. On January 2, 20xx, Q instructs its broker to sell A stock "short." Q, through its...
Support Payments Made After "TCJA" Constitute Alimony
July 12, 2024 - Bulletin Print Report
TP and Spouse executed a Postnuptial Agreement, (the "Agreement"), on Date 1 (prior to December 31, 2018), that contemplates each spouse's respective rights and o...
Failure To Update Driver's License Cost Taxpayer A "PRE"
July 12, 2024 - Bulletin Print Report
P and his wife previously lived with his parents... P purchased the property in September of 2018. According to the evidence presented by P, he and his family moved to the prop...
Section 7436's Filing Deadline Is Not Jurisdictional
July 12, 2024 - Bulletin Print Report
Petitioner, ("P"), did not file quarterly employment tax returns during the years 2016 and 2017. Following an audit, respondent issued a notice of employment tax dete...
Redemption Interest Expense Deductible For NYC UBT Purposes
July 11, 2024 - Bulletin Print Report
A&E Television Networks, LLC, ("AE"), is involved in the creation, acquisition, and distribution of television programming and other content... AE is a partnershi...
Eligible Entity With Two Local Law Members Is Not A Partnership
July 11, 2024 - Volume 18 Issue 132 Print Report
X, a domestic corporation, is the sole owner of L, a domestic limited liability company. Under Reg. Sec. 301.7701-3(b)(1), L is disregarded as an entity separate from its owner...
When Is A Refund Made?
July 11, 2024 - Bulletin Print Report
On May 5, 2017, the I.R.S. mailed P a check for his 2016 tax refund. The I.R.S. made a clerical error. The refund was excessive. On April 5, 2018, P cashed the check. On March...
South Carolina's "DME" Exemption Is Unconstitutional
July 11, 2024 - Bulletin Print Report
Respondents are Delaware corporations, and each has its principal place of business out of state. They each hold a South Carolina, ("SC") retail sales license and sel...
PA. Taxes Not Added Back In Computing N.J. Entire Net Income
July 10, 2024 - Volume 18 Issue 131 Print Report
Plaintiff, (P), is a Pennsylvania (PA) corporation engaged in the business of selling and distributing electricity. In determining its federal taxable income for 1999 and 2000,...
Primo Water And Poland Spring Will Combine Their Resources
July 10, 2024 - Bulletin Print Report
Primo Water Corporation, ("PRMW"), a Canadian corporation, and "an affiliateof BlueTritonBrands, Inc.," ("BT"),whose familiar br...
Declaratory Judgment Action Denied For Lack Of Jurisdiction
July 10, 2024 - Bulletin Print Report
TSF is a Colorado non-profit corporation. TSF filed an application for exemption from property taxation with the PVA, which was denied. TSF appealed the denial to the Local Boa...
Motion To Distribute "Surplus" Foreclosure Sales Proceeds Dismissed
July 10, 2024 - Bulletin Print Report
The Michigan Supreme Court held in Rafaeli, LLC v. Oakland Co, 505 Mich 429 (2020), that former owners of properties sold at tax-foreclosure sales for more t...
PARA To Engage In A (Non-Leveraged) Recapitalization
July 9, 2024 - Bulletin Print Report
The "Transaction Agreement" entered intoby Skydance Media, LLC, ("SM"), and Paramount Global Corporation,("PARA"), documents the multi...
"Facility Fees" Not Currently Deductible
July 9, 2024 - Volume 18 Issue 130 Print Report
On Date 1, Company, (C), entered into two revolving credit agreements (Agreements) with a consortium of banks. C borrowed the full amount available under the Agreements.<...
Owner Of Multiple Properties Denied Michigan "PRE"
July 9, 2024 - Bulletin Print Report
Michigan's principal residence exemption, ("PRE"), is at issue in this case. Petitioner ownstwo residential properties, one located in Michigan, (the "...
Repeal By Implication Is Disfavored
July 9, 2024 - Bulletin Print Report
This case sits at the intersection of two credits that seek to encourage research, the "research credit," and the "orphan drug credit." Section 45C(c) provi...
Revoking A Sec. 83(b) Election
July 8, 2024 - Volume 18 Issue 129 Print Report
On Date 1, Y was granted an award of "x" shares of Employer common stock. On Date 2, Y filed an election under Sec. 83(b) with the Internal Revenue Service Center whe...
No Equitable Exception To Imposition Of Section 72(t) Tax
July 8, 2024 - Bulletin Print Report
Petitioner's mother purchased a home in Maryland, ("property"), in 2009. Petitioner's mother was diagnosed with breast cancer in 2010. Around 2015, petitioner...
Complaint Filed One Day Late
July 8, 2024 - Bulletin Print Report
C is a Georgia corporation that specializes in installing fiber-optic cable. The Department issued an assessment. C requested a conference. The Department upheld the assessment...
Waste Treatment Facility Not Eligible For "EFU" Special Assessment
July 8, 2024 - Bulletin Print Report
The subject property is a portion of a farm consisting of four tax lots. Defendant issued a notice of disqualification removing 27.31 acres of the subject property from Exclusi...
Aggregate Theory Applies In Determining Application Of Sec. 1032
July 5, 2024 - Volume 18 Issue 128 Print Report
A, a corporation, and B, an individual, formed AB partnership. A contributes 100 shares of its own stock, valued at $100x, with a basis of zero, to AB in exchange for 50 percen...
Unitary Business Groups Must File A Combined Return
July 5, 2024 - Bulletin Print Report
Petitioner filed separate returns but later filed amended combined returns with the other members of the Unitary Business Group, ("UBG"). Respondent rejected them. Pe...
Duplexes Were Not "Retirement Homes For The Aged"
July 5, 2024 - Bulletin Print Report
PH is a non-profit entity that owns and operates housing facilities ranging from independent living facilities to long-term skilled nursing facilities. In 2019, PH purchased fo...
Activities Exceeded Mere Solicitation Of Orders
July 5, 2024 - Bulletin Print Report
S is a New Mexico corporation selling branded tobacco products to wholesalers, who in turn sell to Oregon retailers. 15 U.S.C. section 381(a) provides: "No State...shall h...
An "Unadorned" Spin-Off Is Not A "Reorganization"
July 3, 2024 - Bulletin Print Report
A "spin-off," if the manifold requirements of section 355(a) are satisfied, does not result in gain recognition or income inclusion forthe recipients of the sto...
An APA Claim Does Not "Accrue" Until "The" Plaintiff Is Injured
July 3, 2024 - Bulletin Print Report
CP is a truck stopand convenience store located in North Dakota. CP accepts debit cards. Every transaction requires CP to pay an "interchange fee" to the bank t...
Duke Energy Is A "Manufacturer"
July 3, 2024 - Volume 18 Issue 127 Print Report
Duke Energy Corporation, (DE), generates electricity and sells it to customers. Because it does business in each of North Carolina and South Carolina, DE must allocate its inco...
Rescinding An LLC's Certificate Of Dissolution And Termination
July 3, 2024 - Bulletin Print Report
On November 20, 2003, S, (the "LLC"), was created as a New Jersey limited liability company. The LLC owns and operates a Ramada Inn. The LLC holds a liquor license. O...
A Bankruptcy Plan Cannot Discharge Claims Against Non-Debtors
July 2, 2024 - Bulletin Print Report
In the mid-1990s, Purdue Pharma L.P., ("P"), began marketing OxyContin, ("OC"), an opioid prescription pain reliever. Pwas a "family company"...
BA's Acquisition Of SPR Should Be A Reorganization
July 2, 2024 - Bulletin Print Report
Spirit AeroSystemsHoldings, Inc., ("SPR"), announced it has entered into a definitive merger agreement under which The Boeing Company, ("BA"), "w...
The Scope Of Sec. 165(c)(2)
July 2, 2024 - Volume 18 Issue 126 Print Report
An individual taxpayer began to search for a business to purchase. The individual placed advertisements in newspapers, and traveled to various locations to investigate various...
Foreign Subsidiaries Are Not "Unitary Corporations"
July 2, 2024 - Bulletin Print Report
TP conducted its business through domestic and foreign subsidiaries. In March 2017, the Taxation and Revenue Department, (the "Department"),issued a notice of a...
"Chevron Deference" Is Violative Of The "APA"
July 1, 2024 - Bulletin Print Report
"Our Chevron doctrine requires courts to use a two-step framework to interpret statutes administered by federal agencies." A reviewing court must f...
NOK's ADSs Will Be Taxable
July 1, 2024 - Bulletin Print Report
Nokia Corporation, ("NOK), a corporation organized under the laws of Finland, and InfineraCorporation, ("INFR"), a domestic 'C' corporation organiz...
Damages for "Lost Wages" is Includible in Gross Income
July 1, 2024 - Volume 18 Issue 125 Print Report
Several times in the years 2002-2005, R, an individual, submitted job applications to the City of Chicago, but her applications were not given fair consideration....
Failure To Comply With Statutory Service Requirements Was Fatal
July 1, 2024 - Bulletin Print Report
LC's petition had to be filed and served no later than August 24, 2022. LC filed its petition with the clerk of the circuit court on August 22, 2024. On August 23, it prope...
The I.R.S. Should Temper Its "Integrated Transaction" Proclivities
June 28, 2024 - Bulletin Print Report
A corporation acquires all of the stock of another corporation and, pursuant to its avowed plan, the acquiring corporation causes the acquired corporation to completely liquida...
Accounting For Commitment Fees Or "Standby" Charges
June 28, 2024 - Volume 18 Issue 124 Print Report
In Rev. Rul. 56-136, 1956-1 C.B. 92, the Service held that commitment fees incurred pursuant to a bond sale agreement under which funds for construction are made available in s...
Free Mobile Phones Were Subject To Use Tax
June 28, 2024 - Bulletin Print Report
Throughout West Virginia, ("WV"), S and its affiliates own and maintain wireless network equipment. S's physical network infrastructure is utilized by Sprint'...
Church Property Leased To For-Profit Daycare Operator Is Exempt
June 28, 2024 - Bulletin Print Report
LM was the owner of certain real property, (the "church property"). LM has operated a church on the church property. LM is a tax-exempt organization. In June of 2021,...
Unamortized Fees Deductible In Year Of Liquidation
June 27, 2024 - Volume 18 Issue 123 Print Report
P was engaged in the business of owning and operating a hotel. On January 1, 1941, P borrowed $167,000 from GSLIC, evidenced by a first mortgage real estate note providing for...
Hypothecation Loans Are "Real Estate Assets"
June 27, 2024 - Bulletin Print Report
TP is a real estate investment trust, (a "REIT"). A third-party lender, ("B"), originated and made the initial advance on a loan, (the "Construction Lo...
Qualified Settlement Funds Are Section 361(b) Creditors
June 27, 2024 - Bulletin Print Report
D is the parent of worldwide group of entities, (the "DWG"). D proposes to separate Business B from the Retained Businesses. D has Third-Party Debt, Litigation Obliga...
Electronic Dance Music Events Are "Live Musical Arts Performances"
June 27, 2024 - Bulletin Print Report
W was a New York City-based "music event" company. W's primary business concerned the operation of a music venue called "Output," located in Brooklyn, N...
Only Net Income From "FECs" Included In Sales Factor
June 26, 2024 - Bulletin Print Report
DuPont, ("D"), conducts significant international operations resulting in a large number of currency transactions. For U.S. financial reporting purposes, and in line...
Parent Paid Bonuses To Subsidiary's Employees
June 26, 2024 - Volume 18 Issue 122 Print Report
In 1980, Parent (P) established a bonus program for the employees of its wholly-owned subsidiary, S. Under the program, P pays cash bonuses in December of each year to S's...
Extracted Materials From The Earth Are Tangible Personal Property
June 26, 2024 - Bulletin Print Report
Taxpayer, a builder of custom homes, was assessed the use tax on various items purchased for its own use. Taxpayer filed an application for correction contending that dirt and...
Sales Tax Properly Imposed On Purchase Of Vehicle
June 26, 2024 - Bulletin Print Report
On June 24, 2023, Taxpayers purchased a 2004 Honda Pilot, ("P"), for $9,000.00. On July 8, 2023, Taxpayers privatelysold a 2005 Honda CRV, ("CRV"), fo...
The Willens Deal Survey June 2024
June 25, 2024 - The Deal Survey: June 2024 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
Transfer Of Target Stock Does Not Preclude A Sec. 338 Election
June 25, 2024 - Volume 18 Issue 121 Print Report
P is a holding company and is the common parent of an affiliated group with which it files a consolidated income tax return. T is a holding company and is also the common paren...
Failure To Provide Adequate Notice Invalidates Election
June 25, 2024 - Bulletin Print Report
In the fall of 2020, the defendant/appellee, the Board, sought a voter-approved lodging tax increase to raise funds for the Hospital. The proposition was published four weeks i...
The "TIA" Bars A Challenge To Kansas City's Earnings Tax
June 25, 2024 - Bulletin Print Report
This case arises from T's allegation that the City of Kansas City's earnings tax is unconstitutional because it does not allow him to claim a credit for the full amount...
Purchases Of Tangible Personal Property Not Subject To Sales/Use Tax
June 24, 2024 - Bulletin Print Report
APP holds a contract with the United States Department of Energy, (the "DOE"), National Nuclear Security Administration, ("NNSA"), to manage and operate a f...
"Non-Recent" Sale of Property Not Evidence Of Its Value
June 24, 2024 - Bulletin Print Report
The subject property consists of three residential properties and one commercial property. The Auditor valued the four parcels at a total value of $576,800. The Board of Educat...
The I.R.S. May Pursue Unsecured Claims Against An Alter Ego
June 24, 2024 - Bulletin Print Report
D and H are Florida limited liability companies whose membership interests are owned by the same individuals. In 2002, D purchased real property in Tampa, Florida, (the "P...
LLC Is Not A Partnership
June 24, 2024 - Volume 18 Issue 120 Print Report
A is the grantor of Trust, (T). Under Sec. 671 of the Code, all of the income, deductions, and credits of the trust are those of A. On Date...
The "Mandatory Repatriation Tax" Is Constitutional
June 21, 2024 - Bulletin Print Report
Since 1962, Congress has taxed...controlled foreign corporations as "pass-throughs" (with respect to the controlled foreign corporation's"subpart F inc...
Petitioner's Purchases Of Drugs Were Made Under A Medicare Part B Plan
June 21, 2024 - Bulletin Print Report
F operates a Medicare-certified dialysis clinic. F orders prescription drugs through FMC's procurement system. ABC sold prescription drugs to FMC through ABC's specialt...
Reimbursements For Complementary Hotel Stays Is "Gross Receipts"
June 21, 2024 - Bulletin Print Report
DM participates in the Rewards Program, ("RP"), pursuant to the Participation Agreement, ("PA"). The RP is operated and administered by Marriott Rewards, (&...
Illumina Must Be Using The Expansion Doctrine To Facilitate Its Spin-Off
June 21, 2024 - Bulletin Print Report
It is widely believed that one ofthe least successful deals of the recent past wasIllumina, Inc.'s acquisition of GRAIL, Inc. This ill-fatedacquisition to...
Compensatory Transfers Not Subject To Gift Tax
June 21, 2024 - Volume 18 Issue 119 Print Report
In 1979, A and B, the founders of X, each owned 50 percent of the stock of X. On December 31, 1979, A and B each transferred 100 shares of X stock to N, C, and P as a bonus in...
Would A Takeover Imperil BATRA's Split-Off?
June 20, 2024 - Bulletin Print Report
There are preciousfewpublicly traded professional sports franchises. A recent entry into this select category is Atlanta Braves Holdings, Inc., ("BATRA"),...
Prior Protest Did Not Bar A Current Motion
June 20, 2024 - Bulletin Print Report
J leases, sells, and services natural gas compressors. This case involves the taxation of compressors maintained in EC that were leased to customers in SC and IC. In 2011, the...
Liberty's Adjustments To Split-Off Plan Seem Ministerial
June 20, 2024 - Bulletin Print Report
Liberty Media Corporation, ("LMC"), is poised to complete, a split-off in which it will be removing from the Liberty family of corporations, its 84 percent stake in S...
Passive Members Of LLC Are "Responsible Persons"
June 20, 2024 - Volume 18 Issue 118 Print Report
Ask 244, LLC, (the LLC), was assessed (New York) sales and use tax for the period June 1, 2004-May 31, 2009 in the amount of $735,899.91 plus interest. &...
Receivership Does Not Terminate Membership In Consolidated Group
June 20, 2024 - Bulletin Print Report
Parent is the common parent of a consolidated group, ("Parent Group"). Parent owns all the stock of Subsidiary, an insurance company subject to tax under section 831...
Suspended Corporation Has No Capacity To Sue
June 18, 2024 - Bulletin Print Report
XC Foundation, ("XC"), appeals from a Tax Court decision dismissing, for lack of jurisdiction, its petition for declaratory judgment. XC's petition challenged the...
What Is A "Charitable Contribution?"
June 18, 2024 - Volume 18 Issue 117 Print Report
In 2006, Mr. and Mrs. Kalapodis (K) received $75,000 in life insurance proceeds from the passing of their son. K used the proceeds to establish a Memorial Scholarship Fund in h...
Energy Transfer's Suit Challenging New Jersey's "PFF" Was Dismissed
June 18, 2024 - Bulletin Print Report
In 2002, New Jersey enacted the Business Tax Reform Act, which imposed a partnership filing fee, (the "PFF"), on companies with "any income derived from New Jers...
Disabled Veteran Allowed An Exemption For Her "Residence Homestead"
June 18, 2024 - Bulletin Print Report
Y and G are married, and each is a 100 percent disabled U.S.A.F. veteran. In 2012, when they lived together in their jointly owned San Antonio home, G applied for a tax exempti...
A "Statutory Merger" Entails Absorption By One Corporation Of Another
June 17, 2024 - Bulletin Print Report
PHH Holdings Corporation, ("PHHH"),was a wholly-owned subsidiary of PHH Corporation, ("PHHC"). PHHC, in turn, was wholly owned by Cendent Corporation....
Legal Fees Not Deductible
June 17, 2024 - Volume 18 Issue 116 Print Report
The California Franchise Tax Board (FTB) received information from the I.R.S. indicating that that agency disallowed a Schedule A itemized miscellaneous deduction related to le...
Accuracy-Related Penalty Properly Imposed
June 17, 2024 - Bulletin Print Report
S formed RS on February 17, 2011. RS elected to be taxed as an 'S' corporation. RB entered into collective bargaining agreements, ("CBAs"), with Local 813, a...
Indemnity Agreement Covered First-Party Claims
June 17, 2024 - Bulletin Print Report
M wanted to eliminate his tax liability from the sale of his insurance company. He hired a firm that had pitched him a tax-avoidance scheme that involved creating several trust...
Death Benefits Classified As Income In Respect Of A Decedent
June 14, 2024 - Volume 18 Issue 115 Print Report
The decedent was the proprietor of an insurance agency which sold insurance primarily for M and U. The decedent executed a separate contract with each insurance company. The co...
Out-Of-State Affiliate Was Physically Present In Washington
June 14, 2024 - Bulletin Print Report
TP is a distributor of tangible personal property based outside of Washington. TP operated as a subsidiary of P until...when TP was merged into...P. TP makes primarily wholesal...
Testamentary Conveyance Of Leased Realty Was A Change In Ownership
June 14, 2024 - Bulletin Print Report
The property is a commercial building and lots. The property has been owned by the Taylor Trust and MBH as tenants in common. On July 1, 1985, they leased the property to B for...
Option Agreement Not Set Aside Under A "Conduit" Theory
June 14, 2024 - Bulletin Print Report
In 1948, two cousins, EG and NFS, started a road construction company, GF. Six years later, they incorporated petitioner. The sons, VG and NFJ, joined the business during the 1...
Preferred Stock Escapes Sec. 306 Stock Designation
June 13, 2024 - Volume 18 Issue 114 Print Report
C is a corporation engaged in an ongoing business. As of September 4, 1981, C had issued and outstanding 66,001 shares of voting common stock, all of which were held by A. ...
National Bank Of Canada To Acquire Canadian Western Bank
June 13, 2024 - Bulletin Print Report
National Bank of Canada, ("NA") and Canadian Western Bank, ("CWB"), announced that they have entered into a definitive agreement, (the "Agreement"...
Injunctive Relief Barred By The Tax Injunction Act And The Comity Doctrine
June 13, 2024 - Bulletin Print Report
B is the mother of S.B., a minor child. HH is a non-accredited, private home school, and S.B. is enrolled at HH for both education and religious instruction. HH submitted an ap...
National Banks Are Not Exempted From All State Laws
June 13, 2024 - Bulletin Print Report
The United States maintains a dual system of banking, made up of parallel federal and state banking systems. Banks with federal charters, called national banks, are subject pri...
Motor Vehicle Delivery Fee Not Subject To Sales Tax
June 12, 2024 - Bulletin Print Report
Company, ("C"), is a national retail seller of used motor vehicles. Sales are made via C's website. C holds its vehicle inventory at various inspection centers ac...
Proportional Ownership Interests In Realty Did Not Remain The Same
June 12, 2024 - Bulletin Print Report
The real property at issue consists of two Los Angeles supermarkets, (the "properties"). In December 2014, Super A Foods, Inc., (the "corporation"), transfe...
Applying the "Passive Loss" Rules to Trusts
June 12, 2024 - Volume 18 Issue 113 Print Report
Trust, (T), is a "complex" trust. Mr. A is the beneficiary and a trustee of T. T holds various assets, including a partnership interest in B. B wholly-owns...
Real Property Was Properly Classified As "Residential Real"
June 12, 2024 - Bulletin Print Report
The subject property was "residential real" when it was purchased by G in August 2021 in an arm's-length transaction. G contends that the primary use of the subje...
NE And DO Will Join Forces In A Reorganization Transaction
June 11, 2024 - Bulletin Print Report
Noble Corporation plc, ("NE") and Diamond Offshore Drilling, Inc., ("DO"), announced that they have entered into a definitive agreement pursuant towhi...
PWSC Sets A New Trend For "Tax Receivable Agreements"
June 11, 2024 - Bulletin Print Report
PowerSchool Holdings, Inc., ("PWSC"), a self-described "leading provider of cloud-based software for K-12 education," announced that it has entered into a d...
"Subawards" Are Tax-Exempt Income
June 11, 2024 - Volume 18 Issue 112 Print Report
A and B own X, an 'S' corporation. On Date 1, X used its disregarded entity to acquire an "r%" limited partnership interest in Y, a limited partnership. A dev...
Gain From Sale Of Equity Interest Was "Business Income"
June 11, 2024 - Bulletin Print Report
The claimants' original IT 1040 apportioned capital gains from the sale of the company to Ohio...when calculating their non-resident credit. The amended IT 1040 allocated t...
Schlumberger Ltd. Studiously Avoids Reorganization Treatment
June 10, 2024 - Bulletin Print Report
Schlumberger Limited, ("Sodium"), a corporation organized under the laws of Curacao, and its indirect wholly owned subsidiaries, Sodium Holdco, Inc...
Lack Of Legal Or Equitable Title Eliminates Deduction
June 10, 2024 - Volume 18 Issue 111 Print Report
In March 1989, approximately $50,000 that was received from petitioner's parents was deposited as a down payment towards the purchase price of real property (SBC property)...
Payment Of Delinquent Tax Not Required To Maintain An Appeal
June 10, 2024 - Bulletin Print Report
GT is the owner of a power plant. For the 2014 tax year, the assessor imposed an assessed value of $33,445,837 on GT's property. GT appealed the assessment tothe BOR,...
Post-Distribution Repurchases Are Deemed Made Pro-Rata
June 10, 2024 - Bulletin Print Report
The D Worldwide Group is engaged in multiple businesses, including Business A, Business B, Business C, and Business D. Businesses B, C, and D are referred to as the "Contr...
Obligation To Redeem Shares Does Not Diminish Their Value
June 7, 2024 - Bulletin Print Report
M and T, who are brothers, owned a building supply corporation. Under an agreement, the corporation could be required to redeem the deceased brother's shares. To fund the r...
Announcement Of Spin-Off Before Discussions Eliminates Sec. 355(e)
June 7, 2024 - Volume 18 Issue 110 Print Report
D conducts a pharmaceuticals business. C, D's wholly-owned subsidiary, conducts a cosmetics business. D does all of the borrowing for both D and C and makes all of the deci...
The "BAP" Should Not Be Used In Computing The "Tax Factor"
June 7, 2024 - Bulletin Print Report
H is a manufacturer of single-use medical devices. H ships its manufactured products throughout the U.S. and in many countries outside the U.S. H elected to be taxed under subc...
Accounting Method For "Deferred Entrance Fees" Clearly Reflects Income
June 7, 2024 - Bulletin Print Report
Although section 446 of the Internal RevenueCode grants the Commissioner "wide discretion" to determine whether a taxpayer's accounting method clearly refle...
Extraction Of Cash From Spun-Off Entity Not Taxed To Parent
June 6, 2024 - Volume 18 Issue 109 Print Report
D3 has elected to be classified as a REIT within the meaning of Sec. 856(a) of the Code. D3 wholly owns LLC1, a disregarded entity. D3, through LLC1, owns all of the stock of D...
Expansion Doctrine Permits An "Early" Spin-Off
June 6, 2024 - Bulletin Print Report
P is the parent of an affiliated group that files a consolidated return. P owns all outstanding stock of D. D owns all outstanding stock of C. C owns all outstanding stock of C...
Six-Month Clock For Lodging An Appeal Never Began To Run
June 6, 2024 - Bulletin Print Report
The District of Columbia, (the "District"), levied a special assessment (in the amount of $15,146.63) on APPs' property on January 2, 2015. On the evening of Janu...
Vehicle Not Used Directly For Specific Farming Activities
June 6, 2024 - Bulletin Print Report
The Commissioner assessed use tax on CFF's purchase of a Mercedes-Benz utility vehicle. CFF did not pay sales tax on the transaction at the time of purchase and contended t...
Transfer of Bitcoins Not Subject To Sales Tax
June 5, 2024 - Volume 18 Issue 108 Print Report
Applicant (APP) provides Automated Teller Machines (ATMs) through which its customers may purchase Bitcoins. Bitcoins are a form of digital currency that is created by software...
Certain Retroactive Opioid Stewardship Payments Ruled Invalid
June 5, 2024 - Bulletin Print Report
The OSA created an "opioid stewardship fund." The OSA required a $100 million annual payment by all "manufacturers and distributors" of opioids in New York...
Lawsuit Not Filed Within Two Years Of Denial Of Refund Claim
June 5, 2024 - Bulletin Print Report
In May 2011, M was assessed $32,507.30 by the I.R.S. because she failed to timely file tax returns for the 2008 tax year. M alleges, however, that she paid $20,447 in foreign t...
Expanded Version: TCN's Distributions Will Have A Dual Character
June 4, 2024 - Expanded Bulletin Print Report
Tricon Residential, Inc., ("TCN"), a corporation organized under the laws of Canada, is in the final stagesof being acquired by Creedence Acquisition ULC, (the...
Taxpayer Denied California NOL Carryback
June 4, 2024 - Volume 18 Issue 107 Print Report
In 2008, TP liquidated her I.R.A. account and invested the proceeds with MMC. In 2010, TP discovered that she was the victim of a "Ponzi scheme" perpetuated by MMC. I...
Administrative Law Judge Was Not Compensated On A Fee Basis
June 4, 2024 - Bulletin Print Report
In 2018, petitioner was employed as a retired annuitant performing the duties of an administrative law judge, ("ALJ"), for the State of California. Petitioner conduct...
Board Of Education Cannot Appeal Board Of Revision Decisions
June 4, 2024 - Bulletin Print Report
In 2022, the Board of Education, ("BOE"), filed Complaints with the County Board of Revision, ("BOR"), challenging the true value of certain real property a...
Taxpayer's Failure Warrants Maximum FBAR Penalty
June 3, 2024 - Bulletin Print Report
G is a U.S. citizen. In 1996, G became a partner at PWC. He was based in Moscow, Russia. In 2003, he became the CFO of Novatek. In October 2005, an account was opened at C in Z...
"Accrued" Bonus Found To Constitute "IRD"
June 3, 2024 - Volume 18 Issue 106 Print Report
The decedent was in the employ of ACC for more than 20 years prior to his death on November 4, 1943, and at that time was a vice-president and director of the company.
Multiple Dwelling Denied Property Tax Exemption
June 3, 2024 - Bulletin Print Report
On September 8, 1999, Jersey City, ("JC"), adopted ordinances to allow for abatements and exemptions to qualified properties. On June 18, 2019, TP purchased vacant la...
OTCs Were Not "Providers Of Accommodations To Transient Guests"
June 3, 2024 - Bulletin Print Report
In September 2009, PB and JC filed this action against the online travel companies, ("OTCs"). The circuit court found that the OTCswere liable for the taxes...o...
Regular Quarterly Dividends Have Special Status
May 31, 2024 - Volume 18 Issue 105 Print Report
Pursuant to a plan of reorganization, Y Corporation, (YC), agreed to acquire the assets of X Corporation, (XC), in exchange solely for voting stock and the assumption by YC of...
Legal Fees Arose Out Of Personal Activities
May 31, 2024 - Bulletin Print Report
A is a pediatric geneticist who worked at the University of Southern California, ("USC"), in them medical school. In 2004, A was arrested on allegations of sexually a...
Separate Apportionment Percentages Must Be Computed For Each Affiliate
May 31, 2024 - Bulletin Print Report
Plaintiffs are ABC, Inc. and subsidiary corporations that joined with it to file consolidated Oregon returns for the years at issue. Plaintiffs have presented un-refuted eviden...
Most Time Limits Are Non-Jurisdictional
May 31, 2024 - Bulletin Print Report
In 2013, H, a long-time employee of the DOD, filed a claim with the Board objecting to a six-day furlough. The Board referred the case to an administrative judge. In 2016, the...
Intermediate Holding Company Was Not A Financial Institution
May 30, 2024 - Bulletin Print Report
Parent filed consolidated FIET returns for the 2012 through 2014 Return Years. Parent amended the original FIET returns. Parent filed FIET returns for the 2015 through 2020 Ret...
California Resident Denied Credit For Taxes Paid To Canada
May 30, 2024 - Volume 18 Issue 104 Print Report
In 2007, the taxpayers sold real estate located in Ottawa, Canada, which generated a capital gain in the amount of $136,951. The taxpayers asserted that they are entitled to an...
Credit Suisse's Amended Returns Were Rejected
May 30, 2024 - Bulletin Print Report
Plaintiff is part of a unitary business group (UBG), and holds residual interests in real estate mortgage conduits,("REMICs"). A REMIC is a special purpose vehi...
"Rent-Or-Sale" Exemption Not Applicable
May 30, 2024 - Bulletin Print Report
Vacant buildings in the District of Columbia, ("DC"), are subject to a higher tax rate. When a building becomes vacant...an owner has thirty days to register the buil...
USM Is Exiting The Wireless Business
May 29, 2024 - Bulletin Print Report
United States Cellular Corporation, ("USM"), and Telephone and Data Systems, Inc., ("TDS'), the owner of approximately 83 percent of the stock of USM, announ...
City Earnings Tax Not Properly Imposed On Remote Work
May 29, 2024 - Bulletin Print Report
The Ordinance authorizes the City (St. Louis) to impose a one percent tax on "salaries, wages, commissions, and other compensation earned...by non-resident individuals of...
Income To Which A Decedent Is "Entitled"
May 29, 2024 - Volume 18 Issue 103 Print Report
Decedent was an executive vice-president of General Motors, (G.M.), at the time of his death on November 27, 1969. For several years prior to his demise, he had participated in...
Labels Are Not Subject To Sales And Use Tax
May 29, 2024 - Bulletin Print Report
The taxpayer sells information labels to automobile dealers. The label is placed in the car in one of the rear windows and contains various bits of information, sometimes as re...
Will The Alternative Minimum Tax Penalize Reported Earnings?
May 28, 2024 - Bulletin Print Report
There is a new corporatealternative minimum tax, ("AMT"), regime, courtesy of the Inflation Reduction Act, that made its debutin 2023. We are just now sta...
The Willens Deal Survey May 2024
May 28, 2024 - The Deal Survey: May 2024 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
Deducting Recurring Expenses
May 28, 2024 - Volume 18 Issue 102 Print Report
In 1962, M Corporation (MC), granted its employees a stock option. MC filed an offering circular with the S.E.C. registering the number of shares to be issued pursuant to the o...
Loan Repayments Are Not "Gross Receipts"
May 28, 2024 - Bulletin Print Report
A credit service organization, ("CSO"), is "any person (or entity) that, in return for the payment of money or other valuable consideration...can or will...provi...
Residuary Legatees Responsible For Inheritance Taxes
May 28, 2024 - Bulletin Print Report
The decedent was the settlor of the trust. He had three children. The decedent died in November 2020. In 2009 or 2010, the decedent began a romantic relationship with LM. They...
Purchase Of Leased Real Property Accomplished A Change In Ownership
May 24, 2024 - Bulletin Print Report
The Property has been used as a data center since about 2000. On March 11, 2015, TPT sold its interest in the Property to GPT. The Assessor determined that this was a change in...
Federal Changes Lead To State Assessment
May 24, 2024 - Bulletin Print Report
APP was a wholesaler of solar towers. APP executed an agreement in 2015 to sell 162 solar towers for $7,938,000, ("Sale"). The Sale agreement specified that APP would...
ERF To Pay A Special Cash Dividend
May 24, 2024 - Bulletin Print Report
Enerplus Corporation, ("ERF"), is being acquired by Chord Energy Corporation, ("CHRD"). The former is a Canadian corporationwhilethe latter is d...
Preferred Stock Received In 'A' Reorganization Is Not Sec. 306 Stock
May 24, 2024 - Volume 18 Issue 101 Print Report
X has outstanding a single class of common stock. Y has outstanding one class of common stock and one class of preferred stock. None of the preferred stock was "Sec. 306 s...
Expedia's Facilitation Fee Is Not Subject To Sales Tax
May 24, 2024 - Bulletin Print Report
The petition alleged that the defendants were "dealers" engaged in the business of selling and furnishing sleeping rooms...to transient guests; required to report and...
Note Includible In Income When Received
May 23, 2024 - Volume 18 Issue 100 Print Report
On January 14, 1977, the Covenantor (CO) and the Company (C) executed a non-competition agreement. Under this contract, the CO agreed not to compete with the C for a period of...
Stevedore's Gross Receipts Not Subject To Apportionment
May 23, 2024 - Bulletin Print Report
TP is a Washington corporation. TP submitted a refund request. TP asserted that income from certain activities which were previously reported under the service and other activi...
No Limit On Damages Arising From Timely Filed Infringement Claim
May 23, 2024 - Bulletin Print Report
In 1983, N and B formed Music Specialist, Inc., ("MSI"). That company recorded and released one album and several singles. B entered into an agreement with W to licen...
Suit To Bar Enforcement Of FBAR Was Dismissed
May 23, 2024 - Bulletin Print Report
Congress enacted the Bank Secrecy Act to encourage tax compliance and facilitate criminal investigations by requiring U.S. citizens to report financial relationships and transa...
Tenant-Stockholder Interest Is A "Real Property Interest"
May 22, 2024 - Volume 18 Issue 99 Print Report
Partnership (PS) holds interest in a parcel of real estate and several apartment buildings located on the real estate. The apartment buildings are owned by PS under two forms o...
License To Use Real Property Found
May 22, 2024 - Bulletin Print Report
TP operates an international network of retail stores through both franchise and corporate stores. The franchisee receives from TP the right and license to operate a TP store a...
Cultivation Of Plants Is Not "Manufacturing" Or "Processing"
May 22, 2024 - Bulletin Print Report
Taxpayer grows medical marijuana from seeds to usable "flower" (aka "bud"). The flower is then sold to dispensaries, or to other medical marijuana manufactu...
COKE To Repurchase Nearly Forty Percent Of Its Float
May 22, 2024 - Bulletin Print Report
Coca-Cola Consolidated, Inc., ("COKE"), is the largest United States bottler of Coca-Cola products. It can be described asclosely-held, but only in the sense th...
Expanded Version: NGM Biopharmaceuticals, Inc. Will Undergo A "Bootstrap" Acquisition
May 21, 2024 - Expanded Bulletin Print Report
Atlas Neon Merger Subsidiary, Inc. ("PUR"), a wholly-owned subsidiary of newly-formed Atlas Merger Parent, Inc., ("P"), is offering to purchase, (the "...
California Seeks To Legislatively Overturn Microsoft's OTA Victory
May 21, 2024 - Bulletin Print Report
One of the signature parts of the Tax Cuts and Jobs Act, P.L. 115-97, was its treatment of deferred foreign income accumulated by multinationals in subsidiaries organized outsi...
Payments Under A Covenant Not To Compete Are "IRD"
May 21, 2024 - Volume 18 Issue 98 Print Report
Petitioner's father ("decedent") died intestate on January 3, 1993. Before he died, decedent sold GAH to another veterinarian. As part of the sales transaction, d...
Sales Factor Excludes Receipts From "Occasional And Substantial" Sales
May 21, 2024 - Bulletin Print Report
APP was the parent company of a unitary business which operated automobile dealerships in California and Alaska. On November 16, 2016, APP sold the assets of its subsidiary cor...
There Is No Two-Year Embargo On Acquisitions Of "Spinco"
May 20, 2024 - Bulletin Print Report
Since the enactment, in 1997, of section 355(e) of the Internal Revenue Code, the so-called "anti-MorrisTrust" rule, it has become an article of faith on Wall S...
Land And Buildings Are Not "Of A Like Kind"
May 20, 2024 - Volume 18 Issue 97 Print Report
After 1957, land which the taxpayer held for investment was condemned. In the same year, he expended the proceeds of the condemnation in the construction of an office building...
Apple Music Streaming Service Is Not Subject To Sales Tax
May 20, 2024 - Bulletin Print Report
The instant motion concerns Apple's sale of subscriptions to its Apple Music streaming service. Apple Music is a service that uses the internet to stream audio content, suc...
Reliance On Agent Insufficient To Abate Penalty
May 20, 2024 - Bulletin Print Report
On April 6, 2023, the Taxation and RevenueDepartment, (the "Department"), issued a notice of assessment to the Taxpayer for the tax period ending December 31, 2...
AIG To Sell Down Its CoreBridge Financial Corporation Stake
May 17, 2024 - Bulletin Print Report
AIG, Inc., as of December 31, 2023, owned approximately 52 percent of the stock of CoreBridge Financial Corporation, ("CB"). AIG had expressed an intent to reduce its...
CRGY Is Annexing SBOW
May 17, 2024 - Bulletin Print Report
Crescent Energy Company, ("CRGY"), and Silver Bow Resources, Inc., ("SBOW"), announced that they have entered into a definitive agreement pursuant to which...
Deferred Estate Tax Accelerated By Redemption
May 17, 2024 - Volume 18 Issue 96 Print Report
A died in 1982. A's interest in X corporation, (X), a closely held business, exceeded 35 percent of the adjusted gross estate, and A's personal representative elected t...
Filing In Wrong County Does Not Invalidate An "NFTL"
May 17, 2024 - Bulletin Print Report
Petitioner, ("P"), timely filed Form 1040 for 2016 but failed to pay the tax shown as due. The I.R.S. assessed the tax P had reported for 2016 and mailed him a timely...
Unused Tax Credits Have Value
May 16, 2024 - Bulletin Print Report
AC operates a solar-electricity power-generation facility, (the "facility"), that uses renewable energy equipment. AC built the facility and placed it in service in 2...
"Short" Dividends Are Not "Real" Dividends
May 16, 2024 - Volume 18 Issue 95 Print Report
In a "short sale," which is usually handled by a broker, the short-seller is required to pay to the lender of the stock an amount equal to the cash dividend on the st...
Section 6038(b) Penalties Are Assessable
May 16, 2024 - Bulletin Print Report
Section 6038(a) requires U.S. persons to file information returns reporting their control of any foreign business. F failed to report his control of foreign financial accounts...
The Time Share Classification And Rate Were Constitutional
May 16, 2024 - Bulletin Print Report
The Maui County Code, (the "MCC"), outlines the real property classifications in the County. "...real property must be classified, upon consideration of its high...
Substantial Intercorporate Transactions Justified Combined Filing
May 15, 2024 - Volume 18 Issue 94 Print Report
KLC operates pre-K learning centers and after-school care for children ages six weeks to 12 years. K operates child day care centers and before and after-school programs for ch...
Transience Of Occupancy Defines A "Hotel"
May 15, 2024 - Bulletin Print Report
Petitioner, ("P"), is a Delaware limited liability company. P leases residential apartments, ("Rentals"), in New York City from cooperative and condominium...
Company Was Not In The "Health" Business
May 15, 2024 - Bulletin Print Report
Company, ("C"), provides "x" to customers based on orders from the customers' physicians. The order specifies the type of test required and provides bas...
Sightseeing Tours Were Subject To Sales Tax
May 15, 2024 - Bulletin Print Report
The Arkansas Gross Receipts Tax, also referred to as the "sales tax," is generally applicable to the sale of tangible personal property and certain enumerated services...
CHRD's Acquisition Of ERF Has An Unfavorable Tax Profile
May 14, 2024 - Bulletin Print Report
Chord Energy Corporation, ("CHRD"), a Delawarecorporation, and Enerplus Corporation, ("ERF"), a corporation organized under the provincial laws of Alb...
Dietary Product Exempt From Sales Tax
May 14, 2024 - Volume 18 Issue 93 Print Report
Petitioner, (P), is a California corporation that manufactures and distributes a line of products directly to consumers and through retailers under the name, "X," tha...
Residential Property Was Used For The "Tax-Exempt Purpose"
May 14, 2024 - Bulletin Print Report
O is a non-profit New Jersey corporation and a Federal section 501(c)(3) organization created in 2015 by D "to provide support services to adults with intellectual and dev...
Out-Of-State Services Were Incidental To The In-State Ones
May 14, 2024 - Bulletin Print Report
TP is an employment agency based in Houston, Texas, whose sole owner also resides in Texas. TP has no physical office in New Mexico, ("NM"). TP's work for Chevron...
Johnson & Johnson Will Retire Debt Tax-Efficiently
May 13, 2024 - Bulletin Print Report
A spin-off or split-off can be tax-free if, among other requirements, the distributing corporation distributes to its shareholders at least an amount of stock constituting cont...
Expenses Of Producing Capital Gains Deductible Under Sec. 212(1)
May 13, 2024 - Volume 18 Issue 92 Print Report
The taxpayer had long owned stock of APC which was engaged in the business of producing motion pictures. In January 1956, APC was dissolved. Each shareholder received his or he...
TracFone Wireless, Inc. Conducts A Telephone Business
May 13, 2024 - Bulletin Print Report
TracFone, Inc., ("T"), buys wireless airtime from network carriers, then resells this airtime on a prepaid basis at retail (to consumers) and at wholesale (to retaile...
No "Economic Hardship" Exception To Early Withdrawal Tax
May 13, 2024 - Bulletin Print Report
In 2018, when she was in her early 50s, petitioner received a taxable retirement plan distribution in the amount of $10,342. She withdrew the money to pay past-due rent and to...
Beer Tax Is Properly Imposed On "Heavy Beer"
May 13, 2024 - Bulletin Print Report
Utah Code section 59-15-101 provides: "A tax is imposed... on all beer, as defined in section 32B-1-102, that is imported, or manufactured for sale, use, or d...
Leasehold And Fee Found To Be Similar Or Related In Service And Use
May 10, 2024 - Volume 18 Issue 91 Print Report
Y is engaged in the business of hauling, handling, and storing office furniture. Y leased 10 acres of land improved by an office building and several small warehouses in which...
The "Aircraft Valuation Law" Withstands A Constitutional Challenge
May 10, 2024 - Bulletin Print Report
For 2017, the Utah Tax Commission's Property Tax Division valued Delta's aircraft according to the Aircraft Valuation Law's preferred method. Salt Lake County chall...
Depth Of Supervisor's Penalty Review Is Irrelevant
May 10, 2024 - Bulletin Print Report
On their timely filed return for 2015, petitioners claimed a deduction for a net operating loss, ("NOL"). The I.R.S. selected petitioners' 2015 return for examina...
INBX Sets Record Date For Taxable Spin-Off
May 10, 2024 - Bulletin Print Report
Inhibrx, Inc., ("INBX"), is engaging in a "Morris Trust" transaction in which Sanofi is the merger partner. This particular Morris Trust transaction is, unl...
REMICs Are Not "Secured" By Mortgages
May 9, 2024 - Volume 18 Issue 90 Print Report
A mortgage-backed security (MBS) is a tradable asset entitling its owner to principal and interest payments from a pool of mortgages. A simple type of mortgage security is know...
Compression Stockings Are "Medical Appliances"
May 9, 2024 - Bulletin Print Report
On Date 1, the taxpayer saw his cardiologist, DOCTOR. She ordered an ultrasound vascular procedure to be performedon the taxpayer's legs. On Date 2, DOCTOR placed an...
Loss Deduction Thwarted By Disguised Sale Rules
May 9, 2024 - Bulletin Print Report
The "distressed"receivables involved in the transaction originated with SB, a metal productssupplier organized under the laws of Brazil. E purchased produ...
Agency Property Used In Connection With A Business Is Taxable
May 9, 2024 - Bulletin Print Report
The MBTA owns many outdoor advertising signs. In October 2019, O entered into a contract with the MBTA to manage the MBTA signs. Under the contract, the MBTA granted O the excl...
Professional Gamblers Are Subject To Section 165(d)'s Limitations
May 8, 2024 - Bulletin Print Report
Petitioners, ("Ps"), were each a fifty percent partner in the partnership, SJ. During 2018, SJ's activity consisted solely of DA and DE placing wagers on slot mac...
Handling Directors' Qualifying Shares In A 'B' Reorganization
May 8, 2024 - Volume 18 Issue 89 Print Report
X is a national bank engaged in business as a commercial bank. It had outstanding only common stock, which was publicly held. Y, a bank holding company, acquired all of the X s...
Credit Card Rewards Eligible For Recurring Item Exception
May 8, 2024 - Bulletin Print Report
TP is a bank that issues credit cards. TP allows its cardholders to earn rewards...that can then be redeemed for cash, statement credits, travel, gift cards to third party vend...
Unclear Statute Construed In Favor Of The Taxpayer
May 8, 2024 - Bulletin Print Report
In 2017, K acquired GHC and its subsidiaries, including GHO. Three non-profit organizations were involved in the transaction: GHC, K, and GHCF. GHCF was formed in 2015, in cont...
Payments Not Contingent Upon Success Of Research
May 7, 2024 - Bulletin Print Report
M, a structural engineering firm, creates construction documents of the structural design for building projects. M sought research tax credits for its expenses in creating the...
Illinois Respects Sec. 338(h)(10) Elections
May 7, 2024 - Volume 18 Issue 88 Print Report
Prior to December 30, 2013, B, a New Jersey corporation, owned all the stock of D, a Delaware corporation, and A, a Pennsylvania corporation. A owned all of the stock of C, a N...
Perrier Is A "Soft Drink" Subject To Sales Tax
May 7, 2024 - Bulletin Print Report
M purchased a single 16-ounce bottle of Perrier from S. S collected and remitted sales tax. M filed refund petitions with the Department. The Department denied M's petition...
Qualified Amended Returns Not Found
May 7, 2024 - Bulletin Print Report
L and his wife are Swiss citizens. In 2006 and 2007, they lived in the U.S. Each year, they under-reported their taxable income by telling the I.R.S. they had no foreign bank a...
Treatment Of Amounts Paid To "Facilitate" A "Covered Transaction"
May 6, 2024 - Volume 18 Issue 87 Print Report
Sec. 263(a)(1) and Reg. Sec. 1.263(a)-2(a) provide that no deduction shall be allowed for any amount paid out for property having a useful life extending substantially beyond t...
At-Home Pandemic Work Deemed Performed In The City
May 6, 2024 - Bulletin Print Report
The issue in this case is whether the City of Cincinnati, (the "City"), can assess income tax liability to a non-resident employee for work performed outside the City...
Significant Harm Not Required For Title VII Claims
May 6, 2024 - Bulletin Print Report
From 2008 through 2017, M worked as a plainclothes officer in the Department's specialized Intelligence Division. MD asked the Department to transfer M out of the unit. The...
Silo Systems Are "Heavy Equipment"
May 6, 2024 - Bulletin Print Report
Silo systems are used to deliver sand at hydraulic fracturing sites. Due to their size, the sand silos are transported to a customer site on separate transport trailer...
OC Launches A Tender Offer For DOOR's Notes
May 3, 2024 - Bulletin Print Report
In anticipation of Owens Corning's acquisition of Masonite International Corporation's stock from its shareholders, OC is seeking to "refinance" some of DOOR&...
Improvements To Replacement Property Are QRP
May 3, 2024 - Volume 18 Issue 86 Print Report
TP received a letter from City requesting that TP sell his farm land to City. The letter stated that if TP was unwilling to sell, C would acquire the property through either em...
Collection Of Back Taxes Barred By Statute Of Limitations
May 3, 2024 - Bulletin Print Report
The city of Valdez, Alaska, ("V"), appealed the State's determination that certain property was not taxable. V won. But because the litigation took so long, V has...
"Timely Mailed/Timely Filed" Rule Found Inapplicable
May 3, 2024 - Bulletin Print Report
Like all federal courts, the United States Tax Court is a court of limited jurisdiction. In a deficiency case, the court's jurisdiction depends upon the issuance of a valid...
Expanded Version: ExxonMobil's Plan For The Acquisition Of Pioneer Natural Resources
May 2, 2024 - Expanded Bulletin Print Report
Pioneer Natural Resources Company, ("PNR"), ExxonMobil Corporation, ("EMC"), and SPQR, LLC, ("Merger Subsidiary"), a newly-formed, wholly owned, s...
Gain Not Included In Unincorporated Business Gross Income
May 2, 2024 - Volume 18 Issue 85 Print Report
Petitioner, (P), a partnership, was engaged in the business of selling office supplies by mail. On June 7, 1968, all of its partners entered into an agreement wherein each such...
Property Deemed To Have Been Held For Productive Use Or Investment
May 2, 2024 - Bulletin Print Report
TP is one of "X" beneficiaries of Trust. Trust holds Property, real property located in State Z. Decedent's Will provided for the Trust to cease upon the death of...
Intent To Defraud Is Necessary For A Theft
May 2, 2024 - Bulletin Print Report
H was incorporated in July 1998 to serve as the holding company for P. P faced a consistent lack of profitability. H turned to capital raises to cushion P's losses. These c...
Guarantor Denied Interest Expense Deduction
May 1, 2024 - Volume 18 Issue 84 Print Report
The taxpayers, husband and wife, were majority shareholders in a cattle ranch known as RV. On June 19, 1965, RV borrowed $1.5 million from the T....
Tax Court Petition Was Filed One Day Late
May 1, 2024 - Bulletin Print Report
Like all federal courts, the United States Tax Court is a court of limited jurisdiction. See section 7442 of the Code. In deficiency cases, "our jurisdiction depends upon...
Each Tenant Possesses Individual Rights In "Entireties" Property
May 1, 2024 - Bulletin Print Report
In July 2021, M filed for relief under Chapter 7... M listed his home, in which he had an interest as a tenant by the entirety, in his schedule of assets. M...
Section One Of The "FAA" Contains No Industry Requirement
May 1, 2024 - Bulletin Print Report
F is the second-largest producer and marketer of packaged bakery foods in the United States.B and W were franchisees who owned the rights to distribute F products in cert...
Successive Mergers Treated As A Single Merger
April 30, 2024 - Bulletin Print Report
UMB Financial Corporation, ("UMBF"), and Heartland Financial USA, Inc., ("HTLF"), announced that they have entered into a definitive agreement pursuant to&n...
"Incomplete" Spin-Offs (And Split-Offs) Have Gained Popularity
April 30, 2024 - Bulletin Print Report
Most spin-offs and split-offs, at least historically, have involved the complete separationof the controlled corporation(s),"spinco" or "splitco,&quo...
Sale Of Partnership Interests Does Not Give Rise To UBT
April 30, 2024 - Volume 18 Issue 83 Print Report
The limited liability company (LLC) is treated as a partnership for federal tax purposes. The members of the LLC are selling their membership interests to the Purchaser (PU). T...
Property Leased To For-Profit Entities Remained Exempt
April 30, 2024 - Bulletin Print Report
F seeks to recover property taxes paid under protest with respect to four buildings, (the "Property"). The Property is part of a larger complex, the University of New...
Will The Stabroek Block Contretemps Derail The Chevron/Hess Merger?
April 29, 2024 - Bulletin Print Report
Last fall, Hess Corporation, ("HC"), and Chevron Corporation, ("CC"), and Yankee Merger Sub, Inc., ("Merger Sub"), a direct wholly-owned subsidiar...
How To Measure A Class Of Stock's "Voting Power"
April 29, 2024 - Volume 18 Issue 82 Print Report
The common parent of an affiliated group of corporations owned 100 percent of the common stock and 50 percent of the preferred stock of one of its subsidiaries. The other 50 pe...
Permit Conditions Imposed By Legislation Are Subject To Scrutiny
April 29, 2024 - Bulletin Print Report
The Board of Supervisors is a legislative body under state law, and the adoption of the General Plan is a legislative act. The General Plan requires developers to pay a "t...
Market-Based Sourcing Of Receipts Was Permitted
April 29, 2024 - Bulletin Print Report
A corporate entity that does business both inside and outside of New Jersey, is subject to CBT on the income it allocates to New Jersey. One component of the allocation factor...
NeoGames Is Reincorporating
April 26, 2024 - Bulletin Print Report
NeoGamesS.A. is organized under the laws of Luxembourg. It has entered into an agreement pursuant to which, via a reverse triangular merger, it will be acquired by an Aus...
Preferred Stock Found To Be Voting Stock
April 26, 2024 - Volume 18 Issue 81 Print Report
The question presented is whether the preferred stock issued by WGPC constitutes nonvoting stock. The decision of this question determines whether WGPC was affiliated with RWC....
Rule 10(b)-5 Does Not Proscribe "Pure Omissions"
April 26, 2024 - Bulletin Print Report
Section 10(b) of the Securities Exchange Act of 1934 makes it "unlawful for any person...to use or employ, in connection with the purchase or sale of any security, any man...
Omission In Citation Did Not Amount To A Due Process Violation
April 26, 2024 - Bulletin Print Report
On July 6, 2021, plaintiff filed a complaint...challenging a Superior Court decree that foreclosed the right of redemption from a title conveyed by a tax collector's deed t...
Federal Trade Commission Finalizes Anti-"Non-Compete" Rules
April 25, 2024 - Bulletin Print Report
The Federal Trade Commission, (the "FTC"), as widely expected, finalized its controversial rules outlawing, except in limited circumstances, non-compete clauses, hist...
DIS And IBM Denied Deduction For Related Member Royalties
April 25, 2024 - Bulletin Print Report
Former Tax Law section 208(9)(o)(2) provided: "...for the purpose of computing entire net income...a taxpayer must add back royalty payments to a related member to the ext...
Equitable Ownership Governs Party Entitled To Interest Deduction
April 25, 2024 - Volume 18 Issue 80 Print Report
Because of their poor credit rating, petitioners were unable to qualify for financing to purchase the Alisal Property (AP). On April 4, 1990, a Grant Deed was issued to H and A...
No Refund Of Tax Upon Removal Of Leased Vehicle From New York State
April 25, 2024 - Bulletin Print Report
In August 2020, while living in Pennsylvania, petitioner co-leased a 2020 Dodge Ram truck for a term of 42 months from a Pennsylvania dealership. The monthly base payment under...
The Willens Deal Survey April 2024
April 24, 2024 - The Deal Survey: April 2024 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
Enhanced Penalties For Willful Failure To File FBAR Properly Assessed
April 24, 2024 - Bulletin Print Report
V was an international agricultural salesman who did business in Eastern Europe. He opened a Swiss bank account and, from 2006 to 2011, failed to report the account's exist...
Embracer Group AB Plans A Spin-Off
April 24, 2024 - Bulletin Print Report
The board of directors of Embracer Group AB, ("EG"), announced a plan to separate EG into three "market-leading games and entertainment companies:" Asmodee...
Sec. 338 Replaced "Kimbell-Diamond"
April 24, 2024 - Volume 18 Issue 79 Print Report
P formed S for the sole purpose of acquiring all the stock of T by means of a reverse subsidiary cash merger. S merged into T with T surviving. The shareholders of T exchanged...
Aerial Cables Are Personal Property
April 24, 2024 - Bulletin Print Report
"Operating property" is assessed annually by the Idaho Tax Commission. Syringa, ("S"), is a telecommunications company providing voice and data transmission...
Forty Percent Is A "Substantial Part"
April 23, 2024 - Bulletin Print Report
Matterport, Inc., ("MTTR"), announced that it has entered into a definitive agreement with CoStar Group, Inc., ("C"), pursuant to which "C will acquire...
Entity Does Not Constitute A "Club Or Organization"
April 23, 2024 - Volume 18 Issue 78 Print Report
Petitioner, (P), was a country club which provided its patrons with social events, golf, tennis, and swimming. The Division of Taxation issued to P two notices of determination...
Church Unable To Quash Third-Party Summons
April 23, 2024 - Bulletin Print Report
GSH declared itself a church pursuant to section 508(c)(1)(A) of the Internal Revenue Code. GSH operates a thrift store with a small space inside that serves as a coffee shop....
What Is Michigan's "Default" Tax Rate?
April 23, 2024 - Bulletin Print Report
MCL206.51(1) provides: "...there is levied...upon the taxable income of every person other than a corporation a tax at the following rates... (b) Except as otherwise...
Expanded Version: Will WISH Be Able To "Monetize" Its Net Operating Losses?
April 22, 2024 - Expanded Bulletin Print Report
ContextLogic, Inc., ("WISH")," made a rather stunning announcement on February 12, 2024 regarding its immediate future. WISH, proud owner of some $2.7 billion in...
Settlement Payment Largely Excluded From Gross Income
April 22, 2024 - Volume 18 Issue 77 Print Report
In 2007, petitioners received a payment of $375,000 in settlement of a lawsuit. In the complaint, petitioners alleged that FH, an accounting firm, and certain accountants who w...
Tax On Arizona Tax Rebate Not Enjoined
April 22, 2024 - Bulletin Print Report
On March 13, 2020, the President declared a national emergency based on the outbreak of COVID-19. In 2022, twenty-onestates made special payments to their citizens in par...
Retained Shares Fall On The "Bad" Side Of The Sec. 355(e) Fraction
April 22, 2024 - Bulletin Print Report
In a "Reverse Morris Trust" transaction, i.e., a spin-off which is followed, as part of the overall plan, by a business combination in which spinco is theactive...
Property Conveyance To Related Corporation Ruled A Sale
April 19, 2024 - Volume 18 Issue 76 Print Report
The Hs owned 89 percent of the stock of HI. FH purchased HF, a tract of undeveloped land. She conveyed the property to HI in 1972. HI agreed to pay FH 1/3 of any net profit tha...
Eliminating A "DIG"
April 19, 2024 - Bulletin Print Report
PO is a domestic partnership that owned all of the outstanding stock of Parent. Parent was the common parent of a consolidated group, (the "Parent Consolidated Group"...
Taxable Property Acquired By Exempt Organization Remained Taxable
April 19, 2024 - Bulletin Print Report
S is a religious, non-profit organization serving skateboarders in Portland, Oregon... S is exempt from taxation under section 501(c)(3) of the Internal Revenue Code. On July 5...
I.R.S. Summons Was Issued In Good Faith
April 19, 2024 - Bulletin Print Report
In 1990, the United States and Spain entered a treaty in which both nations agreed that their respective tax authorities would exchange information with one another to enable t...
Contribution Of Stock Did Not Beget A Constructive Distribution Or Gift
April 18, 2024 - Bulletin Print Report
There are occasions where a dominant shareholder of a corporation is asked to "take one for the team," so to speak, by means of a voluntary surrender of a portion of...
Tesla, Inc. Is "Reincorporating"
April 18, 2024 - Bulletin Print Report
Tesla, Inc., ("TI"), is organized under the laws of Delaware. For well-publicized reasons, involving Mr. Musk's compensation,it has become disillusioned wit...
Is TGI Fridays Inverting?
April 18, 2024 - Bulletin Print Report
TGI Fridays, ("TGI"), recently announced that it had reached agreement...for a proposed "all-share acquisition" by U.K.-based hospitality business, and the...
Merger Without Continuity Of Interest Is A Sale
April 18, 2024 - Volume 18 Issue 75 Print Report
X is a state chartered savings and loan association having permanent shares of stock outstanding. X proposes to merge with and into Y, a federally chartered nonstock membership...
Ownership Of Assets Is Required For A Theft Loss Deduction
April 17, 2024 - Bulletin Print Report
P owned variable life insurance policies, ("Policies") on December 11, 2008. Seven of the Policies were with S, and the other nine were with G. "The assets of ea...
Military Retirement Pay Included In Gross Income
April 17, 2024 - Volume 18 Issue 74 Print Report
APP retired from the U.S. Navy on March 3, 1987. APP's Form DD-214 shows that APP was honorably discharged for "Retirement." APP applied for service-connected dis...
Taxpayer Fell Short Of Being A "Real Estate Professional"
April 17, 2024 - Bulletin Print Report
The Bs, Minnesota residents, own a single-family home on Bainbridge Island in the State of Washington,( the "Bainbridge Island property"). The Bs claimed losses...
Gain From Sale Of JV Interest Characterized As "Business Income"
April 17, 2024 - Bulletin Print Report
ALV, an 'S' corporation, was founded by AA and owned by him, the Trust, BW, and VA. ALV contributed substantially all of its operating assets to a joint ventur...
I.R.S. Waives Certain Underpayment Penalties
April 16, 2024 - Bulletin Print Report
The relief provided in this notice applies only for the purpose of calculating the installment of estimated income tax of a corporate taxpayer that is due on or before April 15...
Overpayment Election Not Intended To "Hinder" The Trustee
April 16, 2024 - Bulletin Print Report
The Ws, a married couple, filed a joint Chapter 7 bankruptcy petition on August 27, 2020. The bankruptcy court denied both Debtors a discharge under section 727(a)(2)(B). Secti...
Failure To Submit Sec. 83(b) Election With Return Excused
April 16, 2024 - Volume 18 Issue 73 Print Report
On Date 1, Y received "X" shares of common stock in X corporation, (X), for whom Y had provided services. On that same date, Y executed an election pursuant to...
Amgen's Penalties Were Timely Approved
April 16, 2024 - Bulletin Print Report
The I.R.S. audited petitioner's 2010 through 2012 federal tax returns. At the close of the audit, the I.R.S. prepared and issued to petitioner a memorandum, (the "exam...
Entity Remains A "Club"
April 15, 2024 - Volume 18 Issue 72 Print Report
Petitioner, (P), is a not-for-profit organization exempt from Federal taxation and is the sole owner and operator of "X," which provides its members with use of a gol...
COVID-Era Tax Court Petition Found To Be Timely
April 15, 2024 - Bulletin Print Report
Respondent, ("R"), issued petitioners, ("Ps"), a notice of deficiency dated December 2, 2019. The notice specified March 2, 2020, as the last day to petitio...
In-State Distributors Establish The Requisite "Physical Presence"
April 15, 2024 - Bulletin Print Report
R is an online auto parts retailer based in Wisconsin. The Arizona Department of Revenue, (the "Department"), assessed a transaction privilege tax ("TPT"),...
Managed Communities Are Not "Health Care Facilities"
April 15, 2024 - Bulletin Print Report
Taxpayer, ("TP"), is a publicly traded State corporation that has elected to be taxed as a real estate investment trust, ("REIT"), under sections 856 throug...
Purchase Of Ingredients For Use In Providing Meals Are Sales For Resale
April 12, 2024 - Bulletin Print Report
C and K are each Nursing Homes licensed by the Louisiana Department of Health and Hospitals. SH is a Level 3 Adult Residential Care Provider. ARCPs and Nursing Homes must provi...
Residual Value Protection Arrangement Not "Insurance"
April 12, 2024 - Volume 18 Issue 71 Print Report
During Year 1 and prior years, TP entered into contracts ("the contracts") entitled "XYZ insurance policies" with unrelated parties ("the pro...
"PFML" Premiums Constitute A "Tax"
April 12, 2024 - Bulletin Print Report
The Washington Paid Family and Medical Leave Act, (the "PFML"), provides paid sick leave benefits to Washington employees. The PFML requires employers to collect prem...
Distributor Owes Fuel Tax On Delivery To Retail Dealer
April 12, 2024 - Bulletin Print Report
BN has been a registered distributor of gasoline and diesel fuel in Cook County, ("CC"), since 2011. The Department issued two notices of tax determination and assess...
Stock Repurchase Regulations Closely Track Prior Guidance
April 11, 2024 - Bulletin Print Report
The I.R.S.'s proposed regulations addressing the "stock repurchase excise tax" introduce relativelyfew deviations from the prior preview of those regulation...
Taxpayer Not Recipient Of "Amusement Charges"
April 11, 2024 - Volume 18 Issue 70 Print Report
Petitioner operates a small "game room," consisting of a pinball machine, a jukebox, and two billiard tables. Each of these devices is coin-operated....
Withdrawal Of Vehicles From Stock Triggers Sales Tax Liability
April 11, 2024 - Bulletin Print Report
TF and TA are each vehicle dealerships. ADFA issued notices of proposed assessment. ADFA found that TF had assigned vehicles with dealer license tags to JB, SR, and ATN; and th...
Supervisory Approval Of A Penalty Determination Was Timely Obtained
April 11, 2024 - Bulletin Print Report
On November 28, 2011, an Internal Revenue Agent sent the Bs a cover letter and a series of enclosures. The cover letter referred to "findings" in an "enclosed re...
Capital Loss Sustained By Liquidation Distribution Transferee
April 10, 2024 - Volume 18 Issue 69 Print Report
In 1937, the taxpayers decided to liquidate a corporation in which they had equal stock ownership. Partial distributions made in 1937, 1938, and 1939 were followed by a final o...
Storage Fees Constitute Rents From Real Property
April 10, 2024 - Bulletin Print Report
TP intends to elect to be treated as a real estate investment trust, ("REIT"). Property A is comprised of "a" acres of land located in City A. Once Property...
Property Leased To A College Is Not Tax-Exempt
April 10, 2024 - Bulletin Print Report
O is a for-profit commercial real estate developer. On April 30, 2009, O purchased the Property. Starting January 1, 2011, O began leasing the Property to N. N is a school, col...
"IPPC" Used Its Property To Further A Tax-Exempt Charitable Purpose
April 10, 2024 - Bulletin Print Report
A owns several properties in Minneapolis, which are used exclusively as private residences for tenants whose incomes are 30-50 percent of the area median income. All of its uni...
Australian/Canadian Gold Company Consolidation Appears To Be Taxable
April 9, 2024 - Bulletin Print Report
Westgold Resources Limited, ("WGX"), an Australian corporation, and Karora Resources, Inc., ("KRR"), organized under the laws of Canada, "have agreed t...
Reduction Of Undersecured Nonrecourse Debt Yields CODI
April 9, 2024 - Volume 18 Issue 68 Print Report
In 1988, A borrowed $1 million from C and signed a note payable to C for the same amount that bore interest at a fixed market rate. A had no personal liability with respect to...
Tax Exemption Is Not "Federal Financial Assistance"
April 9, 2024 - Bulletin Print Report
H was a student at CP. In 2020, H and her mother sued CP for violating Title IX of the Education Amendments of 1972. To support their Title IX claim, APPs alleged that CP recei...
Faulty Advice Leads To A Refund Of A "Non-Refundable" Payment
April 9, 2024 - Bulletin Print Report
Utah Code section 59-10-1403.2(2) provides: (a) For each taxable year that begins on or after January 1, 2022, but begins on or before December 31, 2025, a pass-through entity...
'S' Corporations Need Not Run The Gauntlet Of The "Device" Test
April 8, 2024 - Bulletin Print Report
Assume we have secured as a new client an 'S' corporation, ("SCo"),the stock of which is wholly owned by A, an individual. SCo has no accumulated earnin...
Nebraska And Utah Supreme Courts Interpret "Including" Differently
April 8, 2024 - Bulletin Print Report
The widely-read blog, "Adams on Contract Drafting," in April 2007, made the following observations regarding the legal significance and implications of the solitary w...
Manufacturer Of Pharmaceuticals May Have "Nexus" With Virginia
April 8, 2024 - Volume 18 Issue 67 Print Report
TP, a partnership, is a developer and manufacturer of prescription drugs. TP markets its products in Virginia (V) through sales personnel. Although some of TP's sales repre...
Processed NGLs Are Subject To Severance Tax
April 8, 2024 - Bulletin Print Report
C is a natural gas producer. Fracking causes substances to be released from shale, including oil, condensate, methane, and NGLs. The oil and condensate are typically sold at th...
Receipts Not Directly Derived From Disposition Of Software
April 5, 2024 - Bulletin Print Report
Section 199 of the Internal Revenue Code was in force between 2004 and 2017. It allowed a deduction equal to nine percent of receipts from certain "domestic production act...
Extensive Marketing Efforts Did Not Make Lakers' Owner A "Dealer"
April 5, 2024 - Bulletin Print Report
In 2013, "APP," Dr. Jerry Buss, the former owner of the Los Angeles Lakers, purchased three contiguous single-family properties, (the "Shoreline Properties"...
Holding Company Acquisition Meets "COBE" Requirement
April 5, 2024 - Volume 18 Issue 66 Print Report
Target, (T), engages in Business A indirectly through its wholly-owned subsidiary, C. T also engages in Business B indirectly through its wholly-owned subsidiary, S....
Addressing Alaska Air's Accounting And Sunoco L.P.'s Distributions
April 5, 2024 - Bulletin Print Report
Alaska Air Group's Q1 operations were, to put it mildly, "impacted" by Flight 1282 in January and the Boeing 737-9 MAX grounding, which extended into February. As...
"QSBS" Must Be Acquired At Original Issuance
April 4, 2024 - Bulletin Print Report
J, a former employee of the Universityof Oklahoma, ("OU"), is a named inventor on two patents. J assigned his rights in both patents to OU before November 2003....
Recovery Of Overpayment Not Included In Gross Income
April 4, 2024 - Volume 18 Issue 65 Print Report
A taxpayer received a sum of money from her tax consultant as "recompense" for an error made by the latter in the preparation and filing of the taxpayer's tax ret...
Jurisdiction Requires An Actual Dispute
April 4, 2024 - Bulletin Print Report
Hawaiian Airlines, ("H"), purchased spare parts from Boeing, ("B") for H's fleet of B aircraft, and agreed to pay certain taxes related to those purchas...
Digital Textbooks Are Exempt From Sales And Use Tax
April 4, 2024 - Bulletin Print Report
B is a subsidiary of A, which is one of the largest contract operators of physical and virtual bookstores for college and university campuses and K-12 institutions across the c...
Acquisition Of Former Operating Corporation Satisfies "COBE"
April 3, 2024 - Volume 18 Issue 64 Print Report
Target, (T), is a closed-end nondiversified investment company. T qualifies as a regulated investment company under Sec. 851 of the Code. A...
British Airways' Payments Were For "Taxable Transportation"
April 3, 2024 - Bulletin Print Report
Section 4261(a) of the Internal RevenueCode applies a 7.5 percent tax to "the amount paid for taxable transportation of any person." The excise taxes imposed by...
Property Leased To A For-Profit Entity Is Not Exempt
April 3, 2024 - Bulletin Print Report
RPTL 420-a(1)(a) mandates: "Real property owned by a corporation or association organized or conducted exclusively for...charitable or hospital...purposes...and used exclu...
"MTP" Not Exempt From Ad Valorem Taxation
April 3, 2024 - Bulletin Print Report
If a business engages in manufacturing activity as defined in WIS. STAT. section 70.995(1)-(2), it reports its "manufacturing property" used in that activity to the D...
Put Option Makes "Covered Write" A Straddle
April 2, 2024 - Volume 18 Issue 63 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 purchases a 12-...
Non-Taxable Compensation Treated As "Income"
April 2, 2024 - Bulletin Print Report
All property within the jurisdiction of this state (Idaho) "is subject to property tax." A property tax reduction benefit is available to certain qualifying individua...
Land Lessor Does Not "Provide Housing"
April 2, 2024 - Bulletin Print Report
O is a North Carolina non-profit organization, and its purpose is "to own and maintain land as a manufactured home community..." O owns approximately 3.74 acres of la...
Federal Tax Lien Properly Attached To Property Once Held By A "QPRT"
April 2, 2024 - Bulletin Print Report
The Ys transferred property into a Qualified Personal Residence Trust, ("QPRT"), in 1996. Nominal title to the property was subsequently transferred back to...
Expanded Version: Sports Owners' Tax Benefits Are Now Under I.R.S. Scrutiny
April 1, 2024 - Bulletin Print Report
The sale of the Baltimore Orioles to a group led by Carlisle Group founder and private-equity legend David Rubenstein coincides with the much-heralded establishment by the newl...
Assessing The Character Of "Boot" Gain
April 1, 2024 - Volume 18 Issue 62 Print Report
In Rev. Rul. 75-83, 1975-1 C.B. 112, X merged with and into Y in a reorganization under Sec. 368(a)(1)(A) of the Code. The sole shareholder of X received shares of Y stock and...
PPV And VOD Programming Is Not Tangible Personal Property
April 1, 2024 - Bulletin Print Report
Petitioner, ("P"), provides Television, ("TV") services to customers in Louisiana, ("La"), in exchange for monthly subscription fees. P a...
Failure To Timely File Form Precludes Claim To Surplus Proceeds
April 1, 2024 - Bulletin Print Report
In 2020, the Michigan Supreme Court ruled that former owners of properties sold at tax-foreclosure sales possess a "cognizable, vested property right to the surplus procee...
Book Not Entitled To Sales Tax Exemption
March 28, 2024 - Bulletin Print Report
RISCAdenied the application (for sales tax exemption) because the Book was sold on...so was commercial; and was also not a signed and numbered limited edition. Taxpayer,...
Accruing "Deductible" Contributions To Charities
March 28, 2024 - Volume 18 Issue 61 Print Report
TP owns and operates a station. The station is being operated pursuant to the FCC's Order. The Order requires that TP pay over part of the profits earned from the operation...
"Out-Of-Time" Refund Request Denied
March 28, 2024 - Bulletin Print Report
Taxpayer purchased the Truck at issue and registered and paid use tax on the Truck on a value of...on July 15, 2022. The Auditor testified that he reviewed the Taxpayer's r...
"Other Municipal Charge" Is A Term Of Art
March 28, 2024 - Bulletin Print Report
The City of Sea Isle City, (the "City"),is on a barrier island adjoining the Atlantic Ocean in Cape May County. The plaintiff, A, is a tenant of a property. A o...
Contingent Liabilities Assumed In A Merger
March 27, 2024 - Volume 18 Issue 60 Print Report
X merged with Z in a reorganization qualifying under Sec. 368(a)(1)(A). A and B, the shareholders of Z, agreed to reimburse X for any after-tax expenses that X might incur as a...
Church Affiliate Not Operated Primarily For Religious Purposes
March 27, 2024 - Bulletin Print Report
The petitioners, Catholic Charities Bureau, Inc., ("CCB"), and four of its sub-entities, seek an exemption from having to pay unemployment tax to cover their employee...
"Replacement Cost" Plausibly Includes Sales Tax
March 27, 2024 - Bulletin Print Report
P insured a leased vehicle under a policy through GEICO, ("G"). Under the policy, G may choose to pay the actual cash value, ("ACV"), to the insured... ACV...
Medical Marijuana Products Are "Articles Of Commerce"
March 27, 2024 - Bulletin Print Report
Taxpayer is a processor of medical marijuana products in Arkansas. DFA issued the Proposed Tax Assessment on April 21, 2023. Taxpayer converts marijuana plant materials into re...
Will Liberty Media's Split-Off Of SiriusXM Be A "Disqualified Distribution?"
March 26, 2024 - Bulletin Print Report
The recently announced split-off by Liberty Media Corporation of its stake in SiriusXM Holdings, Inc. has galvanized certain prominentinvestors into action. These investo...
Change in Obligor Does Not Produce "Significant Modification"
March 26, 2024 - Volume 18 Issue 59 Print Report
D Corporation, (D), and C Corporation, (C), D's wholly-owned subsidiary,are both Country A corporations. On Date M, D distributed, pro-rata to its sharehold...
Taxpayer Was A "Qualified New York Manufacturer"
March 26, 2024 - Bulletin Print Report
"Viticulture" is the cultivation of grapevines for the purpose of growing and producing grapes. It includes the growing of grapes for any commercial purpose.Gra...
"Decision" Encompasses Jurisdictional Dismissals
March 26, 2024 - Bulletin Print Report
The I.R.S. issued a notice of deficiency to F in 2018 for taxes owed for the 2014 and 2015 tax years. Pursuant tosection 6213(a) of the Code, he had 90 days to file a pet...
The Willens Deal Survey March 2024
March 25, 2024 - The Deal Survey: March 2024 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
Senator Whitehouse Wants To Do Away With Tax-Free Reorganizations
March 25, 2024 - Bulletin Print Report
Senators Sheldon Whitehouse(D-R.I.), and J.D. Vance, (R-Ohio),with no advanced warning, recently introduced a rather startling piece of legislation that would more...
Transfer Of Property Was "Incident To The Divorce"
March 25, 2024 - Bulletin Print Report
On March 3, 1984, L and D married. L owned stock in API as his separate property. After API merged with PI, L received cash and stock as his separate property. In 1988, L loane...
Dwelling Unit Is A Mere Camp Or Cottage
March 25, 2024 - Volume 18 Issue 58 Print Report
Petitioners are residents of New Jersey. S, the husband, maintained employment in New York, and consequently petitioners filed as New York nonresidents as to the husband's...
"Usage" Agreements Found To Be Taxable Sales
March 25, 2024 - Bulletin Print Report
P manufactured laser devices used by physicians and other medical professionals to treat certain skin conditions...and it both directly sold the laser devices...and provided th...
Use (Not Intention) Takes Real Property Off The Tax Rolls
March 22, 2024 - Bulletin Print Report
The subject property consists of approximately 14.68 acres at New Market, Tennessee, in Jefferson County.The property is owned by the taxpayer. Approximately five acres o...
Legal Fees Incurred In Patent Infringement Suits
March 22, 2024 - Volume 18 Issue 57 Print Report
FDA approval must be obtained before a new drug can be legally marketed and sold in the U.S. A company seeking to market a drug that has never been approved before must submit...
The Section 6015(e)(1)(A) Filing Deadline Is Jurisdictional
March 22, 2024 - Bulletin Print Report
On June 16, 2021, the Commissioner issued separate notices of determination to PAO and PAU, denying each of their requests for innocent spouse relief for 2018. PAU mailed a Pet...
Non-Resident's Tax Credits Applied Before Apportionment
March 22, 2024 - Bulletin Print Report
The Department of Arkansas, ("AK"), Heritage issued a state income tax credit in the amount of $125,000 to LSP, L.P. The Ws were residents of Alaska, ("AL")...
TCN's Distributions Will Have A Dual Character
March 21, 2024 - Bulletin Print Report
Tricon Residential, Inc., ("TCN"), a corporation organized under the laws of Canada, is in the process of being acquired by Creedence Acquisition ULC, (the "Purc...
Payment Of Check Does Not Relate Back To Delivery Date
March 21, 2024 - Volume 18 Issue 56 Print Report
Petitioners filed joint returns on the cash receipts and disbursements method of accounting for each of 1959 and 1960. During 1960, petitioner husband did some work for one LT...
The Pandemic Was Not An "Access Interruption Event"
March 21, 2024 - Bulletin Print Report
Utah Code section 59-2-1004.6 allows a property owner to seek an adjustment to a county's assessment of the fair market value of the owner's property if the "prope...
A "Calamity" Is Not Limited To Natural Events
March 21, 2024 - Bulletin Print Report
I owned real property in Lincoln, Nebraska. As of January 1, 2020, the assessor had valued this real property at $793,800. On or about May 30 or 31, the property was damaged by...
Pipeline User Fees Are "Rents From Real Property"
March 21, 2024 - Bulletin Print Report
Taxpayer, ("TP"), is a real estate investment trust, ("REIT"). TP invests in energy infrastructure assets. S is a partnership. TP owns an approximately &quo...
FUSN Shareholders Will Receive CVRs
March 20, 2024 - Bulletin Print Report
AstraZeneca AB, ("AZN"), has entered into a definitive agreement to acquire Fusion Pharmaceuticals, Inc., ("FUSN"). AZN, through a newly formed Canadian sub...
Unemployment Compensation Is Not "Compensation"
March 20, 2024 - Volume 18 Issue 55 Print Report
During 1992, petitioner, (P), earned $306.26 in taxable wages, $299.36 in taxable interest income, $106 from jury duty service, and received $10,660 in unemployment compensatio...
USAC Is A Federal Instrumentality
March 20, 2024 - Bulletin Print Report
A is a provider of Lifeline, ("L"), services in Washington. It provides free mobile devices and wireless services to L-eligible consumers and receives a $9.25 reim...
A Tax Credit Is Not A Tax Payment
March 20, 2024 - Bulletin Print Report
APPs were residents of Arizona, ("AZ"), during 2017. APPs timely filed their California Non-Resident Return for the 2017 taxable year. APPs claimed an Other State Tax...
Expanded Version: SUN And NS Announce The LP Equivalent Of A 'B' Reorganization
March 19, 2024 - Expanded Bulletin Print Report
Sunoco L.P., ("SUN"), and NuStar Energy L.P., ("NS"), each a publicly traded partnership that has avoidedcorporate tax treatment by satisfying section...
Conversion Under "Formless" Conversion Statute
March 19, 2024 - Volume 18 Issue 54 Print Report
On January 1, 2003, A is organized in State as an unincorporated entity that is classified as a partnership for federal income tax purposes. A elects to convert under a state l...
Ninth Circuit Applies The "Beard" Test
March 19, 2024 - Bulletin Print Report
S brought this adversary proceeding in his Chapter 7 bankruptcyseeking a determination that his federal tax debts for 2003, 2004, 2006, and 2009 were dischargeable. The B...
Bona Fide Debt Not Found
March 19, 2024 - Bulletin Print Report
By 2010, H was the managing partner of NKSF, an accounting firm. K became one of NKSF's first clients. K regularly borrowed money from the partners at NKSF. On July 14, 200...
Contributions To Exempt Organizations Deductible Under Sec. 162
March 18, 2024 - Volume 18 Issue 53 Print Report
TP is a partnership. TP began operating in 2010 as a joint venture between Member 1 and Member 2. In State, owners of identified facilities are required to obtain a Certificate...
Commercial Laundry Denied "Grow NJ" Tax Credits
March 18, 2024 - Bulletin Print Report
The New Jersey Economic Development Authority, ("NJEDA") administers "Grow NJ." Grow NJ grants tax credits to businesses based on jobs created or retained i...
Proxy Voting Advice Is Not "Solicitation"
March 18, 2024 - Bulletin Print Report
This case concerns whether proxy advisory firms "solicit" proxies within the meaning of section 14(a) of the Securities Exchange Act of 1934. The Securities and Excha...
Absence Of Return Makes Assessment Timely
March 18, 2024 - Bulletin Print Report
L was the sole shareholder of T. In 2011, somebody on T's behalf filed Form SS-4 with the I.R.S. to obtain an EIN. T's SS-4 specified that it would file a Form 944 rath...
Disability Benefits Are "Social Security Benefits"
March 15, 2024 - Volume 18 Issue 52 Print Report
Petitioner, (P), was approximately 50 years of age at the end of 2010. During that year, P did not earn any wages, salaries, fees or other amounts derived from, or received for...
State Payments Were Based On Or Measured By Income
March 15, 2024 - Bulletin Print Report
P operated a casino in Indiana through a subsidiary company. The Department determined that certain payments by P to other state governments needed to be added back to the calc...
Refundable Tax Credits Are "Receivables" For REIT Asset Test Purposes
March 15, 2024 - Bulletin Print Report
TP is the sole general partner of OP. TP elected to be treated as a real estate investment trust, ("REIT"). OP is the sole member of S. S is a disregarded entity. S o...
Fuel Retailer Not Eligible For Temporary Storage Exemption
March 15, 2024 - Bulletin Print Report
Among the ROTA's exemptions is one that exempted "personal property purchased from an Illinois retailer by a taxpayer engaged in centralized purchasing activities in I...
MO's Sale Of BUD Stake Should Not Incur Taxes
March 14, 2024 - Bulletin Print Report
Altria Group, Inc., ("MO"), through the years, has seen its ownership of Miller Brewing metamorphose into different forms. Currently, that Miller Brewing investment i...
Dividends Properly Included In California Sales Factor Denominator
March 14, 2024 - Bulletin Print Report
APP and certain unitary affiliated entities filed a water's edge combined report for the fiscal year ending June 30, 2018. During that tax year, APP received repatriated di...
Expense Not Paid When Check Issued
March 14, 2024 - Volume 18 Issue 51 Print Report
VA is a personal service C corporation that uses the cash receipts and disbursements method of accounting. RV is the sole shareholder and CEO and CFO of VA. KV, RV's spouse...
Taxpayer Eligible For The "Subject To Tax" Exception
March 14, 2024 - Bulletin Print Report
HCM, (also referred to as "TP"), filed a final year Alabama business income tax return for tax year 2009. HCM wasmerged into HI as of December 31, 2009. HI is a...
Section 6501(l)(4) Applies Purely Prospectively
March 14, 2024 - Bulletin Print Report
P was employed as a corporate executive until at least 2004. He participated in many deferred compensation arrangements. In 2004, P was offered (and he accepted) a $26 million...
Merger Of "Transitory" Subsidiary Recast As Direct Acquisition
March 13, 2024 - Volume 18 Issue 50 Print Report
P wanted to acquire all of the outstanding stock of Y for cash. P was only able to purchase 97.9 percent of the outstanding stock of Y for cash. In order to complete the acquis...
BlackRock Forgoes A Basis Step-Up
March 13, 2024 - Bulletin Print Report
BlackRock, Inc., ("BLK"), is frequently credited with founding the "ESG" movement, a designation that it now seemingly regrets given the well-publicized&nbs...
Cummins, Inc. Is About To Shed Atmus Filtration Technologies, Inc.
March 13, 2024 - Bulletin Print Report
Cummins, Inc., ("CI"), owns just north of 80 percent (80.5 percent to be exact)of the issued and outstanding CommonStock of Atmus Filtration Technologies,...
Taxpayer's Primary Function Was Collection And Analysis Of Information
March 13, 2024 - Bulletin Print Report
Petitioner, ("P"), is a company that provides services to advertisers...that measure the effectiveness of their advertising campaigns. After survey data is collected...
EQT And ETRN Will Combine In An All-Stock Transaction
March 12, 2024 - Bulletin Print Report
EQT Corporation, ("EQT"), and Equitrans Corporation, ("ETRN"), announced that they have entered into a definitive merger agreement. EQT will be acquiring&nb...
Form 4868 Not a Claim for Refund
March 12, 2024 - Volume 18 Issue 49 Print Report
The parties agree that petitioner overpaid his Federal income tax for 2005. The issue is whether he is entitled to a refund or credit of Federal income tax for 2005....
Florida's Section 382 Limitation Tracks The Federal Limitation
March 12, 2024 - Bulletin Print Report
Verizon Communications, Inc., ("V"), acquired MCI, Inc., ("M"), in 2006 and Terremark Worldwide, Inc., ("T"), in 2011. When V acquired M, M had ac...
Federal "Mitigation" Provisions Not Incorporated Into Florida Law
March 12, 2024 - Bulletin Print Report
Earlier this millennium, Verizon Communications, Inc. ("V"), acquired some companies and began filing consolidated annual tax returns with them. Some of these companie...
NGM Biopharmaceuticals, Inc. Will Undergo A "Bootstrap" Acquisition
March 11, 2024 - Bulletin Print Report
Atlas Neon Merger Subsidiary, Inc. ("PUR"), a wholly-owned subsidiary of newly-formed Atlas Merger Parent, Inc., ("P"), is offering to purchase, (the "...
Bond Premium And Discount Are Not Netted
March 11, 2024 - Volume 18 Issue 48 Print Report
The corporation sold $4,000x of its bonds in 1964 at face value. In a transaction in 1969, the corporation redeemed $200x face value of such bonds at a price of $202x in accord...
Sales Tax Measured By Unbundled Cell Phone Price
March 11, 2024 - Bulletin Print Report
B bought a Samsung Galaxy S5 from Verizon for $249.99 as part of a "bundled transaction." The bundle required B to sign a two-year wireless service contract with Veri...
Gain From Sale Of Partnership Interest Was Apportioned (Not Allocated)
March 11, 2024 - Bulletin Print Report
Taxpayer, ("TP"), a South Carolina resident individual, was a partner in "Management Partnership," which owned 49 percent of "Operating Partnership.&qu...
Obligation Not "Indebtedness" For Purposes Of Sec. 108(e)(4)
March 8, 2024 - Volume 18 Issue 47 Print Report
Partnership (PS) was created to construct and operate "Project." On Date 1, A, a State Y corporation, withdrew from PS. On Date 2, B, a State Y corporation, withdrew...
Improvements To Land Were Not "Omitted" Property
March 8, 2024 - Bulletin Print Report
S and SSH are Kentucky companies that purchased property several years ago. The former PVA of MC, "B," received copies of the deeds and reflected the transfers of tit...
Non-Resident Unable To Rely On P.L. 86-272 To Avoid State Taxation
March 8, 2024 - Bulletin Print Report
K is the sole owner of LLC, a limited liability company organized under the laws of the state of Maryland. During the years 2012 through 2015, LLC was a disregarded entity. Eff...
Only The Same Consumer Can Claim A Sales Tax Credit
March 8, 2024 - Bulletin Print Report
On March 19, 2022, Taxpayer and "X" purchased a 2022 Kawasaki Ninja 650 ( the "K")...including a service and handling fee and an extended warranty. Taxpayer...
"Old Colony" Principle Applies To Partner's Payment Of Partnership Debt
March 7, 2024 - Volume 18 Issue 46 Print Report
MO is an Ohio limited partnership organized in 1986 with two partners. One was MOG, the general partner, and the other was MML, the limited liability partner. Each had a 50 per...
Prison Company Not Entitled To Gross Receipts Deduction
March 7, 2024 - Bulletin Print Report
TP is a private prison company that contracted with two counties to build and maintain two prisons, then subsequently supervise, house, and provide services to prisoners within...
"Toxic" Lender Found To Be An Exchange Act "Dealer"
March 7, 2024 - Bulletin Print Report
A was a so-called "toxic" lender. A obtained convertible debt of penny-stock companies, converted the debt into common stock at a steep discount, and sold the stock i...
Bakery Equipment Exempt From Sales And Use Tax
March 7, 2024 - Bulletin Print Report
C operates retail stores worldwide. Within these stores, C sells varied merchandise. C's stores include a bakery. Each bakery produces freshly baked products. All of the ba...
Failure To Timely Pay Tax Was Negligent
March 6, 2024 - Bulletin Print Report
The main issue to be decided is whether the Taxpayer owes penalty and interest. On October 17, 2022, the Department issued an assessment to Taxpayer. Taxpayer filed a timely wr...
Can JBLU "Recover" Its Costs From The Terminated SAVE Acquisition?
March 6, 2024 - Bulletin Print Report
JetBlue Airways Corporation, ("JBLU"), entered into a definitive agreement, in July 2022, to acquire Spirit Airlines, Inc., ("SAVE"). It was always apparent...
Vista Outdoor, Inc. Will Divest Its Sporting Products Business
March 6, 2024 - Bulletin Print Report
Vista Outdoor, Inc., ("VSTO"), conducts two principal lines of business, the Outdoor Products business, ("OP"), and the Sporting Products business, ("S...
Retention Of Debenture Not Part Of A Tax Avoidance Plan
March 6, 2024 - Volume 18 Issue 45 Print Report
X is engaged, through its subsidiaries, in various manufacturing businesses. Y, a wholly-owned subsidiary of X, has been actively engaged in a manufacturing business for 20 yea...
Direct Ownership Required For "Deemed Paid" Foreign Taxes
March 5, 2024 - Volume 18 Issue 44 Print Report
P is a domestic corporation that owns all of the stock of four domestic subsidiary corporations. P and its subsidiaries constitute an affiliated group and P filed a consolidate...
Taxpayer Was Not A "Qualified Performing Artist"
March 5, 2024 - Bulletin Print Report
Petitioner is a performing artist, appearing in commercials and doing voice-over work. In 2019, she was paid for her work in what was described as an industry standard: a "...
Capitalized Costs Of "QTP" Are Eligible For The "BRTC"
March 5, 2024 - Bulletin Print Report
G possessed an ownership interest in GDC. GDC owned an eighty percent interest in HSC. The certificates of occupancy for the resident building of the "Project" were e...
Financing Costs Were Incurred "By Reason Of" Production Activities
March 5, 2024 - Bulletin Print Report
23rd Chelsea Associates, L.L.C., ("23"), purchased real property and development rights on West 23rd Street, New York, New York. The T was placed in service on August...
"Interim Financing" Agreement Is "Boot"
March 4, 2024 - Volume 18 Issue 43 Print Report
X Corporation, (X), owns 86 percent of the stock of Y Corporation, (Y). M Corporation, (M), wished to acquire Y in a statutory merger. A merger agreement was executed...
Bureau Failed To Undertake Efforts To Serve Upset Sale Notice
March 4, 2024 - Bulletin Print Report
M was the owner of Property. M failed to pay real estate taxes on the Property beginning with the 2020 tax year. In early 2021, the Bureau sent M a "Claim Notice" by...
The FCRA Clearly Waives Sovereign Immunity
March 4, 2024 - Bulletin Print Report
This case arises from a loan K secured from the RHS, a division of the United States Department of Agriculture, ("USDA"). According to K, he repaid his loan in full b...
Group Member's "NBLs" May Not Be Shared With New Group Members
March 4, 2024 - Bulletin Print Report
From January 1, 2011 until January 31, 2016, the "AHI Entities" were a part of a Wisconsin combined group, the parent of which was AH. The combined group ceased to ex...
Voting Stock Ownership For Purposes Of Sec. 902
March 1, 2024 - Volume 18 Issue 42 Print Report
FX, a foreign corporation, has outstanding 100 shares of voting stock divided into two classes: 95 shares of Class A stock and five shares of Class B stock. The classes are ide...
FA's Stock Will Be Taxable
March 1, 2024 - Bulletin Print Report
First Advantage Corporation, ("FA"), announced that it has entered into a definitive purchase agreement to acquire Sterling Check Corporation, ("STER"). FA...
Shareholder Withdrawals Were Distributions
March 1, 2024 - Bulletin Print Report
Petitioner, ("T"),is a manufacturer of amusement machines. T made loans characterized as demand notes, (the "Loans"), to S. None of the Loans included...
Overpayment Interest Accrues Only After Filing A "Processible" Return
March 1, 2024 - Bulletin Print Report
The Taxpayer Advocate Service has asked the Office of Servicewide interest to implement a policy of paying interest on an over-payment reported on an individual income tax retu...
Private "Target" Serves As "Issuing" Corporation In Latest SPAC Merger
February 29, 2024 - Bulletin Print Report
Webull Corporation, ("WC"),has chosen to "go public" by means of a business combination with a special purpose acquisition company, ("SPAC")...
Municipality May Tax An Employee Working From Home
February 29, 2024 - Bulletin Print Report
In March 2020, Ohio's governor declared a state of emergency due to the COVID-19 pandemic. The Ohio Department of Health directed people to stay at home. The General Assemb...
Sec. 108 Does Not Apply To Exclude "Gain" From Gross Income
February 29, 2024 - Volume 18 Issue 41 Print Report
As of December 30, 1988, P held a recourse note from petitioners with a balance due of $152,260. At that time, petitioners were unable to make the required payments. Pursuant t...
Untimely Refund Claim Did Not Merely Clarify A Timely One
February 29, 2024 - Bulletin Print Report
AGH filed its 2015 federal income tax return on September 19, 2016. AGH alleges that in 2019 its accountant discovered an error in the tax return. AGH's accountant prepared...
"Boot" In A Divisive 'D' Reorganization Not Distributed
February 28, 2024 - Volume 18 Issue 40 Print Report
D is engaged in the business of real estate acquisition, subdivision, development, sale, leasing, and management. CI and CII will each be incorporated (by D) in State X.<...
COVID-19 Shutdown Did Not Cause Physical Loss Or Damage To Property
February 28, 2024 - Bulletin Print Report
R, a city in St. Louis County, Missouri, purchased a commercial property insurance policy from M to protect against loss of "business income," i.e., sales tax revenue...
Tardy Order Started The Appeals Clock
February 28, 2024 - Bulletin Print Report
In May 2015, the Cs filed a notice of appeal to the Tax Appeal Court, ("TAC"). The Cs contested the City's classification of several investment properties they ow...
State And Local Bond Interest Is "Excluded" From Taxable Income
February 28, 2024 - Bulletin Print Report
Section 220.11, Fla. Stat., provides, "A tax measured by 'net income' is hereby imposed on every taxpayer for each taxable year." "Net income," in t...
Is The HES/CHV Merger In Peril?
February 27, 2024 - Bulletin Print Report
Chevron Corporation, ("CHV"), several months ago, announced it had enteredinto a definitive agreement to acquire Hess Corporation, ("HES"), in an &quo...
What If Borrowed Stock Becomes Worthless?
February 27, 2024 - Bulletin Print Report
The Wall Street Journal, on January 2, 2024,reported that an alarming number of companies engaged in different phases of the beleaguered electric vehicle industryha...
AA Set To Acquire Joint Venture Partner
February 27, 2024 - Bulletin Print Report
Alcoa, ("AA"), and Alumina Limited, ("AL"),an Australian corporation, are partners in a joint venture that goes by the name of "AWAC." AA is...
Tax-Free Liquidation Into a Tax-Exempt Organization
February 27, 2024 - Volume 18 Issue 39 Print Report
P is a privately held member-owned cooperative with approximately "a" members. On Date 2, P became exempt from federal income tax under Sec. 501(c)(12)....
"Offset" Social Security Benefits Are Included In Income
February 27, 2024 - Bulletin Print Report
W worked as a registered nurse until 2014. In that year, she became disabled. She began receiving New York workers' compensation benefits in 2014. In 2015, W applied to the...
Recently Purchased Business Can Be Spun-Off
February 26, 2024 - Volume 18 Issue 38 Print Report
D has been engaged under a dealer franchise in the sale and service of brand Y automobiles since Year 1. In Year 8, D acquired a franchise for the sale and service of brand Y a...
Legislative Regulations Were Not Unreasonable
February 26, 2024 - Bulletin Print Report
In July 2015, plaintiffs filed refund claims with the Division of Taxation, ("Division"), for certain sales and use taxes, ("SUTs"), they paid for manufactu...
Seed Tester Eligible For "Scientific" Exemption
February 26, 2024 - Bulletin Print Report
Indiana Crop Improvement Association, Inc., ("IC"), sought an exemption...for real and personal property that it uses to operate a seed testing laboratory. In 1935, t...
Compensation For Rendering Services Is "Gross Income Of The Business"
February 26, 2024 - Bulletin Print Report
C is a wholesale distributor of beverages and conducts business in Washington. Y operates a wine distribution business in Washington. In 2011, C entered into a contract with Y,...
Funhouse Is An Amusement "Device" Or "Facility"
February 23, 2024 - Volume 18 Issue 37 Print Report
Petitioner, (P), is a Delaware corporation engaged in the business of providing amusement rides, food, and novelty concessions at state and county fairs. P has been granted the...
Divorce Instrument Contained A "Non-Alimony Designation"
February 23, 2024 - Bulletin Print Report
On November 21, 2005, petitioner, ("P"), and MS entered into a marital settlement agreement, ("Settlement Agreement"). Paragraph 1, captioned "Equitabl...
Use Tax Found To Be "Externally Consistent"
February 23, 2024 - Bulletin Print Report
Ellison Drainage, Inc., ("E"),is a Minnesota-based corporation with its principal place of business in Minnesota. Between 2017 and 2020, E completed approximate...
Railroad Entitled To Minnesota Subtraction For Pre-2013 Expenses
February 23, 2024 - Bulletin Print Report
S owned and operated railroads in the United Statesand Canada. On its federal income tax returns for tax years 2005 through 2017, the Railroad, ("RR"), claimed...
Merger Not A "Disposition" Of Installment Obligation
February 22, 2024 - Volume 18 Issue 36 Print Report
P is the common parent of an affiliated group of corporations. S is a wholly-owned subsidiary of P that was acquired by P in a taxable transaction on Date 1. &n...
Taxpayer Did Not Have A "Qualifying Child"
February 22, 2024 - Bulletin Print Report
Petitioner is the grandmother of A.V. and has been A.V.'s court appointed guardian since 2007. A.V. was not employed during 2020. Petitioner helped A.V. pay for rent, phone...
Whistleblower Need Not Prove "Retaliatory Intent"
February 22, 2024 - Bulletin Print Report
Congress enacted the Sarbanes-Oxley Act in the wake of the Enron scandal. 18 U.S.C. section 1514A establishes that no employer may "discharge, demote, suspend, threaten, h...
Failure To Report Swiss Account Was A Willful Violation Of FBAR
February 22, 2024 - Bulletin Print Report
K is a U.S. citizen. In 2008, K opened an interest-bearing account at FB in Zurich. He designated the account as "numbered." He also requested that FB retain, rather...
The Willens Deal Survey February 2024
February 21, 2024 - The Deal Survey: February 2024 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
Alternatives or Separate and Distinct Proposals?
February 21, 2024 - Volume 18 Issue 35 Print Report
In the spring of 1944, the board of directors of petitioner, (SL), appointed a committee of the board to make a study of "all phases of the capital structure&quo...
Right To Apply For Club Membership Enhanced Real Estate Value
February 21, 2024 - Bulletin Print Report
Georgia imposes taxes upon all owners of non-exempt real and tangible personal property at the property's fair market value. Real property does not include the intangible b...
Vehicle Not "Used Directly" For Farming Activities
February 21, 2024 - Bulletin Print Report
The Commissioner assessed use tax on B's purchase of the vehicle. At the time of purchase, B did not pay sales tax on the transaction, contending that the vehicle was exemp...
Consulting Firm Was "Located" In The Ballpark Area
February 21, 2024 - Bulletin Print Report
"QHTCs" were granted various benefits, including a temporary exemption from the District of Columbia's corporate franchise tax. The "Ballpark Act" amend...
DKNG Agrees To A Forward Triangular Merger
February 20, 2024 - Bulletin Print Report
DraftKings, Inc., ("DKNG"), announced that it has reached an agreement to acquire Jackpocket, ("J"), "for total consideration of approximately $750 mil...
COF Proposes To Annex DFS
February 20, 2024 - Bulletin Print Report
Capital One Financial Corporation, ("COF"), and Discover Financial Services, ("DFS"), announced that they have entered into a definitive agreement pursuant...
Child-Related Contingency Eliminates Alimony Tax Deduction
February 20, 2024 - Bulletin Print Report
Petitioners appeal from the Tax Court's decision affirming the Commissioner of Internal Revenue's denial of an alimony deduction under section 215(a) and the Commission...
Gift Of Cash Surrender Value Of Life Insurance Policy Not Deductible
February 20, 2024 - Volume 18 Issue 34 Print Report
A taxpayer made a contribution to a college by irrevocably assigning to it the cash surrender value of a paid-up life insurance policy on the taxpayer's life. The college i...
Lions Gate Can Promptly Spin-Off Its Studio Business
February 20, 2024 - Bulletin Print Report
Screaming Eagles Acquisition Corporation,, ("SEAC"), a special purpose acquisition company, ("SPAC"), announced that it has entered into a definitive agreem...
Foreign Service Officer Subject To New York State Tax
February 16, 2024 - Volume 18 Issue 33 Print Report
Petitioner, (P), is a member of the Foreign Service and received orders to work for up to three years at United States Mission to the United Nations (USUN) in New York City. P...
Valuation Is Based On A Property's Existing Use
February 16, 2024 - Bulletin Print Report
At issue is the valuation of a 70-parcel residential rental community (the "property") comprised of 35 structures. Each structure contains two adjacent apartments, an...
IRA Funds Were Constructively Received
February 16, 2024 - Bulletin Print Report
Petitioner, ("P"), was indicted for crimes related to the distribution of controlled substances. P was a pharmacist in Kentucky. P's property, including the IRA,...
Lien Attached To Property Held By Third-Party Nominee
February 16, 2024 - Bulletin Print Report
To satisfy a delinquent taxpayer's outstanding liabilities, the Government may attach liens to property that is under the taxpayer's control or the control of a third p...
Is Sony Planning A Series Of Distributions Of SFGI Stock?
February 15, 2024 - Bulletin Print Report
It appears that Sony Group Corporation, ("S"), has reached a definitive decision to distribute to its shareholders somewhat more than eighty percent of the stock of i...
Property Acquired From Former Spouse Not "Purchased"
February 15, 2024 - Volume 18 Issue 32 Print Report
On October 8, 1989, petitioner, (P), married TH. Approximately two years later they purchased a home. The home was originally titled in P's and his mother's names, but...
Net Debt Relief Is "Other Property"
February 15, 2024 - Bulletin Print Report
S was the sole member of T. During 2011, T sold a commercial property (the "relinquished property") as part of a section 1031 transaction. In 2012, as part of the sam...
Installing Artificial Turf Is Not "Landscaping"
February 15, 2024 - Bulletin Print Report
TP performed contracts...that involved all aspects of either or both constructing and replacing athletic fields. The Department of Finance and Administration, (the "DFA&qu...
Erroneous Depreciation Charges Reduce Basis
February 14, 2024 - Volume 18 Issue 31 Print Report
In 1969, KIP began construction on nine prefabricated buildings that were then leased to a college for three years. The buildings cost $578,030 to erect.  ...
Forestry Is Not "Farming"
February 14, 2024 - Bulletin Print Report
TP has a farm in County. About two-thirds of the farm "is in timber," and the remainder is "hay meadow." TP included in his 2007, 2008, 2014, and 2015 feder...
Insurer's Gross Receipts Not Included Numerator Of Sales Factor
February 14, 2024 - Bulletin Print Report
The Plans cover certain claims by retail device customers for hardware service and technical support. Plans are sold through Apple, Inc., ("AI"). Plaintiffs...
CCI Was Not A "Qualified Emerging Technology Company"
February 14, 2024 - Bulletin Print Report
Petitioners calculated their corporation franchise tax on the entire net income base using the reduced rate as a qualified emerging technology company, ("QETC"). The...
Will WISH Be Able To "Monetize" Its Net Operating Losses?
February 13, 2024 - Bulletin Print Report
ContextLogic, Inc., ("WISH")," made a rather stunning announcement on February 12, 2024 regarding its immediate future. WISH, proud owner of some $2.7 billion in...
FANG Will Not Enjoy A Basis Step-Up
February 13, 2024 - Bulletin Print Report
We had high hopes that the acquisition by Diamondback Energy, Inc., ("FANG"), of Endeavor Parent LLC, ("EP"), would result in FANG achieving a cost basis in...
Funhouses Found To Be "Places Of Amusement"
February 13, 2024 - Volume 18 Issue 30 Print Report
Petitioner, (P), operates an annual haunted attraction ("the Attraction"). The Attraction is made up of roughly five different "funhouses" that are containe...
New Or Inherited Holding Period?
February 13, 2024 - Bulletin Print Report
In 2017, JS owned 231.744 acres of land in Taylor County, Florida. It donated a conservation easement on that land and claimed a deduction under section 170 of the Internal Rev...
Redemption Of 'S' Corporation Stock
February 12, 2024 - Volume 18 Issue 29 Print Report
Company, (C), has outstanding 150 shares of voting common stock and 1,657.8 shares of nonvoting common stock. A, the President and Chairman of the Board of Directors of C, dire...
Reimbursed Construction Costs Is "Good" REIT Income
February 12, 2024 - Bulletin Print Report
TP is a real estate investment trust, ("REIT"). TP's predecessor was P. TP and P togetherare referred to as "Company." TP is a limited partner of...
Benefits Are From Sources Other Than Privately Funded Sources
February 12, 2024 - Bulletin Print Report
Applicant is a public university that was created by the laws of Missouri. It pays benefits from two plans, the "R Plan" and the "S"Plan." For th...
The Municipalities Cannot Sue Non-Franchise Holders
February 12, 2024 - Bulletin Print Report
In 2005, the Texas Legislature added Chapter 66 to the Texas Public Utility Regulatory Act, ("PURA"), in an effort to "streamline state and municipal regulation...
Name Given To Certificates Controlling
February 9, 2024 - Volume 18 Issue 28 Print Report
The taxpayer was incorporated under the laws of New York on June 20, 1929. On June 25th, it purchased all of the stock of OPP and paid the sellers 1,000 shares of its own stock...
Full-Time National Guard Duty Is "Active Service"
February 9, 2024 - Bulletin Print Report
Plaintiff, ("P"), is a New Jersey resident and owns a residence in the Township. On January 20, 2023, the VA notified her that she is entitled to benefits commencing...
Activities Did Not Constitute A "Commercial Enterprise"
February 9, 2024 - Bulletin Print Report
In 2012, H created Rides2Work, ("R"), to connect vehicle drivers and riders interested in carpooling...for a fee. In September 2012, the first version of the R websit...
Statutory Remedy Precludes Equitable Relief
February 9, 2024 - Bulletin Print Report
The School District, ("SD"), seeks to recover from Property Owner, ("PO"), the amount in taxes it would have paid but for the County's delay in revising...
Barratt Developments PLC And Redrow PLC Announce A "Scheme"
February 8, 2024 - Bulletin Print Report
Barratt Developments PLC and Redrow PLC, each organized under the laws of the United Kingdom, recentlyannounced that the boards of directors of each such corporation have...
Base Year Land Value Not Altered By Swift Demolition Of Improvements
February 8, 2024 - Bulletin Print Report
On March 20, 2014, the Greenspans, (the "Gs"),purchased a home in Long Beach, California for $900,000. The change in ownership accompanying the purchasetr...
Trade Show Attendance Creates Taxing Nexus
February 8, 2024 - Volume 18 Issue 27 Print Report
TP is a privately-held corporation headquartered outside of Washington. TP sells custom apparel for sport and spirit teams over the internet, by telephone, and by catalog. All...
Extension For Trader To Make A Section 475(f)(1) Election Denied
February 8, 2024 - Bulletin Print Report
TP engages in securities trading. TP represents that during Date 3, TP began to actively trade securities in a revocable trust account. TP's acquisitions of certain securit...
The Incentive Period Runs During Months Of Non-Production
February 8, 2024 - Bulletin Print Report
Apache Corporation, ("A"), owned three horizontally completed oil wells that were subsequently sold to Bluebird Energy, LLC, ("B"), in July 2021. The wells...
Outsourcing Decision Leads To Partial Liquidation
February 7, 2024 - Volume 18 Issue 26 Print Report
X is engaged in the businesses of tanning and processing hides, and selling and merchandising the finished product. X has outstanding cumulative preferred nonvoting stock; and...
Fiber-Optic Cables Are Taxable Real Property
February 7, 2024 - Bulletin Print Report
Petitioner is a company that provides Internet, telephone and cable television services via fiber-optic cables and conduits to its private customers around the New York State....
Inter-Company Transfers Were Deemed Distributions And Contributions
February 7, 2024 - Bulletin Print Report
F was the sole shareholder of two 'S' corporations, C and CR. C's business operations included the collection of trash. CR's business operations consisted of pr...
Certified Mail Requires A Signature
February 7, 2024 - Bulletin Print Report
The Absecon City Tax Assessor sent a Chapter 91 request...via regular mail on June 15, 2022, without any response. On July 27, 2022, the Assessor resent the request directing&n...
Holding Company Found To Have "Nexus" With Detroit
February 6, 2024 - Bulletin Print Report
What is the modus operandi of a private equity firm? Typically, the firm sponsors a fund, organized as a partnership, and solicits investors, of some means, who a...
Choice Hotels And Wyndham Hotels Test The Limits Of Step Integration
February 6, 2024 - Bulletin Print Report
Choice Hotels International, Inc., ("CHH"), has been in hot pursuit of its industry colleague, Wyndham Hotels & Resorts, Inc., ("WH"), for quite some ti...
Convertible Debentures Not Regarded As Equity Under Sec. 385
February 6, 2024 - Volume 18 Issue 25 Print Report
ACQ (or TP) acquired all of the stock of T on "p." The aggregate purchase price was "$q," consisting of "$r" in cash, "$s" in conv...
Amazon Was In The Business Of Selling "TPP" At Retail
February 6, 2024 - Bulletin Print Report
Amazon Services, ("AS"), operates the Amazon.com website, (the "Marketplace"). The Department of Revenue, (the "Department"), assessed AS $12,490,...
Grant Of Bargain Option Is Not Payment Of Charitable Contribution
February 5, 2024 - Volume 18 Issue 24 Print Report
On January 2, 1980, A, an individual, granted to X, an organization described in Sec. 170(c)(2) of the Internal Revenue Code, a written option to purchase real property located...
Taxpayer Intent To Evade Tax Not Necessary To Invoke Section 6501(c)(1)
February 5, 2024 - Bulletin Print Report
For tax years 1993 through 1999, (the "years at issue"), the Ms relied on a tax return preparer, DH, to prepare their federal income taxreturns. Unbeknownst to...
Comparable-Assessment Analysis Led To Abatement Of Property Tax
February 5, 2024 - Bulletin Print Report
On the relevant valuation and assessment dates for the fiscal years at issue, Appellant, ("APP"),was the assessed owner of Condominium Unit 7 located at 400 Mar...
SUN And NS Announce The LP Equivalent Of A 'B' Reorganization
February 5, 2024 - Bulletin Print Report
Sunoco L.P., ("SUN"), and NuStar Energy L.P., ("NS"), each a publicly traded partnership that avoids corporate tax treatment by satisfying section 7704(c)&#...
Interest on Condemnation Award Not Excludible
February 2, 2024 - Volume 18 Issue 23 Print Report
Dominick and Louis Denaples, (D),were equal partners in two partnerships, D&L and K, and each owned 50 percent of the stock of an 'S' corporation, R...
Amazon Was Not The Consignee Of Merchants' Products
February 2, 2024 - Bulletin Print Report
O and S sell products on Amazon.com by participating in Amazon's "Fulfillment By Amazon," ("FBA"), program. To participate in the FBA program, a merchan...
Consolidation Of Pension Fund Assets Was Not Unconstitutional
February 2, 2024 - Bulletin Print Report
On January 1, 2020, Public Act 101-610 became effective and amended...portions of the pension code to consolidate all applicable local police and firefighter pension fund asset...
Sports Owners' Tax Benefits Are Now Under I.R.S. Scrutiny
February 2, 2024 - Bulletin Print Report
The sale of the Baltimore Orioles to a group led by private-equity legend David Rubenstein coincides with the establishment by the Internal Revenue Service of a "task forc...
Non-Resident Alien's Personal Exemption Deduction Is Zero
February 1, 2024 - Bulletin Print Report
B was a "non-resident alien." Section 873 governs deductions that non-resident aliens may claim when computing taxable income. Section 873(a) provides, "in the c...
Double Deduction Denied
February 1, 2024 - Volume 18 Issue 22 Print Report
In 1980, the taxpayer, a manufacturing corporation, discovered that between 1974 and 1977 an employee had embezzled $70,000x by writing checks for fictitious purchases of raw m...
Full-Time Employee Not A "Real Estate Professional"
February 1, 2024 - Bulletin Print Report
In 1994, G began renting out a California property he owned. In 2016, G bought a property in Hawaii; and in 2017, G began renting out the Hawaii property. G had a full-time...
Existence Of "STRP" Does Not Render Property "Commercial"
February 1, 2024 - Bulletin Print Report
The taxpayer, ("TP"),occupies the subject Property as his personal residence. TP, in 2016, applied for, and received, a non-owner-occupied permit to use the Pro...
Late Filing Of Request For Hearing Does Not Eliminate Penalties
January 31, 2024 - Bulletin Print Report
On March 20, 2018, the Department issued a gross receipts tax assessment to TP. On May 10, 2018, TP filed a timely written protest to the assessment of penalty. On May 16, 2018...
Redemption Of Nonvoting Stock Fails To Qualify Under Sec. 302(b)(1)
January 31, 2024 - Volume 18 Issue 21 Print Report
X had outstanding three classes of stock consisting of 100 shares of voting common stock, 100 shares of nonvoting common stock, and 50 shares of nonvoting 9 percent cumulative...
"Qualified Tuition And Related Expenses"
January 31, 2024 - Bulletin Print Report
In 2020, petitioner's son was enrolled in East Los Angeles College. On her 2020 federal income tax return, petitioner claimed the American Opportunity Credit, (the "AO...
A Late-Filed Submission Can Be A "Return"
January 31, 2024 - Bulletin Print Report
Plaintiff, ("P"), had an obligation to file his 2004 federal income tax return by April 15, 2005, or timely file for an extension, but failed to do either. On or abou...
WSC Offers Just Enough Stock To Accomplish A Reorganization
January 30, 2024 - Bulletin Print Report
WillScot Mobile Mini Holdings Corporation, ("WSC"), announced it has entered into a definitive agreement to acquire McGrath RentCorp, ("MGRC"). The deal, wh...
Loss Not Sustained In Year Claimed
January 30, 2024 - Volume 18 Issue 20 Print Report
On June 26, 2000, petitioners and some of their family members loaned MC $10,000,000, of which petitioners contributed $4,044,096, in exchange for a promissory note. According...
Unused Portion Of Property Not Eligible For Tax Exemption
January 30, 2024 - Bulletin Print Report
Petitioner, a not-for-profit corporation, owns two parcels of land which, since at least the 1980s, qualified for exemption from real property taxes for religious and education...
The Section 4973 Exaction Is A "Tax"
January 30, 2024 - Bulletin Print Report
In 2004, petitioner accepted a $26 million buyout from his company. The $26 million was paid in exchange for his ESOP stock and for his relinquishment of the interests he held...
TSLA Expresses Confidence In Its Ability To Generate Taxable Income
January 29, 2024 - Bulletin Print Report
Corporations are required to recognize"deferred tax assets" for "deductible temporary differences" and for loss and creditcarryforwards. Tesla,...
Contribution Of Partial Interest In Property
January 29, 2024 - Volume 18 Issue 19 Print Report
A, an individual taxpayer, is a shareholder of X corporation, (XC). A contributes 100 shares of A's voting stock in XC to Y, an organization described in Sec. 170(c) of the...
CCA Did Not Accept A Non-Taxable Transaction Certificate In "Good Faith"
January 29, 2024 - Bulletin Print Report
CCA owned and operated the Detention Center, ("DC"). CCA incarcerated inmates for the County at the DC pursuant to the contract it executed with the County in 2010. C...
Online Travel Companies Are Not "Proprietors" Or "Managing Agents"
January 29, 2024 - Bulletin Print Report
Online Travel Companies, ("OTCs"), operate websites where travelers can book hotel rooms. The city of Tucson, Arizona assessed Expedia, ("E"), for taxes und...
Recasting A Recapitalization To Find Sec. 306 Stock
January 26, 2024 - Volume 18 Issue 18 Print Report
X has outstanding 100 shares of voting common stock. A owned 20 of those shares. X entered into a plan of recapitalization under which all of the X shareholders surrendered the...
Indicia Of Recklessness Led To Willful Violation Of "FBAR"
January 26, 2024 - Bulletin Print Report
Defendants are U.S. citizens. The Lloyds Account, (the "LA"), was comprised of three components. Defendants did not disclose the existence of the LA to Y when he prep...
Reimbursement For Rebates Are Part Of Gross Receipts
January 26, 2024 - Bulletin Print Report
APP, a MetroPCS-authorized dealer, sold cell phones, cell phone accessories, and prepaid wireless service plans at seven locations in California. CDTFA conducted an audit of AP...
The Toll Road Was A "Highway"
January 26, 2024 - Bulletin Print Report
"Motor Carriers" are registered with and authorized by the U.S. Department of Transportation to haul others' property in interstate commerce. They each remitted q...
Website Not "Vendor" Of Restaurant Sales
January 25, 2024 - Volume 18 Issue 17 Print Report
Petitioner, (P), operates a website through which restaurants in over 27 cities and two countries offer meals for sale. When a meal is ordered through the website, the payment...
Section 83(b) Election Was Timely Revoked
January 25, 2024 - Bulletin Print Report
On Date 1, Y was granted an option to purchase "X" shares of Employer common stock, subject to a risk of forfeiture. On Date 2, Y filed an election under section 83(b...
Country Club Initiation Fees Were "Bona Fide"
January 25, 2024 - Bulletin Print Report
RO is a non-profit corporation that owns and operates a country club in Vancouver, Washington. The most expensive memberships are "proprietary," "corporate,"...
No Excise Tax Exemption For Returned Vehicles
January 25, 2024 - Bulletin Print Report
TP owns and operatesused motor vehicle dealerships in New Mexico. TP is licensed as a used motor vehicle dealer as well as a motor vehicle sales finance company. At the t...
INBX To Engage In An Intentionally Defective Morris Trust Transaction
January 24, 2024 - Bulletin Print Report
Inhibrx, Inc., ("INBX"), and Sanofi announced that the companies have entered into a definitive agreement under which Aventis, Inc., ("AI"), a subsidiary of...
LPSN Takes Steps To Protect Its Deferred Tax Assets
January 24, 2024 - Bulletin Print Report
LivePerson, Inc., ("LPSN"), has amassed sizable net operating losses, ("NOLs"),virtually all of whichwere sustained in tax years beginning after...
Substantial Compliance Saves "Defective" Sec. 1042 Election
January 24, 2024 - Volume 18 Issue 16 Print Report
A and B are husband and wife. C was a domestic C corporation and never had any stock outstanding that was readily tradable on an established securities market. C established an...
Tobacco Wholesaler Denied Refund Of Overpaid Taxes
January 24, 2024 - Bulletin Print Report
M is a wholesaler of tobacco products. M purchased "Other Tobacco Products," ("OTP"), from UST, also a wholesaler of tobacco products. UST purchased the OTP...
CHK And SWN Strike A Deal
January 24, 2024 - Bulletin Print Report
Chesapeake Energy Corporation, ("CHK"), and Southwestern Energy Company, ("SWN"), recentlyannounced that they have entered into an agreement to merge...
Circumstances In Which A Recently Acquired Business Can Be Spun-Off
January 23, 2024 - Bulletin Print Report
The active trade or business requirement, found in section 355(a)(1)(C), is arguably the one that is most closely identified with spin-offs. There are several layersto th...
Charitable Contributions Made By Credit Card
January 23, 2024 - Volume 18 Issue 15 Print Report
The I.R.S. has given further consideration to Rev. Rul. 71-216, 1971-1 C.B. 96, which holds that a taxpayer who used a bank credit card to contribute to a qualified charity may...
The USPS Postmark Date Controls
January 23, 2024 - Bulletin Print Report
The Bs appeal pro se from the Tax Court's denial of a motion to reconsider or vacate its decision sustaining the Internal Revenue Service's levy acti...
Recovered "FUSF" Contributions Are Subject To Sales Tax
January 23, 2024 - Bulletin Print Report
Petitioner, ("P"), is a limited liability company. Since May 2016, Charter Communications, Inc. has been the parent company of P. P provides "VoIP" telecomm...
The Willens Deal Survey January 2024
January 22, 2024 - The Deal Survey: January 2024 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
Winery's Merger Agreement Was Crafted To Ensure A Tax-Free Outcome
January 22, 2024 - Bulletin Print Report
Where an acquisitive transaction qualifies as a reorganization, within the meaning of section 368(a) of the Code, the shareholders of the acquired corporation become entitled t...
Total AGI Is Used To Limit I.R.A. Deductions
January 22, 2024 - Volume 18 Issue 14 Print Report
During 2001 and 2002, petitioner husband was an active participant in a Sec. 403(b) employer-sponsored retirement plan. Petitioner husband claimed I.R.A. contribution deduction...
Lawsuit Barred By "Full-Payment Rule"
January 22, 2024 - Bulletin Print Report
Plaintiffs filed their 2018 tax return over six months after the April 15, 2019 deadline. The I.R.S. assessed income tax, as well as penalties. Plaintiffs allege that they file...
A "De Facto" Merger Occurred
January 22, 2024 - Bulletin Print Report
EK was a majority owner of F, a logging business. TK, EK's spouse, was F's secretary. F failed to pay its unemployment compensation taxes... FS is also a logging busine...
How To Calculate "Gross Income Stated In The Return"
January 19, 2024 - Volume 18 Issue 13 Print Report
Petitioners filed their 2006 and 2007 Forms 1040 on September 17, 2007 and October 2, 2008, respectively. Respondent sent petitioners a notice of deficiency on September 26, 20...
Remission Of Late Payment Penalties Granted
January 19, 2024 - Bulletin Print Report
Unique Paving Materials, ("UPM"), owns three parcels of real property in Cuyahoga County, Ohio. For the second half of tax year 2022, UPM received a late payment pena...
The Date Of Mailing Is The Date Of Delivery
January 19, 2024 - Bulletin Print Report
This deficiency case is presently before the court on respondent's Motion to Dismiss for Lack of Jurisdiction. Respondent asserts that petitioner did not timely submit and...
Property Qualified For "Greenbelt" Status
January 19, 2024 - Bulletin Print Report
R purchased the 19.9 acre property in Douglas County, Nebraska in 2016 with "the ultimate intent of developing it." At the time the property was purchased, and subseq...
Valuing A Prize Or Award
January 18, 2024 - Volume 18 Issue 12 Print Report
RT, whose name had been selected by chance from a telephone book, was called on the telephone on April 18, 1948 and was asked to name a song that was being played on a radio pr...
Memorandum Of Contract Recorded After Deadline
January 18, 2024 - Bulletin Print Report
S moved to the home in Carmel, Indianain October of 2020. She contracted to purchase the home on December 31, 2020, completing an application forIndiana's homes...
"Market Discount" Rules Apply To Repossessed Property
January 18, 2024 - Bulletin Print Report
OM operated a car dealership in Indiana, ("IN"). OM regularly executed installment sale contracts to finance part or all of its customers' purchase prices and the...
Income From Issuance Of "Offsets" Is Qualifying REIT Income
January 18, 2024 - Bulletin Print Report
TP intends to elect to be taxed as a REIT. TP owns commercial forest land, (the "Site"). The Site will qualify as real property within the meaning of section 856 of t...
Congress Moves To Restore Business Tax Benefits
January 17, 2024 - Bulletin Print Report
A bipartisan agreement is taking shape in Congress to restore, at least temporarily, certain business tax benefits that had beeneliminated by certainprovisions of t...
Sec. 108(a) Does Not Permit The Exclusion Of Gain
January 17, 2024 - Volume 18 Issue 11 Print Report
The taxpayers owned and occupied a residence that had a fair market value significantly less than the amount of the first and second recourse mortgages that encumbered the hous...
Prejudicial Dismissal Of "DOTA" Petition Was Warranted
January 17, 2024 - Bulletin Print Report
Petitioner filed a petition with the Division of Tax Appeals on September 30, 2022. The petition "appears to challenge a property tax." A statutory notice or concilia...
SNPS And ANSS To Undertake A "Taxable" Merger
January 17, 2024 - Bulletin Print Report
Synopsys, Inc., ("SNPS"), and Ansys, Inc., ("ANSS"), announced, on January 16, 2024, that they have entered into a definitive agreement pursuant towhi...
Agreement Classified As An "Option"
January 16, 2024 - Volume 18 Issue 10 Print Report
GR was engaged in the stock brokerage and underwriting business, and V was its sole shareholder and principal executive officer. On Septemb...
Petition Date Specified In The "NOD" Is Controlling
January 16, 2024 - Bulletin Print Report
On October 7, 2021, respondent mailed the first notice to petitioners for their 2017 taxable year. The first notice bears a stamped date specifying December 5, 2022, as the las...
Sterling Silver Flatware Is Not Exempt From Sales And Use Tax
January 16, 2024 - Bulletin Print Report
TP purchased sterling silver flatware, ("SSF"). TP requests a ruling to determine if SSF (and hollowware) meet the criteria for the exemption from application of the...
Modification Of Trust Instrument Resulted In A Gift
January 16, 2024 - Bulletin Print Report
In Year 1, A establishes and funds Trust, an irrevocable inter vivos trust, for the benefit of A's Child and Child's descendants. Under the governing...
Expanded Version: Is Twenty-Seven Percent "Good" Continuity Of Interest?
January 12, 2024 - Expanded Bulletin Print Report
Crescent Point Energy Corporation, ("CPG"), recently announced that it has entered into an "arrangement agreement" to acquire Hammerhead Energy, Inc., (&quo...
Use Of Appreciated Property To Satisfy A Claim Produces Gain
January 12, 2024 - Volume 18 Issue 9 Print Report
At the time of his death on February 1, 1973, the decedent owned 150 shares of common stock in a domestic corporation. The shares were valued for estate tax purposes at $70 per...
"TRAC" Lessor Denied Sales Tax Refunds And Credits
January 12, 2024 - Bulletin Print Report
G leases fleets of vehicles to businesses throughout the United States, including New York. Each of the lease agreements contained a "terminal rental adjustment clause,&qu...
Parent's Activities Established Nexus For Out-Of-State Affiliate
January 12, 2024 - Bulletin Print Report
TP is a distributor of tangible personal property based outside of Washington, ("W"). TP operated as a subsidiary of P until...when TP was merged into P...and has ope...
Pittsburgh's Tax On Non-Resident Athletes Cannot Be Salvaged
January 11, 2024 - Bulletin Print Report
Section 304 of the Local Tax Enabling Act, (the "Act"), provides that a...city with a publicly funded sports stadium or arena ("Facility") may impose a Faci...
I.R.A. Deduction Denied High Income Couple
January 11, 2024 - Volume 18 Issue 8 Print Report
During 2009, S was a self-employed consultant who reported his income on Schedule C. During 2009, T, S's wife, was employed by A. A made contributions on T's behalf to...
Lawsuit Can Be Filed Only After Administrative Remedies Are Exhausted
January 11, 2024 - Bulletin Print Report
In all Missouri counties, including Jackson County, ("County"), real property is assessed for tax purposes on a two-year cycle with the assessor placing values on pro...
Equitable Tolling Does Not Apply To Jurisdictional Time Limitations
January 11, 2024 - Bulletin Print Report
T owned property in Philadelphia, Pennsylvania, (the "Property"). On January 4, 2018, the City filed...a Tax Claim against T for unpaid real estate taxes, penalties,...
Deed In Lieu Of Foreclosure Is A Sale Or Exchange
January 10, 2024 - Volume 18 Issue 7 Print Report
On September 1, 1975, the taxpayer, an individual, acquired unimproved real property that was subject to a mortgage. The taxpayer was not personally liable on the mortgage. The...
Temporary Staffing Business Was A Qualified Trade Or Business
January 10, 2024 - Bulletin Print Report
Company, ("C"), operated as an interim staffing services business with a focus on matching experienced executives and managers with the staffing needs of its clients....
A "Renewal" Was Found To Be An "Approval"
January 10, 2024 - Bulletin Print Report
Plaintiff is a district library. Defendant 1, ("D1"),is a municipal corporation, and Defendant 2, ("D2"), is a public body corporate established by D1...
Foreclosure Sale Not Essential To A Takings Clause Violation
January 10, 2024 - Bulletin Print Report
Plaintiff was the owner of a commercial industrial property in Lansing, Michigan. In 2016 and 2017,a certificate of forfeiture of real property was recorded... The county...
ExxonMobil's Plan For The Acquisition Of Pioneer Natural Resources
January 9, 2024 - Bulletin Print Report
Pioneer Natural Resources Company, ("PNR"), ExxonMobil Corporation, ("EMC"), and SPQR, LLC, ("Merger Subsidiary"), a newly-formed, wholly owned, s...
RPT Realty Adjusts The Conversion Ratio Of Convertible Preferred Stock
January 9, 2024 - Bulletin Print Report
Kimco Realty, ("KIM"), has agreed to acquire RPT Realty, ("RPT"), in "an all-stock transaction" that is intended to, and undoubtedly will, qualify...
Trailer Not Affixed To Land
January 9, 2024 - Volume 18 Issue 6 Print Report
In 2005, petitioner accepted a job at L in California. She started her job on or about April 26th of that year while still living with her daughter in Wichita, Kansas.
PBMs Are Not Agents Of Their Customers
January 9, 2024 - Bulletin Print Report
TP provides pharmacy benefit management services to its customers. Customers provide health care insurance coverage to their members. Audit determined that TP failed to report...
Defective Petition Led To Dismissal
January 8, 2024 - Bulletin Print Report
Petitioner filed a petition with the New York Division of Tax Appeals on August 26, 2022. The petition challenges a notice of disallowance of a 2021 STAR credit that was disall...
Avoiding Sec. 305(b)(3)
January 8, 2024 - Volume 18 Issue 5 Print Report
X has 3,000 shares of $100 par value voting common stock outstanding. For valid business reasons, a plan of reorganization was adopted pursuant to which X agreed to the issuanc...
Use Of "BAP" to Calculate QEZE "Tax Factor" Was Irrational
January 8, 2024 - Bulletin Print Report
BH is an 'S' corporation. BH has been certifiedas a QEZEsince March 2002. BH derives significant income from other states and countries by way of mail and o...
Sales To MCOs Not Eligible For Illinois ROT Exemption
January 8, 2024 - Bulletin Print Report
M is a licensed provider of durable medical equipment, ("DME")...to individuals enrolled in Medicaid, ("ME"). Historically, the Illinois Department of Healt...
Trader's Losses Found To Be Capital In Nature
January 5, 2024 - Volume 18 Issue 4 Print Report
L has been engaged in the practice of law from 1969 to the time of trial. In September 1979, L commenced trading in commodity futures for his own account. During the periods he...
Group Membership Is A Factor In Determining Arm's-Length Interest Rates
January 5, 2024 - Bulletin Print Report
FP owns USSub. USSubowns operating assets and operates businesses essential to the group's financial performance. As a result, if USSub's financial condition were...
Notice Provisions Of The Tax Sale Law Were Not Satisfied
January 5, 2024 - Bulletin Print Report
Appellant, ("APP"),submitted the winning bid for the Property at the tax sale on September 15, 2021. On October 14, 2021, P filed an Appeal, (the "First Pe...
Property Tax Petition Was Timely Served And Filed
January 5, 2024 - Bulletin Print Report
H owned the H Golf Course until it sold it to GC on September 21, 2021. Prior to the sale, the subject property was classified, valued, and taxed under the "Open Space Law...
Butane Is A Taxable (Not An Alternative) Fuel
January 4, 2024 - Bulletin Print Report
In 2005, Congress enacted "the Act," creating two new tax credits for producers of alternative fuels and alternative fuel mixtures. The Act provided an "alternat...
Replacement Value Is Not Adjusted Basis
January 4, 2024 - Volume 18 Issue 3 Print Report
The taxpayer sold certain assets consisting of printing equipment, minor tools, supplies, and the land and building where the "Claremont News" was located. The taxpay...
Hotel Serves Museum's "Mission"
January 4, 2024 - Bulletin Print Report
W is a section 501(c)(3) non-profit corporation. W constructed, owns, and operates Hotel. Hotel is located across the street from Museum. Museum is operated by MI. MI is also a...
"Outbound" Spin-Off Escapes The Rigors Of Section 367(e)
January 4, 2024 - Bulletin Print Report
FP is a publicly traded Country A corporation, and the parent of a worldwide group, (the "P Worldwide Group"). The P Worldwide Group's business operations include...
Sec. 108(e)(5) Is Narrowly Construed
January 3, 2024 - Volume 18 Issue 2 Print Report
In 1988, A, an individual taxpayer, purchased an office building from B for $1,000,000. To pay for the building, A signed a note payable to C, a third party lender, for $1,000,...
City's Petition For A Tax Deed Was Found To Be Defective
January 3, 2024 - Bulletin Print Report
This case concerns the City's efforts to obtain a deed for property sold at a tax sale. The owner of such property has a right to redeem it for a period of time following t...
Head Of Household Return Is Not A "Separate" Return
January 3, 2024 - Bulletin Print Report
MS filed as "head of household." Her husband, MR, filed as "single." Since the Ss are married and live together, MS cannot file as head of household and MR...
Must LGF Delay The Spin-Off Of "PubCo?"
January 3, 2024 - Bulletin Print Report
Lions Gate Entertainment Corporation, ("LGF"), announced a transaction, a very complex transaction we might add, in which, in effect, it will be transferring its crit...
"Rebates" Do Not Constitute "Gross Income"
January 2, 2024 - Volume 18 Issue 1 Print Report
The taxpayer (TP), an individual, purchases "scrip" from an organization described in Sec. 170(c) of the Internal Revenue Code....
Lessee Taxed On Property Leased From Authority
January 2, 2024 - Bulletin Print Report
On January 1, 2019, the appellant, ("APP"),was the lessee of a parcel of real estate owned by the Massachusetts Port Authority, ("M"), consisting of l...
Texas' "Place Of Transfer" Approach To Sourcing Is Permissible
January 2, 2024 - Bulletin Print Report
Texas levies a franchise tax on all businesses chartered, organized, or conducting business within Texas. Texas applies the franchise tax on the business's "taxable ma...
Tax Court Petition Was One Day Late
January 2, 2024 - Bulletin Print Report
On October 13, 2022, the Internal Revenue Service sent petitioners a notice of deficiency for 2017 and 2018. The notice stated that the last day on which petitioners could time...
A Short Sale Does Not Create An "Indebtedness"
December 29, 2023 - Volume 17 Issue 249 Print Report
Y is a qualifying charitable remainder unitrust under Sec. 664(d)(2) and (d)(3) of the Code. Y proposes to invest in a number of funds that will be treated as partnerships for...
Circulating A Free Newspaper Is Not A Charitable Activity
December 29, 2023 - Bulletin Print Report
The subject property consists of a 0.98 acre lot improved with a single-family home. One bedroom is used as an office for both C's operations and the tax preparing services...
EQT May Appeal An Assessments Of Another Person's Property
December 29, 2023 - Bulletin Print Report
This case arises from a protest of a property tax appraisal of EQT's producing natural gas wells in MC by the Tax Department, and the property tax assessment by the MC Asse...
An "SMLLC" Is Disregarded For Tennessee Tax Purpose
December 29, 2023 - Bulletin Print Report
TP is a wholly owned subsidiary of a publicly-traded company headquartered outside of Tennessee, ("TN"). TP is headquartered outside of TN. TP maintains "Facilit...
Income and Expenses Required For an "Active Trade or Business"
December 28, 2023 - Volume 17 Issue 248 Print Report
A corporation had been engaged in the refining, transporting, and marketing of petroleum products since 1929. Since 1947, the...
Passive Activity Gross Income Is Investment Income
December 28, 2023 - Bulletin Print Report
J is involved in several companies. With respect to the three companies at issue, DFC, R, and P, J estimates that he spent more than one hundred hours, but less than five hundr...
Municipality's Lien On Real Property Was Valid
December 28, 2023 - Bulletin Print Report
Plaintiffs commenced these consolidated actions to collect delinquent ad valorem property taxes for the years 2017 and 2018 on various and sundry real properties, including the...
Local Taxpayer Standing Was Not Found
December 28, 2023 - Bulletin Print Report
In June 2020, CG, a venture capital firm based in Chicago, purchased a residential property in Roanoke, Virginia. CG subsequently leased the residence to P. P opened and operat...
Conditions For Waiver Of Sovereign Immunity Were Not Met
December 27, 2023 - Bulletin Print Report
On August 30, 2022, the Department issued and mailed a Notice of Final Determination, ("NOFD"), to Respondent, ("R"), assessing additional sales and use tax...
Compensatory Options Not Counted For Sec. 1504 Purposes
December 27, 2023 - Volume 17 Issue 247 Print Report
P is a State X corporation that serves as a holding company. P has one class of common stock outstanding which is both widely held and publicly traded. &...
Taxpayer Lacked Standing To Appeal The "RMV" Of Residential Property
December 27, 2023 - Bulletin Print Report
The subject property is a 1,632-square foot house built in 2016 and situated on a 1.10-acre lot. Both parties agree that the value of the subject property is impacted by a deco...
The Sales Tax Credit Is "Person-Specific"
December 27, 2023 - Bulletin Print Report
The Petition seeks relief from a Proposed Tax Assessment involving the denial of a credit against sales and use tax. The Petition was timely filed. The burden of proof is a pre...
Letter Of Credit Is A "Payment" For Purposes Of Sec. 170
December 26, 2023 - Volume 17 Issue 246 Print Report
On August 27, 1982, the taxpayer executed an irrevocable banker's letter of credit (LOC) in favor of a charitable organization under Sec. 501(c)(3) of the Code....
Perfected "PMSIs" Take Priority Over Federal Tax Liens
December 26, 2023 - Bulletin Print Report
Between February 11, 2013 and January 9, 2017, the Secretary made assessments against W. W failed to pay in full. Federal tax liens arose in favor of the United States on the d...
California's P.L. 86-272 Guidance Is Voided
December 26, 2023 - Bulletin Print Report
A is a non-profit trade association. California's franchise tax is imposed on the net income of every corporation doing business within the limits of this state. P.L. 86-27...
Only USPS Postmarks Signify Receipt Date Of Tax Payments
December 26, 2023 - Bulletin Print Report
W concedes that its 2019 real property tax payments were not received by the County treasurer by their due dates. Late fees were assessed. The Board of Tax Appeals, (the "...
When Must Procedural Requirements Be Strictly Complied With?
December 22, 2023 - Bulletin Print Report
Tax statutes, be they federal, state, or local, frequently embody a mixture of both substantive and what might be termed "procedural" requirements. It is usually not...
Earthstone Energy's Special Dividend Will Be Subject To Withholding Tax
December 22, 2023 - Bulletin Print Report
Several months ago, Permian Resources Corporation, ("PR"), and Earthstone Energy, Inc., ("ESTE"), entered into a plan and agreement which envisioned the acq...
Preferred Stock Constitutes An "Interest In The Affairs" Of The Issuer
December 22, 2023 - Volume 17 Issue 245 Print Report
In 1926, under an agreement with petitioner, EFC organized a new corporation with 12,500 shares of non-voting preferred stock and 30,000 shares of common stock.
Damages On Account Of Wrongful Termination Are Not Excluded
December 22, 2023 - Bulletin Print Report
Q began working for A in 2009. Q suffers from anxiety. The work conditions exacerbated her anxiety which led to migraines and agoraphobia. The company asked her to go on unpaid...
No Tax Impediments To A WBD/PARA Deal
December 21, 2023 - Bulletin Print Report
In April 2022, a "Reverse Morris Trust," ("RMT"), transaction was completed in which AT&T spun-off a subsidiary, "SpinCo," to which its Warner...
Expanded Version: Will SWX's Spin-Off Of Centuri Group Holdings, Inc. Be Delayed?
December 21, 2023 - Expanded Bulletin Print Report
Southwest Gas Holdings, Inc., ("SWX"), recently disclosedthat, in connection with thepreviously announced planned separation and spin-off of its wholly ow...
Satisfaction Of Shareholder's Obligation Creates Constructive Dividend
December 21, 2023 - Volume 17 Issue 244 Print Report
S purchased the assets of an automobile dealership in 1941. He promptly formed a corporation to operate the dealership. LE eventually acquired 40 percent of the shares of stock...
Accuracy-Related Penalty Was Timely Approved
December 21, 2023 - Bulletin Print Report
During the taxyears at issue, R was employed full time as a project manager for the University of Maryland. R also owned a vacation home in Ocean City, Maryland. During e...
Deferred Compensation Taxable By State Where Services Were Performed
December 21, 2023 - Bulletin Print Report
Taxpayer, ("TP"), resided in Indiana and worked for a company in Indiana, ("IE"), until early 2018. IE has been withholding income tax on wages it paid to T...
The Willens Deal Survey December 2023
December 20, 2023 - The Deal Survey: December 2023 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
FASB Proposes Updated "Induced Conversion" Guidance
December 20, 2023 - Bulletin Print Report
The Financial Accounting Standards Board, ("FASB"),has issued an "Exposure Draft" of a Proposed Accounting Standards Update, ("ASU"),e...
Taxpayer's Losses Were Not Classified As "Passive"
December 20, 2023 - Volume 17 Issue 243 Print Report
Petitioners filed a joint return for 2008 wherein they claimed a deduction for "nonpassive" losses from flowthrough entities ('S' corporations) totaling $3,80...
City Had Private Right Of Action Under The Video Service Providers Act
December 20, 2023 - Bulletin Print Report
The City filed a putative class action against Defendants,which arestreaming companies. Defendants sought dismissal because the City allegedly lacked a private righ...
Late Refund Claim "Shall Not Be Allowed"
December 20, 2023 - Bulletin Print Report
On or around March 27, 2015, L, from his home in New York, made an online purchase of a loader located in Iowa. L paid $35,000 for the loader. He paid Iowa sales tax at a rate...
Value Is Best Established Through A Contemporary Arm's-Length Sale
December 19, 2023 - Bulletin Print Report
In 2007, Lost Lake purchased land in the Town of Forestburgh, Sullivan County, New York, to develop as one of the DD resort communities. Lost Lake subdivided the property into...
DOOR Proposes A Taxable Reverse Triangular Merger
December 19, 2023 - Bulletin Print Report
Masonite International, Inc., ("DOOR"), a corporation organized under the laws of British Columbia, and PGT Innovations, Inc., a domestic corporation, ("PGTI&quo...
Exemption Application Was Not Timely Delivered
December 19, 2023 - Bulletin Print Report
Petitioner owns real property that it claims qualified for an "EMPP" tax exemption. Petitioner attempted to file Form 5278 with respondent. Respondent did not receive...
Conveyance Of Note Is Not A "Payment"
December 19, 2023 - Volume 17 Issue 242 Print Report
On December 1, 1971, petitioner, (P), executed a pledge in the stated sum of $25,000 to the 1972 JWFA. On December 30, 1971, P executed a non-interest bearing negotiable promis...
Settlement Payment Contained Unstated Interest
December 18, 2023 - Bulletin Print Report
On December 14, 1999, the DBT had owned 16.4 percent of the common stock of BPSI. On December 16, 1999, BPSI filed with the Pennsylvania Department of State articles of merger...
Sale Recast To Ignore "Conduits"
December 18, 2023 - Volume 17 Issue 241 Print Report
SS conveyed a partial interest in her gas station to her children shortly before she and they joined in selling it to Texaco, Inc. (TI). SS and each of her children reported a...
Capital Gain Of Non-Resident Found To Be Massachusetts Source Income
December 18, 2023 - Bulletin Print Report
On April 16, 2016, APPs filed their 2015 Form 1...which indicated April 30, 2015 as their last date of Massachusetts, ("M"), residency. The Commissioner issued a Noti...
Contiguous Property Qualified For "CAUV" Classification
December 18, 2023 - Bulletin Print Report
The subject property is a single parcel consisting of 36.72 acres. W purchased the subject property in 2017. Shortly thereafter, it began clear-cutting a portion, approximately...
Nicotine Pouches And Lozenges Are Not "Tobacco Products"
December 15, 2023 - Bulletin Print Report
R sells oral nicotine products in the form of nicotine pouches and nicotine lozenges under the brand name "V" throughout Texas. R began paying the Cigars and Tobacco...
Without Continuity Of Interest There Is No Reorganization
December 15, 2023 - Volume 17 Issue 240 Print Report
The question is whether the transfer by CSC to DOC was a reorganization or a mere sale which subjected the transferor to a tax on any profit realized. &n...
Informal Claim For Refund Was Defective
December 15, 2023 - Bulletin Print Report
From 2001 to 2005, D was the shareholder of DEI. D was charged with tax evasion. D pleaded guilty and was ordered to pay $1,633,471.00 in restitution to the I.R.S. for underpay...
Inactive Shareholder Found To Be A "Responsible Person"
December 15, 2023 - Bulletin Print Report
The Division issued the notices to petitioner as a "responsible person" of the corporation because petitioner was listed as the incorporator, sole shareholder, and li...
Local Connecticut Personal Property Tax Was "Internally Consistent"
December 14, 2023 - Bulletin Print Report
HN is the sole member of Alico, LLC, ("A"), a Massachusetts, ("M") company. A owned two vehicles for use in its business. The vehicles are driven daily by t...
Gain From Sale Of Management Contract Is Ordinary Income
December 14, 2023 - Volume 17 Issue 239 Print Report
The taxpayers were engaged in the management of mutual insurance companies. The management contract here involved existed between the taxpayers and GSLIC. The management activi...
Biometric Identification Service Not Subject To Sales And Use Tax
December 14, 2023 - Bulletin Print Report
TP is in the business of verifying the identity of individuals so that the individuals may pass through airport security check points more quickly. To sign up for TP's &quo...
"Party Platters" Are Prepared Foods
December 14, 2023 - Bulletin Print Report
Petitioner, ("P"), is the owner of TD. TD sold a variety of prepared foods as well as deli meat and other non-prepared foods. The auditor determined that P failed to...
The Minority Shareholders Of SIRI Will Be Governed By Section 351
December 13, 2023 - Bulletin Print Report
The merger agreement pursuant to which Sirius XM Holdings, Inc. ("SIRI"), will become a wholly owned subsidiary of Liberty Sirius XM Holdings, Inc., ("SplitCo),...
"Outbound" Transfer Checks All Of The "Helen Of Troy" Boxes
December 13, 2023 - Bulletin Print Report
Star Bulk Carriers, ("SBLK"), a corporation organized under the laws of the Marshall Islands, and Eagle Bulk Shipping, Inc., ("EGLE"), a domestic 'C'...
The Lending Of Money Does Not Constitute The "Sale Of Property"
December 13, 2023 - Volume 17 Issue 238 Print Report
At the end of 1992, Petitioner, (P), opened a credit card account with MBNA. P used the credit card to pay hospital bills and receive cash advances during periods of unemployme...
Citigroup Allowed A Tax Deduction For Its Basis In Its "RAP" Rights
December 13, 2023 - Bulletin Print Report
G, C's predecessor, was induced by federal regulators to absorb a failing Savings & Loan bank, B. B, not surprisingly, had liabilities exceeding assets of nearly $800 m...
Only "SSI" Payments Are Excluded From Gross Income
December 13, 2023 - Bulletin Print Report
Respondent determined a deficiency in petitioner's federal income tax for taxable year 2019, ("year in issue"). The sole issue for decision is whether payments of...
Sirius XM And Liberty Media Are Finally Parting Company
December 12, 2023 - Bulletin Print Report
The separation of Sirius XM Holdings, Inc., ("SIRI"), from Liberty Media Corporation, ("LMC"), frequently rumored, has now become, or will by Q3 of 2024, a...
Expanded Version: FUN Will Cease To Be An MLP
December 12, 2023 - Expanded Bulletin Print Report
Cedar Fair, L.P., ("FUN"), an owner and operator of amusement parks,was one the last of the so-called "electing 1987 partnerships," (in fact, the only...
Operation Of Parking Garage Taints Otherwise Exempt Rental Income
December 12, 2023 - Volume 17 Issue 237 Print Report
Petitioner, (P), a New York partnership, owned and operated a rental apartment building located at 800 Fifth Avenue in New York City. The building contained 208 rental apartmen...
The Tax Injunction Act And The Comity Principle Preclude Jurisdiction
December 12, 2023 - Bulletin Print Report
B is non-resident of the City of St. Louis, (the "City"), who was denied City earnings tax refunds for days he worked outside the City during tax years 2021 and 2022....
Rental Activity Was Per Se Passive
December 12, 2023 - Bulletin Print Report
The tax court did not err in finding that R materially participated in Rogerson Aircraft Equipment Group, ("RAEG"), in 2014, 2015, and 2016 under section 469(h) of th...
Tax Complications Dominate The Donation Of A Partnership Interest
December 11, 2023 - Bulletin Print Report
Many taxpayers, as the end of the year rapidly approaches, turn their attention to two things: loss selling and charitable contributions. One of the most durable of tax savvy m...
Secretary Exercises Authority To Exclude Items From REIT's Gross Income
December 11, 2023 - Volume 17 Issue 236 Print Report
TP elected to be treated as a REIT. TP's primary business is to own, manage, acquire and dispose of timberland properties. TP conducts substantially all of its business thr...
Court Rejects Claim Of Perpetual Exemption From Property Taxes
December 11, 2023 - Bulletin Print Report
For nearly 40 years, HC granted J an annual exemption from ad valorem property taxes. In 2019, however, the County reversed course. It denied J an exemption. It also assessed b...
Inaccessibility Of Filing Location Extends Petition Filing Date
December 11, 2023 - Bulletin Print Report
The Commissioner issued a notice of deficiency to S for 2017 and 2018. The notice was dated August 25, 2022. The Commissioner sent it by certified mail on August 26, 2022. The...
Sale Of Stock Prior To Split-Off Not A "Device"
December 8, 2023 - Volume 17 Issue 235 Print Report
A corporation has been engaged in the M business and in the B business for more than five years. All of the stock was owned by a husband and wife and their son. The husband own...
Statute Of Repose Applied To Negligent Injury To Economic Interests
December 8, 2023 - Bulletin Print Report
Under ORS 12.115(1), "in no event shall any action for negligent injury to person or property of another be commenced more than 10 years from the date o...
An "Early Distribution" Tax Was Properly Assessed
December 8, 2023 - Bulletin Print Report
The Internal Revenue Service, (the "I.R.S."), selected petitioner's 2019 federal income tax return for examination. The I.R.S. determined that petitioner had rece...
Certain "Pre-populated" Tips Are Subject To Sales Tax
December 8, 2023 - Bulletin Print Report
Colorado imposes a sales tax on the "amount paid" for food or drink served or furnished in or by dining establishments and other like places of business where food or...
When A Partnership Terminates
December 7, 2023 - Volume 17 Issue 234 Print Report
Each limited liability company (LLC) is classified as a partnership. Neither holds any "unrealized receivables" or "substantially appreciated inventory," an...
Primary Use Of Property Is Private
December 7, 2023 - Bulletin Print Report
The subject property comprises two parcels that are 97 acres in total. The Clark County Park District, (the "District"), acquired title to the subject property in Mar...
Statute Imbued With An Implied "Savings Clause"
December 7, 2023 - Bulletin Print Report
In September 2016, L purchased an apartment complex. The Assessor increased the property's assessment to...for 2016, 2017, and 2018. L initiated appeals. Because neither pa...
Attorney Found To Be A "Judgment Lien Creditor"
December 7, 2023 - Bulletin Print Report
This action is a dispute over whether the government's I.R.S. tax lien or the plaintiff's judgment against an Estate has a priority with respect to the assets of the Es...
The "Convenience Of The Employer" Test Was Not Suspended For COVID
December 6, 2023 - Bulletin Print Report
Petitioners are residents of Connecticut, ("CT"). Z is a professor of law at the Cardozo School of Law of Yeshiva University in Manhattan, ("C"). Petitioner...
Pre-Redemption Sale Of Stock Did Not Invoke Sec. 302(c)(2)(B)(ii)
December 6, 2023 - Volume 17 Issue 233 Print Report
X is a corporation engaged in an ongoing business, whose shares were held by A and A's child, B. A owned 500 shares and B owned 100 shares, 80 of which B inherited from his...
Taxable Transfers Between Group Members Are Disregarded
December 6, 2023 - Bulletin Print Report
Parent is a Country Z publicly traded corporation with subsidiaries in multiple countries engaged in the Parent Business and the Controlled Business.Controlled is a newly...
Beverages Qualified For Reduced Food Sales Tax Rate
December 6, 2023 - Bulletin Print Report
Applicant is a manufacturer and retailer of non-alcoholic beverages in ready-to-drink twelve ounce aluminum cans to individuals. Approximately 75 percent to 80 percent of Appli...
SWX's New Strategy For Centuri Holdings Facilitated By Its Copious NOL
December 5, 2023 - Bulletin Print Report
Southwest Gas Holdings, Inc., ("SWX"), is committed to disposing of its subsidiary, Centuri Holdings, Inc., ("CH"). That much is clear.What remains&nb...
Hedge Fund Executive Denied New York Resident Tax Credits
December 5, 2023 - Bulletin Print Report
Petitioner, ("P" or "G"), was domiciled in New York State and City during 2014 and 2015. G received a schedule K-1 as a partner of Hildene Holding Company,...
Spin-Off Had Immediate Business Reason
December 5, 2023 - Volume 17 Issue 232 Print Report
X owned an automobile 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.  ...
A Cumulative Conveyance Was Found To Be A Transfer Of Ownership
December 5, 2023 - Bulletin Print Report
Petitioner is a corporation that owns a "family cottage" for its shareholders' use. DB and WB, husband and wife, owned 24 percent of petitioner's shares befor...
Fines Not Subject To Sales Tax
December 4, 2023 - Volume 17 Issue 231 Print Report
Petitioner, (P), is an exempt organization under (New York) Tax Law Sec. 1116(a)(4) and is registered as such with the Department of Taxation and Finance for sales and use tax...
Gain On Sale Of Goodwill Is "Apportioned"
December 4, 2023 - Bulletin Print Report
C is an 'S' corporation. Until 2015, C was owned in part by a non-resident named CA. That year, CA and her co-owner sold their stock in C to an unrelated third party. T...
Green Card Holder Not Subject To FBAR Penalties
December 4, 2023 - Bulletin Print Report
A was born in Mexico and has lived there all his life. The As own a condominium in Florida which is used for vacation and relaxation. In 1984, A applied for lawful permanent re...
A Recent Arm's-Length Sale Is The Best Evidence Of True Value
December 4, 2023 - Bulletin Print Report
The subject property consists of three parcels. The subject property was valued at $6,791,000. The Board of Education, ("BOE"),filed a complaint seeking an incr...
Is This A Wash Sale?
December 1, 2023 - Bulletin Print Report
A taxpayer owns stock in Ycorporation which has, unfortunately, declined in price during the period the taxpayer has owned the stock. Thus, the taxpayer is "sitting&...
Spin-Off Of "Cross Financed" Rental Business Does Not Qualify
December 1, 2023 - Volume 17 Issue 230 Print Report
M was engaged in two businesses, operating a hotel and renting improved real estate, both residential and commercial. The hotel business was started upon organization in 1920 a...
"True Object" Of A Mixed Transaction Determines Its Taxability
December 1, 2023 - Bulletin Print Report
The company conducts business as a "travel experience enterprise." The company conducts travel business through two legal entities, CA and CB. CA and CB are sister co...
The State Was Not The "Owner" Of Collected Sales Taxes
December 1, 2023 - Bulletin Print Report
R started a business in 2014. Between August 2015 and December 2016, R's business filed sales tax returns without paying any sales tax. R's business closed in 2017. The...
NAPA's Merger Is Structured For Tax Efficiency
November 30, 2023 - Bulletin Print Report
The DuckhornPortfolio, Inc., ("NAPA"), recently announced that it has entered into a definitive agreement to acquire Sonoma-Cutrer Vineyards,Inc., ("SCV&qu...
Fee For Use Of Golf Simulator Not Taxable
November 30, 2023 - Volume 17 Issue 229 Print Report
Petitioner, (P), is the owner and operator of a golf simulator business. The golf simulator facility has four golf simulators, a bar, and limited food service....
Qualified Research Excludes "Funded" Projects
November 30, 2023 - Bulletin Print Report
C, an 'S' corporation, claimed tax credits for 2013 pursuant to section 41 of the Code. The Code provides a tax credit for qualified research activities. To constitute...
Severance Tax Is Based On "Gross Value" Of Natural Resources Severed
November 30, 2023 - Bulletin Print Report
E is a natural gas producer. At each well, E recovers an impure mixture of various liquid and gaseous natural resources, together with water and sediment. E uses its own equipm...
Functional Analysis Test Applied To State Law Limited Partners
November 29, 2023 - Bulletin Print Report
SorobanCapital Partners LP, ("S"), is a limited partnership composed of a general partner and limited partners. It reported as net earnings from self-employment...
PG Awarded Research Credits
November 29, 2023 - Volume 17 Issue 228 Print Report
Procter & Gamble, (PG), has long engaged in extensive research activities. As a result of these activities, PG claimed research tax credits under Sec. 41 of the I...
Premature Commencement Of Article 7 Proceeding Dismissed
November 29, 2023 - Bulletin Print Report
On September 19, 2016, petitioner, ("P"), the record owner of the "property" commenced this proceeding pursuant to Real Property Tax Law, ("RPTL")...
Concurrent Jurisdiction Over Appeals Found
November 29, 2023 - Bulletin Print Report
C owns non-residential property with an equalized municipal valuation of $1 million or greater in the City... C requested a partial abatement of its 2021 property taxes, which...
State And Local Taxes Not Aggregated For Commerce Clause Purposes
November 28, 2023 - Bulletin Print Report
During the relevant years, APP resided in Philadelphia, (the "City"), but worked exclusively in Wilmington, Delaware. Thus, she was subject to four income taxes (and...
Transfer Of Property To An LLC Not A "Retail Sale"
November 28, 2023 - Volume 17 Issue 227 Print Report
A joint venture operating in California plans to partially liquidate by distributing certain tangible personal property to each of its "50/50 partners."...
Citibank Had A Physical Presence In Washington
November 28, 2023 - Bulletin Print Report
Citibank, ("C") does not have a place of business or any employees or property within Washington, ("W"). However, C generated, during the assessment period,...
"As Applied" Challenge To Utah's "AVL" Failed
November 28, 2023 - Bulletin Print Report
The property tax obligations of certain businesses--including airlines--are centrally assessed by the Utah State Tax Commission, (the "Commission"). Before 2017, the...
Overlapping Ownership Rule Saves An RMT Transaction
November 27, 2023 - Bulletin Print Report
DP, a Country A publicly traded corporation, is the ultimate parent of a worldwide group of corporations. DP appears to be Flex LTD. The Distributing Group consists of Business...
Withholding Tax Imposed On Guaranteed Payments
November 27, 2023 - Bulletin Print Report
Taxpayer, ("TP"),is an Indiana limited liability partnership. TP files Form 1065 and Form IT-65, respectively. For the non-resident partners, TP files composite...
The Willens Deal Survey November 2023
November 27, 2023 - The Deal Survey: November 2023 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
Continuity Of Interest And Long-Term Bonds
November 27, 2023 - Volume 17 Issue 226 Print Report
The Gulf Coast Irrigation Company was the owner of irrigation properties. Petitioner was the sole shareholder of the Irrigation Company. A contract called for a conveyance of a...
Data Entry Error Precludes Property Tax Discount
November 27, 2023 - Bulletin Print Report
For tax year 2020-21, the Assessor offered an online option to pay property tax bills...using ACH.The Assessor used a vendor known as FIS as part of the online payment pr...
Characterizing False Claims Act Settlement Payments
November 24, 2023 - Volume 17 Issue 225 Print Report
F operates dialysis centers in the U.S. and throughout the world. Between 1993 and 1995, whistleblowers brought a series of civil actions against F under the False Claims Act (...
Recordation Tax Need Not Be Paid On "Holdbacks"
November 24, 2023 - Bulletin Print Report
Presidential, ("P"), is a company that conducts closings for real estate sales. A portion of the funding secured by the deed of trust, ("DOT") was not distr...
Employee Not Entitled To Any Premium Tax Credit
November 24, 2023 - Bulletin Print Report
In November 2013, petitioner was both unemployed and without health insurance. He applied for health insurance through the Federal Health Insurance Marketplace, (the "Mark...
Facilities Were Not "Processing Facilities"
November 24, 2023 - Bulletin Print Report
The crux of thisdispute is where C's natural gas production stops and processing begins. Costs incurred in the production of...natural gas are not deductible...but co...
Claims Processing Services Were Rendered In Maine
November 22, 2023 - Bulletin Print Report
ESI and its affiliated entities were engaged in a unitary business that involved business activity within and outside Maine. ES sold prescription drugs by mail order delivery a...
Recapitalization Paves The Way For A Prompt Spin-Off
November 22, 2023 - Volume 17 Issue 224 Print Report
M, a domestic corporation engaged in the hardware business, owned all of the common stock and 12 percent of the preferred stock of N, a domestic corporation engaged in the appl...
Resale Exemption From Use Tax Found Applicable
November 22, 2023 - Bulletin Print Report
During the relevant tax period, S was wholly owned by a subsidiary of Wal-Mart Stores, Inc. S purchased Equipment for resale to other Wal-Mart subsidiaries that own and operate...
Johnson Controls' Disclosures Were Adequate
November 22, 2023 - Bulletin Print Report
In January 2016, at the very height of the "inversion" craze, Johnson Controls, Inc., ("J"), entered into an agreement to merge with Tyco International, plc...
Section 965 Income In Not A "Deemed" Dividend
November 21, 2023 - Bulletin Print Report
PCC's foreign subsidiaries had earnings generated outside the U.S. In 2017, the U.S. deemed such income from 1986 to 2017 repatriated into the U.S. under the "TCJA.&qu...
Is Twenty-Seven Percent "Good" Continuity Of Interest?
November 21, 2023 - Bulletin Print Report
Crescent Point Energy Corporation, ("CPG"), announced that it has entered into an "arrangement agreement" to acquire Hammerhead Energy, Inc., ("HHRS&qu...
Presumption Of Validity Not Rebutted By Zillow.com Data
November 21, 2023 - Bulletin Print Report
P and his wife owned residential real property in V which they purchased in 2012 for $270,000. The property was reassessed in 2021 at $303,800 and P filed a grievance challengi...
Taxpayer Found To Have Acquired Equitable Title To Property
November 21, 2023 - Volume 17 Issue 223 Print Report
In 1993, petitioners moved from VBV to RMV. After reading about a house for sale in the local newspaper, petitioners contacted the seller, GF. GF offered to finance the sale wi...
Partnership's Taxable Income Was "ECI"
November 20, 2023 - Bulletin Print Report
YAG was formed as a Delaware limited partnership on January 2, 2001. In early 2007, YAG registered under the laws of the Cayman Islands. Until January 14, 2007, YA was YAG'...
Capital Contribution Not Described In Sec. 382(l)(1)
November 20, 2023 - Volume 17 Issue 222 Print Report
T has been engaged in Business A since 1985. Part of T's business is the development of products the commercial sale of which is subject to regulatory approval; T has not y...
Aramark Does Not Act As An Agent
November 20, 2023 - Bulletin Print Report
Aramark Corporation, ("A"), provides its services based on two types of contracts: (1) profit and loss and (2) management. Under a profit and loss contract, A operate...
Real Property Was "Substantially Ready" For Its Intended Use
November 20, 2023 - Bulletin Print Report
Plaintiff, ("P"), was the owner of real property and improvements, (the "subject property"). The subject property is improved with a four-story brick apartm...
Failure To Provide Written Statement Renders "NOFD" Void
November 17, 2023 - Bulletin Print Report
The Department is a state agency. On September 27, 2017, the Department issued a notice of proposed assessment to Ingram Micro, Inc., ("I"). I requested a review of t...
Liberty Media Corporation Retires Debt Tax-Efficiently
November 17, 2023 - Bulletin Print Report
Recently, Liberty Media Corporation, ("LMC"), and a newly formed corporation, Atlanta Braves Holdings, Inc., ("ABH"), engaged in a reorganization, of the &#...
Home Office Not A Regular Place Of Business
November 17, 2023 - Volume 17 Issue 221 Print Report
Petitioner, (P), maintained a law office at 222 Madison Avenue, New York, NY during the 1983 tax year. P contended that during the 1983 tax year he maintained law offices both...
Post-Spin Equity Awards Excluded From Section 355(a)(1)(D) Calculus
November 17, 2023 - Bulletin Print Report
D is the parent of a worldwide group...engaged in Business A and Business B. D has outstanding D Debt, including the Revolver Amount. Subsidiary, ("S"), has outstandi...
Inadvertent REIT Election Treated As Not Made
November 16, 2023 - Bulletin Print Report
TP was formed on Date 2 as a State limited liability company. TP's sole member, LP, is a subsidiary partnership of a private equity real estate fund, (the "Fund")...
Adoption Tax Credit Denied
November 16, 2023 - Volume 17 Issue 220 Print Report
Under Sec. 23 of the Internal Revenue Code, a taxpayer undertaking the "adoption of a child with special needs which becomes final during a taxable year" is eligible...
The Department Of Environmental Protection Cannot Impose A Tax
November 16, 2023 - Bulletin Print Report
The Petition for Review, ("PFR"), relates to Pennsylvania's participation in the Regional Greenhouse Gas Initiative, (the "RGGI"), based on regulations...
Sham Transaction Did Not Produce A Deductible Loss
November 16, 2023 - Bulletin Print Report
In October 2002, APP incorporated F. During the 2004, 2005, and 2006 tax years,F reported net losses. Between June 4, 2003, and December 20, 2007, APP made numerous trans...
DISH Network And EchoStar Change The "Direction" Of Their Merger
November 15, 2023 - Bulletin Print Report
In August, 2023 DISH Network Corporation, ("D") entered into an Agreement and Plan of Merger, (the "Original Merger Agreement"), with EchoStar Corporation,...
Ascertaining The Date Of "Disposition" Of Stock
November 15, 2023 - Volume 17 Issue 219 Print Report
On July 1, 1958, the taxpayer purchased 100 shares of common stock. On October 1, 1958, the taxpayer entered into an agreement for the sale of this stock at a loss; and to deli...
Taxpayer Entitled To Lower "Refinancing" Rate
November 15, 2023 - Bulletin Print Report
An individual purchased four condominium units by four separate deeds. Each unit was encumbered by a different deed of trust with different lenders. The four units were transfe...
Tax Court Affirms That 90-Day Petition Deadline Is Jurisdictional
November 15, 2023 - Bulletin Print Report
On March 21, 2022, respondent issued to petitioner a notice of deficiency for tax year 2018. The notice indicated that the "last day to petition (the) Tax Court" was...
United Therapeutics Joins The List Of CVR Issuers
November 14, 2023 - Bulletin Print Report
When the parties to an acquisition are uncertain about the value of the target, it may be best to delay paying a portion of the merger consideration until such time, if ever, t...
Taxpayer Cannot Deduct Interest Paid On Another's Indebtedness
November 14, 2023 - Volume 17 Issue 218 Print Report
The taxpayers were majority shareholders in a cattle ranch known as RV. On June 19, 1965, RV borrowed $1.5 million from T at an interest rate of 10 percent per annum....
I.R.S. Tax Claims Accorded Priority Status
November 14, 2023 - Bulletin Print Report
On April 9, 2021, S filed their chapter 7 bankruptcy petition. On July 13, 2021, the I.R.S. filed their proof of claim, ("Initial Proof of Claim"). The I.R.S. stated...
Catering Services Are Subject To Sales Tax
November 14, 2023 - Bulletin Print Report
APP is a restaurant and tenant of a hotel. In addition to its restaurant services,APP also provides catering services to the hotel. The hotel contracts with banquet group...
RPT Special Dividend Should Be Free Of Withholding Tax
November 13, 2023 - Bulletin Print Report
The acquisition of RPT Realty, ("RPT"), by Kimco Realty Corporation, ("KIM"), each a real estate investment trust, (a "REIT"), seems to be proceed...
None Of The Income Allocated To KO Was "Blocked"
November 13, 2023 - Bulletin Print Report
The Coca-Cola Company, ("TCCC"), is the ultimate parent of a group of entities, ("Company"). The Internal Revenue Service made adjustments that increased pe...
Distribution Motivated By Mixed Purposes Satisfies Sec. 355
November 13, 2023 - Volume 17 Issue 217 Print Report
X has been engaged in the farming business for more than five years. The stock is owned 25 percent each by Father, Mother, Son, and Daughter. Although Father and Mother partici...
Fusion Targets Are Not Subject To Sales Tax
November 13, 2023 - Bulletin Print Report
TP operates the "Facility" that has on its premises: a storefront, two pistol shooting ranges, one rifle shooting range, a classroom.... The shooting ranges are only...
Internal Sales Valued By Reference To Comparable External Sales
November 10, 2023 - Bulletin Print Report
M is an asphalt manufacturer with production facilities in Washington. M's manufacturing division provides asphalt both to its construction division ("internal sales&q...
"Customer/Competitor" Business Purpose Supports A Split-Off
November 10, 2023 - Volume 17 Issue 216 Print Report
Y is engaged in the business of commercial printing and has been so engaged for the past five years. Its outstanding stock consists of shares of common stock of which 15 percen...
Non-Profit Corporation Did Not Distribute Income or Profit
November 10, 2023 - Bulletin Print Report
Plaintiff, ("P"), paid $7,500 to become a member of the Club, a non-profit organization formed under N.J.S.A. 15A-2.1. His membership payment was memorialized in a &q...
Collection Notice Violated The "Automatic Stay"
November 10, 2023 - Bulletin Print Report
B filed a chapter 13 petition for relief on March 19, 2021. On November 1, 2021, Treasury sent B a notice attempting to collect a pre-petition claim. Through the notice, Treasu...
Reverse Morris Trust Features A Downstream Merger
November 9, 2023 - Bulletin Print Report
In most cases, the second "leg"of a "Reverse Morris Trust" transaction involves the merger of spincowith and into an unrelated corporation. In o...
John Malone Is Not Infallible
November 9, 2023 - Bulletin Print Report
In January 2010, Liberty Global, Inc., ("LG"), indirectly owned more than 50 percent of the voting interests in Jupiter Telecommunications Co. Ltd., ("JT"),...
Sec. 305(b) Found Inapplicable
November 9, 2023 - Volume 17 Issue 215 Print Report
On Date K, SHA was one of three unrelated individuals that collectively owned all of the stock of T. T was a State X corporation whose outstanding stock consisted of one class...
Home Office Deductions Not Permitted
November 9, 2023 - Bulletin Print Report
P is an IT professional. P was employed by SRA OSS. In addition to working for SRA OSS, P purportedly conducted an activity that he reported as a business activity on Schedule...
Tender Offer And Merger Treated As An Integrated Acquisition Of Assets
November 8, 2023 - Bulletin Print Report
Cadeler A/S, a public limited company incorporated under the laws of Denmark, is offering to exchangefor each outstanding share of Eneti, Inc., a corporation incorporated...
Trustees Can "Manage" The Affairs Of A REIT
November 8, 2023 - Volume 17 Issue 214 Print Report
Advice has been requested whether trustees of an unincorporated trust can contract for the construction of an office building on land owned by the trust without adversely affec...
Non-Owning Spouse Has No Interest In Marital Property
November 8, 2023 - Bulletin Print Report
R owes the United States $327,419.11 for unpaid income taxes, interest, and penalties. Multiple federal liens attached to his property interests, including his interest in the...
MCL 211.78t Is Both Exclusive And Constitutional
November 8, 2023 - Bulletin Print Report
Respondents owned real properties and fell behind on their property taxes. Petitioner foreclosed their properties effective March 31, 2021. None of the respondents tim...
Party To A Reorganization
November 7, 2023 - Volume 17 Issue 213 Print Report
X corporation changed its name and issued new stock certificates to its shareholders in exchange for the X stock held by them prior to X corporation's change in name. The t...
Cash Boot Purge Includes Normal Quarterly Dividends
November 7, 2023 - Bulletin Print Report
D, which may well be Johnson & Johnson, is the parent of a worldwide group of entities, (the "DWG"). D is also the common parent of an affiliated group that files...
Certain Clothing And Footwear Is Exempt From Sales Tax
November 7, 2023 - Bulletin Print Report
Petitioner, ("P"), is a retailer of party goods... P is owned by PCH, a publicly traded retail chain. A statement of proposed audit changes was issued to P, "SSO...
Penalty Approval After Formal Communication Found Timely
November 7, 2023 - Bulletin Print Report
An examination of P's returns for 2011 and 2012 was conducted by a tax compliance officer, ("TCO"). On June 2, 2014, the TCO issued P letter 692 ("15-day let...
Extension Of Variable Prepaid Forward Contracts Is A Taxable Event
November 6, 2023 - Bulletin Print Report
In "EI," we considered whether decedent realized capital gain by executing amendments extending two variable prepaid forward contracts, ("VPFCs"), in 2008....
Option Treated As Exercised
November 6, 2023 - Volume 17 Issue 212 Print Report
Prior to Date A, TP owned 15,000 shares of M stock. On Date A and Date B, TP was granted 10,000 Incentive Stock Options (ISOs) and 30,000 ISOs for M stock, respectively. The ex...
Accumulated Depreciation Includes The Cost Of Removal
November 6, 2023 - Bulletin Print Report
S owns an interstate electric transmission line. S files an annual valuation report with the Arizona Department of Revenue, (the "Department"), and maintains its book...
Reliance On Agent Does Not Excuse Late e-Filing
November 6, 2023 - Bulletin Print Report
L hired CPA KW to prepare and file his federal income tax returns for 2014-2016. Treasury Regulations deemed KW a "specified tax return preparer," requiring him to fi...
Grants Excluded From Gross Income
November 3, 2023 - Volume 17 Issue 211 Print Report
State established the Grant Program, run by Department,for the purpose of securing job-creating economic development opportunities....
An 'S' Election Is Property Of The Estate
November 3, 2023 - Bulletin Print Report
O founded V in 1993. O elected that it be treated as an 'S' corporation. V filed for chapter 11 bankruptcy. V contracted to sell its assets. The sale price was $370 mil...
Transfer Of Property At Husband's Death Was Exempt From Death Taxes
November 3, 2023 - Bulletin Print Report
The Ws created the Trust on June 26, 2007. The Trust assets included the Ws' personal residence and 5,938 shares of stock. The Ws previously owned the residence as tenants...
Military Contractor Engaged In "Sales For Resale"
November 3, 2023 - Bulletin Print Report
O produces specialty vehicles. The U.S. government regularly contracts with O to design and manufacture vehicles for the U.S. military. O routinely purchases both direct and in...
FUN Will Cease To Be An MLP
November 2, 2023 - Bulletin Print Report
When Are Special Foods and Beverages Medical Care Expenses?
November 2, 2023 - Volume 17 Issue 210 Print Report
On Date 2, the taxpayer, (TP), had a physician advise adouble mastectomy in orderto address medical conditions "X" and "Y". On Date 3,...
Loss Corporation Permitted To Make A Late Section 382(l)(5)(G) Election
November 2, 2023 - Bulletin Print Report
For the taxable year endingDate 1, Parent and its subsidiaries, which included Sub 1 and Sub 2, elected to file a consolidated federal income return, (the "Parent Gr...
Taxpayer Did Not Dwell At His Purported Principal Residence
November 2, 2023 - Bulletin Print Report
P claimed a principal residence exemption, ("PRE"), on the H property in 2005 and enjoyed the exemption for several years. At some point in 2012, P began caring for h...
Data Migration And Management Is A Qualified Trade Or Business
November 2, 2023 - Bulletin Print Report
C was formed in Year 1 and elected classification as an association to be taxed as a 'C' corporation. On Date 1, C elected to be classified as an 'S' corporatio...
PEAK And DOC Forgo A Basis Step-Up
November 1, 2023 - Bulletin Print Report
HealthpeakProperties, Inc., ("PEAK"), and Physicians Realty Trust, ("DOC"), are each real estate investment trusts, ("REITs"), within the me...
"Capital Asset" Is Narrowly Construed
November 1, 2023 - Volume 17 Issue 209 Print Report
TP owned Vessel, a fishing vessel. In Year 2, TP sold Vessel to Transferee. TP retained ownership of Vessel's "catch history" and license limitation per...
Claims Barred By Sovereign Immunity
November 1, 2023 - Bulletin Print Report
The Development Authority of DeKalb County, (the "Authority"), is the title owner for a piece of real property, (the "property"). The Authority leased the p...
Escheat Provisions Found To Be Unconstitutional
November 1, 2023 - Bulletin Print Report
At the time of his death in 2006, D owned a parcel of property in Richmond, Virginia. Payment of local property taxes on the parcel ceased after his death. The City filed an ac...
O And SRC Propose A Tax-Free Reorganization
October 31, 2023 - Bulletin Print Report
Realty Income Corporation, ("O"), and Spirit Realty Capital, Inc., ("SRC"), are each real estate investment trusts, ("REITs"), within the meaning...
Citigroup Must Pay Sales Tax On Purchase Of Bicycle Equipment
October 31, 2023 - Volume 17 Issue 208 Print Report
P has entered a contract with the NYCDOT to operate a bicycle rental program (Program). P is Citigroup. The Program provides Users with access to bikes located at hundreds of s...
"MA" Organization Not Exempt From Illinois Income Tax
October 31, 2023 - Bulletin Print Report
Y requested information regarding the taxability of Medicare Title XVIII premiums under Illinois law. Section 201(a) of the Illinois Income Tax Act, ("IITA"), imposes...
Settlement Payment For Tort Damages Not Deductible As "COGS"
October 31, 2023 - Bulletin Print Report
AnadarkoPetroleum Corporation, ("A"), an oil and natural gas production company, partnered with British Petroleum, ("BP")...through a joint operating...
"Purge" Allows For 'B' Reorganization
October 30, 2023 - Volume 17 Issue 207 Print Report
X is engaged in the banking business. Y is a holding company. Y holds "d%" of the stock of X. Y proposes to acquire sufficient shares of X so that it will hold at lea...
The Equitable Tolling Principle Does Not Apply To Section 6511
October 30, 2023 - Bulletin Print Report
Mr. W initiated this action on January 13, 2020. He alleged that he owed an outstanding tax debt, but also that the I.R.S. had "seized" his tax refunds for 2001 and 2...
No Relief Where Excessive "Household Income" Found
October 30, 2023 - Bulletin Print Report
Utah Code Ann. section 59-2-103(2) provides for the assessment of property as follows: "All tangible taxable property located within the state shall be assessed and taxed...
New Jersey's Litter Fee Applies To Manufacturers
October 30, 2023 - Bulletin Print Report
C manufactures litter-generating packaged meat products which it distributes throughout the country. C stores and distributes meat products through its Swedesboro, New Jersey f...
Who Owns A Lottery Ticket?
October 27, 2023 - Volume 17 Issue 206 Print Report
A and B are individual taxpayers who have been married to each other since date (a). Throughout their marriage, they have filed joint returns, held their property in joint owne...
Netflix And Its Competitors Do Not Offer "Video Service"
October 27, 2023 - Bulletin Print Report
Illinois requires anyone who wants to provide "cable or video service" to obtain permission from state or local authorities, and pay a fee, as a condition of using pu...
Government Cannot Obtain Summary Judgment On Willfulness Dispute
October 27, 2023 - Bulletin Print Report
K was born in Japan. K obtained a U.S. Permanent Resident Card. K does not speak English. In 2014, the Japanese Tax Authority informed the I.R.S. that K received certain income...
Novartis Sets Sandoz Free
October 27, 2023 - Bulletin Print Report
Recently, Novartis AG completed the separation of its subsidiary, Sandoz Group AG. The business purpose asserted for the spin-off was the ubiquitous "fit and focus,"...
Will SWX's Spin-Off Of Centuri Group Holdings, Inc. Be Delayed?
October 26, 2023 - Bulletin Print Report
...
Redeemed Shareholder Not Barred From Attribution Waiver
October 26, 2023 - Volume 17 Issue 205 Print Report
X is a domestic corporation engaged in an ongoing business. It has 1,000 shares of voting common stock outstanding which are held as follows: A (548), B-D (39 each), E (333), a...
A Form 1099-C Does Not Discharge Debt
October 26, 2023 - Bulletin Print Report
Debtor, ("D"), filed a chapter 13 petition on July 8, 2022. CF filed an unsecured claim on July 29, 2022. D objected to CF's claim. D argues that "the debt h...
Retroactive Change To Terms Of Trust Saves Transfer Tax
October 26, 2023 - Bulletin Print Report
On September 4, 2018, Grantors, ("Gs"),created Trust. It is a revocable living trust. During their lifetimes, G are entitled to a quarterly distribution of &quo...
Research Credits Are Subject To The Section 38(c) Limitation
October 25, 2023 - Bulletin Print Report
JI, an 'S' corporation, reported research credits under section 41 to its shareholders for 2013 through 2016. Shareholders J and K claimed their share of research credi...
Parent's Cancellation of Sub's Debt Does Not Cause CODI
October 25, 2023 - Volume 17 Issue 204 Print Report
P, a foreign corporation, owned all of the stock of S, a domestic corporation. S conducted Business A. In its business, S maintained an inventory of component parts....
Public Auction That Excluded Potential Bidders Ruled Invalid
October 25, 2023 - Bulletin Print Report
The provisions of the Code governing the procedure for conducting a tax sale begin with the requirement for the Department to provide notice to the property owner. Payment to t...
The Willens Deal Survey October 2023
October 24, 2023 - The Deal Survey: October 2023 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
Warrants For Stock: Recapitalization Or Taxable Exchange?
October 24, 2023 - Bulletin Print Report
Allego N.V., ("ALLG," or the "company"), recently announced that it has commenced an "exchange offer," (the "Offer"), and companion &quo...
Restrictions Imposed On NOL Carrybacks In N.Y. Are Proper
October 24, 2023 - Volume 17 Issue 203 Print Report
Because P sustained net operating losses (NOLs) of $110,833 in 1973 and $235,226 in 1974, he filed a claim for both Federal and New York refunds for income taxes paid in 1971,...
Getting To The Essence Of A Canadian "Butterfly" Transaction
October 24, 2023 - Bulletin Print Report
D is a publicly traded corporation engaged in non-pharmaceutical Business A and non-pharmaceutical Business B, which includes conducting research and development activities for...
Installed Cranes Are Real Property
October 24, 2023 - Bulletin Print Report
TP operated a marine cargo terminal and was in the business of providing marine cargo handling services at the Port of Virginia. The Department audited TP and assessed use tax...
No Withholding Tax Imposed On Redemption Distributions
October 23, 2023 - Bulletin Print Report
One of the more interesting deals in the market is Vista Outdoor, Inc.'s proposal for disposing of its Sporting Products business and returning to its shareholdersthe...
"Place Of Amusement" Found
October 23, 2023 - Volume 17 Issue 202 Print Report
Article 28 of the (New York State) Tax Law requires a sales tax to be paid on any "admission charge" for use of any "place of amusement." The taxpayer (TP)...
Valuation Errors In Centrally Assessed Property Cannot Be Corrected
October 23, 2023 - Bulletin Print Report
After persuading the department that the valuation methodology that it hadused to assess taxpayer's property in 2020-21 had been flawed, taxpayer asked the department...
"SOH" Transfer Application Was Not Timely Filed
October 23, 2023 - Bulletin Print Report
This case involves Florida's "SOH" assessment cap. In 2008, voters approved a separate constitutional amendment that permits a homeowner to transfer the benefit a...
Sonny Corleone's Tax Problem
October 20, 2023 - Bulletin Print Report
This case concerns two IRAs that James Caan, ("C"), held at UBS. One of the IRAs held a partnership interest ("PAI") in a hedge fund ("PAF"). It w...
Refund Of Subscription Price Of Rights
October 20, 2023 - Volume 17 Issue 201 Print Report
The outstanding stock of X consists of a single class of common stock. In 1973, the directors of X distributed to its common shareholders transferable rights to subscribe, on o...
Certificate Holder Not A Person Entitled To Surplus Proceeds
October 20, 2023 - Bulletin Print Report
Every March, the City of Baltimore, Marylandissues a list of residential properties with attached liens that will become available at the tax sale in May. When its bids a...
Hyatt Hotels Cannot Avail Itself Of The Trust Fund Doctrine Exception
October 20, 2023 - Bulletin Print Report
Hyatt Hotels Corporation was the U.S. common parent for the Hyatt group of companies. Petitioner owns, leases, manages, and franchises hotel, residential, and timeshare propert...
Trust NOL Expires Upon Termination
October 19, 2023 - Volume 17 Issue 200 Print Report
GM executed a trust agreement on January 1, 2002 that created the MCLT. The corpus of the trust consisted of part ownership in several real estate partnerships. The trust was f...
VMW Shareholders Must Elect The Form Of Merger Consideration
October 19, 2023 - Bulletin Print Report
Broadcom, Inc., ("AVGO"), and VMware, Inc., ("VMW"), announced that the deadline for VMW's shareholders to elect the form of merger consideration they w...
BAM To Separate A Portion Of Its Asset Management Business
October 19, 2023 - Bulletin Print Report
Brookfield Asset Management recentlyannounced the details of its ambitiousplan to distribute to its Class A and Class B shareholdersall of the stock of a newl...
WHLR Replaces Equity With Debt
October 19, 2023 - Bulletin Print Report
Wheeler Real Estate Investment Trust, Inc., ("WHLR"), is offering to exchange shares of its Series D Cumulative Convertible Preferred Stock for six percent Subordinat...
No Tax Relief Granted For Repayment Of Overpaid Wages
October 18, 2023 - Bulletin Print Report
Under Utah Code Ann. section 59-10-104(1), "a tax is imposed on the state taxable income of a resident individual." State taxable income means the resident individual...
Real Property Correctly Classified Through An Article 78 Proceeding
October 18, 2023 - Bulletin Print Report
In this article 78 proceeding for declaratory judgment and other relief the petitioner seeks to reverse the administrative decision of the DOF,upheld on appeal by the Com...
Bargain Sale Did Not Produce Deductible Loss
October 18, 2023 - Bulletin Print Report
In 2006, S purchased three retail buildings as investments. In 2017, S transferred the "E" property to the City and claimed a loss relating to that property. S stated...
Sec. 83(b) Election Properly Disregarded
October 18, 2023 - Volume 17 Issue 199 Print Report
On March 26, 1990, the Board of Directors of C voted to transfer 300 shares of stock to Employees (Es) subject to restrictions that constitute "a substantial risk of forfe...
Floating Boat Docks Are Tangible Personal Property
October 17, 2023 - Bulletin Print Report
Applicant has rented floating dock space from a Lessor for ten years, with the lease renewal and billing cycle being done annually. The Lessor has charged the Applicant sales t...
Related Party Loss From Sale Of Inventory Disallowed
October 17, 2023 - Bulletin Print Report
APP, a California resident, was the sole owner and president of TM, a California-based 'S' corporation that developed and manufactured custom boats. In 2016, prior to d...
Sales Tax and Donuts
October 17, 2023 - Volume 17 Issue 198 Print Report
Krispy Kreme Doughnut Corporation, (KK), sought review of a decision that it must collect sales tax at the four percent rate (rather than at the one percent rate) on...
Exemption Began On First Day Of Real Property Tax Year
October 16, 2023 - Bulletin Print Report
Petitioners, ("Ps"), are the owners of an 18-acre parcel of real property. On March 4, 2004, the Town adopted a resolution whereby Ps were granted a real property tax...
Triangular Merger And Liquidation Recast As A 'C' Reorganization
October 16, 2023 - Volume 17 Issue 197 Print Report
P, whose stock is widely held and publicly traded, is a manufacturing corporation organized under the laws of State A. T, whose stock is closely held, is a manufacturing corpor...
Tractor Did Not Satisfy The "Double-Direct" Test
October 16, 2023 - Bulletin Print Report
TP, an Indiana farmer, purchased a Ford 5000 tractor, ("Tractor"), at auction. TP paid sales tax on the Tractor. TP requested a refund of the tax paid, stating that t...
Nine West Failed To Meet Its Evidentiary Burden
October 16, 2023 - Bulletin Print Report
Nine West, ("NW"), is a global designer, marketer, and wholesaler of apparel... NW paid CAT on receipts for all goods shipped to distribution centers in Ohio, includi...
Purchaser Of Foreign Goods Was Not The "Importer"
October 13, 2023 - Bulletin Print Report
Plaintiff is a wholesaler and retailer of truck parts and tires. From 2012 to 2017, TT purchased tires wholesale from Chinese manufacturers. The parties stipulate that, "A...
Series Of Steps Collapsed Into An 'F' Reorganization
October 13, 2023 - Bulletin Print Report
Parent, a Country A corporation, is the foreign parent of a worldwide group, (the "Parent Group"). Parent has a single class of voting common stock outstanding that i...
Period For Requesting A "CDP" Hearing Is Subject To "Equitable Tolling"
October 13, 2023 - Bulletin Print Report
When the I.R.S. files a notice of federal tax lien, ("NFTL"), on a taxpayer's property to collect an unpaid assessment, the Code gives the taxpayer the right to a...
Recomputing A Worthless Stock Deduction
October 13, 2023 - Volume 17 Issue 196 Print Report
P (or TP) is an Indiana corporation engaged in the manufacture of precision instruments. M was an Illinois corporation engaged in a business related in character to that conduc...
Exxon and Pioneer Reach Historic Agreement
October 12, 2023 - Bulletin Print Report
It did not take long for the rumors to become reality. Exxon Mobil Corporation ("Exxon"),and Pioneer Natural Resources, ("Pioneer"), jointly announced...
Carry Back Of NOL To Resident Taxable Year Permitted
October 12, 2023 - Volume 17 Issue 195 Print Report
Petitioner, (P), was a resident of New York State (NYS) during taxable years 1993-1995. P intends to change his residence during 1996 at which time he will be considered a nonr...
I.R.S. Extends Wash Sale Relief To All Money Market Funds
October 12, 2023 - Bulletin Print Report
An investment company that is registered under the Investment Company Act of 1940that meets the requirements of Rule 2a-7 under the 1940 Act is permitted to hold itself o...
Tours Conducted For Amusement Are Subject To Sales Tax
October 12, 2023 - Bulletin Print Report
SC charges customers for rides in horse-drawn carriages in downtown Nashville, Tennessee. SC is licensed and regulated by the Commission. SC charges its customers based on time...
Sale Of Scientific Books By A Museum Produces UBTI
October 11, 2023 - Volume 17 Issue 194 Print Report
The organization maintains and operates an art museum devoted to the exhibition of American folk art. It operates a shop in the museum that offers for sale to the general publi...
Electronically Delivered Software Not Subject To Sales Tax
October 11, 2023 - Bulletin Print Report
TMRsubmitted a timely sales tax refund claim. The Department issued a Notice of Denial Letter. TMR is an affiliate of T-Mobile, ("TM"), and acts as a procuremen...
OTCs Are Technology Companies
October 11, 2023 - Bulletin Print Report
The Online Travel Companies, ("OTCs"), are technology companies that operate websites that enable travelers to research destinations...and request reservations... The...
Restored Pay And Allowances Not Excludible From Gross Income
October 11, 2023 - Bulletin Print Report
The issue is whether forfeited military pay that is subsequently restored to a service member pursuant to section 875 of the Uniform Code of Military Justice when a court-marti...
BMY Will Use CVRs In Connection With Its Acquisition Of MRTX
October 10, 2023 - Bulletin Print Report
Bristol-Myers Squibb, ("BMY"), and Mirati Therapeutics, Inc., ("MRTX"), announced that they have entered into a definitive merger agreement pursuant to ...
DISH Network Scores A Refund Of Penalties And Interest
October 10, 2023 - Bulletin Print Report
Washington imposes a "B&O" tax on every person that has a substantial nexus with this state...for the act or privilege of engaging in business activities. The tax...
Federal NOLs Cannot Offset Connecticut AGI
October 10, 2023 - Volume 17 Issue 193 Print Report
In 2008, the plaintiffs reported a net operating loss (NOL) of $66,044,546. As a result of the NOL, the plaintiffs sought to reduce their 2003 federal tax liability to zero and...
Taxation Of "Motor Vehicles" Is Capped
October 10, 2023 - Bulletin Print Report
In Jack's Custom Cycles, Inc. v. South Carolina Department of Revenue, 439 S.C. 35, 885 S.E.2d 433 (Ct. App. 2023), the Court of Appeals held that the te...
Service Provider Ineligible For Industrial Processing Exemption
October 9, 2023 - Bulletin Print Report
S describes itselfas a "precision oncology company" established to partner "with pharmaceutical companies for cancer drug development..."S state...
Food For Home Consumption Exempt From Sales Tax
October 9, 2023 - Bulletin Print Report
Company, ("C"), is a remote seller of food products and has no physical presence in Colorado, ("CO"). C does not have any retail locations. The food product...
Holidays And Holding Period
October 9, 2023 - Volume 17 Issue 192 Print Report
The taxpayer purchased a security from a registered security exchange on December 24, 1968. He made payment for and received delivery of the security on December 30, 1968, and...
Economic Substance Doctrine Precludes Alcohol Fuel Mixture Credits
October 9, 2023 - Bulletin Print Report
The "VEETC" (or the "alcohol fuel mixture credit") was available pursuant to section 6426(b) until the end of 2011 for taxpayers who created qualifying fuel...
AMC May Proceed With Its Restructuring Plan
October 6, 2023 - Bulletin Print Report
AMC Entertainment Holdings, Inc., ("AMC"), is now poised to implement its controversialrestructuring plan since, on August 11, 2023, the court finally approved...
Tour Bus Not A "Place Of Amusement"
October 6, 2023 - Volume 17 Issue 191 Print Report
Petitioner, (P), intends to provide bus sightseeing tours in midtown Manhattan. The tour is narrated by two guides, runs 75 minutes in duration, and follows a 4.2 mile route. T...
Habitual Late Filer Had Statutory Penalty Reduced
October 6, 2023 - Bulletin Print Report
Taxpayer is appealing the penalty assessed by the Division under Utah Code Ann. section 59-2-207, for the late filing of the annual property tax statement for the 2022 tax year...
Claims Court Incorrectly Conflated Two Tax Doctrines
October 6, 2023 - Bulletin Print Report
GSS Holdings (Liberty), Inc., ("GSS"),serves as the managing member and owner of Liberty Street Funding LLC, ("LS"). In September 2006, LS purchased a...
Underpayment Penalty Falls In The Face Of Substantial Authority
October 5, 2023 - Bulletin Print Report
TP's Schedule C described his business as "farmer/produce retail." TP's business in 2015 involved the sale of marijuana products. After audit, the Department...
Consent Payment Does Not Result In "Significant Modification"
October 5, 2023 - Volume 17 Issue 190 Print Report
TP is a publicly traded and widely held corporation. S is wholly-owned by TP and is an entity disregarded as separate from TP. S has "a" series of publicly-traded exc...
Writ Of Mandamus Denied
October 5, 2023 - Bulletin Print Report
O is a school district. In June 2023, it began the process to place a new operating levy on the November 2023 general-election ballot. R.C. 5705.03 establishes the process that...
Tardy Administrative Claim For Refund Bars Lawsuit
October 5, 2023 - Bulletin Print Report
This case concerns W's 2016 and 2018 income taxes, Those taxes were one of the subjects of W's Chapter 13 bankruptcy proceedings in the U.S. Bankruptcy Court. The I.R.S...
Is LLY's PNT Acquisition A Business Combination Or Asset Acquisition?
October 4, 2023 - Bulletin Print Report
Eli Lilly and Company, ("LLY") and POINT BiopharmaGlobal, Inc., ("PNT"), announced a definitive agreement for LLY to acquire PNT, a "radiopharmac...
Redemption Of Non-Voting Common Stock Found To Be A Distribution
October 4, 2023 - Volume 17 Issue 189 Print Report
Corporation has outstanding 150 shares of voting common stock and 1,657.8 shares of non-voting common stock. A, the President and Chairman of the Board of Directors, directly o...
"Taking" Does Not Occur When Condemnation Action Is Filed
October 4, 2023 - Bulletin Print Report
At issue in this case is whether the former owners of property that was taken by the City through eminent domain are entitled to a refund of the property taxes they paid betwee...
Taxpayer Successfully Changed His Domicile
October 4, 2023 - Bulletin Print Report
Taxpayer, ("TP"), asserts thathe was not required to file Louisiana, ("LA"), income tax returns or pay LA income tax for the Tax Years because he was...
Pledging Option Stock As Collateral
October 3, 2023 - Volume 17 Issue 188 Print Report
Company has extended Incentive Stock Options to its employees. Following exercise of an option, the employee may enter into a "Margin Account Agreement" (the Agreemen...
Theft By False Pretenses Not Established
October 3, 2023 - Bulletin Print Report
J began investing in the real estate activities of H in 2001 and continued through approximately the end of 2011. J invested through two negotiated unsecured promissory notes,...
Only Duress Can Discredit An Arm's-Length Sale
October 3, 2023 - Bulletin Print Report
The Fiscal Officer valued the subjectproperty, an automobile dealership, at $988,900 for tax year 2019. The BOE filed a complaint seeking a value of $2,450,000 with the B...
Audiometers Are Not Hearing Aids
October 3, 2023 - Bulletin Print Report
Applicant uses items, referred to as "audiometers," in its business to "test patients for possible hearing aids." Sales of hearing aids and hearing aid supp...
Starbucks Doubleshot Energy Drink Not Subject To Sales Tax
October 2, 2023 - Volume 17 Issue 187 Print Report
Petitioner's stores sell Starbucks Doubleshot Energy (SDE) coffee drinks in cans for off-premises consumption. Labels submitted by Petitioner for the drinks listed as the p...
Lease Revenues From "COAMs" Exempt From Sales Tax
October 2, 2023 - Bulletin Print Report
F owns and operates an amusement facility in Georgia that contains an arcade room... Some of the equipment used at F's facility...are classified as "coin operated amus...
Candy Is Taxed At The "Food" Rate
October 2, 2023 - Bulletin Print Report
Applicant is a business that sells various in-house made fudge, in-house made chocolate, and various other types of individual pieces of candy. It was represented that "th...
Debtor Only Entitled To "Surplus Proceeds" From Foreclosed Property
October 2, 2023 - Bulletin Print Report
After Mr. Freed, ("F"), fell behind approximately $1,100 on his property taxes, T, acting on behalf of the County, and pursuant to Michigan's "GPTA," fo...
Converting An MLP Into A REIT
September 29, 2023 - Volume 17 Issue 186 Print Report
PS is a publicly traded limited partnership that owns and operates Property. PS owns the stock of two subsidiaries, Sub 1 and Sub 2. To improve access to capital markets and fo...
Capitalized Interest Is Not Deductible
September 29, 2023 - Bulletin Print Report
SSE sells commercial, industrial, and residential electric services. H owned 96 percent of the stock and W owned the remaining four percent. H chose to have SSE be a 'C'...
Certain Penalties Not Subject To Supervisory Approval Requirement
September 29, 2023 - Bulletin Print Report
Petitioner, Piper Trucking & Leasing, LLC, is a single-member limited liability company. Employers are required to file Form W-2...and Form W-3 with the Social Security Adm...
Regulation Curing Constitutional Defect Applied Retroactively
September 29, 2023 - Bulletin Print Report
Lorillard Tobacco Company, ("LTC"), claimed a 100 percent exception to the add-back of New Jersey, ("NJ"), allocated royalties it paid to its wholly owned s...
Conversion Did Not Result In A New Obligor On The Debt Instrument
September 28, 2023 - Bulletin Print Report
LLC 1 is engaged in Business A. LLC 1 is wholly owned by LLC 2. LLC 2 is wholly owned by LLC 3. LLC 3 is "s%" owned by LLC 4, with the remaining interest held by a th...
Acquiring Control In A "Permissible" Manner
September 28, 2023 - Volume 17 Issue 185 Print Report
X and Y were corporations engaged in manufacturing. A and B, individuals, each owned 50 percent of the stock of X. A owned 25 percent of the stock of Y and X owned the remainin...
Equipment To Be Used In A Data Center Is Exempt From Sales Tax
September 28, 2023 - Bulletin Print Report
In 2014, TP began purchasing equipment to establish a data center in Virginia, ("V"). The purchased equipment was delivered to a storage facility...but not to the sit...
The Ultimate Destination Determines The Situs Of Receipts
September 28, 2023 - Bulletin Print Report
V is a global manufacturer of oleo-chemicals and personal care products. It manufactures bar soap, deodorant, and similar items at its plant in Kansas. V has no property or emp...
Sales of Property Between "Related Parties"
September 27, 2023 - Volume 17 Issue 184 Print Report
The total stock issued by petitioner, W.A. Drake, Inc., (WD), was 4,380 shares. WD had acquired 1,176 1/3 shares which were held in its treasury. The remaining 3,203...
Deferred Fees Sourced Using The "BAP" For The Years Earned
September 27, 2023 - Bulletin Print Report
In 2017, petitioners were non-resident partners of Aristeia Holdings, L.P., ("A"). A owned 100 percent of AristeiaCapital, LLC, ("AC"), a disregarded...
Botox Found Subject To Use Tax
September 27, 2023 - Bulletin Print Report
Applicant is a medical spa that offers "cosmetic injectionsThe cosmetic products are purchased from out of state and are injected by registered nurses or nurse pract...
Resident Credits Are Limited To Taxes Imposed On Income
September 27, 2023 - Bulletin Print Report
TPs were Virginia, ("V"), residents, and the husband, ("H"), was a shareholder in an 'S' corporation, ("SSC"), that paid corporate franchi...
Liberty Media's Proposed "Business Combination" With SIRI
September 26, 2023 - Bulletin Print Report
In November 2021, Liberty Media Corporation, ("LMC"), acquired sufficient additional stock in Sirius XM Holdings, Inc., ("SIRI"), to place LMC "in cont...
Gain From Sale Of Real Estate Treated As "IRD"
September 26, 2023 - Volume 17 Issue 183 Print Report
A, an individual, entered into a real estate sales contract containing a clause making the contract cancellable by either party if the borrower did not obtain a mortgage commit...
Taxpayer Was Not A "Bona Fide Non-Resident"
September 26, 2023 - Bulletin Print Report
Taxpayer, ("TP"), purchased a truck in 2018 and another truck in 2019 from a Rhode Island, ("RI") dealer and both times used a Massachusetts address. TP fil...
Connections With Virginia Did Not Prevent Domicile Change
September 26, 2023 - Bulletin Print Report
The Department of Revenue, (the "Department),determined that the taxpayer, ("TP"), was taxable as a part-year resident of Virginia, ("V") and iss...
Compression System Was Not Farm Machinery And Equipment
September 26, 2023 - Bulletin Print Report
Taxpayer, ("TP"), is an Oregon corporation engagedin the business of compressing large bales, consisting of straw, into smaller bales using a "Compression...
The Deal Survey September 2023
September 22, 2023 - The Deal Survey: September 2023 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
"Proportional" Payments Of Compensation Was A Disguised Dividend
September 22, 2023 - Bulletin Print Report
The Vs formed K, a C corporation, in 2003. On February 13, 2012, K sold its assets to a third party for a total sales price of $5.1 million. The buyer issued two promissory not...
Social Security Benefits Are Not An "Internal-Revenue Tax"
September 22, 2023 - Bulletin Print Report
S held the position of I.R.S. Senior Appraiser beginning on July 10, 2006. S transferred from Connecticut to Hawaii. On September 16, 2011, C, S's supervisor, received an a...
Sec. 1341 Applies To "Arrowsmith" Payments
September 22, 2023 - Volume 17 Issue 182 Print Report
A, an individual, owned 75 percent of the outstanding stock of X. X owned all of the stock of three domestic corporations. In 1976, X adopted a plan of liquidation and pursuant...
The Section 6511 Limitations Periods Are Jurisdictional
September 22, 2023 - Bulletin Print Report
On August 16, 2010, the I.R.S. prepared a substitute income tax return for Plaintiffs for the tax period ending December 31, 2008. The return resulted in an assessment of taxes...
Income From Disposition Of Property Not Treated As "IRD"
September 21, 2023 - Volume 17 Issue 181 Print Report
B, A's father, died testate on "X." During B's lifetime, B was a professional artist. At B's death, B owned a number of the paintings that B had created....
Sanitization Of Textiles Constitutes "Processing"
September 21, 2023 - Bulletin Print Report
A operates industrial facilities in Tennessee. A is in the business of leasing hygienically-clean textiles to customers for a single use. Some are new and some are used. When A...
Remedial Actions Survive The Death Of A Party
September 21, 2023 - Bulletin Print Report
After G passed away in July 2003, his wife, L, was the sole beneficial owner of the "Swiss Account." She passed away in 2021. The parties agree that she failed to tim...
Interest On A Deficiency Runs From Due Date Of Return
September 21, 2023 - Bulletin Print Report
On April 13, 2018, petitioner filed an electronic request for an extension of time within which to file her New York State personal income tax return for the tax year 2017. The...
Loss On Sale Of Bonds Not Precluded By Sec. 1091
September 20, 2023 - Volume 17 Issue 180 Print Report
Y would like to sell 98 U.S. Treasury 7 1/2 percent bonds and purchase, on the same day. 98 U.S. Treasury 8 3/8 percent bonds. The U.S. Tre...
Asset Reorganizations Implicate The Disposition-Payment Rule
September 20, 2023 - Bulletin Print Report
In 2011, TBLtransferred intangible property to an affiliated foreign corporation. The transfer occurred in the context of a reorganization. The tax treatment of TBL's...
Tax Court Petition Date Could Not Be Extended
September 20, 2023 - Bulletin Print Report
On May 23, 2022, the I.R.S. sent petitioners, by certified mail, a notice of deficiency for tax year 2019. The notice advised petitioners that they had 90 days from the date of...
Sourcing A Mutual Fund Service Provider's Receipts
September 20, 2023 - Bulletin Print Report
APP is an investment management company headquartered in Colorado. APP provides services to mutual funds. In accordance with Reg. Sec. 25137-14, APP assigned the gross receipts...
GPRE Takes A Page From MMP's "Rollup" Playbook
September 19, 2023 - Bulletin Print Report
Green Plains, Inc., ("GPRE"), owns an approximately49 percent limited partner interest and a two percent general partner interest in a publicly traded partnersh...
PENN Entertainment's Payments To ESPN Should All Be Tax-Deductible
September 19, 2023 - Bulletin Print Report
PENN Entertainment, Inc., ("PENN"), recently announced that it hadentered into an exclusive U.S. online sports bettingagreement, referred to as the "...
Husband And Wife Were Not "Living Apart"
September 19, 2023 - Volume 17 Issue 179 Print Report
Throughout 1997, Petitioner, (P), was married to MC, although the couple was "emotionally estranged." Nevertheless, P and MC both resided in the same residence (the M...
Instructional Classes Are Not Subject To Sales Tax
September 19, 2023 - Bulletin Print Report
Applicant, ("APP"), is a bakery that makes various food items, including decorative cookies. On occasion, APP will host cookie decorating classes. These classes take...
The Postmark Determines The Timeliness Of A Refund Claim
September 19, 2023 - Bulletin Print Report
T alleges the following: "On April 15, 2022, I mailed my 2018 tax return for the year ending December 31, 2018 to the defendant by certified mail. I never received my refu...
Palmer Applies To Redemption/Sale Of "ROFR" Stock
September 18, 2023 - Volume 17 Issue 178 Print Report
X is a retired executive officer of C. X was a participant in C's executive stock purchase plan (the Plan). X has entered into 14 different stock restriction agreements in...
"ESBTs" Can Carry Over NOLs
September 18, 2023 - Bulletin Print Report
An 'S' corporation incurred a net operating loss, ("NOL"), that it passed through to its sole shareholder, an electing small business trust, ("ESBT"...
Capital Loss Induced Refund Request Was Timely Filed
September 18, 2023 - Bulletin Print Report
Taxpayer, ("TP"), is an out-of-state corporation. TP conducts business in Indiana. TP submitted an amended 2017 tax return calling for a refund of income tax. The Dep...
Section 404A Plans Are Not "Qualified Retirement Plans"
September 18, 2023 - Bulletin Print Report
G filed for Chapter 7 bankruptcy on May 11, 2021. G claimed an exemption for the Fund. The Fund is a Registered Retirement Savings Plan, ("RRSP"), organized under Can...
Transfer Of Legal Title Not A "Disposition" Of Option Stock
September 15, 2023 - Volume 17 Issue 177 Print Report
Following the exercise by an employee of an Incentive Stock Option, (ISO), such employee may enter into a "street name arrangement" with a brokerage firm....
Post-Production Expenses Are Not A Factor In Valuation
September 15, 2023 - Bulletin Print Report
Antero Resources Corporation,("A"),asks us to return to the issues we considered in Steager v. Consol. Energy, Inc., 242 W.Va. 209 (201...
Target Granted An Extension To Make A "Safe Harbor" Election
September 15, 2023 - Bulletin Print Report
TP, a publicly held corporation, entered into a merger agreement dated Date 4. TP had no majority shareholder. TP was acquired in a reverse triangularmerger with Merger S...
"D&O" Insurance Proceeds Excluded From A REIT's Gross Income
September 15, 2023 - Bulletin Print Report
TP is a real estate investment trust, ("REIT"). P is a publicly traded REIT which owns an "a"% indirect interest in TP through OP. On Date 2, C and P entere...
TNET Raises The Possibility Of Constructive Dividends
September 14, 2023 - Bulletin Print Report
TriNet Group, Inc., ("TNET"), is engaging in a massive, nearly $1 billion, stock repurchase which has some unusual features, most notablyfrom a federal income t...
Informal Claims for Refund
September 14, 2023 - Volume 17 Issue 176 Print Report
During 2005, petitioners sold real property located in California that resulted in a capital gain of $425,330, while they were N.Y. residents. &...
"Development Rights" Are Real Property
September 14, 2023 - Bulletin Print Report
TP is a limited partnership. TP owns Property 1, located in City A, State Z, through one of its disregarded entities, DE 1. Property 1 has been held for productive use in a tra...
Failure To Provide Sufficient Notice Upends A Tax Sale
September 14, 2023 - Bulletin Print Report
W, a New Jersey resident,is the record owner of a residential property located in Pennsylvania. W owed delinquent taxes for tax year 2019. On June 26, 2021, the Bureau se...
Smurfit Kappa And WestRock Propose A Business Combination
September 13, 2023 - Bulletin Print Report
The boards of directors of paper manufacturersSmurfit Kappa Group plc, ("S"), and WestRock Company, ("W"), recently announced the signing of a definit...
Involuntary Conversion By Destruction And Condemnation
September 13, 2023 - Volume 17 Issue 175 Print Report
The taxpayer owned improved real estate that it used in its trade or business in City X. Dangerous chemicals were released in the city where the taxpayer's property was loc...
Threshold Rejection Of Whistleblower's Cannot Be Reviewed
September 13, 2023 - Bulletin Print Report
On February 25, 2020, petitioner, ("P"), filed with the WBO Form 211. P alleged that Targets had engaged in money laundering through real estate transactions. On June...
No Credit Permitted For Taxes Paid By Another Consumer
September 13, 2023 - Bulletin Print Report
In 2013, PCM contracted with the Daimler Group for the construction of a data center in New Albany, Ohio. In 2016, after construction was complete, the tax commissioner commenc...
A Merger In Which Each Constituent Serves As The "Acquirer"
September 12, 2023 - Bulletin Print Report
Bank of California, Inc., ("BANC"), and PacWest Bancorp, ("PACW"), two West Coast stalwarts who have been punishedin the wake of the Silicon Valley Ba...
SJM's Stock Will Be Taxable To TWNK's Shareholders
September 12, 2023 - Bulletin Print Report
Hostess Brands, Inc., ("TWNK"), announced that it has entered into a definitive agreement with the JM Smucker Company, ("SJM"), in connection with which the...
Taxpayer Involuntarily Disposed Of Option Stock
September 12, 2023 - Volume 17 Issue 174 Print Report
In June 1973, X granted an option to purchase shares of its common stock to the taxpayer who was one of its employees. The option satisfied the qualified stock option requireme...
The "SCDF" Was Not A Component Of "Sales Price"
September 12, 2023 - Bulletin Print Report
J sold NGL it produced from gas wells to EP under the terms of the Purchase Agreement. Gas from wells operating prior to June 1, 2012, was classified as "Base Production;&...
Tax Sale Found To Be Invalid
September 11, 2023 - Bulletin Print Report
On October 1, 2015, the County assessed the property in the name of "LW," the property's owner at that time. Three months later, LW conveyed the property to C, wh...
Accrual Delayed By A Condition Subsequent
September 11, 2023 - Volume 17 Issue 173 Print Report
TP is a multiple-employer VEBA formed by P Corporation, (P), in Year 1. T is a simple trust operating as a welfare benefit fund and was formed by P in Year 2....
Insurance Policy Covered Opioid Costs
September 11, 2023 - Bulletin Print Report
MD is a wholesale distributor of pharmaceutical drugs. C insured MD under a claims-made liability policy. The policy provides for reimbursement of defense costs and for liabili...
Non-Dealer Ineligible To Use The "Resale" Exception
September 11, 2023 - Bulletin Print Report
DK formed KC LLC to purchase, modify, and resell automobiles. DK obtained an investor, LH, to contribute to his business plan, and they began buying cars and titling them in Mo...
FASB Will Alter The Accounting For "Crypto" Assets
September 8, 2023 - Bulletin Print Report
The Financial Accounting Standards Board, ("FASB"), has reached final decisions on the controversial topic of accounting for so-called "crypto assets." It a...
DRE And Member Are Separate And Distinct Trades Or Businesses
September 8, 2023 - Volume 17 Issue 172 Print Report
LLC was previously a subsidiary of Company that converted, in Year A, to a limited liability company, whose sole member is Company. LLC has not made an election under Reg. Sec....
Exception of "No Cause Of Action" Denied
September 8, 2023 - Bulletin Print Report
The Department of Revenue, (the "Department"), claims that the Taxpayer, ("TP"), owes sales taxes on Hotel rooms and poolside cabanas furnished and rented t...
Excess Tax Sale Funds Are Personal Property
September 8, 2023 - Bulletin Print Report
On May 15, 2015, the City of Atlanta filed a demolition lien against a certain parcel of real property. The record shows that JL was the record owner of the property at the tim...
Bloomberg Article On Spin-Offs Does Not Make Any Sense
September 7, 2023 - Bulletin Print Report
We feel compelled to respond to a Bloomberg Intelligencer article in which the author speculates that the I.R.S. is preparing to "attack" and "retroactively tax&...
Dividends Indirectly Derived From Debt Financed Property Not UBTI
September 7, 2023 - Volume 17 Issue 171 Print Report
Y is a tax-exempt organization recognized under Sec. 501(c)(3) of the Code. Y intends to form a corporation in Foreign Country ("C") for the purpose of facilitating a...
Receipts From Wholesale Sales Included For "CAT" Purposes
September 7, 2023 - Bulletin Print Report
The typical transaction at issue in this case goes as follows. A customer approaches a dealer, (the "transferee dealer"), about purchasing a specific vehicle, for exa...
Intangible Assets Must Be Removed From The Taxable Value Of Realty
September 7, 2023 - Bulletin Print Report
The Westin St. Francis, ("WSF") is the third largest hotel in San Francisco. The hotel consists of two buildings on two lots. C operates the hotel pursuant to a manag...
"Operational Term Payments" Were Qualifying REIT Income
September 7, 2023 - Bulletin Print Report
TP, a real estate investment trust, ("REIT"), owns or controls timberlands. TP has entered into an agreement, (the "Agreement"), with SU under which SU pays...
TransAlta's Stock Appears To Be Taxable To U.S. Holders
September 6, 2023 - Bulletin Print Report
TransAlta Corporation, ("TAC"), owns approximately sixty percent of the outstanding stock of TransAlta Renewables, Inc., ("RNW"). Each of TAC and RNWi...
ICE And BKI Finally Close Their Deal
September 6, 2023 - Bulletin Print Report
It has taken quite a while but, finally, Intercontinental Exchange, Inc., ("ICE"), was grantedpermissionto complete its acquisition of Black Knight, Inc.,...
Reciprocal Options Do Not Cause A Present Sale
September 6, 2023 - Volume 17 Issue 170 Print Report
X is an 'S' corporation. X and A propose to enter into an agreement that provides options to both parties that, at a future date, may result in the transfer of ownershi...
REGN's CVRs Helped To Land DBTX
September 6, 2023 - Bulletin Print Report
The use of contractual contingent value rights, ("CVRs"), to bridge valuation gaps has become almost standard operating procedure in the world of health care acquisit...
Animal Vaccines Are Exempt "Drugs"
September 5, 2023 - Bulletin Print Report
This letter is in reply to your request on behalf of the Taxpayer regarding the Virginia retail sales and use tax application to certain animal vaccines. The Taxpayer requests...
FASB Seeks To Impose "Robust" Income Tax Disclosure Requirements
September 5, 2023 - Bulletin Print Report
It is virtually impossible, under the current state of income tax reporting, to determine the amount of income taxes a company actually pays during a given taxable year with re...
"Regulated Public Utility Exception" Did Not Apply
September 5, 2023 - Volume 17 Issue 169 Print Report
H and W and their three grandchildren owned all the stock in S, an 'S' corporation. For 1977 and years prior, S owned a 19.59652 percent working interest in an oil prod...
Loan Participations Were Not "Securities"
September 5, 2023 - Bulletin Print Report
M was a drug testing company. In March 2012, defendants executed a credit agreement (the "2012 Credit Agreement") providing M with a term loan and revolving loan. &qu...
UBS Made A "Bargain Purchase"
September 1, 2023 - Bulletin Print Report
It has now been several months since the closing of the historic acquisition by UBS Group AG of troubledCredit Suisse AG. Upon the closing of the transaction, each outsta...
"Additional Consideration" Spoils A 'B' Reorganization
September 1, 2023 - Volume 17 Issue 168 Print Report
A was the sole shareholder of Y, and was the guarantor on an unsecured note of Y in the principal amount of $200x issued to Z, an unrelated party, in exchange for a loan....
Amended Return Constituted A Claim For Refund
September 1, 2023 - Bulletin Print Report
Petitioner's representative, C, filed petitioner's Original 2017 Louisiana Individual Income Tax Return, (the "OR"), on June 19, 2020. The OR showed a balance...
Retirement Income Not Exempt From State Income Tax
September 1, 2023 - Bulletin Print Report
Taxpayer, ("TP"), argues that the income for the tax years at issue is from a "retirement system for retirees of the United States Government." It is undisp...
"COI" and "COBE" Found To Exist
August 31, 2023 - Volume 17 Issue 167 Print Report
T is a holding company which, through its subsidiaries, is engaged in Business P and in Business D. T has three classes of stock outstanding: Class A voting common stock owned...
Taxpayer Properly Fell Within The "Amusement" Classification
August 31, 2023 - Bulletin Print Report
Petitioner is a limited liability company that runs a jeep tour business. Petitioner's jeep tour business operates by taking customers on jeep tours in the desert surroundi...
On-Demand Air Carrier Not Eligible For Sales Tax Exemption
August 31, 2023 - Bulletin Print Report
TP is an air carrier authorized by the Federal Aviation Administration, ("FAA"),to operate...in Virginia. As a result of an audit by the Department, TP was asse...
Issuance Of Check "Moots" Refund Lawsuit
August 31, 2023 - Bulletin Print Report
J produces Tezos tokens, a form of cryptocurrency, through a process known as "staking." As J sees it, he owes taxes on the tokens only when he sells or transfers the...
Calculating A Creditor's Holding Period In Repossessed Property
August 30, 2023 - Volume 17 Issue 166 Print Report
A small group of investors, termed the LO, has leased a parcel of land to corporate taxpayer, the LE. The LO is entitled, upon the LE's default, to repossess the land and t...
Service Charges Includible In Retailer's Gross Receipts
August 30, 2023 - Bulletin Print Report
APP is engaged in the business of providing election services and/or products, including ballot administration. APP's customers contract with APP to administer elections an...
Use Restrictions Are Not Real Or Tangible Personal Property
August 30, 2023 - Bulletin Print Report
The subject property is comprised of a use restriction, a right of first refusal, and a reservation of mineral rights related to real property. C conveyed title of the land and...
Credit For Taxes Paid To California Denied
August 30, 2023 - Bulletin Print Report
The issue is whether TPs are entitled to a credit against their New Mexico taxes for taxes paid to California. TPs have income from numerous sources. TPs have rental properties...
KIM Agrees To Annex RPT
August 29, 2023 - Bulletin Print Report
Kimco Realty Corporation, ("KIM"), and RPT Realty, ("RPT"), are each real estate investment trusts, ("REITs"), for federal income tax purposes and...
Notice Of Deficiency Was Timely Issued To Joint Filers
August 29, 2023 - Bulletin Print Report
All of the Ss'tax returns from 1999 through 2003, and from 2005 through 2014, were filed as joint returns. The tax return at issue in this case is the Ss' 2004 ta...
Marketplace Facilitator Need Not Collect And Remit Use Tax
August 29, 2023 - Bulletin Print Report
Applicant, ("APP"),is a California based section 501(c)(3) non-profit organization and marketplace facilitator. APP provides a marketplace platform exclusively...
"Mind Body" Classes Subject To NYC Sales Tax
August 29, 2023 - Volume 17 Issue 165 Print Report
Petitioner, (P), operates several facilities in New York City (NYC). These facilities provide instruction in yoga as well as a variety of classes that are included as part of a...
Cook County's Lost Tax Revenues Cannot Be Recouped
August 28, 2023 - Bulletin Print Report
Cook County, ("CC"), contends that a number of banks operating in northern Illinois made credit too readily available to some borrowers, who defaulted, and then forec...
Where The "Historical" Shareholder Dissolves
August 28, 2023 - Volume 17 Issue 164 Print Report
P owned all of the stock of S for over five years during which time P has been engaged in the manufacture and sale of wire products and S has also been engaged in the active co...
Member Must Report Disregarded Entity's COD Income
August 28, 2023 - Bulletin Print Report
P was the sole member of S, a single member limited liability company. S ceased to exist in approximately May 2008. It was a disregarded entity, ("DRE"), for federal...
A State May Tax All Income Of Its Residents
August 28, 2023 - Bulletin Print Report
Taxpayers, husband and wife, filed Virginia resident tax returns for the 2018 through 2020 taxable years, claiming subtractions for distributions taken from retirement accounts...
Section 355(a) Is Not Elective
August 25, 2023 - Bulletin Print Report
Section 355(a) of the Internal Revenue Code Code provides, in pertinent part, that "If a corporation...distributes to a shareholder, with respect to its stock...solely sto...
Receiving Stock Of A Successor To The Issuer Of "CVRs"
August 25, 2023 - Volume 17 Issue 163 Print Report
FA, an FC corporation, uses the accrual method of accounting. FA wished to acquire T, the domestic common parent of a consolidated group of corporations using the accrual metho...
Property Used In A Production Activity Is Exempt From Sales & Use Tax
August 25, 2023 - Bulletin Print Report
The Court of Special Appeals ruled that Potomac Edison Co., ("PE"), processing activities were performed within the statutory definition of "production activity....
Debtor's Tax Refund "Attributed To" Refundable Credits
August 25, 2023 - Bulletin Print Report
Debtor filed his Chapter 7 bankruptcy petition on September 28, 2021. A tax refund comes from tax "payments," including refundable credits and other payments such as...
FASB Standardizes Accounting For Joint Venture Formations
August 24, 2023 - Bulletin Print Report
Accounting Standards Update, ("ASU"), 2023-25, "Business Combinations--Joint Venture Formations" (Subtopic 805-60) Recognition and Initial Measurement, fill...
The Deal Survey August 2023
August 24, 2023 - The Deal Survey: August 2023 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
PR And ESTE To Engage In A "Two-Party" 'A' Reorganization
August 24, 2023 - Bulletin Print Report
Permian Resources Corporation, ("PR"), and Earthstone Energy, Inc., ("ESTE"), announced that they have entered into a definitive agreement under which PR wi...
First Prong Of "All Events" Test Not Satisfied
August 24, 2023 - Volume 17 Issue 162 Print Report
GE owns supermarkets and pharmacies under the name "GE" and gas stations and convenience stores under the names "GG" and "GEE." During the years a...
FBAR Conviction Upheld On Appeal
August 24, 2023 - Bulletin Print Report
The Bank Secrecy Act requires many citizens and residents to report financial relationships and transactions with foreign banks. See 31 U.S.C. section 5314(a).Citizens an...
Taxes For Late Filed Returns Are Not Dischargeable
August 23, 2023 - Bulletin Print Report
On August 12, 2020, the Court confirmed the Debtor's plan...which she successfully completed, and on March 31, 2023, the Court entered an order granting the Debtor a discha...
When Is Deferred Compensation A "Payroll Expense?"
August 23, 2023 - Volume 17 Issue 161 Print Report
Petitioner, ("P"), inquires whether nonqualified deferred compensation earnings are considered taxable for purposes of the Metropolitan Commuter Transportation Mobili...
Tax Court Unable To Order Refund Of Overpayment
August 23, 2023 - Bulletin Print Report
Petitioner did not timely file a Federal income tax return for 2015. The I.R.S. prepared a substitute for return, ("SFR"), and, on April 5, 2021, issued petitioner a...
Trust Entitled To A Section 642(c)(1) Deduction
August 23, 2023 - Bulletin Print Report
Decedent created Trust on Date 1 and died on Date 2. Decedent owned an individual retirement account, ("IRA"), at the time of his death, which named Trust as the sole...
JNJ Announces Results of KVUE Exchange Offer
August 22, 2023 - Bulletin Print Report
Johnson & Johnson, ("JNJ"), is now poised to complete the "split-off" of its subsidiary, Kenvue, Inc., ("KVUE"). The exchange offer though whi...
Leased Apartments Not "Taxable Premises"
August 22, 2023 - Volume 17 Issue 160 Print Report
Petitioner, (P), which owns retail stores throughout the world, maintains its principal offices in New York City. It is necessary for it to call to this City, from time to time...
Student Loan Discharged In Bankruptcy
August 22, 2023 - Bulletin Print Report
In 2010 and 2011, A obtained two loans from Bank of North Dakota, ("BND"),to attend GU. A graduated with an associate degree of applied medical science in Decem...
Informal Claim For Refund Insufficient To Waive Sovereign Immunity
August 22, 2023 - Bulletin Print Report
JP created the Trust on February 26, 2002, and subsequently conveyed his home, (the "Property"), to the Trust for a term of five years. P, the son of JP, was the sole...
Disregarding Transitory Steps
August 21, 2023 - Volume 17 Issue 159 Print Report
X, a State C banking corporation, has outstanding 2,000x shares of common stock which were publicly-held. X has decided that its stock should be owned directly by a c...
Transferred Property Included In Gross Estate
August 21, 2023 - Bulletin Print Report
Decedent died on August 30, 2014. SW, Decedent's daughter, was appointed the personal representative of Decedent's estate on September 25, 2014.A Maryland estate...
COD Income Or Gain?
August 21, 2023 - Bulletin Print Report
In 2012, E was an 'S' corporation. P was the 100 percent shareholder of E. E was the sole member of the PLF entities, treated as disregarded entities. The PLF entities...
The "California Method" Strikes Again
August 21, 2023 - Bulletin Print Report
The Franchise Tax Board, ("FTB"), accepted APPs' assertion that they were part-year residents of California during the 2018 taxable year. Part-year residents are...
DINO Agrees To "Roll Up" HEP
August 18, 2023 - Bulletin Print Report
HF Sinclair Corporation, ("DINO") owns a 47 percent limited partner interest in Holly Energy Partners, L.P., ("HEP").and a non-economic general partne...
ET And CEQP To Engage In An "Assets-Over" Merger
August 18, 2023 - Bulletin Print Report
Energy Transfer L.P. ("ET"), and Crestwood Equity Partners L.P., ("CEQP"), each a publicly traded partnership, announced that the parties have entered into...
Effects Of Liquidating An "Insolvent" Subsidiary
August 18, 2023 - Volume 17 Issue 158 Print Report
P is a State X corporation the stock of which is widely held and publicly traded. FS is a Country Y corporation which was formerly engaged in retailing consumer electronic merc...
The Section 4980H Exaction Is A "Tax"
August 18, 2023 - Bulletin Print Report
The Affordable Care Act, ("ACA"), contains both an individual mandate and an employer mandate. The employer mandate requires "large employers" to give full...
Exercising Stock Option With Previously Acquired Stock
August 17, 2023 - Volume 17 Issue 157 Print Report
A corporation has both a qualified stock option plan and a nonqualified stock option plan. An employee who exercises an option granted under the nonqualified plan may pay for t...
Taxpayer Permitted To Contest Revocation Of Homestead Exemption
August 17, 2023 - Bulletin Print Report
In 2003, H purchased a home, (the "subject property"). In 2007, he applied for, and received, a homestead exemption on the subject property. Generally, an application...
Tax Credit Denied For Lack Of "Notice" And "Registration"
August 17, 2023 - Bulletin Print Report
Taxpayers, ("TPs"), claimed an overpayment for the 2013 Tax Period, in part based on their claim for the Motion Picture Investment Tax Credit, ("MPITC"). Th...
Baseball Team's Promotional Items Not Eligible For Resale Exemption
August 17, 2023 - Bulletin Print Report
P was a professional baseball team. The team's stadium is owned by City, and P rents the property from City. Texas imposes a tax upon each sale of a taxable item in this st...
FIS's Tax Problem Will Be Mitigated By "Leveraged Partnership" Technique
August 16, 2023 - Bulletin Print Report
In 2019, to much fanfare, Fidelity National Information Services, Inc., ("FIS"), acquired all of the outstanding stock of Worldpay, Inc., ("WP"). The acquis...
Luxury Box Not Used For Commercial Activity
August 16, 2023 - Volume 17 Issue 156 Print Report
Petitioner, (P), is a national accounting firm with offices in New York City. From 1974-1985, P was a party to a series of three-year agreements with the operator of Madison Sq...
Holding Company Properly Excluded From New York Combined Return
August 16, 2023 - Bulletin Print Report
LL is a publicly traded Australian corporation that conducts business operations in numerous countries. LLAH, a Delaware corporation, wholly owns a group of subsidiaries (colle...
Sales Factor Properly Used To Apportion "Tax Base"
August 16, 2023 - Bulletin Print Report
The MBTAimposed "a business income tax on every taxpayer with business activity within this state..." For companies operating in multiple jurisdictions, the MBT...
CLF And X: Forward Or Reverse Merger Proposed?
August 15, 2023 - Bulletin Print Report
Cleveland-Cliffs, Inc., ("CLF"),decided to go public with an offer it previously made exclusively to the Board of Directors of the United States Steel Corporati...
Novartis Breathes Life Into The "Open Transaction" Doctrine
August 15, 2023 - Bulletin Print Report
Companies with products and/or processes that are still in the developmental stage, and have not yet attainedcommercial viability, are notoriously difficult to value. Whe...
Recalculating Gross Profit From An Installment Sale
August 15, 2023 - Volume 17 Issue 155 Print Report
In 1969, a taxpayer sold shares of stock having an adjusted basis of $40,000 for $100,000 and elected to report his gross profit of $60,000 from the sale on the installment met...
Fracking Equipment Exempt From Sales Tax
August 15, 2023 - Bulletin Print Report
S is in the fracking business. Fracking is a process that entails pumping a pressurized mixture of...into the earth to fracture...rock formations and extract oil and gas. At is...
Rescinded Sale Does Not Interrupt Holding Period
August 14, 2023 - Volume 17 Issue 154 Print Report
Trust X (TX) acquired Farm Y (FY) on December 31, 1951. On September 9, 1974, TX sold FY to T, the trustee of TX, for a total sales price that was less than the appraised value...
Tax Court Had Jurisdiction To Review "WB's" Action
August 14, 2023 - Bulletin Print Report
Section 7623 provides for awards to individuals who supply information to the Government about third parties who have underpaid their taxes or otherwise violated the internal r...
Operated Rentals Are Subject To Sales Tax
August 14, 2023 - Bulletin Print Report
TP rents audio equipment to customers for use in concerts, festivals, meetings, and other events. TP's rentals can be categorized into two general groups: rentals of bare e...
A "Refinancing" Does Not Require The Same Borrowers
August 14, 2023 - Bulletin Print Report
An individual acquired four condominium units...by four separate deeds. Each unit was encumbered by a different deed of trust with different lenders. The four units were transf...
AVID Is A "Loss Corporation"
August 11, 2023 - Bulletin Print Report
Avid Technology, Inc., ("AVID"), is the subject of a leveraged buy-out, ("LBO"). It recently announced that it has entered into a definitive agreement to be...
Alaska Taxes Some Dividends Received By Foreign Corporations
August 11, 2023 - Volume 17 Issue 153 Print Report
Schlumberger Limited (SL) is incorporated in the Netherlands Antilles. Its only service is the management of its subsidiaries; it receives fees for this service. It also receiv...
Who Bears The Burden Of Estate Tax On Non-Probate Property?
August 11, 2023 - Bulletin Print Report
On March 12, 2018, B signed his last will and testament, (the "Will"). In his Will, B appointed S as executor of his estate. The Will bequeathed $100,000 to S. It pro...
Change Of Domicile Is "Part Of A Process"
August 11, 2023 - Bulletin Print Report
The Department of Revenue, (the "Department"), concluded that TP was taxable as a domiciliary resident of Virginia. TP appeals, contending she was a resident of State...
Asset Sale Did Not Accelerate Deferred Compensation Deductions
August 10, 2023 - Bulletin Print Report
H is a limited partnership formed in 2000 to acquire an N.B.A. franchise, the Vancouver Grizzlies, which later became the Memphis Grizzlies. In October 2012, H sold the Grizzli...
Museum's Gift Shop Sales Do Not Generate UBTI
August 10, 2023 - Volume 17 Issue 152 Print Report
Y is exempt from tax under Sec. 501(c)(3) of the Code. Y's purposes include operation of a museum and research center that provides a location to receive and display materi...
The "SRP" Is Found To Be A "Tax Measured By Income"
August 10, 2023 - Bulletin Print Report
From 2014 to 2018, the Affordable Care Act's "individual mandate" instructed most Americans to purchase health insurance. See section 5000A(a). Abstainers paid a...
Resort Considered Commercial Property
August 10, 2023 - Bulletin Print Report
The "Resort" is comprised of 109 condominium units that contain 5,688 timeshare fractional interests under the Tennessee Timeshare Act. Timeshare fractional interests...
DISH And SATS Will Become One
August 9, 2023 - Bulletin Print Report
The Ergen family has long enjoyed a controlling interest in each of DISH Network Corporation, ("DISH"), and EchoStar Corporation, ("SATS"). Approximately fo...
Trailers Not Eligible For Sales Tax Exemption
August 9, 2023 - Bulletin Print Report
B sold "trailer type vehicles" to non-Wisconsin residents, who did not use the trailers in Wisconsin. Each of the trailers was designed to be used in conjunction with...
Lack Of Employees Does Not Preclude Finding Of Active Business
August 9, 2023 - Volume 17 Issue 151 Print Report
D is an 'S' corporation. A and B each directly own "a%" of the equity ownership interests of D. The remaining "b%" of the equity ownership interests...
Refunds Belong To Working Spouse
August 9, 2023 - Bulletin Print Report
The debtor and his wife filed a joint tax return for 2022. On February 2, 2023, the debtor filed his Chapter 7 bankruptcy petition. He is the primary wage earner for the family...
Purging Sec. 306 Stock
August 8, 2023 - Volume 17 Issue 150 Print Report
X corporation (X) has outstanding Class A nonvoting common stock, Class B voting common stock, and nonvoting preferred stock. The preferred stock was limited and preferred as t...
Termination Of Insurance Policy Gave Rise To Income
August 8, 2023 - Bulletin Print Report
P resided at his home, (the "SMP"), through February 16, 2017. The SMP was left vacant until September 15, 2017. As of that date through the end of 2017, P rented the...
Resale Exception To Use Tax Not Available
August 8, 2023 - Bulletin Print Report
K was a part owner of SP, which enhanced high-performance cars and made them faster. K started a new side business that would purchase, modify, and resell automobiles. He forme...
Hot Tub/Spa Not Exempt From Gross Retail Tax
August 8, 2023 - Bulletin Print Report
Taxpayer protests the Indiana Department of Revenue's (the "Department") denial of his claim for refund of the sales tax paid on the purchase of a spa. The taxpay...
Patent Infringement Suit Legal Expenses Are Deductible
August 7, 2023 - Bulletin Print Report
The Hatch-Waxman Act, ("HWA"), established an expedited process for obtaining FDA approval to sell generic drugs. Generic manufacturers could now file an Abbreviated...
Sales Tax Was Not Overpaid
August 7, 2023 - Bulletin Print Report
Taxpayer, ("TP"), is an individual who purchased a vehicle in Indiana and paid sales tax at the time of purchase. TP'svehicle was transported to his home st...
Foreign Corporation Not Included In Kentucky Consolidated Return
August 7, 2023 - Volume 17 Issue 149 Print Report
AT&T (T) is organized under the laws of New York and has hundreds of subsidiaries across the nation. Approximately 20 were located in Kentucky (KY). The subsidiaries not lo...
Horse Farm Activity Fell Short Of A Trade Or Business
August 7, 2023 - Bulletin Print Report
The issue in this appeal involves the Department's disallowance of expenses for a horse farm that Taxpayers claimed on their Schedules F. The Department contends that the h...
Refund Of Sales Tax Denied Art Dealer
August 4, 2023 - Volume 17 Issue 148 Print Report
Petitioner, (P), is art gallery located in New York City. On or about September 9, 2003, P acquired what was purported to be a Max Ernst painting (the Painting) from GDM for th...
Basis Adjustment Attributable To "Bonus Depreciation" Was Permitted
August 4, 2023 - Bulletin Print Report
H was a partner in a partnership that placed equipment in service in 2009. Fixed date conformity, ("FDC"), additions and subtractions for bonus depreciation were clai...
Health Care Services Were "Sitused" To Ohio
August 4, 2023 - Bulletin Print Report
TRC'sprimary service is dialysis treatment and education. TRC asserted that laboratory testing services and healthcare provider services were performed out of state,...
I.R.S. Identifies "MISTs" As A "Listed Transaction"
August 4, 2023 - Bulletin Print Report
It will come as no surprise that gross income includes, among many other things,"gains from dealings in property." See section 61(a)(3) of the Code. In general,...
Senior Living Facilities Are Health Care Properties
August 3, 2023 - Volume 17 Issue 147 Print Report
TP elected to be taxed as a REIT. TP is in the business of owning and leasing senior housing and healthcare related real estate. In Year 2, TP acquired an ownership interest in...
No Assessable Leasehold Interest Was Found
August 3, 2023 - Bulletin Print Report
The subject parcel is a leasehold interest in a public parking garage which was constructed in 2016. Respondent valued the leasehold interest at $6,896,400. Respondent issued a...
CSC's Capital Loss Is Being Questioned By The I.R.S.
August 3, 2023 - Bulletin Print Report
CSC was the U.S. parent of a group of corporations that joined in the filing of a consolidated Federal income tax return. In July 2007, CSC acquired all of the stock of COV. As...
Challenge To Amended Section 6050I Is Premature
August 3, 2023 - Bulletin Print Report
Plaintiffs, ("Ps"), are regular users of crypto currency. Ps seek declaratory relief against the enforcement of section 6050I. In 2021, the Infrastructure Investment...
NEWR Will Engage In A "Parent-Subsidiary" LBO
August 2, 2023 - Bulletin Print Report
On July 31, 2023, New Relic, Inc., ("NEWR"), announced it had entered into an Agreement and Plan of Merger with Crewline Buyer, Inc., ("Parent"), and Crewli...
Sports Clubs Not Part Of Lodging Facilities
August 2, 2023 - Volume 17 Issue 146 Print Report
TP intends to elect to be taxed as a REIT. TP was formed to acquire a portfolio of hotels. TP's acquisition of the hotels will be effectuated by a contribution of the prope...
Transfer Of Ownership Found To Have Occurred
August 2, 2023 - Bulletin Print Report
In 2007, the parents formed P, a limited liability company. P's assets include two residential rental properties. In 2014, the parents assigned 100 percent of their interes...
Sales Tax Paid Twice On The Same Purchase
August 2, 2023 - Bulletin Print Report
TP is an Arkansas, ("AK"), resident who chose to purchase a car from an Indiana dealership. The dealership charged TP Indiana sales tax at TP's home state's r...
Warrants Are Securities Which Have No Principal Amount
August 1, 2023 - Bulletin Print Report
Historically, stock purchase warrants were neither "stock" nor "securities" for tax purposes. Thus, when warrants were received in a non-recognition transac...
Condominium Units To Be Combined Taxed At Lower Rate
August 1, 2023 - Volume 17 Issue 145 Print Report
Petitioners have entered into a Purchase Agreement (the Agreement) for the purchase of three adjacent condominium units (the Property) which they intend to combine into a singl...
A Tax Sale Is Not A "Judicial" Sale
August 1, 2023 - Bulletin Print Report
The United Department of Housing and Urban Development has two deeds of trust on a Missouri home. They were security for home-equity loans taken out by a couple that previously...
The Processing And Storage Of Wine Is "Agriculture"
August 1, 2023 - Bulletin Print Report
APP owns a stretch of land in TC. The majority of the property comprises 63 acres. This parcel is made up entirely of vineyards. In 2018, the TC Auditor created two new parcels...
OID Accruals Were Investment Interest
July 31, 2023 - Bulletin Print Report
Petitioner, ("P"), is an attorney. He has been involved in real estate activities for many years. IM is a limited partnership of which P was a member. XWD is a single...
Section 6213(a)'s Deadline Is Not Jurisdictional
July 31, 2023 - Bulletin Print Report
In 2015, I and D each received $8,826.30 to settle a lawsuit. The I.R.S. mailed a notice of deficiency. The I.R.S. levied on their property. The Cs filed a petition in the Tax...
Bank Can Deduct Discount On Mortgage Prepayment
July 31, 2023 - Volume 17 Issue 144 Print Report
The taxpayer is a domestic savings and loan association. With interest rates higher in the 1980s as compared to earlier years, the taxpayer offered discounts on an individual b...
Louisiana Basis And Federal Basis Diverge
July 31, 2023 - Bulletin Print Report
Ps arethe sole shareholders of BJF, (the "Corporation"). The Corporation is an 'S' corporation. For the 2019 tax year, the Corporation sold a commercial...
"Unclean Hands" Doctrine Was Not Applicable
July 28, 2023 - Bulletin Print Report
With respect to P's Federal income tax for 2013 and 2017, the I.R.S. determined deficiencies...plus accuracy related penalties. The deficiencies are attributable to short-...
Musician Subject To New York State MCTMT
July 28, 2023 - Volume 17 Issue 143 Print Report
Petitioner, (P), is a nonresident musician who has been touring and making albums for many years. He currently performs several times a year in the metropolitan commuter transp...
Transfer Of Ground Lease Subject To D.C. Tax
July 28, 2023 - Bulletin Print Report
The Archbishop of Washington is the owner of land at 1717 Rhode Island Avenue, N.W. In 2002, the Archbishop and M entered into an agreement for the lease of the land to M until...
"Lev Par" Is An Antidote For A Low Basis
July 28, 2023 - Bulletin Print Report
Fidelity National Information Services, Inc., ("FIS"), in 2019, acquired Worldpay, Inc., ("W"), in a cash and stock deal for well north of $30 billion. The...
Is Goodwill a Capital Asset?
July 27, 2023 - Volume 17 Issue 142 Print Report
During Year 1 through Year 2, TP, a C corporation, operated a "b" business consisting of three separate divisions: X, Y, and Z....
Sovereign Immunity Waiver Was Not "Unequivocally Expressed"
July 27, 2023 - Bulletin Print Report
The I.R.S. concluded that WA owed a tax deficiency and it undertook efforts to collect that amount. WI was involved in that effort. WA learned that the I.R.S. had levied and ga...
The Theft Loss Deduction Has Been Suspended
July 27, 2023 - Bulletin Print Report
In December 2010, plaintiffs became the owners and operators of FP. FP, operating online, sold raw pet food. In October 2014, G moved the business to Florida, registering the b...
PACW Will Be The "Accounting Acquirer"
July 26, 2023 - Bulletin Print Report
Bank of California, Inc., ("BANC"), and PacWest Bancorp, ("PACW"), have announced the signing of a definitive merger agreement pursuant to which the compani...
Registering Shares With The S.E.C.
July 26, 2023 - Volume 17 Issue 141 Print Report
Pursuant to a plan of reorganization which qualified under Sec. 368(a)(1) of the Internal Revenue Code, the acquiring corporation paid all of the costs necessary to register wi...
"Futility Exception" Obviates Need For Administrative Review Of Claim
July 26, 2023 - Bulletin Print Report
G.L. 1956 section 31-36-7 requires that: "Every distributor shall...render a report...of the amount...of fuels purchased, sold, or used by the distributor within this stat...
Airport Property Exempt From Taxation
July 26, 2023 - Bulletin Print Report
AA applied for a tax exemption for fifteendifferent properties that it owns and leases to private entities. The properties are located within airports in HC. The lessees...
No Retail Transaction Found
July 26, 2023 - Bulletin Print Report
TP is an Indiana resident. TP purchased a vehicle in 2017 in Illinois, listing both himself and his corporation as co-owners. TP later sold his company and k...
JNJ Chooses A Split-Off Of KVUE
July 25, 2023 - Bulletin Print Report
Johnson & Johnson, ("JNJ"), currently owns 1,716,160,000 shares of Kenvue, Inc., ("KVUE"), or approximately 89.6 percent of KVUE's issued and outsta...
Disposition Of Note With Unstated Interest
July 25, 2023 - Volume 17 Issue 140 Print Report
In January 1970, X issued 1,000 shares of its common stock in exchange for all of the stock of Y. On September 1, 1972, X sold its stock in Y to M for a noninterest bearing not...
Only Temporary Housing Is Exempt From Taxation
July 25, 2023 - Bulletin Print Report
CC is non-stock corporation established in 1984. CC is recognized as a charitable organization under section 501(c)(3) of the Code. CC is licensed by DDS to operate "CLA&q...
Tesla Buyer Not Entitled To A Trade-In Credit
July 25, 2023 - Bulletin Print Report
JM wanted to purchase a 2022 TeslaModel Y. He owned a 2015 Buick Enclave and intended to use that vehicle as a trade-in when buying the Tesla. But there were no Tesla dea...
New Jersey Has Retaliated Against Its Neighboring States
July 24, 2023 - Bulletin Print Report
As threatened, the great state of New Jersey has taken action to "level the playing field," from a tax point of view, with several of its neighboring states, most not...
No Credit For Tax Imposed On 'S' Corporation Income Allocated To N.J.
July 24, 2023 - Volume 17 Issue 139 Print Report
Plaintiff, (P), is the sole shareholder of C, a New Jersey corporation. C has elected to be taxed as an 'S' corporation. For 2009, C filed a New York State 'S'...
Related Party Advances Found To Be Equity
July 24, 2023 - Bulletin Print Report
AL coordinated lot sales for six bonded real estate developments, ("2009 development projects"): (1) SD, being developed by RI, (2) CBD, being developed by RRDN...
Taxpayer Who "Paid The Tax" Is Entitled To A Refund
July 24, 2023 - Bulletin Print Report
C is an Indiana car dealership whose customers include Kentucky residents. C collected Kentucky's "MVUT" for its Kentucky customers and deposited the funds into i...
Sec. 267(b)(4) Should Not Be Read Literally
July 21, 2023 - Volume 17 Issue 138 Print Report
Y owns all of the stock of C. A is Y's son-in-law. A is active in the management of C and is also the trustee of several trusts created by Y for the benefit of A's chil...
In-State Activity Exceeded P.L. 86-272 Protection
July 21, 2023 - Bulletin Print Report
U is an 'S' corporation with its headquarters in Wisconsin. U is a web-based distributor of industrial and packaging products. U shipped most inventory items from its d...
Non-Resident's Income Taxed In California
July 21, 2023 - Bulletin Print Report
APPs timely filed a Form 540 California Resident Income Tax Returnfor the 2017 tax year, reporting a California adjustment for Nevada wage income earned by AH in 2017. FT...
Frivolous Return Penalty Is Constitutional
July 21, 2023 - Bulletin Print Report
Minnesota, ("M"), law imposes an income tax on the taxable income of both residents and non-residents. Non-resident individuals and shareholders are required to file...
The Willens Deal Survey July 2023
July 20, 2023 - The Deal Survey: July 2023 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
Withholding Agent Cannot Rely On Incorrect Exemption Form
July 20, 2023 - Volume 17 Issue 137 Print Report
The withholding agent (WA) filed Forms 1042-S with the Service showing a claimed exemption from withholding on payments of "effectively connected income." During an e...
Uncashed Checks Included In Gross Estate
July 20, 2023 - Bulletin Print Report
In 2007, D signed a power of attorney agreement appointing his son, DO, as his agent. DO made annual monetary gifts to family members from 2007 to 2014. On September 6, 2015, D...
The Tax Injunction Act Robbed A Federal Court Of Jurisdiction
July 20, 2023 - Bulletin Print Report
H is an Arizona company that sells products online throughout the country. It argues that Louisiana's parish-by-parish sales-and-use tax system is so costly to navigate tha...
Payments That Benefit Shareholders Not Considered Dividends
July 19, 2023 - Volume 17 Issue 136 Print Report
Approximately 1/3 of C's shareholders own less than 100 shares of C's common stock. More than 1/2 of these shareholders own less than 26 shares. C incurs substantial ex...
The Braves Are On Their Own
July 19, 2023 - Bulletin Print Report
On July 18, 2023, Liberty Media Corporation effected a distribution of its stock in Atlanta Braves Holdings, Inc. to the holders of certain classes of its tracking stock. The v...
Reacquisition Of Vehicle Subjected To Use Tax
July 19, 2023 - Bulletin Print Report
TP, as part of a new job, sold her vehicle to her new employer. After a week or so of working at the employer, TP decided she would return to her old job and left the new emplo...
Cutting Is Not "Fabrication"
July 19, 2023 - Bulletin Print Report
APP is a steel and aluminum distributor. APP purchases its aluminum and steel from various vendors for resale. On occasion, a customer may request "further work" from...
No Double Credit For The Same Investment
July 18, 2023 - Bulletin Print Report
B is an insurance company. B is in the business of issuing accident and health insurance plans. B is subject to a "Premium Tax," as well as corporate income tax on it...
Fair Cash Value Was Not Less Than Assessed Value Of Dwelling
July 18, 2023 - Bulletin Print Report
On January 1, 2019, and January 1, 2020, APP was the assessed co-owner of a condominium unit, (the "subject unit"). The subject unit is a two-story unit with an ocean...
"Arrowsmith" Required Capital Loss Treatment For Settlement Payment
July 18, 2023 - Volume 17 Issue 135 Print Report
In 1961, the taxpayer sold his interest in two oil and gas leases and reported a long-term capital gain of $190,000 from the sale. In 1962, it was determined that the wells on...
Corporation Allowed A Gross Receipts Tax Deduction
July 17, 2023 - Bulletin Print Report
R had commercial contracts with the VA and IHS. Under these contracts, R's nurse employees would provide health care services for the VA and IHS. The Department assessed R...
CEO Maintained A Permanent Place Of Abode In New York City
July 17, 2023 - Bulletin Print Report
The Division conducted a residency audit of petitioner for the tax year 2017. The sole issue is whether petitioner, who admittedly spent more than 183 days within New York City...
Securing A Dependency Exemption For A Non-Relative
July 17, 2023 - Volume 17 Issue 134 Print Report
Petitioner, (P), and his wife were married in September 2009. At that time, P's wife moved out of her mother's home and into P's apartment. At the time P's wife...
Vessel Found Subject To California Use Tax
July 17, 2023 - Bulletin Print Report
On January 14, 2014, in Oregon, APP purchased a sailing yacht, (the "Vessel"), for $65,000.00. APP did not remit any sales or use tax to the Oregon sellers in connect...
Only Tax On Income "Derived" From Another State Is Creditable
July 14, 2023 - Volume 17 Issue 133 Print Report
On June 18, 2001, Petitioner, (P), an individual who is domiciled in New York State, won a jackpot at a slot machine at the Trump Taj Majal Casino in Atlantic City, New Jersey....
The Dominant Motivation Was Investment Related
July 14, 2023 - Bulletin Print Report
AH was in the business of real estate development and hotel ownership and management. AH, PG, and RL founded S to raise funds for SS, which was S's wholly owned subsidiary....
Furnishing Of Go-Karts Constituted "Leasing" Of "TPP"
July 14, 2023 - Bulletin Print Report
APP operates indoor go-kart racing venues in California. APP purchased go-karts for use at its venues from a vendor in Italy without paying tax to California or tax reimburseme...
State Tax Refunds Constitute Qualifying REIT Income
July 13, 2023 - Volume 17 Issue 132 Print Report
TP elected to be treated as a REIT. TP owns 100 percent of the stock in S. S is a qualified REIT subsidiary (QRS). S owns, indirectly through entities taxable as partnerships,...
Eli Lilly Embraces The "Closed Transaction" Approach To CVRs
July 13, 2023 - Bulletin Print Report
Recently, Eli Lilly & Co., ("E"), and SigilonTherapeutics, Inc., ("S") announced a definitive agreement for L to acquire the stock of S from its s...
Taxpayer Provides "Credit Bureau Services"
July 13, 2023 - Bulletin Print Report
TP is an out-of-state corporation that provides two types of check risk management services: (1) retail check services, and (2) payroll check cashing services. TP makes recomme...
Leasehold Interest Found To Be "Public Property"
July 13, 2023 - Bulletin Print Report
The Authority sued the Board, seeking a declaration that its leasehold interest in certain property, "SH," was exempt from ad valorem taxation. The trial court grante...
Citigroup Can Deduct Its Worthless "RAP Right"
July 13, 2023 - Bulletin Print Report
One S&L-crisis era"assisted" merger occurred between Glendale Federal Bank, FSB, ("G"), and First Federal Savings and Loan of Broward, ("B&qu...
Spin-Off To Facilitate Raising Needed Capital
July 12, 2023 - Volume 17 Issue 131 Print Report
P corporation, (P), is a closely-held corporation that owns and operates a golf and tennis resort in State A. P has for more than five years owned all of the stock of S corpora...
Fishing Charter Activity Not Engaged In For Profit
July 12, 2023 - Bulletin Print Report
S has been fishing in Alaska for more than thirty years. In 2010, he decided to establish HJC and acquired a boat designed to fish for halibut. In 2015 and 2016, S filed fishin...
Late Filed Appeal Robs Court Of Jurisdiction
July 12, 2023 - Bulletin Print Report
In 2012, plaintiffs purchased residential real property in defendant for $6,267,500. Starting in 2013, and in every year thereafter, plaintiffs submitted a forest management pl...
Contributed Property Found To Be Inventory
July 12, 2023 - Bulletin Print Report
GC is a partnership. In January 2006, ILC purchased nearly 2,000 acres of undeveloped land in Tennessee for over $9 million to develop into a residential vacation comm...
"HEROES" Act Does Not Authorize Loan Forgiveness
July 11, 2023 - Bulletin Print Report
The Higher Education Act of 1965, (the "EA"), specifies the terms and conditions attached to federal loans. It authorizes the Secretary to cancel or reduce loans,&nbs...
Excluded Gain Supports Deduction Of Suspended PALs
July 11, 2023 - Volume 17 Issue 130 Print Report
A, an individual, buys a principal residence for $700,000 and occupies and uses the residence as his principal residence for two years before converting the residence into a re...
Taxpayer Never Abandoned Ohio Domicile
July 11, 2023 - Bulletin Print Report
S applied for refunds of personal income tax paid for tax years 2016 and 2017. On her applications, she asserted that she lived in Florida to help care for her aging parents du...
Where Does Infringing Conduct Occur?
July 11, 2023 - Bulletin Print Report
H manufactures radio remote controls for construction equipment. It sells and services these products...in more than 45 countries. A began to sell H-branded products that incor...
"TIF" Is Not An "Assessment" Excluded From "Real Estate Taxes"
July 10, 2023 - Bulletin Print Report
The Minnesota legislature established "TIF" as a financing tool "to support local economic development...using the incremental property taxes, or 'tax increm...
Timing Of Sec. 304 Dividend
July 10, 2023 - Volume 17 Issue 129 Print Report
The I.R.S. will dispose of cases under Sec. 301 (relating to distributions of property by a corporation to its shareholders) that are substantially identical on their facts to...
IT Business Was "Carried On" In New York City
July 10, 2023 - Bulletin Print Report
Taxpayer is an IT consulting service that involves analysis and programming. The partners that own the firm reside in New York City and work from their homes located i...
Sovereign Immunity Is Abrogated "With Respect To" 11 U.S.C. Sec. 544
July 10, 2023 - Bulletin Print Report
Section 544(b)(1) of the Bankruptcy Code provides that "the trustee may avoid any transfer of an interest of the debtor in property...that is voidable under applicable law...
Reinsurer Qualifies As An "Insurance Company"
July 7, 2023 - Volume 17 Issue 128 Print Report
Retailer (R) sells Products to customers. R offers customers the option to also purchase a Product Service Contract (PSC). The PSC is issued by O and provides coverage for the...
Declaratory Relief Is Unavailable With Respect To Federal Taxes
July 7, 2023 - Bulletin Print Report
On April 4, 2021, Plaintiff, ("P"), filed a Complaint against the Commissioner of the I.R.S. The United States filed a Motion to Dismiss the Complaint. P alleges he i...
Acquisition Indebtedness Exceeded The Statutory Limit
July 7, 2023 - Bulletin Print Report
In 2019, petitioners, ("Ps"), owned two homes, which they acquired after October 1987 and before December 16, 2017. Ps owned the first home in Virginia for the entire...
Tax Court Correctly Calculated "Entire New Jersey Income"
July 7, 2023 - Bulletin Print Report
Plaintiffs are a married couple who were involved in two disputes with the Director. The first dispute occurred in 2004, ("TI"). During that period, T earned income i...
U.S. Property Held By Trustee Not Held By CFC
July 6, 2023 - Volume 17 Issue 127 Print Report
Y corporation, ("Y"), a controlled foreign corporation (CFC) is a wholly-owned subsidiary of X corporation, ("X"), a domestic corporation. &...
Petition For Property Tax Relief Was Not Timely Submitted
July 6, 2023 - Bulletin Print Report
On December 28, 2015, petitioner, ("P"), filed a petition in Superior Court pursuant to section 44-5-26(c), alleging that respondent conducted an illegal property tax...
Parkour Classes Are A Physical Fitness Activity
July 6, 2023 - Bulletin Print Report
TP operates a parkourgym in Washington and conducts parkour classes. Audit determined that the income was properly classified under the retailing B&O tax classificati...
UPS Permitted To Use Alternative Apportionment Formula
July 6, 2023 - Bulletin Print Report
In 3.5.19.15 of the New Mexico Administrative Code, the Department sets forth special rules for apportioning income for interstate trucking companies. The regulation appo...
Taxpayer Did Not "Construct" Principal Residence
July 5, 2023 - Volume 17 Issue 126 Print Report
On January 23, 2009, Petitioner, (P), purchased a house in Port St. Lucie, Florida from GMAC. GMAC had obtained title to the property as a result of foreclosure proceedings. P...
Only A Certificate Can Earn One An Exemption From FICA Tax
July 5, 2023 - Bulletin Print Report
Plaintiffs are Australian nationals who were living in the U.S. temporarily between 2017 and 2020. During that time, plaintiff's employer collected Social Security taxes (&...
Stamping And Embroidering Dog Tags And Collars Is "Manufacturing"
July 5, 2023 - Bulletin Print Report
TP makes online sales of pet products such as tags, collars, leashes, and people products, such as military and medical ID tags. The typical customer is a pet owner purchasing...
Losses Did Not Occur In A Disaster Area
July 5, 2023 - Bulletin Print Report
On March 13, 2020, President Trump declared that the COVID-19 outbreak in the U.S. constituted a nationwide emergency pursuant to the Stafford Act. The declaration is referred...
FIS Exploring Sale Of Worldpay
July 3, 2023 - Bulletin Print Report
In 2019, Fidelity National Information Services, Inc., ("FIS"), and Worldpay, Inc., ("WP), engaged in a business combination in which FIS acquired the stock of W...
A Contractual Commitment Is Not Consideration For A Retail Sale
July 3, 2023 - Bulletin Print Report
Sales taxes in Massachusetts are governed by G.L. c. 64H. Section 2 mandates a 6.25 percent tax on retail sales of tangible personal property and services. The tax is based on...
CFC Partner Avoids Sec. 956
July 3, 2023 - Volume 17 Issue 125 Print Report
TP is a domestic corporation and the parent of a consolidated group. US1 is a domestic corporation wholly owned by TP. F1 is wholly owned by a member of TP's consolidated g...
Section 1603 Grants Are Separate Intangible Assets
July 3, 2023 - Bulletin Print Report
OC partnered with A in 2006 "to finance, develop, and construct wind farms." OC and A entered into an agreement with SCE providing that the OC/A subsidiary would deve...
Unsigned Return Is Not Valid
July 3, 2023 - Bulletin Print Report
S's purported 2013 federal income tax return was filed on October 15, 2014. The return included two signatures: one for CA, a certified public accountant who signed as prep...
One Year Note Found To Be A "Security"
June 30, 2023 - Volume 17 Issue 124 Print Report
M, on December 16, 1958, formed a corporation under the laws of Georgia. On January 1, 1959, M transferred various assets to the corporation. M received for the transfer 2,498...
Lease Breach Acceleration Debt Was A Liability
June 30, 2023 - Bulletin Print Report
During 2015, petitioner, ("P"), owned and operated PBS, LLC. On June 17, 2015, P signed a promissory note to FFBC for a small business loan in the amount of $15,000....
U.C.L.A. M.B.A. Qualified Taxpayer For A New Trade Or Business
June 30, 2023 - Bulletin Print Report
Petitioner graduated with a liberal arts degree in Spanish and French from Occidental College in 2012. She began working for IL as a translation services coordinator. During 20...
Sale Of Two Condominium Units Not A "Bulk Sale"
June 30, 2023 - Bulletin Print Report
Taxpayers sold two condominium units. One unit was a four-bedroom apartment, unit number 4X, which the taxpayers acquired in 1996 as a primary residence. Additionally, the taxp...
Chinook/Novartis Endorse Open Transaction Approach To CVRs
June 29, 2023 - Bulletin Print Report
We have reviewed many deals over the past few years in which the consideration offered to the shareholders of the acquired corporation consisted not only of "current"...
Preferential Dividend Does Not Reduce REIT's Earnings and Profits
June 29, 2023 - Volume 17 Issue 123 Print Report
TP is a domestic corporation that has elected to be treated as a REIT. TP is engaged in the acquisition and holding of commercial mortgage-backed securities (CMBS) issued by RE...
Electronic Tax Court Petition Not Timely Filed
June 29, 2023 - Bulletin Print Report
The Commissioner mailed a notice of deficiency to S on September 8, 2022. The notice stated that the last day to file a petition with the Tax Court was December 12, 2022. While...
Uninhabitable Property Not Properly Classified As Commercial
June 29, 2023 - Bulletin Print Report
The issue to be determined is whether the Assessor has proven, by a preponderance of the evidence, that the property should be classified as commercial for tax years 2022 and 2...
Attribute Of Stock Or Other Property?
June 28, 2023 - Bulletin Print Report
Where a transaction qualifies as a "reorganization," within the meaning of section 368(a) of the Code, the shareholders of the acquired corporation are permitted ...
Furnishing Electricity Is A Service
June 28, 2023 - Volume 17 Issue 122 Print Report
The taxpayer, a producer of electricity, argued that it was entitled to a refund because it paid taxes when it was actually eligible for an exemption under Sec. 39-26-709(1)(a)...
OAH Must Dismiss Constitutional Claims To Tax Statutes
June 28, 2023 - Bulletin Print Report
PM used its "Capital Base" to calculate its franchise tax in accordance with N.C.G.S.section 105-122(b). A corporation's Capital Base was to be calculated b...
The Right To Purchase Wireless Service Is Subject To Sales Tax
June 28, 2023 - Bulletin Print Report
W is an 'S' corporation. N is its sole shareholder. W operated six stores...selling mobile phone equipment, products, and services as an independent contractor with Boo...
Late Filed Safe Harbor Election Denied
June 27, 2023 - Bulletin Print Report
On Date 7, TP entered into an agreement with Investment Bank, ("IB"), which provided that IB would act as TP's financial advisor in connection with the sale of TP...
Deemed Liquidation Created By Sec. 338(h)(10) Not Under Sec. 332
June 27, 2023 - Volume 17 Issue 121 Print Report
P is the common parent of a consolidated group. P owns all of the stock of S1. S1 owns at least 80 percent of the stock of S2. S2 owns all of the stock of S3. &...
Venue Is A Function Of Statute
June 27, 2023 - Bulletin Print Report
G owns an underground natural gas storage facility in RC. It owns additional properties, including pipelines, that run through thirty-two Mississippi, ("M"), counties...
E-Mail Was Not A Claim For Refund
June 27, 2023 - Bulletin Print Report
Defendant conducted an audit of plaintiff's tax returns in May 2018. On October 17, 2018, L sent an e-mail to VB, the "Holdings Memo." The memo begins with L'...
The Willens Deal Survey June 2023
June 26, 2023 - The Deal Survey: June 2023 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
New Yorker Denied Resident Tax Credit
June 26, 2023 - Volume 17 Issue 120 Print Report
Petitioner, (P), and her late husband, in 1981, invested approximately $25,000 in RA, LP (R). R, along with an insurance company, built an office tower in Boston, Massachusetts...
Retention Of Driver's License Did Not Preclude Change Of Domicile
June 26, 2023 - Bulletin Print Report
Virginia recognizes two classes of "residents," a domiciliary resident and an actual resident. For a person to change domiciliary residency, that person must intend t...
Cadeler A/S And Eneti, Inc. Announce A Business Combination
June 26, 2023 - Bulletin Print Report
CadelerA/S, ("C"), and Eneti, Inc., ("E"), announced that they have entered into a business combination agreement to combine through a stock-for-stock...
The Bankruptcy Code Strips Tribes Of Their Immunity
June 26, 2023 - Bulletin Print Report
P is a federally recognized Tribe that owns several business entities. One of the businesses, L, allowed C to borrow $1,100 in the form of a short-term loan. C filed for Chapte...
Deducting Dividends On "Qualified Preferred Stock"
June 23, 2023 - Volume 17 Issue 119 Print Report
A, B, and C are public utilities. Rates charged to customers are regulated. Therefore, A, B, and C are public utilities within the meaning of Sec. 247(b)(1) of the Internal Rev...
"NIL" Collectives Are Not Tax-Exempt
June 23, 2023 - Bulletin Print Report
In 2021, the NCAA adopted an interim name, image, and likeness, ("NIL"), policy, (the "Interim Policy"), permitting student-athletes to be compensated for u...
Obligation To Repatriate Foreign Assets Not "Stayed" Pending Appeal
June 23, 2023 - Bulletin Print Report
On November 11, 2022, the court entered Final Judgment for the United States and against S in the amount of $12,555,813.00, plus further accruals of late payment penalties and...
Government May Execute Upon Debtor's Cello
June 23, 2023 - Bulletin Print Report
F was the executor of Estate. F created the Trust, ostensibly transferring the Cello from F as Settlor to F as Trustee. The Estate stipulated to additional tax liabilities. F f...
Assessing The Date Of "Transfer" Of Option Stock
June 22, 2023 - Volume 17 Issue 118 Print Report
X has granted nonqualified options to certain of its key employees. Under the terms of the options, the employees have an unconditional right to receive X stock upon notice to...
Objectively Reasonable Claim Can Be A False Claim
June 22, 2023 - Bulletin Print Report
The False Claims Act, ("FCA"), imposes liability on anyone who "knowingly" submits a "false" claim to the Government. The FCApermits private...
CVRs Are Now Standard Operating Procedure
June 22, 2023 - Bulletin Print Report
Chinook Therapeutics, Inc., ("KDNY"), is a biopharmaceutical company focused on developing medicines for the treatment of kidney diseases. It announced that it has en...
Retroactive Application Of Act Found Unconstitutional
June 22, 2023 - Bulletin Print Report
From April 2009 through March 2012, C was an authorized dealer for B, a provider of prepaid wireless service, and operated three stores. C sold cellular telephones, accessories...
Pre-Recorded On Demand Fitness Classes Subject To Sales Tax
June 21, 2023 - Bulletin Print Report
TP offers access to both live, instructor-led fitness classes and pre-recorded, on demand fitness classes. Customers gain access to the classes by purchasing online memberships...
Taxpayer Not Engaged In A Rental Business
June 21, 2023 - Volume 17 Issue 117 Print Report
H worked full time in the sales division of PA. In June 2004, petitioners (H and his wife) acquired a single-family home (CP). In 2004, petitioners and their children were livi...
Taxpayer Did Not Occupy Property As His Principal Residence
June 21, 2023 - Bulletin Print Report
Petitioner, ("P"), owns two residential properties in Kalamazoo, Michigan--the L property and the O property. P requested a principal residence exemption,("...
Vacant Real Property Eligible For Property Tax Exemption
June 21, 2023 - Bulletin Print Report
Petitioner, ("P"), was incorporated in 1864 as a charitable organization. One of its charitable objects is to: "build and maintain a Masonic hall or temple in th...
Redemption Of Fractional Shares Of Sec. 306 Stock
June 20, 2023 - Volume 17 Issue 116 Print Report
X is a domestic corporation with only one class of $15 par value voting common stock outstanding. On April 30, 1980, X effected a recapitalization whereby, pursuant to the plan...
Property Not Used For Purposes Warranting A Tax Exemption
June 20, 2023 - Bulletin Print Report
Petitioner is a local development corporation organized for several charitable and public purposes, including the protection of water quality in the portion of New York City...
Compensation For Providing Free Hotel Stays Is Subject To "TPT"
June 20, 2023 - Bulletin Print Report
D participates in the Marriott Rewards Program, (the "RP"). The RP permits hotel guests to earn points from their paid stays at Marriott-branded hotels. The members m...
Taxpayer Was Not A Grocery Store
June 20, 2023 - Bulletin Print Report
The Taxpayer, a retailer of home decor with several locations in Virginia, sells a limited selection of packaged foods in its stores. The Taxpayer states that it has been colle...
Anatomy Of A Master Limited Partnership "Roll-Up"
June 16, 2023 - Bulletin Print Report
Recently, ONEOK, Inc., ("OKE"), and Magellan Midstream Partners, L.P., ("MMP), a master limited partnership, ("MLP"), announced that they have executed...
Liquidating An Insolvent Corporation
June 16, 2023 - Volume 17 Issue 115 Print Report
C is a State X corporation engaged in property management and other businesses. C has outstanding 228,000 shares of voting common stock, all of which are held by Trust (T), a r...
Loss From "Sham" Transaction Not Deductible
June 16, 2023 - Bulletin Print Report
In October 2002, APP co-foundedand incorporated F. F reported net losses. APP made numerous transfers or advances of funds to F. APP's trust and W executed a document...
Surplus Lines Broker Includible In Combined Tax Return
June 16, 2023 - Bulletin Print Report
TP and its affiliates filed combined Virginia corporate income tax returns and consolidated federal income tax returns. The Department's auditor removed Subsidiary A from t...
D's Payment Of Liabilities To Which Assets Transferred To C Are Subject
June 15, 2023 - Volume 17 Issue 114 Print Report
D is a State A corporation engaged in the "a" and "b" businesses. D has one class of voting common stock outstanding, all of which is held by A. C is a corp...
Sales Not Found To Be "Wholesale" Sales
June 15, 2023 - Bulletin Print Report
T is a Wyoming corporation and has a retail location in Mississippi, ("M"). T sells various items of property to purchasers in the oil and gas industry. Section 27-65...
Appeals Before The OTA Are Not Tolled By The "Automatic Stay"
June 15, 2023 - Bulletin Print Report
CDTFA based two notices of deficiency ("NOD"), on its determination that APP had aggregate unreported sales of nearly $21 million. Subsequently, APP appealed CDTFA...
Venerable Common-Law Rule Completely Supplanted By Statute
June 15, 2023 - Bulletin Print Report
The I.R.S. audited P. The I.R.S. misinterpreted its own audit, concluding that P had underpaid. He paid up. Properly understood, the audit revealed that P had overpaid. So P ti...
Loss On Sale Of Farm Disallowed
June 14, 2023 - Volume 17 Issue 113 Print Report
Petitioner, (P), was a family corporation. The assets of the corporation consisted mostly of farm lands. Included among them was the "Anderson farm."...
The Care Of Horses Is A Charitable Purpose
June 14, 2023 - Bulletin Print Report
MEC is a Connecticut non-stock corporation. MEC owns property in Torrington, Connecticut. MEC is recognized as a charitable organization under section 501(c)(3) of the Internal...
An LLC Is Distinct From Its Member
June 14, 2023 - Bulletin Print Report
CalSTRS, ("CS"), the California State Teachers' Retirement System, is a "unit of the Government Operations Agency" authorized to "invest the assets...
Liberty Media Prepares To Split-Off The Atlanta Braves
June 14, 2023 - Bulletin Print Report
Liberty Media Corporation, ("LMC"), is in the final stages of separating from the LMC family its subsidiary that operates the Atlanta Braves baseball club and also da...
Purchase Of Partnership Interest Benefits From "Expansion Doctrine"
June 13, 2023 - Bulletin Print Report
Corporation A, a country A corporation, owns all of the stock of Corporation B. Corporation A and Corporation B together own all the outstanding stock in Distributing. Distribu...
Taxpayer Denied Real Property Tax Credit
June 13, 2023 - Volume 17 Issue 112 Print Report
During 2007, WM, an individual, was the sole shareholder of LO and of LOH. LOH was the sole shareholder of MI. LO, LOH, and MI were all 'S' corporations. LO became cert...
Union's Conduct Not Protected By NLRA
June 13, 2023 - Bulletin Print Report
The National Labor Relations Act, (the "NLRA"),encourages collective bargaining between labor and management. To enforce the NLRA, Congress created the National...
Redemption Obligation Is Not A "Liability"
June 13, 2023 - Bulletin Print Report
M and T owned all of the stock of C. M owned 77.18 percent of the stock; and T owned 22.82 percent thereof. M and T are brothers. The brothers and C entered into a stock purcha...
NDAQ Will Not Get A Basis Step-Up
June 12, 2023 - Bulletin Print Report
It is ordinarilythe case, where a public corporation acquires a private one, that the deal will be structured to permit the acquirer to obtain a "cost" (i.e., s...
Source-Identifying Trademarks Are More Likely To Infringe And Dilute
June 12, 2023 - Bulletin Print Report
VIP Products LLC makes a dog toy designed to look like a bottle of Jack Daniel's whiskey. Though not entirely. For example, on the toy, the words "Jack Daniel's&qu...
Energy Credit Available To Domestic Partnership
June 12, 2023 - Volume 17 Issue 111 Print Report
Y, a domestic corporation, was the sole member of X, a disregarded entity. Y has not elected to be exempt from federal income tax pursuant to Sec. 936 of the Code. Z, a domesti...
Tax Court Abates Late Filing And Late Payment Penalties
June 12, 2023 - Bulletin Print Report
Petitioner, 92 years old, operated a law practice. He did not timely file returns or timely pay employment tax liabilities for the periods ending September 30, 2017 through Jun...
Section 11 Liability Only Attaches To Registered Shares
June 12, 2023 - Bulletin Print Report
The Securities Act of 1933 requires a company to register the securities it intends to offer to the public with the SEC. The Securities Exchange Act of 1934 requires publicly t...
Fraternal Organization Not Eligible For A Property Tax Exemption
June 9, 2023 - Bulletin Print Report
In 2017, petitioner, as an alleged "benevolent organization," filed an application for a real property tax exemption pursuant to (New York) Real Property Tax Law sect...
Sale To Private Third Party Comes Within Sec. 1033
June 9, 2023 - Volume 17 Issue 110 Print Report
The district court found that the sale by the taxpayer of its property to TBCC was as a result of the threats of condemnation described in the findings. However, the court conc...
Foundation Was Not A "Scientific Institution"
June 9, 2023 - Bulletin Print Report
The Foundation is a non-profit corporation that occupies about two-thirds of Hurricane Island under a forty-year lease that began in January 2010. In March 2019, the Foundation...
Section 183(b)(2) Deductions Are Unequivocally "Below-The-Line"
June 9, 2023 - Bulletin Print Report
In 2011, the Gs formed CLC to own and charter a yacht. CLC elected treatment as a disregarded entity. Because CLC lacked a profit motive, the Commissioner adjusted the Gs'...
EIP Will Vote Against The ONEOK/MMP Deal
June 8, 2023 - Bulletin Print Report
Not surprisingly, we suppose, one of the largest holders of Magellan Midstream Partners, L.P., ("MMP"), has indicated that the tax profile of the MMP/ONEOK deal will...
Stock Acquisition And Preplanned Liquidation Not Integrated
June 8, 2023 - Volume 17 Issue 109 Print Report
Mr. A owns T. T had $150x worth of assets and $50x of liabilities. The value of P's assets, net of liabilities, is $410x. P forms X for the sole purpose of acquiring all th...
Contingent Fee Arrangement Was Improper
June 8, 2023 - Bulletin Print Report
ISD employed attorney L to pursue claims regarding the Appraisal District's allegedly inaccurate valuation of Kinder Morgan's mineral interests. The contract with L pro...
Is Deferred Compensation An "Above-The-Line" Item?
June 8, 2023 - Bulletin Print Report
The taxpayer, ("TP"), on the receiving end of TAM 202315010, January 9, 2023,is taxed as a non-life insurance company under part II of subchapter L of the Code....
Corrected Refund Claims Were Untimely
June 8, 2023 - Bulletin Print Report
In 2017, D's tax preparer filed amended tax returns for him...claiming a refund of amounts paid for tax years 2013 and 2014.The I.R.S. denied the refund claims and in...
REIT May Render Non-Customary Services Through A TRS
June 7, 2023 - Volume 17 Issue 108 Print Report
R is a REIT. R owns and operates rental apartment properties. In 2002, R formed T to provide services to tenants of its properties. R and T filed Form 8875 to jointly elect for...
Clinical Testing Expenses That Are Also Qualified Research Expenses
June 7, 2023 - Bulletin Print Report
U, a biotechnology company, is a Delaware public benefit corporation. For each of the tax years 2011 through 2014, U computed and claimed both the research credit under section...
Only The Account Owner Can Claim A "529" Deduction
June 7, 2023 - Bulletin Print Report
In 2008, petitioners established a section 529 tuition plan ("529 Plan") for the benefit of their minor son, with the state of Rhode Island, ("RI 529"), thr...
Whistleblower's Information Did Not Lead To Administrative Action
June 7, 2023 - Bulletin Print Report
V sent information to the Whistleblower Office of the I.R.S. that he believed showed a company was underpaying taxes by taking unjustified deductions and using improper transfe...
A Stock’s “Inherent Attribute” Determines Whether It Is “Voting Stock"
June 6, 2023 - Bulletin Print Report
Who Is An "Independent Contractor?"
June 6, 2023 - Volume 17 Issue 107 Print Report
The trust, a REIT, entered into a partnership with X for the purpose of constructing and holding for investment a number of apartment buildings. The trust contributed 10 acres...
Tax Exemptions Are Not Granted By Implication
June 6, 2023 - Bulletin Print Report
B reported income from his law practice and a sizable net operating loss carry forward that was more than sufficient to shield his income from income tax. But his self-employme...
Vehicle Expenses Were Non-Deductible Commuting Expenses
June 6, 2023 - Bulletin Print Report
L is a sheet metal worker. During the years at issue he was employed by DZ. From 2012 through 2019, L worked at the Browns Ferry Nuclear Plant, ("BFNP"), as an employ...
Cleaning Equipment Not Used In The Production Process
June 5, 2023 - Bulletin Print Report
S manufactures and distributes cheese. Cheese is manufactured in batches. After each batch is completed, the "clean-in-place," ("CIP"), equipment runs a cle...
Proceeds From Voluntary Sale Not Eligible For Sec. 1033 Benefits
June 5, 2023 - Volume 17 Issue 106 Print Report
The taxpayer was the owner of a shopping center that contained a number of stores and offices under various lease agreements. A part of the...
GNL And RTL Choose A Tax-Free Deal
June 5, 2023 - Bulletin Print Report
While many acquisitions of real estate investment trusts, ("REITs"), are structured as taxable acquisitions of the assets of the acquired REIT, so as to provide the a...
Club's Real Property Not Used Exclusively For Charitable Purposes
June 5, 2023 - Bulletin Print Report
The subject property is improved with a building. The Club claimed the property was used for "monthly meetings, luncheon/card parties, Election Day luncheons..." The...
Thomson Reuters To Return Capital To Shareholders
June 2, 2023 - Bulletin Print Report
Thomson Reuters, ("TRI"), has been gradually liquidatingits positionin the London Stock Exchange, ("LSEG"). More accurately, the shares so sold...
Preliminary Recapitalization Makes Spin-Off Possible
June 2, 2023 - Volume 17 Issue 105 Print Report
Distributing, (D), is a holding company incorporated in State X. Its assets consist of 3,602 shares of voting common stock in Controlled (C), a 27.875 percent interest in a par...
Non-Resident Employee "Transacted Business" In Alabama
June 2, 2023 - Bulletin Print Report
Taxpayer, it is undisputed, is a domiciliary of Florida. The Taxpayer is a director for T.R. Miller Company, Inc., ("TRM"), which is located in Brewton, Alabama, and...
Tax Sale Purchaser Can Be Reimbursed For "Preservation Improvements"
June 2, 2023 - Bulletin Print Report
The property had served as a rental home located in a residential neighborhood. The property owner, K, stopped paying property taxes in 2015 after a fire extensively damaged th...
Factor Analysis Used To Determine Reasonable Compensation
June 1, 2023 - Bulletin Print Report
H was formed in 1980 as a subchapter 'C' corporation. CH and his wife, GH, each owned fifty percent of the stock. By 2015, largely through the efforts of CH, the compan...
No UBT Deduction For Compensation Paid To Partners
June 1, 2023 - Volume 17 Issue 104 Print Report
TAM is a limited partnership. It was an investment advisor registered with the S.E.C. TAM's affairs were managed by TMC, its general partner, a corporation which elected &#...
Motion To Vacate Tax Lien Foreclosure Was Time-Barred
June 1, 2023 - Bulletin Print Report
In July 2015, the City of New York commenced this action...to foreclose certain tax liens. A notice of foreclosure dated July 24, 2015, was published for six successive weeks i...
Film Venture Not Engaged In For Profit
June 1, 2023 - Bulletin Print Report
S is a physician who practices emergency medicine. During taxable year 2015, the year at issue, S worked at federal facilities in Arizona. S estimates that he works approximate...
Exchange Found To Qualify Under Sec. 1036
May 31, 2023 - Volume 17 Issue 103 Print Report
Mr. D, an individual, transferred his Class A voting common stock of a corporation to Mrs. C, also an individual, solely in exchange for Class B non-voting common stock of the...
Special Purpose Entity Not Conducting Business In Indiana
May 31, 2023 - Bulletin Print Report
TP is a company engaged in the business of providing communications services. TP filed amended corporate tax returns to includeone of its affiliates, "Holdings."...
Medical Office Workers Are Employees
May 31, 2023 - Bulletin Print Report
Petitioner, ("P"),is a limited liability company whose sole member is Dr. K, ("K").P was treated as a disregarded entity. K operated his medical...
Twitter Does Not "Aid And Abet" Terrorist Attacks
May 31, 2023 - Bulletin Print Report
United States nationals who have been "injured...by reason of an act of international terrorism" may sue for damages. 18 U.S.C. section 2333(d)(2) also imposes civil...
The Interaction Of Sec. 1248 And Sec. 351
May 30, 2023 - Volume 17 Issue 102 Print Report
T is a domestic corporation. T owns all of the stock of S, a Country A corporation, and all of the stock of EE, a domestic corporation. T proposes to transfer the stock of S to...
A Partnership Is An Entity For "FIRPTA" Purposes
May 30, 2023 - Bulletin Print Report
PRS is a partnership. C is a U.S. real property holding corporation, ("USRPHC"). C's stock is regularly traded on an established securities market. NRA, a non-res...
Who Is Liable For Unpaid Estate Taxes?
May 30, 2023 - Bulletin Print Report
AP died on July 19, 2000. His gross estate was valued at $193,434,344 for federal estate tax purposes. Nearly all of his assets were held in a living trust. In October 2001, JM...
Taxpayer Need Not Have A Legal Interest In Records Summoned
May 30, 2023 - Bulletin Print Report
The I.R.S. may issue a summons to "determine the liability" of a taxpayer or "any transferee or fiduciary" for unpaid taxes. See section 7602(a). The I.R.S....
DM Will Engage In An "Outbound" Transaction
May 26, 2023 - Bulletin Print Report
Stratasys Ltd., ("SSYS"), an Israeli corporation, and Desktop Metal, Inc., ("DM"), a domestic corporation, announced that they have entered into a definitiv...
Remaining Value From A Tax Sale Is "Property"
May 26, 2023 - Bulletin Print Report
Hennepin County, ("HC"), imposes an annual tax on real property. GT bought a condominium in Minneapolis. By 2015, it had accumulated about $2,300 in unpaid taxes and...
Liquidating Distributions Were Compensation For Services
May 26, 2023 - Volume 17 Issue 101 Print Report
The issue is whether payments made in liquidation of partnership interests which constitute the retiring partners' pro rata share of the partnership's unrealized receiv...
Taxpayer Used "Cost Accounting Methodology"
May 26, 2023 - Bulletin Print Report
PESCO, ("P"), designs and manufactures unique products for use in the oil and gas industry. It applied for a tax credit to recoup some of its research and development...
Apportionment Method May Be Elected In An Amended Return
May 25, 2023 - Bulletin Print Report
H is a Virginia corporation. Virginia law requires that "multi-state businesses...apportion their income to determine the amount of their income that is taxable in Virgini...
Gauging The Basis Of Property Acquired For Stock
May 25, 2023 - Volume 17 Issue 100 Print Report
M is a State X corporation which is engaged in the manufacture and sale of products and systems. M is the parent of an affiliated group which files a consolidated federal incom...
Decorative Grass Is Not "A Thing Of The Soil"
May 25, 2023 - Bulletin Print Report
T is a lawn care company. By its own admission, it is not an agricultural business. T cares for the lawns and landscaping of its residential and commercial clients. The followi...
Refund Of Early Withdrawal Penalty Is Excluded From Debtor's Estate
May 25, 2023 - Bulletin Print Report
M filed a Chapter 7 petition with the Bankruptcy Court on September 27, 2022. He disclosed a 2021 tax refund not yet received that was joint with his ex-spouse. H, the trustee,...
CVX's Basis In PDCE Will Not Reflect Its Outlay
May 24, 2023 - Bulletin Print Report
Chevron Corporation, ("CVX"), recently announced it has entered into a definitive agreement with PDC Energy, Inc., ("PDCE"), to acquire all outstanding shar...
The Willens Deal Survey May 2023
May 24, 2023 - The Deal Survey: May 2023 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
Lack Of Employees Not A Bar To Meeting Active Business Test
May 24, 2023 - Volume 17 Issue 99 Print Report
D has elected to be an 'S' corporation. D owns approximately "a" acres of land. D engages principally in Business A. S, which is wholly owned by D, is engaged...
Deficient "CWA" Precludes Charitable Contribution Deduction
May 24, 2023 - Bulletin Print Report
APPs deducted $5,021,550 on Schedule A of their 2009 California income tax return for charitable cash contributions to the Foundation. Foundation,a tax-exempt private fou...
Defective Certificate Of Formation Precludes Property Tax Exemption
May 24, 2023 - Bulletin Print Report
P owns five parcels of real property, (the "Subject Properties"), located in Jersey City, New Jersey. P submitted applications to the Municipality for property tax ex...
Intellectual Property Is The Corporation's Principal Asset
May 23, 2023 - Bulletin Print Report
H founded Company on Date 1 as a 'C' corporation. On the date of its formation, Company issued "A" shares constituting "B%" of Company's stock t...
Notice Of Gift Tax Deficiency Not Timely Issued
May 23, 2023 - Bulletin Print Report
On September 22, 2006, UVLPolicy No. XXX-X03-06 was issued. On April 23, 2007, S and his mother jointly requested that SW assign the policy so that S's mother, aunt,...
I.R.A. Runs Afoul Of Sec. 408(m)
May 23, 2023 - Volume 17 Issue 98 Print Report
CM and its affiliate, CN, are non-bank entities that provide precious metals administration and safekeeping services to various customers. Taxpayer requests the following rulin...
Debt Discharge Must Be Reported To The I.R.S.
May 23, 2023 - Bulletin Print Report
E is a credit union. When certain debtors defaulted on loans, E sent presale notices to the debtors stating that the collateral for the loans was being repossessed. Two of thes...
"Buy/Sell" Transactions Were An Exchange Of Inventory
May 22, 2023 - Bulletin Print Report
SP was the general partner of SL. SP had three corporate partners, each of which was included in S's Tax filings for the Tax Period. SPMT was a disregarded entity that flow...
I.R.A. Did Not Purchase A Collectible
May 22, 2023 - Volume 17 Issue 97 Print Report
CM formed Trust T(TT) as an investment trust under State A law. The trustee of TT is TN, a banking corporation organized under the laws of State A. TT is a grantor trust....
Sovereign Immunity Was Not Unmistakably Abrogated
May 22, 2023 - Bulletin Print Report
Congress passed the Puerto Rico Oversight, Management, and Economic Stability Act of 2016, ("PROMESA"), to deal with a fiscal emergency. PROMESA creates, as its cente...
Disability Benefits Properly Excluded From Gross Income
May 22, 2023 - Bulletin Print Report
Conn. Gen. Stat. section 5-192p provides: "If a member of Tier II, while in state service, becomes disabled...prior to age sixty-five, he is eligible for disability retire...
REIT Merger Intended To Qualify As A Tax-Free Reorganization
May 19, 2023 - Bulletin Print Report
Regency Centers Corporation, ("REG"), and Urstadt Biddle Properties, Inc., ("UBP"), each a real estate investment trust, ("REIT"), announced that...
Receipts From Hedging Not Derived From Primary Business Activity
May 19, 2023 - Bulletin Print Report
P was engaged in a fully integrated petroleum business. P used derivative commodity instruments...to manage risks related to the price volatility of crude oil and other petrole...
Origination Of Mortgage Loan Not A "Purchase" Thereof
May 19, 2023 - Volume 17 Issue 96 Print Report
Petitioner, (P), a bank, claimed an investment tax credit in the amount of $701,785 on its 1999 franchise tax return in connection with a building that it purchased and used ex...
FRG Is Engaging In A "Two-Corporation" LBO
May 19, 2023 - Bulletin Print Report
Management and itsaffiliates and related partiescurrently owns approximately 36 percent of the stock of Franchise Group, Inc., ("FRG"). The remainder of t...
Tax Fraud Sentences Are Geared To Actual And Intended Losses
May 19, 2023 - Bulletin Print Report
U and T were indicted in 2018 for engaging in two fraudulent tax schemes over the course of a decade. U was convicted of conspiracy to defraud the United States and eight count...
Is UBS's Acquisition Of Credit Suisse A Reorganization?
May 18, 2023 - Bulletin Print Report
More details have now emerged regarding UBS Group AG's acquisition of its former rival, Credit Suisse Group AG. As advertised, the acquisition will be structured as a merge...
Sale Of Borrowed Stock Effects A "Disposition" Of Option Stock
May 18, 2023 - Volume 17 Issue 95 Print Report
The taxpayer acquired stock through the exercise of a "qualified stock option." Prior to the lapse of the holding period required in Sec. 422(a)(1) ("no disposit...
Interest On Child Support Arrearages Was Taxable
May 18, 2023 - Bulletin Print Report
During 2011 and 2012, petitioner and her former spouse were engaged in litigation in the Circuit Court of Mobile County, Alabama, (the "state court"),concerning...
Section 6426 Credits Reduce Excise Tax Liability
May 17, 2023 - Bulletin Print Report
G is an agricultural cooperative that sells gasoline and diesel fuel, renewable fuels, alcohol fuel mixtures, and biodiesel mixtures. Petitioner incurred a section 4081 fuel ex...
Pension Agreement Is Not A Prohibited Interest
May 17, 2023 - Volume 17 Issue 94 Print Report
A and A's children, B and C, own all of the stock of X. Upon A's retirement, X redeemed all its stock held by A for an amount of cash equivalent to the fair market valu...
Not All Residential Property Eligible For Property Tax Exemption
May 17, 2023 - Bulletin Print Report
The Utah Legislature chose to enact a property taxexemption, but limited the definition of "residential property" to "any property used for residential pur...
Verizon's Services Are Internet Access Services
May 17, 2023 - Bulletin Print Report
The Division determined that petitioner, ("P"), was liable for additional tax pursuant to Tax Law section 184 on its gross receipts from Verizon's services. The a...
Distributions Of Stock Disregarded For Purposes Of Sec. 355(b)(2)(D)
May 16, 2023 - Volume 17 Issue 93 Print Report
X has operated a business since 1960 and has owned all the stock of Y which has conducted an active trade or business since its incorporation in 1961. &n...
Unity Of Ownership And Occupation Not Required For Tax Exemption
May 16, 2023 - Bulletin Print Report
TSF is a non-profit entity. It has two member churches. TSF owns the property...in Paducah, Kentucky. The property has been used for many years as a church by other oc...
Residence And Intent Are The Essential Ingredients For A New Domicile
May 16, 2023 - Bulletin Print Report
Taxpayer stated that his position is that he was not domiciled in Alabama in 2018 and, therefore, he is not subject to Alabama income tax on his wages during that year. The Rev...
Title To Property Did Not Confer Ownership
May 16, 2023 - Bulletin Print Report
This matter involves real property located in the City, ("property"). The Church uses the property exclusively for religious purposes, which the City does not dispute...
Carryover Of Unused Foreign Tax Credits
May 15, 2023 - Volume 17 Issue 92 Print Report
P, a foreign corporation, owns all of the stock of S-1 and S-2. S-1 is a foreign corporation that is incorporated in Country X. S-2 is a domestic corporation engaged in the ban...
Newmont's Acquisition Of Newcrest Will Not Be A Reorganization
May 15, 2023 - Bulletin Print Report
Newmont Corporation, ("NEM"), announced that it has finally bagged the prize it has long been pursuing. It has entered into a binding "Scheme Implementation Deed...
OKE's Acquisition Of MMP Will Be Fully Taxable
May 15, 2023 - Bulletin Print Report
ONEOK, Inc., ("OKE"), and Magellan Midstream Partners, L.P., ("MMP"), announced that they have executed a definitive merger agreement, in whicha newly...
Netflix's Winning Streak Continues In Louisiana
May 15, 2023 - Bulletin Print Report
This case concerns the application of Louisiana's Consumer Choice for Television Act, (the "CCTA"), which authorizes subdivisions of the State to collect franchis...
Refund Of Tobacco Products Excise Tax Granted
May 15, 2023 - Bulletin Print Report
APPsreported andpaid tax to CDTFAon the distribution of "shisha."Shishais a product containing molasses, flavorings, and tobacco. APPs&#...
Section 6501(a) Is Inapplicable To Assessment Of Section 6700 Penalties
May 12, 2023 - Bulletin Print Report
The Internal Revenue Service assessed penalties pursuant to section 6700 of the Code against C in connection with his promotion of a tax shelter scheme. C filed a motion to rec...
Gain Was Realized Before Domicile Changed
May 12, 2023 - Bulletin Print Report
For tax year 2016, petitioners filed form IT-203 as New York State part-year residents. Petitioners reported that they moved out of New York City on May 15, 2016. Petitioners r...
Entire "Gap" Mortgage Subject To New York Recording Tax
May 12, 2023 - Volume 17 Issue 91 Print Report
On July 6, 2011, petitioner (P) purchased an auto dealership, which included real property, in Middle Village, New York. On that date, P entered into a mortgage agreement with...
Electronically Filed Tax Court Petition Was Not Timely
May 12, 2023 - Bulletin Print Report
The Commissioner mailed a notice of deficiency to the Ns on April 14, 2022, determining an income tax deficiency. The notice was dated April 18, 2022, and the notice stated tha...
Livent Corporation Will "Invert"
May 11, 2023 - Bulletin Print Report
Allkem Ltd., and Livent Corporation announced the signing of a definitive agreement "to combine the two companies." From Livent's point of view, the deal resemble...
Failure To Withhold Does Not Relieve Employee Of Liability
May 11, 2023 - Volume 17 Issue 90 Print Report
Mr. I reported income he received in 2009 from GW as "wages, salaries, tips and other employee compensation" on his Massachusetts (M) Resident Income Tax Return filed...
Interest Accrued On U.S. Savings Bonds Was Found To Be "IRD"
May 11, 2023 - Bulletin Print Report
Petitioner filed his 2018 federal income tax return on April 15, 2019. For that year, OZ issued him a Schedule K-1...that reported interest income and dividend income. For 2018...
Claim Excepted From Chicago's False Claims Ordinance
May 11, 2023 - Bulletin Print Report
PL was engaged in the "lease-to-own" business. PL had not been paying the Chicago lease tax on its lease transactions. W, a former employee of PL, filed a complaint a...
Taxpayer Not "Doing Business" in N.Y.
May 10, 2023 - Volume 17 Issue 89 Print Report
P Corporation, (P), sells gifts and awards to companies that wish to honor their employees. P has manufacturing and inventory warehousing facilities located in North...
Vested Rights Cannot Be Extinguished Retrospectively
May 10, 2023 - Bulletin Print Report
H filed earnings tax returns with the city of Kansas City, (the "City"), in March 2022, seeking a refund of earnings taxes withheld from her pay checks during 2019 an...
Out-Of-State Resident Entitled To Sales Tax Refund
May 10, 2023 - Bulletin Print Report
Taxpayer, ("TP"), is a Michigan resident who purchased a recreational vehicle, ("RV"), from an Indiana dealership. TP paid Indiana's seven percent sales...
REIT Does Not Furnish Health Care Services
May 10, 2023 - Bulletin Print Report
TP is a limited liability company that intends to elect to be taxed as a real estate investment trust,("REIT"). The Facilities are marketed as "Independent...
Braves Split-Off Features Tax-Free Debt Extinguishment
May 9, 2023 - Bulletin Print Report
Liberty Media Corporation ("Liberty")is in the process of converting its Atlanta Braves tracking stock into "asset-based" stock via a tax-free distrib...
Payments To Protect Business Reputation Are Deductible
May 9, 2023 - Volume 17 Issue 88 Print Report
The taxpayer is a furniture moving and storage company. During the taxable year, a fire totally destroyed its warehouse, which contained household goods of many of the taxpayer...
Non C-Band Assets Constitute Qualified Replacement Property
May 9, 2023 - Bulletin Print Report
TP is a partnership for federal income tax purposes. TP operates commercial communications satellites. TP has rights to transmit information in...the spectrum. Many of TP's...
California "HCSPs" Are Not "Insurers"
May 9, 2023 - Bulletin Print Report
Theseappeals ariseout of suits brought by M. M seeks to compel the California State Board of Equalization...to collect the gross premium tax, ("GPT"), fro...
Special Dividends Not Part Of The Purchase Price Of Stock
May 8, 2023 - Bulletin Print Report
Husband, ("H"), owned stock in Cellmania, ("C"), a 'C' corporation. On June 11, 2010, Research in Motion, ("R"), sent a letter of intent,...
Sequential Reorganizations Recast
May 8, 2023 - Volume 17 Issue 87 Print Report
W was incorporated in 1954, and was engaged in the business of owning and leasing real estate and personal property. W has 1,169 shares of common stock issued and outstanding....
QRTEA's Deferred Tax Liability
May 8, 2023 - Bulletin Print Report
Qurate Retail, Inc., ("QRTEA"), is reporting a deferred tax liability in the amount of $970 million and labeled"Discount on exchangeable debentures."...
Pre-Wayfair Nexus Not Found
May 8, 2023 - Bulletin Print Report
The sole issue is whether Arizona has "nexus" under pre- Wayfair cases. Nexus is one part of a four-part Commerce Clause analysis set forth in precedent,...
Repeal Of Section 958(b)(4) Singes MO
May 5, 2023 - Bulletin Print Report
Altria Group, Inc., ("MO"), has owned slightlymore than 10 percent of the stock, by vote and value, of Anheuser-Busch InBevSA/NV, ("ABI"), for s...
Tennessee "Respects" Sec. 338(h)(10) Elections
May 5, 2023 - Volume 17 Issue 86 Print Report
SP owns all of the stock of S. S, in turn, owns all of the stock of T. T will distribute more than 50 percent of its retained assets and certain liabilities to S. A subsidiary...
Linen Rental Business Was Not A "Processing Operation"
May 5, 2023 - Bulletin Print Report
AN rents disinfected, reusable linens to hospitals, outpatient facilities, and long-term care centers in Arizona, ("AZ"). AN seeks summary judgment that its purchases...
Right To Proceeds Fixed Before Gift Of Stock Completed
May 5, 2023 - Bulletin Print Report
As of January 1, 2015, CSTCwas owned by petitioner and his two brothers, with each such sibling holding a one-thirdshare of the stock. FC is a tax-exempt charitable...
Taxpayer Received A Profits Interest For Services
May 4, 2023 - Bulletin Print Report
Before October 14, 2011, JL owned 100 percent of the outstanding shares or membership interests in NPA, Inc., CCS, NOU, and ACC. Those entities conducted consumer loan business...
Loss On Sale Of Farm To Son-In-Law Is Deductible
May 4, 2023 - Volume 17 Issue 85 Print Report
In 1939, Petitioner, (P), purchased a farm, paying $5,500 for it. He made improvements to the farm. Title to the farm was in the name of P's spouse. In October 1938, P'...
Protocol Upgrade Is Not A Realization Event
May 4, 2023 - Bulletin Print Report
An individual holds a cryptocurrency native to a blockchain distributed ledger that undergoes a protocol upgrade. In particular, Mr. T, on Date 1, purchases ten units of C, a c...
Energy Project Properly Increased Value Of Underlying Real Estate
May 4, 2023 - Bulletin Print Report
Plaintiff, ("P"), owns a 14.6 acre tract of land in Lincoln, Rhode Island, (the "property"). Pentered into a long-term lease with G for the constructi...
Partnership Interest Did Not Acquire A Business Situs In Massachusetts
May 3, 2023 - Bulletin Print Report
E, a Delaware Limited Liability Company, ("LLC"), provided portfolio management services. E was classified as a partnership. E had offices in California, Massachusett...
"In Connection With" Is Broadly Construed
May 3, 2023 - Volume 17 Issue 84 Print Report
Sec/ 174(a)(1) of the Code allows a taxpayer to take as a deduction "experimental expenditures which are paid or incurred by him during the taxable year in connec...
Disability Payments Were Includible In Gross Income
May 3, 2023 - Bulletin Print Report
On September 8, 2014, H was hired to work for an insurance agency and brokerage company. The company provided disability insurance for its employees, including H. On June 1, 20...
North Carolina Law Does Not Incorporate Federal Definition Of "Partner"
May 3, 2023 - Bulletin Print Report
"A taxpayer that has constructed, purchased, or leased renewable energy property" is eligible to receive a credit "if the property is placed in service in this S...
JPM Makes A "Bargain" Purchase
May 2, 2023 - Bulletin Print Report
JPMorgan Chase, ("JPM") announced that it has acquired "the substantial majority of assets and assumed the deposits and certain other liabilities of First Republ...
"Headlee" Claim For Refund Determined To Be Time-Barred
May 2, 2023 - Bulletin Print Report
The City is served by two electric utility providers, L and C. The City granted L use of the City's rights of way. In exchange, L agreed to "collect and remit to the C...
Loss On Sale To Step-Grandson Not Barred
May 2, 2023 - Volume 17 Issue 83 Print Report
H and M are husband and wife. H was the owner of a two-family apartment house and the land on which it stood in Syracuse, New York. On Marc...
Gains Are "Reportable As Income"
May 1, 2023 - Bulletin Print Report
H is a limited liability company that acquired leasehold interests in several oil and gas properties. H sold its leasehold interests and reported to the Comptroller on its fran...
Bankruptcy Court Cannot Grant Innocent Spouse Relief
May 1, 2023 - Bulletin Print Report
Debtor, ("D"), commenced this adversary proceeding seeking a determination under section 505 of the Bankruptcy Code that she owes no taxes for 2015, 2016, and 2017 as...
The Long Reach Of Sec. 1042(e)(1)
May 1, 2023 - Volume 17 Issue 82 Print Report
TP is a shareholder of A, a domestic C corporation. A maintains an ESOP. TP did not receive the shares in a distribution from a plan described in Sec. 401(a) of the Code, or a...
"CRAT" Distributions Were Ordinary Income
May 1, 2023 - Bulletin Print Report
The A and G charitable remainder annuity trust, ("CRAT"), was created on November 2, 2015. A and G were the CRAT's non-charitable beneficiaries. The CRATins...
Can Illumina Spin-Off GRAIL Tax-Efficiently?
April 28, 2023 - Bulletin Print Report
Illumina, Inc., ("ILMN"),acquired GRAIL, ("G"), in August 2021. The transactionwas structured along familiar lines. ILMN, to effect the acquisit...
Unsworn Letter From Contractor Cannot Establish Basis
April 28, 2023 - Bulletin Print Report
Petitioners, ("Ps"), owned real property located at 500 Old Town Road, Southampton, New York, (the "S property"). On December 4, 2013, Ps sold the S propert...
Merger Without "Continuity" Cannot Be A Reorganization
April 28, 2023 - Volume 17 Issue 81 Print Report
The Tax Court held that literal compliance with the provisions of a state law authorizing a merger would not in itself effect a reorganization; that the test of contin...
Items That Have General Use Are Not "Medical Equipment"
April 28, 2023 - Bulletin Print Report
The taxpayer filed a claim for refund of the sales tax she paid on the purchase of a "swim spa." The Department of Revenue, (the "Department"), determined t...
A Rolled Over IRA Constitutes "Retirement Funds"
April 28, 2023 - Bulletin Print Report
Debtor was married to RK, who passed away in 2008. After her husband's death, Debtor "rolled over"RK's IRA to Debtor's IRA. All funds in the account...
Amounts Spent By "Relocation" Entity Not Income To Employee
April 27, 2023 - Volume 17 Issue 80 Print Report
Y has established an employee relocation program designed to assist its employees being transferred to new work locations. As part of the program Y has entered into a contract...
"Solely" Leaves No Leeway
April 27, 2023 - Bulletin Print Report
Lithium Americas Corporation, ("L"), and Arena Minerals, Inc., ("A"), each a Canadian corporation, announced the completion of their plan of arrangement &qu...
Employee Could Not Prove He Was A "Real Estate Professional"
April 27, 2023 - Bulletin Print Report
Petitioners, ("Ps"), deducted rental real estate losses for 2017 from their three cabins in Maine. Respondent determined that Ps' loss from the cabins was a passi...
No Deductible Loss On Sale Of Residence
April 26, 2023 - Volume 17 Issue 79 Print Report
A taxpayer and his spouse conveyed their unencumbered personal residence to an unrelated individual in exchange for an annuity agreement that provided for payments of a specifi...
Aircraft Not "Situated" In California
April 26, 2023 - Bulletin Print Report
A7, a Delaware limited liability company,owned a GulfstreamG-550 jet aircraft. The aircraft was physicallypresent in Ventura County for seven and a half month...
An Interstate Compact Is Construed As A Contract
April 26, 2023 - Bulletin Print Report
In 1953, New York, ("NY"), and New Jersey, ("NJ"), entered into the Waterfront Commission Compact, (the "WCC"). In 2018, NJ sought to withdraw fro...
Debtor Not Engaged In The Business of Liquidating
April 25, 2023 - Volume 17 Issue 78 Print Report
BM's primary business was the transportation of medical specimen between doctors' offices and laboratories. On July 7, 2000, BM filed for Chapter 11 bankruptcy protecti...
Hospital Assessment Fee Not An Illegal Exaction
April 25, 2023 - Bulletin Print Report
The purpose of the program is "to levy an assessment fee on hospitals..." The program imposes a yearly assessment on non-exempt hospitals in an amount calculated as a...
Only Trade-In Consideration Reduces Sales Price
April 25, 2023 - Bulletin Print Report
On October 24, 2015, L purchased a new motor vehicle, ("vehicle 1"), from an automotive dealership for $36,590.00, and paid $3,155.89 in New York State sales tax on t...
Professor's Wages Not Sourced To Location Of Students
April 25, 2023 - Bulletin Print Report
State taxable income derived from Utah sources includes state taxable income attributable to or resulting from...the carrying on of a business, trade, profession, or occupation...
The Willens Deal Survey April 2023
April 24, 2023 - The Deal Survey: April 2023 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
Albertsons Will Treat "Spinco" As "Merger Consideration"
April 24, 2023 - Bulletin Print Report
One of the longest-running sagas in recent deal history involves the union of Albertsons Companies, Inc., ("ACI"), and Kroger Co., ("KC"). In connection wit...
Structural Constitutional Challenges Belong In District Court
April 24, 2023 - Bulletin Print Report
The Securities Exchange Act and the FTC Act authorize the Commissions to address statutory violations either by bringing civil suits or by instituting their own administrative...
Property Tax Appeal Dismissed For Lack Of Subject Matter Jurisdiction
April 24, 2023 - Bulletin Print Report
On August 25, 2021, IXCfiled with the BOR a "Special COVID-19-Related Complaint Against the Valuation of Real Property" with regard to three separate parcels of...
Payment Is Made When A Check Is Delivered
April 24, 2023 - Bulletin Print Report
In February 1995, G incorporated R. In June 1995, he incorporated H, and H became R's parent. R paid $7.25 million for C, a nursing home, and for the leases to nine other n...
Employee Transfer Does Not Create Massachusetts Nexus
April 24, 2023 - Volume 17 Issue 77 Print Report
ADSW and ADNAC, ADSW's parent, were subsidiaries of Allied-Domecq, an international conglomerate headquartered in England. Included within the Allied-Domecq family is Dunki...
HBM Will Acquire CMMC In A Tax-Free Manner
April 21, 2023 - Bulletin Print Report
Hudbay Minerals, Inc., ("HBM"), and Copper Mountain Mining Corporation, ("CMMC"), each organized under the laws of Canada, have announced a business combina...
Transfer Of QRP To Estate Not A Disposition
April 21, 2023 - Volume 17 Issue 76 Print Report
SH owns 100 percent of the common stock of X. SH will sell qualified securities to an ESOP that is qualified under Sec. 401(a) and satisfies the requirements of Sec. 4975(e)(7)...
Membership Interest In LLC Treated As "Stock"
April 21, 2023 - Bulletin Print Report
On March 13, 2003, LLC was formed as an Arizona limited liability company. Plaintiff, ("P"), was a member of LLC. LLC was taxed as an 'S' corporation...
Construction And Building Materials Are Exempt From Sales Tax
April 21, 2023 - Bulletin Print Report
Company is a retailer that sells grass seed, erosion control blankets, and fertilizer. On occasion, Company sells those products to construction contractors who present Company...
Only Income From "Incidental" Investments Is Deductible
April 20, 2023 - Bulletin Print Report
The LLCs are investment funds, and they acquire investors through private offerings...known as a private placement. The LLCs invest in debt instruments like defaulted credit ca...
Charter's Equipment Was Used Directly In Manufacturing
April 20, 2023 - Bulletin Print Report
To provide telecommunications service to Charter, ("C") customers, CI's various pieces of equipment work together in a coordinated and synchronized fashion to tra...
Sec. 1042 Election Made By Decedent's Executor
April 20, 2023 - Volume 17 Issue 75 Print Report
On September 21, 1989, Decedent (D) sold 9,161 shares of Corporation A (CA) common stock to the ESOP maintained by CA. At the time of D's death on August 14, 1990, he had y...
The Claim For Which Legal Fees Were Incurred Was Personal
April 20, 2023 - Bulletin Print Report
A was a physician, geneticist, and molecular biologist. A holds over 34 patents related to gene therapy. During A's years at the University of Southern California, his rese...
NWSA Settles Defamation Case
April 19, 2023 - Bulletin Print Report
As everyone now knows, Fox News has reached an agreement with Dominion Voting Systems resolving, via settlement, a lawsuit brought by Dominion in which Fox was accused of infli...
Buildings Were Not "Damaged" By COVID-19 Pandemic
April 19, 2023 - Bulletin Print Report
RSA 76:21, I, provides that local officials "shall prorate" a building's assessment "whenever a taxable building is damaged due to uninten...
Sale Of Undamaged Property Is An Involuntary Conversion
April 19, 2023 - Volume 17 Issue 74 Print Report
TP owned a four-family apartment building situated on a city lot at Location B in City A which was destroyed by fire. TP received insurance proceeds as compensation for the des...
Intangible Assets Immune From Direct Property Taxation
April 19, 2023 - Bulletin Print Report
Tax assessors sometimes appraise commercial property using the income method. Los Angeles County, (the "County"), incorrectly assessed a hotel owned by the taxpayer,...
GrubHub Is A Retailer's Agent
April 19, 2023 - Bulletin Print Report
Appellant operated a restaurant from June 1, 2011 through July 15, 2014. Appellant made in-person sales at the restaurant, and online sales via Eat24 and GrubHub. Appellant and...
Section 6038(b) Penalties Are Not "Assessable Penalties"
April 18, 2023 - Bulletin Print Report
P owned 100 percent of KCI, a foreign corporation, and 100 percent of MVI, also a foreign corporation. P had a reporting obligation under section 6038(a) to report his ownershi...
Medical Equipment Retailer Denied "Government Body" Exemption
April 18, 2023 - Bulletin Print Report
The Illinois Retailers' Occupation Tax Act, ("ROTA"), imposes a tax upon persons engaged in this State in the business of selling tangible personal property to pu...
'S' Corporation Shareholder Claimed Correct Tax Reduction Credit
April 18, 2023 - Volume 17 Issue 73 Print Report
G is the sole shareholder of TLC and FGR, each an 'S' corporation. All of the corporations' operations are contained solely within a New York State "enterprise...
"Concession Fee" Is Not "Rental Income"
April 18, 2023 - Bulletin Print Report
A and E operate car rental companies at the Minneapolis-St. Paul International Airport. A and E lease their facilities from the Metropolitan Airports Commission, (the "MAC...
Specially Designed Vehicles Not Subject To Excise Tax
April 17, 2023 - Bulletin Print Report
Almost half of the peanuts produced in the U.S. are harvested in Georgia. During the harvesting season, peanuts must be properly dried. The farmer loads the peanuts onto specia...
FDX Obtains A Credit For Taxes Paid On "Offset Earnings"
April 17, 2023 - Bulletin Print Report
The Tax Cuts and Jobs Act, ("TCJA"), replaced the worldwide system of corporate taxation with a "territorial" system. When U.S. corporations receive dividen...
Single Sale Comminuted Into Multiple Sales
April 17, 2023 - Volume 17 Issue 72 Print Report
The taxpayer corporation was indebted to a shareholder. Four lots of stock owned by the corporation were transferred to the shareholder. On two lots there were gains; on the ot...
Sleep Center Performs Services In The "Field Of Health"
April 17, 2023 - Bulletin Print Report
ASC's central function is to conduct sleep studies and produce reports on those studies. The reports are used by physicians...to make diagnoses, determine whether or not to...
Parent Inherits Liquidated Subsidiary's Business History
April 14, 2023 - Volume 17 Issue 71 Print Report
Dover Corporation, (D), owned DCF, a Delaware corporation. DCF owned DUK. DUK owned H&C, a U.K. corporation engaged in the business of installing and servicing elevators.&n...
Navigating The Constructive Ownership Rules
April 14, 2023 - Bulletin Print Report
While there are several "flavors" of constructive ownership (of stock) rules interspersed throughout the Internal RevenueCode, it is safe to say that those cont...
Residency Is A Use-Based Requirement
April 14, 2023 - Bulletin Print Report
The homestead tax exemption...says: "Every person who the legal or equitable title to real estate and maintains thereon the permanent residence of the owner...shall be exe...
Partner Entitled To Pass-Through Energy Credit
April 14, 2023 - Bulletin Print Report
A taxpayer that has constructed, purchased, or leased renewable energy property is eligible to receive a credit "if the property is placed in service in this State during...
Sale For Nonrecourse Note Not Given Tax Effect
April 13, 2023 - Volume 17 Issue 70 Print Report
In Year A, M owned "a" shares of 'S' corporation stock. In Month B of Year A, 'S' corporation announced that it planned to establish two trusts to whi...
Retirement Account Withdrawals Were Penalized
April 13, 2023 - Bulletin Print Report
In 2018, G submitted a withdrawal request for $71,147 to his retirement company, GW, which GW duly processed. GW issued a 2018 Form 1099-R to G, indicating a distribution of $7...
Full-Time Employees Were Not "Real Estate Professionals"
April 13, 2023 - Bulletin Print Report
During 2018, PH was employed full time by Northrup Grumman Systems Corporation and PW was employed full time by the U.S. Department of Defense. In addition to their employment,...
OTCs Are Not "Operators" Of Lodging Establishments
April 13, 2023 - Bulletin Print Report
In Clark County, Nevada, a "combined transient lodging tax" is imposed with the sale or rental of "transient lodging" to any individual natural person who h...
GasLog Ltd. Intends To "Roll Up" GasLog Partners
April 12, 2023 - Bulletin Print Report
GasLog Ltd., ("GLL"), and GasLog Partners, ("GLP"), announced that they have entered into a definitive merger agreement pursuant to which GLL will acquire &...
NEM's "Best And Final Proposal" Looks Like A Winner
April 12, 2023 - Bulletin Print Report
Newmont Corporation, ("NEM"), submitted a revised proposal to the Board of Directors of Newcrest Mining Ltd., ("NCM"), that appears to be more in line with...
Minimum Annual Rent Is The CRT Tax Base
April 12, 2023 - Volume 17 Issue 69 Print Report
Petitioner (P) entered into a license agreement with the NYC Department of Parks and Recreation (Ps) on August 3, 2007 with respect to the operation and management of the indoo...
Data Processing Services Are Exempt From Sales Tax
April 12, 2023 - Bulletin Print Report
In 2009, the legislature expanded the list of transactions subject to retail sales tax to include...digital automated services. The definition of "digital automated servic...
Disproportionate Incorporation Recast
April 11, 2023 - Volume 17 Issue 68 Print Report
A owned all of the stock of X. A organized Y, paying $50x for all of the common stock, and caused X to purchase from Y all of Y's four percent noncumulative, nonvoting pref...
Design Costs Are Part Of Taxable Value For Use Tax Purposes
April 11, 2023 - Bulletin Print Report
Federal contractors are generally subject to paying use tax to Washington on the value of articles used in the process of a federal contract. A contracted with the Army in 2007...
Taxpayers Did Not Substantiate The Value Of Their Casualty Loss
April 11, 2023 - Bulletin Print Report
Under section 165 of the Code, a taxpayer can deduct non-business losses that "arise from...casualty..." The first requirement of casualty losses is that only physica...
Amortized Bond Premium Was Not Deductible
April 11, 2023 - Bulletin Print Report
New York adjusted gross income, ("AGI"), starts with a taxpayer's federal AGI and is increased and decreased by New York-specific modifications. Included among th...
Divorced Father Secures Dependency Exemption Deductions
April 10, 2023 - Volume 17 Issue 67 Print Report
Petitioner (P) married CLA in 2008. CLA had two children from previous relationships: BE was born in 2006, and HA was born in 2007. P, CLA,...
Washington's Capital Gains Tax Is Constitutional
April 10, 2023 - Bulletin Print Report
Taxation in Washington, ("W"), is unique. "We have no state personal or corporate income tax and instead generate revenue primarily through a combination of sale...
Taxpayer Must Repay Her "APTC" Payments
April 10, 2023 - Bulletin Print Report
On May 15, 2018, P enrolled in health insurance for herself and her two dependents. On the basis of the information P provided in her application, she received a monthly APTC o...
Consent To Change Accounting Method Not Obtained
April 6, 2023 - Bulletin Print Report
"Base acres" are the right to receive farm program subsidies for the production of certain commodities from the USDA. These rights attach to the farm, not the farm ow...
Liberty Media Goes With Counsel's Opinion For Braves Split-Off
April 6, 2023 - Bulletin Print Report
Liberty Media Corporation, ("LMC"), announced, uncharacteristically we might add, that it is proceeding with the split-off of Atlanta Braves Holdings, Inc.witho...
Could SJM Have Divested Its Pet Foods Business Tax Efficiently?
April 6, 2023 - Bulletin Print Report
On February 8, 2023, Post Holdings, Inc., ("PHI"), and PCB Sub, LLC, ("PCB"), a newly created, wholly-owned, indirect subsidiary of PHI, and a disregarded e...
Loss From Sale Of Metals Disallowed
April 6, 2023 - Volume 17 Issue 66 Print Report
Petitioner (P) issued a bona fide purchase order on July 12, 1950 for 200,000 pounds of mixed metal. The company shipped nine lots totaling 199,396 pounds in April and Septembe...
Household Income Exceeded Exemption Guidelines
April 6, 2023 - Bulletin Print Report
R filed an application requesting a poverty tax exemption for her residential real property. The Board denied R's application, finding that she did not meet the "Exemp...
Relinquishment Of Anticipated Income Does Not Give Rise To Loss
April 5, 2023 - Volume 17 Issue 65 Print Report
The taxpayer was 47 years of age in 1967 when her husband died at age 49 while in his 28th year of employment with the Federal Government. Upon her husband's death, the tax...
Landlord Exemption Not Substantially Similar To Homestead Exemption
April 5, 2023 - Bulletin Print Report
P has lived in his LC home since 1990. P's wife, DS, owned two rental properties in Utah. Neither P nor DS ever resided at the Utah properties. DS rented the properties to...
Verano Holdings Corporation Will Undertake A "Recapitalization"
April 5, 2023 - Bulletin Print Report
VeranoHoldings Corporation, ("VRNO"),a Canadian corporation whose stock is tradedon the Canadian Securities Exchange and is quoted for trading in th...
EXR Will Pursue A Tax-Free Acquisition Of LSI
April 4, 2023 - Bulletin Print Report
Extra Space Storage, Inc., ("EXR"), and Life Storage, Inc., ("LSI"), announced that the two corporations, each a real estate investment trust, ("REIT&q...
Retained Rights Prevents Sale Or Exchange
April 4, 2023 - Volume 17 Issue 64 Print Report
During the early part of 1946, petitioner became interested in forming a corporation. The corporation was incorporated on June 24, 1946, under the name TWI, and thereafter enga...
Wholesaler-To-Wholesaler Transactions Are Exempt From Business Tax
April 4, 2023 - Bulletin Print Report
E discovers, develops, manufactures, markets, and sells pharmaceutical products in the United States. E does not maintain a place of business in Tennessee, ("T"). The...
Taxpayer Was Not A "Speculative Builder"
April 4, 2023 - Bulletin Print Report
In 2003, D purchased property in Spokane, Washington. In 2004, D quitclaimed the property to SU. D is SU's sole member. D and SU entered into a "purchase and sale agre...
"Involuntary" User Fee Was Not A Tax
April 4, 2023 - Bulletin Print Report
P is a non-profit residential real estate association consisting of individual members who each owned real property required to connect to public sewers. Defendant amended sect...
EDR And WWE Will Join Forces To Become "TKO"
April 3, 2023 - Bulletin Print Report
Endeavor Group Holdings, Inc., ("EDR"), and World Wrestling Entertainment, Inc., ("WWE"), founded by the legendary Vince McMahon, today announced what, in r...
Part-Year Resident Tax Calculation Is Constitutional
April 3, 2023 - Volume 17 Issue 63 Print Report
In April 2000, petitioners moved from California to New York. They filed a New York income tax return for 2000 as part-year residents, but reported only a portion of petitioner...
Arm's-Length Sale Is The Best Evidence Of Value
April 3, 2023 - Bulletin Print Report
Petitioner, ("P"), is the owner of a parcel of land, (the "subject premises"), in the Town of Glenville,containing a 10,000 square foot office buildin...
Lack Of Return Of Foreclosure Mailing Not Decisive
April 3, 2023 - Bulletin Print Report
In May 2018, defendant Saratoga County, (the "County"),commenced a foreclosure proceeding against the property at issue. In December 2018, a default judgment in...
Altria Group, Inc. Can Now Monetize Its Stake In ABI Tax-Efficiently
April 2, 2023 - Bulletin Print Report
Now that AltriaGroup, Inc., ("MO"), has "sustained" its heretofore "paper"loss in JUULLabs, Inc., ("JUUL"), through th...
New Jersey Does Not Tax "Phantom" Income
March 31, 2023 - Bulletin Print Report
M invested $1.1 million in H, a limited liability company. H held a patent for an energy drink bottle. H was not a success and annual losses reduced M's capital account fro...
Determining Basis Of Stock Received In Contingent Stock Reorganization
March 31, 2023 - Volume 17 Issue 62 Print Report
X is a domestic corporation engaged in the manufacture and sale of consumer products. The stock of X is listed on the New York Stock Exchange. Y is a domestic corporation engag...
Uber Driver Did Not Maintain "Adequate Records"
March 31, 2023 - Bulletin Print Report
O earned money carrying passengers using software from the ride-hailing company Uber. He used his vehicle for both business and personal purposes. O did not keep records of his...
Retired Couple's Social Security Benefits Were Largely Taxable
March 31, 2023 - Bulletin Print Report
Petitioners, ("Ps"), were retired in 2019. They received during that year investment income, Social Security benefits, and retirement benefits. Ps reported on Schedul...
Asset Not Acquired Or Passed From A Decedent
March 30, 2023 - Bulletin Print Report
In Year 1, A, an individual, established irrevocable trust, "T," and funded T with "Asset" in a transfer that was a completed gift for gift tax purposes. A...
Sec. 1033 Applies To Sales Of "Downed" Timber
March 30, 2023 - Volume 17 Issue 61 Print Report
In Rev. Rul. 72-372, 1972-2 C.B. 471, the taxpayer was the owner of timberland. As a result of a hurricane, a considerable number of trees were uprooted. The timber was not ins...
On Whom Does The "Incidence" Of Tax Fall?
March 30, 2023 - Bulletin Print Report
The excise at issue was imposed on a vehicle leased by APP. APP was an active-duty Marine...who temporarily resided in B due to his duty assignment at Fort Devens.APP lea...
"Income Earned" In Another State
March 30, 2023 - Bulletin Print Report
TP is a Louisiana, ("LA"), resident. For 2020, TP sold property in Arkansas, ("AK"), which resulted in long-term capital gain of $120,591. AK calculates the...
Sale And Exchange Properly Segregated
March 29, 2023 - Volume 17 Issue 60 Print Report
By contract between M, an individual, and the JC, a corporation, it was provided that M should sell 1,026 shares of his stock of 2C for $65 per share, but should retain the bal...
Nominal Claims For Refund Are Not "Duly Filed"
March 29, 2023 - Bulletin Print Report
A taxpayer may not sue the government for a refund of an overpayment unless the taxpayer has "duly filed" a claim with the I.R.S. A claim that is untimely filed pursu...
Claims Were Not Personal Obligations Of Decedent
March 29, 2023 - Bulletin Print Report
Decedent, ("D"), died April 27, 2015. D had two children, MM and CMD. On August 7, 2003, D and his then business partner formed NH. In 2007, NH borrowed approximately...
"In-House" Leveraged Spin-Off Accomplished
March 29, 2023 - Bulletin Print Report
Parent, ("P"), and Distributing, ("D"), are members of an affiliated group of corporations that join in the filing of a consolidated U.S. federal income tax...
Partnership Interest Not Involuntarily Converted
March 28, 2023 - Volume 17 Issue 59 Print Report
TPs became limited partners in XPS in 1983 by contributing "$k." The XPS activities include investing in commercial real estate. During 1988, the General Partners ent...
IBM Cannot Deduct Royalty Payments From Foreign Affiliates
March 28, 2023 - Bulletin Print Report
Petitioner, the legal owner of certain intangible property including the International Business Machines, ("IBM"), brand, is organized under the laws of New York. Dur...
No Vested Right To Higher Rate On Tax Refunds Found
March 28, 2023 - Bulletin Print Report
BFRA section 16 provides: "...notwithstanding any other provision of law, the Comptroller shall set the annual interest rate for an income tax refund that is the result of...
Incorporation Accelerates Sec. 481 Adjustment
March 27, 2023 - Volume 17 Issue 58 Print Report
PRS commenced business in 1965 and established two separate businesses, a P business (PB) and a T business (TB). PRS applied for and received permission to change its method of...
Cost Of Food Is Not A Medical Expense
March 27, 2023 - Bulletin Print Report
TP purchased Product for TP's infant, who, at the time,was five months old and qualified as TP's dependent. Product is neither medicine nor a drug, but rather foo...
Transfer Of Real Estate To An LLC Was A Change In Ownership
March 27, 2023 - Bulletin Print Report
In 2000, the As purchased, as tenants by the entireties, a non-homestead property in Miami, (the "Subject Property"). In 2015, the As established TP, a for-profit Flo...
Remote Employee Conducted Business In Alabama
March 27, 2023 - Bulletin Print Report
During 2020, Taxpayer, ("TP"), worked for BBVA. He was renting an apartment in Alabama. During the pandemic, his job was changed to a remote job, and he was able to w...
Diversification Achieved In A "Permissible" Manner
March 24, 2023 - Volume 17 Issue 57 Print Report
A, B, Trust 1 (T1), and Trust 2 (T2) propose to form a limited partnership, P. A, B, T1, and T2 will each contribute to P shares of X common stock, stock that is traded on the...
Raytheon Company Denied Preferential Tax Rate
March 24, 2023 - Bulletin Print Report
Petitioner, ("P"), is the parent company of an affiliated group of entities. P and its affiliates, (the "R combined group"), filed combined reports... Durin...
Sales Proceeds Excluded From Receipts Factor
March 24, 2023 - Bulletin Print Report
Company is a limited partnership that files federal form 1065 and Colorado form DR 0106 partnership returns. Company is a real estate rental company. Company has always reporte...
Collection Of Sales Tax Is Not The Conduct Of "Trade" Or "Commerce"
March 24, 2023 - Bulletin Print Report
G filed this class action under the Unfair Trade Practices and Consumer Protection Law, ("UTPCPL"), alleging that APPs engaged in unfair trade practices by charging s...
The Willens Deal Survey March 2023
March 23, 2023 - The Deal Survey: March 2023 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
Returned Surplus Not An Employer Reversion
March 23, 2023 - Volume 17 Issue 56 Print Report
On Date 1, Company (C) purchased certain assets and assumed certain liabilities from the Prior Company. In connection with this transaction, assets and liabilities of...
The Homestead Exemption Applies To Section 724(b) Of The B.C.
March 23, 2023 - Bulletin Print Report
In 2011, the Debtor and her husband bought their residence. The Debtor filed a voluntary petition seeking relief under Chapter 7 of the U.S. Bankruptcy Code. In her petition, t...
Date Of Delivery Of Deed Is Controlling
March 23, 2023 - Bulletin Print Report
I purchased the property for use as a church through a deed dated June 29, 2018, that was recorded in the county land records on September 18, 2018. On Augus...
AMC Seeks To Convert Its "APEs" Into Common Stock
March 22, 2023 - Bulletin Print Report
AMC Entertainment Holdings, Inc., ("AMC"), plans to convenea special meeting of its stockholders at which certain proposed amendments to the company's Certi...
Partner Cannot Make Sec. 1033 Deferral Election
March 22, 2023 - Volume 17 Issue 55 Print Report
In 1960, the taxpayer, a medical doctor, formed a partnership in State M with two other medical doctors for the purpose of owning and managing a medical building. The taxpayer...
Estate Did Not Effect A Qualified Reformation Of A "CRAT"
March 22, 2023 - Bulletin Print Report
On September 2, 1997, B settled the Trust. On September 17, 2015, she executed a will that provided for the transfer of her residuary estate to the Trust. Upon B's death, t...
Merged Corporation Lacked Capacity To Petition Tax Court
March 22, 2023 - Bulletin Print Report
P was a 'C' corporation. P was the parent of an affiliated group of corporations which included T. T was a 'C' corporation. On January 5, 2001, P merged, downst...
Holding Company And Operating Subsidiary Were "Unitary"
March 21, 2023 - Bulletin Print Report
Appellant, ("APP"),an individual, was a California non-resident. APP owned an indirect membership interest in Holdco, ("H"), which was classified as a...
Waiving Attribution In Order To Qualify Under Sec. 302(b)(3)
March 21, 2023 - Volume 17 Issue 54 Print Report
A corporation (C) was owned by a father (F)and his three sons (S1, S2, and S3). F is a director, employee, and the President of C. S1 is a director, a former em...
Statute Of Limitations Never Began To Run
March 21, 2023 - Bulletin Print Report
S was a partnership. S claimed a loss of $35.5 million arising from a tax-shelter transaction on its 2001 return. A partnership's return "shall be filed...at such time...
Netflix Was Not A "Franchise Holder"
March 21, 2023 - Bulletin Print Report
In 2007, the Georgia General Assembly passed the "TV Act." The Appellants argue that the trial court erred in concluding that the TV Act does not provide them with a...
Defining Control
March 20, 2023 - Volume 17 Issue 53 Print Report
Certain persons transferred property to a corporation in exchange for a combination of voting and nonvoting stock, i.e., 83 percent of the Class A voting common stock, 83 perce...
UBS To Acquire Credit Suisse
March 20, 2023 - Bulletin Print Report
Whether voluntarily or not, the die is now cast. UBS is acquiring itsbeleaguered rival, Credit Suisse, in a transaction apparently brokered by the Swiss banking authoriti...
SIVB Files A Chapter 11 Petition
March 20, 2023 - Bulletin Print Report
SVB Financial Group, ("SIVB"), announced it has filed a voluntary petition "for a court supervised reorganization under Chapter 11 in the United States Bankruptc...
StubHub "Sold At Retail" Admissions To Events
March 20, 2023 - Bulletin Print Report
StubHub, Inc., ("S"), operates an online marketplace where tickets to sporting events, concerts, theater and other live entertainment services were bought and sold. T...
RSUs And Options Are Not Counted For Section 355(a)(1)(D) Purposes
March 20, 2023 - Bulletin Print Report
D is the parent of a worldwide group, (the "D Group"). D has shares of common stock and convertible preferred stock outstanding. D also has RSUs, stock options, and r...
Massachusetts Tax Exemption Encompasses Capital Gains
March 17, 2023 - Bulletin Print Report
G.L.c. 121A provides a tax exemption as an incentive for private entities to invest in urban redevelopment projects. The tax concession provides that these private entities are...
Distributions Not "Annual Additions"
March 17, 2023 - Volume 17 Issue 52 Print Report
TP elected to be treated as an 'S' corporation effective as of June 1, 1989. Effective as of January 1, 1994, TP established the Plan, an ESOP, as defined in Sec. 4975(...
Fraudster Fails Section 1341's Second Prong
March 17, 2023 - Bulletin Print Report
G was a psychiatrist in Texas between 2007 and 2014. In October 2014, he was indicted on fifty-two counts of health care fraud for submitting false claims for reimbursement to...
Failure To Provide Resale Certificate Proves Decisive
March 17, 2023 - Bulletin Print Report
Retail vendors in the District of Columbia, ("DC"), are generally required to pay a sales tax in connection with sales of tangible personal property. See D.C. Code se...
Persistent Losses Render Section 183(a) Applicable
March 16, 2023 - Bulletin Print Report
During the years at issue, S and F owned the Company, a horse farm in New Jersey. The taxpayers lost more than $3.5 million during the years at issue, 2010-2013.The Tax C...
Sec. 167(c)(2) Does Not Prevent Lease Termination Deductions
March 16, 2023 - Volume 17 Issue 51 Print Report
ABC is a Michigan corporation that makes and distributes non-alcoholic beverages. ABC acquired a company that held a long-term lease on a bottling plant. ABC concluded that the...
QTIP Trust Property Is Included In The Gross Estate
March 16, 2023 - Bulletin Print Report
Decedent's husband's will instructed the trustees of the SK Trust to pay the trust's net income to decedent at least quarterly during her lifetime and authorized th...
Goodwill Industries' Thrift Store Is Exempt From Property Taxation
March 16, 2023 - Bulletin Print Report
The subject property is owned by GW, of which the sole member is Goodwill Industries, Inc., ("G"). G is a non-profit corporation and is exempt from federal taxes unde...
Anti-Dilution Adjustments In Connection With Spin-Offs Are Benign
March 15, 2023 - Bulletin Print Report
Where a corporation which has stock purchase warrants outstanding engages in a tax-free spin-off, it is generally the case that the terms of the warrants will be adjusted in or...
Acquisition Found To Be A "QSP"
March 15, 2023 - Volume 17 Issue 50 Print Report
P is a state chartered banking corporation. It has outstanding 75,000 shares of common stock held by approximately 300 shareholders. T is a corporation formed to purchase a par...
Momentary Ownership Overlooked For 'S' Corporation Election Purposes
March 15, 2023 - Bulletin Print Report
D corporation, ("D"),was formed on Date 1. On Date 2, D elected to be treated as an 'S' corporation. D is engaged in Business X and Business Y, which is...
Devisee Had A Legal Interest In Property
March 15, 2023 - Bulletin Print Report
The real property at issue was owned by BH, who died on December 13, 2019. BH's will devised her real and personal property to L. At some point before BH's death, the p...
What Will Become Of SVB's NOLs?
March 14, 2023 - Bulletin Print Report
SVB Financial Group, the parent of Silicon Valley Bank, had, surprisingly, approximately $6.4 billion of net operating loss carryovers as of the close of its most recent taxabl...
Banking Difficulties Shine A Spotlight On Accounting For Debt Securities
March 14, 2023 - Bulletin Print Report
The Federal Reserve's efforts to increase interest rates, with a view towards taming inflation, has caused problems for certain financial institutions whose asset/liability...
Related Party License Arrangement Did Not Have Economic Substance
March 14, 2023 - Bulletin Print Report
Skechers USA, Inc., ("S") is a company headquartered in California. S sells footwear. In 1999, S formed SKII, a Delaware corporation, as a wholly-owned subsidiary. Th...
Unamortized Loan Costs
March 14, 2023 - Volume 17 Issue 49 Print Report
Mr. A died in 1983. During his lifetime, he hadpurchased a number of single-family homes, townhouses, and condominiums that he leased to others.  ...
Water Rights Are Real Property And Like Kind To Fee Interest in Realty
March 14, 2023 - Bulletin Print Report
In Year 1, F began Ranch, ("R"), and was the original licensee of a License for the diversion and use of water issued by State A. Ranch Owners are the successors in i...
Abandoned Property "Escheats" To The State Of Purchase
March 13, 2023 - Bulletin Print Report
"Escheatment" is the power of a State...to take custody of property deemed abandoned. These cases require us to decide which States have the power to escheat the proc...
80 Percent of the "Voting Power"
March 13, 2023 - Volume 17 Issue 48 Print Report
At the beginning of 1984, when Alumax, Inc. (AL)was owned 50 percent by Amax (A) and 50 percent by "Japanese interests" (J), AL undertook a restructur...
Gain On Sale Of Partnership Interests Classified As Ordinary Income
March 13, 2023 - Bulletin Print Report
TP engaged in the promotion and sale of interests in LLCs. The only asset held by the LLCs was land. Each of the LLCs engaged in transactions involving the donation of an easem...
Claims Court Lacked Jurisdiction To Consider A Tax Refund Suit
March 13, 2023 - Bulletin Print Report
A FICA tax is "imposed on the income of every individual." Wages under a non-qualified deferred compensation plan are subject to a special timing rule. The FICA tax o...
No Substantial Reduction In Activities Performed
March 10, 2023 - Volume 17 Issue 47 Print Report
X corporation, (X), owned two parcels of real property (parcel A and parcel B), each consisting of land and a building erected thereon. X has one class of stock outst...
Social Club's Property Is Exempt From Taxation
March 10, 2023 - Bulletin Print Report
The Italian-American Brotherhood Club, ("IAB"), is a tax-exempt non-profit corporation under section 501(c)(3) of the Code. It applied for property tax exemption. The...
The Shared Responsibility Payment Is "Measured By Income"
March 10, 2023 - Bulletin Print Report
Under the Bankruptcy Code, certain categories of claims have priority, including (1) excise taxes on transactions, and (ii) taxes on or measured by income. Debtors, ("Ds&#...
Appraised Value Not Used For Insolvency Purposes
March 10, 2023 - Bulletin Print Report
The question is whether the Taxpayers were, in fact, insolvent. The resolution of that dispute hinges on the fair market value (at the time of the debt cancelation) of certain...
AbbVie's "Inversion" With Shire plc Is Still Causing Problems
March 9, 2023 - Bulletin Print Report
One of the most notorious transactions of the "inversion era" was one that was not seen to completion, the inversion of AbbVie, Inc., in which Shire plcwas to s...
ENGH's Stock Will Be Redeemed
March 9, 2023 - Bulletin Print Report
Vistra Corporation, ("VST"), announced that it has executed a definitive agreement with Energy Harbor Corporation, ("ENGH"), pursuant to which ENGH will mer...
"Excessive" Payments Included in Gross Income
March 9, 2023 - Volume 17 Issue 46 Print Report
Sec. 1603 of the American Recovery and Reinvestment Act, (ARRA), appropriated funds for paymentsto applicants who placed specified energy property in service du...
Lessor's Reimbursed Costs Are Subject To Sales Tax
March 9, 2023 - Bulletin Print Report
Wisconsin, ("W"), imposes a five percent sales tax on the sale or lease of tangible personal property, ("TPP"), including aircraft, as well as on select&nbs...
Retailer Denied Refund Of Excess Sales Tax Reimbursements
March 9, 2023 - Bulletin Print Report
Appellant, ("APP"), a California corporation, operates a facility in South El Monte, California, where APP designs and manufactures fluid control and filtration produ...
Digital Assets Belong To The Bankruptcy Estate
March 8, 2023 - Bulletin Print Report
Who owns the cryptocurrency, ("CC"), assets deposited in Earn Accounts by Celsius's account holders before the July 15, 2022 petition date, (the "Petition Da...
"Disproportionate" Split-Off Recast
March 8, 2023 - Volume 17 Issue 45 Print Report
P owns all of the stock of S. For valid business reasons, P distributed all of the stock of S to one of its shareholders, Mr. A (A), in exchange for all of the shares of P owne...
PBM Services Are Functionally Related To Insurance
March 8, 2023 - Bulletin Print Report
During the 2012 to 2015 tax period at issue in this appeal, the insurance business exemption provided: "This chapter shall not apply to any person in respect to 'insur...
The "TUF" Was Not A Tax
March 8, 2023 - Bulletin Print Report
The City established a Transportation Utility Fee, ("TUF"). Property owners would be charged a monthly fee based on their "intensity of use" of the city str...
Sale Does Not Reduce Possessions Corporation Credit
March 7, 2023 - Volume 17 Issue 44 Print Report
Between 1976 and 1996, Congress encouraged U.S. corporations to invest in Puerto Rico (PR) by establishing a possessions corporation system of taxation. A special credit availa...
Daily Rate Worker Not Paid On A "Salary Basis"
March 7, 2023 - Bulletin Print Report
The Fair Labor Standards Act, (the "FLSA"), exempts certain categories of workers from its protections, including the overtime-pay guarantee. When an employee is a &q...
Car-Racing Expenses Were Not Deductible
March 7, 2023 - Bulletin Print Report
Petitioner, ("P"), became licensed to practice law in 1982. In 2003, he moved to Indiana and became licensed to practice law there. In 2010, he moved back to Colorado...
Non-Operating Interest Owners Lacked Standing
March 7, 2023 - Bulletin Print Report
Kinder Morgan, ("KM"), is a 44 percent fractional interest owner in the MU, (the "unit").The members of CO2 are non-operating working interest owners...
MO Will "Crystallize" The Capital Loss In Its JUUL Stake
March 6, 2023 - Bulletin Print Report
Altria Group, Inc., ("MO"), has, to say the least, experienced bitter disappointment from its once-heralded investment in JUUL Labs, Inc. ("JLI"). From all...
Sec. 1033 Election Must Be Made By Partnership
March 6, 2023 - Volume 17 Issue 43 Print Report
A and M each owned 50 percent of the stock of KBRC, which had acquired title to an office building in Newark, NJ in October 1944. On November 3, 1960, the corporation was disso...
Selling Costs Not Governed By The "Indopco" Regulations
March 6, 2023 - Bulletin Print Report
P is a domestic 'C' corporation. TP is a wholly owned domestic subsidiary of P. S is a domestic limited partnership. S is a closed private equity investment fund. On Da...
Notice Of Deficiency Was Timely Issued
March 6, 2023 - Bulletin Print Report
MRS is listed as the beneficial owner of XE. XE held a single asset, a UBS account ending in 0857. UBS records reflect that MRS is the beneficial owner of UBS account 0857. NPB...
"Odd Lot" Shareholders Do Not Receive Constructive Dividend
March 3, 2023 - Volume 17 Issue 42 Print Report
Approximately 1/3 of the shareholders of Company, (C), ownfewer than 100 shares. More than 1/2 of these shareholders own less than 26 shares. C incurs substanti...
Court Embraces Destination-Based Sourcing For Services
March 3, 2023 - Bulletin Print Report
The question requires our interpretation of a provision of the Tax Reform Code of 1971 allocating a corporation's sales of services between Pennsylvania and other states fo...
Debt For Money "Obtained By Fraud" Not Dischargeable
March 3, 2023 - Bulletin Print Report
In 2005, K and D, (the "Bs"), jointly purchased a house in San Francisco, California. Acting as business partners, the pair decided to remodel the house and sell it a...
Securing “Exchange” Treatment In A Brother-Sister Redemption
March 2, 2023 - Bulletin Print Report
A sale or exchange of stock gives...
Sec. 1042 Applied To Sale By Partnership
March 2, 2023 - Volume 17 Issue 41 Print Report
TP acquired 666,363 shares of C stock in 1995 as a result of a reorganization. C is the sponsor of an ESOP. On April 30, 1997, the ESOP purchased 309,478 shares of C from TP. A...
Local Sales Tax Precluded Revenue Sharing
March 2, 2023 - Bulletin Print Report
Before 2019, section 39-22-623(1)(a)(II)(A), C.R.S. 2022, provided that to receive shares of state income tax revenue from cigarette sales, local governments were "prohibi...
A Life Estate Is Not A "Fee Simple Estate"
March 2, 2023 - Bulletin Print Report
Petitioners, ("Ps"), filed an application to place their property in the State Property Tax Deferral Program, (the "Program"). Maine Revenue Services, (&quo...
ROCC Shareholders Will Be Taxed On BTE's Equity
March 1, 2023 - Bulletin Print Report
Baytex Energy Corporation, ("BTE"), a Canadian corporation, announced that it has entered into a definitive agreement to acquire Ranger Oil Corporation, ("ROCC&q...
Penalties For Non-Willful "FBAR" Violations Are Accrued Per Report
March 1, 2023 - Bulletin Print Report
The Bank Secrecy Act, ("BSA"), requires those who possess foreign accounts with an aggregate balance of more than $10,000 to file an annual report on a form known as...
Taxpayer Did Not Effect A "Deferred Exchange"
March 1, 2023 - Volume 17 Issue 40 Print Report
On April 21, 1995, while married to his first wife, Petitioner (P) purchased property A (PA) for $488,000. P and his first wife were later divorced, and on February 4...
Contractor Qualified For "Mill Machinery Exemption"
March 1, 2023 - Bulletin Print Report
F used approximately 80 percent of the hot mix asphalt, ("HMA") it produced at its facilities for various construction projects upon which it served as a contractor o...
Merger Recharacterized As A 'B' Reorganization
February 28, 2023 - Volume 17 Issue 39 Print Report
P and Y are each publicly owned corporations. P wanted to acquire "the business" of Y but could do so "with an effective result" only if the corpo...
Seller/Buyer Non-Compete Clauses Survive The FTC's Purge
February 28, 2023 - Bulletin Print Report
The Federal Trade Commission, (the "FTC"), in its never-ending quest to remove real and perceivedobstacles to competition, hasnow focused its attention on...
Widow Was A "Person Aggrieved"
February 28, 2023 - Bulletin Print Report
P and her husband, G, purchased the subject property as tenants-by-the-entirety in 1976. G died in December 2020, leaving P as the sole owner. In 2021, P received a notice of a...
Commissions Paid To DISC Are For Partner Services
February 28, 2023 - Bulletin Print Report
P is an architectural, urban planning, and engineering firm. It was a New York limited liability partnership. SD was formed on June 28, 2004. As an entity subject to subchapter...
I.R.S. Could Not Rely On Form 1099
February 27, 2023 - Bulletin Print Report
In 2017, the SSA reported on Form SSA-1099 that T was awarded disability benefits totaling a gross amount of $17,164. However, the SSA reduced this gross amount by a total of $...
Legal Use Of Property Controls For RPTT Purposes
February 27, 2023 - Bulletin Print Report
The Property is located in Staten Island. The Property consists of two buildings, each a semi-detached two-family house. The Property was used as two separate two-family dwelli...
Media Company Taxed As If It Were The Owner Of Signs
February 27, 2023 - Bulletin Print Report
On January 1, 2020, the Massachusetts Bay Transportation Authority, ("MBTA"), was the owner of 14 Signs located in Boston. The appellee assessed O on the Signs. O pai...
Gain From Sale Of Real Estate Not UBTI
February 27, 2023 - Volume 17 Issue 38 Print Report
Y is exempt from tax under Sec. 501(c)(3) of the Code. The M property (MP) is a 7.6 acre piece of land which has been developed by its various lessees. Y has been a p...
Aviation Fuel Not Consumed Solely Outside Of Illinois
February 24, 2023 - Bulletin Print Report
Petitioner, ("P"), contracted, purchased and arranged for the shipment and delivery of aviation fuel into Illinois from various suppliers and resold that fuel to Amer...
Court Allocates Burden Of Withholding Tax
February 24, 2023 - Volume 17 Issue 37 Print Report
PTI is a Taiwan-based manufacturer of semiconductors. PTI filed the underlying claim against T in December 2011, alleging claims breach of contract and fraud arising...
ATVs Eligible For Partial Sales Tax Exemption
February 24, 2023 - Bulletin Print Report
J is in the business of selling ATVs and UTVs. J collected and remitted sales tax up to $300 on the retail purchase price of each ATV and UTV because J considered them to be &q...
"Holds" Substantially All Of Its Properties
February 23, 2023 - Volume 17 Issue 36 Print Report
P is a manufacturing corporation organized under the laws of State A. T is also a manufacturing corporation organized under the laws of State A. P organizes S as a wholly owned...
TECK Proposes A Taxable Spin-Off
February 23, 2023 - Bulletin Print Report
Where a foreign corporation engages in what we would identify as a "spin-off," it is rarely the case that such spin-off is carried out in a manner that would render i...
Section 6621(d) Provides A Temporal Limitation For Interest Netting
February 23, 2023 - Bulletin Print Report
Under section 6621(d) of the Code, when "underpayments and overpayments by the same taxpayer offset each other, no interest is due." In Case 1, B's un...
Tax Treaty Is Relevant To Determination Of FBAR Filing Requirement
February 23, 2023 - Bulletin Print Report
The I.R.S. audited plaintiffs' tax filings for the 2011 through 2015 tax years. The led to FBAR penalties which were assessed only for tax years 2012 and 2013. Anyone who q...
The Willens Deal Survey February 2023
February 22, 2023 - The Deal Survey: February 2023 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
Taxpayer Must Capitalize "Indirect" Inventory Costs
February 22, 2023 - Volume 17 Issue 35 Print Report
TP is primarily in the business of purchasing grain from farmers and producers and reselling the grain to large grain terminals and processors. The CBOT provides an o...
iCloud Subscriptions Not Subject To Sales Tax
February 22, 2023 - Bulletin Print Report
Petitioner, ("P"), offered a remote personal electronic storage capacity service called "iCloud," ("IC"). IC allows a user to upload their persona...
Canadian Plan Of Arrangement Appears To Be Tax-Efficient
February 22, 2023 - Bulletin Print Report
B2Gold, ("B"), and Sabina Gold & Silver Corporation, ("S"), each a Canadian corporation, announced that the parties have entered into a definitive agree...
Salary Continuation Benefits Not Excluded From California Income
February 22, 2023 - Bulletin Print Report
W worked for AmgenUSA, Inc. during the 2014 tax year. W did not contribute to State Disability Insurance, ("SDI"), during the 2014 tax year because her employer...
Costs Attributable To Abandoned "Alternatives" Not Deductible
February 21, 2023 - Volume 17 Issue 34 Print Report
The taxpayer is primarily engaged in the business of Business A to consumers and small businesses. Prior to Year 3, the taxpayer also operated two businesses that provided Busi...
Insurance Companies Cannot File Combined Returns
February 21, 2023 - Bulletin Print Report
This case involves the calculation of tax under the Income Tax Act of 1967, MCL 206.1 et seq. Petitioners, ("Ps"), argue that under MCL206.61...
Installation Of Repair Parts Subject To Use Tax
February 21, 2023 - Bulletin Print Report
APP, a New York corporation, is a distributor, retailer, and repairer of medical devices. APP offered optional lump-sum maintenance contracts with the sale of its products and...
"MSGE Spinco" Will Be Capitalized With Two Classes Of Stock
February 17, 2023 - Bulletin Print Report
We now have the details (with the public filing of the Form 10) regarding the eagerly anticipated spin-off by Madison Square Garden Entertainment Corporation of a portion,...
"Renting" Or "Leasing" Connotes Possession And Use
February 17, 2023 - Bulletin Print Report
W is the owner of property located in Grand Rapids, Michigan, (the "property"). She purchased the property in 2006 and, since 2007, after converting the property from...
Parent Cancels Subsidiary's Indebtedness
February 17, 2023 - Volume 17 Issue 33 Print Report
P is the parent of an affiliated group of corporations that file their Federal income tax return on a consolidated basis. P's stock is publicly held. Sub 1 and Sub 2 are ea...
Abatement Of Interest On Deficiency Denied
February 17, 2023 - Bulletin Print Report
In 2014 and 2015, plaintiffs reached agreement with the I.R.S. regarding their federal tax liability, and the I.R.S. issued final federal determinations for the Years at Issue....
Walmart Subsidiary Achieves An Abatement Of Use Tax
February 17, 2023 - Bulletin Print Report
WS is a Delaware limited liability company. The Director assessed Missouri use tax against WS. WS was a subsidiary of ELP. ELP, in turn,was a subsidiary of Wal-Mart Store...
Shared Appreciation Mortgages
February 16, 2023 - Volume 17 Issue 32 Print Report
In Rev. Rul. 83-51, 1983-1 C.B. 48, in each of three situations, an individual purchased a home in 1981 and used it as his principal residence. In connection with the...
"LTIP" Payment Was Not A Signing Bonus
February 16, 2023 - Bulletin Print Report
In 2011, APP resided in New York and Florida. At this time, APP was employed by JPM. K offered APP the position of Chief Risk Officer in Oakland, California. The Employment Agr...
Section 751 Deems A Sale Of Inventory Items
February 16, 2023 - Bulletin Print Report
R was a non-resident alien individual during 2008 and 2009. IV manufactures and sells 5-hour Energy drinks. IV was treated as a partnership for federal income tax purposes. Bet...
Personal Goodwill Not Distributed By Corporation
February 15, 2023 - Volume 17 Issue 31 Print Report
On April 19, 1982, B organized BT. B owned 100 percent of BT. B did not have an employment contract with BT; and he never signed a noncompete agreement. None of BT's employ...
Will NEM's All-Stock Offer Be Taxable?
February 15, 2023 - Bulletin Print Report
Where the "merger consideration" in a proposed transaction consists exclusively of the acquirer's stock, it generally follows that the shareholders of the acquire...
Parking Easement Is A Present Interest In Real Estate
February 15, 2023 - Bulletin Print Report
The condominium consists of a nine-story, thirty-seven unit residential building with fifty-four parking spaces. M paid the developer of the condominium $33,000 for a "per...
Is FIS's Spin-Off Dependent On Satisfying The "Expansion Doctrine?"
February 14, 2023 - Bulletin Print Report
In 2019, Fidelity National Information Services, Inc. ("FIS"), and Worldpay, Inc., ("WP"), engaged in a business combination in which the former acquired al...
Kentucky Law Discriminates Against Interstate Commerce
February 14, 2023 - Bulletin Print Report
The PSC, (the "Commission"),regulates utilities in Kentucky, ("K"). K utilities are encouraged to buy cheaper coal. Compared to states with no severan...
Taxpayer Successfully Established New Domicile
February 14, 2023 - Volume 17 Issue 30 Print Report
The issue is whether TP was domiciled in Alabama in 2007 and thus subject to Alabama income tax in that year. TP was born and raised in Alabama. She moved to New York...
Full Refund Of EZ-ITC Permitted
February 14, 2023 - Bulletin Print Report
GlobalFoundries U.S., Inc.operates a manufacturing facility within a designated Empire Zone in Malta, New York. Petitioner, ("P"), seeks a refund of EZ-ITCs in...
Landlord Was Not A Charitable Organization
February 14, 2023 - Bulletin Print Report
U and W appeal from decisions of the Appellate Tax Board, (the "board"), finding that the taxpayers were not entitled to real estate tax exemptions under G.L. c. 59,...
No Refund Of "REET" Tax Permitted
February 13, 2023 - Volume 17 Issue 29 Print Report
Decedents, husband and wife, had two children, BA and BB, and owned property located in Washington (the Property). Decedent A died intestate in May 2009. Decedent B d...
Waste Hauler Not Eligible For The "Rolling Stock" Exemption
February 13, 2023 - Bulletin Print Report
Petitioner contends that it is entitled to an exemption from use tax because its trucks are "rolling stock used in interstate commerce and purchased, rented, or leased by...
Distributing Corporation Takes Steps To Eliminate An "ELA"
February 13, 2023 - Bulletin Print Report
Distributing is a publicly traded domestic corporation. Distributing is engaged in the active conduct of Business A, Business B, and Business C. Distributing owns all of the st...
3M Loses A Transfer Pricing Case
February 10, 2023 - Bulletin Print Report
3M Company owns, directly and indirectly, hundreds of subsidiaries, one of which is 3M Brazil. Many years ago, 3M Company granted 3M Brazil a non-exclusive license to use certa...
Will A "Constructive" Redemption Trigger Repurchase Excise Tax?
February 10, 2023 - Bulletin Print Report
Section 4501 of the Internal Revenue Code, enacted in the Inflation Reduction Act of 2022, as is by now well-known, imposes on each "covered corporation" an excise ta...
I.R.A. Did Not Purchase Property
February 10, 2023 - Volume 17 Issue 28 Print Report
In 2008, D rolled over funds from an I.R.A. at NM into a pre-existing self-directed I.R.A. he had with Charles Schwab (CS). On February 6, 2009, D signed a contract t...
The Right To Brownfield Credits Is A Receivable
February 10, 2023 - Bulletin Print Report
Taxpayer, ("TP"), will elect to be a real estate investment trust, ("REIT"), for the taxable year ending Date 1. TP owns "Site," which is in State...
A Club's Initiation Fees Are Fully Deductible
February 9, 2023 - Bulletin Print Report
R is a non-profit corporation that owns and operates a country club. R offers several levels of membership. New members must pay a one-time initiation fee with their applicatio...
ADP Leased Tangible Personal Property
February 9, 2023 - Bulletin Print Report
eTime, ("ET"), is an application software that allows clients' employees to login using the internet from their computers and enter their time and other employmen...
Educational Organization Entitled To Charitable Tax Exemption
February 9, 2023 - Bulletin Print Report
R's stated purpose was "to improve and stimulate agricultural and mechanical skill." R organizes the annual Rochester Fair, ("RF"). In 2020, R filed an...
Attribution Rules Apply To Sec. 302(b)(1)
February 9, 2023 - Volume 17 Issue 27 Print Report
Y is a corporation engaged in the business of publishing a daily newspaper. Prior to October 31, 1977, Y had outstanding400 shares of stock. Of that number, 250...
Contract Terms Determines Proper Time For Accrual
February 8, 2023 - Volume 17 Issue 26 Print Report
TP uses the accrual method of accounting. It manufactures consumer products and distributes these products to dealers, who in turn sell to the public. TP provides adv...
Qualified Appraisal Not Found
February 8, 2023 - Bulletin Print Report
During 2016 and 2017, petitioners,("Ps"), were the soleshareholders of I. I was an 'S' corporation. Ps executed an agreement with M. The engagemen...
Failure To Exhaust Administrative Remedies Led To Dismissal Of Suit
February 8, 2023 - Bulletin Print Report
On August 11, 2017, W filed her 2012 income tax return with the South Carolina Department of Revenue, (the"Department"), claiming a refund. On February 14, 2018...
Accuracy-Related Penalties Properly Imposed
February 8, 2023 - Bulletin Print Report
Petitioner hired DC to prepare his 2018 federal income tax return. DC did not have a preparer tax identification number ("PTIN"). The 2018 federal income tax return w...
Share Repurchases Not Evidence Of A Device
February 7, 2023 - Bulletin Print Report
D is a publicly traded State A corporation. We believe D is GE. D is engaged in Business A and Business B (including Business C, a division of Business B). At the time of...
Non-Profit Corporation Not An Instrumentality Of Government
February 7, 2023 - Bulletin Print Report
I is a private, non-profit corporation. I's members includes counties, county officers and employees, and affiliated associations. I is comprised of fifteen affiliate assoc...
Business License Tax Imposed On Gross Income Is Constitutional
February 7, 2023 - Volume 17 Issue 25 Print Report
This appeal involves a constitutional challenge to the Town of Hilton Head Island'sbusiness license tax ordinance (O), which requires businesses within the...
Spin-Off By A Controlled Foreign Corporation
February 7, 2023 - Bulletin Print Report
Parent, ("P"), is the parent of a worldwide group of affiliates, (the "P Worldwide Group"). The P Worldwide Group is engaged in multiple businesses, includi...
SPAC's Self-Tender Offer Appears Subject To Repurchase Tax
February 6, 2023 - Bulletin Print Report
dMY Technology Group VI, ("D"), a special purpose acquisition company, ("SPAC"), has located a target, "RWT,"which it is proposing to acquir...
PSA Is Proposing A Taxable Transaction
February 6, 2023 - Bulletin Print Report
Public Storage, Inc., ("PSA"), we learned this morning, is proposing to acquire "all of the outstanding shares and units of Life Storage, Inc., ("LSI")...
JNJ's "Talc" Affiliate Was Not In "Financial Distress"
February 6, 2023 - Bulletin Print Report
OC, a wholly owned subsidiary of Johnson & Johnson, ("JJ"), sold healthcare products. It also produced Baby Powder, a skincare product. Its base was talc. Concern...
Points On Refinancing Bridge Loan Deductible In Year Paid
February 6, 2023 - Volume 17 Issue 24 Print Report
In January 1981, the Hs financed the purchase of their principal residence by obtaining a $122,000 three year loan with a balloon payment secured by a mortgage on the...
Faculty Housing Qualifies For Tax Exemption
February 6, 2023 - Bulletin Print Report
R is a registered not-for-profit college preparatory school in Westchester County, New York.R is a day school that provides education for children from pre-kindergarten t...
Limited Scope Of "Next-Day" Rule
February 3, 2023 - Volume 17 Issue 23 Print Report
ACQ is the common parent of a consolidated group. On 11/30/xx, a subsidiary in the ACQ group merges with and into T and T's shareholders exchange their T stock for cash (th...
Amounts Paid To Acquire "PRVs" Must Be Capitalized
February 3, 2023 - Bulletin Print Report
A pharmaceutical company, ("PC"), must obtain FDA approval of a new drug application, ("NDA"), to market and sell any new drug in the United States. Congres...
Debtor Neither Legal Nor Equitable Owner Of Residential Property
February 3, 2023 - Bulletin Print Report
The property involved in this case is located in Paradise Valley, Arizona, (the "property"). In 2005, E purchased the property for $1,525,000...obtaining a $1,143,750...
Gain On Sale Of SBUX Stock Was Non-Business Income
February 3, 2023 - Bulletin Print Report
P is headquartered in Washington State. P and Starbucks, ("S") are unaffiliated, not a unitary business, and are in unrelated industries. In 1991 or before, P purchas...
Interest On GSE Obligations Not Exempt From Taxation
February 2, 2023 - Volume 17 Issue 22 Print Report
TP is a Washington-based bank. TP was audited by the Department of Revenue. Tax was applied to TP's gross income from interest on securities issued by Fannie Mae and Freddi...
Payment Of Spouse's Attorney's Fees Was Not "Alimony"
February 2, 2023 - Bulletin Print Report
Petitioner, ("P"), instituted divorce proceedings in California. A court order, ("order"), was issued. P was ordered to pay $9,146 in monthly alimony. Under...
Original Cost Is Reduced By "Rebates"
February 2, 2023 - Bulletin Print Report
A business receives a rebate for making purchases of certain fixed assets in bulk. The assets are purchased and the rebate is given after the fact as a refund. The rebate is pr...
GEO Group Is Not An "Instrumentality" Of Any Government
February 2, 2023 - Bulletin Print Report
The GEO Group, Inc., ("G"), owns and operates correctional and detention facilities. G operated such facilities in Texas under contracts with the State of Texas and t...
Gain From Sale Of Goodwill Classified As Business Income
February 1, 2023 - Bulletin Print Report
KC founded Cities Management, Inc., ("CMI"), in 1988 as a Minnesota corporation. CMI was primarily engaged in the business of managing community associations in Minne...
Nonrefundable Interest Must Be Ratably Allocated
February 1, 2023 - Volume 17 Issue 21 Print Report
In October 1977, petitioner (P) entered into negotiations to purchase an office building from TF. P paid the entire purchase price with a nonrecourse purchase money mortgage fo...
Equitable Tolling Of A Statute Of Limitations Not Available
February 1, 2023 - Bulletin Print Report
A served in the Navy from 1977 until 1981. Approximately 30 years later, the VA received A's application for disability compensation. The regional office granted A benefits...
Exception To ALJ Determination Not Timely Filed
February 1, 2023 - Bulletin Print Report
The determination of the Administrative Law Judge, ("ALJ"), was mailed by the United States Postal Service, ("USPS"), certified mail on March 10, 2022 to pe...
MAGT To Be Acquired In A "Disproportionate" Acquisition
January 31, 2023 - Bulletin Print Report
Magnet Forensics, Inc., ("MAGT"), a Canadian corporation, announced it has entered into a definitive arrangement agreement with "PU," a newly-created corpor...
Skilled Nursing Provider Could Not Deduct Its Gross Receipts
January 31, 2023 - Bulletin Print Report
TP is a licensed home health agency. Specifically,TP is a licensed skilled nursing provider that offers services to the United States Department of Energy employees...wit...
No Refund Of "HI" Tax Permitted
January 31, 2023 - Volume 17 Issue 20 Print Report
Plaintiff (P) was employed as a pilot by United Airlines (U) from January 29, 1979 until October 1, 2004. This case concerns the FICA tax treatment of P's retirement benefi...
Notice 2007-83 Has Been "Set Aside"
January 31, 2023 - Bulletin Print Report
In 2004, Congress added section 6707A to the Internal Revenue Service'sarsenal of tools for identifying tax avoidance schemes. Section 6707A permits the I.R.S. to pen...
Isolated Redemption Does Not Trigger Deemed Distribution
January 30, 2023 - Volume 17 Issue 19 Print Report
C is a privately held holding company with all of its stock (consisting of Class A voting stock and Class B nonvoting stock) held by or for the benefit of members of...
Software Vendor Denied Approval Of Claim For Refund
January 30, 2023 - Bulletin Print Report
Petitioner, ("P"), filed an Application For Refund. The Department issued a Notice of Decision of Refund Denial. In 2007, Oracle, ("O"), first sold a perpet...
The "Functional" Approach Is Used In Bankruptcy Cases
January 30, 2023 - Bulletin Print Report
The Affordable Care Act, (the "ACA"), included a mandate (sincerepealed) requiring most individuals to maintain health insurance. Individuals who did not mainta...
St. Louis Area Teleworkers Not Subject To Local Tax
January 30, 2023 - Bulletin Print Report
The City adopted the Earnings Tax in 1959. Since then, the City has imposed a one percent tax on the earnings of non-residents of the City "for work done or services perfo...
Civil Fraud Penalty Timely Approved By Revenue Agent's Supervisor
January 27, 2023 - Bulletin Print Report
M was indicted on two counts of tax evasion. He pled guilty to the 2000 count and the government dismissed the 2001 count. The I.R.S. sent M a notice of deficiency asserting in...
Points Paid To Refinance Mortgage Addressed
January 27, 2023 - Volume 17 Issue 18 Print Report
In 1981, A obtained a 16-percent mortgage loan (old mortgage loan) expressly for the purchase of a principal residence. On August 20, 1986, A refinanced the old mortg...
Discharged Non-Recourse Debt Is Included In The "Amount Realized"
January 27, 2023 - Bulletin Print Report
California encourages adult citizens with developmental disabilities to live in group homes. They are operated by social-service entrepreneurs like the Ps. Group homes are much...
NOLs Had To Be Carried Back
January 27, 2023 - Bulletin Print Report
TP and its affiliates filed consolidated federal and separate Virginia corporate income tax returns for the years at issue. TP reported a separate net operating loss, ("NO...
Can SPGI's Stock Repurchase Constitute A Partial Liquidation?
January 26, 2023 - Bulletin Print Report
S&P Global, ("SPGI") recently announced that it has entered into an agreement to sell its Engineering Solutions business to investment funds managed by KKR...for...
ACI Finally Pays Its Controversial Special Dividend
January 26, 2023 - Bulletin Print Report
Albertsons Companies, Inc., ("ACI"), in connection with its proposed business combination with The Kroger Company., ("KR"), declared a special dividend in O...
Adding Accrued Interest To Loan Balance
January 26, 2023 - Volume 17 Issue 17 Print Report
A state permits lending institutions to make "reverse" mortgage loans to individuals who own their own homes which they occupy as their principal residence. A reverse...
Diabetes Did Not Render A Taxpayer "Disabled"
January 26, 2023 - Bulletin Print Report
In 2017, L worked at LCEwhere he had been employed for approximately four years. L lost his job in 2017. To make ends meet, he obtained a distribution from a section 401(...
The Willens Deal Survey January 2023
January 25, 2023 - The Deal Survey: January 2023 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
"Payment" Of Interest Is Required To Secure A Deduction
January 25, 2023 - Volume 17 Issue 16 Print Report
The Battelsteins were land developers. In 1971, G, a financial institution, agreed to lend the Battelsteins more than $3 million to cover the purchase of a piece of p...
Determining A Service Member's Domicile
January 25, 2023 - Bulletin Print Report
The Alabama Department of Revenue determined that TPs' domicile during 2016 was Alabama. TPs moved to Alabama in 2014, had purchased a home, and had claimed a homestead exe...
Brokers Receive Some Relief From "PTP" Withholding Requirements
January 25, 2023 - Bulletin Print Report
Sections 864(c)(8) and 1446(f) were added to the Internal Revenue Code by the TCJA. The former provides that gain or loss of a foreign person on the sale or exchange of an inte...
Ohio Will Allow Vendors Bad Debt Deductions For Uncollectible Accounts
January 25, 2023 - Bulletin Print Report
Many retailers offer their customers store-branded private label credit cards that are issued to the customers by a financial institution. Under the typical agreement between t...
Fees Paid With Negotiable Promissory Note
January 24, 2023 - Volume 17 Issue 15 Print Report
An individual issued and delivered a negotiable promissory note to a lawyer who accepted the note in payment for legal services rendered to the individual as operator of a smal...
Cryptocurrency Donations Require A Qualified Appraisal
January 24, 2023 - Bulletin Print Report
TPA purchased units of Cryptocurrency B, ("CB"), for personal investment purposes. TPA later transferred all of herunits to CH, a charitable organization descri...
Identification Of The "Retailer" Is A Discretionary Determination
January 24, 2023 - Bulletin Print Report
Amazon fulfills orders for products sold by third-party merchants through a program it calls "Fulfillment by Amazon," ("FBA"). Amazon provides advertising,...
QSub Gain Is Realized By Parent
January 24, 2023 - Bulletin Print Report
P is an Iowa chartered bank that is 100 percent owned by A. A elected to be treated as an 'S' corporation. A made the election for P to be taxed as a qualified subchapt...
Spin-Off Motivated By Desire To Raise Capital
January 23, 2023 - Volume 17 Issue 14 Print Report
D is the common parent of an affiliated group of corporations that files a consolidated federal income tax return. D owns all of the stock of C, a State A corporation, and all...
Prematurely Filed Lawsuit Was Dismissed
January 23, 2023 - Bulletin Print Report
CB became a permanent resident of the U.S. in 2006. CB's father opened an account in her name at the Taiwan Cooperative Bank, ("TCB"). She had a financial interes...
Housing Accommodation Includible In Gross Income
January 23, 2023 - Bulletin Print Report
S received an offer of employment from R to work as an engineer at the Joint Defense Facility at Pine Gap, Alice Springs, Northern Territory, Australia, ("Pine Gap")....
Retailer Not A Guarantor Of Uncollectible Accounts
January 23, 2023 - Bulletin Print Report
TP owned and operated more than a dozen retail department stores in Washington. TP offers its customers a store-branded private label credit card that was issued to its custome...
When Is A Cryptocurrency Loss Sustained?
January 20, 2023 - Bulletin Print Report
TPA purchased units of Cryptocurrency B, ("CB"), in 2022 at $1 per unit for personal investment purposes on a cryptocurrency exchange. The per unit value decreased si...
What We Can Learn From 3M's Reverse Morris Trust Ruling
January 20, 2023 - Bulletin Print Report
LTR 202249011, May 10, 2022, is the ruling letter issued by the I.R.S. to 3M Company, ("MMM"),in connection with its "Reverse Morris Trust," ("RM...
NY Legislators Propose Surtax On Capital Gains And Mark-To-Market Levy
January 20, 2023 - Bulletin Print Report
Although Governor Hochulseems intent on not raising taxes this year, her colleagues in the New York State Legislature are not expressing such reticence. The recent setbac...
Indirect Ownership Counts For Purposes Of Sec. 1504(d)
January 20, 2023 - Volume 17 Issue 13 Print Report
P has a 52-53 week taxable year ending on the last Saturday in December. Part of P's business in Country is conducted through a holding company, SM1, which was organized un...
Vacant Land Not Eligible For Exemption
January 20, 2023 - Bulletin Print Report
The subject property is 0.295 acres of vacant land with no improvements thereon... The subject property was deeded to Rockford Baptist Church, Inc. on January 21, 2004. The sub...
Anatomy Of An "Upstream" Exchange
January 19, 2023 - Bulletin Print Report
There areobvious advantages, from a tax standpoint, to "replacing" equity with indebtedness, not the least of which is the opportunity to convert non-deductible...
Coin-Operated Laundry Facilities Create UBTI
January 19, 2023 - Volume 17 Issue 12 Print Report
TP is a private operating foundation. Grantor owns Apartment complex (AC). Grantor intends to transfer ownership of AC to TP as a donation. The AC annually generates several mi...
Education Expenditures Could Not Be Substantiated
January 19, 2023 - Bulletin Print Report
Petitioner, ("P"), has a daughter, AM, who was enrolled in post-secondary education at University College, London, ("UCL"), during the year in issue. UCL is...
Reagents Not Exempt From Sales Tax
January 19, 2023 - Bulletin Print Report
Taxpayer, ("TP"), is a provider of diagnostic testing and analytical services with locations in Virginia and throughout the United States. The auditor denied TP refun...
Disallowed Interest Reduces E&P When It Is Incurred
January 18, 2023 - Volume 17 Issue 11 Print Report
A holds a paid-up life insurance contract on his own life. X is a calendar-year C corporation unrelated to A. On the first day of Year 1, X purchases A's life ins...
Ranching Activity Entered Into For Profit
January 18, 2023 - Bulletin Print Report
Petitioners, ("Ps"), sought to diversify their business interests by acquiring a cattle ranch. Ps purchased the property for $2 million. Ps hired a foreman, RP. Withi...
Residence Is Not Synonymous With Employment
January 18, 2023 - Bulletin Print Report
On March 17, 2021, the Department assessed TP for personal income tax, penalty, and interest for the 2018 tax year. TP filed a timely written protest to the assessment. Prior t...
Lump-Sum Payment Found To Be Alimony
January 18, 2023 - Bulletin Print Report
APP and FH married in 1991 and divorced in 2002. APP and FH executed a Marital Settlement Agreement, ("MSA"), which was incorporated into a Judgment of Dissolution. S...
OTA's Function Is To Determine The Amount Of Tax Liability
January 17, 2023 - Bulletin Print Report
Appellant, ("APP"),timely filed her 2015 California tax return, reporting tax due. APP remitted timely payment of tax due when she filed the return. On March 9,...
Shareholders' Agreement Does Not Constitute "Voting Securities"
January 17, 2023 - Volume 17 Issue 10 Print Report
The taxpayer, a corporation licensed by the Small Business Administration to operate as a small business investment company, registered with the S.E.C. as a closed-en...
"COD" Income Requires A Bona Fide Debt
January 17, 2023 - Bulletin Print Report
F owned RSB. H moved from New Jersey to California around June 2011, when he began working for RSB. F purchased a residential house located in California for APPs, (the "C...
Taxpayer Must Establish Undue Hardship
January 17, 2023 - Bulletin Print Report
The Department of Revenue, (the "Department"),assessed TPs for deficient taxes...for tax year 2013. TPs appealed to the Magistrate Division of the Tax Court. Wh...
No Resident Tax Credit For Out-Of-State Franchise Taxes
January 13, 2023 - Bulletin Print Report
Taxpayers filed a Virginia resident income tax return for 2018 claiming a credit for Unincorporated Business Franchise Tax, ("UBFT"), paid to the District of Columbia...
Gain From Sale Of Land Is Ordinary Income
January 13, 2023 - Volume 17 Issue 9 Print Report
Plaintiff (A)purchased the Property (undeveloped real estate in EastPalo Alto,California) in 1987. He purchased the land for purposes of developing...
Non-Uniform Tax Assessment Was Unconstitutional
January 13, 2023 - Bulletin Print Report
The Company must pay M&T tax to the County for the machinery and tools it uses in its factory. On May 11, 2017, the Board increased the M&T tax rate to $4.24 per $100 o...
Determining An Estate Beneficiary's Constructive Ownership
January 12, 2023 - Volume 17 Issue 8 Print Report
Advice has been requested whether, for purposes of Sec. 318(a) of the Internal RevenueCode, in determining the applicability of Sec. 302(b)(2) to a redemption o...
PSX To "Roll Up" DCP
January 12, 2023 - Bulletin Print Report
Phillips 66, ("PSX"), and its "captive" MLP, DCP Midstream, L.P., ("DCP"), announced that they have entered into a definitive agreement pursuant t...
Suspended Corporation Cannot Initiate Lawsuit Regarding Its Tax Status
January 12, 2023 - Bulletin Print Report
The I.R.S. issued petitioner, ("P"), a final adverse determination letter revoking its tax-exempt status retroactively to 2016. P petitioned this court seeking a decl...
"Unearned" APTC Creates A Tax Liability
January 11, 2023 - Bulletin Print Report
Since April 2015, petitioner, ("P"), has been unemployed. Consequently, she made early withdrawals from a retirement or pension plan. P was enrolled in health insuran...
Sec. 354(a) Takes Precedence Over Sec. 453B(a)
January 11, 2023 - Volume 17 Issue 7 Print Report
T is a trust that is subjectto the provisions of Secs. 671-677 and A is the grantor of T. T holds notes (Old Notes) thatare payable by X, a corporation. T...
The "California Method" Does Not Tax Extraterritorial Income
January 11, 2023 - Bulletin Print Report
APP filed a 2016 California Non-Resident Return reporting $82,070 in Federal AGI and $75,581 of California AGI. The Franchise Tax Board, ("FTB"), received information...
"Relo" Company Is The Purchaser Of An Employee's Home
January 10, 2023 - Volume 17 Issue 6 Print Report
X, a limited partnership, is in the business of providing relocation services to employers (E). X and E will enter into an agreement pursuant to which X, upon notific...
Sweepstakes Was An Amusement Service
January 10, 2023 - Bulletin Print Report
The Texas sales tax is imposed on the sale of amusement services... Amusement services includes "the provision of amusement, entertainment, or recreation." For purpos...
Lease Agreements Found To Be Joint Ventures
January 10, 2023 - Bulletin Print Report
TP entered into contracts with convenience stores, (the "proprietors"), concerning coin-operated amusement machines, (the "machines"). The contracts reflect...
Payment Of Expenses Not Incompatible With 'B' Or 'C'
January 9, 2023 - Volume 17 Issue 5 Print Report
Pursuant to a plan of reorganization, X proposes to transfer substantially all of its properties to Y in exchange for shares of voting stock of Y followed by the dist...
Farm Machinery Not Primarily Used For Exempt Purposes
January 9, 2023 - Bulletin Print Report
P is a veterinarian about 75 percent of whose practice involves treating large animals. P tows a trailer marked "Small Animal Mobile Clinic" behind his pickup truck....
No Relief Granted For Late Filing Of A Refund Claim
January 9, 2023 - Bulletin Print Report
FICA tax is imposed on the income of every individual... Wages under a non-qualified deferred compensation plan are subject to a special timing rule. The FICA tax on wages defe...
"Book-Out" Transactions Found To Be Taxable
January 9, 2023 - Bulletin Print Report
Cook County (Illinois) taxes the sale of gasoline, diesel fuel, biodiesel fuel, and GDiesel at a retail level pursuant to the Fuel Tax Ordinance. When a distributor sells fuel...
'B' Reorganization Gives Way To Qualified Stock Purchase
January 6, 2023 - Volume 17 Issue 4 Print Report
Acquiring Corporation, (ACQ), a State A corporation, is the parent corporation of a consolidated group. Target (T) a Country B corporation, is the parent company of a...
Municipality's Tax On Remote Workers Not Unconstitutional
January 6, 2023 - Bulletin Print Report
This case stems from a provision in 2020 H.B. 197--section 29--regarding municipal taxation that the General Assembly enacted in March 2020 in response to Governor DeWine's...
Transfer Of Reversionary Interests Is Taxable
January 6, 2023 - Bulletin Print Report
The District of Columbia generally taxes the sale of real estate as a percentage of the total sale, divided equally between the buyer and seller. It does so through two differe...
Remedy For Uniformity Clause Violation Is A Refund Of Previous Taxes
January 6, 2023 - Bulletin Print Report
TP is a Delaware corporation. TP carried into the 2014 Tax Year net losses...apportioned to Pennsylvania, ("P"), in the amount of $791,244,978. For the 2014 Tax Year,...
A Financial Transaction Is Not An Unexpected Event
January 5, 2023 - Bulletin Print Report
APP held stock in CelgeneCorporation. On November 19, 2019, Bristol-Myers Squibb Company purchased Celgene Corporation in a "merger acquisition, which resulted in AP...
SPAC's Stock Issuance Should Reduce Repurchase Excise Tax Base
January 5, 2023 - Bulletin Print Report
It turns out that SPACswill not only benefit from the I.R.S.'s surprising decision to exclude liquidating distributions from the definition of a "repurchase,&quo...
Tender Offer/Merger Stepped Together To Find A Reorganization
January 5, 2023 - Volume 17 Issue 3 Print Report
P and T are widely-held, manufacturing corporations organized under the laws of State A. P seeks to acquire all of the outstanding stock of T. P initiates a tender of...
"USAC" Is Not A Federal Government Instrumentality
January 5, 2023 - Bulletin Print Report
A is a telecommunications company that provides wireless telecommunications services to consumers...including Lifeline, ("L"), services. L is a federal program design...
Merchants' Claims Were Barred By The Tax Injunction Act
January 5, 2023 - Bulletin Print Report
G is a trade association for e-commerce merchants. Members sell products through Amazon's "FBA" program. Goods are ostensibly sold by the merchant, but "fulf...
Assignable Note Includible In Gross Income
January 4, 2023 - Volume 17 Issue 2 Print Report
On January 14, 1977, the Covenantor (the CO) and the Company (the C) executed a non-competition agreement. Under this contract, the CO agreed not to compete with the...
Law Firm's Deferral Scheme Thwarted
January 4, 2023 - Bulletin Print Report
TP is a law firm organized as a partnership. TP is a cash method taxpayer. TP represents a client, ("C"), in connection with C's legal claim against a defendant,...
"Cookies" Did Not Translate Into In-State Physical Presence
January 4, 2023 - Bulletin Print Report
U was an online retailer that sold after-market automobile parts and accessories; it was headquartered in California. U did not own or lease any offices, facilities, inventory,...
Fracking Services Subject To Sales Tax
January 4, 2023 - Bulletin Print Report
D extracts crude oil on parcels that it leases from the State of Wyoming. D hired contractors to perform fracking services. Those contractors charged D sales tax on some of the...
"COBE" Not Required In A Recapitalization
January 3, 2023 - Volume 17 Issue 1 Print Report
Sec. 368(a)(1)(E) of the Code provides that a recapitalization is a reorganization. A recapitalization has been defined, succinctly, as "a reshuffling o...
Split-Off Gains Will Be Excluded From "AFSI"
January 3, 2023 - Bulletin Print Report
The I.R.S.'s guidance on the corporate alternative minimum tax, (the "CAMT"), enacted in the Inflation Reduction Act of 2022,adopts the same governing...
Tax Court Petition Was Not Timely Filed
January 3, 2023 - Bulletin Print Report
A appeals the Tax Court's dismissal of his petition to challenge a notice of deficiency...for lack of jurisdiction. The I.R.S. contends the Tax Court lacked jurisdiction ov...
"Full Retail Value" Does Not Include Sales Tax
January 3, 2023 - Bulletin Print Report
On February 11, 2020, defendant shoplifted a Play Station 4 video game console from a Kohl's department store. The price of the Play Station 4 was $299.99, exclusive of sal...
Sec. 311(a) Loss Reduced Basis And "AAA"
December 30, 2022 - Volume 16 Issue 248 Print Report
The taxpayer, A, was formed as a C corporation on Date 1. It elected 'S' status on Date 2. On Date 3, A transferred corporate-owned real estate to B, a shareholder of A...
A Casino's "PC Points" Are Akin To Airline Miles
December 30, 2022 - Bulletin Print Report
DR operates Mohegan Sun, a casino and resort in Pennsylvania. DR contends it was entitled to deductions from its gross revenue for "PC Points" it distributed to playe...
Wisconsin Resident Had Minnesota-Source Income
December 30, 2022 - Bulletin Print Report
W was a licensed physician and surgeon by the Minnesota Board of Medical Practice specializing in anesthesiology. In 2019, he was employed as a physician and received $551,214....
A Signed "Letter 950" Is Written Supervisory Approval
December 30, 2022 - Bulletin Print Report
Respondent determined deficiencies for the years at issue, as well as an addition to tax under section 6651(a)(1) and an accuracy-related penalty under section 6662(a) for each...
CVRs Should Be Excluded From The "Amount Realized"
December 29, 2022 - Bulletin Print Report
Where the parties to an acquisition are unable to agree on the value of the target (or, less frequently, on the value of the acquirer) for purposes of fixing the merger conside...
Post-Death Stock Dividends
December 29, 2022 - Volume 16 Issue 247 Print Report
This is an estate tax case in which the executor elected to value the gross estate of the decedent by valuing the property included therein on the date of decedent's death...
EITC Refunds Not Exempt From Creditor Claims
December 29, 2022 - Bulletin Print Report
On her bankruptcy schedules, M claimed exemptions in 100 percent of the tax refunds, ("Claim of Exemptions"). The Trustee objects to $4,361.00 of M's EITC tax ref...
Reliance On Tax Professional Is "Good Cause"
December 29, 2022 - Bulletin Print Report
On June 9, 2021, the Department of Revenue, (the "Department"), issued petitioners, ("Ps"), a Proposed Assessment. Under the Revenue Procedures Act, Ps had...
I.R.S. Issues Guidance On The "Repurchase Excise Tax"
December 28, 2022 - Bulletin Print Report
Section 4501 of the Internal Revenue Code, added by the Inflation Reduction Act, imposes on eac...
Refund Not Partnership "Item" Or "Property"
December 28, 2022 - Volume 16 Issue 246 Print Report
TP is an individual investor in X, a limited liability company (LLC) that is treated as a partnership. TP has a zero basis in his partnership interest. In Year 1, the LLC purch...
"At-Risk" Rules Deny Pass-Through Losses
December 28, 2022 - Bulletin Print Report
DC was classified as a partnership for U.S. federal and California income tax purposes. SS was a disregarded entity. SS was a member of DC. APP was the sole member of SS. SPM i...
Electricity And Fuel Not Subject To Sales Tax
December 28, 2022 - Bulletin Print Report
TP is a subdivision homeowners association registered in the State of Florida as a non-profit corporation that services a community of 200 residences. Each member of the associ...
Distribution From Estate Not "Retirement Income"
December 27, 2022 - Bulletin Print Report
In 2018, APP was the beneficiary of a distribution of taxable retirement benefits that were received by the estate of APP's brother. This distribution was included in APP&#...
No Waiver Of Attribution For A Director
December 27, 2022 - Volume 16 Issue 245 Print Report
A redemption agreement between the corporation and the individual shareholder provides that a total of $350x will be paid to such shareholder for all ofhis stoc...
Depreciation Found To Be "Non-Taxable Income"
December 27, 2022 - Bulletin Print Report
PO filed an application with County, ("C"), for so-called "circuit breaker" tax relief for the 2020 tax year. C denied the application. PO was domiciled in...
Aluminum Producer Purchased Tax-Exempt Supplies
December 27, 2022 - Bulletin Print Report
C manufactures aluminum. As part of that business, C purchased anode stubs, Inductotherm lining, thermocouples and tube assemblies, and welding wire and industrial gases from K...
When Must A Liquidating Corporation File Its Tax Return?
December 23, 2022 - Volume 16 Issue 244 Print Report
The question relates to the time for filing a Federal income tax return and paying the tax due thereon by a corporation that has satisfied or made provision for all o...
State Of Delivery May Impose Sales Tax
December 23, 2022 - Bulletin Print Report
Petitioner, ("P"), is an 'S' corporation headquartered in Wisconsin. P is engaged in the production and sale of printed materials...for distribution across th...
Instruments And Equipment Are Subject To Sales Tax
December 23, 2022 - Bulletin Print Report
Are Taxpayer's sales of XXXX(the "Product"), subject to Florida Sales and Use Tax when sold at retail in Florida? The answer is yes... Taxpayer sells medica...
The Minnesota Estate Tax Is Constitutional
December 23, 2022 - Bulletin Print Report
J died on November 8, 2018, as a domiciliary of Minnesota, ("M"). The sole asset of her estate is the Trust. J established the Trust upon the death of her husband in...
Volkswagen Special Distribution
December 22, 2022 - Bulletin Print Report
Volkswagen AG's shareholders overwhelmingly approved a special distribution in the amount of EUR 19.06 "per ordinary and preferred share entitled to distribution."...
The Willens Deal Survey December 2022
December 22, 2022 - The Deal Survey: December 2022 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
Retention Of Driver's License Not Determinative Of Domicile
December 22, 2022 - Bulletin Print Report
Taxpayer, ("TP"), was born in Alabama in 1988 and lived there until 2015. He moved to Jacksonville, Florida, because his child had been born there. He leased an apart...
WFC Should Score Tax Deductions For "Remediation" Payments
December 22, 2022 - Bulletin Print Report
On December 20, 2022, Wells Fargo & Company, ("WFC") issued a press release announcing that it hasreached a settlement with the Consumer Financial Protectio...
Deemed Sale Gain Not Apportionable Business Income
December 22, 2022 - Volume 16 Issue 243 Print Report
MW was a Delaware corporation with its principal place of business located in California. MW was a wholly-owned subsidiary of MP. MW was in the business of processing...
CR Is Embarking On A "Reverse Spin-Off"
December 21, 2022 - Bulletin Print Report
Crane Holdings Co., ("CR"), is proceeding towards an April 2023separation of its two principalbusinesses, its "Industrial Technology" business a...
Partnership Was The True Seller Of Real Property
December 21, 2022 - Bulletin Print Report
AWG, a limited liability company taxed as apartnership, operated a winery in Paso Robles, California.AWG had two members, YHIand WGP. WGP had four partners, K...
Certificates Treated As Equity Interests
December 21, 2022 - Volume 16 Issue 242 Print Report
Y is a farmer's cooperative association which markets and processes agricultural productson behalf ofits members. Its member-patrons possess membershi...
College Student Did Not Change Domicile
December 21, 2022 - Bulletin Print Report
Two classes of residents, a domiciliary resident and an actual resident, are set forth in section 58.1-302. The domiciliary residence of a person means the permanent place of r...
Delayed Payment Classified As "Boot"
December 20, 2022 - Volume 16 Issue 241 Print Report
In 1951, D received a cash payment of approximately $12,000 from CBSI. The question is whether that payment was taxable as a long-term capital gain or was ordinary in...
Heavy Equipment Is Not "Motor Vehicles"
December 20, 2022 - Bulletin Print Report
Heavy equipment sales and rentals are generally subject to sales tax under Tax Rule GR-15.2. The rentals at issue involved excavators, boom lifts, and buggies. Exemption is lim...
Nebraskans Failed To Prove A Change In Domicile
December 20, 2022 - Bulletin Print Report
The As filed Nebraska, ("N"), income tax returns claiming status as non-residents of N. The Department sent the As notices of proposed deficiencies. Each of the As ow...
New Orleans Gallonage Tax Not Properly Imposed
December 20, 2022 - Bulletin Print Report
TP is a wholesale dealer of High Alcoholic Content Beverages, ("HACB"). TP has obtained licenses and permits from the State and from Jefferson Parish, ("JP"...
Reacquisition Of Improvements To Realty Governed By Sec. 1038(a)
December 19, 2022 - Volume 16 Issue 240 Print Report
In September 1976, PMC, which was wholly owned by petitioners, opened escrow on 11.3 acres of land in California. In May 1977, petitioners assumed PMC's position...
Bundled Transaction Found Subject To California Sales Tax
December 19, 2022 - Bulletin Print Report
APP operates an automated teller machine, ("ATM"), network in this state. APP enters into Franchise Agreements with franchisees. An ACFNbusiness consists of the...
Artist Was Not An "Occasional Seller" Of Property
December 19, 2022 - Bulletin Print Report
For tax year 2018, DC filed Schedule C forms as part of his federal personal income tax returns. The Schedule C reported business income. The taxpayer did not file gross receip...
Charter Communications Was Not A "Qualified New York Manufacturer"
December 19, 2022 - Bulletin Print Report
On their combined returns, petitioners calculated their franchise tax on the entire net income base using the reduced tax rate as a "qualified emerging technology company....
MSGE Revises Its Spin-Off Plan
December 16, 2022 - Bulletin Print Report
Madison Square Garden Entertainment Corporation, ("MSGE"), has tweaked the spin-off plan it announced in October, although the manner in which the spin-off will be ef...
Retainers Are Prosthetic Devices
December 16, 2022 - Bulletin Print Report
Taxpayer, ("TP"), operates an orthodontic practice in Indiana. Post-treatment retainers are provided for every comprehensiveorthodontic patient to maintain stab...
Redemption Cannot Pass Muster Under Sec. 302(b)
December 16, 2022 - Volume 16 Issue 239 Print Report
SHA owned, directly, 50 percent of the stock of Y. As a result of family attribution, SHA is considered to own approximately 94 percent of the stock in X. It is plann...
Fees For "Idle Time" Not Subject To Sales Tax
December 16, 2022 - Bulletin Print Report
Sales and use tax is imposed on the sales at retail...in this state. Tangible personal property is personal property which may be seen, weighed, measured, felt or touched, or i...
When Are Bonds Considered "Substantially Identical?"
December 15, 2022 - Bulletin Print Report
On September 30, 2022, the New York Times reported that "this year is the most devastating period for bonds since at least 1926...and that bond investors are experiencing...
Consultant Secures A Business Bad Debt Deduction
December 15, 2022 - Volume 16 Issue 238 Print Report
In Date a, A contacted TP with a business proposition regarding the acquisition and management of Corp. B (B), a manufacturer of C. A formed N for the purpose of acqu...
Annuities Are Included In "Disposable" Income
December 15, 2022 - Bulletin Print Report
For 2019, Owner had in place a senior citizen property tax exemption for the subject property at income threshold one. The Assessor determined that Owner's 2020 income requ...
A Temporary Work Assignment Does Not Defeat NY Residency
December 15, 2022 - Bulletin Print Report
The issue is whether petitioner, who admittedly spent more than 183 days within New York City, ("NYC"), in 2017, maintained a permanent place of abode that resulted i...
Dissenters' Stock Is No Longer Outstanding
December 14, 2022 - Volume 16 Issue 237 Print Report
C is aState W corporation that performs services for both the government and the private sector. At present, 68,300 shares of C common stock are held by current...
New California Resident Scores A "Free" Basis Step-Up
December 14, 2022 - Bulletin Print Report
An Australian software magnate who had become, to his consternation, a California resident was awarded a lucrative consolation prize, what amounted to a "cost-free,"...
Taxpayer Qualified For The "M&E" Exemption
December 14, 2022 - Bulletin Print Report
TP manufactures custom component parts for industrial equipment and provides equipment repair and refurbishing services. Repairs may require replacement components. TP may fabr...
Certain Medical Examinations Are Subject To Sales Tax
December 14, 2022 - Bulletin Print Report
Worker's compensation is a state-regulated insurance program that pays medical bills and replaces some lost wages for employees who are injured at work or who have work-rel...
New Jersey To Take Action Against Its Neighboring States
December 13, 2022 - Bulletin Print Report
The New Jersey Legislature appears certain to enact, in early 2023, a tax bill that will go a long way to ending, or at least mitigating,its "second-class" stat...
"Right-Of-Use" Assets Are Intangible In Nature
December 13, 2022 - Bulletin Print Report
The Financial Accounting Standards Board, ("FASB"), has updated its accounting standards for leases. FASB requires privately-held companies...to follow Accounting Sta...
Taxpayer Denied Warehouse Tax Incentive
December 13, 2022 - Bulletin Print Report
TP is a manufacturer, wholesaler, and retailer of medical supplies. TP submitted Warehouse Tax Incentive applications...requesting remittance of sales and use tax paid for cost...
Seller Recognizes Gain On Repossession Of Real Property
December 13, 2022 - Volume 16 Issue 236 Print Report
Petitioner (P) purchased his personal residence and the surrounding 80 acres of land ("property") in 1966 for $25,000. On July 11, 2006, P agreed to sell th...
Twitter, Inc. Has Gone Private
December 12, 2022 - Bulletin Print Report
On October 27, 2022, a corporation, "Merger Sub," a wholly-owned subsidiary of "Parent," each such corporation recently created by Mr. Elon R. Musk, ("...
Status Of Property Is Determined On "Tax Day"
December 12, 2022 - Bulletin Print Report
Petitioner acquired the subject property pursuant to a donation agreement on April 12, 2021. Respondent subsequently levied summer and winter taxes against the subject property...
Environmental Protection Payments Excluded From Gross Income
December 12, 2022 - Bulletin Print Report
Suffolk County (N.Y.) is experiencing degraded water quality as a result of excess nitrogen and nitrogen pollution. To address the adverse effects of nitrogen pollution...Suffo...
Determining The Basis Of Stock Received In A Sec. 351 Exchange
December 12, 2022 - Volume 16 Issue 235 Print Report
A, an individual, was engaged in business as a sole proprietor. The assets of the proprietorship consisted of accounts receivable with a basis of zero and fair market...
"Agricultural Use" Not Found
December 9, 2022 - Bulletin Print Report
In 2013, TPs submitted an application, (the "Application"). The Application sought to dedicate 32.406 acres on the Parcel to the ranching of "off site feed"...
Who "Manufactured" Polaroid Cameras?
December 9, 2022 - Volume 16 Issue 234 Print Report
Sec. 3406(a)(4) of the 1939 Code provided: "There shall be imposed on the following articles, sold by the manufacturer, producer, or importer, a tax....cameras.....
"Living Within The Boundaries" Not Synonymous With "Domicile"
December 9, 2022 - Bulletin Print Report
At issue is whether TP is entitled to the income tax exemption set forth in NMSA 1978, section 7-2-5.5 (1995), which provides that income earned by a tribal member is exempt fr...
COVID-Era Method Of Taxation Is Constitutional
December 9, 2022 - Bulletin Print Report
C is a resident of ST and is employed in the petroleum refining industry with a usual place of business in O. From March 15, 2020 to thistime the complaint was filed, C w...
Sales Tax Credit Was Properly Denied
December 8, 2022 - Bulletin Print Report
On October 3, 2018, Taxpayer purchased a Trailer. Taxpayer registered the vehicle with the Department on October 25, 2018. The Trailer was purchased by, and is titled in, the n...
Los Angeles Has A New "Mansion" Surtax
December 8, 2022 - Bulletin Print Report
Los Angeles voters, overwhelmingly,approved a new tax on high end real estate transfers. The proceeds from the tax, estimated to be anywhere from $600 million to $1 billi...
Litigation Settlement Ruled Tax-Free
December 8, 2022 - Volume 16 Issue 233 Print Report
C and D, individuals, entered into an oral contract with H, an individual. H agreed to manage the business of C and D, taking a significant reduction in salary in the...
"Streamers" Are Able To Avoid Franchise Fees
December 8, 2022 - Bulletin Print Report
N and H are video-content providers that stream on-demand shows and movies to their subscribers over the Internet. Because N and H make their content available through the publ...
How To Compute The Basis Of "Qualified Replacement Property"
December 7, 2022 - Volume 16 Issue 232 Print Report
In 1942, plaintiff acquired improved real property. On February 2, 1966, the Department of Highways purchased that property from the plaintiff for $125,300 in cash. According t...
"COP" Rule Used To Determine Florida Sales Factor
December 7, 2022 - Bulletin Print Report
TEI is a subsidiary of T. Both are headquartered in Minnesota. TEIearns revenue from providing services to T and certain other third parties. In 2011, TEI and T entered i...
Taxpayer's "VSC" Sales Were Wholesale Sales
December 7, 2022 - Bulletin Print Report
P's business involves entering into vehicle service contracts, ("VSCs"), with buyers of vehicles and then administering those VSCs. The VSCs are extended warranti...
Tax Abatement Agreement Not Found
December 7, 2022 - Bulletin Print Report
TEX. LOC. GOV'T CODE ANN. section 381.004(b) authorizes "the commissioners court of the county to develop and administer a program...for state and local economic devel...
When Are Shares No Longer Outstanding?
December 6, 2022 - Volume 16 Issue 231 Print Report
P is the common parent of an affiliated group filing a consolidated federal income tax return. S is a member of P's affiliated group. P owns 100 percent of the common stock...
Fuel Surcharges Are Subject To Sales And Use Tax
December 6, 2022 - Bulletin Print Report
Retailers selling tangible personal property at retail may or may not charge their customers for delivering merchandise via their own vehicle. However, when fuel costs increase...
Transfer To Trust Terminates Property Tax Relief
December 6, 2022 - Bulletin Print Report
At issue is whether Mr. B's transfer of the "subject property" to the Trust made him ineligible for taxpayer relief pursuant to TENN. CODE ANN. section 67-5-702(a...
Taxpayer's "ESA" Payment Was Timely
December 6, 2022 - Bulletin Print Report
This case involves the issue of whether petitioner, ("P"), complied with the statutory requirements of the Eligible Manufacturing Personal Property, ("EMPP"...
Depositors Have The Rights Of Shareholders
December 5, 2022 - Volume 16 Issue 230 Print Report
X and Y, both organized in State R, have operated continuously for many years as mutual savings banks. Neither had any capital stock outstanding, nor were there any other writt...
Absence Of A "Return" Prevented Discharge Of Tax Debts
December 5, 2022 - Bulletin Print Report
K failed to file income tax returns when due for 1997 and 2000. Nor did he pay the taxes that were owed. In March 2003, the I.R.S. assessed the tax believed to be due for 1997....
Deeded Property Subject To Inheritance Tax
December 5, 2022 - Bulletin Print Report
The parties stipulated decedent "deeded" the property to C by a series of deeds from 1992 to 1995. The parties further stipulated decedents continued to control and f...
Mayo Clinic Is An "Exclusively Educational Organization"
December 5, 2022 - Bulletin Print Report
In 1965, the I.R.S. determined that Mayo Clinic, ("MC") was a tax-exempt entity under section 501(c)(3) of the Internal RevenueCode. On February 28, 1969, MC me...
Who Is The "Manufacturer" Of Medical Device?
December 2, 2022 - Volume 16 Issue 229 Print Report
C1 produces "Device" for C2 pursuant to License Agreement. Device is a taxable medical device described in Sec. 4191(b) of the Code. Sec. 48.0-2(a)(4)(i) of the Manuf...
Challenge To Mandatory Repatriation Tax Dismissed
December 2, 2022 - Bulletin Print Report
Appellants' Petition for Rehearing En Banc is DENIED. Four judges dissented. At the Founding, the dissenters noted, for a direct tax to be constitutional, the federal gover...
Tier 1 Railroad Retirement Benefits Are Not Workmen's Compensation
December 2, 2022 - Bulletin Print Report
S worked for 33 years for Metro-North, ("MN"), until hisretirementin 2015. He retired following diagnosis and surgery for colon cancer. Upon his retiremen...
Video Service Not Provided
December 2, 2022 - Bulletin Print Report
In 2008, the Tennessee, ("T"), General Assembly enacted the Competitive Cable and Video Services Act, (the "Act"). The Act requires "any entity...seeki...
General Electric Will Retain 19.9 Percent Of HealthCare Shares
December 1, 2022 - Bulletin Print Report
General Electric Company, ("GE"), announced that its Board of Directors has approved the spin-off of its health care business, ("GE HealthCare"). GE HealthC...
CFC Partners Hold U.S. Property Held By Another Partner
December 1, 2022 - Volume 16 Issue 228 Print Report
USP is the common parent of an affiliated group of corporations that file a consolidated income tax return. Throughout Tax Year 1, USP indirectly wholly owned numerous controll...
When Are Tax Credits "Awarded"
December 1, 2022 - Bulletin Print Report
In 2015, plaintiffs, ("Ps"), installed solar panels on their home and received a Residential Energy Tax Credit, ("RETC)", totaling $6,000. Ps' RETC appl...
NASCAR's Receipts Are Not "Sitused" To Ohio
December 1, 2022 - Bulletin Print Report
The Ohio General Assembly enacted the Commercial Activity Tax, ("CAT"), in 2005. The CAT is imposed on "taxable gross receipts for the privilege of doing busines...
PKN Orlen To Acquire Oil And Gas Producer
December 1, 2022 - Bulletin Print Report
One of the world's largest companies, PKN Orlen, recently acquired, as a complement to its oil refining business, the assets, subject to the liabilities, of an oil and gas...
Can We Insure “Exchange” Treatment of Pre-Merger Distributions?
November 30, 2022 - Bulletin Print Report
One of more enduring issues faced by tax advisors who travel in the mergers and acquisitions space is the proper classification, for federal income tax purposes, of what we can...
A REIT's Swap Income Is Not Included in Gross Income
November 30, 2022 - Volume 16 Issue 227 Print Report
TP has elected to be taxed as a Real Estate Investment Trust, (REIT). S is wholly-owned by TP and has elected to be taxed as a "taxable REIT subsidiary" und...
Damages For Emotional Distress Not Excludible From Gross Income
November 30, 2022 - Bulletin Print Report
In September 2009, Chicago State University, ("CSU"), hired T as project director of a federal grant that CSU had received. T expressed concerns to the U.S. Departmen...
Tenancy By The Entireties Equated To Right Of Survivorship
November 30, 2022 - Bulletin Print Report
The As created the Trust on August 17, 2004. The As created the Trust to qualify as a "grantor trust." The Trust provided that the As would be the trustors and truste...
STAR In-Kind Dividend Update
November 29, 2022 - Bulletin Print Report
Following up on yesterday's bulletin, iStar, Inc., ("STAR"), has announced the pr...
Substitution Of Obligor Not A Significant Modification
November 29, 2022 - Volume 16 Issue 226 Print Report
D and C are both Country A corporations. Neither is required to file a U.S. federal incometax return. On Date M, D distributed pro rata to its shareholders all...
Cost Of Performance Properly Used To Determine Fair Value Of Services
November 29, 2022 - Bulletin Print Report
Texas imposes a franchise tax on each taxable entity that does business in the state. A taxable entity's franchise tax obligation is determined by multiplying the "tax...
Premature Attempt To Redeem Delinquent Property Not Penalized
November 29, 2022 - Bulletin Print Report
Plaintiff, ("GK"), purchased a tax sale certificate on a condominium unit in North Bergen, New Jersey, owned by defendant, GC. After waiting the full two years requir...
Recast Transaction Treated As Consecutive Spin-Offs
November 29, 2022 - Bulletin Print Report
Foreign Parent is the parent of a large, worldwide group of business entities. Foreign Parent owns FDE1, which owns FDE 2, which owns FDE 3. Parent is a domestic corporat...
Retroactive Changes To The I.R.C. Produce A State Tax Refund
November 28, 2022 - Bulletin Print Report
A Colorado taxpayer's state income tax liability begins with their "federal taxable income, as determined pursuant to section 63 of the internal revenue code." Th...
STAR To Disburse An "In-Kind" Dividend
November 28, 2022 - Bulletin Print Report
The merger of Safehold, Inc., ("SAFE"), and iStar, Inc., ("STAR"), was already a rather complicated affair. It just got even more complex. To recap, STAR cu...
Absence Of Income Does Not Preclude A Finding Of An "ATB"
November 28, 2022 - Bulletin Print Report
Distributing is a privately held corporation engaged in "Business." Business includes conducting research and development activities for the production of Product X a...
One's Only Residence Is His Principal Residence
November 28, 2022 - Volume 16 Issue 225 Print Report
At the time of his mother's passing, petitioner's sister lived in the Elmsford (N.Y.)home (EH), while petitioner lived in a New York City apartment. In...
Pandemic Did Not Excuse Failure To Appeal
November 25, 2022 - Bulletin Print Report
Plaintiff challenges the value of property...for the 2020-21 tax year. Defendant moves to dismiss Plaintiff's appeal of the 2020-21 tax year because plaintiff failed to app...
Payroll And Property Must Be Considered Together
November 25, 2022 - Bulletin Print Report
In 2001, Avnet, Inc., ("AI"), instituted a program to securitize its accounts receivable. It did so by selling its accounts receivable to a wholly owned subsidiary, &...
Waived Dividend Does Not Produce "Constructive" Dividend Income
November 25, 2022 - Volume 16 Issue 224 Print Report
M is an insurance holding company. M has outstanding common stock that is widely-held and publicly traded. M also has outstanding shares of preferred stock consisting...
Taxpayer Denied Special Assessment Ratio
November 25, 2022 - Bulletin Print Report
When a property is classified as residential, it receives a special assessment ratio of four percent, rather than the default six percent ratio. The four percent ratio is appli...
Partnerships Are An “Aggregate” For Spin-Off Purposes
November 23, 2022 - Bulletin Print Report
Incentive Payments Are Not A Rebate
November 23, 2022 - Volume 16 Issue 223 Print Report
Auto manufacturers offer "Facility Image Upgrade Programs" (P). To provide an incentive for a dealership to participate in P, a manufacturer may offer "...
Property Tax Increase Not Subject To Referendum
November 23, 2022 - Bulletin Print Report
The petitioners ask us to decide whether "a property tax increase by a school district is subject to a referendum..." Article VI, section 1 of the Utah Constitution p...
Toyota Prius Prime Not Eligible For Use Tax Exemption
November 23, 2022 - Bulletin Print Report
TP purchased a new 2021 Toyota Prius Prime XLE, (the "Vehicle"), from a Toyota auto dealer...located in Oregon in 2020. It had a Hybrid Synergy Drive System, ("H...
Roadside Services Do Not Alter Or Improve The Vehicle
November 22, 2022 - Bulletin Print Report
B provides...roadside services to drivers in Wyoming, ("W"). B has nevercollected sales tax on these services. The Department of Revenue, ("DOR"), det...
Transportation Companies Not Exempt From Texas Franchise Tax
November 22, 2022 - Bulletin Print Report
S initiated administrative proceedings seeking a refund claim for franchise tax paid... The trial court granted the State's motion for summary judgment and denied S's m...
Purchases Allocated To The Government Not Subject To Sales Or Use Tax
November 22, 2022 - Bulletin Print Report
O is a Wisconsin corporation. O incurred various expenses for indirect materials that were allocated to the "Five Government Contracts." O was assessed UTAor pa...
I.R.S. Reclassifies What Is In Form A Charitable Contribution
November 22, 2022 - Volume 16 Issue 222 Print Report
In 1966, Y, a taxable corporation, paid dividends to its sole shareholder, Z, an organization exempt under Sec. 501(c)(3) of the Code as a charitable organization. In...
Attorney Had Priority Lien Against Qui Tam Funds
November 21, 2022 - Bulletin Print Report
The issue in this False Claims Act, ("FCA"), case is who gets priority over funds obtained through a partial settlement of the case: is it the government...or the pla...
Residential Property Not Held For Investment
November 21, 2022 - Bulletin Print Report
The Trust was created on July 20, 2006 by the Bs to hold title to land, (the "LAp"). The Bs used the LApto collateralize a $3 million mortgage...to finance cons...
The Willens Deal Survey November 2022
November 21, 2022 - The Deal Survey: November 2022 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
FNF's "Imperfect" Spin-Off
November 21, 2022 - Bulletin Print Report
Fidelity National Financial, Inc., ("FNF"), has a well-deserved reputation forcreativity both in terms of its capital structure and the ways in which it chooses...
Dominant Motivation Finding Yields Business Bad Debt Deduction
November 21, 2022 - Volume 16 Issue 221 Print Report
In 1980, L founded AFS. The purpose of ASF was to provide and install alternative fuel systems. L was the principal shareholder of AFS. He was also the chairman of th...
Uber's "Safe Rides Fee" Is Subject To Sales Tax
November 21, 2022 - Bulletin Print Report
Beginning April 2014, Riders paid Uber a "Safe Riders Fee" on trips facilitated by and through the Uber App. From July 23, 2012 until March 2014, Uber did not charge...
Contribution Made Within 60 Days Of Withdrawal Is A "Rollover"
November 18, 2022 - Volume 16 Issue 220 Print Report
H developed technology in the late 1990s and licensed the technology to several related companies. He made secured loans to two of these companies in 2006 and 2007. T...
A Lease Tax Was Not An Ad Valorem Tax
November 18, 2022 - Bulletin Print Report
L filed suit against P alleging that the parties' lease agreement required P to pay a certain tax imposed by the City of Chicago on the lease of personal property. The circ...
Moving Expense Reimbursement Found To Be Taxable
November 18, 2022 - Bulletin Print Report
On his 2018 Virginia, ("V"), resident individual income tax return, TP claimed a subtraction for moving expenses that were paid for by his employer during the 2018 ta...
The Braves Are Set To Become A Rare "Pure Play" Sports Franchise
November 17, 2022 - Bulletin Print Report
Investors have been anticipating this day for quite some time, and now it has finally arrived. Liberty Media Corporation, ("LMC"), has announced that its board of dir...
Developer Not Entitled To Capital Gains Treatment
November 17, 2022 - Volume 16 Issue 219 Print Report
GB and DD formed GF in September 2002. In November of that year, GF purchased, for approximately $3.2 million, 1,982 acres of land in Florida (the GFp). Petitioners s...
City Had No Right Of Action Against Netflix And Hulu
November 17, 2022 - Bulletin Print Report
The Arkansas Video Service Act, (the "VSA"), establishes a state wide franchising scheme for authorizing video service providers to provide services in political subd...
Reasonable Cause For Failure To File Found
November 17, 2022 - Bulletin Print Report
Taxpayer is a physician with specialties in Critical Care and Cardiology.Between February 1 and June 25, 2021, Taxpayer served in a voluntary deployment to NYC Health + H...
Property Owner Found Exempt From Income Taxes
November 17, 2022 - Bulletin Print Report
C is engaged in the business of selling and developing real estate. C sought an income tax exemption pursuant to R.C. 715.72(Q). The trial court found that C was exempt from in...
MMX Acquisition Appears To Be Taxable
November 16, 2022 - Bulletin Print Report
Triple Flag Precious Metals Corporation, ("TFPM") and Maverix Metals, ("MMX"), each a Canadian corporation, announced that they have entered into a definiti...
Court Enjoins Student Loan Discharge Program
November 16, 2022 - Bulletin Print Report
This case centers on the plaintiff States' request to preliminarily enjoin the Secretary of Education from implementing a plan to discharge student loan debt. The district...
"Bausch & Lomb" Doctrine Prevents a 'B' Reorganization
November 16, 2022 - Volume 16 Issue 218 Print Report
X corporation, ("X"), owned all of the outstanding stock of Y corporation, ("Y"). Y owned in excess of 80 percent of the outstanding stock of Z co...
Court Cannot Entertain Challenge To The "GILTI" Regulations
November 16, 2022 - Bulletin Print Report
Plaintiffs, ("Ps"), challenge regulationseffecting the TCJA's provisions revising the "GILTI" of certain controlled foreign corporations. On June...
Issuer Of Extended Warranties Is An Insurance Company
November 15, 2022 - Volume 16 Issue 217 Print Report
TP is a partnership operating under the laws of State N. TP is engaged in the business of selling equipment to commercial customers. TP is forming a wholly-owned subs...
Responsible Party Tax Assessment Not Time-Barred
November 15, 2022 - Bulletin Print Report
GD, a corporation, operated a bar in Kansas City. T was the owner and an officer of GD before he passed awayin December 2015. The director made additional assessments aga...
Vacation Pay And Termination Pay Subject To Virginia Taxation
November 15, 2022 - Bulletin Print Report
During 2018, Taxpayers, a husband and wife, were residing in Virginia when the husband separated from his Virginia employer. He received both severance pay and pay for unused v...
"Unusual Condition(s)" Requires Revaluation Of Property
November 15, 2022 - Bulletin Print Report
In May 2020, after receiving their 2020 property valuations, the taxpayers sent a letter to Weld County's assessor requesting revaluation of their properties under the unus...
Platform Credits Are Not Subject To Sales Tax
November 14, 2022 - Bulletin Print Report
Company, ("C"), enables people, ("Viewers"), to watch streaming videos on C's Internet-based platform, ("Platform"). Viewers can view real-tim...
Deductions And Credits Denied For Want Of A Profit Motive
November 14, 2022 - Bulletin Print Report
O bought solar lenses through a program created by J. Under the program, J would use the lenses in a new system to generate electricity... J never finished the system. J funded...
Transfer Of Funds To Charity Not Deductible
November 14, 2022 - Volume 16 Issue 216 Print Report
Prior to 1959, the taxpayer was owned by SR (75 percent) and byPB (25 percent). Following SR's death in 1959, his stock was transferred to the SR Foundation...
Retained Shares Used To Satisfy Recently-Incurred Debt
November 14, 2022 - Bulletin Print Report
D retained the "Retained Shares." See section 355(a)(1)(D). D generally will use the Retained Shares to satisfy debt. D has determined that the Retention furthers wha...
A Corporation In "Run-Off" Mode Is Still An Insurance Company
November 11, 2022 - Volume 16 Issue 215 Print Report
On Date 1, the "B" court entered an order finding Taxpayer, (TP), to be "insolvent" and as a consequenceplaced TP into "rehabilitation&...
Any Appeals And Petitions Toll The Statute Of Limitations
November 11, 2022 - Bulletin Print Report
For the six-year period from 1986 through 1991, W did not pay federal income taxes. In October 1994, W late-filed his tax returns for those years. The I.R.S. made tax assessmen...
ALKS To Pursue Spin-Off Of Oncology Business
November 11, 2022 - Bulletin Print Report
Alkermesplc, ("ALKS"), announced approval by its Board of Directors "to explore separating its commercial stage neuroscience business an...
Membership Dues Subject To Sales Tax
November 11, 2022 - Bulletin Print Report
The Club is a federal tax-exempt entity. The Club collected and remitted sales tax on monthly membership dues collected from Club membersand also on charges for meals and...
Pre-Revenue Corporations Are Not Active For Helen Of Troy Purposes
November 10, 2022 - Bulletin Print Report
FA conducts research and product development. FA will acquire all the USC stock from USSHin exchange for newly-issued FA stock pursuant to a reorganization described in s...
An "Induced" Split-Off Is A "True Bargain Transaction"
November 10, 2022 - Bulletin Print Report
Although a pro-rata spin-off remains the most popular methodfor a corporation to divest itself, tax-efficiently, of a suddenly incompatible business, some distributing co...
The "Forward Cash Merger" Is Alive And Well In REIT-Land
November 10, 2022 - Bulletin Print Report
An acquisition technique that had, at one time, occupied a prominent place in an investment banker's arsenal, the "forward cash merger," was relegated to relative...
Dividends Qualify For The "Same Country" Exception
November 10, 2022 - Volume 16 Issue 214 Print Report
X is a publicly held domestic corporation. X owns all of the stock of Y, a domestic corporation. Prior to Date 1 of Year 1, X owned all of the stock of Z, a corporation o...
Difficulty Of Care Payments Are Subject To FICA And FUTA Tax
November 9, 2022 - Bulletin Print Report
A parent who is an individual service provider to his or herdisabled child received in-home care payments from a State program. A 2002 Field Service Advisory, 2002 WL 131...
Sale Of Portion Of Business Line Produced "Operational" Income
November 9, 2022 - Volume 16 Issue 213 Print Report
Elan Corporation plc (P) is an Irish public limited company headquartered in Ireland. It is a worldwide pharmaceutical company. P conducted operations through two primary busin...
Section 1398 Does Not Apply To Corporations
November 9, 2022 - Bulletin Print Report
EFI was incorporated in 1991. EFI made a valid election to be treated as an 'S' corporation. Petitioners held a tenpercent interest in EFI, while petitioners'...
Weather Forecasting Services Not Subject To Sales Tax
November 9, 2022 - Bulletin Print Report
TP provides forecasting to its clients. The forecasting may include location specific forecasts, advance notice and assessment of severe weather threats, severe weather alerts,...
IAA To Move North Of The Border
November 8, 2022 - Bulletin Print Report
Ritchie Brothers Auctioneers, Inc., ("RBA"), a Canadian corporation, and IAA, Inc., ("IAA"), a domestic corporation, have entered into a definitive agreemen...
Parent And Subsidiary Not Related At The Relevant Time
November 8, 2022 - Volume 16 Issue 212 Print Report
P owns S. On Date 1, P formed HS, by transferring "$a" to HS in exchange for "b" shares of HS stock. On Date 2, HS filed a registration statement with the S...
Out-Of-State Law Firm Had Substantial Nexus With Washington
November 8, 2022 - Bulletin Print Report
TP is an out-of-state law firm specializing in legal services related to the procurement of patents from the USPTO. TP provides legal services to customers headquartered in Was...
Injectable Medication And Injectable Biologics Are Subject To Sales Tax
November 8, 2022 - Bulletin Print Report
Is the sale at retail of an injectable medication or injectable biologic for use in a hospital or an independent surgery center exempt from sale and use tax under Code section...
Patronage Dividends Excluded From REIT's Gross Income
November 7, 2022 - Volume 16 Issue 211 Print Report
TP elected to be treated as a REIT. TP's primary business is to own and manage timberlands. In Year 1, TP entered into a credit agreement. In Year 5, TP borrowed "$b&q...
The DTA Cannot Consider Facial Constitutional Challenges
November 7, 2022 - Bulletin Print Report
On April 13, 2017, J filed an electronic request for an extension of time within which to file her New York State personal income tax return for 2016. She filed her return on S...
Benefit Of Services Received At A Customer's Residence
November 7, 2022 - Bulletin Print Report
TP provides professional genealogical services to individuals. Audit attributed TP's gross receipts to the state of each customer's residence because Audit determined t...
Unrestricted Right To Income Bars Application Of Section 1341
November 7, 2022 - Bulletin Print Report
The trust was established as a revocable trust. It became an irrevocable trust upon the death of the decedent. Before his death, the decedent transferred his assets to the trus...
Ligand Pharmaceuticals Entrusts OmniAb To A SPAC
November 4, 2022 - Bulletin Print Report
We have seen an inordinate number of special purpose acquisition companies, ("SPACs"), "throw in the towel" and announce their intention to liquidate due to...
Sec. 338(h)(10) Incorporates a Sec. 332 Liquidation
November 4, 2022 - Volume 16 Issue 210 Print Report
P is a domestic corporation that conducts a life insurance business. All of P's stock is owned by H. T is a domestic corporation that conducts a life insurance bu...
Property Tax Payment Service "Relates To Real Property"
November 4, 2022 - Bulletin Print Report
TP performs residential real estate property tax payment services for banks, mortgage companies and other financial institutions, ("Lenders"). TP maintains a database...
"Inflation Fees" Are Subject To Sales Tax
November 4, 2022 - Bulletin Print Report
As a result of recent inflationary times, some retailers are adding a separate fee to a customer's invoice or receipt in order to recover some or all of their increased ope...
EMR Should Plan On Incurring A Large "Minimum" Tax Liability
November 3, 2022 - Bulletin Print Report
Emerson Electric Co., ("EMR"), and Blackstone, Inc., ("BI"), announced a transformative transaction that has as its objective the placing of EMR's...
10 Percent "Additional" Tax Imposed on Plan Distributions
November 3, 2022 - Volume 16 Issue 209 Print Report
The taxpayer, W, an individual,had beena full-time employee of the Association of American Medical Colleges (AAMC) from March 1, 1981 until her retirement...
Interest On "MBS" Subject To "B&O" Tax
November 3, 2022 - Bulletin Print Report
TP is a financial institution. TP earned interest income on investments in mortgage-backed securities, ("MBS investments"), and home equity conversion mortgage-backed...
ABMD Shareholders Will Receive CVRs
November 2, 2022 - Bulletin Print Report
Johnson & Johnson, ("JNJ"), and Abiomed, ("ABMD"), announced that they have entered into a definitive agreement under which JNJwill acquire, throu...
EMR To Employ Leveraged Partnership Divestiture Technique
November 2, 2022 - Bulletin Print Report
On October 30, 2022, Emerson Electric Co., ("EMR"), "BCP Emerald," a Delaware limited partnership formed by investment funds managed by affiliates of Blacks...
Stock Dividend Costs Are Capital In Nature
November 2, 2022 - Volume 16 Issue 208 Print Report
TP is a public utility organized under the laws of West Virginia. Its stock is widely held and it consistently paid cash dividends to shareholders. To retain addition...
Post-Transfer Stock Dividend Includible In Gross Estate
November 1, 2022 - Volume 16 Issue 207 Print Report
In January 1979, D, the decedent, gratuitously transferred 500 shares of stock of X to A. The stock of X is publicly traded. In December 1979, X declared a stock divi...
Refunds Are Not Final Determinations
November 1, 2022 - Bulletin Print Report
Before their marriage on May 16, 2015, petitioners, ("Ps"),separately enrolled in health insurance for taxable year 2015 through ALIC, which they purchased thro...
Student Loan Relief Plan Did Not Cause Injury
November 1, 2022 - Bulletin Print Report
Plaintiff is a Pell Grant recipient who has taken out federal student loans. To pay back his student loans, plaintiff utilizes an income-driven program and intends to seek forg...
Flagstar Is Not Sure How Its Special Dividend Will Be Characterized
October 31, 2022 - Bulletin Print Report
In May 2021, New YorkCommunity Bancorp, Inc., ("NY"), and Flagstar Bancorp, Inc., ("FB"), entered into a definitive merger agreement pursuant to which...
Statutory Conversion Not Subject To Real Estate Transfer Tax
October 31, 2022 - Volume 16 Issue 206 Print Report
In 1969, ABCRT was formed as a Massachusetts Business Trust to hold a single piece of real estate located in New Hampshire. The sole beneficiary of the trust is XYZLP...
Rare Approval Of Alternative Apportionment Method Granted
October 31, 2022 - Bulletin Print Report
In 2019, TP received a favorable ruling authorizing the use of an alternative apportionment method. C1 is a partnership. C1H, formerly C2, is a disregarded limited liability co...
Employees Not "Injured" By Employer's Failure To Remit Withheld Taxes
October 31, 2022 - Bulletin Print Report
Plaintiffs, ("Ps"), worked as delivery drivers for E, a service provider for FedEx. Ps allege that their supervisor told them he was withholding part of their weekly...
Leased Employees Not Included in Payroll Factor
October 28, 2022 - Volume 16 Issue 205 Print Report
TP is an out-of-state holding company which owns a 100 percent membership interest in several limited liability companies. The limited liability companies are disrega...
Receipts From Sale Of Goodwill Excluded From Sales Factor
October 28, 2022 - Bulletin Print Report
Historically, C1's operations consisted of three operating segments: (1) Industry 1 and Industry 2, (2) Industry 3, and (3) Retail. Vital to this petition are C2's comp...
Production Tax Credits Are Intangible Property
October 28, 2022 - Bulletin Print Report
In 2015, KW began construction of a wind farm. The total fair cash value in both counties was $458,003,507. KW filed an appeal. KW sought to have Production Tax Credits, ("...
MSGE's Spin-Off Features A "Retention"
October 27, 2022 - Bulletin Print Report
Madison Square Garden Entertainment Corporation, ("MSGE"), announced that it has "confidentially submitted an initial Form 10 Registration Statement with the S.E...
"Equity Of Redemption" Does Not Delay Worthless Stock Deduction
October 27, 2022 - Volume 16 Issue 204 Print Report
A corporation became insolvent and all of its assets were sold in October 1970 under a foreclosure proceeding for the amount of the company's bonded debt. At that...
Strike Three For Disney
October 27, 2022 - Bulletin Print Report
Petitioner, ("P"), licensed intellectual property to affiliates organized under the law of foreign countries in exchange for royalty payments. P deducted royalty paym...
Premium Tax Credit Cannot Be Used As An Income Tax Credit
October 27, 2022 - Bulletin Print Report
BC has been a certified mutual insurance company...engaged in the business of issuing accident and health insurance plans. As such, BC is subject to and pays the Premium Tax. L...
The Willens Deal Survey October 2022
October 26, 2022 - The Deal Survey: October 2022 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
"Conduit" Does Not Have Unreported Income
October 26, 2022 - Volume 16 Issue 203 Print Report
In 2001, MK and his brother bought a home in Minnesota for $141,000. In 2004, MK's brother transferred his interest in the home to MK. In 2006, MK decided to refi...
LLY Will Use CVRs As Merger Consideration
October 26, 2022 - Bulletin Print Report
Eli Lilly & Co., ("LLY"),and Akouos, Inc., ("AKUS"), recently announced a definitive agreement pursuant to which LLY will acquire all of the stock...
"Submit" Means "Receive" And Not Merely "Transmit"
October 26, 2022 - Bulletin Print Report
Plaintiff, ("P"), owns rental properties in H. On or before April 15, 2016, the assessor provided P with forms on which to disclose P's income and operating expen...
Gift of Stock Before Liquidation Not Recast
October 25, 2022 - Volume 16 Issue 202 Print Report
On April 1, 1986, the directors of C Corporation, (C), adopted a plan of complete liquidation to be effective on that date. Foundation, (F), was incorporated on April...
Reasonable Cause For Untimely Filing Not Shown
October 25, 2022 - Bulletin Print Report
Appellants, ("APPs"),hired a professional accounting firm to file their 2016 tax returns. APPs reviewed the return prior to the extended due date and authorized...
Failure To Limit "Clientele" To Those In Need Doomed Property Tax Break
October 25, 2022 - Bulletin Print Report
P is a tax-exempt charitable organization for federal tax purposes that owns real property, (the "Property"). P provides "flexible financing" for the develo...
Sec. 905(c) Applies In Terms Of U.S. Dollars
October 24, 2022 - Volume 16 Issue 201 Print Report
Petitioner, (P), had its principal office at Philadelphia, PA,and engaged primarily in the operation of an aircraft design facility in the U.K. For fiscal year...
Underpayment Penalties Could Not Be Abated
October 24, 2022 - Bulletin Print Report
Petitioners are Delaware residents who seek an abatement of a penalty arising from petitioners' failure to pay the proper amount of estimated income taxes for 2019. For man...
Confirmation Of Chapter 11 Plan Does Not Lift Automatic Stay
October 24, 2022 - Bulletin Print Report
Respondent issued petitioners a notice of deficiency for taxyear 2011 on July 7, 2016. Shortly thereafter, petitioners filed the petition with this court challenging resp...
Employment Verification Services Are Not Taxable
October 21, 2022 - Bulletin Print Report
Petitioner, ("P"), operates an employment screening business. P provides screening services for its clients including verification services and drug screening service...
Registrar And Transfer Agent Fees
October 21, 2022 - Volume 16 Issue 200 Print Report
A corporation listed its capital stock on a registered stock exchange and appointed botha registrar and a transfer agent to whom fees were paid "to take ca...
Equitable Title Taken Without Just Compensation
October 21, 2022 - Bulletin Print Report
Oakland County took title to plaintiffs' homes under the Michigan General Property Tax Act, (the "Act"), which prescribed the process for tax foreclosures. If tax...
STOR's Merger Consideration Should Not Be Subject To Withholding Tax
October 21, 2022 - Bulletin Print Report
As we previously reported, STORE Capital Corporation, ("STOR"), a real estate investment trust, ("REIT"), and GIC and Oak Street announced that they have en...
CLR Is "Going Private"
October 20, 2022 - Bulletin Print Report
The family, led by HGH, (the "Founder"),which owns approximately 83 percent of the stock of Continental Resources, Inc. ("CLR"), has decided that it w...
I.R.S. Applies Sec. 856(c)(5)(J) To Preserve REIT Status
October 20, 2022 - Volume 16 Issue 199 Print Report
A (or TP) is a real estate investment trust (REIT). TP owned "a" properties and leased "b" properties from third parties. As of Date 1, approximat...
Tax Debts Are Excepted From Discharge
October 20, 2022 - Bulletin Print Report
Debtor, ("D"), filed a case under chapter 13 of the Bankruptcy Code on February 11, 2009. It was converted to a case under chapter 11 on March 2, 2010. On August 12,...
Amounts Collected Not Valid Advances And Reimbursements
October 20, 2022 - Bulletin Print Report
Taxpayers operated a full-service advertising agency in the State of Washington. Sales tax was collected from clients. However, Taxpayer remitted no retail sales tax to the Dep...
Phoenix Suns Owner Robert Sarver’s $10 Million Fine Should Be Deductible
October 19, 2022 - Bulletin Print Report
In a recent article, Richard L. Fo...
Settlement Proceeds Constituted Additional Consideration For Stock
October 19, 2022 - Volume 16 Issue 198 Print Report
Each of two trusts owned 250 shares of MS's outstanding stock. There were outstanding 76,543 shares of common stock of MS, of which some 97 percent were owned by HC and his...
Certain Credit Reporting Services Are Taxable
October 19, 2022 - Bulletin Print Report
Credit rating agencies perform services by assigning a rating to entities or debt obligations indicating the likelihood that debts will be repaid. Agencies may rate the creditw...
Business Interruption Insurance Payments Treated As Qualifying Income
October 19, 2022 - Bulletin Print Report
TP intends to elect to be taxed as a real estate investment trust, ("REIT"). TP owns and operates its properties through OP, a limited partnership. OP owns and leases...
Warrant Exchanges In "Overlap" Transactions
October 18, 2022 - Bulletin Print Report
It appears that the demise of special purpose acquisition companies, ("SPACs"), widely predicted in the popular press, has been greatly exaggerated. SPAC acquisitions...
Apparel Corporations Properly Filed On A Combined Basis
October 18, 2022 - Volume 16 Issue 197 Print Report
ITH owned all the stock of each of ITU and MAC. ITH, in turn, was owned by ITH SpA, an Italian clothing company based in Milan, Italy. ITH performed various services for ITU an...
Personal Information Service Not Subject To Sales Tax
October 18, 2022 - Bulletin Print Report
Y is a Delaware corporation. Its principal place of business is Massachusetts. Y's mission is to "help companies sell smarter." During the audit period, Y offered...
Taxpayer Relegated To "Standard" Deduction
October 18, 2022 - Bulletin Print Report
Solvay Chemicals, Inc., ("S"),mines trona from an underground mine. Much of the trona is processed into soda ash. S sells the soda ash in two forms. The majorit...
Borrowing Property Does Not Create Indebtedness
October 17, 2022 - Volume 16 Issue 196 Print Report
Y is described in Sec. 501(c)(3) of the Code. Y proposes to invest in funds that will be treated as partnerships. The main activity of these funds will consist of investing in...
A "GO" Zone Is Not A Texas "Enterprise" Zone
October 17, 2022 - Bulletin Print Report
C operated a petrochemical production facility. C's facility was designated as a Project as part of the Texas Enterprise Zone Program, ("Program"). C submitted an...
Digital Images Not Subject To Sales Tax
October 17, 2022 - Bulletin Print Report
To engage B's wedding photography services, clients contracted for one of E's packages. Every package included the transfer of digital images via a DVD or flash drive....
Bank Had No "Taxes Imposed" Within The Taxable Year
October 17, 2022 - Bulletin Print Report
US is a member of a consolidated group of affiliates owned by USB. US is subject to South Dakota's bank franchise tax, ( the "SD BFT"). The tax is applied to a fi...
Safehold Will Be The Acquired Corporation In An "Upstream Merger"
October 14, 2022 - Bulletin Print Report
Safehold, Inc., ("SAFE"), and iStar, Inc., ("STAR"), each a real estate investment trust, ("REIT"), engagedin the business of acquiring,&nbs...
New Accounting Proposal for Crypto Assets
October 14, 2022 - Bulletin Print Report
It looks like FASB has decided to change the manner in which "crypto" assets are accounted for. Currently, these assets are treated as "indefinite lived intangibl...
KR And PCI Will Form A Behemoth
October 14, 2022 - Bulletin Print Report
Just days after rumors started circulating about a potential deal, The Kroger Co., ("KR"), and Albertsons Companies, Inc., ("AC") announced this morning tha...
Repurchase Tax Not Limited To “Conventional” Redemptions
October 14, 2022 - Bulletin Print Report
The "Origin of the Claim" Determines Deductibility of an Outlay
October 14, 2022 - Volume 16 Issue 195 Print Report
On November 3, 1956, B-W Corporation, (BW), filed a complaint against Corporation A, (A), alleging thatcertain inter-company correspondence between BW and A con...
Parking Spaces Are "Accommodations"
October 14, 2022 - Bulletin Print Report
Prior to June 5, 2019, section 40-26-1, Ala. Code 1975, provided: "There is levied and imposed...a privilege or license tax upon every person...engaging in the business of...
No Reasonable Cause For Failure To Substantiate Contributions
October 13, 2022 - Bulletin Print Report
P served as the Director of African and Oceanic Art at Sotheby's from 2006-2015. In 2011, P decided to make a substantial contribution to the Minneapolis Institute of Art,...
Securities Lending Constitutes "Effecting Transactions in Securities"
October 13, 2022 - Volume 16 Issue 194 Print Report
Each Fund, (F), is a widely-held foreign entity treated as an association and engaged in investment in stocks and securities in the United States. Each F trades its s...
Operator Of "Platform" Need Not Collect And Remit Rental Receipts Tax
October 13, 2022 - Bulletin Print Report
Taxpayer is a "peer-to-peer" car sharing platform headquartered in California. Taxpayer operates a technology platform that enables vehicle owners, (the "hosts&q...
California Residence Preceded Sale Of Stock
October 13, 2022 - Bulletin Print Report
From 2008-2011 APP remained domiciled in Tennessee, ("T"). On November 1, 2012, C and EE entered into a Purchase Agreement for the sale of EE. C subsequently redeemed...
GE's Plans For Spin-Off Of GE Healthcare Clarified
October 12, 2022 - Bulletin Print Report
General Electric Company's plan to divide itself into three independent publicly traded companies is now coming into sharper focus. GE's filing of the Form 10 with resp...
Vessels Not Engaged In Interstate Or Foreign Commerce
October 12, 2022 - Volume 16 Issue 193 Print Report
Petitioner, (P), is in the business of transporting crushed stone, brick, and sand for its parent, CII, which manufactures and sells crushed stone. P's activities which are...
Philip Morris USA, Inc. Denied North Carolina Export Credits
October 12, 2022 - Bulletin Print Report
In 1999, the North Carolina, ("NC") General Assembly enacted the Export Credit Statute granting cigarette manufacturers a tax credit based on the number of cigarettes...
Only "Owners" Can Claim Historic Rehabilitation Tax Credits
October 12, 2022 - Bulletin Print Report
FIS is a block of adjoining buildings in downtown Toledo, Ohio. Prior to the summer of 2016, Plaintiffs, ("Ps"), owned a number of the buildings in this row. In July...
Therapeutic Devices Sold To Medical Providers Are Subject To Sales Tax
October 12, 2022 - Bulletin Print Report
TP is a multinational medical device and health care company that manufactures Product A. Product A is a device used by medical providers in diagnostic evaluation and monitorin...
MSGS Will Pay A "Special Dividend"
October 11, 2022 - Bulletin Print Report
Madison Square Garden Sports Corporation, ("MSGS"), the owner of the New York Knicks and New York Rangers, announced that its board of directors has declared a specia...
"Boot Relaxation Rule"
October 11, 2022 - Volume 16 Issue 192 Print Report
X entered into a plan of reorganization with Y. Pursuant to the plan, X transferred all of its assets to Y in exchange for voting stock of Y and the assumption by Y o...
Absence Of Tax Opinion Elicited Penalties From Illinois
October 11, 2022 - Bulletin Print Report
This court previously ruled that PepsiCo's decision to create PGM LLC to be the corporate home for its expatriates lacked economic substance and business purpose. Prior to...
Service Not Adequate To Satisfy Due Process Clause
October 11, 2022 - Bulletin Print Report
The assessor mailed TP a request for income and expense information pursuant to N.J.S.A. 54:4-34, otherwise known as "Chapter 91," via certified mail on September 15,...
Shareholder Withdrawals Did Not Constitute "True" Debt
October 10, 2022 - Volume 16 Issue 191 Print Report
C is a corporation engaged in an ongoing business. The stock of C consists of 135 shares of common stock, of which A and B, ahusband and wife, owned 117 shares....
Taxpayer Did Not Purchase A Contract To Perform Capital Improvements
October 10, 2022 - Bulletin Print Report
On December 8, 2015, petitioner made a purchase from J. Petitioner describes the items purchased from J as "completed kitchen cabinetry." Petitioner sought aref...
Lack Of Duly Filed Refund Claim Warranted Dismissal Of Suit
October 10, 2022 - Bulletin Print Report
CS has suffered from Stage IV pulmonary sarcoidosis since 2003. Consequentially, CS has been considered permanently disabled by the State of Ohio since 2006. On May 22, 2019, P...
Rental Property Not Eligible For Four Percent Assessment Ratio
October 10, 2022 - Bulletin Print Report
In 2018, Petitioners purchased their home in Georgetown County. The Assessor denied Petitioners' request to be taxed at the four percent residential assessment rate for 202...
Debt Cancelled "By Operation Of Law"
October 7, 2022 - Volume 16 Issue 190 Print Report
BBC was incorporated on October 21, 1946. During her life, the deceased maintained a running loan account with the corporation. The deceased and B, her husband, filed...
Membership Fees Are Deductible From "Base Rent"
October 7, 2022 - Bulletin Print Report
TP operates a members-only workspace where paying members utilize offices, desks, meeting rooms, and collaborative spaces. TP provides four levels of membership. Upon joining,...
Protective Services At A Construction Site Are Subject To Sales Tax
October 7, 2022 - Bulletin Print Report
As required by local law, petitioner, a developer, engaged the services of a company for the provision of "guard and protective services" at a building construction s...
"CRAT" Distributions Treated As Ordinary Income
October 7, 2022 - Bulletin Print Report
During 2015-2017, petitioners, ("Ps"), were actively engaged in the farming business. In July 2015, Ps formed a charitable remainder annuity trust, ("CRAT I"...
"Underneath" Bank Mergers Satisfy Continuity Of Interest Requirement
October 6, 2022 - Bulletin Print Report
Provident Financial Services, Inc., ("PFS"),the parent of Provident Bank, ("PB"), and Lakeland Bancorp, Inc., ("LBI"),the parent of La...
Properly Issued Notice Of Deficiency Presumed Correct
October 6, 2022 - Volume 16 Issue 189 Print Report
In accordance with Sec. 6103(d) of the Internal Revenue Code, the Division of Taxation (the Division) received information from the I.R.S. that indicated that petitio...
Trust Found To Be A "Non-Resident" Trust
October 6, 2022 - Bulletin Print Report
Trust was created for the benefit of the child of "Settlors" under a trust agreement between Settlors and the Initial Trustee. The beneficiary of the Trust is... (the...
Excess APTC Is A Tax Liability
October 6, 2022 - Bulletin Print Report
During 2017, petitioners were enrolled in health insurance provided by HMOL, which they purchased through the HIM. Petitioners' health insurance premium was $1,524 per mont...
Pennsylvania Recognizes Sec. 338(h)(10) Elections
October 4, 2022 - Volume 16 Issue 188 Print Report
CA, a Pennsylvania corporation, is a wholly-owned subsidiary of CB. CA owns all of the issued and outstanding stock of CC, a New York corporation. CC owns all of the...
"POB" Fees Are Part Of "Selling Price"
October 4, 2022 - Bulletin Print Report
TP sells cannabis. Audit determined that the $4.00 fee, (the "POB Fee"), should be includedin the retail selling price in transactions using TP's POBs...
Judicial Decisions Are Given Full Retroactive Effect
October 4, 2022 - Bulletin Print Report
Plaintiffs owned real property within Kent County. Defendants foreclosed on the real property pursuant to the General Property Tax Act, ("GPTA"), because of delinquen...
Division Of Jointly-Owned Property Subject To "REET"
October 4, 2022 - Bulletin Print Report
In 2018, G1 and G2, ("Grantors"), transferred property, ("Property"), to Grantee. Grantors explained that Grantors and Grantee owned six properties together...
Prior Spin-Off "Reopened"
October 3, 2022 - Volume 16 Issue 187 Print Report
In 1977, C was a wholly owned subsidiary of D. On December 13, 1977, D decided it would distributeC stock to all its shareholders as of that same date. No prior...
Paper Machines Found To Be "Fixtures" Subject To "REET"
October 3, 2022 - Bulletin Print Report
T transferred property to TP and in the process became its parent. The Department determined that the true value of the real property transferred was $550,000 and assessed real...
Software Developer Manufactured Tangible Personal Property
October 3, 2022 - Bulletin Print Report
TP is in the business of creating software platforms. TP has subscriptions to certain data provided by third party vendors. TP's products are developed on computers. The so...
Advance Payments Of Section 367(d) Annual Inclusions Not Permitted
October 3, 2022 - Bulletin Print Report
USP owns FC. In Year 1, USP transfers intangible property with an expected useful life of ten years to FC solely in exchange for stock in FC in a section 351 exchange to which...
SPAC's Early Liquidation Avoids Repurchase Tax
September 30, 2022 - Bulletin Print Report
Liberty Media Acquisition Corporation, ("LMAC"), a special purpose acquisition company, ("SPAC"), filed a preliminary proxy statement relating to a special...
Domestic Partnership Can Avail Itself of Sec. 168(g)(4)(G)
September 30, 2022 - Volume 16 Issue 186 Print Report
TP is an LLC organized under the laws of State 1. TP has not elected to be treated as an association taxable as a corporation.  ...
Judicial Exemption Is As Good As A Statutory Exemption
September 30, 2022 - Bulletin Print Report
In 2015, 2016, and 2017, PV owned a solar power facility whose output went only to municipal properties used for public purposes. During these tax years, the Legislature exempt...
Tax Court Refuses To Make Election On Taxpayer's Behalf
September 30, 2022 - Bulletin Print Report
In 2012, CJ was an 'S' corporation owned equally by C and J. In 2014, P was a partnership owned equally by L, C, DT and AT. In 2012, CJ owed $108,965 in property taxes...
Claim For Credit Of Overpayment Not Timely Filed
September 30, 2022 - Bulletin Print Report
Taxpayers, ("TPs"), filed their 2017 tax return on July 14, 2020, and they requested that their overpayment be carried forward. The request was denied. R.I. Gen. Laws...
Commissions Included In Taxable Gross Receipts
September 29, 2022 - Bulletin Print Report
MetroPCS, ("M"), was a cellular telephone service provider that offered a prepaid cellular telephone service to its customers. APP, an authorized M dealer, operated m...
Transfer Of Investment Assets Always A "Device" Factor
September 29, 2022 - Volume 16 Issue 185 Print Report
P has been engaged in the active conduct of two businesses, Business Q and Business R, throughout the past five years. For bona fide business reasons, P is required t...
The Underlying Document Controls For Sales Tax Purposes
September 29, 2022 - Bulletin Print Report
Taxpayer, a restaurant and hotel located in Virginia, was audited for sales and use tax compliance. During the examination, the auditor concluded that Taxpayer's rental pay...
Retired Employees Can Be Admitted To A "VEBA"
September 29, 2022 - Bulletin Print Report
Taxpayer, ("TP"),was formed in Year 1. TP has periodically received determinations from the Internal Revenue Service that it is a voluntary employees' benef...
Assumption Of Contingent Stock Obligation Approved
September 28, 2022 - Volume 16 Issue 184 Print Report
Pursuant to a plan of reorganization, all of the stock of Y was acquired by X solely in exchange for voting stock of X. Because of the inability of the parties to agr...
BHVN Update
September 28, 2022 - Bulletin Print Report
Biohaven Pharmaceutical Holding Company, Ltd., ("BHNV"), announced that the closing date of the acquisition by Pfizer, Inc. of BHVN, ("the Merger"), is expec...
Cleveland Cannot Tax A Non-Resident Working From Home
September 28, 2022 - Bulletin Print Report
Plaintiff, ("P"), lives in Blue Bell, Pennsylvania, and is employed by A, a biotech company located in Cleveland, Ohio. Prior to the COVID-19 pandemic, P usually ...
Inversion Averted
September 28, 2022 - Bulletin Print Report
Partners and Foreign Founders, all of whom are individuals, together own all of the interests in FP1 and FP2, each treated as a partnership. FP 2 owns certain interests in FP3....
"Buyer's Remorse" Not Sufficient To Create "Standing"
September 28, 2022 - Bulletin Print Report
A donor-advised fund, ("DAF"), is a charitable giving vehicle thatallows donors to take a present-year tax deduction, while distributing the funds to charity at...
Taxpayer Did Not Maintain Permanent Place Of Abode In NYC
September 27, 2022 - Volume 16 Issue 183 Print Report
TP is domiciled in Tennessee. TP and her family are observant orthodox Jews. The community where TP lives is not large enough to sponsor a suitable religious high sch...
Pass-Through Entities Found Liable For Withholding Tax
September 27, 2022 - Bulletin Print Report
LC is a Delaware limited partnership with its principal location in Los Angeles. All of the partners were residents of California, Washington, and Alaska. R is a California gen...
Forgiven PPP Loans Includible In Gross Income
September 27, 2022 - Bulletin Print Report
For both rounds of Paycheck Protection Program, ("PPP"), loans, ("covered loans"), the lender may forgive, and the SBA may guarantee, the full principal amo...
Disabled Veteran Did Not Serve "In Time Of War"
September 27, 2022 - Bulletin Print Report
Plaintiff is the owner of the property at 259 Fairview Avenue, Lawnside, New Jersey, (the "subject property"). Plaintiff was in active service with the United States...
Steel City's "Jock" Tax Is Patently Unconstitutional
September 23, 2022 - Bulletin Print Report
Defendant instituted a "Non-Resident Sports Facility Usage Fee," ("Facility Fee"). Under this program, non-residents of Pittsburgh, ("P"), who use...
Gain From Sale Of Interest In NY Partnership Not NY Source Income
September 23, 2022 - Volume 16 Issue 182 Print Report
Petitioner, (P), is a Georgia limited partnership. The general partner of P is J, a Georgia general partnership. J has a three percent interest in P. On September 27,...
Bookstore's "Memberships" Are Subject To Sales Tax
September 23, 2022 - Bulletin Print Report
Books-A-Million, Inc., ("B"), is a retail bookstore operating thirteen locations throughout South Carolina. Customers of B can become members in the so-called "M...
Carfax Does Not "Manufacture" Vehicle History Reports
September 23, 2022 - Bulletin Print Report
Carfax, Inc., ("C"), is engaged in the business of selling Vehicle History Reports, ("VHRs"), to consumers and dealers. A VHR is a report generated for a sp...
The Willens Deal Survey September 2022
September 22, 2022 - The Deal Survey: September 2022 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
I.R.S. Finds Substantiality Test Is Substantially Complied With
September 22, 2022 - Volume 16 Issue 181 Print Report
UST is a domestic corporation. UST is engaged in Business C with significant interests in the U.S., Europe, and Asia. UST has issued and outstanding shares of common stock, as...
Penalties Need Only Be Approved Before They Are "Assessed"
September 22, 2022 - Bulletin Print Report
K failed to report cash transfers from a former business partner. The I.R.S. concluded that the transfers should have been reported as taxable income. On August 6, 2012, the I....
Durable Medical Equipment Found Subject To Sales Tax
September 22, 2022 - Bulletin Print Report
Taxpayer supplies a device/durable good (an anesthesia machine) for all in the medical profession, including healthcare/hospitals and dental offices. This device can be used by...
California Proves Unsympathetic To "Bottom-Dollar" Guaranties
September 22, 2022 - Bulletin Print Report
A partnership liability can, under certain circumstances, be treated as a recourse liability with respect to a partner who has guaranteed said liability. The tantalizingq...
Lottery Winner Cannot Avoid NYS Tax
September 21, 2022 - Volume 16 Issue 180 Print Report
In 1984, P, a resident of New York State, was a Jackpot Winner in the New York State Lotto Game. P was advised by a letter from the Director of the New York State Lottery: &quo...
"Carried Interest" Not Derived From Connecticut Sources
September 21, 2022 - Bulletin Print Report
AG was domiciled in New York State and City during 2014 and 2015. AG received a schedule K-1 as a partner of Hildene Holding Company, ("H")... The K-1 reported ordina...
Claim For Refund Barred By California Statute Of Limitations
September 21, 2022 - Bulletin Print Report
On June 16, 2011, the Social Security Administration determined that APP was disabled. On March 28, 2005, FTB issued a a Notice of Proposed Assessment, ("NPA"), propo...
Section 172(b)(3) Election Is Also Applicable For NYS Tax Purposes
September 21, 2022 - Bulletin Print Report
Petitioner, ("P"), filed a New York resident income tax return for 2007, dated March 10, 2010, reporting tax due in the amount of $19,414.00. P filed a New York resid...
ADT, Inc.'s Redemption Is Part Of A Larger Transaction
September 20, 2022 - Bulletin Print Report
ADT, Inc. is inviting its shareholders, including its controlling shareholder, Apollo Global Management, Inc., to tender shares of its common stock at a price of $9 per share....
Calculating "Repurchase Premium"
September 20, 2022 - Volume 16 Issue 179 Print Report
PR, a C corporation, acquired S3 in Year 1 when the latter's assets were valued at "$c". When S3 was acquired, P became the new holding company, and S3...
Expenses Not Found To Be "Ordinary And Necessary"
September 20, 2022 - Bulletin Print Report
In 2013, 2015, and 2016, H was employed as a sales agent for A, a manufacturer of audio recording equipment and software. In 2017, H was employed as a sales agent for U, a manu...
Expenses To Place Property In Efficient Condition Must Be Depreciated
September 20, 2022 - Bulletin Print Report
Plaintiffs, ("Ps"), purchased a commercial property in Klamath Falls, Oregonin April 2018. Ps intended to renovate the property and then rent the space to fledg...
Retroactive Tax Rate Increase Not Unconstitutional
September 19, 2022 - Volume 16 Issue 178 Print Report
On three separate dates in May, 2004, Mr. Charles DeMuth (CD) sold a total of 110,000 shares of stock ofHudson City Bancorp (HCB) which resulted in a net gain o...
"Reservation Fees" Are Deductible In Months When Gas Is Transported
September 19, 2022 - Bulletin Print Report
WPX produced natural gas from wells in the Powder River Basin. To transport this gas, WPX's affiliate, M, entered into long-term, firm transportation service agreements wit...
Non-Resident Not Required To Make Declaration Of Estimated Tax
September 19, 2022 - Bulletin Print Report
Plaintiff, ("P"), is a non-resident of Oregon. She neither earned wages subject to Oregon withholding nor had any business or trade connected with Oregon. In 2019, P...
"FBA" Merchants Need Not Collect And Remit Sales Tax
September 19, 2022 - Bulletin Print Report
Section 202(a) of the Tax Code, 72 P.S. section 7202(a), imposes a six percent tax "upon each separate sale at retail of tangible personal property or services." Purs...
STOR's Purchasers In Line For A Basis Step-Up
September 16, 2022 - Bulletin Print Report
STORE Capital Corporation, ("STOR"), an internally-managed, "net lease," real estate investment trust, ("REIT"), and GIC, in partnership with with...
Fraud Penalties and Earnings And Profits
September 16, 2022 - Volume 16 Issue 177 Print Report
Rev. Rul. 107, C.B. 1953-1, 178, holds that fraud penalties recommended against a corporation should not be allowed as liabilities for the purpose of determining the amount of...
Careless Investor Did Not Sustain A Theft Loss
September 16, 2022 - Bulletin Print Report
On July 28, 2008, H won a bid and purchased a leasehold interest in certain property, (the "R sublease"), for $6,330,350. H anticipated that the R sublease would enti...
Credit Or Refund Of Overpaid Estimated Taxes Denied
September 16, 2022 - Bulletin Print Report
Plaintiffs, ("Ps"), made 18 estimated payments during the relevant tax years totaling $875,000. Despite making substantial estimated payments during those years, Ps d...
New R&D Capitalization Rules Wreak Havoc On Free Cash Flow
September 15, 2022 - Bulletin Print Report
In the past, a taxpayer was permitted to treat research or experimental expenditures...as expenses "which are not chargeable to capital account." The expense...
Alternative Method Of Basis Recovery Approved
September 15, 2022 - Volume 16 Issue 176 Print Report
TP is a partnership for tax purposes. TP owns 100 percent of the membership interests of CA, a disregarded single member limited liability company. CA owned 100 percent of the...
Closing Agreement Did Not Prohibit Assessment Of Interest
September 15, 2022 - Bulletin Print Report
The parties agreed Plaintiff, ("P"), had a $7,466,599 deficiency for the 2012 tax year, but no deficiencies for years 2010, 2011, and 2013. The parties entered into a...
Extension Of Time To Make A Section 382(l)(5)(G) Election Granted
September 15, 2022 - Bulletin Print Report
Taxpayer is the common parent of an affiliated group of corporations that files consolidated federal income tax returns, (the "Taxpayer Group"). Taxpayer has represen...
Transfer Restrictions Do Not Create A Second Class Of Stock
September 14, 2022 - Volume 16 Issue 175 Print Report
X has two classes of stock outstanding: voting common stock and nonvoting common stock. The nonvoting common stock is held by A, B, C, siblings, and by D, an unrelated individu...
"Must" And "Shall" Are Not Permissive
September 14, 2022 - Bulletin Print Report
W owns a parcel of real estate in PC. The assessor changed the valuation of the property for the 2018 tax year and again for the 2019 tax year, and sent W a notice of the valua...
REIT's Distributions Treated As Made From Earnings And Profits
September 14, 2022 - Bulletin Print Report
Taxpayer, ("TP"),elected to be treated as a real estate investment trust, ("REIT"), under sections 856 through 860 of the Internal RevenueCode....
Apportioning Litigation Revenues
September 14, 2022 - Bulletin Print Report
BPM is a law firm. The present appeal revolves around the apportionment of revenues that BPM received from insurance companies for providing two distinct services: (1) client a...
How Will SPACs Fare Under The New "Repurchase" Tax?
September 13, 2022 - Bulletin Print Report
The Inflation Reduction Act, (the "Act"), recently signed into law by President Biden, introduces into the tax law an excise tax imposed on the act, by a covered corp...
Bonus Depreciation Properly Claimed
September 13, 2022 - Volume 16 Issue 174 Print Report
TP worked full-time as a high school teacher. TP's uncle told him that one Johnson (J) had an agreement to lease vehicles to the federal government, but that J needed inves...
Two Separate Real Property Transfers Found
September 13, 2022 - Bulletin Print Report
A developer, ("PU"), buys commercial property located in New York City, (the "Property"), for a total purchase price of $100 million, (the "Total Consi...
Split-Off "Acquisitions" Are Disregarded For Section 355(e) Purposes
September 13, 2022 - Bulletin Print Report
D is a closely-held corporation that operates Business A. D has made an election to be treated as an 'S' corporation. D has a single class of common stock outstanding....
Royalties Found To Be Self-Employment Income
September 12, 2022 - Volume 16 Issue 173 Print Report
During the years 1931-1966, an individual wrote and had published 28 books for which he has receivedroyalties. The term, self-employment income, means the "...
Lower RPTT Rate Applies To Sale Of Combined Co-Op Units
September 12, 2022 - Bulletin Print Report
New York City property records show that cooperative apartment units were purchased from separate sellers by Taxpayer. Taxpayer states that the two units were physically combin...
Employee's Travel Expenses Not Allowed As A Deduction
September 12, 2022 - Bulletin Print Report
P has over 30 years of experience working for, or being associated with, non-profit organizations. P served as the executive director of CHJ. CHJ provided educational services...
Appreciation Interest Ruled Deductible
September 12, 2022 - Bulletin Print Report
On August 31, 2006, B organized WTS, a limited liability company, in order to purchase and operate a parcel of commercial real property, (the "Rp"). D purchased an in...
Acquisition Indebtedness
September 9, 2022 - Volume 16 Issue 172 Print Report
F is exempt from tax under Sec. 501(c)(3) of the Internal Revenue Code and is a private foundation under Sec. 509(a). F has n...
Replacement Income Has The Same Character As What It Is Replacing
September 9, 2022 - Bulletin Print Report
Taxpayers own and operate a shrimp boat in the Gulf of Mexico. Taxpayers were residents of Florida. The percentage of shrimp caught by Taxpayer which were sold in Alabama over...
PTC Not Available For "COBRA" Months
September 9, 2022 - Bulletin Print Report
After his employment was terminated in 2015, S purchased "COBRA" continuation health insurance coverage through his former employer. Ps maintained their COBRA coverag...
Social Security Benefits Replacing Disability Benefits Are Taxable
September 9, 2022 - Bulletin Print Report
In 2019, the Commissioner of Internal Revenue determined that M had under-reported her Social Security income on her 2016 Federal income tax return. The Commissioner issued her...
Constellation Brands Revises Its "Reclassification" Agreement
September 8, 2022 - Bulletin Print Report
Constellation Brands, ("STZ" or the "Company"), has two classes of common stock outstanding, Class A common stock and Class B common stock. The classes are...
Outbound Spin-Off
September 8, 2022 - Volume 16 Issue 171 Print Report
FP operates Global Business, which includes Business X and Business Y. FP owns all of the stock of D, a domestic corporation incorporated in State A that was formed o...
Foreign Worker's "Tax Home" Was Not Iraq
September 8, 2022 - Bulletin Print Report
P was offered a position in Iraq with T. That employment lasted from May 23, 2014, until August 21, 2015, when he left Iraq to begin working in Egypt. While P was in Iraq, his...
Donation Of Appreciated Property Goes Terribly Awry
September 8, 2022 - Bulletin Print Report
In 2015, Burbank was a limited partnership existing for the purpose of owning and operating a single hotel property, (the "Hotel"). K was a limited partner in Burbank...
How To Apportion E&P To Distributions
September 7, 2022 - Volume 16 Issue 170 Print Report
M files its income tax return on the basis of a calendar year. On July 1, 1973, M redeemed for cash 25 percent of its outstanding common stock in a transaction that q...
Settlement Payments Did Not Compensate For Physical Injuries
September 7, 2022 - Bulletin Print Report
P worked for PFIas a sales representative. P was hospitalized for acute gastrointestinal bleeding, ("AGB"), and a resulting heart attack. P's AGB was unrela...
Embolization Product Not Exempt From Sales Tax
September 7, 2022 - Bulletin Print Report
APP is a medical corporation... One of the products APP sells is a hydro coil system used for embolization. A catheter with a metallic occludingcoil is inserted into an a...
Unauthorized Insurance Company Exempt From Corporate Income Tax
September 7, 2022 - Bulletin Print Report
L is a Vermont corporation that is a wholly-owned subsidiary of Macy's Inc., ("M"). L is a "captive" insurance company and provides insurance for M'...
"Cohan" Rule Could Not Be Applied
September 6, 2022 - Bulletin Print Report
Respondent determined a deficiency in P's federal income tax and an accuracy-related penalty for 2016. On June 6, 2012, P purchased a home in Southampton, New York. P title...
401(k) Plan Was Not A "Qualified Joint And Survivor Annuity"
September 6, 2022 - Bulletin Print Report
Plaintiff, ("P"), was married to G from 2011 until his death on May 15, 2021. G participated in W's 401(k) retirement plan. P was the sole beneficiary of G's...
Mandatory Statutes Trump Permissive Ones
September 6, 2022 - Bulletin Print Report
Property taxes are based on the assessed value of property as determined by county assessors. See RCW 84.40.030. Property owners may challenge assessors' determinations in...
Outside Basis Not Recoverable By NY Non-Resident
September 6, 2022 - Volume 16 Issue 169 Print Report
Petitioner, (P), was a resident of Colorado in 2005. He filed a New York State nonresident and part-year resident personal income tax return claiming a long-term capi...
Commodity Futures Contracts Are Not Treated As Inventory
September 2, 2022 - Bulletin Print Report
Texas imposes a franchise tax on businesses based or operating in the state. Franchise tax liability is calculated by multiplying a business's "taxable margin" by...
Retirement Funds Subject To Garnishment
September 2, 2022 - Bulletin Print Report
In 2017, G was convicted of Conspiracy to Commit Wire Fraud and Conspiracy to Commit Securities Fraud. At the time G so conspired, he was a partner at K and served as R's o...
Expenses In Defending Patent Infringement Claims Are Deductible
September 2, 2022 - Bulletin Print Report
Between 2008 and 2009, W defended itself in Hatch-Waxman, ("HW"), litigation involving seven different Abbreviated New Drug Applications, ("ANDA"), with Par...
Income Attributable To Prior Services Is Self-Employment Income
September 2, 2022 - Volume 16 Issue 168 Print Report
The corporation in questionhas a policy of appointingindividuals who have served as members of its board ofdirectors for a period of 20 years to the...
WARR Is Liquidating
September 1, 2022 - Bulletin Print Report
Warrior Technologies Acquisition Company, ("WARR"), a special purpose acquisition company, ("SPAC"), that was unable to accomplish its mission, i.e., to com...
Reorganization Was The Origin Of The Claim
September 1, 2022 - Volume 16 Issue 167 Print Report
AG manufactures and sells cement. Before December 31, 2000, V owned approximately 2/3 of the outstanding AG stock. V also owned LRC, a ready-mix cement company. V was...
Absence Of “Residential Interest” Precludes NYS Resident Status
September 1, 2022 - Bulletin Print Report
Petitioners, (“Ps”), j...
Virginia Does Not Permit A Subtraction Modification For "Subpart F Income"
September 1, 2022 - Bulletin Print Report
Taxpayer, ("TP"), was a non-resident of Virginia, ("V"), who had an ownership interest in an 'S' corporation that had V taxable income during the 20...
Practicing Attorney Treated As Professional Fiduciary
August 31, 2022 - Volume 16 Issue 166 Print Report
TP is engaged in the private practice of law. In addition to incomederived from his practice, TP receives income as trustee of 12 separate trusts that he admini...
The Section 72(t) "Exaction" Is Not A Penalty
August 31, 2022 - Bulletin Print Report
P was an employee of the State of New York and was a member of the State's pension plan. In 2015, at the age of 42,she borrowed from her pension account. She did not...
Charges For Use Of Fitness Facility Are "Retail Sales"
August 31, 2022 - Bulletin Print Report
Taxpayer, ("TP"), operates a fitness facility, (the "gym"). TP offers access to the gym to customers in exchange for a membership fee. Members also have acc...
Venue Of Voter Registration And Driver's License Proved Decisive
August 31, 2022 - Bulletin Print Report
In 2013, Petitioners, ("Ps"),acquired residential property in Frankfort, Michigan, (the "BRP"). Ps filed a "PRE" affidavit which was approve...
"Return Of Capital" Distribution Taxable For State Tax Purposes
August 30, 2022 - Volume 16 Issue 165 Print Report
Plaintiffs own common shares in Capstead Mortgage Corporation (CMC), a REIT. Pursuant to a resolution adopted by its board of directors, CMC paida cash distribu...
Recycling Machines Not Eligible For Industrial-Processing Exemption
August 30, 2022 - Bulletin Print Report
Plaintiff, ("P"), sells and leases the container-recycling machines commonly found in grocery stores and also sells repair parts for those machines. These machines ac...
Current Liabilities Are Not Subject To "Add-Back"
August 30, 2022 - Bulletin Print Report
Taxpayer conducts operations within the United States through its U.S. Branch, (the "U.S. Branch"). For federal income tax purposes, the Taxpayer reports the activity...
NBC Universal Is An "Interstate Broadcaster"
August 30, 2022 - Bulletin Print Report
N owned and operated news and entertainment television networks. N's news and entertainment network consisted of N's owned and affiliated television stations, as well a...
Debentures Not "Subordinated" Under Sec. 279(b)(3)
August 29, 2022 - Volume 16 Issue 164 Print Report
A is the common parent of an affiliated group of corporations filing a consolidated return. B, C, and D were the other members of the affiliated group. On Date 2, A a...
Alaska Tax Statute Not Unconstitutionally Vague
August 29, 2022 - Bulletin Print Report
N is the parent entity of the U.S. group. Alaska, ("AS"), law requires corporations doing business in ASto file corporate income tax returns and to pay tax on i...
"Alimony In Gross" Cannot Be Deducted
August 29, 2022 - Bulletin Print Report
TP and his former wife entered into a separationagreement, (the "Agreement"). The Agreement provides, inter alia, "The Husband shall con...
A Liquidating Trustee Is Not A Section 505 Trustee
August 25, 2022 - Bulletin Print Report
On June 3, 2019, GUE Liquidation Companies, Inc. and certain affiliated entities, (the "Debtors"), filed voluntary petitions under chapter 11 of the Bankruptcy Code....
JBLU/SAVE Tax Guidance Is Equivocal
August 25, 2022 - Bulletin Print Report
JetBlue Airways, Corporation, ("JBLU"), and Spirit Airlines, Inc., ("SAVE"), have entered into a definitive merger agreement pursuant to which JBLU has agre...
Vessel Engaged In Interstate Commerce
August 25, 2022 - Volume 16 Issue 163 Print Report
Petitioner (P) is a corporation that charters vessels to its clients for parties and fishing expeditions. Usually, P's vessels depart from Port Jefferson, NY. How...
Tax Payment Requirement For Protesting Assessment Was Relaxed
August 25, 2022 - Bulletin Print Report
By judgment dated June 4, 2021 (and mailed June 9, 2021), the Board issued a judgment affirming the assessment of $835,000 imposed on the Subject for tax year 2021. The deadlin...
Private Equity Holding Company Had No "Nexus" With Detroit
August 24, 2022 - Bulletin Print Report
This case was remanded by the Court of Appeals for reconsideration of the issue of "nexus" in light of South Dakota v. Wayfair, Inc., 138 S.Ct. 208...
Transfer Of Stock To Settle Claims Is A Disposition Thereof
August 24, 2022 - Volume 16 Issue 162 Print Report
XMC was the investment advisor to various Z Mutual Funds. XMC was merged into a subsidiary of Y, XXMC. The shareholders of XMC received Y stock. &...
Entireties Property Not Exempt From The Bankruptcy Estate
August 24, 2022 - Bulletin Print Report
M filed for Chapter 7 bankruptcy on July 16, 2021. He listed among his property a home, (the "Property"), which he and wife own together as "tenants by the entir...
The Willens Deal Survey August 2022
August 23, 2022 - The Deal Survey: August 2022 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
Director Not Engaged In A Trade Or Business
August 23, 2022 - Volume 16 Issue 161 Print Report
In 1947, DP struck up a friendship with JK. In 1955, DP became a director of U, an insurance company, at the request of JK and "out of friendship for him." JK was the...
Will AMMO, Inc. Use The "Expansion" Doctrine?
August 23, 2022 - Bulletin Print Report
AMMO, Inc., the owner of GunBroker.com, the largest online marketplace serving the firearms and shooting sports industries, and a leading vertically integrated producer, design...
Building Materials Purchased By "Contractor" Subject To Sales Tax
August 23, 2022 - Bulletin Print Report
In addition to selling manufactured homes to tenants, Taxpayer also provided additions such as steps, carports, skirting, sun rooms, sheds, garages, driveways, and parking pads...
Convertible Subordinated Debentures Free Of Sec. 279 Taint
August 22, 2022 - Volume 16 Issue 160 Print Report
In 1985, TP, a corporation, borrowed "$x" from financial institutions. The loans are not subordinated and are not convertible into stock of TP. Of the "$x,"...
Rental Of Office Space Not Subject To Sales Or Use Tax
August 22, 2022 - Bulletin Print Report
Taxpayer, a Virginia business entity, provides temporary office space, shared workspace, meeting rooms, business address and mailbox services, and live phone answering services...
Section 3102(b)'s Indemnity Obligation Includes Attorneys' Fees
August 22, 2022 - Bulletin Print Report
The Hospital employed the Residents enrolled in ACGMEat a medical college known as the Hospital's Weill Cornell Campus. In August 2013, two groups of Residents filed...
Beneficial Owner Of Foreign Account Must File An "FBAR"
August 22, 2022 - Bulletin Print Report
K was born and grew up in Buffalo, New York. After completing college, K moved to Greece. K and her father went to Zurich and opened two accounts with UBS. K's name is on b...
Our Proposal For How The JBLU/SAVE Deal Should Be Taxed
August 19, 2022 - Bulletin Print Report
JetBlue Airways Corporation, ("JBLU"), as everyone is now aware, has entered into a definitive agreement pursuant to which JBLU, assuming it secures the necessary reg...
No FTHBC For Property Acquired From Family Member
August 19, 2022 - Volume 16 Issue 159 Print Report
JM, the mother of KM, purchased the K property on May 1, 2007. She has permitted KM and his wife, MM, to live in the home located on the property rent-free since shortly after...
Loans Or Advancements Are Not "Liabilities"
August 19, 2022 - Bulletin Print Report
BCBSAis a national association of 35 independently owned and locally operated Blue Cross Blue Shield, ("BCBS"), companies, which collectively provide health ins...
"Studio" Units Are Not Individual Residential Condominium Units
August 19, 2022 - Bulletin Print Report
TP, a Delaware limited partnership, was the owner of a residential condominium unit, ("Apartment Unit"), in Manhattan. TP was also the owner of two "Studio Units...
Acquired By Inheritance
August 18, 2022 - Volume 16 Issue 158 Print Report
Petitioner, (L),is a grandson of MBL who died in 1931, leaving as her heirs four surviving children and L and his brother who were sons of a deceased daughter o...
Arrangement Was Properly Classified As A Foreign Trust
August 18, 2022 - Bulletin Print Report
In 2005, JR formed the EF as a Stiftung, ("S"), under the laws of Liechtenstein, ("L"). EF's purpose is to provide education and gene...
Dwelling Eligible For Reduced Assessment Ratio
August 18, 2022 - Bulletin Print Report
In 2014 or 2015, S and her husband renovated a structure on the same property as S's legal residence, expanding it from a 400-square foot structure to a structure comprisin...
Bulk Purchase Of Durable Medical Equipment Subject To Use Tax
August 18, 2022 - Bulletin Print Report
Taxpayer operates a dental practice specializing in dental implants. As a result of an audit, Taxpayer was assessed consumer use tax due to the purchase of prosthetic devices a...
Sales Tax Assessed On Purchases By Employees Of Charity
August 17, 2022 - Volume 16 Issue 157 Print Report
TP disputes the assessment of sales tax. In Utah, sales tax is imposed on certain transactions including "retail sales of tangible personal property made within the state....
Transfer Of Condominium Units Exempted From "RPTT"
August 17, 2022 - Bulletin Print Report
A limited liability company, (the "Sponsor"), owns a residential condominium building, (the "Building"). The Sponsor is owned by four members, (the "Me...
Solar Energy System Not Exempt From Property Tax
August 17, 2022 - Bulletin Print Report
SS's equipment, (the "Equipment"), is located on property owned by CU. SS and CU entered into an agreement which gave CU the option to purchase the Equipment... T...
WHR And EMR Advertise Vastly Different Multiples of EBITDA
August 17, 2022 - Bulletin Print Report
Whirlpool Corporation, ("WHR"), announced that it has entered into a definitive agreement with Emerson Electric Co., ("EMR"), to acquire EMR's "ISE...
Trustee And Revocable Trust Are Not "The Same Consumer"
August 16, 2022 - Bulletin Print Report
On February 14, 2020, TP, an individual, purchased a motor vehicle. The invoice lists TP as the buyer. TP registered the vehicle in his personal name with the Department. At th...
Redemptions Do Not "Spoil" a 'B' Reorganization
August 16, 2022 - Volume 16 Issue 156 Print Report
Acquiring Corporation (AC) has only a single class of voting common stock outstanding. That stock iswidely-held and publicly-traded.For the purpose of fac...
Ascertaining Alaska Air's "Transportation Revenue"
August 16, 2022 - Bulletin Print Report
Alaska Airlines, Inc., ("A") was an airline that provided air transportation services to passengers to more than 100 cities... Horizon Air Industries, Inc., ("H&...
New York Moves To "Codify" The Goldman Sachs "Petershill" Decision
August 16, 2022 - Bulletin Print Report
In Matter of Goldman Sachs PetershillFund Offshore Holdings (Delaware) Corporation, TAT(E) 16-9 (GC), New York City Tax Appeals Tribunal, (March 12, 20...
Father's Stock Attributed To Each Of His Sons
August 15, 2022 - Volume 16 Issue 155 Print Report
The petitioner, a corporation, sold, on December 15, 1941, 20 shares of BMC to HWH for $1,000. Its basis in the stock was $2,000. It sold on the same day 250 shares o...
Resident Taxed On Community Property Of Non-Resident's Income
August 15, 2022 - Bulletin Print Report
Husband, ("H"),was a California, ("C"), non-resident who resided and was domiciled in Texas, ("T"). H earned out-of-state wage income throug...
AMC To Distribute "Preferred Equity Units"
August 15, 2022 - Bulletin Print Report
Never a dull moment when it comes to the machinations of AMC Entertainment Holdings, Inc., ("AMC"). On August 4, 2022, the company announced that its Board of Directo...
Legitimate Business Activity Found In Post-Tax Profit Pursuit
August 15, 2022 - Bulletin Print Report
In 2004, Congress created a refined-coal tax credit. AJG formed a new subsidiary, C. C's business model made economic sense only by accounting for the tax credit.&...
"Reverse" Termination Fee Ruled A Capital Loss
August 12, 2022 - Bulletin Print Report
In ILM 202224010, February 24, 2022, the "Agreement" provided for TP's acquisition of T. TP and T later decidedto terminate the Agreement; and TP paid to T...
SPAC Merger Said To Satisfy "COBE" Requirement
August 12, 2022 - Bulletin Print Report
Holisto Ltd., an Israeli corporation,has decided to engage in a business combination with a special purpose acquisition company, (a "SPAC"), by the name of Mori...
Imputed Interest Income Is Non-Business Income
August 12, 2022 - Volume 16 Issue 154 Print Report
Utah taxable income means apportioned income plus non-business income allocable to Utah net of related expenses. Business income means income arising from transaction...
Payments That Survive Death Are Not "Alimony"
August 12, 2022 - Bulletin Print Report
A and E married in 1984. On February 4, 2008, A and E entered into a Marital Termination Agreement, ("MTA"). Two weeks later, the court entered its Judgment and Decre...
Interest Accruing After Delivery Date Belongs To Buyer
August 11, 2022 - Volume 16 Issue 153 Print Report
X, a dealer in municipal bonds, purchased certain municipal bonds on September 1, 1972. On September 15, 1972, X agreed to sell the bonds, and delivered a written con...
XOM's Agreements Were Mineral Leases
August 11, 2022 - Bulletin Print Report
The Qatari agreements grant Exxon, ("E"), rights to explore the North Field. In exchange for mineral rights, E must extract gas and pay Qatar, ("Q"), royalt...
I.R.S. Relaxes Requirements For A Section 754 Election
August 11, 2022 - Bulletin Print Report
A prime example of the dominance of the "aggregate" (as opposed to the "entity") theory of partnership taxation is the election afforded partnerships by sec...
Missouri's Challenge Of "ARPA" Is Dismissed On "Standing" Grounds
August 11, 2022 - Bulletin Print Report
The American Rescue Plan Act of 2021, Pub. L. No. 117-2, ("ARPA"), which was enacted in March 2021, appropriates over $200 billion to states, territories, and tribal...
Returning Escrowed Stock Can Give Rise To Gain Or Loss
August 10, 2022 - Volume 16 Issue 152 Print Report
In January 1976, X acquired substantially all of the assets of Y, subject to its liabilities, in exchange for 150 shares of X voting common stock in a transaction tha...
Wind Turbines Found To Be Real Property
August 10, 2022 - Bulletin Print Report
The principal issue in this appeal is whether wind turbines used for the generation of electricity, and their associated equipment, are properly classified as real property pur...
Online Advertising Does Not Create Nexus
August 10, 2022 - Bulletin Print Report
C, a remote seller of shoes, clothing, and accessories via the internet, does not have employees or representatives that travel within the Commonwealth, nor does C own or lease...
Freight Broker Is Not Subject To The Lower Public Utility Tax
August 10, 2022 - Bulletin Print Report
E is a freight broker; it contracts with motor carriers and customers "to facilitate and coordinate the transportation of goods" nationally. The Department of Revenue...
SARs Are Not Options For Purposes Of Sec. 302
August 9, 2022 - Volume 16 Issue 151 Print Report
Company, (C), is a State X corporation whose stock is widely-held and publicly traded. A, B, and C (the Executives) are executives of C. C signed employment agreement...
Taxpayer Was Not An "Urban Transit Hub"
August 9, 2022 - Bulletin Print Report
J contests M's assessment of a non-residential development fee against the Subject Property. The statute imposes "a fee...on all construction resulting in non-resident...
IS's Shareholders Are Offered Tax Advice
August 9, 2022 - Bulletin Print Report
Unity Software, Inc., ("U"), and ironSource Ltd., ("IS"), a corporation organized under the laws of Israel,are planning a business combination in conn...
COVID-19 Did Not Cause An "Access Interruption"
August 9, 2022 - Bulletin Print Report
Utah Code Ann. section 59-2-103 provides for the assessment of property as follows: "All tangible property...shall be assessed and taxed at a uniform and equal rate on the...
3M Chooses A Split-Off In Connection With Its "RMT" Transaction
August 8, 2022 - Bulletin Print Report
3M Company, ("3M"), decided to dispose of its Food Safety business via a "Reverse Morris Trust," ("RMT"), transaction. In an RMT transaction, the...
Senate Approves New Minimum Tax And "Repurchase" Tax
August 8, 2022 - Bulletin Print Report
H.R. 5376, the so-called "Inflation Reduction Act of 2022," contains two new tax initiatives, each of which promises to have importantimplications for investors...
Ascertaining The Basis Of Replacement Property
August 8, 2022 - Volume 16 Issue 150 Print Report
In 1976, unimproved land with a basis of $60x that was held for investment by the taxpayer, an individual, was condemned, and $300x was paid to the taxpayer by the co...
Payment Processing Services Are Not Subject To Sales Tax
August 8, 2022 - Bulletin Print Report
Taxpayer, ("TP"), offers a payment card management program, ("PCMP"). The PCMPoffers customers the ability to manage and customize debit and prepaid c...
Member Of Affiliated Group Deemed To Have Filed Form 1122
August 5, 2022 - Bulletin Print Report
Parent acquired Sub 1, a non-life insurance company, on Date 4. On Date 5, Parent timely filed an initial consolidated return for the taxable year ending Date 3. Parent filed t...
Disregarded Entity's Personal Property Subject To Local Property Tax
August 5, 2022 - Bulletin Print Report
BP was a Virginia limited liability company whose sole member was DR. BP owned coal and fuel oil situated in the town of Somerset, ("T"), that was used in connection...
PFE's Interest Expense Need Not Be "Added Back"
August 5, 2022 - Bulletin Print Report
PTI filed a 2012 tax return in Ireland and reported the $658 million in interest that PTIreceived from Pfizer, Inc., ("TP"), as income on that return. TP acknow...
Income From "Rabbi Trust" Is Business Income
August 5, 2022 - Volume 16 Issue 149 Print Report
M is a Mississippi corporation with operations in several states, including Missouri (MO). In 1988, M established a deferred compensation plan (the Plan) for a group...
Lessor Denied Sales Tax Credits
August 4, 2022 - Bulletin Print Report
G is a fleet management company that leases fleets of vehicles to businesses. G entered into lease agreements for motor vehicles ("Leased Vehicles") to businesses in...
Timely Protest Bars Discharge Of Tax Indebtedness
August 4, 2022 - Volume 16 Issue 148 Print Report
On February 23, 1988, the California Franchise Tax Board (FTB) sent B a notice of proposed tax assessment for the tax years 1983 and 1984. In response, B's attorn...
Pre-Litigation Notice Of Intent To Foreclose Ruled Sufficient
August 4, 2022 - Bulletin Print Report
In 2005, HNT purchased three contiguous parcels of real property. Property tax payments on all three parcels became delinquent. Lien holders, ("Ls"), each purchased a...
Vertical Division Of A Single Business Passes Muster
August 4, 2022 - Bulletin Print Report
Distributing is an 'S' corporation. Distributing manages and operates a single business, Business A. Distributing has one class of common voting stock. Sibling A is a t...
The Limits Of The "Convertibility" Test
August 3, 2022 - Volume 16 Issue 147 Print Report
In Date A, TP's wholly-owned subsidiary, NS, acquired assets of OP, consisting of the stock of its wholly-owned subsidiary, OS, and other assets. In order to rais...
Equipment Not Found To Be "Fixtures"
August 3, 2022 - Bulletin Print Report
This appeal involves the classification for tax purposes of various equipment associated with grain storage bins. The equipment was bolted to the storage bins. The district cou...
SHLX's "Roll-Up" Will Likely Produce Ordinary Gain
August 3, 2022 - Bulletin Print Report
Over the past few years, we have witnessed numerous "roll-ups" of MLPs. In a roll-up, the general partner/sponsor acquires the publicly held partnership units and, in...
Profit Motive Alone Does Not Indicate A Business
August 3, 2022 - Bulletin Print Report
The Commissioner issued a use tax assessment against BG relatedto the title transfer of nine vehicles in 2010. The Commissioner assessed AM a total tax due of $305,109.47...
Attribution Rules Apply Even Without Actual Ownership
August 2, 2022 - Volume 16 Issue 146 Print Report
In 1958, GC transferred 66 shares of C&R to R for $19,800. He reported a long-term capital gain on this sale. The I.R.S. was of the view that the proceeds should...
MTZ's Stock Will Be Taxable
August 2, 2022 - Bulletin Print Report
MasTec, Inc., ("MTZ"), and Infrastructure and Energy Alternatives, Inc.,("IEA"), announced that they have entered into a definitive agreement under wh...
WLL/OAS Deal Features Unusual Payout By The "Issuing" Corporation
August 2, 2022 - Bulletin Print Report
Whiting Petroleum Corporation, ("WLL"), and Oasis Petroleum, Inc., each a domestic oil and gas exploration and production company,("OAS"), recently an...
NortonLifeLock's "Occasional Sale" Treated Harshly By Illinois
August 2, 2022 - Bulletin Print Report
In the summer of 2019, NortonLifeLock, Inc., ("NLOK"), then known as SymantecCorporation, ("SC"), announced that it had reacheda transformative...
Tax Liability Not Discharged In Bankruptcy
August 1, 2022 - Volume 16 Issue 145 Print Report
Appellant (AP) and her husband filed a timely California tax return for 2008. The couple reported taxable income of $81,953 and tax of $2,359. Later, the Franchise Ta...
Claims For Refund Are Not "Evidences Of Indebtedness"
August 1, 2022 - Bulletin Print Report
In their 2018 state and federal tax return, filed on March 31, 2020, the Ws elected to apply their tax refunds to the subsequent tax year's return. They made the same elect...
Activities Did Not Constitute "Significant Participation Activities"
August 1, 2022 - Bulletin Print Report
TP, through multiple grantor trusts, wholly owns C, an 'S' corporation. C owned multiple entities, the activities of which are treated as separate un-grouped activities...
A Revised Piece Of Tax Legislation Emerges From The Ashes
July 29, 2022 - Bulletin Print Report
To everyone's surprise, it appears that the odds of tax legislation in this session of Congress has increased substantially now that Senator Manchin (D. W.Va.) has agreed t...
"Judicial Admission" At Trial Supports FBAR Penalty Assessment
July 29, 2022 - Bulletin Print Report
B held two bank accounts with UBS. He disclosed neither to the Federal Government until 2008, despite his accountant telling him he was breaking the law by failing to note a fo...
Boot In A Single Entity Reorganization
July 29, 2022 - Volume 16 Issue 144 Print Report
X has outstanding 420 shares of voting common stock of which A owned 120 shares and B, C, and D each owned 100 shares. X adopted a plan of recapitalization that permitted a sha...
Gain On Sale Of Partnership Interest Is Not Distributive Share
July 28, 2022 - Bulletin Print Report
TP, commercially domiciled in City, is a subsidiary of C1 in Country 1. TP has Illinois, ("I"), nexus. TP acquired a minority and limited partner interest in a partne...
The Inevitability Of Dividends
July 28, 2022 - Volume 16 Issue 143 Print Report
During the years 1950-1952, N was the parent of an affiliated group. The group included N's three wholly-owned subsidiaries, a 99.24 percent controlled subsidiary, RE, and...
Trade-In Credit Denied
July 28, 2022 - Bulletin Print Report
G is a Delaware statutory trust that transacts business in Nebraska, ("N"). It purchases motor vehicles and then leases them to customers in N. As a lessor, G elected...
Only the "Acquiring Corporation" Can Assume Liabilities in a 'C'
July 27, 2022 - Volume 16 Issue 142 Print Report
X Corporation, (X), owns Y Corporation, (Y). X proposed to acquire all of the properties of Z Corporation, (Z). X and Z enter...
Tax Refund Traceable To Social Security Benefits Is Exempt
July 27, 2022 - Bulletin Print Report
On February 24, 2022, D, ("D"), filed a Chapter 7 bankruptcy petition. After the petition date, D received an income tax refund of $5,536 for the 2021 tax year. On hi...
Assessment Based On Fraud Was Time-Barred
July 27, 2022 - Bulletin Print Report
Taxpayer's appeal involves final assessments of 2007 though 2013 Alabama individual income tax that were entered by the Alabama Department of Revenue, (the "Department...
Presence Of "Financial Disability" Not Found
July 27, 2022 - Bulletin Print Report
Plaintiff, ("P"), alleges she filed her 2012, 2013, and 2014 tax returns late on April 12, 2019, because she suffered mental and physical impairments from an abusive...
JEF Will Spin-Off Vitesse Energy, Inc.
July 26, 2022 - Bulletin Print Report
Jefferies Financial Group, Inc., ("JEF"), as it periodically does, announced that it has adopted a plan to restructure its businesses. The most recent announcement is...
Holder Of Life Estate "Owns" Property
July 26, 2022 - Volume 16 Issue 141 Print Report
Petitioner's (P) husband, R, owned a home before he and P married. R passed away in August 2011. His will provided P with a life estate in the home, and provided his...
California Bifurcates Non-Resident's Sale Of A Partnership Interest
July 26, 2022 - Bulletin Print Report
1. Non-resident partner A owns a 49 percent interest in ABC Partnership, ("ABC"). ABC's business is carried on wholly within California. ABC's assets include...
Child-Related Contingency Precludes Alimony Deduction
July 26, 2022 - Bulletin Print Report
A and C divorced in 2012. On July 25, 2012, the L.A. Superior Court entered a judgment of dissolution that stated: Neither party shall pay child support; Neither party shall pa...
Federal Courts Cannot Enjoin Assessment Of State Tax
July 25, 2022 - Bulletin Print Report
GLF is a non-profit corporation offering various cultural as well as educational services. In 2013, GLF acquired a property in Queens, (the "Property"), and received...
"IRD"
July 25, 2022 - Volume 16 Issue 140 Print Report
Mr. Henry C. Bickmeyer, (HB), died on November 15, 1973. At the time of his death, HB owned 489 shares of HBC, Inc., (HBC), and 2,500 shares of HBL, Inc., (HBL)....
Art Gallery Not Operated For Profit
July 25, 2022 - Bulletin Print Report
Appellants, ("APPs"), owned LLC which purchased commercial propertyAKB. APPs reported a gain of $7,524,139 from their sale of AKB. On March 8, 2008, APPs began...
Governor's Proclamation Waives Late Payment Interest
July 25, 2022 - Bulletin Print Report
Taxpayer operates a manufacturing facility located in Washington. The Department of Revenue's Audit Division identified additional business and occupation, ("B&O&q...
"Short" Put Option Can Precipitate A "Wash Sale"
July 22, 2022 - Volume 16 Issue 139 Print Report
On December 3, 1984, Mr. A, an individual, sold 100 shares of stock of X corporation (X) and realized a loss with respect to the shares. On December 4, 1984, A sold a...
Concrete Supplier Did Not Install Capital Improvements
July 22, 2022 - Bulletin Print Report
Petitioner is a New York corporation that performs general contracting and concrete placement work for construction projects. Petitioner filed applications for a refund of sale...
Patent Infringement Not A Fifth Amendment Taking
July 22, 2022 - Bulletin Print Report
Dr. F is a licensed attorney and a neurosurgeon who contributed to the development of Diffusion Tensor Imaging, ("DTI"), a magnetic resonance imaging technique that a...
Internet Service Providers Are Not Subject To Virginia's "BPOL" Tax
July 22, 2022 - Bulletin Print Report
In 1998, Congress enacted the Internet Tax Freedom Act, ("ITFA"). The statute places a moratorium on state and local taxes on internet access services. ITFAinit...
The Willens Deal Survey July 2022
July 21, 2022 - The Deal Survey: July 2022 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
Power To Vary The Investment Not Found
July 21, 2022 - Volume 16 Issue 138 Print Report
S, a financial services corporation, created an investment trust funded with a fixed portfolio that included a certain issue of tax-exempt debt obligations. The oblig...
UBS Executive Denied Connecticut Resident Tax Credits - Part II
July 21, 2022 - Bulletin Print Report
C joined UBS in 1996. In 1998, he moved to Connecticut, ("CT"), and moved his office from New York City to Stamford, CT. Gradually, however, his time spent performing...
FASB Clarifies Accounting For Stock With Contractual Sale Restrictions
July 21, 2022 - Bulletin Print Report
FASB points out, in Accounting Standards Update, ("ASU")No. 2022-03, June 2022, "Fair Value Measurement of Equity Securities Subject to Contractual Sale Re...
Disgorgement Did Not Serve A Compensatory Purpose
July 21, 2022 - Bulletin Print Report
CZ was the president of FMC. FMC originated and acquired residential mortgages. FMC pooled the mortgages into mortgage backed securities, which were guaranteed by the GNMA and...
Resolving A Conflict Between The Bankruptcy Code And The "TIA"
July 20, 2022 - Bulletin Print Report
WPG is a real estate investment trust. This dispute concerns WPG's subsidiary, WPGN. Anoka County, ("AC"), assesses ad valorem taxes on January 2 each year. The t...
Contribution To Capital Not Necessarily A Device
July 20, 2022 - Volume 16 Issue 137 Print Report
P has owned all the stock of S for more than five years. Each has been engaged in the active conduct of a trade or business for more than five years. As a result of a...
SAND And NSR Announce Plan Of Arrangement
July 20, 2022 - Bulletin Print Report
Nomad Royalty Co. Ltd., ("NSR"), and Sandstorm Gold Ltd., ("SAND"), each a corporation organized under the laws of Canada, have entered into an "Arrang...
IRA Distribution Is "Moneys Received"
July 20, 2022 - Bulletin Print Report
At issue is whether APP qualifies for the homestead property tax relief program offered pursuant to N.C. Gen. Stat. section 105-277.1. He does not. The County denied APP's...
N.E.A. Has UBTI
July 19, 2022 - Volume 16 Issue 136 Print Report
The National Education Association, (N), and its affiliates are exempt from tax under Sec. 501(a) as Sec. 501(c)(5) labor organizations. Each N member paid dues of $1...
When Is A Gift Of A Check Complete?
July 19, 2022 - Bulletin Print Report
Decedent, ("D"), was domiciled in Pennsylvania, ("PA"), when he died testate on September 11, 2015. In January 2007, D executed a Power of Attorney, ("...
CVRs Can Resolve Valuation Disputes
July 19, 2022 - Bulletin Print Report
In acquisitions in the biotechnology field, it is sometimes difficult to place a value on a target's nascent technology. Manythings have to fall in place, both from a...
Conditions For Section 1059(c)(4) Election Were Met
July 19, 2022 - Bulletin Print Report
Section 1059(a) of the Internal Revenue Code provides that "if any corporation receives any extraordinary dividend with respect to any share of stock and such corporation...
Broadcom Files Preliminary S-4
July 18, 2022 - Bulletin Print Report
Broadcom's preliminary S-4 contains a brief discussion of its expect...
Tardy Tax Payment Forecloses Appeal Of Assessment
July 18, 2022 - Bulletin Print Report
On October 1, 2020, the Board issued a final assessment appraising the fair market value of the property for ad valorem tax purposes. On October 16, 2020, A filed a notice of a...
Sale-Leaseback Did Not Constitute A Mortgage
July 18, 2022 - Bulletin Print Report
TP purchased a gas station for $1,520,000. On the following day, TP sold the gas station to BL for $2,015,200. BL entered into a Lease with TP on the very same day and leased t...
Losses Not Considered In Computing Homeowner's "Income"
July 18, 2022 - Bulletin Print Report
At issue is whether APP qualifies for the homestead property tax relief program offered pursuant to N.C. Gen. Stat. section 105-277.1. APP filed an application to participate i...
Nontaxable Annuity Receipts Are Part Of "Disposable" Income
July 18, 2022 - Volume 16 Issue 135 Print Report
For assessment year 2010, for taxes payable in 2011, the Owner applied for a senior citizen property tax exemption under RCW 84.36.379. The Assessor denied the exempt...
Successor Pension Plan Not Deemed To Be In "Critical Status"
July 15, 2022 - Bulletin Print Report
Plan A, a multi-employerdefined benefit pension plan, is an eligible multi-employer plan under section 432(k)(3) of the Code. Plan A applies to the PBGCfor special...
"Excess" Tax Sharing Agreement Remittance Is A Dividend
July 15, 2022 - Volume 16 Issue 134 Print Report
Petitioner, (P), was formed by a merger on October 31, 1945 of two other corporations, BLS and BNIC. BLS had three wholly-owned subsidiaries with which it filed conso...
Additional Tax On Amended Return Draws Late Payment Interest
July 15, 2022 - Bulletin Print Report
APPs timely filed a 2017 California income tax return, indicating that rental property destroyed by fire would be replaced with similar property under section 1033 of the Inter...
IRA Found Subject To Garnishment
July 15, 2022 - Bulletin Print Report
In 2018, Defendant was sentenced to a term of imprisonment and supervised release and was ordered to pay restitution in the amount of $185,181.43. On March 18, 2022, the United...
U And IS Announce An "All-Stock" Combination
July 14, 2022 - Bulletin Print Report
Unity Software, Inc., ("U"), and ironSource Ltd., ("IS"), a corporation organized and existing under the laws of Israel,announced that they have enter...
Business Purpose Needed For Gaining Spin-Off Control?
July 14, 2022 - Volume 16 Issue 133 Print Report
X owned 40 percent of the stock of Z. Y owned 60 percent of the stock of Z. All of the stock of each of X and Y was owned by Mr. A. Each corporation had been engaged...
Federal Tax Lien Attaches To Alimony Payments
July 14, 2022 - Bulletin Print Report
Y has asked about the priority of the federal tax lien, (the "FTL"), in a situation where the taxpayer was ordered to pay monthly alimony payments to his ex-wife as a...
I.R.S. Not Precluded From Asserting Excise Tax Liability
July 14, 2022 - Bulletin Print Report
In 1999, P was employed as the president of N. N was a subsidiary of T. T maintained an ESOP. As of 2004, P owned 4,586 shares of stock in the ESOP. He also enjoyed benefits un...
Taxpayer Not "Away From Home"
July 13, 2022 - Volume 16 Issue 132 Print Report
Ethel Merman (EM)is a well-known entertainer. She has been in "show business" since 1930, performing mainly in the theater on Broadway. In March 1953,...
Only Apportioned Business Income Is Taxable In California
July 13, 2022 - Bulletin Print Report
APP was a non-resident of California. APP contracted with the CHRBto serve as a HorseRacing Steward in California. Under her contract, APP judged horse races in Cal...
Ticket Broker Need Not Collect And Remit Sales Or Use Tax
July 13, 2022 - Bulletin Print Report
Applicant is a ticket broker located outside Missouri. Applicant acquires and sells tickets to events located within and outside of Missouri. Applicant is unaffiliated with the...
G.M.'s Tax Credit Information Is Subject To Disclosure
July 13, 2022 - Bulletin Print Report
In 1995, the Michigan Legislature the MEGA Act, creating MEGA within the Michigan Strategic Fund, ("MSF"). Pursuant to the Act, refundable tax credits were awarded to...
Pre-Marital NOL Cannot Offset Income Of Spouse
July 12, 2022 - Volume 16 Issue 131 Print Report
AC and LC were married in December 1959. Originally, for the taxable year 1959, they each filed a separate tax return. AC reported adjusted gross income of $8,044.19...
Recycling Not A Bar To Imposition Of New Jersey's "Litter" Fee
July 12, 2022 - Bulletin Print Report
P operates a cardboard manufacturing business which produces shipping containers and displays for sale to its clients. When ready to leave the manufacturing facility, the boxes...
Senior Residential Facilities Were Not "Health Care Facilities"
July 12, 2022 - Bulletin Print Report
Taxpayer, ("TP"), is a real estate investment trust, (a "REIT"). TP holds interests in age-restricted senior residential facilities, (the "Facilities&q...
"Failed To Act" Means "Failed To Render A Decision"
July 12, 2022 - Bulletin Print Report
On January 26, 2016, N submitted a tax refund claim to S and NN (collectively, the "Collector"). The claim alleged an overpayment of sales and use tax. By letter date...
New York Seeks To Tax More Of Hedge Funder's Deferred Compensation
July 11, 2022 - Bulletin Print Report
In 2017, F and T were non-resident partners of AristeiaHoldings, LP, ("AR"). In 2017, AR recognized non-qualified deferred compensation in the amount of $126,20...
Foreign Currency Not Subject To The Wash Sale Provisions
July 11, 2022 - Volume 16 Issue 130 Print Report
The questionto be consideredis whether foreign currenciesconstitute "securities" within the meaning of Sec. 1091 of the Code, relating to...
Inadequate Tax Reporting Caused A Breach Of Contract
July 11, 2022 - Bulletin Print Report
G purchased at a premium a number of taxable municipal bonds issued by Michigan and Texas that he held in his brokerage account at UBS. His relationship with UBS was governed b...
"MSA" Payments Not Includible In Cost Of Goods Sold
July 11, 2022 - Bulletin Print Report
Petitioners, ("Ps"), are engaged in the business of manufacturing cigarettes. Ps are parties to a Master Settlement Agreement, ("MSA"). The MSA requires the...
Accounting For HTA's Special Distribution
July 8, 2022 - Bulletin Print Report
Healthcare Trust of America, Inc., ("HTA"), announced that its Board of Directors has established the last business day prior to the closing date of the merger with H...
Who Is "The Person" Who Made The Overpayment?
July 8, 2022 - Volume 16 Issue 129 Print Report
The husband and wife filed a joint return. The entire amount of the tax liability was paid by the wife. Subsequently, it was determinedthat there was an overpay...
A Portion Of Retirement Benefits Are From "Privately Funded Sources"
July 8, 2022 - Bulletin Print Report
The taxpayer, ("TP"),is a retired Federal government employee. Under the Federal Employees Retirement System, ("FERS"), retired Federal government emp...
Substantial Compliance With A Statutory Requirement Is Not Sufficient
July 8, 2022 - Bulletin Print Report
In 2012, the Commissioner notified I that he had deficiencies for the 2009 and 2010 tax years. I petitioned the Tax Court. He argued that he was entitled to a deduction of $338...
Actual Payment Not Required For Sec. 881 To Apply
July 7, 2022 - Volume 16 Issue 128 Print Report
During 1990, petitioner (a Mexican corporation) rented a fleet of trucks and trailers to another Mexican corporation, H. H did not pay rent for the use of theeq...
Baker's Purchase Of Utilities Subject To Sales Tax
July 7, 2022 - Bulletin Print Report
Applicant has a bakery and freezing operation that produces dough which is then sold to its stores. Applicant combines the raw materials necessary to make the dough. The questi...
Federal Tax Lien Did Not "Attach" To Debtor's Personal Property
July 7, 2022 - Bulletin Print Report
S filed a petition under Chapter 13 of the Bankruptcy Code on August 17, 2021. On September 15, 2021, the I.R.S. filed a proof of claim. S's objection to the claim asserts...
Plant Sales Were Subject To Sales Tax
July 7, 2022 - Bulletin Print Report
Applicant, ("APP"),is a section 501(c)(3) charitable and educational organization whose exclusive purpose is horticultural education to support and to supplemen...
Non-Resident Shareholders Taxed On 'S' Corporation's Business Income
July 6, 2022 - Bulletin Print Report
In 2014, the Family Trust, ("FT"), and the Evan Trust, ("ET"), each an electing small business trust within the meaning of section 1361(e) of the Code, were...
Shares Held In Escrow Are Owned "Directly"
July 6, 2022 - Volume 16 Issue 127 Print Report
X purchased for cash, payable in installments, all the outstandingshares of stock of Y. The shares consisted of Class A common stock and Class B common stock. T...
Corporation Not Synonymous With Its Disregarded Entity
July 6, 2022 - Bulletin Print Report
Plaintiff, ("P"), is a 'C' corporation. During 2016 and 2017, P wholly owned two subsidiaries, (the "subsidiaries"). The subsidiaries are each limit...
Bulk Sale Purchaser Became Liable For Seller's Sales Taxes
July 6, 2022 - Bulletin Print Report
In or around November 2016, P acquired business assets from A. A form AU 196.10 was not filed at any time. P operated an automotive repair shop at a Queens County location. Pri...
GSK plc Announces A "De-merger"
July 5, 2022 - Bulletin Print Report
GSKplc, ("GSK"), and Pfizer, Inc., ("PFE"), operate a joint venture, "Consumer Healthcare Holdings," ("CH JVCo"), in which GSK&nbs...
Parent Owns Subsidiary's Stock Until Sale Closes
July 5, 2022 - Volume 16 Issue 126 Print Report
A is a publicly-held corporation. A is the common parent of an affiliated group of corporations filing a consolidated income tax return. B is a wholly-owned subsidiar...
Con Edison Does Not Charge Twice For The "GRT"
July 5, 2022 - Bulletin Print Report
Petitioners, ("Ps"), each had properties located in New York City during 2014 through 2016. Ps are all related entities owned by Brookfield Properties, Inc. Ps purcha...
"Deed-In-Lieu" Property Produced Only Section 1231 Gain
July 5, 2022 - Bulletin Print Report
During 2012, H was the sole shareholder of an 'S' corporation, EMJ, which was a 50 percent member of LEP. LEP was classified as a partnership for tax purposes. SDM ...
N.J. Resident Did Not Have A "Residential Interest" In N.Y. Vacation Home
July 1, 2022 - Bulletin Print Report
In April 2016, a notice of deficiency was issued to petitioners, ("Ps"), from the Department of Taxation and Finance, (the "Department"). Ps were domiciled...
Corporation's Exercise Of Option Does Not Result In Dividend
July 1, 2022 - Volume 16 Issue 125 Print Report
In 1968, Corporation, (C), had 20,000 shares of common stock outstanding of which 15,000 shares were held by B and 5,000 shares were held by A. On February 20, 1968,...
Bulk Water Is Not Tangible Personal Property Subject To Sales Tax
July 1, 2022 - Bulletin Print Report
The question presented for considerationis whether Company's sales of water are tangible personal property subject to Colorado sales tax. Company is engaged in the bu...
Leases Of "COAMs" Subject To Sales And Use Tax
July 1, 2022 - Bulletin Print Report
TP operates a business where children can drive miniature vehicles along an indoor track. TP leases certain of its business equipment, including its "COAMs," from ano...
Taxpayer's "Abode" Was Outside The United States
June 30, 2022 - Bulletin Print Report
Respondent issued a notice of deficiency to P. P retired from the U.S. Army in 2008 and thereafter purchased a home in Georgia. P's daughter lived with him in the home and...
Contributions to Capital Are Not "Items of Income"
June 30, 2022 - Volume 16 Issue 124 Print Report
N1, N2, and W, each of whom is an individual, own all of the stock of three 'S' corporations, WNNY, GLD, and WNCA. N1 and N2 are brothers. &nb...
TracFone Subject To Maine's Service Provider Tax
June 30, 2022 - Bulletin Print Report
TF sells telecommunications services. TF did not own or operate its own telecommunications facilities but instead purchased the services from other licensed wireless network op...
"Suspended" Corporation Is Capable Of Making A Distribution
June 30, 2022 - Bulletin Print Report
A was incorporated in Delaware on January 29, 2004. A borrowed funds to purchase real property, (the "Q property"). H paid the "earnest money deposit" of $4...
Has JUUL's Stock Become Worthless?
June 29, 2022 - Bulletin Print Report
The FDA recently reached a controversial decision and issued an accompanying order in which it determined that JUUL Labs, Inc. would no longer be permitted to marketits p...
Income From Supplying Water Is Qualifying Income
June 29, 2022 - Volume 16 Issue 123 Print Report
X is a limited partnership. X intends to become a publicly traded partnership by effecting an initial public offering of units. X expects to earn income primarily by assessing...
Supreme Court Rejects "Disparate Impact" Theory
June 29, 2022 - Bulletin Print Report
Medicare, ("M"), provides health insurance coverage for those who are 65 years of age or over, or are disabled. In 1972, Congress extended M coverage to individuals w...
Seattle's "Amazon Tax" Is Constitutional
June 29, 2022 - Bulletin Print Report
On July 6, 2020, the City adopted Ordinance 126108 imposing a "payroll expense tax" on certain entities engaging in business in Seattle. The City delayed the date of...
Trustee Does Not Acquire A Prohibited Interest
June 28, 2022 - Volume 16 Issue 122 Print Report
X had outstanding voting stock all of which was held by A, B, C, D, and Trust. A and B were husband and wife. C was their son, and D, their daughter. Trust was a trust establis...
SAVE/ULCC Merger Bumping Up Against The "Control Requirement"
June 28, 2022 - Bulletin Print Report
Frontier Group Holdings, Inc., ("ULCC"), and Spirit Airlines, Inc., ("SAVE"), are attempting to push their merger to the finish line, in the face of strong...
Land Used In Connection With A Public Water Supply Is Taxable
June 28, 2022 - Bulletin Print Report
The Authority is a municipal utility responsible for supplying potable water to Atlantic City. The Authority owns various parcels of land in the Municipalities. Those lands are...
Property Tax Exemption Limited To One Dwelling
June 28, 2022 - Bulletin Print Report
This case involves three contiguous parcels of real property, the "2514" parcel, the "2520" parcel, and the "2524" parcel. The properties collecti...
Taxpayer Sold "Day Trips For Sightseeing Purposes"
June 27, 2022 - Bulletin Print Report
Taxpayer operates a railroad within Washington. Taxpayer charges its customers for tickets to go on short train trips and special events, and also sells snacks and drinks. Taxp...
Premiums On "Stop-Loss" Insurance Policies Are Taxable
June 27, 2022 - Bulletin Print Report
H does business as Blue Cross Blue Shield, ("BC"). Texas approved BC to sell stop-loss policies to employers who self-fund their employees' health insurance. BC r...
Competition for Capital Precipitates a Spin-Off
June 27, 2022 - Volume 16 Issue 121 Print Report
D is a publicly traded corporation that conducts a pharmaceuticals business. C, a wholly-owned subsidiary of D, conducts a cosmetics business. &...
Cost Of Business Clothing Ruled Deductible
June 27, 2022 - Bulletin Print Report
During each year in issue, MR was employed as a stationary engineer; MRS was employed as a nurse in a clinic operated by K. K's dress code required that MRS be dressed in &...
Cash Originating With Target Treated As "Boot"
June 24, 2022 - Volume 16 Issue 120 Print Report
T is a State A corporation that is a holding company. T has one class of outstanding stock. T owns "a%" of the outstanding stock of ACQ. The ACQ stock is T's prin...
Lessee Had Equitable Title To The Underlying Property
June 24, 2022 - Bulletin Print Report
J is a non-profit corporation and open-enrollment public charter school. On November 13, 2018, J entered a "Build to Suit Lease and Option" to lease property for a ca...
OAS's Special Dividend Promises To Be "Extraordinary"
June 24, 2022 - Bulletin Print Report
Oasis Petroleum, Inc., ("OAS"), announced that its Board of Directors has...declared a "special dividend" of $15.00 per share. The dividend is being declare...
Net Lessee May Grieve Real Estate Tax Assessment
June 24, 2022 - Bulletin Print Report
D operates a car dealership in M. In 2007, D entered into a 20-year net lease with O of a parcel of real property located in M. The lease obligates D to pay "all...real es...
The Willens Deal Survey June 2022
June 23, 2022 - The Deal Survey: June 2022 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
New Home Not Acquired By Means Of "Purchase"
June 23, 2022 - Volume 16 Issue 119 Print Report
MLZ died on April 24, 2008. She left her entire estate to her two sons, EZ and AZ, "to be divided equally, share and share alike." Her estate included a home (the Pro...
Transfer Of Low-Income Housing Exempt From "REET"
June 23, 2022 - Bulletin Print Report
In 2017, a Washington Limited Partnership...transferred a controlling interest in...LLC ("Taxpayer") to Transferee. Taxpayer filed a Real Estate Excise Tax(&quo...
Will The Acquisition Of LWRK Qualify As A Reorganization?
June 23, 2022 - Bulletin Print Report
TELUSCorporation, ("TU"), announced that it has entered into a definitive agreement with LifeWorks, Inc., ("LWRK"), pursuant to which TUwill acq...
Website "Began" Before Revenue Was Generated
June 23, 2022 - Bulletin Print Report
In 2013, P formed V, of which he was the sole member. P and the engineers he hired completed V's core functionality in March 2015, and worked to resolve software "bugs...
Withholding Tax Likely On Algoma's Stock Buyback
June 22, 2022 - Bulletin Print Report
Algoma Steel Group, Inc., a Canadian corporation, is launching a rather...
AT&T's Spin-Off Ruling Does Not Dwell On The "Active Business" Issue
June 22, 2022 - Bulletin Print Report
LTR202224002, December 28, 2021, appears to be the ruling that was issued to AT&T, ("T"), in connection with its highly publicized"Reverse Morris...
Ascertaining The Owner Of Escrowed Shares
June 22, 2022 - Volume 16 Issue 118 Print Report
Pursuant to a stock purchase agreement (SPA) executed on Date 1, PU agreed to acquire 100 percent of the sole class of outstanding stock of T from its shareholders (Ss) over th...
Discharge Of Debt Not Prerequisite To Issuance Of Form 1099-C
June 22, 2022 - Bulletin Print Report
In March 2012, T's predecessor obtained a judgment against G and his wife. After G failed to satisfy the judgment, T issued an I.R.S. Form 1099-C to G for the 2018 tax year...
Defaulting Taxpayer Not Entitled To "QRI" Deduction
June 22, 2022 - Bulletin Print Report
In 2007, Ps executed a credit agreement with HTB,consisting of a promissory note and mortgage secured by their principal residence, with respect to a line of credit up to...
Resort-Area Tax Did Not Automatically "Sunset"
June 21, 2022 - Bulletin Print Report
C seeks to recover a locally imposed resort-area gross receipts excise tax which PIB originally enacted in 1995. PIBenacted its resort-area tax in 1995 by passing Ordinan...
Timely Merger Brings Sec. 332 Into Play
June 21, 2022 - Volume 16 Issue 117 Print Report
P is a domestic corporation. P has issued and outstanding a single class of common stock of which 42.77 percent is held by A, 42.77 percent is held by B, and 14.46 pe...
Expropriation Loss Not Claimed In Proper Year
June 21, 2022 - Bulletin Print Report
H was born in Iran. Prior to the revolution, H inherited one-fourth ownership of a family property, (the "Property"). APPs received a Notice of Confiscation from the...
Modular Units Were Not "Immovable"
June 21, 2022 - Bulletin Print Report
The dispute concerns the applicability of local sales or lease tax on certain property, (the "Property"), that TP leased to FF. A lease or rental is the leasing or re...
Congressionally Sanctioned "Tax Avoidance" Immune From Sec. 269
June 17, 2022 - Volume 16 Issue 116 Print Report
M was organized in 1967 to engage in the business of selling and distributing certain products. All of its common stock was owned by A. M intermittently engaged in th...
Car Lifts Are Not "Capital Improvements"
June 17, 2022 - Bulletin Print Report
Petitioner, ("P") is in the business of design, installation, repair and maintenance, and the sale and lease of car lifts. The Division of Taxation, (the "Divisi...
Sales Of Services Not Covered By P.L. 86-272
June 17, 2022 - Bulletin Print Report
Petitioner, ("P"), is a Florida corporation. P is in the business of selling travel services utilizing Independent Travel Consultants, ("ITCs"), nationwide,...
Author Did Not Provide A Service
June 17, 2022 - Bulletin Print Report
R is a limited liability company solely owned by K. R is the holding company for all the rights, transactions, and income related to K's literary works. R has entered into...
Federal Conformity Cannot Be Inferred
June 16, 2022 - Bulletin Print Report
States and localities are by no means obligated to acknowledge, embrace or otherwise adhere to the federal income tax treatment of a transaction. Accordingly, a transaction tha...
Characterizing "Tax Sharing" Payments
June 16, 2022 - Volume 16 Issue 115 Print Report
X and Y are wholly-owned subsidiaries of P and M and R are wholly-owned subsidiaries of X, all of which qualify as members of an affiliated group, as that term is def...
Ramp Supervisor Engaged In Interstate Commerce
June 16, 2022 - Bulletin Print Report
LS works for Southwest Airlines, ("SA"), as a "ramp supervisor." Her work frequently requires her to load and unload baggage, airmail, and commercial cargo...
Michigan Resident Denied The Benefit Of "Principal Residence Exemption"
June 16, 2022 - Bulletin Print Report
P is a Michigan resident. For many years, P enjoyed a principal residence exemption, ("PRE"), on his Michigan residence. In late 2016, P purchased a second home in Ar...
STZ's Controlling Shareholders Propose A Recapitalization
June 15, 2022 - Bulletin Print Report
Constellation Brands, Inc., ("STZ"), has long had a high vote/low vote common stock structure. The Sands family, (the "Family"), collectively holds over 98...
Fuel Exchange Agreement Creates Nexus
June 15, 2022 - Volume 16 Issue 114 Print Report
TP is a fuel producing companywith an oil refinery in State A. TP's sales office is located in State B, with the company headquarters in State C. For a numb...
"Prospective Use" Doctrine Does Not Provide Tax Exemption
June 15, 2022 - Bulletin Print Report
It is well-settled that real property is presumed taxable, and exemption statutes are strictly construed. See Anderson/Maltbie Partnership v. Levin, 127 Ohio...
Loss From Sale Of Real Estate Was Capital In Nature
June 15, 2022 - Bulletin Print Report
D purchased for investment five condominiums in WB and immediately sold two. D also acquired for investment purposes undeveloped lots and a house in W, (the "WH"). On...
PLD And DRE Enter Into A Merger Agreement
June 14, 2022 - Bulletin Print Report
Prologis, Inc., ("PLD"), and Duke Realty Corporation, ("DRE"), each a real estate investment trust, ("REIT"), announced that they have entered int...
Tax Motivated Disaffiliation Respected
June 14, 2022 - Volume 16 Issue 113 Print Report
P files a consolidated tax return with its includible affiliates. P's sole shareholder, FP, is a foreign corporation. P holds all of the stock of Sub 1, as well a...
The "MRT" Passes Constitutional Muster
June 14, 2022 - Bulletin Print Report
In 2005, the Ms invested in KK. KK is a controlled foreign corporation, ("CFC"). KK is located in India. The TCJAcreated the Mandatory Repatriation Tax, ("...
Expense Of Seller Is Part Of The "Sales Price"
June 14, 2022 - Bulletin Print Report
TP, a restaurant, has implemented a "Cash Discount Program" so as to give patrons an incentive for paying with cash as opposed to paying with credit cards. All items...
Merger Transferee Succeeded To Transferor's Unused Tax Credits
June 13, 2022 - Bulletin Print Report
C is a bank holding company with many subsidiaries, of which three are relevant here. Before 2005, KWA earned tax credits. Those credits were governed by the SBTA, which allowe...
An FBAR Penalty Is A "Debt"
June 13, 2022 - Bulletin Print Report
The Bank Secrecy Act requires U.S. citizens to report interests in foreign accounts with a value exceeding $10,000. Citizens must declare their accounts through an FBAR. C fail...
Voting Stock Can Be "Other Than Common Stock"
June 13, 2022 - Volume 16 Issue 112 Print Report
X has outstanding 1,000 shares of common stock all of whichwere held by five related individuals. X issued two new classes of stock, Class A stock and Class B s...
In-Kind Redemption By Open-End Management Investment Company
June 10, 2022 - Volume 16 Issue 111 Print Report
IC is a corporation organized under the laws of State A and is registered under the Investment Company Act of 1940 as an open-end management investment company. Fund...
Retail Installment Contracts Not Allocated To Louisiana
June 10, 2022 - Bulletin Print Report
T's business at issue herein is its Retail Finance line of business, through which it acquires and services Retail Installment Contracts, ("RICs") from independen...
Reinsurer Granted Permission To Change Apportionment Methodology
June 10, 2022 - Bulletin Print Report
C is domiciled in STATEand has been fully licensed to conduct life, health, and annuity insurance operations in Illinois by the Department of Insurance. C's insurance...
Sec. 318 Applies Only Where Expressly Made Applicable
June 9, 2022 - Volume 16 Issue 110 Print Report
M owned 45 percent of the stock of X. A, an individual, owned 10 percent of the stock of X and 100 percent of the stock of M. The assets of X consist solely of 100 pe...
Bow Manufacturer Properly Subject To Excise Taxes
June 9, 2022 - Bulletin Print Report
E is a wholesale distributor of archery bows and parts. E was owned by S, C, B, O, and K. E's owners established PF to manufacture archery equipment. PF was owned by E'...
SRLP Is Going Private
June 9, 2022 - Bulletin Print Report
Sprague Resources, L.P., ("SRLP"), announced that it has entered into a definitive agreement and plan of merger, (the "Agreement"), pursuant to which an aff...
NYS Tax On Distributions From An I.R.A.
June 8, 2022 - Volume 16 Issue 109 Print Report
Petitioner's spouse had been employed by the New York City Police Department. He submitted retirement papers but died before any payments had been received by him...
Sale For Resale Exemption Not Properly Claimed
June 8, 2022 - Bulletin Print Report
On March 19, 2019, Taxpayer purchased "Aircraft" registered with the FAA. The seller of Aircraft located in Arkansas, ("AK"), did not charge sales tax becau...
Tax Refund Properly Offset Against Delinquent Student Loan
June 8, 2022 - Bulletin Print Report
Between 1981 and 2002, S took out a series of federal student loans to finance his education. All are in default. As of December 5, 2018, S's "Total Balance" was...
Prohibition On Receipt Of Income Precludes Allocation Thereof
June 7, 2022 - Volume 16 Issue 108 Print Report
TT purchased crude oil from the Saudi government by way of Arabian American Oil Company (AA) and resold it both to affiliates and unrelated customers. From early 1979...
No Credit Available For UK Taxes Imposed On Earned Income
June 7, 2022 - Bulletin Print Report
The taxpayers, a husband, ("H"), and wife, ("W"), filed a Virginia, ("V"), resident income tax return for the 2018 taxable year in February 2020....
Hedge Fund Manager Improperly Denied Right To A Jury Trial
June 7, 2022 - Bulletin Print Report
J established two hedge funds and selected P28 as the investment adviser. The SEC launched an investigation and chose to bring an action within the agency alleging that petitio...
Sec. 351 Exchange Can Terminate A Partnership
June 6, 2022 - Volume 16 Issue 107 Print Report
S, a corporation, is wholly owned by a taxpayer, an individual. The taxpayer alsoowned a 50 percent interest in the capital and profits of PYZ partnership. The...
"Retail Sale" Of Medical Equipment Found
June 6, 2022 - Bulletin Print Report
Petitioner, ("P"), develops, manufactures, and commercializes products for the treatment of dermatological disorders. In June 2015, P acquired a technology called &qu...
Disaster Relief Payments Not Included In Gross Income
June 6, 2022 - Bulletin Print Report
P is a utility holding company. P is the parent of S1, S2, and S3, (the "Utility Companies"). The Utility Companies are public utilities under the Federal Power Act....
Change In Use Of Farm Property Did Not Trigger Added Assessments
June 6, 2022 - Bulletin Print Report
The "Subject" consists of two contiguous parcels, about 97.3 acres in total. For several years, plaintiffs applied for, and the assessor annually approved the Subject...
Unrecovered Basis Added To Basis Of Related Person
June 3, 2022 - Volume 16 Issue 106 Print Report
P is a publicly traded corporation. P owns, directly and indirectly, all of the Sub A common stock and all of one class of Sub A preferred stock. Sub A owns all the S...
Rental Activity Does Not Preclude A "PRE"
June 3, 2022 - Bulletin Print Report
Petitioner, ("P"), had applied for and received a Personal Residence Exemption, ("PRE"), in 2018, but respondent revoked it in 2020 on the basis that it det...
Filling Of Prescriptions Constitutes A Qualified Trade Or Business
June 3, 2022 - Bulletin Print Report
TP is a C corporation. TP is only involved in the retail sale of a limited number of drugs and does not manufacture them. The manufacturers of these drugs prefer entering into...
Physical Presence Created Substantial Nexus
June 3, 2022 - Bulletin Print Report
Taxpayer is a New York corporation which sells various consumer products over the Internet, and specifically through Amazon.com marketplace. Taxpayer participated in A...
Will GFI's Acquisition Of AUY Constitute A Reorganization?
June 2, 2022 - Bulletin Print Report
Gold Fields Limited, ("GFI"), and Yamana Gold, Inc., ("AUY"), announced that they have entered into a definitive agreement, (the "Arrangement Agreement...
Earnings On Pensions Not Excluded From NY AGI
June 2, 2022 - Volume 16 Issue 105 Print Report
Petitioners jointly filed their 2007 Resident Income Tax Return, reporting a pension and annuity income exclusion in the amount of $128,000. Mr. Kane (Kane) had attai...
Employee Benefit Expenses Not Included In "COGS"
June 2, 2022 - Bulletin Print Report
Petitioner, ("P"), was the reporting entity for its combined group for Texas franchise tax purposes. One of the affiliates was CB. CB was a manufacturer until 2006, w...
Deed Did Not Satisfy The Requirements Of Section 170(f)(8)(B)
June 2, 2022 - Bulletin Print Report
Petitioner, ("P"), and her late husband acquired a large collection of Native American jewelry and artifacts during their marriage. On or around December 19, 2014, P...
PCH Agrees To Foot OP Unitholders' Tax Bills
June 1, 2022 - Bulletin Print Report
PotlachDeltic Corporation, ("PCH"), and CatchMark Timber Trust, ("CTT"), each a real investment trust, ("REIT"), announced that they have entered...
Preliminary Expenses Not Deductible
June 1, 2022 - Volume 16 Issue 104 Print Report
A taxpayer, in connection with the selection of a site and the establishment of a sales program for a boy's camp which he intends to establish and operate as his business,...
Lubricants And Dyed Diesel Fuel Exempt From Sales Tax
June 1, 2022 - Bulletin Print Report
Taxpayer, ("TP"),manufactures stone aggregate. TP filed a claim for refund of sales tax it paid on its purchase of tangible personal property, including dyed di...
Late "ESBT" Election Does Not Terminate 'S' Corporation Status
June 1, 2022 - Bulletin Print Report
X elected to be an 'S' corporation effective Date 2. On Date 2, shares of X were owned by Trust 1, a grantor trust of which A was deemed to be the owner, and by Trust 2...
Taxpayer Cannot Rely On Erroneous "STC" Interpretation
May 31, 2022 - Bulletin Print Report
P married JL in 2001. After their marriage, they purchased and resided at "413." On March 18, 2010, P was deeded the "Fp;" her husband was not on t...
Seminar Tuition Not Deductible Under Sec. 212
May 31, 2022 - Volume 16 Issue 103 Print Report
TP has a number of business interests, including rental property, a car wash, a laundry, and real estate held for investment purposes. In addition, TP owns stocks and mutual fu...
High-Speed Trader Subject To Use Tax On Market Data
May 31, 2022 - Bulletin Print Report
Petitioner, ("P"), traded stocks and other financial instruments throughout the world. It was headquartered in City A, Texas. P's business model was based on high...
"Momentary Ownership" Ignored For 'S' Corporation Election Purposes
May 31, 2022 - Bulletin Print Report
Distributing is a closely held corporation that operates Business A. Distributing has made an election to be treated as a subchapter S corporation. Distributing has a single cl...
AVGO's Acquisition Of VMW Is Intended To Qualify As A Reorganization
May 27, 2022 - Bulletin Print Report
Broadcom, Inc., ("AVGO"), and VMware, Inc., ("VMW"), announced an agreement under which AVGO will acquire "all of the outstanding shares of VMWin...
No Sec. 338 Election Without A "Qualified Stock Purchase"
May 27, 2022 - Volume 16 Issue 102 Print Report
A Sec. 338 election has the salubriouseffect of "converting" a purchase by one corporation of the stock of another into a purchase of the latter's...
Section 481(a) Adjustment Does Not Constitute Gross Income
May 27, 2022 - Bulletin Print Report
Taxpayer is a State corporation that intends to elect to be taxed as a real estate investment trust, ("REIT"), under sections 856 through 860 of the Code beginning wi...
Food Stamps Are Not An "Asset"
May 27, 2022 - Bulletin Print Report
On June 6, 2017, the State Tax Commission, ("STC"), issued a bulletin addressing the application of MCL 211.7u, the homestead property tax exemption for persons unabl...
Joint Tenant Not Entitled To First Time Homebuyer Credit
May 26, 2022 - Volume 16 Issue 101 Print Report
Plaintiff ("B") argues that she qualifies for a first time homebuyer credit for her 2010 purchase of real property ("HMP"). The record demonstrates that the...
Massachusetts Cannot Tax Foreign Corporation's Capital Gain
May 26, 2022 - Bulletin Print Report
V was formed in 1999 as an 'S' corporation with its commercial domicile and headquarters in Illinois. V operated call centers in Canada. T was a Massachusetts limited l...
Retail Sales Includes Sales Of Digital Goods
May 26, 2022 - Bulletin Print Report
TP is a photography business. TP specializes in producing portrait photographs... The Client Service Agreement, (the "Agreement"), includes the following relevant pro...
Ten Year Carry Back Of "SLLs" Denied
May 25, 2022 - Bulletin Print Report
In Year 3 and Year 4, TP incurred consolidated net operating losses, ("NOLs"). TP validly elected to waive its two-year NOL carry back with an election state...
Non-Custodial Parent Denied Dependency Exemption
May 25, 2022 - Volume 16 Issue 100 Print Report
In 1997, CEK and MEB had a son, EJK. CEK and MEB were never married to each other and maintained separate residences. Pursuan...
Tuition Tax Credit Rejected
May 25, 2022 - Bulletin Print Report
The Ls filed their 2018 South Carolina, ("SC"), Income Tax return on February 7, 2019. The Ls claimed the tuition tax credit based on tuition they paid for their depe...
Duty To Collect Sales Tax Not Affected By Customer Exemption
May 25, 2022 - Bulletin Print Report
TP specializes in providing technical expertise in operations and engineering for the biogas use and management industries. The Customer, ("C"), produces energy from...
The Willens Deal Survey May 2022
May 25, 2022 - The Deal Survey: May 2022 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
Highway Use Tax Is Equivalent To Sales Tax
May 24, 2022 - Bulletin Print Report
Taxpayer resides in North Carolina. In April 2021, Taxpayer purchased a vehicle from a dealership in Indiana, (the "Dealership"). The Dealership collected Indiana sal...
Both Spouses Must Qualify Under The Same Paragraph Of Sec. 36(c)
May 24, 2022 - Volume 16 Issue 99 Print Report
The Packards were married on November 22, 2008 and lived in separate residences until December 1, 2009, when they purchased and moved into a home together in Florida...
Damage Charges Included In Taxable Income
May 24, 2022 - Bulletin Print Report
TP rents recreational vehicles, ("RVs"), to drivers in Washington. The rental agreements specifically address the possibility that vehicles will be returned subject t...
Debtor's IRA Did Not Lose Its Tax Exempt Status
May 24, 2022 - Bulletin Print Report
M filed a petition under Chapter 7 of the Bankruptcy Code. M claimed an exemption in a self-directed IRA. The Trustee, ("T"), objected. On April 14, 2016, M opened a...
Spin-Off Will Not Impede Acquisition Of VMW
May 23, 2022 - Bulletin Print Report
On November 1, 2021, Dell Technologies, Inc., ("DTI"), distributed 81 percent of the stock of its subsidiary, VMWare, Inc., ("VMW"), to its shareholders in...
Alimony Or Separate Maintenance Payments Not Found
May 23, 2022 - Bulletin Print Report
I and E were married on June 20, 2008. On August 2, 2016, I and E separated. On September 17, 2016, I and E signed a "Marital Separation Agreement," ("Agreement&...
The I.R.S. Gets "Whammed"
May 23, 2022 - Volume 16 Issue 98 Print Report
In Rev. Rul. 80-228, 1980-2 C.B. 115, X Corporation, (X), operated its businesses in two separate divisions, (D1 and D2). Each division operated as if it were a separ...
"Ordinary Care" Is Not Synonymous With "Reasonable Cause"
May 23, 2022 - Bulletin Print Report
Four plaintiffs are the "hotel owners." The other three plaintiffs, referred to as "E," are hotel management companies. The hotel owners contracted with E t...
Trade Date Controls Gain Or Loss Reporting
May 20, 2022 - Volume 16 Issue 97 Print Report
A uses the cash receipts and disbursements method of accounting and files his income taxreturns on a calendar year basis. For several years, A held stock that i...
Military Retirement Payments Were Not Excludible From Gross Income
May 20, 2022 - Bulletin Print Report
Petitioner, ("P"), served in the U.S. Army for 26 years. In April 1989, an "MEB" evaluated P and recommended that he be found "physically unfit for wor...
Extension Of Time To File "Triple-Eye" Agreement Granted
May 20, 2022 - Bulletin Print Report
TP is a domestic individual. TP and members of TP's family owned stock in Corporation, ("C"). On "Date," all of TP's stock was redeemed in exchange...
A "Clean Room" Constitutes Tangible Personal Property
May 20, 2022 - Bulletin Print Report
Taxpayer, ("TP"), with a research facility located in Virginia, is engaged in pharmaceutical development, formulation, and production. The Department's auditor as...
No Landlord/Tenant Relationship Between Husband And Wife
May 19, 2022 - Volume 16 Issue 96 Print Report
A and B purchased certain farmland in X as tenants in common in 1981. A farms the land and reports the income and expenses on Schedule F. Beginning in 1984, A paid B...
Purchase Of In-Flight Meals Subject To Sales Tax
May 19, 2022 - Bulletin Print Report
Taxpayer, ("TP"),is an airline operating as a common carrier in interstate and foreign commerce. TP has a contract with V to provide food and beverages for ...
Faxed Delinquent Return Was Property "Filed"
May 19, 2022 - Bulletin Print Report
S is a partnership. S believed its filed its tax return for 2001 in July 2002. The I.R.S. has no record of receiving such a filing. In July 2005, an I.R.S. agent sent S a lette...
Pipeline Is Tangible Personal Property
May 19, 2022 - Bulletin Print Report
M is a subsidiary of Marathon Petroleum Corporation. It owns or leases several thousand miles of pipeline throughout the United States. The pipeline at issue transports crude o...
Gain Attributable To Inventory Not Eligible For Installment Reporting
May 18, 2022 - Volume 16 Issue 95 Print Report
P was a partner in a partnership that held "substantially appreciated inventory." A porton of that property constituted inventory within the meaning of Sec....
FANG's "Roll-Up" Will Be A Tax-Free Reorganization
May 18, 2022 - Bulletin Print Report
There have been numerous MLP "roll-ups" over the past severalyears. These transactions ordinarily involve the acquisition by the "sponsor" of the publ...
The "Assessable Payment" Is A "Tax"
May 18, 2022 - Bulletin Print Report
If certain employers fail to offer their full-time employees specified healthcare coverage, they must pay the federal government a yearly "assessable payment." See se...
Non-Resident Partner Taxable On "Effectively Connected Income"
May 18, 2022 - Bulletin Print Report
I is a domestic limited liability company located in New York. I's business is brokering health insurance to college students. KZ, a New York State resident, held a 33 perc...
Playstudios Will Redeem Its Warrants
May 17, 2022 - Bulletin Print Report
Playstudios, Inc., ("MYPS"), has both publicly issued and privately placed stock purchase warrants outstanding. In an effort to lend a degree of certainty and stabili...
Expenses Of Appraisal Proceedings Not "Organizational Expenditures"
May 17, 2022 - Volume 16 Issue 94 Print Report
Petitioner is the successor by merger to PII. PII was organized on December 3, 1962 in the course of implementing an agreement to consolidate five existingcorpo...
The Shared Responsibility Payment Is Governed By Section 507(a)(8)(A)
May 17, 2022 - Bulletin Print Report
In July 2019, Debtors, ("Ds") filed a Chapter 13 petition. The I.R.S. filed a proof of claim for unpaid taxes, including a shared responsibility payment, ("SRP&q...
Exemption Applies From First Day Of Exempt Use
May 17, 2022 - Bulletin Print Report
TPsown mineral leasehold interests, (the "Leases"). TPs paid property taxes on the Leases in 2018. In March 2019, they timely applied to exempt the Leases from...
Unrecovered Basis In A Sec. 304 Redemption
May 16, 2022 - Volume 16 Issue 93 Print Report
A owns 100 shares of X which is all the outstanding stock of X. B, the son of A, owns all of the stock of Y. A sold 25 shares of stock of X to Y for an amount of cash...
"FIT" Statutes Make No Business/Non-Business Income Distinction
May 16, 2022 - Bulletin Print Report
TP is a holding company. TP's subsidiaries provide banking services. TP filed combined 2014, 2015, and 2016 Indiana Financial Institution Tax, ("FIT"), returns, w...
All Owners Were Not Religious Societies
May 16, 2022 - Bulletin Print Report
Petitioner, ("P"), filed a Petition asserting that it is entitled to a property tax exemption...as a house of public worship. Under MCL 211.7s: "Houses of public...
Sale Of Fabric Subject To NYS Sales Tax
May 16, 2022 - Bulletin Print Report
Petitioner sells fabric by the yard, as well as other clothing accessories, such as buttons, thread, zippers, linings, etc. Petitioner contends that customers "purchase fa...
Will BAM's "Special Distribution" Be Tax-Free For U.S. Shareholders?
May 13, 2022 - Bulletin Print Report
Brookfield, ("BAM"), in conjunction with its Q1 earnings report, announced that it intends to distribute 25 percent of the equity interestsinan entity tha...
Not All Capitalized Costs Are Recoverable
May 13, 2022 - Volume 16 Issue 92 Print Report
TP is aBusiness E holding company. TP's subsidiaries provide various Business F services. Prior to Date X, T1 was a Business E holding company operating und...
Reimbursed Expenses Included In Gross Receipts For Sales Tax Purposes
May 13, 2022 - Bulletin Print Report
CE contracts with customers to perform construction, maintenance, and emergency repairs on those customers' power lines, which are taxable services. The tax is imposed on t...
Award Of Attorney Fees Not Income To Litigants
May 13, 2022 - Bulletin Print Report
The parties seek guidance from the court regarding the proper procedure for disbursing $249,000 in attorney fees, which the court awarded to plaintiffs in a November 19, 2021 o...
Joint Filers Are A "Taxable Unit"
May 12, 2022 - Volume 16 Issue 91 Print Report
In 1980, Taxpayer husband (TPH) inherited a substantial sum of money from his father, which was used to purchase stocks, bonds, and to open savings accounts. These in...
Cell Tower Is Taxable Real Property
May 12, 2022 - Bulletin Print Report
Petitioner is the owner of real property in the Town of Vestal, Broome County.In 2015, petitioner and UST entered into a land use agreement wherein UST leased a portion o...
Personal Reports Are Not A Taxable "Information Service"
May 12, 2022 - Bulletin Print Report
Petitioner, ("P"), provides a coaching/facilitation service that teaches techniques for effective listening and communication in a business environment. P administers...
PFE To Acquire The Balance Of BHVN
May 12, 2022 - Bulletin Print Report
Pfizer, Inc., ("PFE"), and its affiliate, BiohavenPharmaceutical Holding Co., Ltd., ("BHVN"),a company organized under the laws of the British V...
When Does the Sec. 1033 Clock Start?
May 11, 2022 - Volume 16 Issue 90 Print Report
A taxpayer (TP) acquired Property A on Date 1 and leasedsuch propertyto commercial tenants. On Date 2, City Agency filed a condemnation action to acquire...
"IDA" Receipts Not Sourced To New York
May 11, 2022 - Bulletin Print Report
Petitioner, T.D. Ameritrade, Inc., ("P"), introduces brokerage client accounts to TDAC, an affiliated clearingbroker-dealer. P is responsible for opening, appro...
Glucose Monitors Are Subject To Sales Tax
May 11, 2022 - Bulletin Print Report
C sells "Devices." The Devices cannot be purchased without a prescription from a physician. The Devices have two main parts: (i) a Reader, and (ii) a Sensor that User...
New York Non-Residents and "QSOs"
May 10, 2022 - Volume 16 Issue 89 Print Report
In 1968, Petitioner, (P), was granted stock options by his employer, Avon Products, Inc., pursuant to a qualified employee stock option plan. He exercised the options...
Corporate Officer Found Liable For Unpaid Withholding Taxes
May 10, 2022 - Bulletin Print Report
In 1993, the family chose Plaintiff, ("P"), to succeed her father as board chair. When P became board chair, "it was determined that the business would be run by...
Section 6020(b) Tax Liabilities Cannot Be Discharged
May 10, 2022 - Bulletin Print Report
Debtor, ("D"), filed his Chapter 13 bankruptcy petition on April 22, 2015 and noted significant tax liabilities in his Schedules. The I.R.S. assessed D's tax liab...
ICE Pursues A Fully Taxable Transaction
May 9, 2022 - Bulletin Print Report
Intercontinental Exchange, Inc., ("ICE"), announced that it has entered into a definitive agreement to acquire Black Knight, Inc., ("BKI"). The "cash a...
I.R.S. May Attach Property Held By Nominee
May 9, 2022 - Volume 16 Issue 88 Print Report
P has accumulated, as of September 30, 2013, $529,887.09 in unpaid tax liabilities, penalties, and interest for the taxable years 1999-2003. P and his wife incorporat...
Improvements On Tribal Land Are Subject To Property Tax
May 9, 2022 - Bulletin Print Report
In 1999, C, a non-Indian-owned entity, leased 320 acres of land from the Tribe to construct and operate an electric power generating plant, (the "Plant"), on reservat...
"Any Means" Of Understatement Attracts A Penalty
May 9, 2022 - Bulletin Print Report
R timely filed her 2015 North Carolina tax return. On her Schedule C, R claimed business income and deductions for G. The Department disallowed the entire amount of business lo...
Gaming Company Avoids Nevada Use Tax
May 6, 2022 - Volume 16 Issue 87 Print Report
HOC is a Delaware corporation registered to do business in Nevada. HOC purchased four aircraft for the purpose of transporting employees and guests to and from its establishmen...
The FBAR Penalty Is Not A "Fine"
May 6, 2022 - Bulletin Print Report
The Bank SecrecyAct, (the "Act"), requires all U.S. residents and citizens to file returns and keep records of certain relationships with foreign financial agen...
Excess Contributions Cause Loss Of Tax-Exempt Status
May 6, 2022 - Bulletin Print Report
Debtor, ("D"), disclosed among her assets an IRA. She claimed the IRA as exempt. The Trustee concluded that D inherited the IRA and filed this Objection. D, the court...
Credit Card Surcharge Is Part Of The "Sales Price"
May 6, 2022 - Bulletin Print Report
M operates real properties as vacation rentals. He markets these properties through third parties, ("third-party marketers"). The third-party marketers collect the ap...
Redemption Proceeds Can Be Distributed In Partial Liquidation
May 5, 2022 - Volume 16 Issue 86 Print Report
X was a member of a cooperative organization for the purpose of purchasing products from the cooperative for resale in its business and receiving other services provided by the...
Vendor Allowances Are Integrated With Purchase And Sale Of Inventory
May 5, 2022 - Bulletin Print Report
APP operates a chain of home merchandise retail stores and is headquartered in New Jersey. APP has a treasury department at its New Jersey headquarters. L is a member of APP...
"Filed" Means "Delivered"
May 5, 2022 - Bulletin Print Report
H filed applications for abatement or refund of property taxes relating to 85 acres of property that had been divided into 92 parcels. H mailed the applications to the Assessor...
Actual Use Of Property Is Necessary For Exemption
May 4, 2022 - Bulletin Print Report
The subject property is 0.97 acres improved with an 8,659 square foot office building...in Nashville, Tennessee. The property was purchased by United Neighborhood Health Servic...
Visual Display Work Is A "Retail Sale"
May 4, 2022 - Bulletin Print Report
D is a New York based company that serves clients around the globe. D's primary service is to execute "roll-out work." When one of D's clients has a marketing...
Passive Investment Activities Are An "Insurance Business"
May 4, 2022 - Volume 16 Issue 85 Print Report
HC is a State A insurance holding company. HC is the parent of P, a State B stock holding company. P owns C, a State C corporation. C is a life insurance company. S is a State...
"QEZE" Tax Reduction Credit Informed By 'S' Corporation's "BAP"
May 4, 2022 - Bulletin Print Report
B&H Foto& Electronics Corporation, ("B"), is taxed under subchapter S of the Internal Revenue Code. B was certified as a qualified empire zone enterpris...
Management Fees Were Nothing More Than Disguised Distributions
May 3, 2022 - Bulletin Print Report
A's stock was held by MD, an individual, and JEC and MEL. A has not paid dividends since the '70s but has paid its shareholders management fees for at least 20 years. T...
SFI Inclusions Constitute "Qualifying" Income
May 3, 2022 - Volume 16 Issue 84 Print Report
X is a State limited partnership. X contemplates becoming a publicly-traded partnership (PTP). X has invested and will continue to invest the majority of its assets i...
Withholding Tax Is Included In Gross Income
May 3, 2022 - Bulletin Print Report
Petitioner, ("P"), elected to receive a distribution from his employer retirement plan, ("B"), in the amount of $45,000 in 2016. Utilizing a portion of the...
Loss Deduction Would Frustrate Public Policy
May 3, 2022 - Bulletin Print Report
P was employed by the Department of State from May 2003 until March 2014. Between August 2010 and September 2012, P was employed as a consular officer by the State Department a...
Increase In Conversion Ratio Is Not A Deemed Distribution Of Stock
May 2, 2022 - Volume 16 Issue 83 Print Report
X has outstanding both common stock and convertible preferred stock. The preferred stock is convertible into common stock at a fixed ratio. X distributed all of the stock in it...
Land Not Devoted Primarily To Agricultural Use
May 2, 2022 - Bulletin Print Report
On September 11, 2017, N purchased an 8.9 acre parcel of land in K. At the time of purchase, the property was zoned agricultural and contained no habitable structures. In 2018,...
Janitorial Services Not Subject To Sales Tax
May 2, 2022 - Bulletin Print Report
Taxpayer runs a lumber mill in the state of Washington. A local landscaper, (the "Vendor"), provided landscaping services to Taxpayer. Vendor charged retail sales tax...
Affixing Labels To Finished Products Is Not Manufacturing
May 2, 2022 - Bulletin Print Report
P sold wine and water with customized promotional labels. The auditor determined that the labels printed by an out-of-state vendor, "CA," and shipped to P in Texas we...
Settlement Costs Did Not Facilitate Capital Transaction
April 29, 2022 - Volume 16 Issue 82 Print Report
On Date 1, TP and T, publicly traded corporations, entered into a merger agreement under which TP agreed to acquire T in a stock for stock transaction. The merger closed on Dat...
Sales By Receivers Are Subject To "REET"
April 29, 2022 - Bulletin Print Report
Taxpayer owned certain real property in Washington. Taxpayer took out two loans from Bank, and issued two promissory notes to Bank, securing them by a Deed of Trust in the real...
Off-Premises/On-Premises Sign Distinctions Are Content Neutral
April 29, 2022 - Bulletin Print Report
Federal, state, and local governments have long distinguished between signs (such as billboards) that promote...products...located elsewhere and those that promote things locat...
Promotional Items Not Sold To Customers
April 29, 2022 - Bulletin Print Report
P was a professional baseball team based in Texas. Texas imposes a tax on each sale of a taxable item in this state. The term, "taxable item," includes tangible perso...
Credits Reduce Tax Liabilities
April 28, 2022 - Bulletin Print Report
Under section 6426, a fuel producer can earn a credit, (the "Mixture Credit"), by mixing alcohol or biodiesel into its products. The Mixture Credit applies "agai...
Residents Of Puerto Rico May Be Excluded From Benefits Programs
April 28, 2022 - Bulletin Print Report
The United States includes five Territories. This case involves one such Territory, Puerto Rico. Congress has not required residents of Puerto Rico to pay most federal taxes. C...
Can A "Blocker" Corporation Avoid Estate Tax?
April 28, 2022 - Volume 16 Issue 81 Print Report
Petitioner, (P), is domiciled in a state other than New York and is considering the purchase of a condominium in New York. She wants to know the estate tax consequenc...
Section 6330(d)(1)'s Filing Deadline Is Subject To Equitable Tolling
April 28, 2022 - Bulletin Print Report
B is a law firm. In 2015, the I.R.S. notified B of a discrepancy in its tax filings. When B did not respond, the agency assessed an "intentional disregard" penalty an...
PSA To Distribute PSB Gain
April 27, 2022 - Bulletin Print Report
Recently, PS Business Parks, Inc., ("PSB") agreed to be acquired by Blackstone Real Estate ("BREIT"), in a transaction structured as a "reverse cash me...
TWTR's NOLs (And Interest Expense) Will Take A Licking
April 27, 2022 - Bulletin Print Report
Twitter, Inc., ("TWTR"), as everyone now knows, is being acquired by Mr. Elon Musk, ("EM"). EM will be acquiring TWTR through what Ginsburg and Levin refer...
Merger Consideration Constructively Received In Year Of Merger
April 27, 2022 - Volume 16 Issue 80 Print Report
NS owned 21,534 shares of common stock in HCA. Rather than turn the certificates over to a broker or to a bank, NS maintained possession of the certificates. In Novem...
Neither Spouse Qualified As A "Real Estate Professional"
April 27, 2022 - Bulletin Print Report
S was the only member of DBS, a single member LLC through which he operated a wholesale HVAC business. In 2013, DBS purchased two properties in Florida, the "R property&qu...
Workmen's Compensation Excluded From Disposable Income
April 26, 2022 - Bulletin Print Report
The subject property is one of a six-unit residential condominium. The Owners have lived at the property since their purchase on May 1, 2007. DF was 63 years of age on the asse...
Auxiliary Property Found To Be Tax-Exempt
April 26, 2022 - Bulletin Print Report
A operates a network of health care facilities, including hospitals, clinics, and rehabilitation centers, such as "the subject property." A is a tax-exempt organizati...
BX Forgoes Basis Step-Up
April 26, 2022 - Bulletin Print Report
Just last week, the consistently acquisitiveBlackstone Real Estate, ("BREIT"), entered into a plan to acquire ACC. The transaction was structured in the manner...
"In-House" Qualified Stock Purchase
April 26, 2022 - Volume 16 Issue 79 Print Report
P, a publicly traded and widely held domestic holding company, is the common parent of a consolidated group that conducts a number of businesses, including Business A...
Statutory Resident (Of NY) Not Entitled To Credit For CT Taxes
April 25, 2022 - Volume 16 Issue 78 Print Report
Plaintiffs are domiciled in Greenwich, CT and also own a vacation home in East Hampton, NY. Plaintiffs acknowledge that they spent more than 183 days in New York Stat...
Property Not Used "Primarily As A Dwelling"
April 25, 2022 - Bulletin Print Report
County property records identified the subject property as "single family residential." Defendant inspected the subject property and determined that it was commercial...
Owner Is Not A Qualified Employee
April 25, 2022 - Bulletin Print Report
Taxpayer operates dog breeding schools in Washington and in two other states, as well as online, as a limited liability company. Taxpayer took the Veteran's Employer Tax Cr...
Compensation And Grants Are Mutually Exclusive
April 25, 2022 - Bulletin Print Report
In 2010 and 2011, B worked at JL. B had a J-1 exchange visitor visa. He received W-2s from JL. He filed 1040-NR forms with the I.R.S., which claimed an exemption as to the enti...
GENZ's Royalty Income Not Excluded From "Entire Net Income"
April 22, 2022 - Bulletin Print Report
Genzyme Corporation, ("G"), was organized under the laws of the U.S. G owned 100 percent of GLS. G owned 100 percent of GTPC and GTPL. GTPC and GTPL owned one percent...
Non-Residential Development Fee Properly Imposed
April 22, 2022 - Bulletin Print Report
Plaintiff, ("P"),is the owner of real property, (the "subject property"). The subject property was improved with two dwellings prior to P's non-re...
Extracting "Unwanted" Assets In The Context Of Sec. 338(h)(10)
April 22, 2022 - Volume 16 Issue 77 Print Report
X is a holding company. X owns P, also a holding company. P owns T. T is engaged in Business A. T owns Sub A. Sub A is engaged in Business A. P owns Sub B. Sub B is e...
Conveyance Of Realty Subject To Maximum "RPTT" Rate
April 22, 2022 - Bulletin Print Report
Petitioner, ("P"), owned real property in Staten Island, (the "Property"). The Property covered two separate street addresses. Each street address has a sem...
The Willens Deal Survey April 2022
April 22, 2022 - The Deal Survey: April 2022 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
The Uncertain Tax Consequences Of "Poison Pill" Plans
April 21, 2022 - Bulletin Print Report
While so-called "poison pill" plans have been around for several decades, only recently, with the adoption by TWTR of a poison pill plan intended to fend off an unwan...
Small Reductions Can Also Be Regarded As Meaningful Ones
April 21, 2022 - Volume 16 Issue 76 Print Report
Company, (C), had outstanding as of September 30, 1982 the following stock: (a) 122,240 shares of voting common stock (NC); (b) 272,988.64 shares of 1 percent cumulat...
The Common Law "Mailbox Rule" Has Been Supplanted
April 21, 2022 - Bulletin Print Report
The complaint alleges that, on July 18, 2017, P's accountants mailed amended returns, via First Class mail, "in a single envelope to the I.R.S. service center in Holts...
Customers Did Not Purchase Apple Gift Cards
April 21, 2022 - Bulletin Print Report
P designs and markets consumer electronics, software, and personal computers, selling its products through its own retail and online stores. In 2011, P offered a "Back to...
ACC Will Be The Subject Of A Forward Cash Merger
April 20, 2022 - Bulletin Print Report
American Campus Communities, Inc., ("ACC"), a real estate investment trust, ("REIT"), has entered into a definitive agreement in connection withwhich...
Smelter Processes Natural Resources
April 20, 2022 - Volume 16 Issue 75 Print Report
X owns and operates an aluminum smelter. X proposes to transfer the business to a partnership. Units in the partnership will be publicly-traded. The production of alu...
Mailbox Rule Does Not Apply To Court Documents
April 20, 2022 - Bulletin Print Report
To maintain a tax refund suit against the United States, taxpayers must first file a refund claim with the I.R.S. See section 7422(a) of the Code. Taxpayers then have two years...
Airline Tickets Includible In Retiree's Gross Income
April 20, 2022 - Bulletin Print Report
M is a retired airline pilot who was formerly employed by United Airlines, ("UA"). In 2016, UA provided retired pilots (and their family members and friends) with fre...
Stock Subject To First Refusal Right Is Common Stock
April 19, 2022 - Volume 16 Issue 74 Print Report
Pursuant to a plan of recapitalization, X issued shares of new voting common stock and new nonvoting common stock to its shareholders in exchange for shares of its ou...
Private Duty Nurses Were Employees
April 19, 2022 - Bulletin Print Report
P was engaged in the business of providing at-home private duty nursing services to children with special needs, ("patients"). P supplied all nurses with a contract f...
Jurisdiction Lacking With Respect To Untimely Refund Claims
April 19, 2022 - Bulletin Print Report
B and K are retired United Airlines, ("UA"), employees covered by UA's non-qualified deferred compensation, ("NQDC"), plan. Normally, for purposes of FI...
Grant Of Option Is Not A Sale, Exchange, Or Other Disposition
April 18, 2022 - Volume 16 Issue 73 Print Report
An option agreement provided that the option is exercisable only after the death of the optionor by giving notice to the proper person within a certain period of time...
Section 280E Properly Omitted From Computation Of "Base Income"
April 18, 2022 - Bulletin Print Report
TP is a licensed producer of medical cannabis. TP dispenses cannabis to qualified patients through a statewide system of dispensaries. The Department's audit claimed "...
Only Property "Used" Or "Held" Is Eligible For Depreciation
April 18, 2022 - Bulletin Print Report
Plaintiff, ("P"), purchased the "Hansen Lodge" in December 2017. It needed to be improved. As of January 2018, the lodge "was furnished, utilities were...
Taxpayer Not Engaged In "Highway Transportation For Hire"
April 18, 2022 - Bulletin Print Report
APP appeals from a final determination of the Tax Commissioner affirming a sales tax assessment issued to APP in connection withthe purchase of a truck and trailer. APP p...
Rebates Are Not Includible In Gross Income
April 14, 2022 - Volume 16 Issue 72 Print Report
The taxpayer, (TP), an individual, will acquire a credit card issued by a bank through an arrangement promoted by Company, (C). TP will make purchases with the credit...
Restaurant Utensils Not Purchased For Resale
April 14, 2022 - Bulletin Print Report
C operated as a casual restaurant. When C served its customers, it provided them with utensils, items the parties refer to as "small wares," for use within the...
Couple Cannot Meet Section 121's "Use" Requirement
April 14, 2022 - Bulletin Print Report
The Ws married in 2004. In 2005, MSWwas diagnosed with cancer. In that same year, she purchased the MI house where the Ws resided from 2005 through 2009. The Ws did not r...
Affiliated Group Of Entities Found
April 14, 2022 - Bulletin Print Report
TP is a subchapter S corporation. TP is owned by four siblings. Sibling A owns 100 percent of the Class A voting stock, but is only a 40 percent shareholder of Class B non-voti...
FRO And EURN Announce A Business Combination
April 13, 2022 - Bulletin Print Report
Frontline Ltd., ("FRO"), and Euronav NV, ("EURN"), have signed a term sheet that has been approved by the boards of directors of each such corporation...
Gain Not Characterized As "IRD"
April 13, 2022 - Volume 16 Issue 71 Print Report
TP, Decedent's revocable trust, 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...
Connecticut Follows "Libson Shops"
April 13, 2022 - Bulletin Print Report
A Connecticut combined unitary group consists of four members: A, B, C, and D, (the "Combined Group"). The Combined Group has filed a Connecticut unitary corporation...
Taxes Are "Paid" When The Tax Return Is Filed
April 13, 2022 - Bulletin Print Report
For tax year 2012, R made estimated tax payments totaling $626,965. R's tax return was due on March 15, 2013. After securing an extension, and making a final quarterly paym...
Non-Filer Not Entitled To Itemize Deductions
April 12, 2022 - Bulletin Print Report
P resided in Arizona and was employed by Home Depot. P worked from home but traveled regularly by car to the stores under his supervision. P was laid off in mid-2013. He receiv...
Shareholders Had Basis In 'S' Corporation Sufficient To Absorb Losses
April 12, 2022 - Volume 16 Issue 70 Print Report
During 1976, petitioners owned 25 percent of the stock of F, a Nevada corporation. F was an electing small business corporation. On April 23, 1976, F borrowed $100,00...
Shredded Tires Are No Substitute For Coal
April 12, 2022 - Bulletin Print Report
The question presented is whether shredded tires and railroad ties that are utilized and burned to subsidize the requirement for coal in the cement manufacturing process are ex...
Architectural Firm Was Exempt From Sales Tax
April 12, 2022 - Bulletin Print Report
The Applicant is an architectural, engineering, planning, interiors, graphics, and consulting firm. The Applicant's corporate headquarters is located in Missouri. The Appli...
Rental Vehicle Fee Properly Imposed
April 11, 2022 - Bulletin Print Report
G is an 'S' corporation. G requested a refund of rental vehicle fees. The Department denied G's refund request. G leases its taxicabs and equipment to drivers for t...
Aspiring Real Estate Broker Cannot Deduct Educational Expenses
April 11, 2022 - Volume 16 Issue 69 Print Report
During 1976, petitioners were employed as real estate agents in San Diego, California. Both were licensed to sell real estate, as real estate agents, by the Californi...
A "Section 17 Corporation" Has No "Non-Resident Taxable Income"
April 11, 2022 - Bulletin Print Report
CNI is a federally chartered corporation created and organized in 1996 under the Oklahoma Indian Welfare Act, ("OIWA"), commonly referred to as a "section 17 cor...
"Residence" Necessitates Some Degree Of Permanence
April 11, 2022 - Bulletin Print Report
The parties were married in 1985. They moved to New Jersey. Beginning in the late 1990s, the parties rented an apartment on the Upper West Side of Manhattan. In 2010, the parti...
Ascertaining The Amount Of A Claim Against The Estate
April 8, 2022 - Volume 16 Issue 68 Print Report
WS, an attorney, died on November 2, 2003. His wife, GS, died on November 27, 2004. Prior to his death, WS hadrepresented HS. On September 24, 2004, HS's es...
Approval Of A Penalty Need Only Occur Before Assessment
April 8, 2022 - Bulletin Print Report
Taxpayers must disclose participation in "listed transactions" by attaching a disclosure statement to their return. In 1999, Taxpayer became a participating employer...
Section 481(a) Adjustment Excluded From REIT's "Gross Income"
April 8, 2022 - Bulletin Print Report
Taxpayer is a State A corporation that intends to elect to be taxed as a real estate investment trust, ("REIT"), beginning with its tax year ending Date B. Taxpayer o...
Homeowner Exemption Statutes Were Substantially Similar
April 8, 2022 - Bulletin Print Report
P has lived in his LC home since 1990. P's wife owned property in Utah. P and his wife filed joint income tax returns. Neither P nor his wife ever resided at either Utah pr...
Post Holdings' Spin-Off Of BellRing Checks All The Boxes
April 7, 2022 - Bulletin Print Report
Post Holdings, Inc., (POST), one of the nation's leading consumer packaged goods purveyors, has alsogained a well-deserved reputation on Wall Street as an astute fina...
Shareholder Allowed Deduction For Payment of Corporation's Debts
April 7, 2022 - Volume 16 Issue 67 Print Report
On May 1, 1966, Mr. G incorporated GPH to provide plumbing and heating services. Mr. G owned all of its capital stock. In the...
Sales Tax Exemption Based On An Agency Theory Denied
April 7, 2022 - Bulletin Print Report
B is a for-profit corporation that provides property management services. B entered into Hospital Services Agreements, ("HSA"), with certain hospitals. The hospitals...
No Reimbursement For "Tax Agent" Commissions Allowed
April 7, 2022 - Bulletin Print Report
TPscontracted with PAR, a property tax agent, to pursue property valuation reductions. TPs appealed to the STC. TPs were represented before the STC by an attorney
Absence Of Notice And Comment Renders Temporary Regulations Invalid
April 6, 2022 - Bulletin Print Report
In December 2018, a Liberty Global, Inc., ("LGI"), affiliate sold its interest in TGHto LGI's parent company, LG. Under the relevant tax laws at the time, L...
Mixed Use Property Treated As Residential Realty
April 6, 2022 - Bulletin Print Report
The Property was owned by TP and was sold in 2021 to "XXX." TP, along with his deceased wife, had owned the Property since 1997. The Property consists of one building...
"Aggregate" Theory Of Partnerships Does Not Apply In Missouri
April 6, 2022 - Volume 16 Issue 66 Print Report
H (or Petitioner) was a Delaware corporation. Its business address was Dallas, Texas. H was a 99 percent limited partner in LP. LP provided landline telephone service in a larg...
Insurance Department Regulations Incorporated Into Insurance Policy
April 6, 2022 - Bulletin Print Report
P was involved in a car accident and her vehicle was determined to be a total loss. She made a claim to her insurer. Defendant did not pay the sums in dispute in this case--the...
FBAR Penalties Are Geared To Foreign Financial Accounts
April 5, 2022 - Bulletin Print Report
The Bank Secrecy Act, ("BSA"), requires a U.S. citizen to file reports when the citizen maintains a relation with a foreign financial agency. The person must report e...
Only "Unitary" Businesses Can File Combined Reports
April 5, 2022 - Volume 16 Issue 65 Print Report
Petitioner, (P), is the sole shareholder of several 'S' corporations. Most operate exclusively within Michigan, but two or three have multistate operations. P and his w...
Pass-Through Entity Liable For Withholding Taxes
April 5, 2022 - Bulletin Print Report
M is a corporation formed under the laws of Missouri with its headquarters located in Missouri. M is an 'S' corporation for federal tax purposes and is a "pass-thr...
Butane Is Taxable Under Section 4081
April 4, 2022 - Bulletin Print Report
P asserts that it produced an "alternative fuel mixture" when it mixed and sold a mixture of butane and gasoline. P claimed that its mixture of butane and gasoline qu...
Conditional Declaration Sinks Noncustodial Parent
April 4, 2022 - Volume 16 Issue 64 Print Report
Taxpayers who are married and file a joint income tax return may claim personal exemptions for themselves and their dependents. Dependent is defined to include a "qualifyi...
Wholesale Sales Were Properly Sourced To Washington
April 4, 2022 - Bulletin Print Report
TP is a wholesaler of tangible personal property and is headquartered out of state. TP sells its goods to third-party wholesalers in Washington, ("W"). Compliance iss...
Section 4611(b) Imposes A Prohibited Tax On Exports
April 4, 2022 - Bulletin Print Report
Article I, Section 9 of the Constitution provides: "No Tax or Duty shall be laid on Articles exported from any State." The Export Clause categorically bars Congress f...
SRG To Renounce REIT Election
April 1, 2022 - Bulletin Print Report
It is not a common occurrence fora corporation that qualifies as a real estate investment trust, ("REIT"), to voluntarily terminateits status as such . Ho...
Consulting and Advisory Fees Are Not "Carrying Charges"
April 1, 2022 - Volume 16 Issue 63 Print Report
On September 10, 2011, TP and brokerage firm, (BF), entered into a contract entitled "Investment Plan". Under this contract, BF agreed to act as a discretio...
SIRI's Services Are Not Performed In Texas
April 1, 2022 - Bulletin Print Report
S produces radio programming, which it transmits using satellites. Subscribers pay monthly fees to access S's programming. The question is whether S's monthly subscript...
Right To Defer Pension Benefits Cannot Be Abrogated
April 1, 2022 - Bulletin Print Report
Plaintiff, ("P"), was an actuary at TP until March 15, 1991. At the time of his termination, P was vested in an accrued pension benefit under the "1988 Plan.&quo...
Nonvoting Common Stock Is "Common Stock"
March 31, 2022 - Volume 16 Issue 62 Print Report
X corporation, (X), has outstanding Class A nonvoting common stock, Class B voting common stock, and nonvoting preferred stock. The preferred is limited and preferred...
A "VEBA" Is Not Exempt From Sales Tax
March 31, 2022 - Bulletin Print Report
TP is a voluntary employees' benefit association, (a "VEBA"), created under section 501(c)(9) of the Internal Revenue Code. TP is organized as a trust. TP's m...
Butane Is Not Properly Characterized As An "Alternative Fuel"
March 31, 2022 - Bulletin Print Report
V argues that butane is a "liquefied petroleum gas" under section 6426(d)(2) of the Code and therefore an "alternative fuel" eligible for the section 6426(e...
"Bad" '(2)(E)' Can Be a "Good" '(B)'
March 30, 2022 - Volume 16 Issue 61 Print Report
P owns 100 percent of the stock of S. S has owned 98 percent of the stock of R for "a number of years" (i.e., the stock is "old and cold"). The re...
Cannabis Consolidation Continues Unabated
March 30, 2022 - Bulletin Print Report
The consolidation of the cannabis industry is unfolding before our very eyes and shows no signs of abating. The latest transaction, involving companies organized under the laws...
Build Back Better Redux?
March 30, 2022 - Bulletin Print Report
President Biden's fiscal '23 budget proposal contains certain "revenue" items that first appeared in the Build Back Better plan that failed to gain congressio...
The "SRP" Is Not A Penalty
March 30, 2022 - Bulletin Print Report
The ACArequires individuals either to maintain a minimum level of health coverage or to pay a "penalty." See section 5000A. In 2017 and 2018, the ACA provided t...
Sec. 302(b)(1) Automatically Applies To Inactive Minority Shareholders
March 29, 2022 - Volume 16 Issue 60 Print Report
C is an 'S' corporation. C has outstanding a single class of common stock comprised of both voting common stock and nonvoting common stock. All of the outstan...
Artwork Is Tangible Personal Property
March 29, 2022 - Bulletin Print Report
APP is a non-profit organization. APP holds monthly meetings and sponsors art exhibits in a Missouri city, ("City"). APP plans on sponsoring an art event in 2022, (th...
The "Initial Determination" Of Penalties Was Contained In The "FPAA"
March 29, 2022 - Bulletin Print Report
O acquired roughly133 acres of land in Alabama. O granted to the NWT a conservation easement over the land. Later, O donated a fee simple interest in the land to the NWT....
Payment In Consideration For A Tax Credit Is A "Tax Payment"
March 28, 2022 - Bulletin Print Report
TPs were Louisiana residents. On TPs' 2018 Form 40NR, ("Alabama Return"), TPs reported "Tax Due" of $63,319 and "Net Tax Due" of $33,319. The...
No Spousal Attribution Without A Joint Return
March 28, 2022 - Volume 16 Issue 59 Print Report
Petitioner, (P), was married to JO. During 2008, P worked full time as an employee for RREEF, a real estate investment company, and did not own more than a five perce...
Florida Endorses "Customer Based" Sourcing Of Receipts
March 28, 2022 - Bulletin Print Report
The taxpayer is a corporation headquartered in "X," that provides "asset management services" globally to pension funds, large institutions, and individuals...
Preferred Stock Redemption Premium Is Not "Unreasonable"
March 25, 2022 - Bulletin Print Report
P is the common parent of an affiliated group of corporations, (the "P Group"), that joins in the filing of a consolidated U.S. federal income tax return. P has agree...
Stock In Newco Does Not Cause Violation Of "Triple Eye" Agreement
March 25, 2022 - Volume 16 Issue 58 Print Report
X corporation, (X), has elected 'S' corporation status. Prior to 1984, the stock of X was owned by Father, his son, Son, and an unrelated minority shareholder...
Sales Tax Exemption Granted For Property "Transferred To The Customer"
March 25, 2022 - Bulletin Print Report
Petitioner, ("P"), sold pest control services in New York State during the audit period. S is an insect growth regulator for termite elimination and control. The S sy...
Minnesota's "Minimum Fee Tax" Is Partially Invalidated
March 25, 2022 - Bulletin Print Report
The AHTAstates: "Except as provided in subsection (c)...and section 40117...a State...may not levy or collect a tax, fee, head charge, or other charge on--(1) an ind...
First Of Many?--LGND To Effect "RMT" Transaction With SPAC
March 24, 2022 - Bulletin Print Report
A fertile source forSPAC acquisitions would appear to be "unwanted" divisions of public corporations. Instead of shedding these divisions via a conventional sal...
Interactive Fantasy Sport Contests Are Not Prohibited "Gambling"
March 24, 2022 - Bulletin Print Report
In 2016, the New York State Legislature enacted article 14 of the Racing...Law authorizing and regulating interactive fantasy sport, ("IFS"), contests upon determinin...
L.L. Bean Has Substantial Nexus With Ohio
March 24, 2022 - Volume 16 Issue 57 Print Report
L.L. Bean, (B), is a retailer in Maine that sells products to consumers across the U.S., including consumers residing in Ohio. It does so via retail stores, all of wh...
Payments For Waiver Of Liability Shield Are Rents From Real Property
March 24, 2022 - Bulletin Print Report
TP intends to make an election to be treated as a real estate investment trust, ("REIT"). TP conducts its activities through a partnership, (the "Partnership&quo...
The Willens Deal Survey March 2022
March 23, 2022 - The Deal Survey: March 2022 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
Transfer Of "Client Methodology" Not A Sale
March 23, 2022 - Volume 16 Issue 56 Print Report
Petitioner, (P), has many years of experience in sales and sales management. In 2005, he began working for SGT as the vice-president of sales. P was laid off on April...
Picasso Was Purchased "Solely For Resale"
March 23, 2022 - Bulletin Print Report
P is a limited liability company. P is comprised of two trusts: one for the benefit of HL, and the other for the benefit of JL. RL is the father of HL and JL. On April 13, 2015...
"MGI" Method Must Be Used To Characterize CFC Stock
March 23, 2022 - Bulletin Print Report
In 2014, P restructured its ownership of its foreign subsidiaries. Before the restructuring, P directly owned AGHF. P owned, directly or indirectly, 42 CFCsand also direc...
Minority Shareholder Entitled To Sec. 302(b)(1) Benefits
March 22, 2022 - Volume 16 Issue 55 Print Report
X corporation, (XC), has outstanding one class of stock consisting of 1,000 shares of common stock which are held as follows-- --A owns 625 shares, <...
"Loaner" Vehicles Not Exempt From Use Tax
March 22, 2022 - Bulletin Print Report
APP operates a Chevrolet dealership and participates in an incentive program with General Motors, ("GM"). A component of this program is the "Courtesy Transporta...
Saltwater Disposal System Exempt From Property Tax
March 22, 2022 - Bulletin Print Report
On January 1, 2018, B purchased oil and gas wells. Production from the wells requires the removal and disposal of waste water. B disposes of the same via a non-commercial...
Small Reduction Of Proportionate Interest Is Considered "Meaningful"
March 21, 2022 - Volume 16 Issue 54 Print Report
Partnership X, (X) acquired in 1995 3,300x shares of common stock of Y in a transaction under Sec. 368(a)(1)(A) of the Internal RevenueCode. Y's stock is li...
BBUC Issues "Tracking" Stock
March 21, 2022 - Bulletin Print Report
The Brookfield family of entities has a well deserved reputation for innovation when it comes to financing its far flung activities. A recent transaction does nothing to dimini...
Foreign Retirement Plan Included In Debtor's Estate
March 21, 2022 - Bulletin Print Report
Debtor, ("D"), claims as exempt his $72,300 interest in a Retirement Fund: "Sun Life Fund." The commencement of a bankruptcy case creates an estate comprise...
Section 403(b) Contributions Are Included In New Jersey Gross Income
March 18, 2022 - Bulletin Print Report
Plaintiffs, ("Ps"), filed a 2014 New Jersey Gross Income Tax ("GIT") return on April 11, 2015. They excluded from gross income: (1) dividend income; (2) inc...
SAVE/ULCC--No Real Reorganization Risk Exists
March 18, 2022 - Bulletin Print Report
While certain politicians are making noises about the supposed anti-competitive aspects of the proposed merger of Spirit Airlines, Inc., ("SAVE") and Frontier Group H...
"Green" Contracting And Consulting Engaged In For Profit
March 18, 2022 - Bulletin Print Report
Petitioners, ("Ps"), are partners of DJP, a Georgia partnership. DJP ownedthree buildings that housed LZB stores. The LZB stores produced approximately $20 mill...
Single-Member LLC Entitled to Property Tax Relief
March 18, 2022 - Volume 16 Issue 53 Print Report
SR, an individual, purchased residential property in Greenville County, South Carolina in 1991 and has lived there continuously ever since. The property was taxed at...
Gain From Sale Of Goodwill Is Business Income
March 17, 2022 - Bulletin Print Report
H was the 100 percent shareholder of M, a Virginia corporation with an 'S' election in effect. On March 3, 2011, M sold substantially all of its business assets to B fo...
Merger Triggers San Francisco's Real Property Transfer Tax
March 17, 2022 - Bulletin Print Report
Under the version of the Ordinance in effect on March 11, 2014--the date of the merger--SFBTRC1101 and 1102 imposed a tax on the transfer of "any lands, tenements, o...
FNF Announces "In-Kind" Special Dividend
March 17, 2022 - Bulletin Print Report
While "special" dividends have become increasingly common in recent years, it remains, nonetheless, highly unusual, almost unheard of,for the special dividend t...
Retroactive Law Upheld
March 17, 2022 - Volume 16 Issue 52 Print Report
Taxpayers (TPs) received unemployment compensation during 2009. Pursuant to Sec. 85(c) of the Internal Revenue Code, TPs each excluded $2,400 of their unemployment co...
AT&T/Discovery - “RMT” Transaction About To Be Consummated
March 16, 2022 - Bulletin Print Report
In May 2021, AT&T, Inc., (“T&rdquo...
Reduction Of Sole Shareholder's Proportionate Interests Is Meaningful
March 16, 2022 - Volume 16 Issue 51 Print Report
X is a corporation engaged in an ongoing business whose 20 shares of its sole class of common stock is held by A. In order to provide an equity interest in the...
DAL's Records Inadequate To Support Refund Of Sales Tax
March 16, 2022 - Bulletin Print Report
Petitioner, ("P"), is an airline that operates at each of La Guardia Airport, ("LGA"), and John F. Kennedy Airport, ("JFK"). P employs ground serv...
Only Broker-Dealers Can Use "Customer Based" Sourcing Of Receipts
March 16, 2022 - Bulletin Print Report
P is the sole member of US BD and US AM. US BD is registered as a broker-dealer with the SEC and FINRA. US AM is registered with the SEC as an investment advisor. US BD and US...
Settlement Agreement Necessitates Filing Of Form 1099-C
March 15, 2022 - Volume 16 Issue 50 Print Report
Entity 1 (E1) is a financial institution engaged in the business of extending credit to consumers. E1 filed a complaint in the Circuit Court of State X on Date 1 to recover a d...
Disallowed Expenses Did Not Produce Constructive Dividend
March 15, 2022 - Bulletin Print Report
S, a 'C' corporation, is solely owned by MW. S is a commercial printing contractor. S receives customer referrals from property management companies. S claimed a busine...
Co-location Revenue Subject To B&O Tax
March 15, 2022 - Bulletin Print Report
TP provides "co-location" services. The Department issued an assessment. Co-location services generally consist of renting space in data center facilities. TP owns or...
Tax Penalty Obligations Are Not Voidable
March 15, 2022 - Bulletin Print Report
Y is a non-profit corporation. In 2016, Y petitioned for bankruptcy under Chapter 11. Claims against Y included certain tax obligations. The I.R.S. filed a proof of claim. The...
BSET's Special Dividend Should Not Be "Extraordinary"
March 14, 2022 - Bulletin Print Report
On March 11, 2022, as has become itscustom, Basset Furniture Industries, Inc., ("BSET"), announced that its Board of Directors has "declared a special divi...
"Boot" In A Recapitalization Is A Separate Distribution
March 14, 2022 - Volume 16 Issue 49 Print Report
TP, a domestic corporation, acquired "a%" of the common stock of C. The remaining "b%" was owned by I. The relationship between TP and I deteriorated and &q...
Advances To Shareholders Were Not Bona Fide Loans
March 14, 2022 - Bulletin Print Report
SU is a New York corporation that elected to be treated as an 'S' corporation. SU owns a building located in Manhattan. SM and EM, brother and sister, own 75 percent an...
Data Center Exemption Applicable To Reserve Batteries
March 11, 2022 - Bulletin Print Report
TP, a battery manufacturer, sold batteries to Customer, ("C"). C operatesdata centers in Virginia. Sales tax was charged to C on the sale of the batteries. C re...
Cancellation Of Indebtedness Not Governed By Sec. 61(a)(12)
March 11, 2022 - Volume 16 Issue 48 Print Report
The taxpayer, a domestic corporation, is a wholesale distributor. In 1981, it entered into two contracts with an unrelated seller under which the taxpayer agreed to purchase va...
Mistake Of Law Does Not Invalidate Copyright
March 11, 2022 - Bulletin Print Report
A valid copyright is a prerequisite for bringing a civil action for infringement. To obtain registration, the author of a work must submit...a copy of the work and an applicati...
City Golf Course Not Entitled To Tax Exemption
March 10, 2022 - Bulletin Print Report
In 2012, the City acquired the property to treat and dispose of sewage and wastewater... The City also used the property for recreational purposes. The City owns the golf cours...
Ascertaining The Nature of Stock
March 10, 2022 - Volume 16 Issue 47 Print Report
During each of the fiscal years, the entire common stock of WGPC, consisting of 5,000 shares, was owned by WITC, which was in turn owned by RWC....
Only Reasonable Compensation For Services Rendered Can Be Deducted
March 10, 2022 - Bulletin Print Report
H has dedicated his entire career to the construction profession. In 1980, H founded petitioner, ("P"). In 2011, H notified the W developer's representative that...
Excluded COD Income Is Not "Wholly Exempt" From Taxation
March 10, 2022 - Bulletin Print Report
In 2005, Plaintiffs, ("Ps"), purchased a home in Washington for $748,425, and they took out a mortgage in connection with that purchase. A year later, Ps refinanced t...
"Substantially All" of the Assets
March 9, 2022 - Volume 16 Issue 46 Print Report
X Corporation, (X), and Y Corporation, (Y), were unrelated corporations that for many years were engaged in the hardware business. In fact, X operated two significant...
Check-The-Box Election Does Not Taint Spin-Off
March 9, 2022 - Bulletin Print Report
Foreign Parent, ("FP"), owned all the stock of P, a domestic corporation. P owned D2 and LLC, a disregarded entity. D2 owned Sub and D1. Sub owned C. On Date 1, Sub m...
The "ESRP" Is An Excise Tax
March 9, 2022 - Bulletin Print Report
On April 23, 2020, CHI and RC, (the "Debtors"),filed for Chapter 11 relief. For the tax period ending December 31, 2016, the I.R.S. charged CHI an employer shar...
Hot Tub Cleaning Is Not A "Janitorial Service"
March 9, 2022 - Bulletin Print Report
TP provides hot tub cleaning and maintenance services. TP filed amended excise tax returns changing its reporting from "retail sales" to the "service and other a...
Supplier Of Water To "Fracturers" Earns Qualifying Income
March 8, 2022 - Volume 16 Issue 45 Print Report
C is a publicly-traded partnership (MLP). C will provide "essential fluid handling and disposal services to oil and natural gas producers engaged in the exploration, devel...
Washington Capital Gains Tax Is Unconstitutional
March 8, 2022 - Bulletin Print Report
ESSB 5096 provides that, beginning January 1, 2022, an annual state net capital gains tax is imposed on the sale or other voluntary exchange of long-term capital assets by ...
Depreciation Unavailable To A Controlled Substance Business
March 8, 2022 - Bulletin Print Report
In 2012, the State of Colorado licensed the businesses to cultivate, process, and distribute medical marijuana products. B was treated as a partnership and A was treated as an...
Conservation Purpose Was Protected In Perpetuity
March 7, 2022 - Bulletin Print Report
CP is a partnership. The easement at issue is an historic preservation easement associated with the GB. The GB has been listed on the National Register of Historic Places since...
TD's Liquidation Of FHN Will Not Produce A Basis Step-Up
March 7, 2022 - Bulletin Print Report
TD Bank Group, ("TD"), and First Horizon Corporation, ("FHN"), announced that they have signed a definitive agreement "for TD to acquire FHN in an all-...
Timely Transfer Of Property To Trust Defeats Tax Lien
March 7, 2022 - Volume 16 Issue 44 Print Report
LL owned certain real properties in Haskell County, Kansas. After her death in 1991, and subsequent litigation, the mineral interest in the Haskell Country properties was distr...
CDR Will Return Capital To Its Shareholders
March 4, 2022 - Bulletin Print Report
Cedar Realty Trust, ("CDR"), announced that, following its previously announced dual-track review of strategic alternatives, "it has entered into definitive agre...
No Consent Required To Change Depreciation For E&P Purposes
March 4, 2022 - Volume 16 Issue 43 Print Report
TP is a C corporation. TP plans to make a REIT election. TP uses D in its trade or business. On Date 4, TP filed a Form 3115 to change its method of accounting for depreciation...
No Reasonable Cause For Underpayment Of Tax
March 4, 2022 - Bulletin Print Report
Respondent determined a deficiency in petitioners' 2017 Federal income tax and imposed a section 6662(a) accuracy-related penalty. The deficiency and penalty result from an...
Biomass Facilities "Placed In Service" In 2008
March 4, 2022 - Bulletin Print Report
In 2007, CB acquired two defunct facilities and began restoring them and upgrading them to biomass facilities. While renovating in 2007, CB secured Authority to Constr...
When Is W/C "Reasonably Attributable" To A Terminated Business?
March 3, 2022 - Volume 16 Issue 42 Print Report
M, which was actively engaged in conducting a wholesale appliance distributorship and an outlet for the retail sale of appliances for over 30 years, closed its retail...
Non-Custodial Parent Had A "Qualifying Child"
March 3, 2022 - Bulletin Print Report
P and J had two children together who were each minors in 2014. P and J never married and were living separately throughout 2014. The children resided with J for more than one-...
A "Dwelling" Is Subject To A Property Tax Cap
March 3, 2022 - Bulletin Print Report
S owns and occupies residential real property in Indianapolis, Indiana. S's property consists of: (1) a house with an attached garage, (2) detached carriage house, (3) a de...
Separate Businesses Or A Single Business?
March 2, 2022 - Volume 16 Issue 41 Print Report
A corporation is engaged in publishing four trade magazines. Each magazineis circulated monthly to personnel in the particular industrial field covered. The spa...
Baseball Player Rebuts Utah's Domicile Provision
March 2, 2022 - Bulletin Print Report
In 2007, the Bs purchased a house in Utah. The house received a primary residential property tax exemption from 2008 through 2013. The Bs, however, took no action to request th...
Management Income Not A Factor In Ascertaining Real Property Value
March 2, 2022 - Bulletin Print Report
The Lodge, ("L"), is a full-service resort located at the base of the Vail Mountain ski area. The L has eighty hotel rooms and a variety of amenities. In 1970, privat...
HTA's Special Distribution Is Not "Merger Consideration"
March 1, 2022 - Bulletin Print Report
Healthcare Realty Trust, Inc, ("HR"), and Healthcare Trust of America, Inc., ("HTA"), each a real estate investment trust, ("REIT"),announce...
Mural Work Is Subject To Sales Tax
March 1, 2022 - Bulletin Print Report
The Taxpayer is an artist specializing in framed works and murals and seeks a rulingon the taxability (i.e., on the application of the Virginia retailsales and use...
Collection Activity Defers Taxable Year Of Worthlessness Of A Debt
March 1, 2022 - Bulletin Print Report
In 2015, H and C each owned a 50 percent interest in B, an 'S' corporation. B's main customer was TSI. In 2015, TSI stopped making payments to B. TSI'sunp...
Voting Preferred Stock Is Not Excluded Stock
March 1, 2022 - Volume 16 Issue 40 Print Report
ACEC is a public service corporation. During the years in question, it had outstanding 12,500 shares of common stock and 3,702 shares of preferred stock. Holders of p...
Obligation To Repay FTHBC Is A Nondischargeable Tax
February 28, 2022 - Volume 16 Issue 39 Print Report
Before her Chapter 7 bankruptcy in 2010, DB took a first-time homebuyer credit ("FTHBC") pursuant to the Housing Recovery Act of 2008 ("HERA"). Th...
Contacts And Nexus With Oregon Passes Constitutional Muster
February 28, 2022 - Bulletin Print Report
O provided "VoIP" services to customers nationwide, including Oregon, ("OR"). VoIP services allow customers to make phone calls using a broadband internet c...
Superhero Museum Not Exempt From Property Tax
February 28, 2022 - Bulletin Print Report
H sought an exemption for real property that it uses as a museum dedicated to preserving the 80-year history of superheroes in comics, toys, art, film, and animation. H applied...
Abatement Of Penalty Was Clearly Erroneous
February 28, 2022 - Bulletin Print Report
K purchased a truck but did not pay tax on the truck. K failed to demonstrate that he had the requisite for-hire transportation certificate and that the truck was primarily use...
Sale Does Not Permit Deduction Of Deferred Compensation
February 25, 2022 - Bulletin Print Report
On March 30, 2000, Hoops, ("H"), was established as a Delaware limited partnership by and between HM and HH for the purpose of acquiring, owning, operating, and condu...
Trust Beneficiary Not Owner Of Trust Property
February 25, 2022 - Volume 16 Issue 38 Print Report
TP currentlylives in an assisted living facility. Prior to Date 1, TP lived in Residence (R) for 18 years. TP's mother established Trust (T). T holds fee si...
No Deduction For Sale Of Chemicals Used In Fracking
February 25, 2022 - Bulletin Print Report
Fracking is a method used in the oil and gas industry to create fractures in oil or gas bearing formations to maximize oil production. During the fracking process, TP pumps flu...
Retention Of "Surplus Equity" Did Not Violate The "Takings" Clause
February 25, 2022 - Bulletin Print Report
Tpurchased a condominium in Minneapolis in 1999. In 2010, she stopped paying taxes on the condominium. In Minnesota, property taxes are a perpetual lien against the prope...
Will BRK Use The "Equity Method" With Respect To AXP?
February 24, 2022 - Bulletin Print Report
Much like Liberty Media's stake in Sirius XM Radio, Berkshire Hathaway's proportionate interest in American Express has been increasing because each of Sirius and Ameri...
Certain Types of Diversification Do Not Invoke Sec. 351(e)
February 24, 2022 - Volume 16 Issue 37 Print Report
The stock of Y Corporation, (Y), is actively traded on a public stock exchange. Some of the shareholders of Y transferred their stock to X Corporation, (X), a newly-o...
Storage Tanks Were Not Assessable Real Property
February 24, 2022 - Bulletin Print Report
M is in the business of distributing propane. M operated out of a bulk plant with two above-ground fuel storage tanks, two sets of concrete piers and saddles on which the tanks...
When Does Ownership Of Condemned Property Pass?
February 24, 2022 - Bulletin Print Report
The plaintiffs operated EI and EIIas section 8 housing beginning in 1981. On October 7, 2005, the City of Joliet, ("J"), filed a condemnation action against the...
The Willens Deal Survey February 2022
February 23, 2022 - The Deal Survey: February 2022 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
Ascertaining "Voting Power"
February 23, 2022 - Volume 16 Issue 36 Print Report
P is the common parent of an affiliated group filing consolidated income tax returns. Prior to June 5, 1981, S was also the common parent of an affiliated group filin...
Divorced Father Did Not Have A "Qualifying Child"
February 23, 2022 - Bulletin Print Report
P and his former spouse are the parents of three children. In March 2011, P and his former spouse entered into a marital settlement agreement whereby P's former spouse ...
Commercial Printer Denied "Manufacturing Credit"
February 23, 2022 - Bulletin Print Report
For 2014, petitioner, ("P"), qualified as a manufacturer for purposes of the Manufacturing and Agriculture Credit. In 2014, P sold or disposed of two pieces of printi...
Assuming "Valid Reorganization Expenses"
February 22, 2022 - Volume 16 Issue 35 Print Report
Mr. A owned all of the stock of X Corporation, (X). Y Corporation, (Y), acquired all ofthe assets of X in exchange for Y voting common stock and the assumption...
Health Care Fraudster Ineligible For Section 1341 Relief
February 22, 2022 - Bulletin Print Report
G asserts a single claim under section 1341 of the Internal Revenue Code to obtain a tax refund. G argues that he is entitled to a refund because he "reimbursed to Medicar...
I.R.S. Extends The Due Date For A "Regulatory Election"
February 22, 2022 - Bulletin Print Report
TP provides payment processing services to merchants. TP was interested in acquiring T. On Date 1, each share of T common stock was converted into the right to receive "x&...
"California Method" Does Not Result In Double Taxed Income
February 22, 2022 - Bulletin Print Report
APPs were part-year California, ("C"), residents in 2015 and timely filed a joint 2015 C Non-Resident or Part-Year Resident Income Tax Return. APPs reported earning i...
Taxpayer Did Not Make A "Timely" Rollover
February 18, 2022 - Volume 16 Issue 34 Print Report
Petitioner, (P), is a licensed electrical contractor. In 2009, P was working with TCC, a general contractor. TCC failed to pay P about $130,000 that he was due for wo...
Non-Payment Of Taxes Warranted Dismissal Of Complaints
February 18, 2022 - Bulletin Print Report
The complaints brought by plaintiffs pertain to fifteen vacant parcels of land situated in defendant. For tax years 2013 through 2015, NW filed appeals with the Board challengi...
Income From Section 338(h)(10) Deemed Sale Is Business Income
February 18, 2022 - Bulletin Print Report
AM is an 'S' corporation headquartered in North Carolina. It manufactures garage doors and it sells the garage doors throughout the United States, including in Californ...
BREIT Will Acquire APTS In A "Forward Cash Merger"
February 18, 2022 - Bulletin Print Report
Preferred Apartment Communities, ("APTS"), a real estate investment trust, announced that it has entered into a definitive agreement with Blackstone Real Estate Incom...
Exela Technologies, Inc. Launches Unusual Self-Tender Offer
February 17, 2022 - Bulletin Print Report
Exela Technologies, Inc., ("E"), is embarking on a self-tender offer the likes of which we have rarely, if ever, encountered. The company is offering to exchange up t...
What If FUN Incorporated?
February 17, 2022 - Bulletin Print Report
FUN is a publicly traded partnership that does not earn "qualifying income" but is, nevertheless, treated as a partnership for tax purposes. That is so because FUN is...
Shareholder Loans To 'S' Corporation Not Respected
February 17, 2022 - Volume 16 Issue 33 Print Report
TP is the 100 percent shareholder of S3, an 'S' corporation incorporated in 1983. TP also owns the majority interest in two other 'S' corporations, S1...
Transfer Of "QRP" To A Trust Is Not A "Disposition"
February 17, 2022 - Bulletin Print Report
Trust, ("T") was created on...with TP having sole ownership and control as trustee with the power to amend or revoke the trust agreement at any time. TP has, since th...
Property to Which Sec. 263A Applies
February 16, 2022 - Volume 16 Issue 32 Print Report
The petitioner, R, has been a real estate developer since 1989. In 1993, he operated his development business as a sole proprietorship under the name "SW".<...
Capital One Not Entitled To A Sales Tax Refund
February 16, 2022 - Bulletin Print Report
Some retailers offer a private label credit card for customers to use at the retailer's store. Purchases made with these credit cards are financed...by an outside financing...
PCG Will Pay Dividends In Arrears
February 16, 2022 - Bulletin Print Report
Pacific Gas & Electric recently announced that "the Utility declared payment of all cumulative and unpaid dividends on the Utility's preferred stock as of January...
Services Charges Not Subject To Live Entertainment Tax
February 15, 2022 - Volume 16 Issue 31 Print Report
Desert Palace, Inc. (DPI), doing business as Caesars Palace (C), maintains a live entertainment venue called the Colosseum (COL). C retained a third party, AEG, to manage the C...
Storage Of Raw Materials Not "Use" Thereof
February 15, 2022 - Bulletin Print Report
L is a Delaware corporation with its principal place of business in North Carolina. L manufactures cigarettes in North Carolina and sells those cigarettes throughout the U.S. I...
Married Individual Not A "Head Of Household"
February 15, 2022 - Bulletin Print Report
APP timely filed a 2018 California tax return. On that return, APP filed using the head of household, ("HOH"), filing status, identifying one of APP's sons as the...
A Municipal Corporation May Tax Beyond Its Borders
February 14, 2022 - Bulletin Print Report
In March 2020, the Governor of Ohio issued an executive order declaring a state of emergency in response to the COVID-19 virus. Ohio's director of health issued an order re...
Property Tax Petition Was Timely Filed
February 14, 2022 - Bulletin Print Report
Petitioner, ("P"), filed a property tax petition on December 31, 2020 challenging the 2019 assessment for taxes payable in 2020 for a property located in NU. P filed...
Indiana Court Rejects "Destination" Rule
February 14, 2022 - Volume 16 Issue 30 Print Report
Miller Brewing Company, (M), headquartered in Milwaukee, Wisconsin, manufactures and sells malt beverage products throughout the country....
Marijuana Business Denied Work Opportunity Tax Credit
February 11, 2022 - Bulletin Print Report
Does section 280E of the Internal Revenue Code prohibit a taxpayer from entitlement to the section 51 Work Opportunity Tax Creditfor wages paid or incurred in carrying on...
Altruistic Son Found Liable For Father's Tax Deficiencies
February 11, 2022 - Volume 16 Issue 29 Print Report
Since 1993, the taxpayer, (SR), lived with his father, (JR),and provided care for him. In March, 2002, JR purchased a condominium in Delray Beach, Florida where...
Denial Of Property Tax Exemption Not Unconstitutional
February 11, 2022 - Bulletin Print Report
Wyo. Stat. Ann. section 39-13-105(a)(vi) provides a property tax exemption for qualifying veterans who have been bona fide citizens of the State of Wyoming for at least three y...
Estimated Tax Payments Are Not "Taxes Paid"
February 11, 2022 - Bulletin Print Report
F is a pass-through entity that operates medical facilities and provides ancillary healthcare services. F has four individual non-residents of Maryland, 20 non-resident pass-th...
Stock Subject To Warrants Not Counted For Sec. 302 Purposes
February 10, 2022 - Volume 16 Issue 28 Print Report
Corporation, (C), established an employee stock ownership plan, (ESOP), on September 1, 1986. Prior to December 19, 1986, A, an individual, owned 100 percent (1,000 shares) of...
Rental Fee Serves The Purpose Of An Admission Fee
February 10, 2022 - Bulletin Print Report
The primary business of S is to lease (rent) go-carts, ("GCs"), to its customers and let the customers use its indoor racetrack. S does not charge an admission fee to...
Request For Refund Untimely
February 10, 2022 - Bulletin Print Report
The Division received TP'sresident2018 income taxreturn on June 9, 2021. TP's return was due on April 15, 2019. TP had taxes taken out in 2018 by with...
Debt Cancellation As A "Medium Of Payment" Of Other Income
February 9, 2022 - Volume 16 Issue 27 Print Report
In 1984, the taxpayers opened an account with Y, a brokerage firm. The brokerage firm claims that the taxpayers have a balance due on their account of "$x." The taxpa...
Restricted Stock Not Subject To Substantial Risk Of Forfeiture
February 9, 2022 - Bulletin Print Report
On August 10, 1999, L incorporated MOR, an 'S' corporation. On August 10, 1999, L caused MOR to form an ESOP and contributed 150 shares of common stock to the ESOP. The...
Private Foundation Not Eligible For A Basis Step-Up
February 9, 2022 - Bulletin Print Report
An organization exempt from tax under section 501(a) of the Code and described in section 501(c)(3), and which is classified as a "public charity" under section 509(a...
SAVE's Merger Needs To Satisfy The "Control Requirement"
February 8, 2022 - Bulletin Print Report
Spirit Airlines, Inc., ("SAVE"), and Frontier Group Holdings, Inc., ("ULCC"), announced a definitive merger agreement "under which the companies will c...
Damages For Breach Of Contract Not Taxable
February 8, 2022 - Volume 16 Issue 26 Print Report
In 1969, M agreed to construct a nuclear generating plant for P at a price of $250x. The contract specified that M would provide, at no additional cost to P, any additional ite...
Fraudulent Transfer Of Real Property Set Aside
February 8, 2022 - Bulletin Print Report
On December 18, 1998, K purchased a condominium in Virginia. On June 17, 1999, K purchased a parking space. The Cs are K's niece and nephew. The Cs reside in Poland. In May...
Merger Involving Only Foreign Corporations Is An 'A' Reorganization
February 8, 2022 - Bulletin Print Report
SPAC transactions are undertaken for the purpose of enabling a heretofore private entity to "go public." The transaction involving Maria DB Corporation Ab, ("M&q...
VF Corporation Hit With A $500 Million Tax Deficiency
February 7, 2022 - Bulletin Print Report
VF Corporation, ("VF"), and Timberland Co., ("T"),were combined on September 13, 2011. In the merger, a "reverse triangular cash merger," th...
Is GLPI's REIT Status In Jeopardy?
February 7, 2022 - Bulletin Print Report
On September 28, 2012, the Internal Revenue Service, (I.R.S.),issued LTR201337007. This ruling was issued to Penn National Gaming, Inc., ("PENN"), in conn...
Recovery Based On Faulty Tax Advice Not Taxable
February 7, 2022 - Volume 16 Issue 25 Print Report
Y wished to make as large a gift of money as possible to his son without currently incurring any gift tax. In reliance on his Tax Advisors' advice, Y made a gift to his son...
Driver's License And Voting Registration Determine Principal Residence
February 4, 2022 - Bulletin Print Report
Ps jointly owned two homes in Michigan, the "S property" and the "O property." PE lived in the O property and spent weekends, holidays, and some vacations a...
No "Good Cause" To Discontinue Filing Consolidated Return
February 4, 2022 - Volume 16 Issue 24 Print Report
The taxpayer, a manufacturing corporation incorporated in State M, is a common parent of an affiliated group of corporations consisting of the taxpayer and its wholly...
A Bona-Fide Discount Is Excluded From Sales Price
February 4, 2022 - Bulletin Print Report
TP sells books and school supplies primarily through school-hosted book fairs. It also sells books and supplies to schools that have hosted the fairs. A hosting school signs a...
Valid Consent To Extend Limitations Period Found
February 4, 2022 - Bulletin Print Report
During the course of an audit, P agreed to extend the statute of limitations on assessments. Based on the review of sales records for each test period, the auditor determined t...
Damages Not Deductible In Massachusetts
February 3, 2022 - Volume 16 Issue 23 Print Report
In December 2000, M was invited to become a member of Thomas Wessel Partners Group LLC (TWPG LLC) by making a capital contribution and receiving in exchange a 0.5 per...
Clinics Were Used To "Improve" A Hospital
February 3, 2022 - Bulletin Print Report
The District was formed in 1976 as a public, non-profit healthcare organization to provide health care to rural communities. The District is a municipal corporation and politic...
California Pension Fund Not Exempt From Maryland Transfer Tax
February 3, 2022 - Bulletin Print Report
An LLC owned by a pension fund for the employees of Los Angeles County, California, purchased real property in Prince George's County. Absent an exemption, a transferee, su...
Failure To Achieve Business Purpose Not Fatal
February 3, 2022 - Volume 44 Issue 69 Print Report
D corporation is a publicly traded corporation that conducts Business A and Business B directly. D corporation conducts Business C through its wholly owned subsidiary, C corpor...
FUN Receives A Takeover Offer
February 2, 2022 - Bulletin Print Report
Cedar Fair, L.P., ("FUN"), is a publicly traded partnership. In fact, it is a member of a very exclusive club--it is an "Electing 1987 Partnership." (The on...
Brokerage Services Excluded From The Benefits Of Section 1202
February 2, 2022 - Bulletin Print Report
C operates a website on which potential lessees may use the website to make non-binding reservations for the use of certain facilities at specified rental rates from lessors th...
Valvoline Did Not Breach "Tax Matters Agreement"
February 2, 2022 - Bulletin Print Report
Ashland Global Holdings, Inc., ("A"), decided to separate out the Valvoline, ("V"), business and V became its own public company in early 2017. A and V ente...
Deemed Redemption Not Equivalent To A Dividend
February 2, 2022 - Volume 16 Issue 22 Print Report
Reg. Sec. 1.302-2(b) states that the question of "dividend equivalency" (with respect to a redemption of stock) is primarily one of looking at all the facts...
Building Excise Tax Does Not Apply To Parking Garage
February 1, 2022 - Bulletin Print Report
H objects to the imposition of a building excise tax, ("BET"). The tax was levied on two parking garages constructed by H. The issuance of building permits for the ga...
Transfer Of Lease Not Subject To Conveyance Tax
February 1, 2022 - Bulletin Print Report
In 1995, the Rhode Island General Assembly enacted the "mall act," authorizing a public investment in the development of the Providence Place Mall and an associated p...
Engineer Not A Trader
February 1, 2022 - Volume 16 Issue 21 Print Report
During the years at issue, A was the vice president of engineering at STI where his annual salary in 2008 was $230,000. A began buying and selling securities in 1994....
Roth IRA Eligible For Bankruptcy Exemption
February 1, 2022 - Bulletin Print Report
H guaranteed a loan with the Bank. H defaulted on his loan and filed for Chapter 7 bankruptcy. H disclosed an interest in the following retirement accounts: (1) Traditional IRA...
Active Participant Not Entitled To I.R.A. Deduction
January 31, 2022 - Volume 16 Issue 20 Print Report
From January 1 through July 6, 2008, Petitioner (P) worked for S, where she earned wages of $52,621. During her employment with S, P was not covered by an employer re...
Valid Informal Refund Claim Found
January 31, 2022 - Bulletin Print Report
In February 2011, the I.R.S. performed an audit of Ps for the years 2007-2009. The I.R.S. disallowed Schedule C business expenses and assessed Ps tax, interest, and penalty. Th...
Supreme Court Explains The Contours Of The "Duty Of Prudence"
January 31, 2022 - Bulletin Print Report
Northwestern University, ("NU"), offers two retirement plans to eligible employees: the Retirement Plan and the Savings Plan. Both Plans are defined contribution plan...
Attribution To and From Trusts
January 28, 2022 - Volume 16 Issue 19 Print Report
Trust, (T),and one of its beneficiaries, Mr. A, own all of the stock of X Corporation, (X). None of the stock owned by Mr.A is constructively owned...
Transfer Pricing Adjustments Included in Gross Income
January 28, 2022 - Bulletin Print Report
This case involves three separate legal entities that fall under the umbrella of parent company, a large investment management company. Entity A operates as a portfolio manager...
Zimmer Biomet Holdings Will Make Good Use Of Retained ZimVie Stock
January 28, 2022 - Bulletin Print Report
Zimmer Biomet Holdings, Inc., ("ZB"), is in the process of separating its "core orthopedics business" from its spine and dental businesses. The separation w...
Storage Of Property Is Not "Manufacturing Or Processing"
January 28, 2022 - Bulletin Print Report
The taxpayer, a cold storage provider with a facility in Virginia, receives fresh meat products from customers, reduces the temperature of the product to freezing or near-freez...
Deemed Liquidation Constitutes A Section 354(b)(1)(B) "Distribution"
January 27, 2022 - Bulletin Print Report
HC 1 is a Country A company, classified as a corporation for U.S. federal income tax purposes, owned by members of a family of U.S. individuals (each a "family member"...
Vector Group's Spin-Off Of Douglas Elliman Will Be Partially Taxable
January 27, 2022 - Bulletin Print Report
Vector Group, Ltd., ("VGR"), will soon be distributing the vast majority of thestock of its wholly-owned subsidiary, Douglas Elliman, Inc., ("DOUG"),...
Characterizing Foreclosure Gains
January 27, 2022 - Volume 16 Issue 18 Print Report
A bank issues mortgage loans as a regular part of its banking business. On December 15, 1965, the bank placeda loan with A in the amount of $450x. The loan was...
"As-Applied" Constitutional Challenge Succeeds
January 27, 2022 - Bulletin Print Report
P is commercially domiciled in Virginia and authorized to do business in North Carolina, ("NC"). P is subject to NC Franchise Tax. P was wholly-owned by Altria Group,...
Delivery Charges Are Included In "Sales Price"
January 26, 2022 - Bulletin Print Report
Plaintiff, ("P"),is a licensed motor carrier that transports aggregate material in bulk quantities for its customers engaged in construction projects. P purchas...
Qui Tam Award Not Eligible For Capital Gains Treatment
January 26, 2022 - Volume 16 Issue 17 Print Report
Petitioner husband (PH) served as a reimbursement manager for KI. PH believed that KI's practices violated Federal law. PH and another KI employee, B, agreed to f...
MO Can Deduct The Full Amount Of Punitive Damage Payments
January 26, 2022 - Bulletin Print Report
In 1997, the estate of JW sued Philip Morris, ("PM"). The jury awarded economic damages, non-economic damages, and punitive damages. The Oregon Supreme Court affirmed...
True Object Of Mixed Transaction Is Performance Of Services
January 26, 2022 - Bulletin Print Report
Taxpayer, ("TP"), provides security monitoring services for both residential and commercial customers. In addition to the basic service, TP offers an optional system,...
Bargain Purchase Of Mortgaged Property Produces Ordinary Income
January 25, 2022 - Volume 16 Issue 16 Print Report
X, which qualifies as a REIT, engages primarily in short-term financing activities, such as originating, making, and servicing construction and development loans that...
Divorced Father Was Not A "Head Of Household"
January 25, 2022 - Bulletin Print Report
S is the father of two minor children, IJH and MJS. S shares joint legal custody of his two children pursuant to a Custody Order dated September 11, 2012. The Custody Order ind...
Airplane Not "Farm Machinery And Equipment"
January 25, 2022 - Bulletin Print Report
Is Applicants'out-of-state purchase of an antique airplane for use in their cattle and goat operations subject to sales and use tax under Chapter 144? The answer is a...
Zogenix Shareholders Will Receive "CVRs"
January 24, 2022 - Bulletin Print Report
UCB S.A., ("U"), and Zogenix, Inc., ("Z"), announced that the companies have entered into a definitive agreement under which U will acquire all of the capit...
The Willens Deal Survey January 2022
January 24, 2022 - The Deal Survey: January 2022 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
Literal Compliance With Section 7433 Is Required
January 24, 2022 - Bulletin Print Report
Plaintiffs, C and K, filed an action seeking damages under sections 7433 and 7426 of the Internal Revenue Code. Defendant has filed a Motion to Dismiss based on C's failure...
Irrevocable Renunciation Of Interest In Trust
January 24, 2022 - Volume 16 Issue 15 Print Report
The shareholders of Y corporation (Y) are A, B, (who is unrelated to A), and Trust (an inter vivos 10-year accumulation trust). A was a contingent beneficiar...
Debt Acquired By Related Party
January 21, 2022 - Volume 16 Issue 14 Print Report
On January 1, Year 1, P issued indebtedness that provides for monthly interest payments of $80,000 and a principal payment of $10,000,000 on its stated maturity date...
Taxpayer Did Not Engage In Qualifying "Remediation"
January 21, 2022 - Bulletin Print Report
Taxpayer, ("TP"), performs environmental remediation services... During the Audit Period, TP remediated radioactive waste from a mine. No weapons grade radio...
OTCs Are Not "Hotels"
January 21, 2022 - Bulletin Print Report
On January 2, 2019, plaintiff filed suit against defendants who facilitated online reservations for hotel rooms between consumers and hotels. The petition alleged that the &quo...
"Immediate Supervisor" Personally Approved Penalty Determination
January 21, 2022 - Bulletin Print Report
The instantcase involves a charitable contribution deduction claimed by L for a conservation easement. The I.R.S. disallowed the deduction and determined penalties. Secti...
Absence of Resale Certificate Fatal
January 20, 2022 - Volume 16 Issue 13 Print Report
Petitioner, (P), is a large volume retailer and wholesale distributor of electronic home entertainment equipment. P operated 26 retail stores in the New York City metropolitan...
Nexus (Without Physical Presence) Supports Assessment Of Tax
January 20, 2022 - Bulletin Print Report
The Audit Division concluded that TP had sufficient contacts with Washington, ("W"), to establish nexus, based on the attribution of the physical presence of the reta...
Software Developer Qualified As A "Manufacturing Corporation"
January 20, 2022 - Bulletin Print Report
Almost all of the revenues that AK derived from its CDNbusiness units were attributable to the sale of software products, (the "CDN Software Products"). AK'...
Dell's Private Letter Ruling Reveals How VMware Was Jettisoned
January 19, 2022 - Bulletin Print Report
On September 7, 2016, the predecessor of Dell Technologies, Inc., ("DTI"), completed the acquisition of the stock of EMC Corporation, ("EMC"). One of EMC...
Residuary Legatee's Stock Attributed To Estate
January 19, 2022 - Volume 16 Issue 12 Print Report
B died in 1954. His estate included 755 shares of a corporation's outstanding 757 shares of common stock. In 1957, the estate sold 89 shares of such stock to the estate. Th...
Vaccine Mandate For Healthcare Workers Upheld
January 19, 2022 - Bulletin Print Report
In November 2021, the Secretary of Health and Human Services, (the "Secretary"), announced that, in order to receive Medicare and Medicaid, ("M&M"), fun...
Refund Claim Keeps Tax Period "Open"
January 19, 2022 - Bulletin Print Report
On June 13, 2017, the Department of Revenue, (the "Department"), issued a proposed assessment based upon its audit of P's 2012-2015 corporate income tax returns....
Even Partial Days Count For N.Y. Residency Determinations
January 18, 2022 - Volume 16 Issue 11 Print Report
Petitioners filed joint nonresident income tax returns for 2005 and 2006. During those years, petitioners maintained a permanent place of abode in New York. The Division issued...
Tuition Tax Credit Denied
January 18, 2022 - Bulletin Print Report
Ps' son, MH, was enrolledat Clemson University, ("CU"), during tax year 2018. MH was enrolled during the 2018 spring and fall semesters at CU. However, for...
Resident Taxed On Retirement Plan Distribution
January 18, 2022 - Bulletin Print Report
From the beginning of 2014 until July 21, 2014, R was employed and working in Colorado. During his employment in Colorado, he participated in a 401(k) plan sponsored by his emp...
The Supreme Court Stays The "Vaccine Mandate"
January 14, 2022 - Bulletin Print Report
The Secretary of Labor, acting through the Occupational Safety and Health Administration, ("OSHA"), recently enacted a vaccine mandate for most of the Nation's wo...
Teekay Corporation To Redeem Convertible Notes
January 14, 2022 - Bulletin Print Report
Teekay Corporation, a corporation organized under the laws of the Marshall Islands, is offering to purchase any and all of the outstanding 5.00 percent Convertible Senior Notes...
Refinery Supplier Earns Qualifying Income
January 14, 2022 - Volume 16 Issue 10 Print Report
X is a publicly traded partnership. X is primarily engaged in the business of operating a system of petroleum product and crude pipelines, storage tanks, distribution terminals...
Disability Does Not Toll The Statute Of Limitations
January 14, 2022 - Bulletin Print Report
The taxpayer filed her 2016 Virginia individual income tax return in August 2020, claiming a refund. The Department of Taxation, (the "Department"), denied the refund...
Education Did Not Qualify Pilot For New Trade Or Business
January 13, 2022 - Volume 16 Issue 9 Print Report
Petitioner is a professional airline pilot licensed by the Federal Aviation Administration since 1967. Prior to 1978, petitioner was employed as a pilot by a charter airline.
The United States Is Not Bound By State Limitations Statutes
January 13, 2022 - Bulletin Print Report
JB owes the United States unpaid taxes for the tax years 1999 through 2006. The United States filed an action on August 1, 2019 to reduce to judgment JB's tax liabilities....
COVID-19 Does Not Justify Abatement Of Late Filing Penalty
January 13, 2022 - Bulletin Print Report
TP is in the business of oil and gas production. TP operates in New Mexico, ("NM"), and in 15 other states. TP remits severance tax payments in all 16 states where it...
Deduction Not Denied Due Solely To "Poor Dividend History"
January 12, 2022 - Volume 16 Issue 8 Print Report
In Charles McCandless Tile Service v. United States , 422 F.2d 1336 (Ct. Cl. 1970), the court found that the compensation paid by a closely held corporation w...
Confidential Reports Exempt From Sales Tax
January 12, 2022 - Bulletin Print Report
Petitioner, ("P"), is a multilevel marketing company that sells health and beauty products to consumers through network marketing channels. The network marketing arra...
Philadelphia's Wage Tax Is Not Discriminatory
January 12, 2022 - Bulletin Print Report
TP is a resident of Philadelphia, ("PH"), Pennsylvania, ("P"). She worked full time in Wilmington, ("W"), Delaware, ("D"). TP's empl...
TTWO And ZNGA Are Planning A Reorganization
January 11, 2022 - Bulletin Print Report
Take-Two Interactive Software, Inc., ("TTWO"), and Zynga, Inc., ("ZNGA"), announced that they have entered into a definitive agreement pursuant to which &qu...
Financial Consultant Can Deduct Costs Of Obtaining Masters Degree
January 11, 2022 - Volume 16 Issue 7 Print Report
Y received an M.B.A. in December 1977, and was employed thereafter as a financial consultant . In 1986, Y resigned from his full-time financial and administra...
Printing Is A Manufacturing Activity
January 11, 2022 - Bulletin Print Report
R, a manufacturer of cash register tapes, was founded in 1989. The purchase of electricity is generally subject to a sales and use tax. The Tax Code defines "manufacturing...
Lack Of Signature And Verification Means Claims Were Not "Duly Filed"
January 11, 2022 - Bulletin Print Report
The Bs are United States citizens. In October 2018, the I.R.S. received amended returns for the Bs for 2015 and 2017. These returns were prepared and signed by their attorney,&...
Substitution of Notes Creates 'S' Corporation Basis
January 10, 2022 - Volume 16 Issue 6 Print Report
Mr. G owned 25 percent of the stock of F Corporation, (F). F was an electing small business corporation--an 'S' corporation. F borrowed $450,000 from Bank, (B...
Mere Assembly Is Not Manufacturing
January 10, 2022 - Bulletin Print Report
TP is engaged in the business of assembling, and then selling at the wholesale level, pre-cooked frozen ingredients into frozen sandwiches, entrees, and "bowl/bag" ty...
For-Profit Entity Granted Property Tax Exemption
January 10, 2022 - Bulletin Print Report
Wildwood Forest, LLC, ("W"), applied for an exemption for its real property. The Board of Appeals found the property was 100 percent taxable. The Boy Scouts of Americ...
Orthodontics Is Not A New Trade Or Business
January 7, 2022 - Volume 16 Issue 5 Print Report
The taxpayer, a dentist engaged in "general dental practice," returned to dental school for post-graduate studies in orthodontics. He attended dental school...
State Representative Not Liable For Delinquent Property Taxes
January 7, 2022 - Bulletin Print Report
On August 24, 1988, Representative MoniqueDavis, ("D"), entered into an agreement to rent the Property, a one-story office building owned by the Chicago Board o...
Per Session Method Properly Used To Determine "Wagering Gains"
January 7, 2022 - Bulletin Print Report
Taxpayers are individuals who reside outside of Indiana. During 2019, Taxpayers made repeated visits to a casino in Indiana and played slot machines. For each casino visit, Tax...
Compromising A Disputed Liability
January 6, 2022 - Volume 16 Issue 4 Print Report
Prior to April 1996, petitioner (P)maintained two credit card accounts with MBNA, an M account and a V account. On April 8, 1996, the balance due on his V accou...
The "BAP" Is Properly Used In Determining The QEZE "Tax Factor"
January 6, 2022 - Bulletin Print Report
FG is the CEO and sole shareholder in two corporations, FGRand TLC, each certified in the New York State Empire Zones Program. FG also owned FIS, also certified in the Pr...
Near Certain Merger Must Inform Valuation Of Stock
January 6, 2022 - Bulletin Print Report
D is the founder of Company. At the end of Year 1, D contacted two Investment Advisors to explore the possibility of finding an outside buyer. In Year 2, approximately six mont...
Bankruptcy Does Not Terminate "Affilation"
January 5, 2022 - Volume 16 Issue 3 Print Report
X is the common parent of an affiliated group of corporations filing a consolidated return. Y has been a wholly owned subsidiary of X since its organization in "...
Qui Tam Payments Are "Incentive Payments"
January 5, 2022 - Bulletin Print Report
Mr. O filed a qui tam action in 2014 alleging that his employer violated the False Claims Act, ("FCA"). The federal government intervened and began prosecuting the ca...
Certain Tax Credits Are "Federal Aid Assistance"
January 5, 2022 - Bulletin Print Report
Debtor, ("D"), filed a chapter 7 petition on December 30, 2020. A month later, D filed her 2020 federal incometax return and received a refund, claiming it full...
WMB Is Awarded A "Break-Up" Fee
January 4, 2022 - Bulletin Print Report
Williams Companies, Inc., ("WMB"), will receive, after years of litigation, a "termination fee" from Energy Transfer, L.P., ("ET"),in the am...
Applying NOLs
January 4, 2022 - Volume 16 Issue 2 Print Report
The petitioners are the sole shareholders of RWH, Inc., (RWH), an 'S' corporation. As individual taxpayers, the petitioners suffered losses for the taxable ye...
Cuomo Executive Order Did Not Toll Statutory Protest Deadline
January 4, 2022 - Bulletin Print Report
The subject of the motion of the Division of Taxation, (the "Division"), is the timeliness of petitioners' protest of a notice of deficiency. Petitioners filed a...
Costs Of Acquiring and Installing "USTs" Are Deductible
January 3, 2022 - Volume 16 Issue 1 Print Report
X employs the accrual method of accounting. X operates a manufacturing facility. In the past, X's manufacturing operations have produced waste by-products. X plac...
Costco Penalized For "Paper" Filing
January 3, 2022 - Bulletin Print Report
Costco, ("C"), filed its amended 2016 Alaska corporation net income tax return on December 19, 2019. It filed the return on a paper form. Its final net Alaska income...
California Corporation Had Sufficient Nexus With Oregon
January 3, 2022 - Bulletin Print Report
OI provided "VoIP" services to customers nationwide, including in Oregon, ("O").VoIP services allow customers to make phone calls using a broadband in...
Transfers "Upon Its Organization" Exempt From Sales Tax
December 31, 2021 - Volume 15 Issue 250 Print Report
Petitioner, (P), was incorporated on February 1, 1980, and its sole business is the transportation and delivery of beer sold to retail establishments by its sister co...
How Much Is A Basis Step-Up Worth?
December 31, 2021 - Bulletin Print Report
FactSetResearch Systems, Inc., ("FDS"), announced that it has entered into a definitive agreement, (the "Asset Purchase Agreement"), to acquire the CU...
City Cannot Seek Review Of Appeals Board's Determination
December 31, 2021 - Bulletin Print Report
This case raises the novel question of whether the municipality itself can seek certiorari review of a determination of the municipality's board of review. The Church owns...
Only A Trustee's Activities Are Relevant For "Material Participation"
December 31, 2021 - Bulletin Print Report
CLT is an irrevocable trust created by the Hs in 2005. JH served as trustee and LH, his wife, served as special trustee. The trust document names JH's mother as beneficiary...
"At The Election Of Any Shareholder"
December 30, 2021 - Volume 15 Issue 249 Print Report
Plaintiff, JR, in 1960, received a stock dividend from RMC. Sec. 305(a) provides as a general rule that the value of a stock dividend is not included in gross income....
Hook Stock Holder Does Not Participate In Spin-Off
December 30, 2021 - Bulletin Print Report
D is the parent of a worldwide group. D has a single class of voting common stock outstanding, approximately "a%" of which is owned by US Sub 1, a subsidiary of D. Su...
Lundin Energy And AkerBP Are Planning An "RMT" Transaction
December 30, 2021 - Bulletin Print Report
The Board of Directors of each of Lundin Energy AB, ("Lundin"), and AkerBP, ("Aker"),have reached an agreement on a business combination which will cr...
Rentals From Real Estate Excluded From "NESE"
December 30, 2021 - Bulletin Print Report
1. TP owns and rents, in the course of a trade or business, a vacation property via an online rental marketplace. TP provides...items to make the vacation property fully habita...
T's Spin-Off "Blessed" By The I.R.S.
December 29, 2021 - Bulletin Print Report
Last May, AT&T, Inc., ("T"), entered into an agreement with Discovery, Inc., ("DISCA"), to pursue a so-called "Reverse Morris Trust," ("R...
QDEL And OCDX Planning A "Global" Section 351 Transaction
December 29, 2021 - Bulletin Print Report
Quidel Corporation, ("QDEL"), and Ortho Clinical Diagnostics plc, ("OCDX"), announced that they have entered into a definitive agreement in which QDEL...
Only Reasonable Compensation Is Deductible Under Sec. 83
December 29, 2021 - Volume 15 Issue 248 Print Report
P was the president and controlling shareholder of Corporation, (C). His sons, A and B, were both vice-presidents of C. Each son owned "m" shares of C's...
Student Loan Discharges Should Not Be Reported
December 29, 2021 - Bulletin Print Report
Section 9675(a) of the American Rescue Plan Act of 2021, ("ARP"), amended section 108 of the Internal Revenue Code, to provide a special rule for discharges of certai...
Donkey Breeding Activity Was Engaged In For Profit
December 29, 2021 - Bulletin Print Report
In 2004, the Hs formed E. The Hs decided, in mid-2010, to move forward with breeding miniature donkeys, ("MDs"). H thought himself well positioned for this endeavor g...
The "True Object" Test Permits Exemption From Sales Tax
December 28, 2021 - Bulletin Print Report
The Taxpayer contacts with the United States Navy to repair and replace various command, communication, control, intelligence, surveillance and reconnaissance systems on Navy s...
Homeowners' Association Has Standing To Pursue Property Tax Appeals
December 28, 2021 - Bulletin Print Report
The Association is a homeowners' association. On or about July 6, 2017, the Association filed an appeal with the Board of Review, ("BOR"), challenging the propert...
Loss Corporation Avoids The Full Rigors Of The "Segregation Rules"
December 28, 2021 - Bulletin Print Report
Where a "loss corporation" (i.e., a corporation which is entitled to use a net operating carryover...for the taxable year that includes a testing date...or has a net...
Closed-End Fund Eligible For Sec. 852(b)(6) Relief
December 28, 2021 - Volume 15 Issue 247 Print Report
F is a closed-end management investment company. Its shares are listed and traded on the New York Stock Exchange. F has elected to be treated as a regulated investment company...
BP Proposes To "Roll Up" BPMP
December 27, 2021 - Bulletin Print Report
One of the more popular transactions of the last few years has been the so-called "partnership roll up," a transaction in which the corporate sponsor of a Master Limi...
Credits Can Offset The Affiliated Group's Tax Liability
December 27, 2021 - Volume 15 Issue 246 Print Report
Isle of Capri Casino, Inc. (IOC) computes its Mississippi (M) corporate income tax and franchise tax on a combined basis with its affiliated entities. Four entities in the affi...
Tenants-In-Common Agreement Did Not Create A Business Entity
December 27, 2021 - Bulletin Print Report
On April 4, 2016, a Tenants-In-Common Agreement was created by a group of individuals and business entities. The Agreement explicitly states that they are not a business entity...
Tax On Limestone Purchases Ruled Unconstitutional
December 27, 2021 - Bulletin Print Report
N owns and operates an electrical power generating facility in which it produces multiple products. N introduces limestone into its process for the dual purposes of inhibiting...
Intellectual Property Not Held "Primarily For Sale"
December 23, 2021 - Volume 15 Issue 245 Print Report
Y is a tax-exempt supporting organization under Sec. 501(c)(3). Y is governed by and supports the public university system in the state in which it is incorporated. Y provides...
Storage Fees And Pipeline Use Fees Are "Rents From Real Property"
December 23, 2021 - Bulletin Print Report
TP intends to elect to be taxed as a real estate investment trust, ("REIT"). TP owns two Storage Terminal Facilities. The Storage Terminal Facilities also include oth...
The Sales Tax Is A "Destination" Tax
December 23, 2021 - Bulletin Print Report
Petitioner, ("P"), was the president of Home Depot, Inc.,("HDI"), a New Jersey corporation specializing in the sale and installation of hotel furnishi...
Absence Of Income Collection Does Not Preclude An "ATB"
December 23, 2021 - Bulletin Print Report
Distributing, ("D"), is a publicly traded State A corporation. From its incorporation in Year A (more than five years ago), D has engaged in research and development...
BRG's "Spin-Off" Will Be Treated As A Liquidating Distribution
December 22, 2021 - Bulletin Print Report
Bluerock Residential Growth REIT, Inc., ("BRG"), announced it has entered into a definitive agreement with affiliates of Blackstone Real Estate Partners IX L.P., (&qu...
Leaseholds Are Equivalent To Fee Interests In Real Estate
December 22, 2021 - Volume 15 Issue 244 Print Report
The Partnership is engaged in the general practice of law. No partner of the Partnership has more than a five percent interest in the capital or profits of the Partne...
Absence Of Enclosed Structure Does Not Preclude A "Lease"
December 22, 2021 - Bulletin Print Report
Taxpayers, ("TPs"), rent out RV storage spaces for 'dead storage' of vehicles. TPs entered into written agreements with tenants and collected rent in exchange...
LendingTree's Primary Function Is To Consummate A Loan
December 22, 2021 - Bulletin Print Report
Petitioner, ("P"), is a Delaware limited liability company headquartered in Charlotte, North Carolina. P operates an online marketplace through which it connects pros...
Open Market Repurchases Do Not Impact "Continuity of Interest"
December 21, 2021 - Volume 15 Issue 243 Print Report
T merges with and into P, a corporationthe stock of whichis widely held, and is publicly and actively traded. In the merger, the T shareholders receive, i...
"Granite Trust" Technique Under Siege
December 21, 2021 - Bulletin Print Report
In order to encourage public utility holding companies to simplify their corporate structures, Congress enacted section 112(b)(6), in the Revenue Act of 1935,the predeces...
Cargill Is Subject To New Jersey's "Litter Fee"
December 21, 2021 - Bulletin Print Report
Cargill, ("C"), processes and manufactures meat products at various locations around the country. None of these locations are in New Jersey, ("NJ"). The mea...
HOG Chooses A Tax-Free Transaction With IMPX
December 21, 2021 - Bulletin Print Report
Harley-Davidson, Inc., ("HOG"), and AEA-BridgesImpact Corporation, ("IMPX"), a special purpose acquisition company organized under the laws of the Cay...
The Willens Deal Survey December 2021
December 20, 2021 - The Deal Survey: December 2021 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
Absence Of Active Business Precludes Section 162 Deductions
December 20, 2021 - Bulletin Print Report
PH purchased 10 acres of property in California, (the "property"). The property was in the middle of the Mojave Desert. PH purchased the property with the intent of d...
ENTG's Stock Will Be Taxable
December 20, 2021 - Bulletin Print Report
Entegris, Inc., ("ENTG"), and CMC Materials, Inc., ("CCMP"), announced that the companies have entered into a definitive agreement pursuant to which "E...
MMM To Engage In A "Leveraged" RMT Transaction
December 20, 2021 - Bulletin Print Report
Neogen Corporation, ("Parent"), and 3M, (the "Company" or "3M"), announced that they have entered into a definitive agreement pursuant to which 3M...
Transfer Of Property To Revocable Living Trust Can Be A "Sale"
December 20, 2021 - Volume 15 Issue 242 Print Report
Petitioner formed a revocable living trust for probate planning purposes, and sought to transfer title and registration for a motor vehicle to the trust. A "reta...
Amount Received On Policy Termination Includes Capitalized Interest
December 17, 2021 - Volume 15 Issue 241 Print Report
In June 1989, B acquired an insurance policy on his life from NW. The policy was a so-called "whole life" policy having both acash value and loan feat...
Designer's Services Income Was Properly Allocable To Washington
December 17, 2021 - Bulletin Print Report
T is an industrial design firm headquartered in Seattle. T specializes in designing the interior of passenger airplanes. T contracts with Boeing, ("B"), to provide su...
Interest On "Obligations" Of A Political Subdivision Was Tax Exempt
December 17, 2021 - Bulletin Print Report
The Plaintiffs in this action are real estate developers, ("Plaintiffs" or "Developers") who sought to develop parcels of land in Colorado. Developing the l...
Terminix Global Holdings, Inc. And Rentokil Initial PLC Will Join Forces
December 17, 2021 - Bulletin Print Report
Rentokil Initial plc, ("RIP"), a U.K. corporation, and Terminix Global Holdings, Inc., ("TGHI"), announced that they have entered into a definitive agreemen...
Leveraged Spin-Offs May Lose Some Of Their Allure
December 16, 2021 - Bulletin Print Report
Almost every spin-off undertaken nowadays is of the "leveraged" variety. In a leveraged spin-off, the goal is to "shift" debt from remainco to spinco on a t...
Continuity Of Interest Met When Historical Shareholder Dissolves
December 16, 2021 - Volume 15 Issue 240 Print Report
P owned all of the stock of S for over five years during which time P had been activelyengaged in the manufacture and sale of wire products and S had been activ...
Nights Spent Determine A Child's Principal Place Of Abode
December 16, 2021 - Bulletin Print Report
B has one child, BB, from a prior marriage to AB. The Divorce Decree was entered on August 15, 2013. Accompanying the Divorce Decree was a "Parenting Plan." The Paren...
Coca-Cola Has No Legitimate "Reliance Interests"
December 16, 2021 - Bulletin Print Report
On November 18, 2020, the Tax Court issued an Opinion in this case, 135 T.C. 145 (2020). See The Willens Report, Estranged Spouse Is A "Member Of The Household"
December 15, 2021 - Bulletin Print Report
O was the sole owner of a house on Hilton Head Island, ("HHI"). She occupied the property as her primary legal residence. O timely applied for the 2017 tax year, seek...
Timely Request To Revoke Section 83(b) Election Honored
December 15, 2021 - Bulletin Print Report
On Date 1, Y was granted "x" restricted stock units of Employer, subject to a substantial risk of forfeiture. On Date 2, Y filed an election under section 83(b) of th...
Overlapping Directors Do Not Spoil A "Retention" Spin-Off
December 15, 2021 - Bulletin Print Report
Distributing is a publicly traded State A corporation and the common parent of an affiliated group, (the "Distributing Group"). Distributing has a single class of vot...
Reporting Debt Discharges
December 15, 2021 - Volume 15 Issue 239 Print Report
Entity 1 is a financial institutionwhich providesits members certain"thrift" services, such as checking and savings accounts, certificates...
No Equitable Tolling Of New York State's Statute Of Limitations
December 14, 2021 - Bulletin Print Report
Petitioner filed a 2014 amended New York resident income tax return. Petitioner's amended return was dated April 10, 2018. However, the envelope containing the return indic...
Environmental Risk Reports Are Not Subject To Sales Tax
December 14, 2021 - Bulletin Print Report
Petitioner, ("P"), is a consulting firm. P's clientele consists almost exclusively of banks and financial institutions. P's services include real-estate valua...
Historic Homeowner Rehabilitation Credit Allowed
December 14, 2021 - Volume 15 Issue 238 Print Report
By a deed recorded on March 29, 2011, Petitioner was conveyed property at 19 Pleasant Street, Sidney, New York. The property was conveyed to him subject to "the...
Sale Of Property Did Not Terminate Partnership
December 13, 2021 - Bulletin Print Report
In 2002, ALLC was organized as a limited liability company in California. In 2002, ALLC purchased real property, (the "Property"), for $5,850,000. On November 14, 201...
Virtual Presence Did Not Satisfy The Physical Presence Requirement
December 13, 2021 - Bulletin Print Report
AP was an online retailer headquartered in California that sold automobile parts and accessories . AP sold products over the Internet and to a lesser extentby catalog to...
Navigating Sec. 249's Safe Harbor Is Treacherous
December 13, 2021 - Volume 15 Issue 237 Print Report
T issued, at face value, $X million of a% convertible debentures. The debentures had a term of 15 years. Each $Y of debt principal was convertible into one share of T...
State Taxes Were Non-Dischargeable In Bankruptcy
December 13, 2021 - Bulletin Print Report
S failed to file California tax returns in the 1990, 1991, 1992, and 1996 tax years. Around 2007, the I.R.S. made upward adjustments in S's federal tax liability for those...
Agreement Found To Be A Taxable "License"
December 10, 2021 - Bulletin Print Report
TP is an electric and natural gas utility. TP reportedrevenue from cable companies and other utilities to use TP's utility poles under the Service and Other Activitie...
An Entertainment Venue Failed To Collect and Remit Sales Tax
December 10, 2021 - Volume 15 Issue 236 Print Report
Petitioner, (P), is a Nevada limited liability company with its principal place of business in New York, New York. P owns and operates the Hustler Club which is an ad...
Whirlpool's CFC Earned Foreign Base Company Sales Income
December 10, 2021 - Bulletin Print Report
Subpart F taxes an American corporation directly on certain kinds of income held by its foreign subsidiaries--which Congress referred to as "controlled foreign corporation...
Repurchase Premium Paid In Stock Is Deductible
December 9, 2021 - Volume 15 Issue 235 Print Report
TP filed a voluntary petition on Date 1 to reorganize under Chapter 11 of the Bankruptcy Code. TP submitted a plan of reorganization (the Plan) which was approved on...
"Tacit Consent Rule" Used To Certify Joint Return
December 9, 2021 - Bulletin Print Report
The Ss have lived together at their current family home in New York since 1999. O handled all financial affairs. A chose to remain uninvolved with her family's financial ma...
Refund Suit Barred By Sovereign Immunity
December 9, 2021 - Bulletin Print Report
In 2013, the I.R.S. examined F's taxes for 2010-2012 and increased his taxable income for each year. F did not pay the additional taxes right away. So, in 2016, the I.R.S....
Like-Kind Exchanges Are Taxable In Pennsylvania
December 9, 2021 - Bulletin Print Report
TPshold equal shares in a number of limited partnerships for the purpose of buying, selling, developing, and managing real estate. Each limited partnership reported its p...
Has Liberty Media Corporation Slain The Active Business Dragon?
December 8, 2021 - Bulletin Print Report
Liberty Media Corporation, ("LMC"), and SiriusXM Holdings, Inc., ("SIRI"), have had a long and rather interesting relationship. More than five years ago, LM...
Loans By REITs Secured By Ownership Interests In Entities
December 8, 2021 - Volume 15 Issue 234 Print Report
Sec. 856(c)(4)(A) provides that at the close of each quarter of its taxable year, at least 75 percent of the value of a REIT's total assets must be represented by...
Taxpayer Did Not Resell Tangible Personal Property
December 8, 2021 - Bulletin Print Report
Taxpayer, ("TP"), provides remote access software. TP filed a request for refund of retail sales tax paid on the servers it purchased. The application was denied. TP...
"Tie-Breaker" Rule Denies Dependency Exemption Deduction
December 8, 2021 - Bulletin Print Report
P is father to LK. In March 2015, LK and her minor child, IME, moved to live with P. LK moved because of domestic problems with her spouse. P was unaware of the marriage. In th...
Credit Reduction Was Not A "Deficiency"
December 7, 2021 - Bulletin Print Report
The Department of Treasury, (the "Department"), audited the tax returns of M for tax years 2008 through 2010. The Department eventually finished the audit in 2017, an...
Tax Assessments Were Not "Time-Barred"
December 7, 2021 - Bulletin Print Report
TP submitted a High Technology Application For Sales and Use Tax Deferral, dated March 24, 2010. The application is for an investment project in Seattle consisting of tenant im...
Sec. 357(c)(1) Does Not Apply To Acquisitive Reorganizations
December 7, 2021 - Volume 15 Issue 233 Print Report
A owned all the stock of X and Y. Y acquired all of the assets of X in exchange for an amount of Y stock constituting Sec. 368(c) control and the assumption by Y of X...
Assessment Of Penalties On A "Per Form" Basis Rejected
December 7, 2021 - Bulletin Print Report
Each person with a financial interest in a financial account in a foreign country shall report such relationship to the Commissioner of Internal Revenue. The prescribed reporti...
When Are Dividends Includible In Gross Income?
December 6, 2021 - Volume 15 Issue 232 Print Report
The taxpayer is a casualty insurance company taxable under Sec. 831 of the Internal Revenue Code. Although the taxpayer generally uses the accrual method of accounting, for 197...
Delaware's NOL Policy Is Invalidated
December 6, 2021 - Bulletin Print Report
Each corporation that does business in Delaware, ("D"), must pay a tax of 8.7 percent onits taxable income derived from in-state activities. The starting point...
Timely "Check-of-the-Box" Converts A Capital Loss Into An Ordinary Loss
December 6, 2021 - Bulletin Print Report
In LTR 8939001, June 9, 1989, the players areA, a domestic corporationwhich owns 100 percent of the issued andoutstanding stock of B, a holding company incorp...
Coupons Need Not Be Linked To Specific Items Purchased
December 6, 2021 - Bulletin Print Report
TP sought a partial refund of sales tax he paid on items purchased on three occasions at BJ's in Downingtown, Pa. In the first two instances, his purchase receipt reflected...
Sales Tax Imposed On Transfer Of Property To Grantor Trust
December 3, 2021 - Volume 15 Issue 231 Print Report
Petitioner (the Settlor) created an irrevocable trust (the Trust) pursuant to a trust agreement between the Trustees and the Settlor. The Settlor is deemed to own...
COVID-19 Stay Did Not Warrant Abatement Of Interest And Taxes
December 3, 2021 - Bulletin Print Report
At a foreclosure sale conducted on February 25, 2020, NS purchased the Property for $225,000. The Foreclosure Purchaser, (the "FP"), deposited $46,000. The Contract o...
Franchise Fee Violated Telecommunications Act Of 1996
December 3, 2021 - Bulletin Print Report
On March 22, 2016, the City of Shreveport, Louisiana, (the "City"),filed a petition for breach of contract. InAugust 1996, it entered into a non-exclusive...
Tenant's "PILOT" Payments Not "Eligible Real Property Taxes"
December 3, 2021 - Bulletin Print Report
The Company was the owner of property located in the City of Buffalo, consisting of land and building, (the "Property"). The Company entered into a brownfield site cl...
"Entireties" Property Not Exempt From Process Under Federal Law
December 2, 2021 - Bulletin Print Report
Debtor, ("D"), filed for relief under chapter 7 of the Bankruptcy Code on July 16, 2021. D lists an ownership interest in real property, (the "Property"), w...
REIT Never "Held" Lessee's Securities
December 2, 2021 - Volume 15 Issue 230 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 or its subsidiaries...
The Testing And Monitoring Of Real Property Is Subject To Sales Tax
December 2, 2021 - Bulletin Print Report
P performs engineering and environmental consulting services. P's primary services involve environmental testing and analysis in connection with potentially contaminated re...
I.R.S. Claims Not Entitled To Priority
December 2, 2021 - Bulletin Print Report
The "individual mandate" required Americans to maintain a minimum standard of health care coverage. If not insured, citizens were required to make a "Shared Resp...
I.R.S. Temporarily Reduces "Cash Limitation Percentage"-REITs And RICs
December 1, 2021 - Bulletin Print Report
Publicly-offered real estate investment trusts, ("REITs"), and publicly-offered regulated investment companies, ("RICs"), must distribute, in order to prese...
Property Leased Subject To Use Tax
December 1, 2021 - Volume 15 Issue 229 Print Report
Petitioner purchased an aircraft from one company and immediately executed a five-year lease to another company that already had possession of the aircraft
Leases Are Not Exempt From Sales Tax
December 1, 2021 - Bulletin Print Report
CP owns a Cessna Citation aircraft which it leases to related and unrelated parties, (the "Lessees"), pursuant to an "Aircraft Dry Lease." The Dry Lease req...
Bond Buyer Not A "Trader"
December 1, 2021 - Bulletin Print Report
Petitioners, ("Ps"), buy and hold tax-exempt obligations issued by state and local governments other than New York. In some instances, Ps paid a premium to acquire th...
Issue Manager Was I.R.S. Agent's "Immediate Supervisor"
December 1, 2021 - Bulletin Print Report
S was treated as a partnership for Federal income tax purposes. In May 2014, S acquired 1,000 acres of land. On December 28, 2015, S granted a conservation easement over a port...
Popular Acquisition Format Must Navigate Common Control Rules
November 30, 2021 - Bulletin Print Report
A widely-used acquisition format which, on the surface, has a rather quotidiantax profile, has been roiled by the possibility that it could also be described in section 3...
Non-REIT To Engage In A "Forward Cash Merger"
November 30, 2021 - Bulletin Print Report
Goodrich Petroleum Corporation, ("GDP"), announced that it has entered into a definitive merger agreement pursuant to which a subsidiary of PalomaPartners VI, L...
Medical Equipment Subject To Sales Tax
November 30, 2021 - Bulletin Print Report
"System" is a type of spinal cord stimulator that is designed to be a long-term solution for persons who have permanent chronic pain due to an injury or other disorde...
"Spillover" Rule Survives Amendment to Sec. 304
November 30, 2021 - Volume 15 Issue 228 Print Report
Mr. A and Mr. J, who arebrothers, each owned 50 percent of the stock of Corporation A, (CA), and Corporation I, (CI). Each of CA and CI were 'S' corpora...
Rejected Return Was Timely "Filed"
November 29, 2021 - Bulletin Print Report
P timely filed a request for an extension of time to file his 2014 Federal income tax return, extending the due date from April 15, 2015 to October 15, 2015. Along with the ext...
"BAB" Refunds Are Subject To Sequestration
November 29, 2021 - Bulletin Print Report
Plaintiffs are all public-sector power providers. They all issued Direct Payment Build America Bonds,("BABs"), authorized by the ARRA. Under the ARRA, issuers o...
Estimated Market Value Is The Measure Of Consideration For The "RPTT"
November 29, 2021 - Bulletin Print Report
G1 is a limited liability company. G2 is also a limited liability company, (together, the "Gs"). G is a limited liability company wholly owned by LS, which is a Delaw...
A Corporation Cannot Own Its Parent
November 29, 2021 - Volume 15 Issue 227 Print Report
X owns 100 percent of the stock of Y and Y owns 100 percent of the stock of Z. Y purchased the stock of S, a wholly owned subsidiary of Z, for cash in an amount equal to the fa...
Sec. 6426 Credits Reduce Deductible Excise Tax Liability
November 26, 2021 - Volume 15 Issue 226 Print Report
The question is whether, for federal income tax purposes, the credits allowed under Sec. 6426(a) reduce a claimant's liability for excise taxes. Claimants typically include...
Legal Incidence Not Economic Burden (Of A Tax) Is Controlling
November 26, 2021 - Bulletin Print Report
Under the California R&TC: (1) certain leases are treated as sales, (2) sales tax is imposed on sellers, (3) use tax is imposed on buyers, and (4) as a matter of state cons...
Increased Assessment Not An Illegal "Spot Assessment"
November 26, 2021 - Bulletin Print Report
The property is in a residential zone near the campus of Rutgers University. The property consists of a three-story building with 32 two-bedroom apartments and two one-bedroom...
LAUR's Partial Liquidation Falls Within Section 302(e)(2)
November 26, 2021 - Bulletin Print Report
The taxpayer, ("TP"), is a publicly traded domestic corporation that owns T. TP is Laureate Education, Inc., ("LAUR"). T owns TS. Each of T and TS is a disr...
Investment Manager Did Not Add Substantial New Line Of Business
November 24, 2021 - Volume 15 Issue 225 Print Report
X is a publicly traded partnership (PTP) that is an "electing 1987 partnership" under Sec. 7704(g). Since its inception, X has been engaged in the business...
Failure To Disclose Foreign Trusts Was Properly Penalized
November 24, 2021 - Bulletin Print Report
Under section 6048(a) and (c), a U.S. person must report: (1) creation of a foreign trust; (2) transfers to a foreign trust; or (3) distributions received from a foreign trust....
Physical Possession Of IRA Assets Causes A Taxable Distribution
November 24, 2021 - Bulletin Print Report
M established, on August 19, 2015,a self-directed IRA and named KT the IRA custodian. On August 24, 2015, CB formed GH. GH is a single-member LLC that is a disregarded en...
Build Back Better Targets "Granite Trust" Transactions
November 24, 2021 - Bulletin Print Report
The Build Back Better legislation, H.R. 5376, contains numerous high profile tax provisions, not the least of which is the proposed excise tax on stock buybacks and the alterna...
Overlapping Ownership Rule Comes To RXN's Rescue
November 23, 2021 - Bulletin Print Report
Ever since section 355(e) of the Code was enacted in 1997, "Morris Trust" and "reverse Morris Trust" transactions, the latter being much more prevalent than...
Can A "Defective" Reverse Morris Trust Transaction Be Salvaged?
November 23, 2021 - Bulletin Print Report
A conventional "Reverse Morris Trust" ("RMT") transaction, if it is to accomplish its tax objectives, should embodya series of steps that areund...
The Willens Deal Survey November 2021
November 23, 2021 - The Deal Survey: November 2021 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
"Damage" Payments Ruled Non-Deductible Personal Expenses
November 23, 2021 - Volume 15 Issue 224 Print Report
In 1993, D enrolled as a student at the University of Tennessee College of Medicine (UT). In 1994, D entered into a Conditional Award Agreement (the Agreement) with U...
Concert Tickets Are Not Services
November 23, 2021 - Bulletin Print Report
G operates Parx Casino, ("P"). As part of its efforts to encourage slot machine and table game play, G distributed to patrons of P various promotions... P also gave a...
Sales Proceeds Not Eligible For Sec. 1033 Benefits
November 22, 2021 - Volume 15 Issue 223 Print Report
The taxpayer was the owner of a shopping center that contained a number of stores and offices under various lease agreements. A part of the shopping center was destro...
Video Display Systems Are "Business Fixtures"
November 22, 2021 - Bulletin Print Report
The Video Display Systems at issue are installed in sports stadiums/arenas, as digital billboards, on the facade of buildings, as signs by entrances to buildings, and on the in...
KKR's Tax Receivable Agreement Called Into Question
November 22, 2021 - Bulletin Print Report
Plaintiff is a KKRshareholder that seeks to enforce its statutory right to inspect the Company's books and records concerning the decision of the Board of Directors t...
SEC Continues To Question SPAC Accounting Policies
November 22, 2021 - Bulletin Print Report
D and Z Media Acquisition Corporation, (the "Company"), in a recently filed Form 8-K, stated the following: "...the management of the Company has re-evaluated th...
The WarnerMedia Separation Will Probably Be A "Split-Off"
November 19, 2021 - Bulletin Print Report
Preliminary proxy materials were recently issued by Discovery, Inc., (to be re-named Warner Bros. Discovery, Inc., ("WBD")), and they shed some additional light on ex...
The Limited Role Of Sec. 7503
November 19, 2021 - Volume 15 Issue 222 Print Report
Plaintiffs filed their joint Federal income tax return for 1955 on Monday, April 16, 1956. April 15, 1956, the date prescribed for filing, fell on a Sunday. Pursuant...
Ground Lease Encompassed More Than A Real Estate Transaction
November 19, 2021 - Bulletin Print Report
In 2008, P sought to apply for a casino operator's license. P needed to demonstrate that it had rights to a site on which to build a casino. P and S, a REIT, reached an agr...
AMT Will Enjoy A Basis Step-Up
November 19, 2021 - Bulletin Print Report
American Tower Corporation, ("AMT"), and CoreSight Realty Corporation, ("COR"), each a real estate investment trust, ("REIT"), announced that they...
Cash Basis Taxpayers Are Entitled To "ROT" Refunds
November 19, 2021 - Bulletin Print Report
K is a used car dealership that sells cars via installment loan contracts. The loans have a high default rate, and K repossesses many of the cars before they are fully paid off...
Alarm Assessments Are An Unconstitutional Tax
November 18, 2021 - Bulletin Print Report
In 1986, the city enacted Ordinance 448-1986 to regulate security alarm systems because of the high cost of responding to false alarms. The ordinance was codified in Chapter 80...
Foodservice Management Company Provides "Consulting Services"
November 18, 2021 - Bulletin Print Report
Taxpayer, ("TP"), is a "foodservice category management" company. Its clients include companies that are foodservice distributors, manufacturers, and foodse...
A Pension Plan Is A Section 361(b)(3) Creditor
November 18, 2021 - Bulletin Print Report
DP is a publicly traded State A corporation. DP appears to be Alliance Data Systems Corporation. DP directly conducts both Business A and the R Business in Country A and indire...
Distributions by an 'S' Corporation Can Trigger Capital Gain
November 18, 2021 - Volume 15 Issue 221 Print Report
J, Inc., (J), was organized on July 13, 1995. On August 29, 1995, Mr. M, through his revocable living trust, acquired all of J's stock: 10,000 shares of common st...
Relocation Benefits Are Not Taxable Compensation
November 17, 2021 - Bulletin Print Report
CSXrequires its employees to move to different locations. CSX chooses to pay for most of the expenses the relocating employees incur in moving to the new location. When C...
Escrow Deposit Terminates Installment Sale Privilege
November 17, 2021 - Volume 15 Issue 220 Print Report
A sold unimproved real property to B on January 2, 1975 for $100x. A received a cash down payment of $10x and B's purchase money promissory note in the amount of...
Stimulus Payments Are Not Unemployment Benefits
November 17, 2021 - Bulletin Print Report
On January 11, 2021, the court sentenced R to 60 months in prison. In addition, the court ordered that R pay $45,000 in restitution. The U.S. sought a writ of garnishment again...
Will Toshiba's Spin-Offs Qualify Under Section 355?
November 17, 2021 - Bulletin Print Report
Toshiba Corporation, ("TC"), following the lead of General Electric, announced its intention "to separate into three standalone corporations." One such corp...
Distribution Found To Result From A "Genuine Contraction"
November 16, 2021 - Volume 15 Issue 219 Print Report
X is a State X corporation engaged in the business of farming on three parcels of land. X has outstanding common stock held by the estate of A, B (A's spouse), an...
Business Entity Eligible For Managed Health Care Deduction
November 16, 2021 - Bulletin Print Report
The issue is whether TP is entitled to a deduction under New Mexico Stat. Ann. section 7-9-93. TP is engaged in the business of providing the services of its nurse employees on...
Daimler AG To Engage In A "De-Merger" Transaction (But Not A Spin-Off)
November 16, 2021 - Bulletin Print Report
Daimler AG, having secured all of the required consents and approvals,is very close to separating its trucking operations from its passenger car operations by means of a...
RBC's/RXn's Groundbreaking Section 355(e) Ruling
November 16, 2021 - Bulletin Print Report
D is the common parent of an affiliated group of domestic corporations that file a consolidated return. D has a single class of common stock outstanding, the shares of which ar...
NE Will Reincorporate (And Acquire Maersk)
November 15, 2021 - Bulletin Print Report
Noble Corporation, ("NE"), a Cayman Islands corporation, and the prodigiously named "The Drilling Company of 1972," ("Maersk Drilling"), also a fo...
Conversions Are Recapitalizations
November 15, 2021 - Volume 15 Issue 218 Print Report
X is engaged in a manufacturing business and has shares of voting common stock and nonvoting preferred stock outstanding. All the common stock is owned by employees....
Safety Wear And Accessories Subject To Sales Tax
November 15, 2021 - Bulletin Print Report
Applicant is a retail establishment that sells safety wear, which includes steel-toed boots, footwear accessories, clothing, and glasses. Applicant sells to individuals who wor...
Home Inspectors Do Not Provide Professional Services
November 15, 2021 - Bulletin Print Report
K is certified by the West Virginia, (WV), Fire Marshal to perform home inspection services. To obtain this certification, he passed a National Home Inspector Examination, comp...
"Failed" Liquidation Constitutes A Reorganization
November 12, 2021 - Volume 15 Issue 217 Print Report
P corporation owns more than 80 percent of the stock of S corporation. The balance of the outstanding stock of S corporation was publicly held. For valid business reasons, &quo...
Social Security Benefits Are Included In Modified Adjusted Gross Income
November 12, 2021 - Bulletin Print Report
For 2015, K reported $59,228 of social security ("SS") benefits, of which $16,829 and $14,523 were attributable to lump-sum payments relating to 2013 and 2014, respec...
Reliance On Professional Advice Justifies Penalty Waiver
November 12, 2021 - Bulletin Print Report
The estate tax underpayment of $165,708 from which the disputed penalty of $16,571 arose resulted from a miscalculation reflected in line 7 of the MET 1F form submitted to the...
FBAR Penalties Properly Assessed On A Per Account Basis
November 12, 2021 - Bulletin Print Report
During the 2004-2010 tax years, S had access to several foreign bank accounts, but she did not report those accounts to the I.R.S. Specifically, S did not file an "FBAR.&q...
CPL Will Be A Party To A "Forward Cash Merger"
November 11, 2021 - Bulletin Print Report
Core Point Lodging, Inc., ("CPLG"), is a real estate investment trust, (REIT). It has recently announced that it has entered a definitive agreement to be acquired by...
Revenue Raising Ordinance Was Not A Tax
November 11, 2021 - Bulletin Print Report
In 2015, two separate suits were filed against the City of Westlake, ("W"),challenging Ordinance 880, which increased utility gas rates. In 2017, two additional...
FBAR Defendant Must Repatriate Foreign Assets
November 11, 2021 - Bulletin Print Report
On August 27, 2018, the Government initiated this case against S for willfully failing to file FBARs as required by 31 U.S.C. section 5314. The court found in favor of the U.S....
Exempt Organization's Website Is A "Periodical"
November 11, 2021 - Volume 15 Issue 216 Print Report
Y is an organization described in Sec. 501(c)(3) of the Internal Revenue Code. Y's principal activity has been publishing an educational magazine. Originally, Y p...
Thoughts On BHC's "Granite Trust" Presentation
November 10, 2021 - Bulletin Print Report
Bausch Health Companies, (BHC), entered into a so-called "Granite Trust" transaction several years ago for the purpose of recognizing a loss that had economically acc...
GE's Planned Corporate Mitosis
November 10, 2021 - Bulletin Print Report
We are not sure if the market was anticipating the news coming out of GE, but, regardless, it is quite startling. The company announced its intention "to form three...publ...
Underpayment Interest Not Abated
November 10, 2021 - Volume 15 Issue 215 Print Report
C1 filed its TY1 corporate tax return as the parent of a consolidated group. In TY1, C1 was 100 percent owned by C2, a foreign parent. The corporations were not membe...
Casual Sale Exemption Not Available
November 10, 2021 - Bulletin Print Report
KarvoPaving Company, ("Karvo"), is a road construction company that does most of its work for the Ohio Department of Transportation, ("ODOT"). ODOT...
Heart Monitor Is Subject To Sales Tax
November 10, 2021 - Bulletin Print Report
The heart monitor is temporarily implanted under the skin to monitor irregular heartbeats. This product is single use, and a prescription is required to purchase the device. Th...
Bankruptcy Plan Prioritizing Tax Debts Is Rejected
November 9, 2021 - Volume 15 Issue 214 Print Report
In 2011, SC and LC (the Cs) filed for Chapter 13 bankruptcy relief. They proposed, and the bankruptcy court rejected, a plan to pay nondischargeable state and federal...
Overpayment Interest Accrues From Last Date Prescribed For Filing
November 9, 2021 - Bulletin Print Report
TP (or "X"), a foreign corporation, sought a refund on its Year 1 Form 1120-F for all of the withholding taxes on interest paid to TP by a related U.S. corporation du...
Development Of Software Is A Qualified Trade Or Business
November 9, 2021 - Bulletin Print Report
TP was formed and incorporated on Date 1 to develop and commercialize software "to assist medical providers in providing medical treatment to individual patients." Th...
Cables And Conduits Are Taxable Real Property
November 9, 2021 - Bulletin Print Report
Petitioners, ("Ps"), are affiliated telecommunication companies that own fiber-optic cables and conduits that connect public rights-of-way to private customers... Suc...
California Sales Tax Is Imposed On The Retailer
November 8, 2021 - Bulletin Print Report
APP has operated a video game and electronics store in Los Angeles since July 1, 1982. On February 1, 2012, CDTFAvisited APP's business location andfound that i...
Defining "Common Stock"
November 8, 2021 - Volume 15 Issue 213 Print Report
A corporation, (C), has outstanding a single class of common stock held by 10 individuals, each of whom owns 20 shares. C entered into a plan of recapitalization unde...
Taxpayer Not Entitled To Manufacturing Classification
November 8, 2021 - Bulletin Print Report
On January 31, 2019, APP timely filed a Form 355Q, seeking classification as a manufacturing corporation. On its Form 355Q, APP stated that it was not presently engaged in manu...
Taxpayer Did Not Incur Deductible "Moving Expenses"
November 8, 2021 - Bulletin Print Report
In 2016, P was employed by AN as a car salesperson. Prior to January 2016, she worked at AN's Illinois dealership. In 2016, she moved from Illinois to Texas due to personal...
Closing The Transferor's Taxable Year
November 5, 2021 - Volume 15 Issue 212 Print Report
Substantially all of the properties of M Corporation (M) were acquired by X Corporation (X) in exchange solely for a portion of the voting stock of X in a transaction qualifyin...
Excess "APTC" Is An Increase In Tax
November 5, 2021 - Bulletin Print Report
Petitioners, ("Ps"), reported adjusted gross income of $181,183 on their joint Federal tax return for 2018. Their "modified adjusted gross income" was also...
Transportation By Hired Car Is Subject To Sales Tax
November 5, 2021 - Bulletin Print Report
E contracts with its drivers and independent contractors to provide "chauffeured transportation service" to its customers. In July 2018, E applied to the Commissioner...
The SRP Is Not An Unsecured Priority Claim
November 5, 2021 - Bulletin Print Report
AP filed a voluntary Chapter 13 petition on December 19, 2019. APP filed a proof of claim, which includes an unsecured priority claim. Of this amount, APP identified $2,409.00...
Has SIRI Become An ATB?
November 4, 2021 - Bulletin Print Report
On November 1, 2021, Liberty Media Corporation, ("LMC"), entered into an Exchange Agreement with certain Berkshire Hathaway parties, (the "Holders"), "...
Self-Assessed Taxes Are Not "Claimed By The State"
November 4, 2021 - Bulletin Print Report
G describes itself as the reporting entity of a combined group of investment advisers who assist individuals with their investments. Although G maintains a Dallas office to sup...
Limited Partners Engaged In A Trade Or Business
November 4, 2021 - Volume 15 Issue 211 Print Report
P was a partnership whose sole asset was a shopping mall in Florida. In 1998, P deeded ownership of the mall to SG (the operating partnership of an UPREIT) in exchange for a li...
"Standing" Requires An Injury In Fact
November 4, 2021 - Bulletin Print Report
B sued the Department of the Treasury and the Secretary of the Treasury, claiming that the federal government does not have the constitutional power to require citizens to pay...
Taxpayer Not Permitted To Revoke Section 59(e) Election
November 4, 2021 - Bulletin Print Report
TP is a consolidated group. TP filed its original return for Tax Year on Date 3. TP properly elected to capitalize under section 59(e) "$c" of the total eligible rese...
I.R.S. Questions BHC's "Granite Trust" Transaction
November 3, 2021 - Bulletin Print Report
Section 332(a) of the Code provides: "No gain or loss shall be recognized on the receipt by a corporation of property 'distributed in complete liquidation' of anot...
PSX Will "Roll Up" PSXP
November 3, 2021 - Bulletin Print Report
Phillips 66, ("PSX"), and Phillips 66 Partners, ("PSXP"), announced that they have entered into a definitive agreement "for PSX to acquire all of the p...
Covered Transactions Part II
November 3, 2021 - Volume 15 Issue 210 Print Report
TP indirectly owns all of the issued and outstanding common stock of Sub 1, a foreign corporation. Sub 1 owns Sub 2. Sub 2 is a disregarded entity. Seller owns Target...
Buried Cable Is Real Property
November 3, 2021 - Bulletin Print Report
Once in the ground, the taxpayer's fiber opticcables "stay in the ground forever." Removing a cable through the conduit would require the use of pulleys and...
The "SRP" Is A Tax Measured By Income
November 3, 2021 - Bulletin Print Report
The Debtors, ("Ds"), filed their Chapter 13 case on October 21, 2019. The I.R.S. claims the Ds owe "SRPs" for failing to maintain health insurance. The I.R....
SPAC Repurchases
November 2, 2021 - Bulletin Print Report
There is legitimate concern that the proposed excise tax on stock repurc...
Straight Debt Is Not A Second Class Of Stock
November 2, 2021 - Volume 15 Issue 209 Print Report
Corporation, (C), elected to be an 'S' corporation for its first year of existence. C has never been taxed as a C corporation. Its shares are held in equal pa...
In-State Representative Creates Constitutional Nexus
November 2, 2021 - Bulletin Print Report
P is an Illinois corporation. P sells heating, air conditioning, and air quality equipment through its website. P had an employee in Texas. P sold tangible p...
Section 7623(b) Has A Remedial Purpose
November 2, 2021 - Bulletin Print Report
P filed on April 25, 2013, a timely petition in the Tax Court for a review of an adverse determination of the I.R.S. Whistleblower Office, ("WBO"), regarding his clai...
RJF Will Acquire TSC
November 2, 2021 - Bulletin Print Report
Raymond James Financial, Inc., ("RJF"), and Tri State Capital Holdings, Inc., ("TSC"), have entered into a definitive agreement under which RJF will acquire...
Build Back Better Affects Interest Expense And Leveraged Spin-Offs
November 1, 2021 - Bulletin Print Report
In addition to the well-publicized items in the "Build Back Better" plan, there are certain other provisions, which have not yet received much attention, that will af...
A Properly Structured "Leveraged Partnership" Works
November 1, 2021 - Bulletin Print Report
In 1981, Tribune, ("T"), bought the Chicago Cubs for $21.1 million; it also purchased Wrigley Field for $600,000. T held the Cubs in its wholly owned subsidiary, CNLB...
Advertising Expenses Need Not Be Capitalized
November 1, 2021 - Volume 15 Issue 208 Print Report
TP produces Z products and distributes through a network of dedicated retailers. TP has a standing offer for its retailers to enter an Agreement to maintain its retail space as...
Virginia's Conformity With The IRC Only Goes So Far
November 1, 2021 - Bulletin Print Report
The taxpayer, ("TP"), a Virginia resident, wholly ownedthree 'S' corporations and two controlled foreign corporations, ("CFCs"). The three ...
Stock Buybacks Again In The Crosshairs Of Tax Writers
October 29, 2021 - Bulletin Print Report
Stock buybacks are once again being singled out for taxation in the President's latest attempt to push his spending plan across the Congressional finish line. The plan he h...
"Purge" Dividend Mechanics
October 29, 2021 - Volume 15 Issue 207 Print Report
TP is a State A corporation that is the common parent of an affiliated group that files a consolidated income tax return. TP intends to elect under Sec. 856 of the Internal Rev...
The Extraordinary Breadth Of The "Billionaires' Income Tax"
October 29, 2021 - Bulletin Print Report
One tax proposal that seems easy to understand, the so-called "Billionaires' Income Tax" championed by Sen. Wyden (D-Or.), is, it should come as no surprise, quit...
Date Of Delivery Of Deed Commences Ownership
October 29, 2021 - Bulletin Print Report
The Respondent, a church, purchased the subject property via a deed dated June 29, 2018, and recorded among the Land Records on September 18, 2018. The Respondent applied for a...
No Reasonable Cause For Failure To Timely File And Pay
October 29, 2021 - Bulletin Print Report
PH owned multiple businesses, including MP, MC, and RF. PH and PW each owned shares in 'S' corporations. Around 2016, respondent began an audit for petitioners'&nbs...
Return Of The Corporate AMT
October 28, 2021 - Bulletin Print Report
Now that increases in the corporate tax rate have apparentlybeen ruled out, it appears that the so-called "billionaires' tax," the tax on stock buybacks, an...
Liberty/Sirius Spin-Off Update
October 28, 2021 - Bulletin Print Report
Now that Liberty Media Corporation, ("LMC"), is on the precipice of attaining 80 percent ownership of Sirius XM Holdings, Inc., ("SXM"), questions have once...
"Tax Sale" Of Property Not An Involuntary Conversion
October 28, 2021 - Volume 15 Issue 206 Print Report
The taxpayers, A, owned as tenants in common a 1/4 interest in approximately five acres of real estate located in the state of Washington. The remaining interest was...
A Fireplace Is Tangible Personal Property
October 28, 2021 - Bulletin Print Report
After the customer selects a fireplace, Y supplies the customer, or the customer's contractor, with the manufacturer's specifications for framing and foundation work. O...
Rare Partnership Merger Sighting
October 27, 2021 - Bulletin Print Report
Oasis Petroleum, Inc., ("OAS"), announced that Oasis Midstream Partners, ("OMP"), in which OAS holdsan approximate 67 percent interest, has entered in...
Restated Financial Statements Used To Determine "CAT" Credit
October 27, 2021 - Volume 15 Issue 205 Print Report
With respect to the former corporate franchise tax, businesses not having positive net income accumulated net operating losses (NOLs) which could be carried forward a...
A Contract Was Not Rescinded
October 27, 2021 - Bulletin Print Report
On January 19, 2021, the Js purchased a 2021 Toyota from M for a netprice of $42,801. On February 9, 2021, the Js titled the Toyota and paid $3,306.38 in state and local...
Non-Custodial Parent Not Entitled To Dependent Exemption
October 27, 2021 - Bulletin Print Report
The Division determined that petitioner was not entitled to head of household filing status, three dependent exemptions, the empire state child credit, and the non-custodial pa...
The Willens Deal Survey October 2021
October 26, 2021 - The Deal Survey: October 2021 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
Qualified Rollover Devoid Of Tax Consequences
October 26, 2021 - Volume 15 Issue 204 Print Report
On April 11, 1986, the taxpayer deposited $2,000 into his I.R.A. for the taxable year of 1985. On May 1, 1986, the taxpayer withdrew $1,500 of this amount for his per...
Gun Tax Ordinances Are Unconstitutional
October 26, 2021 - Bulletin Print Report
In 2012, the Cook County Board of Commissioners, (the "Board"), enacted the Firearm Tax Ordinance, ("FTO"). The FTO imposed a $25 tax on the retail purchase...
Extended Assessment Period Applies To The Entire Return
October 26, 2021 - Bulletin Print Report
TP filed a second amended return, reporting an omission of dividend income (subpart F income) and claiming credit and credit adjustments. This second amended return was filed a...
Lessee Was An "Aggrieved Person"
October 25, 2021 - Bulletin Print Report
In 2004, O entered into a ground lease with S for a "pad site" of approximately 1.5 acres. The lease had a term of 20 years with provision for renewals. The lease req...
Requisition Or Condemnation Is "A Taking For Public Use"
October 25, 2021 - Volume 15 Issue 203 Print Report
The taxpayer purchased stock "on margin" from a brokerage firm that subsequently declared bankruptcy. A trustee in bankruptcy was appointed who proceeded to...
Tax Court Cannot Issue "Advisory Opinions" In Moot Matters
October 25, 2021 - Bulletin Print Report
For 2014 and 2015, Ps excluded foreign earned income from their federal adjusted gross income on their federal income tax returns. On their original Maryland resident income ta...
Sec. 482 Does Not Apply To "Unlawful" Income
October 22, 2021 - Volume 15 Issue 202 Print Report
Procter & Gamble, (PG), owned all of the stock of Procter & GambleA.G., (AG), a Swiss corporation. AG paid royalties to PG for the use of PG's paten...
No Theft Loss Deduction For A Failed Investment
October 22, 2021 - Bulletin Print Report
S established EBS, an 'S' corporation. S, through EBS, joined with M and C to create SMC, a 'C' corporation. SMC established PFC for the purpose of investing in...
No Legal Obligation To Restore Items Of Income
October 22, 2021 - Bulletin Print Report
In January 2004, the Hs established the trust. The trust is considered a "grantor trust." With respect to BMO and FIS, (the "restricted stock"), the trustee...
CADE's Special Dividend Will Not Be "Other Property Or Money"
October 22, 2021 - Bulletin Print Report
Cadence Bancorporation, ("CADE"), and its wholly-owned subsidiary, Cadence Bank, N.A., areabout to be merged with and into BancorpSouth Bank, ("BXS"),...
Ousted Director's Stock Not "Converted"
October 21, 2021 - Volume 15 Issue 201 Print Report
A acquired a minority interest in the common stock of a corporation. The following restriction was placed upon each certificate of common stock of the corporation: &q...
M's e-Commerce Business Has The Requisite History Of Active Conduct
October 21, 2021 - Bulletin Print Report
Jana Partners, LLC is calling for Macy's, Inc., ("M"), to spin-off its "e-commerce" business, i.e., to separate its e-commerce business from its venerab...
Dwelling Was Neither Owned Nor Occupied
October 21, 2021 - Bulletin Print Report
The property at issue is located on HR in Subdivision. All parcels in the neighborhood are owned by ES and are leased to individuals. R took over the lease in 2015. R claimed t...
Schedule B Is The Key To A Finding Of FBAR "Willfulness"
October 21, 2021 - Bulletin Print Report
H has been a United Statescitizen since birth. As sole owner of TVVand CU, H had a financial interest in, and signature authority over, TVV's and CU's bank...
Cleveland Properly Applied "Games Played" Method Of Apportionment
October 20, 2021 - Volume 15 Issue 200 Print Report
During the years in question, appellant (AP) was a nonresident professional football player for the Chicago Bears. In each of the years in question, AP, as part of th...
Maine Resident Could Not Deduct Gambling Losses
October 20, 2021 - Bulletin Print Report
Taxpayer, ("TP"), was a Maine resident individual. In the year at issue, TP made regular trips to a Maine casino, (the "Casino"), where she engaged in "...
ZD Effects A "Leveraged" Spin-Off
October 20, 2021 - Bulletin Print Report
Consensus Cloud Solutions, Inc., ("CCSI" or "spinco") announced that it has now completed its previously announced separation from ZiffDavis, Inc., (&...
VMW's Special Dividend Will Coincide With Its Separation From DELL
October 19, 2021 - Bulletin Print Report
The separation of VMWare, Inc. ("VMW"), from Dell Technologies, ("DELL"), is drawing nearer. DELL has determined that the distribution of its 81 percent in...
Calculating Involuntary Conversion Gain
October 19, 2021 - Volume 15 Issue 199 Print Report
In 1991, petitioner (P) purchased a residential apartment building for $82,500. The apartment building had 11 private rooms, shared kitchens and bathrooms, and a tota...
State Tax Debt Could Not Be Discharged
October 19, 2021 - Bulletin Print Report
B filed California tax returns for 2003-2005. In 2008, the I.R.S. assessed about $145,000 of additional federal income taxes for those years. He did not notify the FTB...
ADS Announces A Spin-Off
October 19, 2021 - Bulletin Print Report
Alliance Data Systems Corporation, ("ADS"), announced that its Board of Directors has approved "the separation of ADS's 'LoyaltyOne' segment, consist...
Trader's Futures Contracts An Not Treated As Inventory
October 19, 2021 - Bulletin Print Report
Texas imposes a franchise tax. Franchise tax liability is calculated by multiplying a business's taxable margin by the franchise tax rate. Taxable margin is determined by m...
Bank Deal Is A "Reverse Acquisition"
October 18, 2021 - Bulletin Print Report
One of the larger banking deals of 2021 was recently announced by the participants, Columbia Banking System, Inc., ("CBSI"), and UmpquaHoldings Corporation, (&q...
Abatement Application Must Be Signed "By The Taxpayer"
October 18, 2021 - Bulletin Print Report
Taxpayers, ("TPs"), own property at a condominium development in B. TPs' attorney received a message from the condominium developer, requesting legal representati...
"In-House Merger" Not An Involuntary Conversion
October 18, 2021 - Volume 15 Issue 198 Print Report
TP owned shares of common stock of X corporation (X). X has been taken over by Y corporation (Y) through a merger between Z corporation (Z), an indirect wholly-owned...
Release of ESOP Shares Found To Violate Sec. 409(p)
October 15, 2021 - Volume 15 Issue 197 Print Report
JR incorporated petitioner (PE) in 2002 to engage in the rental and leasing business. In the same year, PE elected to be treated as an 'S' corporation. PE had...
PCRX/FLXN Deal Features Liberal Use Of CVRs
October 15, 2021 - Bulletin Print Report
Pacira BioSciences, Inc., ("PCRX"), and Flexion Therapeutics, Inc., ("FLXN"), recently announced a definitive agreement pursuant to which PCRX will acquire...
Tax Credit Reduction Legislation Is Constitutional
October 15, 2021 - Bulletin Print Report
Under the supermajority voting provision set forth in the Nevada Constitution, at least two-thirds of the members' votes in each house of the Legislature are required to pa...
Promissory Note Was "Payable On Demand"
October 15, 2021 - Bulletin Print Report
M argues that he was entitled to a refund based on an "un-cashable" $2.25 million check that he erroneously included in his Original 2012 Return. Because M did not pr...
A "Defective" Sec. 351 Is A Taxable Sale--But To Whom?
October 14, 2021 - Volume 15 Issue 196 Print Report
X is a corporation formed under the laws of State L that produces "H." Y is a corporation formed under the laws of State M that also produces "H."...
EMR And AZPN Will Engage In A "Global" Section 351 Transaction
October 14, 2021 - Bulletin Print Report
Emerson, ("EMR"), and AspenTech, ("AZPN"), announced that thecompanies have entered into a definitive agreement to contribute EMR's industrial sof...
Not All Of Duke's Property Is "Manufacturing Property"
October 14, 2021 - Bulletin Print Report
Duke, ("D"), is a regulated public utilityprimarily engaged in the generation, transmission, distribution, and sale of electricity in parts ofNorth Caroli...
Netflix And Hulu Need Not Pay Video Service Provider Fees
October 14, 2021 - Bulletin Print Report
In 2013, the Arkansas Legislature passed the Video Service Act, ("VSA"). The VSAallows video service providers to avoid the need to negotiate separate authoriza...
Owner's Consent Renders Conversion "Voluntary"
October 13, 2021 - Volume 15 Issue 195 Print Report
The taxpayer, a real estate developer, acquired unimproved land for the purpose of subdividing it into residential lots for the construction and sale of homes. At the...
"LNBFs" Are "Fixtures"
October 13, 2021 - Bulletin Print Report
D provides satellite television services to its customers. D contracted with APP to provide and install a satellite television system ("system") at D's customers&...
Owner Of "IP" Not Treated As Manufacturer Of Fishing Reels
October 13, 2021 - Bulletin Print Report
X designs, markets, and sells fishing reels, ("Reels"). X owns intellectual property relating to the mechanical architecture and manufacture of Reels, ("XIP"...
Airport Concessionaire Taxable On Sublease Income
October 13, 2021 - Bulletin Print Report
Businesses operating in Oakland, California must obtain a business tax certificate and pay business license taxes each year. A separate business tax certificate is required for...
Managing MO's Gain In Its ABI Stake
October 12, 2021 - Bulletin Print Report
Altria Group, Inc., ("MO"), accounts for its investments in Anheuser-Busch InBev SA/NV, ("ABI"), and JUUL Labs, Inc., ("JUUL"), using the so-calle...
Exchanging Vested For Nonvested Shares
October 12, 2021 - Volume 15 Issue 194 Print Report
Investors formed X in 2004 by contributing $1,000 each in exchange for 100 shares of stock. In exchange for A's agreement to perform services for X, X issues 100...
Sourcing Gain Or Loss On Commodity Derivatives
October 12, 2021 - Bulletin Print Report
TP operates across the entire spectrum of the Business. In the normal course of its business, TP executes thousands of sale and exchange transactions of physical inventory prop...
Excavators Exempt From Sales Tax
October 11, 2021 - Bulletin Print Report
During the tax period at issue, W owned and operated a lignite coal mine in Texas. W used different types of heavy equipment to produce the coal. The first step was removing a...
Untimely Filing Bars Overpayment Credit
October 11, 2021 - Bulletin Print Report
TPs filed a 2016 Virginia individual income tax return in June 2020, reporting an overpayment of income tax and requesting that the overpayment be credited as an estimated paym...
Cash In Lieu Of Fractional Shares Of Sec. 306 Stock
October 11, 2021 - Volume 15 Issue 193 Print Report
X is a domestic corporation with only one class of voting common stock outstanding. On April 30, 1980, X effected a recapitalization whereby one share of voting common stock an...
ERISA Does Not Bar Taxation Of ESOP-Owned Corporation
October 8, 2021 - Bulletin Print Report
TP is an 'S' corporation incorporated under the laws of Tennessee, ("T"). TP established the Employee Stock Ownership Trust, (the "Trust"), as...
The "SALT" Cap Is Constitutional
October 8, 2021 - Bulletin Print Report
In 2017, Congress passed the Tax Cuts and Jobs Act, (the "Act"), which, among other things, imposeda $10,000 cap on the state and local tax, ("SALT"),...
N.J. Corporation Denied "Investment Company" Status
October 8, 2021 - Volume 15 Issue 192 Print Report
R was formed in 1981. M was its sole employee and shareholder. In 1999, M retired due to age and deteriorating health. R did not seek a replacement for its employee. The corpor...
"Use-Of-Money" Principle Defeats Assessment Of Underpayment Interest
October 8, 2021 - Bulletin Print Report
In 1997, G held 120,000 shares of stock in S. On August 22, 1997, S engaged in a cash-out merger, which resulted in G's S shares being converted into the right to receive $...
IAC Will Acquire Meredith's "Spinco"
October 7, 2021 - Bulletin Print Report
IAC and Meredith Corporation, ("MDP"), announced their entry into an agreement pursuant to which IAC's digital publishing unit "will acquire the entity, (&qu...
Consent Required For Change From Improper To Proper Method
October 7, 2021 - Volume 15 Issue 191 Print Report
In 1956 and 1957, W and M acquired approximately 960 acres of unimproved real estate. After the land was subdivided, 30 parcels were sold under sales contracts providing for a...
VNE Accepts A "Superior Offer"
October 7, 2021 - Bulletin Print Report
Qualcomm, Inc., ("QCOM"), and SSW Partners, ("SSW"), announced they have reached a definitive agreement to acquire Veoneer, Inc., ("VNE"), "f...
Alimony Payments Not Allocable To Tax-Exempt Income
October 7, 2021 - Bulletin Print Report
In 2012, P filed for divorce from his then wife, ML. P and ML signed an agreement in 2014, ("2014 agreement"), incident to their divorce proceeding in which P agreed...
International Paper Co. Completes Spin-Off Of Sylvamo Corp.
October 7, 2021 - Bulletin Print Report
International Paper Co., ("IP"), on October 1, 2021, completed its spin-off of Sylvamo Corp. ("SC"), a newly-formed subsidiary created to receive (and then...
Arizona Taxpayer Held To Be An Investor
October 6, 2021 - Volume 15 Issue 190 Print Report
Taxpayers' (TPs) federal tax return claimed Schedule C expenses and a capital loss. The Schedule C expenses related to husband's (TP) activity of trading options. The S...
Debt Transfer In A 'D' Reorganization Does Not Implicate Section 108(e)(4)
October 6, 2021 - Bulletin Print Report
D is engaged in Business A. D made an election to be treated under subchapter S with an effective date of Date 1. M owns "r%" of the stock of D. N owns the remaining...
Informal Claim Meets The Requirements Of Section 7422(a)
October 6, 2021 - Bulletin Print Report
On January 28, 2015, Ps filed a refund claim for the 2009, 2010, 2011, and 2012 tax years, and now seek a refund for tax years 2009 and 2010. Ps' counsel faxed A a letter o...
Financial Disability Not Demonstrated
October 6, 2021 - Bulletin Print Report
On February 22, 2015, Plaintiff filed Form 1040 for tax year 2013. On December 15, 2017, Plaintiff filed Form 1040X for tax year 2013. The I.R.S. disallowed the refund claim. P...
U.S. Bond Market Discount Income Not Deductible In N.C.
October 5, 2021 - Volume 15 Issue 189 Print Report
Petitioner, (P), is a C corporation and a wholly-owned subsidiary of FBI, a bank holding company. During the 2001 tax year, P held U.S. government securities that were acquired...
Only Certificate Holders Need Pay Franchise Fees
October 5, 2021 - Bulletin Print Report
Plaintiff filed a class action suit for violation of Texas Utilities Code section 66.005(a) on behalf of all Texas municipalities in which Defendants, Netflix, Inc. and Hulu, L...
Limited Reversion Right Does Not Defeat Economic Performance
October 5, 2021 - Bulletin Print Report
C1, C2, and C3 are owned by TP, a State A corporation, and each is treated as a disregarded entity for federal income tax purposes. C4 was the subject of tort claims alleging d...
Inventory Cannot Be Depreciated
October 5, 2021 - Bulletin Print Report
The taxpayer, ("TP"),operated a sole proprietorship under the business name "KM." TP's business was "facilitating" sales between busines...
JCOM's Leveraged Spin-Off Ruling Is Instructive
October 4, 2021 - Bulletin Print Report
The Distributing Group (which appears to be J2 Global, Inc. and its subsidiaries),has been actively engaged in three businesses, Business A, Business B, and Business C. D...
CrossFit Provides Physical Fitness Services
October 4, 2021 - Bulletin Print Report
K provides its members with classes on CFI's specialized approach to fitness and mastery of techniques. As a requirement to teach CF classes, the instructors must be certif...
Sec. 183(b)(2) Deductions Are Miscellaneous Itemized Deductions
October 4, 2021 - Bulletin Print Report
During the years at issue, the Gs operated CLC, which generated income and incurred expenses from boat chartering activities. CLC was a disregarded entity. The Gs reported the...
Holding Period Of Newly-Issued Stock Determined
October 4, 2021 - Volume 15 Issue 188 Print Report
Petitioner, (P), was the sole owner of an unincorporated printing and publishingbusiness. He incorporated the business on April 1, 1940 and contributed all the...
Agreement To Purchase Securities Did Not Commence Holding Period
October 1, 2021 - Volume 15 Issue 187 Print Report
Plaintiffs' claim is based on the contention that they were entitled to taxation of liquidating dividends attributable to certain shares of stock of K&S as lo...
Divorce Decree Shows No Abandonment Of Domicile
October 1, 2021 - Bulletin Print Report
Two classes of residents, a "domiciliary resident" and an "actual resident," are set forth in Virginia Code section 58.1-302. The domiciliary residence of a...
Separate Gifts May Be Valued Separately
October 1, 2021 - Bulletin Print Report
Between 2009 and 2013, P purchased $82,853,050 in tracts of timberland in Maine and Vermont. From 2010 to 2013, he gave interests in these tracts to his two sons, C and B. Each...
Perrigo--Not Surprisingly--Reaches A Favorable Settlement With "IR"
September 30, 2021 - Bulletin Print Report
Perrigo Company plc, ("P"), has reached an agreement with the "Irish Office of the Revenue Commissioner," ("Irish Revenue"),providing for th...
Change In Accounting Method Without Consent Is Ineffective
September 30, 2021 - Volume 15 Issue 186 Print Report
Petitioner, (P), was the sole shareholder of an 'S' corporation, BMP. BMP's business consists of providing entertainment for parties. P would often enter...
Canadian Miners Announce Merger Of Equals
September 30, 2021 - Bulletin Print Report
Agnico Eagle Mines, Ltd., ("AEM"), and rival Kirkland Lake Gold, Ltd., ("KL"), each a Canadian corporation, announced that they have entered into a definiti...
Gain From Sale Of "121A Properties" Is Taxed In Massachusetts
September 30, 2021 - Bulletin Print Report
R held a minority interest in three Massachusetts, ("M"), limited partnerships, (the "121A Partnerships"), each of which owned an urban redevelopment projec...
Claims For Refund Of "Ancient" Taxes Denied
September 30, 2021 - Bulletin Print Report
W regularly filed his Maryland income tax returns after they were due. In 2008, W filed his original tax returns for 2004, 2005, and 2006. On May 26, 2010, W filed amended retu...
Portfolio Stock Not Classified As "Debt Financed"
September 29, 2021 - Volume 15 Issue 185 Print Report
In January, 1983, X raised $8 million ina stock issuance. The prospectus stated that thenet proceeds "would be added to working capital and used for...
Educational Institution Was Not A "Seminary Of Learning"
September 29, 2021 - Bulletin Print Report
U applied to the Assessor's office for an exemption from property taxes with respect to the "subject property" on the grounds that it is an educational institutio...
U.S. Bancorp Will Acquire MUFG Union Bank N.A.
September 29, 2021 - Bulletin Print Report
U.S. Bancorp, ("Purchaser"), announced that it has entered into a definitive agreement to acquire MUFG Union Bank N.A., ("Bank") from Mitsubishi UFJ Financi...
No Equitable Exception To Section 6532's Statute Of Limitations
September 29, 2021 - Bulletin Print Report
Plaintiff filed her complaint on April 20, 2020. Plaintiff was unable to electronically file her income tax returns for 2012-2016, so she delivered the income tax returns to th...
Sec. 483 Applies To "Indefinite Payments"
September 28, 2021 - Volume 15 Issue 184 Print Report
Under a plan of reorganization, Y acquired all the stock of Z in exchange solely for part of the voting stock of Y. At the closing date, the shareholders of Z receive...
Redemption Obligation Is Not A Corporate Liability
September 28, 2021 - Bulletin Print Report
M owned 77 percent and T owned 23 percent of the stock of C. The brothers and C signed a Stock Purchase Agreement, (the "Stock Agreement"), in 2001. The Stock Agreeme...
Maine Resident Not Entitled To A Credit For Connecticut Taxes
September 28, 2021 - Bulletin Print Report
The taxpayer, ("TP"), was a resident of the State of Maine. TP owned and operated a Connecticut limited liability company, (the "Company"), which was a pass...
DELL Will Get Its Ruling
September 28, 2021 - Bulletin Print Report
We understand that there is some concern in the investment community regarding the status of DELL's private letter ruling request. Since DELL's spin-off of VMW is condi...
Lorillard Must Add-Back Certain Royalties Paid To An Affiliate
September 27, 2021 - Bulletin Print Report
Lorillard Tobacco Company, ("L"),manufactures, markets, distributes, and sells cigarettes in New Jersey. In 1999, L assigned its intellectual property, includin...
MIC Begins Its Liquidation
September 27, 2021 - Bulletin Print Report
Macquarie Infrastructure Corporation, (the "Corporation"),has commenced the process that will culminate, sometime in 2022,in its liquidation, with all of...
Portfolio Indebtedness Is An Exceedingly Narrow Concept
September 27, 2021 - Volume 15 Issue 183 Print Report
(1) X owned portfolio stock. X acquired a new facility and borrowed to finance the acquisition, rather than sell its portfolio stock. The portfolio stock was not used...
"Instant Savings" Disbursements Are Not Receipts Subject To Sales Tax
September 24, 2021 - Bulletin Print Report
The transactions with respect to whichthe Attorney General contends that a sales tax is due consist of sales of goods, accompanied by so-called "Instant Savings,&quo...
Merger Of "Transitory" Subsidiary Into T Is A Redemption
September 24, 2021 - Volume 15 Issue 182 Print Report
X is a State X corporation. X has outstanding shares of common stock which are held by 320 shareholders. No shareholder owns 50 percent or more of X's stock. H is...
A Construction Contractor Is A Retailer Of "Fixtures"
September 24, 2021 - Bulletin Print Report
APP is a California corporation engaged in the business of furnishing and installing tangible personal property on to real property. APP was awarded a contract by a California...
I.R.S. Finalizes Section 301 Regulations
September 24, 2021 - Bulletin Print Report
It was a long time coming, but the I.R.S. finally got around to finalizing the regulations under section 301 of the Code, the section that deals with the taxation of distributi...
A Film Library Is Not a Capital Asset
September 23, 2021 - Volume 15 Issue 181 Print Report
C, Inc., (C), is a broadcasting company. During the years at issue, C incrementally contributed its film library to a charity described in Sec. 170(c). The film libra...
Section 1059(c)(4) Election Effectively Made
September 23, 2021 - Bulletin Print Report
In Year 1, TP acquired newly-issued preferred stock of Corporation, ("C"). The preferred stock is not publicly traded. During Year 2, TP received four quarterly divid...
Brewery Property Entitled To An "EMPP"
September 23, 2021 - Bulletin Print Report
This case concerns an "EMPP" exemption for the 2020 tax year. In Michigan, all property, real and personal, not expressly exempted, shall be subject to taxation. &quo...
Federal Law Enforcement Officer Receives Tax Benefit
September 22, 2021 - Volume 15 Issue 180 Print Report
A served as a "federal law enforcement officer" by being a Special Agent with a Federal agency for 23 years, retiring on December 31, 2010. During his tenur...
Equitable Tolling Does Not Apply To Section 6013(b)
September 22, 2021 - Bulletin Print Report
On April 15, 2013, PHR requested an extension of time to file his federal income tax return and paid an estimated tax payment of $20,000 for the 2012 tax year. His request did...
Prospective Application Of "Nextel" Is Not Unconstitutional
September 22, 2021 - Bulletin Print Report
TP carried into the 2014 Tax Year net losses apportioned to Pennsylvania, ("PA"), in the amount of $791,244,978. For the 2014 Tax Year, TP's taxable income apport...
Corporation Denied Consent To Make New 'S' Election
September 21, 2021 - Volume 15 Issue 179 Print Report
X filed an election to be treated as an 'S' corporation effective for its taxable year beginning Date 1. In Year 1, the Regulator (R)and X agreed that X...
What If TROX Experiences An "Ownership Change?"
September 21, 2021 - Bulletin Print Report
There are rumors circulating that Tronox Holdings, PLC, is on Apollo Global Management, Inc.'s radar. Apollo is well-known for its ability to annex businesses in which it h...
Cincinnati's Billboard Tax Violates The First Amendment
September 21, 2021 - Bulletin Print Report
The Cincinnati City Council enacted CMC Chapter 313 and levied an excise tax on the privilege of installing, placing, and maintaining outdoor advertising signs in the city of C...
The Willens Deal Survey September 2021
September 20, 2021 - The Deal Survey: September 2021 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
Tax Receivable Agreements Under The Microscope
September 20, 2021 - Bulletin Print Report
Carvana Co. is an unmitigatedWall Street success story, as evidenced by its nearly $28 billion market capitalization. Recently, however, the company and its founders were...
New FASB Guidance On Accounting For Equity Securities
September 20, 2021 - Bulletin Print Report
The Financial Accounting Standards Board, ("FASB"), has released a proposed Accounting Standards Update, ("ASU"), clarifying the manner in which reporting e...
CP Wins The Battle For KCS
September 20, 2021 - Bulletin Print Report
Canadian Pacific Railway Limited, ("CP"), and Kansas City Southern, ("KCS"), announced that they have entered into a "merger agreement," pursuant...
Restructuring Does Not Accelerate Estate Tax Payments
September 20, 2021 - Volume 15 Issue 178 Print Report
Decedent died owning a greater than 20 percent interest in each of several closely-held general partnerships, limited liability companies (LLCs), and corporations. De...
Legal Expenses Fall Prey To "Gilmore"
September 17, 2021 - Bulletin Print Report
Over time, C incurred various debts to A, which the couple formalized in several written documents. In early 1993, C approached A with a proposal to use a trading method she de...
LAUR Is "Partially" Liquidating
September 17, 2021 - Bulletin Print Report
Laureate Education, Inc., ("LAUR"), in connection with the sale of its Walden e-Learning, LLC unit, has adopted a plan of "partial liquidation,"pursua...
Sale Of Partnership Interest Yields Long-Term Capital Gain
September 17, 2021 - Volume 15 Issue 177 Print Report
Petitioner (P) contributed $25 in cash to RDP-3 in exchange for a 25 percent partnership interest. On September 17, 1984, RDP-3 borrowed $5.7 million in order to purc...
Goldman Sachs Group To Acquire GreenSky, Inc.
September 17, 2021 - Bulletin Print Report
The Goldman Sachs Group, Inc., (GSG), and GreenSky, Inc., ("GSI"), announced that they have entered into a definitive agreement pursuant to which GSGwill acquir...
Temporary Work Site Is Taxpayer's "Tax Home"
September 17, 2021 - Bulletin Print Report
In 2014, P worked for two employers, one of which was E. During 2015, E was P's only employer. That year, P worked in the vicinity of Hobbs, New Mexico, ("H"). H...
Lack Of Tax Avoidance Motive Insufficient For Reorganization Status
September 15, 2021 - Volume 15 Issue 176 Print Report
In 1955, WI was formed. The assets of a partnership were transferred to the corporation and all of the stock of the corporation was issued to two of its partners, the...
Damages For Emotional Distress Cannot Be Excluded From Gross Income
September 15, 2021 - Bulletin Print Report
P filed a lawsuit against A, her employer. The complaint asserted a litany of claims focused on workplace harassment and retaliatory employment practices. P alleged that she ha...
Aircraft Lease Not Pursued With The Objective Of Gain
September 15, 2021 - Bulletin Print Report
CVE owns 100 percent of BB and S is the 100 percent owner of CVE. CVE is the sole member of CPPP. On April 8, 2011, BB purchased a 2/3 interest in an airplane from a seller in...
Property Purchased For Lease Is "Resold"
September 15, 2021 - Bulletin Print Report
Applicant, ("APP"), is a limited liability company based in Missouri. APP's primary business is to design and assemble specialized, custom lighting, sound, video,...
Sperm Donor Does Not Qualify Under Sec. 501(c)(3)
September 14, 2021 - Volume 15 Issue 175 Print Report
On October 15, 2003, Mr. N founded and incorporated Free Fertility Foundation (FFF) as a non-profit "public benefit" corporation. &nbs...
BPOL Tax Fell Within The ITFA's Grandfather Clause
September 14, 2021 - Bulletin Print Report
Under Virginia law, a local governing body may require a license for certain businesses... This license is often referred to as a "BPOL." The City of Norfolk requires...
"Kombucha" Beverages Are "Soft Drinks"
September 14, 2021 - Bulletin Print Report
Business 1, Inc. is a State-based corporation anddoes business as a food retailer in Illinois. Business 2 is a product line currently consisting of 25 flavors. All produc...
Netflix and Hulu Do Not Provide "Video Service"
September 13, 2021 - Bulletin Print Report
NRS711.670(1) provides that a..."local government may require a video service provider to pay a franchise fee...based on the gross revenue that th...
Senate Tax Writers Seek To Impose A Tax On Stock Buybacks
September 13, 2021 - Bulletin Print Report
Senators Wyden(D-Oregon) and Brown (D-Ohio), the former the chairman of the powerful Senate Finance Committee, have some "interesting" ideas for raising revenue...
A Business Purpose Is Needed For The Stock Distribution
September 13, 2021 - Volume 15 Issue 174 Print Report
D is a domestic corporation engaged in Business X and Business Y. As of Date M1, D had approximately 5,376,503 shares of common stock outstanding. D's common stock is widel...
All Teaching Is the Same
September 10, 2021 - Volume 15 Issue 173 Print Report
In 1971, TP, an individual, became a teacher at SC, a parochial school in Philadelphia. At the time of her initial employment, she had graduated from high school and...
Coffee Shop Sales Exempt From Sales Tax
September 10, 2021 - Bulletin Print Report
Applicant, ("APP"),is a Missouri public school district. APP provides primary and secondary public education. APP recently purchased a property that APP intends...
Non-Resident Alien Treated As A Virginia Resident
September 10, 2021 - Bulletin Print Report
Virginia Code section 58.1-301 provides...that the terminology and references used in Title 58.1 will have the same meaning as provided in the Internal Revenue Code "unles...
Real Property Did Not "Escape Taxation"
September 10, 2021 - Bulletin Print Report
In 2014, D received an implausibly low property tax bill for her waterfront property. D timely paid the bill. The next year the Appraiser discovered thaterrors affecting...
Sale Not Governed By Sec. 304
September 9, 2021 - Volume 15 Issue 172 Print Report
S is a corporation engaged in an ongoing business. As of June 29, 1982, all of the outstanding stock of S was held by S's Shareholders. S's Shareholders are comprised o...
Actor's Predominant Objective Was To Make A Profit
September 9, 2021 - Bulletin Print Report
P is a former national sales director for MK. P was entitled to participate in MK's deferred compensation program, known as the FSP. In 2008, two years before she reached t...
Cable TV Services Not Subject To Sales Tax
September 9, 2021 - Bulletin Print Report
Company provides cable television services. Subscribers first choose one of a number of service packages offered by Company, all of which share similar elements, (a "Basic...
Subsidized Housing Was "Temporary"
September 9, 2021 - Bulletin Print Report
RH and G are both tax-exempt charitable organizations. RH owns a residential property, known as "VH," which it leases to G. VH houses up to five men at a time. VH pro...
Amounts Held In Trust Not Investment In U.S. Property
September 8, 2021 - Volume 15 Issue 171 Print Report
Y, a controlled foreign corporation, (CFC), is a wholly-owned subsidiary of X, a domestic corporation. Y adopted a plan to provide retirement pension benefits to its employees,...
Professor Was A "Statutory Resident" Of New York
September 8, 2021 - Bulletin Print Report
During 2014, P was issued a Form W-2 from his employment with the Los Angeles Community College District, where he taught English online through West Los Angeles College. He wa...
"Selling" Does Not Require Passage Of Title
September 8, 2021 - Bulletin Print Report
During the time period at issue, Xerox Corporation, ("X"), offered a variety of distribution agreements to meet its customers' needs: purchase agreements, finance...
Compensation Was Not Paid "In This State"
September 8, 2021 - Bulletin Print Report
Should an Illinois, ("IL"), employer withhold IL income tax from an employee who does not work or reside in IL? The answer is no. Section 701 of the IL Income Tax Act...
Corporation Not Eligible For Economic Hardship Exemption
September 3, 2021 - Bulletin Print Report
When S failed to pay employment taxes due for 2013, the I.R.S. provided notice to S of its intent to issue a levy. After receiving a levy notice the taxpayer has the right to r...
"Comity" Doctrine Employed To Dismiss Federal Lawsuit
September 3, 2021 - Bulletin Print Report
T, an individual, owns the "Property," located in Terre Haute, Indiana.The Property is used as a church and has been tax-exempt since it was established in 1925...
Changing Timing Is A Change In Method Of Accounting
September 3, 2021 - Volume 15 Issue 170 Print Report
Does a change from "open transaction" treatment to "realization" treatment constitute a change in method of accounting under Sec. 446? It does. See CCA 2014...
Deducting "Traveling" Expenses
September 2, 2021 - Volume 15 Issue 169 Print Report
Sec. 162(a) of the Internal Revenue Code provides that there shall be allowed as a deduction all of the ordinary and necessary expenses paid or incurred during the ta...
"Willfulness" Requires "Specific Intent"
September 2, 2021 - Bulletin Print Report
For the 2009 and 2010 tax years, JR prepared tax returns for two individuals and their related companies. After determining that the tax returns understated taxes, the I.R.S. a...
"Repairs" And "Modifications" Are Not Ascertained Qualitatively
September 2, 2021 - Bulletin Print Report
Section 4051(a)(1) of the Code provides: "There is hereby imposed 'on the first retail sale' (after production, manufacture, or importation) of the following artic...
I.R.S. Grants Extension of Time to File "Gain Recognition" Election
September 1, 2021 - Volume 15 Issue 168 Print Report
TP Corporation, (TP),owned S Corporation, (S), which owned T Corporation, (T). Pursuant to a stock purchase agreement entered into on Date 3, S sold the stock o...
Proposition 22 Is Unconstitutional
September 1, 2021 - Bulletin Print Report
The California Constitution vests in the Legislature the "plenary power, unlimited by any provision of this Constitution, to create and enforce a comple...
Leased Property Did Not "Belong To The State"
September 1, 2021 - Bulletin Print Report
On December 31, 2018, the subject property, (the "Property"), had an office building with 33,000 usable square feet. The Property is the subject of an agreement, (the...
Business Expense Deduction For Donations To Exempt Organization
August 31, 2021 - Volume 15 Issue 167 Print Report
X participated in the organization of Y, a nonprofit corporation formed for theexclusive purpose of providing current and retired employees of X the opportunity...
Generator Is "Exempt Production Equipment"
August 31, 2021 - Bulletin Print Report
Petitioner manufactures and sells plastic packaging. Petitioner generates most of the electricity used to power its manufacturing equipment on-site using a solar array and a ge...
Supreme Court Strikes Down Nationwide Eviction Moratorium
August 31, 2021 - Bulletin Print Report
The Centers For Disease Control and Prevention, ("CDC"), has imposed a nationwide moratorium on evictions of any tenants who live in a county that is experiencing&nbs...
Taxpayer Was Not "Carrying On" A Trade Or Business
August 30, 2021 - Bulletin Print Report
M was a residential real estate developer. In 1983 he began his own home building company, which came to comprise a variety of entities, (the "M entities"). In March...
Use Tax On Aircraft Not Unconstitutional
August 30, 2021 - Bulletin Print Report
Minnesota, ("M"), imposes either a sales tax or use tax on the purchase of aircraft. See Minn. Stat. section 297A.82. M also imposes an annual tax on aircraft under M...
Using Property To Exercise An Option
August 30, 2021 - Volume 15 Issue 166 Print Report
A owned a parcel of unencumbered real property that is beingused in A's trade or business and thathad an adjusted basis of $50x. For $5x, A granted B...
No Refund Of "REET" In Connection With A Rescission
August 27, 2021 - Bulletin Print Report
TP is a Washington development company. TP builds new homes and sells them to individual buyers. On May 4, 2016, TP sold real property, ("Property"), to B. B provided...
I.R.S. Defers Withholding Requirements On Transfers Of PTP Interests
August 27, 2021 - Bulletin Print Report
Section 864(c)(8) of the Internal Revenue Code generally provides thatgain or loss derived by a foreign person on the sale or exchange of an interest in a partnership eng...
Walmart's Property Tax Claim Was Time-Barred
August 27, 2021 - Bulletin Print Report
Walmart, Inc., ("W"), owns real property improved by Supercenter stores, (the "Properties"). W alleges that the Counties discriminated against the company b...
Aggregating Acquisitions Of Stock
August 27, 2021 - Volume 15 Issue 165 Print Report
X is the common parent of an affiliated group which has filed consolidated returns for taxable years immediately preceding the taxable year in question, and X is requ...
How Will Daily Mail's Special Distribution Be Taxed?
August 26, 2021 - Bulletin Print Report
Daily Mail & General Trust plc, ("DMGT"), has a history of sharing its largesse with its shareholders and, apparently, is in the final planningstages of doi...
Non-Profit Service Corporation Did Not Operate For "Gain Or Profit"
August 26, 2021 - Bulletin Print Report
PS is a Pennsylvania non-profit corporation. PS is exempt from federal income tax as a charitable organization under section 501(c)(3) of the Internal Revenue Code. PS provides...
Defense Contractor Was A "Qualified Individual"
August 26, 2021 - Bulletin Print Report
In October 2011, P received an offer from ACF to work in Afghanistan, ("A"), She accepted it at once. P's house in Texas was completed in October 2011. She regist...
Not All "Guaranteed Payments" Are Deductible
August 26, 2021 - Volume 15 Issue 164 Print Report
The limited partnership was formed to acquire, develop, and sell real property. Most of the necessary capital was acquired from cash invested by the limited partners...
Property Not "Occupied" Not Exempt From Tax
August 25, 2021 - Bulletin Print Report
In December 2015, P bought the "Bp" and filed a "PRE" affidavit with respect to the Bp. However, on the affidavit, P listed his parents' address as his...
Non-Taxable Income Reduced State Net Operating Loss Deduction
August 25, 2021 - Bulletin Print Report
On July 1, 2019, the Department adjusted the net operating loss, ("NOL"), calculation for TP's tax year ending December 31, 2017. This adjustment was based on the...
Series Of Transactions Constitutes "Reverse Acquisition"
August 25, 2021 - Volume 15 Issue 163 Print Report
X is an active State A corporation. It is the common parent of an affiliated group filing consolidated incometax returns. Prior to the consummation of the trans...
EQC And Starwood Vying For MNR's Affections
August 24, 2021 - Bulletin Print Report
Monmouth Real Estate Investment Corporation, ("MNR"), had reached an agreement to be acquired by Equity Commonwealth, ("EQC"), but Starwood Real Estate Inco...
Boundary Line Adjustment Subject To "REET"
August 24, 2021 - Bulletin Print Report
TP owned a parcel of real property in Washington, (the "Property"). On or about July 22, 2017, TP transferred a strip of the Property to Gs, owners of an adjacent par...
Common Ownership Does Not Prevent "Insurance"
August 24, 2021 - Volume 15 Issue 162 Print Report
P owns all of the stock of 12 domestic subsidiaries that provide professional services. Together the 12 subsidiaries have a significant volume of independent homogene...
Worthless Stock Loss Found To Be Capital In Nature
August 23, 2021 - Bulletin Print Report
In 2009, PC was incorporated. During its existence, PC did not have any gross receipts. On October 24, 2009, U signed a stock subscription agreement with PC...
Whistleblower's Information Did Not Lead To A Productive "Action"
August 23, 2021 - Bulletin Print Report
P filed a Form 211 whichthe I.R.S. Whistleblower Office, (the "Office"), received on February 6, 2009. P identified Target, ("T"), that developed cond...
Contractual Separation Agreement Does Not End Marital Status
August 23, 2021 - Volume 15 Issue 161 Print Report
Petitioner (P) and his wife began living apart on April 11, 1964. In June 1964, they executed a written separation agreement. As of the end of 1973, the year at issue...
The Willens Deal Survey August 2021
August 20, 2021 - The Deal Survey: August 2021 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
Preliminary Activities Not "Carrying On" A Trade Or Business
August 20, 2021 - Volume 15 Issue 160 Print Report
In or around 1980, petitioners purchased an 88.81-acre parcel of land in Greenville, New York, (town). Petitioners reside in a single family residence on that propert...
Nieces And Nephews Were "Qualifying Children"
August 20, 2021 - Bulletin Print Report
During 2015, petitioner lived with and cared for her mother at petitioner's home. Petitioner received compensation for the care of her mother through an agency, IL, which w...
An Employee's Marketing Expenses Are Deductible On Schedule A
August 20, 2021 - Bulletin Print Report
During 2014 and 2015, MRS received wages for which her employer issued Forms W-2. MR was employed as a car salesman at S, an automobile dealership. S paid MR commissions for th...
Ambiguous Statute Construed In Favor Of Taxpayer
August 20, 2021 - Bulletin Print Report
BSI is an Oregon limited liability company formed to own "the aircraft." BSI purchased the aircraft in 2003 for the private use of Mr. B, an Arizona resident. BSI reg...
Are Reimbursements Of "BPD Fees" Gross Income?
August 19, 2021 - Bulletin Print Report
TP is a U.S. corporation that is a member of an affiliated group, ("Group"). Group develops, manufactures, and distributes medical care products, including branded pr...
Restitution Orders May Be Enforced Against 401(k) Accounts
August 19, 2021 - Bulletin Print Report
From 2007 to 2017, F embezzled over $19 million from his former employer, NCI. F pleaded guilty to one count of wire fraud. The district court ordered F to pay restitution in t...
Coaxial And Fiber Optic Cable Are Real Property Assets
August 19, 2021 - Bulletin Print Report
TP is a limited liability company. TP is an indirect subsidiary of P, which is a REIT. TP intends to make an election to be taxed as a REIT. TP leases systems composed of perma...
Sales Properly Subject To Missouri Sales Tax
August 19, 2021 - Volume 15 Issue 159 Print Report
Applicant is an apparel and promotional products distributor located in Missouri with only one office location. Applicant has a customer whose corporateheadquar...
Is BHP Group Turning A Spin-Off Into A Dividend?
August 18, 2021 - Bulletin Print Report
Woodside Petroleum Ltd., ("W") and BHP Group, ("BG"), have entered into a "merger commitment deed" to combine their respective oil and gas portfol...
The Step Transaction Doctrine's Kryptonite
August 18, 2021 - Bulletin Print Report
Recently, Performance Food Group, Inc., ("PFG"), and Core-Mark Holding Co., ("CM"), entered into a plan and agreement pursuant to which PFG will acquire CM...
No UBT Deduction For Commissions Paid To A "DISC"
August 18, 2021 - Bulletin Print Report
P is an architectural, urban planning, and engineering firm. It was a New York limited liability partnership. SD was formed as a Delaware corporation on June 28, 2004. On or ab...
Contingencies Prevent Agreement From Being An "Option"
August 18, 2021 - Volume 15 Issue 158 Print Report
On Date 1, a Stock Option Agreement (Option Agreement) was entered into between PU and representatives of the shareholder that controlled the majority of TP's sto...
Foreign Tax Credits Cannot Offset The "NII" Tax
August 17, 2021 - Bulletin Print Report
Petitioner, ("P"), timely filed Form 1040 for 2013. She reported tax of $63,632 and she claimed a foreign tax credit of $63.632 to offset this tax. P attached Form 89...
Utilities Are Subject To Sales Tax
August 17, 2021 - Bulletin Print Report
P is a broadcasting company for a local television station. P had three NYSEGaccounts for its purchases of electricity. The auditor determined that additional tax was due...
Involuntary Conversions Encompass More Than Fifth Amendment Takings
August 17, 2021 - Bulletin Print Report
The Fifth Amendment to the United States Constitution provides, succinctly: "Nor shall private property be 'taken' for public use without just compensation."...
Taxpayer Could Not Correct Filing Status
August 17, 2021 - Volume 15 Issue 157 Print Report
Petitioner, (P), his wife, and their four children resided in Minneapolis. P's wife is the widow of P's half-brother, who was the biological father of the fou...
Machinery And Equipment Was "Used Directly" In Manufacturing
August 16, 2021 - Bulletin Print Report
Taxpayer, ("TP"), installed a bottling line at a bottling plant located in Washington. TP contemplated that the production line would be placed in service and product...
One's Home Is An Asset For Purposes Of Sec. 108(d)(3)
August 16, 2021 - Volume 15 Issue 156 Print Report
Petitioners incurred more than $100,000 in credit card debt. The amount by which their debt exceeded the amount paid was $77,265. Petitioners did not include this amo...
"Tax Distributions" Were Not Fraudulent Conveyances
August 16, 2021 - Bulletin Print Report
On May 4, 2006, P, F, and M formed FS as a Delaware limited liability company, (an "LLC"). On June 30, 2008, FS converted to a C corporation, under the name FSII. On...
Back-To-Back Mergers Intended To Qualify As Reorganizations
August 16, 2021 - Bulletin Print Report
Almost every deal involving a combination of cash and stock consideration nowadays is structured as a so-called "back-to-back" series of mergers. In these transaction...
Active Rents Exception Unaffected By GAAP
August 13, 2021 - Volume 15 Issue 155 Print Report
TP is a domestic corporation that provides a wide variety of financial services in the U.S. and throughout the world. TP is a wholly-owned subsidiary of P. TP and P i...
Taxpayers Denied "Physicians' Tax Credit"
August 13, 2021 - Bulletin Print Report
Generally, Alabama's legislature allows an income tax credit for a licensed Alabama physician who practices medicine; and "resides in a community" that has less t...
Absent A Postmark "Deemed Delivery Rule" Inapplicable
August 13, 2021 - Bulletin Print Report
Those who overpay federal income taxes may apply to the I.R.S. for a tax refund. A claim for refund generally must be filed "within three years from the time the return wa...
Telecommuter Taxed Where Services Were Performed
August 13, 2021 - Bulletin Print Report
In 2016, TP purchased a vacation home in Hawaii. In each of the years 2017-2019, TP spent time in Hawaii ranging from three to four months. In late December of 2019, TP travele...
Payment By Partner Of Partnership's Debt
August 12, 2021 - Volume 15 Issue 154 Print Report
MO is an Ohio limited partnership that was organized in 1986 with two partners: MOG, the general partner, and MML, the limited partner. Each held a 50 percent interest in MO.&n...
CP Will Not Be Deterred
August 12, 2021 - Bulletin Print Report
The battle for Kansas City Southern, (KCS), is by no means over. The jilted suitor, Canadian Pacific Railway, Ltd., (CP), has increased its offer and is convinced that its prop...
An LLC Was Not A "Business Corporation"
August 12, 2021 - Bulletin Print Report
APP was a Virginia limited liability company whose sole member was DR, a Delaware limited liability company. APP and DR were both members of the DI consolidated group. On Janua...
DKNG's Ever-Expanding Empire
August 12, 2021 - Bulletin Print Report
DraftKings, Inc., ("DKNG"), continues to grow by leaps and bounds. It is certainlynot averse to using its stock to make acquisitions, and its latest acquisition...
Assets Of An Out-Of-State Trust Included In Resident's Taxable Estate
August 11, 2021 - Bulletin Print Report
At the time of her death, HE was lifetime beneficiary of a trust, (the "G" trust) that had been created upon the death of her husband, DG. After HE died in 2015, the...
Deferral Of Guaranteed Payments Not Permitted
August 11, 2021 - Volume 15 Issue 153 Print Report
A is a partner in partnership X, (X). In 1979, pursuant to an agreement between A and X, A received $500x as a "finder's fee" for obtaining acceptable applicants...
Exercise Of Professional Judgment Is Not "Reasonable Cause"
August 11, 2021 - Bulletin Print Report
B and R, CPAs, conducted business as a partnership and prepared tax returns for individuals, partnerships, corporations, and fiduciaries. For the years 2013 and 2014, Petitione...
Federal Tax Lien Can Attach To Intangible Personal Property
August 11, 2021 - Bulletin Print Report
Between August 2013 and August 2016, the I.R.S. filed special notices of federal tax liens in accordance with section 6323(f) of the Code with the Secretary of State of Connect...
What Is An "Other Periodical?"
August 10, 2021 - Volume 15 Issue 152 Print Report
Petitioner, (P), was organized on September 6, 1957. P's principal business was the compilation and distribution by mail to its customers of charts containing confidential...
A Portion Of A Preferred Share Is "Stock" For Purposes Of Section 382
August 10, 2021 - Bulletin Print Report
TP is a State A corporation whose common stock is widely held and publicly traded. On Date 2, TP acquired the stock of Target. In order to fund a portion of the purchase price...
California Counties Overtaxed A Railroad's Property
August 10, 2021 - Bulletin Print Report
BNSF Railway Co., ("B"), owns property in various California Counties, (the "Counties"). B alleges that the Counties are taxing its property at a higher rat...
Doctrine Of Federal Conformity Not Applicable
August 10, 2021 - Bulletin Print Report
In 2012, N owned both a direct interest in CL and an indirect interest in that entity through an ownership interest in LS, for a total ownership interest of 42.575 percent. CL...
Senator Wyden Would Eviscerate Carried Interest As We Know It
August 9, 2021 - Bulletin Print Report
Senator Wyden (D-Oregon), the powerful chairman of the Senate Finance Committee, has introduced legislation, "the Ending the Carried Interest Loophole Act," (the &quo...
PENN Will Offer Canadian Residents Tax-Free "Rollover" Treatment
August 9, 2021 - Bulletin Print Report
Penn National Gaming, Inc., ("PENN"), and Score Media & Gaming, Inc., ("SCR"), recently announced that they have entered into a definitive agreement &qu...
Income From Prepaid Postage and Handling Qualifies For Deferral
August 9, 2021 - Volume 15 Issue 151 Print Report
The taxpayer is a magazine publisher that reports its income for federal income tax purposes on an accrual method of accounting. The taxpayer offers subscribers an opportunity...
Collection Of Sales Tax Is Not "Trade" Or "Commerce"
August 9, 2021 - Bulletin Print Report
Walmart, ("W"), sells "5-Hour Energy" to customers in Pennsylvania, ("PA"). Bottles of 5-Hour Energy are labeled as "Dietary Supplements,&quo...
Bad Timing Leads To Assessment Of Pennsylvania's Transfer Tax
August 6, 2021 - Bulletin Print Report
The instant matter involves a dispute between Petitioner, ("P"), and the Commonwealth of Pennsylvania over a Transfer Tax assessed on a deed, ("Deed"), from...
No State Tax Credit For Foreign Taxes Permitted
August 6, 2021 - Volume 15 Issue 150 Print Report
The taxpayers, a husband and his wife, filed a joint Virginia resident income tax return for 2012. During that year, the husband realized gain from the sale of real property in...
Rebates Were Not A "Bona Fide Discount"
August 6, 2021 - Bulletin Print Report
Taxpayer, headquartered out-of-state, sells its products to distributors throughout the country, including in Washington. Taxpayer provides "inventory pricing adjustments&...
Author's Promotional Income Was Derived From Her Trade Or Business
August 6, 2021 - Bulletin Print Report
S is a crime fiction author. S received income for her books through contracts with publishers. S was required to write an original manuscript for a book. If the manuscript was...
Land Sale Produced Ordinary Income
August 5, 2021 - Volume 15 Issue 149 Print Report
C was organized in March 2000 by P, B, and K (petitioners). C elected to be taxed as a partnership. Petitioners incorporated EG in Montana in August 2000.  ...
Uncapping Of Taxable Value Of Realty Permissible
August 5, 2021 - Bulletin Print Report
MIM was established by MJ and JW in 2014. TML was established by MIM, RB, and EL for the purpose of purchasing, developing, and selling the subject property. MIM owned a 42 per...
NOLs Can Shelter "Built-In Gains"
August 5, 2021 - Bulletin Print Report
The value of a target's net operating losses, ("NOLs"), to an acquirer has always been shrouded inmystery. Whether an acquirer should "pay" for th...
Donee Must Be Entitled To Proportionate Part Of Extinguishment Proceeds
August 5, 2021 - Bulletin Print Report
Section 170(a) of the Internal Revenue Code provides the general rule that a deduction is allowed for a charitable contribution made within the taxable year. Section 170(f)(3)(...
Principal Residence Consists Of Land And Improvements Thereon
August 4, 2021 - Volume 15 Issue 148 Print Report
A's principal residence was destroyed in September 1991 by a tornado that was subsequently declared a disaster by the President. In the same year, A received insurance proc...
Temporary Storage Of Natural Gas Does Not Incur Ad Valorem Tax
August 4, 2021 - Bulletin Print Report
This case began in 2011 when M sought an exemption from ad valorem tax on natural gas owned by M but shipped in a third party's pipeline and stored in the pipeline company&...
Contractor Not Engaged In Retail Sale Of Systems
August 4, 2021 - Bulletin Print Report
TP is a licensed contractor with an electrical specialty. TP considers itself to be the user or consumer of all materials installed in the real property of its customers and pa...
Forest Products Tax Exemption Not Available
August 4, 2021 - Bulletin Print Report
Taxpayer is a Virginia company engaged in harvesting forest products, sawmill operations, and farming. The auditor found that Taxpayer made tax exempt purchases of lime and two...
Lawn Care Company Not Entitled To Use Tax Exemption
August 3, 2021 - Bulletin Print Report
The statute exempts from the use tax: "Property sold to a person engaged in a business enterprise and using and consuming the property in the tilling, planting, caring for...
Payments To "Adviser General Partner" Subject To Sec. 707(a)
August 3, 2021 - Volume 15 Issue 147 Print Report
ABC is a partnership and is registered with the S.E.C. as an open-end diversified management company. The partnership agreement provides for two classes of general partners: (1...
The "Mailbox Rule" Has Been Conclusively Supplanted
August 3, 2021 - Bulletin Print Report
In early 2009, MC rolled over $325,308 from a traditional IRA to a SIMPLE IRA. Plaintiffs dispute that this was a rollover, and instead claim that the transaction was a "t...
Bankruptcy Court Applies The "Withholding Rule"
August 3, 2021 - Bulletin Print Report
KC, the "Debtor," filed thisChapter 7 bankruptcy case on December 23, 2020. Before the petition date, the Debtor and his non-filing spouse, CC, filed a joint fe...
Square, Inc. To "Force" A "Qualified Stock Purchase" Of APT
August 2, 2021 - Bulletin Print Report
Square, Inc., ("SQ"), and AfterpayLtd., ("APT"), an Australian company, announced that they have entered into a "Scheme Implementation Deed"...
BVS And MSON Are Planning A "Cash Option" Merger
August 2, 2021 - Bulletin Print Report
Bioventus, Inc., ("BVS"), and Misonix, Inc., ("MSON"), announced that they have entered into a definitive agreement in connection with which BVS will acquir...
Taxpayer's Home Was Her Principal Place Of Business
August 2, 2021 - Bulletin Print Report
During the year in issue, P lived in a 1,288-square-foot, two bedroom apartment; she paid $27,447.76 in rent for the apartment that year. P was employed as an account executive...
M.B.A. Candidate Was Not The "Prevailing Party"
August 2, 2021 - Bulletin Print Report
M began an M.B.A. program at the Kellogg School of Management at Northwestern University in the fall of 2014. Prior to receiving his degree, M was employed as a Senior Consulta...
Management Fees Found To Be "Guaranteed Payments"
August 2, 2021 - Volume 15 Issue 146 Print Report
The taxpayers are the general partners in a limited partnership formed to purchase, develop, and operate a shopping center. The partnership agreement specifies the taxpayers...
"Domesticating" Gives Rise To Shareholder Level Tax Consequences
July 30, 2021 - Bulletin Print Report
We have seen any number of foreign corporations "domesticate" by means of a merger of the foreign corporation with and into a newly created (almost always) Delaware c...
Reimbursed Expenses Not Deductible
July 30, 2021 - Volume 15 Issue 145 Print Report
TP is a limited partnership. TP has leased the Business Premises since Year 1 and extended its lease on Date 1. On Date 2, State Agency informed the landlord that it...
Taxes Erroneously Paid To Vendor Cannot Be Credited
July 30, 2021 - Bulletin Print Report
The taxpayer, a veterinary office in Virginia, was assessed sales tax on sales made to customers independent of the provision of professional services on which saidtax wa...
Related Party Loss Was Disallowed
July 30, 2021 - Bulletin Print Report
L is a "commercial paper conduit" and wholly owned subsidiary of GSS. For tax purposes, L is a flow through partnership, in which GSS is a partner. In 2011, L filed a...
Owner/Beneficiary Of A Foreign Trust Was Subject To A 35 Percent Penalty
July 29, 2021 - Bulletin Print Report
W was the sole owner and beneficiary of an offshore trust. Section 6048 of the Code requires U.S. owners of a foreign trust to ensure that the trust files an annual return, see...
Deemed Asset Sale Gain Is N.Y. Source Income
July 29, 2021 - Volume 15 Issue 144 Print Report
Plaintiffs, residents of Tennessee, were shareholders of JBS, incorporated in Tennessee and taxable as an 'S' corporation for Federal and New York State incom...
Indefinite Employment Fixes One's Tax Home
July 29, 2021 - Bulletin Print Report
Around 2014, P began working as a nurse at the VA hospital in Louisville, Kentucky. P worked full time at the VA hospital through at least 2018. When she began working...
Entrepreneur May Deduct MBA Expenses
July 29, 2021 - Bulletin Print Report
P received an undergraduate degree from the University of California, Berkeley in 2011. After receiving his degree, P worked as an investment banking analyst at Goldman Sachs f...
Capstead Mortgage's Merger Intended To Be A Taxable Transaction
July 28, 2021 - Bulletin Print Report
Benefit Street Partners Realty Trust, Inc., ("Parent"), and Capstead Mortgage Corporation, (the "Company"), announced they have entered into a definitive me...
Debt Not Secured By Principal Residence
July 28, 2021 - Volume 15 Issue 143 Print Report
At all relevant times, petitioners have owned the Oakland Gardens property (OG), and have used it as their primary residence. In June, 2005, petitioners entered into...
National Bank Subject To Virginia Bank Franchise Tax
July 28, 2021 - Bulletin Print Report
An affiliated group that does business in Virginia, (the "Virginia Group"), files its Virginia corporate income tax returns on a separate entity basis. Affiliate A is...
Franchise Fee Dispute Best Adjudicated By State Court
July 27, 2021 - Bulletin Print Report
The Indiana Video Service Franchises Act of 2006, (the "Act"), regulates the way cable television companies do business within the Hoosier state. Anyone offering &quo...
Supplemental Payments Not Qualified Foster Care Payments
July 27, 2021 - Volume 15 Issue 142 Print Report
TPs operated a group home for foster children during the years in question. The group home provided care for handicapped children, and the number of suchchildre...
Pipe Manufacturer Not Eligible For Tax-Exempt Status
July 27, 2021 - Bulletin Print Report
According to petitioner, ("P"), it is "a successor to a for-profit business that never made any profit." The reference to the "for-profit business"...
Environmental Mitigation Costs Found Deductible
July 27, 2021 - Bulletin Print Report
TP owns two facilities (Unit 1 and Unit 2) located at an energy generating station (Station) in State. An unrelated entity, Entity B, owns a third facility (Unit 3) at Station....
Refund Of ITC Carryover Denied
July 26, 2021 - Bulletin Print Report
P operates a manufacturing facility within a designated Empire Zone. P seeks a refund of Empire Zone investment tax credits, ("EZ-ITC") in the amount of $219,684,307...
Tender Offer Is An Isolated Redemption
July 26, 2021 - Volume 15 Issue 141 Print Report
Corporation A, (CA), is an investment company registered with the S.E.C. CA is incorporated in State X and engages in business as a diversified, closed-end management...
Property Located On Leased Premises Subject To Tax
July 26, 2021 - Bulletin Print Report
In 1951, Florida ceded to the federal government exclusive jurisdiction over an area of land, which became Eglin Air Force Base. The Deed provided that the property was exempt...
Will There Be Withholding Tax Imposed On QTS's Liquidating Distribution?
July 23, 2021 - Bulletin Print Report
QTS Realty Trust, ("QTS"), is being acquired by an affiliate of Blackstone in a mannerthat, at least in the REIT world, is quite commonly employed. In short, QT...
Deferred Subscription Income Constitutes A Liability
July 23, 2021 - Volume 15 Issue 140 Print Report
Partnership (PS) is an equal general partnership owned in equal proportionsby A and B. During Year 1, PS distributed a total of "$g" to A and B and in...
Fidelity Was Not A "Fiduciary"
July 23, 2021 - Bulletin Print Report
Plaintiff, a participant and beneficiary in the Pfizer Consolidated Pension Plan, (the "Pfizer Plan"),alleges that Defendants, the Pfizer Retirement Committee a...
Aggrieved Investor Did Not Sustain A "Net Operating Loss"
July 23, 2021 - Bulletin Print Report
In August 2007, Mr. Swartz, ("S"),invested $1.5 million in securities of CTI Holdings, LLC, ("CTI"), a "global entertainment company." Two m...
The Willens Deal Survey July 2021
July 22, 2021 - The Deal Survey: July 2021 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
Short Sale Obligation Constitutes A "Liability"
July 22, 2021 - Volume 15 Issue 139 Print Report
P owns all of the stock of S. P enters into a "short sale" of XYZ securities on a national securities exchange. P's broker takes securities on han...
Industry Profit Margins Cannot Invoke The "Cohan" Rule
July 22, 2021 - Bulletin Print Report
F held a 50 percent shareholder interest in AE, an 'S' corporation. On a 2015 Form 1120S, AE reported $6,755,527 in gross receipts and $6,379,331 in cost of goods sold....
No Foreign Tax Credit Without Foreign Source Income
July 22, 2021 - Bulletin Print Report
P jointly owned two brokerage accounts, one with each of his sons, DAV and DAN. Each of the accounts generated foreign source income during tax year 2016. The Canadian Governme...
Property Not Used Exclusively For Public Worship
July 22, 2021 - Bulletin Print Report
OTR Living Water Ministry, ("OTR"), seeks exemption from real property taxation for parcel number 081-0004-0029-00. The subject property is improved with a three-stor...
PRGO Failed To Adequately Disclose Its Irish Tax Dispute
July 21, 2021 - Bulletin Print Report
In December 2013, PerrigoCompany plc, ("PRGO"), purchased Elan Corporation plc, ("E"), which allowed PRGOto establish its tax domicile in Irelan...
Redemption Is An Isolated Transaction
July 21, 2021 - Volume 15 Issue 138 Print Report
Company, (C), is a domestic corporation. C has outstanding 9,981,537 voting common shares, 148,414 Series A shares, 257,269 Series B shares, 472,048 Series C shares,...
Repair Property Not Exempt From Sales Tax
July 21, 2021 - Bulletin Print Report
C manufactures aluminum. For its manufacturing process, C purchased the "items" from Kentucky vendors. C paid the sales and use tax to the vendors. Because C believed...
Incarcerated Taxpayer Failed To Establish Reasonable Cause
July 21, 2021 - Bulletin Print Report
L was incarcerated from April 2013 to June 2015. In May 2013, he executed a Universal Power of Attorney appointing KB as his attorney in fact. While incarcerated, L directed KB...
MIC's Proxy Materials Outline "Reorganization's" Tax Consequences
July 20, 2021 - Bulletin Print Report
Macquarie Infrastructure Corporation, ("MIC"), recently issueda preliminary proxy statement in which it discusses, in some substantial detail, the steps of the...
Guardian Cannot Be Foster Care Provider
July 20, 2021 - Volume 15 Issue 137 Print Report
Taxpayers (TPs) reside in Ohio with their adult son, Tony, who is 30 years old. Tony has been severely handicapped since birth. Tony is unable to provide for his own&...
Digital Mark Does Not Meet Signature Requirement
July 20, 2021 - Bulletin Print Report
Plaintiff, ("P"), is a U.S. citizen. In 2015 and 2016, he lived in Australia while working for a defense contractor. P filed timely Form 1040 for tax years 2015 and 2...
Refund Claim Was Duly Filed
July 20, 2021 - Bulletin Print Report
On November 12, 2018, P sent the I.R.S. a Form 1120X for its fiscal year that ended February 2015, ("Tax Year 2014"). The amended return requests a refund. The amende...
Reinstated Mortgage Loses Its Priority
July 20, 2021 - Bulletin Print Report
On February 24, 2006, the Ns granted a mortgage to CB on their property. The mortgage was duly recorded. In subsequent years, several federal tax liens pursuant to section 6321...
Late Filing Penalty Properly Waived
July 19, 2021 - Bulletin Print Report
TPs attempted to file an extension to file their Return for 2018. In addition, they made an estimated payment of $4,200 by the May 15, 2019 deadline to pay Louisiana personal i...
Steps Will Occur "In Pursuance Of A Plan Of Reorganization"
July 19, 2021 - Bulletin Print Report
Taxpayer, ("TP"), is the common parent of a worldwide group of foreign and domestic affiliates. TP owned all of the membership interests in DE1, a disregarded entity....
PRGO's Irish Tax Dispute Enters A New Phase
July 19, 2021 - Bulletin Print Report
Perrigo Company plc, ("PRGO"), has had a cloud hanging over it for nearly three years in the form of a 1.636 billion Euros income tax deficiency assessed by "Iri...
Property Is Both Destroyed and Condemned
July 19, 2021 - Volume 15 Issue 136 Print Report
TP owned improved real estate used in its trade or business in city X. Dangerous chemicals were released in the city whereTP's property was located. A gover...
California Taxation Of Liquidation Of An Insurance Company
July 16, 2021 - Bulletin Print Report
T is an insurance company and is not subject to the corporate franchise and income tax imposed by Part 11 of the California Revenue and Taxation Code, ("CRTC"). T was...
Determining Sec. 357(c) Gain When Multiple Properties Transferred
July 16, 2021 - Volume 15 Issue 135 Print Report
As of April 20, 1982, C and D were eachpartners in general partnerships P1 through P12; and trusts T3, T4, and T5 werepartners in each of P1, P2, P4, P5,...
XOG Shareholders Are In Line For "Tax-Free" Dividends
July 16, 2021 - Bulletin Print Report
Bonanza Creek Energy, Inc., ("BCEI"), and Extraction Oil & Gas, Inc., ("XON"), are in the process of meeting the prerequisites that will enable the comp...
Occasional Sales Are Not Subject To The "ROT"
July 16, 2021 - Bulletin Print Report
A is a subsidiary of an infrastructure industry conglomerate, B. A leases access and scaffolding systems in Illinois. Generally, afterthe lease expires, possession of the...
The '87 FBAR Penalty Regulation Is A "Nullity"
July 15, 2021 - Bulletin Print Report
K willfully failed to file "FBAR" for 2008 as required by 31 U.S.C. section 5314. The FBAR should have reported two bank accounts held by K at Credit Suisse. The aggr...
Commitment Fees Are A Cost Of Acquiring The Loan
July 15, 2021 - Volume 15 Issue 134 Print Report
Rev. Rul. 56-136, 1956-1 C.B. 93, holds that commitment fees incurred pursuant to a bond sale agreement under which funds for construction are made available in speci...
BBBY Not Liable For Michigan Use Tax On Advertising Materials
July 15, 2021 - Bulletin Print Report
Plaintiff, ("P"), operated 31 stores in Michigan. P produced advertising materials that were delivered to its Michigan customers through the mail. P designed the adve...
Liberty Mutual Holding Company Will Annex The "State Auto Group"
July 15, 2021 - Bulletin Print Report
Liberty Mutual Holding Company, Inc., ("LMHC"), State Automobile Mutual Insurance Company, ("SAM"), and SAM's 59-percent owned subsidiary, State Auto Fi...
Agent Must Reveal Identity Of Condemning Authority
July 14, 2021 - Volume 15 Issue 133 Print Report
X, a corporate trustee for a public utility engaged in the production of electric power (power company), purchased various tracts of land on behalf of the power compa...
KNX Secures A Basis Step-Up
July 14, 2021 - Bulletin Print Report
Recently, Knight-Swift Transportation Holdings, Inc., ("KNX"), acquired 100 percent of the outstanding stock of AAA Cooper Transportation and an affiliated entity, (&...
Taxpayer Failed To Document The Amount Of Her Claimed Casualty Loss
July 14, 2021 - Bulletin Print Report
Taxpayer, ("TP"), timely filed her 2016 Alabama individual income tax return in which she requesteda refund of $2,112. The Alabama Department of Revenue, (the &...
Foreign LLC Considered To Be "Doing Business" In California
July 14, 2021 - Bulletin Print Report
APPs were LLCs organized in Louisiana. APPs were not registered to do business with the California Secretary of State. Hotel #3 was organized to invest in IC, a California LLC...
Tax Avoidance Not Primary Purpose For 'C' Reorganization
July 13, 2021 - Volume 15 Issue 132 Print Report
F is engaged in acquiring large tracts of unimproved real estate and developing those tracts into recreational and retirement communities. GF was organized to insure...
Can PFE "Spin-Off" Its Consumer Healthcare JV Interest?
July 13, 2021 - Bulletin Print Report
In 2019, Pfizer, Inc., ("PFE"), and GSKcontributed "our respective health care businesses into a JV." These businesses had been conducted by each of G...
New Business Ineligible For Small Business Tax Credit
July 13, 2021 - Bulletin Print Report
Taxpayers, ("TPs"), timely filed their 2017 Alabama individual income tax return on which they requested a refund. The refund request was generated by a $3,000 tax cr...
Minister Subject To Self-Employment Tax
July 13, 2021 - Bulletin Print Report
KA is an ordained bishop and a full-time pastor of the New Horizons Church. The As reported a total income of $53,560 in 2017 and $64,090 in 2018. Each tax return filed contain...
Recordation Tax Cannot Be Imposed On Conveyance Of Intangible Assets
July 12, 2021 - Bulletin Print Report
In July 2014, the "BLLCs" contracted to sell three senior living facilities located in Montgomery and Baltimore Counties. The buyer of the three facilities was B. The...
Spin-Off Features Unusually Sequenced Debt-For-Debt Exchange
July 12, 2021 - Bulletin Print Report
Distributing, ("D"), is a publicly traded State A corporation and serves asthe common parent of a group of domestic affiliated corporations, (the "D Group&...
Timely Request To Revoke Sec. 83(b) Election Granted
July 12, 2021 - Bulletin Print Report
On Date 1, Y received, in exchange for the performance of services, "X" shares of Employer common stock granted to Y by Employer, subject to "a substantial risk...
Selling "Mixed-Use" Property
July 12, 2021 - Volume 15 Issue 131 Print Report
The petitioners resided on "the property" and they operated a towing business from a building they constructed on part of the property. &nbs...
Personal Residence Not Considered I.R.S. Agent's "Tax Home"
July 9, 2021 - Bulletin Print Report
In 2009, W began working as a revenue agent for the I.R.S. His "post of duty" was the I.R.S. examination office in Laguna Niguel, California, ("LNC"); it wa...
Periodic Pension Payments
July 9, 2021 - Volume 15 Issue 130 Print Report
The taxpayer, a domestic corporation,provides fiduciary and administrative services to individual and corporate retirement plans. With respect to the IRAs it se...
Tax Violated The Supremacy Clause Of The U.S. Constitution
July 9, 2021 - Bulletin Print Report
In 2015, WR sold a tract of timberland to the USFS. The property had been designated by the county as "forestland" and, therefore, subject to a lower tax rate than no...
Property Held In Trust Not Owned By Grantor Or Beneficiary
July 8, 2021 - Volume 15 Issue 129 Print Report
The Constitution of the State of Virginia provides that "all property, except as hereinafter provided, shall be taxable." The Constitution authorizes limited exemptio...
Forfeited Deposits Are Not Subject To Sales And Use Tax
July 8, 2021 - Bulletin Print Report
B owns and operates BSR. BSR offers lodging accommodations, upon which sales B collects both Use Tax and Sales Tax. At booking, B assesses guests the "Resort Services Fee,...
FBAR Defendant Ordered To Repatriate Swiss Assets
July 8, 2021 - Bulletin Print Report
The Government brought this action against S for failing to report his relationship with a foreign financial agency as required by 31 U.S.C. section 5314, (i.e., "FBAR&quo...
Health Care Practitioner Denied Deduction From Gross Receipts
July 8, 2021 - Bulletin Print Report
On June 17, 2020, the Taxation and Revenue Department, (the "Department"), issued a Notice of Assessment of Taxes and Demand for Payment to TP. J, TP's spouse, wa...
Primarily Remedial Claims Survive Death
July 7, 2021 - Bulletin Print Report
The I.R.S. assessed FBARpenalties pursuant to section 5321(a)(5) for G's non-willful failure to files FBARsreporting his financial interest in foreign bank acco...
Ohio State University's Airport Is Exempt From Tax
July 7, 2021 - Bulletin Print Report
The Airport sits on a 325.614-acre parcel owned by the state of Ohio. Ohio State University, ("OSU"), Airport operates as a full-service airport. It also qualifies as...
Lowboy Not "Integral And Essential" To The Production Process
July 7, 2021 - Bulletin Print Report
TP is a trucking and excavating company based in Indiana. The Indiana Department of Revenue, (the "Department"), assessed use tax on several items purchased by TP. TP...
"Boot" Gain Found To Be A Dividend
July 7, 2021 - Volume 15 Issue 128 Print Report
Distributing, (D), owns all the stock of Controlled, (C). C conducts a real estate construction and development business. The other subsidiaries of D, which is a holding compan...
State-Owned Property Can Be Condemned By Private Parties
July 6, 2021 - Bulletin Print Report
We are asked, the Court said, to decide whether the Federal Government can constitutionally confer on pipeline companies the authority to condemn necessary rights-of-way in whi...
Inherited IRA Distributions Cannot Be Rolled Over
July 6, 2021 - Bulletin Print Report
DA assumed ownership of IRA X upon DA's spouse's death. On Date 1, DA named Trust T as the beneficiary of IRA X. On Date 2, DA executed a power of appointment over Trus...
Accrual Of Interest Not Affected By Sec. 7507(a) Immunity
July 6, 2021 - Bulletin Print Report
TPB is a corporation for tax purposes. On Date 1, TPBwas insolvent, and on that date, the FDIC took receivership of TPB. Between Date 1 and Date 2, TPB's income taxes...
Leasing Business "Carried On" During Period of Nonoccupancy
July 6, 2021 - Volume 15 Issue 127 Print Report
In 1973, TP purchased an office building for the purpose of leasing space to tenants. TP felt renovation of the building was needed in order to get it "in more rentable co...
International Seaways' Special Dividend Will Not Be Extraordinary
July 2, 2021 - Bulletin Print Report
As contemplated by the merger agreement, the board of directors of International Seaways, Inc., ("ISI"), has declared a "contingent special dividend" amount...
Ordinances Impose Invalid "Taxes"
July 2, 2021 - Bulletin Print Report
The Greenville County Council, ("GCC"), enacted the two ordinances at issue in 2017. Ordinance 4906 was enacted "to change the road maintenance fee to...$25.&quo...
Acquiring Replacement Property Finalizes A Sec. 1033 Election
July 2, 2021 - Volume 15 Issue 126 Print Report
In 1978, the taxpayer realized a gain on the involuntary conversion of its property. On its 1978 income tax return, the taxpayer elected to defer recognition of the gain under...
Extended Limitations Period Properly Applied
July 2, 2021 - Bulletin Print Report
P owned an interest in C, a partnership. Ps filed a joint 2006 Form 1040, wherein they reported $1,531,256 of capital gain on line 13. They listed the same figure on line 12 of...
Consideration Includes Relief From A Mortgage
July 2, 2021 - Bulletin Print Report
On September 5, 2017, Taxpayer quitclaimed her interest in the real property, (the "Residence"), to Buyer 1 and Buyer 2. The Department of Revenue determined that the...
What If A "Two-Step" Merger Fails To Qualify As A Reorganization?
July 1, 2021 - Bulletin Print Report
Performance Food Group Co., ("PFG"), and Core-Mark Holding Co., ("CM"), have entered into a plan and agreement pursuant to which PFG will acquire CM in a &q...
Threat Or Imminence of Condemnation
July 1, 2021 - Volume 15 Issue 125 Print Report
Sec. 1033(a)(2)(A) of the Internal Revenue Code provides that if property is involuntarily converted into money, and the taxpayer during a specified replacement period, for the...
VTR Has The Right To Preserve SNR's REIT Status
July 1, 2021 - Bulletin Print Report
Ventas, Inc., ("VTR"), and New Senior Investment Group, Inc., ("SNR"), each a real estate investment trust, ("REIT"), announced that they have ent...
Vocational School Disqualified From "Tuition Fee Deduction"
July 1, 2021 - Bulletin Print Report
Taxpayer, ("TP"), offered bachelor's and associate's degree programs, which included some general educational requirement courses required for finishing the d...
Butane Is A Taxable Fuel
June 30, 2021 - Bulletin Print Report
USV is a privately held corporation. One aspect of its business is to produce and sell motor fuels. Since 2012, USV has commonly added butane to the gasoline it produces and se...
Compensation For Injury To Goodwill Not Taxable
June 30, 2021 - Volume 15 Issue 124 Print Report
Petitioner, (P), was engaged in the banking business in Kentucky. It was the custom of P to make a charge for the collection of checks drawn on it and sent from other...
Taxpayer Was Not An "Interstate Fleet Motor Carrier"
June 30, 2021 - Bulletin Print Report
P's customer base is primarily utility companies. P engages in several activities to serve these customers, including well pad construction...and other...trucking or transp...
Travel Expenses Not Incurred While Taxpayer Was Away From Home
June 30, 2021 - Bulletin Print Report
During the tax year at issue, the Ss maintained a personal residence in Las Vegas, Nevada, while MS worked in Arizona. His employer paid him an expense reimbursement at a daily...
Supreme Court Declines To Hear "Remote" Worker Case
June 29, 2021 - Bulletin Print Report
We are disappointed, but hardly surprised, that the United States Supreme Court has chosen not...
In-State Deliveries Establish Substantial Nexus
June 29, 2021 - Volume 15 Issue 123 Print Report
Space Age Fuels, Inc., (SA), is a retail and wholesale seller of fuel. SA is incorporated in Oregon and maintains its principal place of business in Oregon. Approxima...
Lack Of Transactional Nexus Barred Imposition Of Sales Tax
June 29, 2021 - Bulletin Print Report
P is an 'S' corporation headquartered in Wisconsin. Pis engaged in the business of commercial printing of "printed materials" to customers throughout th...
Teleworkers Eligible For "REAP" Credit
June 29, 2021 - Bulletin Print Report
TP is an unincorporated business tax, ("UBT"), filer and receives an annual Relocation Employment Assistance Program, ("REAP"), credit for consulting servic...
Custom Manufacturer Engaged In A Qualified Trade Or Business
June 28, 2021 - Bulletin Print Report
Taxpayer, ("TP"), a 'C' corporation, is in the business of manufacturing "Class of Products" as prescribed by third-party health care providers. Spe...
FCC Order Equivalent To A "Public Taking"
June 28, 2021 - Bulletin Print Report
Taxpayers, ("TPs"), are in the business of providing communication services through commercial communicationsatellites and other infrastructure, (the "Sate...
Minority Shareholder's Redemption Is A Dividend Equivalent
June 28, 2021 - Volume 15 Issue 122 Print Report
On or about Date 1, Company, (C), made an offer to purchase up to #1 shares of its common stock and up to #2 shares of its Class A common stock for Amount 1. C's...
Basis Reductions Occur In The Year Of Disposition
June 25, 2021 - Bulletin Print Report
In 2009, P purchased 27 investment properties on which he assumed outstanding loans totaling $1,714,520. All of the loans were held by the same bank, (the "lending bank&qu...
Indefinite Suspension Of A Trade Or Business
June 25, 2021 - Volume 15 Issue 121 Print Report
The taxpayer, who has been engaged in the practice of anesthesiology for several years, suspended practice indefinitely because of substantialincreases in premi...
Appropriation Of A Right Of Access Is A Physical Taking
June 25, 2021 - Bulletin Print Report
The Agricultural Labor Relations Board of California, (the "Board"),has promulgated a regulation providing that the self-organizing rights of employees include...
Damages For Failure To Complete A Merger
June 24, 2021 - Volume 15 Issue 120 Print Report
On Date 1, TP entered into an Agreement and Plan of Merger with B (Agreement 1) to acquire the stock of B. Under the terms of Agreement 1, B was permitted to consider...
Idle Mine Is Not "Low Grade Iron Ore Mining Property"
June 24, 2021 - Bulletin Print Report
From its opening in 1963 until August 2016, low grade iron ore was mined on the property at an average of 5.5 million tons per year. During that period of time, the property on...
Capitalized Waste Stripping Not Exempt From Taxation
June 24, 2021 - Bulletin Print Report
In January 2018 the Borough assessor valued the Fort Knox Mine--owned by FGM--at $673.1 million and assessed property taxes accordingly. Of that value, $655.3 million derived f...
Business Purpose For Distribution Found
June 23, 2021 - Volume 15 Issue 119 Print Report
Distributing, (D), is a State X corporation. D is engaged in two businesses: MB and EB. D has a single class of common stock outstanding, all of which is held by SHA. Employee...
L Brands, Inc. Announces Details Of Proposed Victoria's Secret Spin-Off
June 23, 2021 - Bulletin Print Report
L Brands, Inc., ("L"), has decided to divest its Victoria's Secret operation in a tax-efficient manner, i.e., by means of a tax-free spin-off of such operation to...
Virginia Has Not Adopted The "CARES" Act
June 23, 2021 - Bulletin Print Report
The taxpayer filed a 2018 Corporate Application for Refund Carry Back of Net Operating Loss, claiming a net operating loss deduction for the 2016 taxable year by carrying back...
Universal Music Group B.V. Will Have New Owners
June 22, 2021 - Bulletin Print Report
Vivendi S.E., ("V"), currently owns 80 percent of the Ordinary Shares of Universal Music Group B.V., ("UMG"), and a consortium led by the Tencent group owns...
The Willens Deal Survey June 2021
June 22, 2021 - The Deal Survey: June 2021 Print Report
Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
Temporary Cessation of Business Activity Does Not Bar Deduction
June 22, 2021 - Volume 15 Issue 118 Print Report
X, an attorney, was admitted to practice law in Z in May 1987. In September 1986, X began employment as an associate attorney with a law firm. In June 1988, accepted employment...
Claims Processing Services Not Subject To Sales Tax
June 22, 2021 - Bulletin Print Report
Petitioner, ("P"), is a Kansas limited liability company with a principal place of business in Florida. P does not maintain an office in New York State. P does not ha...
Bitcoin And Ether Differ In "Nature And Character"
June 22, 2021 - Bulletin Print Report
Virtual currency is a digital representation of value that functions as a medium of exchange, a unit of account, or a store of value other than a representation of the U.S. dol...
Plaintiffs Not Injured By Unenforceable "Individual Mandate"
June 21, 2021 - Bulletin Print Report
As originally enacted, the Affordable Care Act required most Americans to obtain minimum essential health insurance coverage. The Act also imposed a monetary penalty on individ...
Donor Lacks "Standing" To Sue Donor-Advised Fund's Sponsor
June 21, 2021 - Bulletin Print Report
Schwab Charitable Fund, ("SCF"), is a 501(c)(3) public charity that sponsors a donor-advised fund. The fund allows donors to make tax-deductible charitable donations...
Ascertaining One's "Principal Residence"
June 21, 2021 - Volume 15 Issue 117 Print Report
For the past 11 years, petitioner, (P), has been employed as an internal revenue officer by the I.R.S. in New Jersey. On January 21, 2005, P purchased a "residential condo...
Advisory Bulletin Is Not A "Regulation"
June 18, 2021 - Bulletin Print Report
Oil and gas producers in Alaska have been subject to an annual production tax since 1977. The statutes have included a variety of credits that North Slope producers may obtain...
Inherited I.R.A. Ruled To Be Exempt Property In Chapter 7 Case
June 18, 2021 - Volume 15 Issue 116 Print Report
The Chapter 7 Trustee objected tothe claim of exemption of debtors JST and SFB in the asset known as "the Inherited I.R.A." The Inherited I.R.A. was a...
Legal Tender Generally Exempt From Illinois Retailers' Occupation Tax
June 18, 2021 - Bulletin Print Report
A client will be selling paper currency to customers located in Illinois. The currency to be sold was generally issued by a nation or by a state's government. The currency...
What Is The "Change" Date In A Title 11 Case?
June 17, 2021 - Volume 15 Issue 115 Print Report
TP began incurring losses and generated a net operating loss (NOL) carryforward in its tax year ending Year 1. On Date 1, TP filed a voluntary petition in bankruptcy...
No Loss Deduction For "Withheld" Income
June 17, 2021 - Bulletin Print Report
Mr. Mark Staples, ("S"), worked for the federal government until 2012, at which time he retired therefrom due to a disability. In that same year, he began receiving d...
Aircraft Not Used Principally In Interstate Commerce
June 17, 2021 - Bulletin Print Report
A purchased the Aircraft in Ohio and stored it in Maryland, his place of residence. He did not pay any sales and use tax for the Aircraft in either of Ohio or Maryland. During...
Property Leased By A Charter School Not Exempt From Tax
June 17, 2021 - Bulletin Print Report
Texas has authorized O to operate public open-enrollment charter schools and provide public education... Part of O's main campus is located on property it does not own but...
Taxpayer Runs Afoul Of The "Substantial Variance" Rule
June 16, 2021 - Bulletin Print Report
E's 2017 tax return reported a loss of $1,419,373. Several months after filing its 2017 return after the close of its 2017 fiscal year on March 31, 2018, E filed an amended...
Defrauded I.R.A. Owner Not "Distributee" Of Unauthorized Withdrawals
June 16, 2021 - Volume 15 Issue 114 Print Report
During 2008, Petitioner, (P), was an employee of the U.S. Air Force, and MS, his wife, was an employee of BT. P and MS permanently separated in January 2009 and were...
Inherited 401(k) Account Is Not Part Of Bankruptcy Estate
June 16, 2021 - Bulletin Print Report
Debtors filed a Chapter 7 bankruptcy petition on April 2, 2020. Prior to the filing of the bankruptcy, Decedent died on February 5, 2020. The Decedent owned a 401(k) account wi...
Valuing A "Survival Claim Action" For Estate Tax Purposes
June 16, 2021 - Bulletin Print Report
Decedent, a New Jersey resident, died testate on March 4, 2014 from a natural gas explosion which occurred when a utility company struck a gas line while performing underground...
MIC Announces Final Step Of Its "Strategic Alternative Process"
June 15, 2021 - Bulletin Print Report
More quickly than we thought possible, Macquarie Infrastructure Corporation, ("MIC"), has announced the culmination of its "strategic alternative process" b...
Organic Mattresses Are Not "Medicines" Exempt From Sales Tax
June 15, 2021 - Bulletin Print Report
Starting in 2008, APP sold "all-organic" mattresses at retail in California. APP purchased the mattresses from a supplier,("S"),in Illinois for...
Accelerated Issuance Of Contingent Stock
June 15, 2021 - Volume 15 Issue 113 Print Report
Pursuant to a plan of reorganization, all of the stock of Y was acquired by X solely in exchange for voting stock of X. The plan included an agreement that the shareh...
I.R.S. Rules Favorably On A Retention Of Formation Shares
June 15, 2021 - Bulletin Print Report
The Internal Revenue Servicewill issue favorable rulings regarding the application of Sec. 355(a)(1)(D)(ii), relating to the retention by D (in a transaction intended to...
Equipment Not "Used Directly" In Manufacturing
June 15, 2021 - Bulletin Print Report
APP is a manufacturer of drywall finishing products. APP purchases an item designated as a "roll lifter." The roll lifter is designed to pick up rolls of raw material...
Pre-Sale Distribution Not A Constructive Dividend To Buyer
June 14, 2021 - Volume 15 Issue 112 Print Report
P and S were U.S. corporations filing consolidated federal incometax returns. All of the outstanding stock of S was held by P. In 1971, S and T, an unrelated U....
Start-Up Expenses Are Not "Ordinary"
June 14, 2021 - Bulletin Print Report
A is an inventor and registered patent attorney. He practices law through his firm, APPA, an 'S' corporation of which he is the sole member and owner. In 2005, he devel...
Sec. 481(a) Adjustment Included In Adjusted Taxable Income
June 14, 2021 - Bulletin Print Report
TPAtimely filed a Form 3115 to change its method of accounting for depreciation with respect to certain property beginning with the taxable year beginning January 1, 2020...
XERS's Acquisition Of SBBP Will Feature The Use Of "CVRs"
June 14, 2021 - Bulletin Print Report
Xeris Pharmaceuticals, Inc., ("XERS") and StrongbridgeBiopharmaplc, ("SBBP"), an Irish public limited company, announced that they have entered...
Recovery Of Capital Treatment For Lawsuit Settlement Proceeds Denied
June 11, 2021 - Bulletin Print Report
In March 2010, P's former spouse filed for divorce. As part of the divorce proceedings, P and her divorce attorney participated in mediation. In May 2012, P's divorce a...
Advertising Services Not Subject To Sales Tax
June 11, 2021 - Bulletin Print Report
Petitioner provides marketing and customer relationship consulting services exclusively to businesses in the automotive industry, primarily car dealerships. Petitioner uses its...
Student Not "Established" In A Trade Or Business
June 11, 2021 - Volume 15 Issue 111 Print Report
Petitioner, (P), graduated from Cornell University (CU) in May 1981 with a Bachelors degree in operations research. Following graduation, P was employed by Xerox Corp...
Oregon's Method Of Taxing Part-Year Residents Upheld
June 11, 2021 - Bulletin Print Report
Before 2016, Plaintiffs, ("Ps") resided out of state and had "no personal or financial connection to Oregon." On January 3, 2016--still residing outside of...
Social Security Benefits Are U.S. Source Income
June 10, 2021 - Bulletin Print Report
The question is whether the I.R.S. correctly computed the allowable foreign tax credit, ("FTC"), for 2014. During 2014, H received wages of $74,680 for services perfo...
Southwest Airlines Did Not Operate Enough "Departing Flights"
June 10, 2021 - Bulletin Print Report
In May 2011, SW completed an acquisition of AT. Despite the merger, the two airlines continued to file separate air carrier reports with the Department of Revenue, ("DOR&q...
Landlord Entitled To Sales Tax Credit
June 10, 2021 - Bulletin Print Report
Petitioner, ("P"), is a commercial real estate company that acquires and manages commercial properties throughout New York City. P purchases electricity and electric...
Unaccrued Contract Rights Are Property
June 10, 2021 - Volume 15 Issue 110 Print Report
RL was a closely-held corporation engaged in the mortgage banking and themortgage servicing business. RL serviced mortgages as agent for insurance companies and...
Seattle's "Amazon" Tax Found To Be Constitutional
June 9, 2021 - Bulletin Print Report
The City, on July 6, 2020, passed Ordinance No. 126108 imposing a payroll expense tax, ("PET"), on certain entities engaged in business in the City of Seattle. Ordina...
Aggregate Gross Receipts
June 9, 2021 - Volume 15 Issue 109 Print Report
In 1970, P, a domestic manufacturing corporation, formed S, a wholly-owned domestic corporation, with a capital contribution of $10,000x. P and S filed their tax returns on a c...
Rights To Tax Refund Not Exempt From Bankruptcy Estate
June 9, 2021 - Bulletin Print Report
The Debtors in this Chapter 7 bankruptcy case are husband and wife. The Debtors each claimed as exempt 100 percent of their interests in tax refunds. The Trustee objected to th...
CPA's FBAR Violations Were Found To Be Willful
June 9, 2021 - Bulletin Print Report
After graduating from the University of Miami (Fla.), K worked for an accounting firm for two years and then began his own accounting practice. During the course of his career,...
QTS's Acquisition Will Be Structured As A "Forward Cash Merger"
June 8, 2021 - Bulletin Print Report
QTS Realty Trust, ("QTS"), and Blackstone, ("BX"), announced that they have entered into a definitive agreement "under which Blackstone Infrastructure...
Adjustment To Gross Income Was A Partnership Item Of FPAA Recipient
June 8, 2021 - Bulletin Print Report
Respondent issued a notice of final partnership administrative adjustment, ("FPAA"), for the 2011 taxable year of ES NPA. The FPAA increased ES NPA's ordinary inc...
Discharge Of "Purchase Money Debt" Does Not Invoke Sec. 108(a)
June 8, 2021 - Volume 15 Issue 108 Print Report
The taxpayer is a general partnership whose sole asset is an office building, which was purchased for "$x" under a contract providing for the payment of monthly insta...
"Unprotected Conduct" Subjects Foreign Corporation To N.J. Taxation
June 8, 2021 - Bulletin Print Report
Plaintiff, ("P"), is a wholesale produce distributor which purchases and sells fresh fruits and vegetables. P purchases and distributes produce to supermarkets, groce...
MIC's Tax Vision On The Brink Of Realization
June 7, 2021 - Bulletin Print Report
In February, we wrote about Macquarie Infrastructure Corporation, ("MIC"), and its ambitious plan to divest itself of its Atlantic Aviation, ("AA"), busines...
Seat Of Management Determines "Commercial Domicile"
June 7, 2021 - Bulletin Print Report
APP is a limited liability company, ("LLC"), that was organized in Arizona on January 7, 2016. APP's articles of organization list only two members, JR and DG, bo...
Exploring The Tax Consequences Of PSTH's Proposed Transaction
June 7, 2021 - Bulletin Print Report
Pershing Square Tontine Holdings, Ltd., ("PSTH"), a special purpose acquisition company, ("SPAC"), has announced a proposed transactionthe likes of wh...
Termination Payments Not Self-Employment Income
June 7, 2021 - Volume 15 Issue 107 Print Report
M began working as an exclusive insurance agent, on an independent contractor basis, for State Farm, (SF), in 1949. On March 1, 1977, M and SF entered into the fourth of a succ...
Receipt Of Boot Does Not Warrant Loss Deduction
June 4, 2021 - Volume 15 Issue 106 Print Report
Petitioner, (P), is a New York corporation. W is a Delaware corporation with an authorized capital stock of 1,000 shares. Between September 27, 1933 and November 27, 1934, P ac...
Intent To Defraud Is A Necessary Element Of Embezzlement
June 4, 2021 - Bulletin Print Report
P and ER co-founded WW, an 'S' corporation. During 2016, P was the sole shareholder of WW. On July 18, 2018, P filed a civil suit against ER. P alleged that ER had misa...
MoneyGram Does Not Receive "Deposits"
June 4, 2021 - Bulletin Print Report
MoneyGram International, Inc., ("M"), offers various money transfer services to individuals and financial institutions. It contends that two of its services make it a...
Tax Imposed On Short-Term Occupancy Was Valid
June 4, 2021 - Bulletin Print Report
The Hs own homes within Fairfax County, ("FC"). Prior to March 20, 2018, the Hs used various online marketplace platforms to rent out their individual homes for short...
Qualified Temporary Investment Income
June 3, 2021 - Volume 15 Issue 105 Print Report
TP is a REIT. TP is the managing general partner of LP and owns approximately "a%" of the outstanding common units of LP. In Month 1, TP raised capital through a publ...
"Dual" Resident Entitled To Tax Credit
June 3, 2021 - Bulletin Print Report
Taxpayer, ("TP"), filed a Virginia resident income tax return for the 2019 taxable year, claiming a credit for income tax paid to Maryland. The Department denied the...
Vessel Manager Liable For Use Tax
June 3, 2021 - Bulletin Print Report
The Use Tax Act imposes a tax on the use, storage, or consumption of tangible personal property in this State. The Use Tax Act defines "use" as "the exercise of...
Access Is Not "Possession Or Control"
June 3, 2021 - Bulletin Print Report
G owns and operates health clubs in Texas that sell memberships subject to a Membership Agreement. G purchased items for its health clubs on which it paid sales and use tax. Th...
NOLs From "Closed" Years Could Not Be Adjusted
June 2, 2021 - Bulletin Print Report
R is in the business of aircraft leasing. R leases aircraft to its affiliate. On its tax year 2012 CBT return, it reported the total net operating loss, ("NOL"), carr...
The American Jobs Plan Would Dismantle The TCJA
June 2, 2021 - Bulletin Print Report
In addition to the "American Families Plan," primarily dealing with the taxation of individuals and families, President Biden is proposing the "American Jobs Pla...
"Place Of Celebration" Rule Determines Surviving Spouse
June 2, 2021 - Bulletin Print Report
S and H were married in New York City in 1955 and subsequently had two children together. In 1965, they entered into a separation agreement. From that point on, S and H never r...
Merger Between Date of Death and Alternate Valuation Date
June 2, 2021 - Volume 15 Issue 104 Print Report
At the time of his death on August 13, 1967, the decedent owned 41,738 shares of C. On January 11, 1968, C was merged with and into Gulf & Western, (GW). As a result of the...
Overpayment Interest On A Late-Filed Return
June 1, 2021 - Bulletin Print Report
Sec. 6611(a) of the Code provides that interest shall be allowed and paid upon any overpayment in respect of any internal revenue tax. Sec. 6611(b) provides that interest start...
Drop-Shipper Denied "COGS" Offset To Gross Receipts
June 1, 2021 - Bulletin Print Report
During 2017, P bought and sold items online, using a "drop-shipping" model in which he would purchase an item from a third party, such as Home Depot or through eBay.c...
The American Families Plan Would Increase Tax On "Capital Income"
June 1, 2021 - Bulletin Print Report
President Biden's budget proposal contains tax provisions that would implement his vision of a "fairer" tax code; one in which "high income" taxpayers w...
"Defective" 'B' Reorganization Is A Qualified Stock Purchase
June 1, 2021 - Volume 15 Issue 103 Print Report
ACQ is the common parent of an affiliated group that files a consolidated income tax return (the ACQ Group). ACQ does not directly own a controlling interest in ACQ Sub, but AC...
Accounting For "Guaranteed Excess Yield" On Participations
May 28, 2021 - Volume 15 Issue 102 Print Report
The taxpayer is a domestic building and loan association. The taxpayer sells participation interests in loans. The average contract rate of interest on the loans was lower than...
Refund Claims Not Timely Filed
May 28, 2021 - Bulletin Print Report
Plaintiff, ("P"), filed an Oregon corporation excise tax return on December4, 2015, for the tax year ending February 28, 2015. P filed an amended federal return...
SPAC To Serve As The Acquired Corporation In Cross-Border Deal
May 28, 2021 - Bulletin Print Report
In all of the SPAC deals we have encountered, the SPAC serves as the "issuing" corporation in the transaction. The SPAC issues its stock (and any other merger conside...
Cleveland Can Tax A Non-Resident's Option Exercise Income
May 28, 2021 - Bulletin Print Report
In 2007, while W was working in Cleveland, Ohio, Sherwin-Williams, ("SW"), granted her options to purchase 2,715 shares of SW common stock. W retired and moved to Flo...
"Interest" Paid On Dividend Arrearages Not Deductible
May 27, 2021 - Volume 15 Issue 101 Print Report
A corporation has outstanding seven percent cumulative preferred stock. The preferred stock certificates contain the following provisions: (1) The holders of preferre...
Laboratory Instrument Not Exempt From Sales Tax
May 27, 2021 - Bulletin Print Report
Taxpayer is an accredited hospital operating in Florida. Taxpayer is renting the "System" from "Lessor," and Lessor is charging the Taxpayer Florida Sales T...
Hertz's Reorganization Plan Has Something For Everyone
May 27, 2021 - Bulletin Print Report
The Hertz Corporation will soon emerge from bankruptcy, seemingly healthier than it ever was. In fact, the spirited bidding for Hertz not only will permit its numerouscre...
Waiver Of Carryback Period Applies To "SLLs" (Not Composed Of "PLLs")
May 27, 2021 - Bulletin Print Report
TP is the parent of an affiliated group that files a consolidated federal income tax return. In each ofYear 3 and Year 4, TP incurred consolidated net operating losses, (...
Grant Of Voting Rights To Preferred Holders Facilitates Reorganization
May 26, 2021 - Bulletin Print Report
Cabot Oil & Gas Corporation, ("COG"), and Cimarex Energy Company, ("XOC"), announced that they have entered into a definitive agreement whereby the comp...
No Redemption Or "Other Corporate Contraction" Found
May 26, 2021 - Volume 15 Issue 100 Print Report
C is the common parent of an affiliated group that files a consolidated federal income tax return. C owns all of the stock of H. T was the common parent of an affilia...
Merger "Direction" Matters
May 26, 2021 - Bulletin Print Report
On May 21, 2021, Canadian National Railway, ("CN"), and Kansas City Southern, ("KCS"), announced that they have entered into a definitive merger agreement....
Retirement Plan Contributions Exempted From "Disposable Income"
May 26, 2021 - Bulletin Print Report
P is 36 years of age. Her annual income is above the median family income in South Carolina for her household size. P makes monthly contributions to her retirement plan of $471...
The Willens Deal Survey May 2021
May 25, 2021 - The Deal Survey: May 2021 Print Report
Welcome to our summary of deals for May 2021. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
The Broad Sweep Of A Sec. 302(c)(2)(A) "Interest" In the Corporation
May 25, 2021 - Volume 15 Issue 99 Print Report
Stock in Corporation (C) was held by family members A, B, C1, and D and by Trusts 1-9 established by the family. As a result of a dispute between A, B, C1, and D and...
Software Vendors Have Access To The Tax Abatement Process
May 25, 2021 - Bulletin Print Report
Between 2009 and 2012, H purchased or licensed software from the "vendors." H installed the software on its servers in the Commonwealth (i.e., Massachusetts); and the...
Taxpayer Cannot Litigate Existence Or Extent Of Withholding Obligations
May 25, 2021 - Bulletin Print Report
In July 2014, the Gs and N entered a Contract for Deed, ("Contract"), for the sale of residential property in Arizona, ("Property"). The Gs agreed to pay $1...
Value Not Synonymous With Consideration
May 25, 2021 - Bulletin Print Report
In 2015, APP sold to P a hotel and conference center, ("HB"), for the purchase price of $125,000,000. The HB was comprised of real property, tangible personal propert...
T/DISCA--"Delayed RMT" Will Not Be Necessary
May 24, 2021 - Bulletin Print Report
The Agreement and Plan of Merger, (the "Agreement"), dated May 17, 2021, regarding the Reverse Morris Trust transaction to be undertaken by T and DISCA, reiterates, i...
Cycle-boats Are Not "Commercial Vessels"
May 24, 2021 - Bulletin Print Report
Petitioner provides "cycle-boat" sightseeing tours. Passengers may purchase individual tickets or book the entire boat for a group tour. Petitioner provides the drive...
Sec. 338(h)(10) Election Triggers Mandatory New York 'S' Election
May 24, 2021 - Bulletin Print Report
On July 21, 2012, FI acquired the stock of LI and BI from petitioners, ("Ps"), for cash and shares of FI, (the "sale"). LPI was an 'S' corporation....
Exempt Assets Count In Insolvency Computation
May 24, 2021 - Volume 15 Issue 98 Print Report
On October 9, 1984, the taxpayers purchased their residence for $130x. On October 7, 1987, the mortgagee foreclosed on the residence. At the time of the foreclosure,...
Social Security Recipient Found To Have "Excess APTC"
May 21, 2021 - Bulletin Print Report
Before 2017, H had a pending claim for Social Security benefits under the SSDI program for a disability from several years before. At or about the beginning of 2017, H enrolled...
Receipts From Sale Of "Scrip" Subject To Sales Tax
May 21, 2021 - Bulletin Print Report
Petitioner serves as the managing member of The Executive Club, LLC, which operates an adult entertainment establishment, (the "club"), in Manhattan. After guests pai...
Business Purpose Not A Factor Under Sec. 302(b)(1)
May 21, 2021 - Volume 15 Issue 97 Print Report
CMI was organized on February 20, 1976. Upon incorporation, DZ was the sole ownerof all ofthe stock. On September 8, 1978, DZ transferred 1/3 of the stock...
Tax Refunds Owned As "TBE"
May 21, 2021 - Bulletin Print Report
On March 26, 2019, the Debtor, ("D"), filed this case under Chapter 7 of the Bankruptcy Code. After the filing, D and his spouse, G, filed their 2018 and 2019 federal...
PFGC And CORE Will Engage In A "Reorganization"
May 20, 2021 - Bulletin Print Report
Performance Food Group Co., ("PFGC"), and Core-Mark Holding Co., Inc., ("CORE"), announced that they have entered into a definitive agreement pursuant to wh...
Additional Thoughts Regarding T's Historic "RMT" Transaction
May 20, 2021 - Bulletin Print Report
Apparently, certain analysts were disappointed to learn that AT&T, Inc., ("T"), is divesting its WarnerMedia business through the means of a Reverse Morris...
Theft By False Pretenses
May 20, 2021 - Volume 15 Issue 96 Print Report
A and B, while shareholders of U and V, entered into an agreement and plan of reorganization with W, a publicly traded corporation whose stock was listed on the Ameri...
Express Scripts Is A Service Provider
May 20, 2021 - Bulletin Print Report
Many health insurers provide health insurance and medical benefits programs to their members or employees, a standard part of which is a prescription drug or pharmacy benefit....
Is Mayo Clinic An "Educational Organization?"
May 19, 2021 - Bulletin Print Report
Mayo Clinic, ("M"), oversees healthcare system subsidiaries and operates the Mayo College. M is a tax-exempt organization under Sec. 501(c)(3) of the Code. The I.R.S....
Gain From Grant Of Easement Determined
May 19, 2021 - Volume 15 Issue 95 Print Report
The taxpayer purchased a 60-acre farm in 1928 for $60,000. In 1964, an electric power company purchased an easement along the southern boundary of the farm for the construction...
Taxpayer Acted With "Reckless Disregard" Of A Known Or Obvious Risk
May 19, 2021 - Bulletin Print Report
R has been a naturalized citizen of the United States since 1982. In 1998, R opened his first foreign bank account, ("UBS account"). R chose to have a numbered, rathe...
IHSS Payments Constitute "Earned Income"
May 19, 2021 - Bulletin Print Report
APPs filed a joint federal income tax return for 2018. On that return, APPs reported wages of $6,308; adjusted gross income of $6,308; zero taxable income; zero tax liability;...
Suit To Enjoin Reporting Requirements Not Barred By The "AIA"
May 18, 2021 - Bulletin Print Report
The Anti-Injunction Act, (the "Act"), provides: "No suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court...
Newspaper Cannot Deduct Cost Of a Subscriber List
May 18, 2021 - Volume 15 Issue 94 Print Report
X corporation, ("X"), is the publisher of a local newspaper. On January 1, 1971, X entered into a contract with Y corporation, ("Y"), also a publisher, for...
Reliance On Attorney Insufficient To Show Reasonable Cause
May 18, 2021 - Bulletin Print Report
Failure to file an estate tax return or pay estate tax by the relevant deadlines results in the imposition of penalties. For both late filing and late payment, penalties are ca...
How Are Digital Assets Accounted For?
May 17, 2021 - Bulletin Print Report
Although the Financial Accounting Standards Board, ("FASB"),has not yet opined on the proper accounting for digital (or "crypto") assets, we do have s...
Land Used By Utilities Authority Subject To Tax
May 17, 2021 - Bulletin Print Report
Plaintiff, ("P"), is the owner of various parcels in the defendant municipalities. P made a claim for a tax exemption. P's exemption application was denied. In 19...
Taxpayer Was A "Manufacturer" For "BPOL" Tax Purposes
May 17, 2021 - Bulletin Print Report
The Taxpayer, ("TP"), operates a plant in the City that produces fertilizer additives that are sold to fertilizer companies to be incorporated into fertilizer. Raw ma...
T And DISCA To Embark On A Massive "RMT" Transaction
May 17, 2021 - Bulletin Print Report
AT&T, Inc., ("T"), and Discovery, Inc., ("DISCA"), announced a definitive agreement "to combine WarnerMedia's entertainment, sports, and news a...
New York Gross Receipts
May 17, 2021 - Volume 15 Issue 93 Print Report
A Corporation (A), a Delaware corporation, owns and operates a social networking website. A also provides online advertising services to advertisers. A maintains sale...
Investment Club Earnings Not Subject To "SE" Tax
May 14, 2021 - Volume 15 Issue 92 Print Report
A partnership is engaged solely in the operation of a group investment program involving insured bank savings certificates. Individuals participating in the arrangeme...
No "COGS" Deduction In The Absence Of Gross Receipts
May 14, 2021 - Bulletin Print Report
During tax years 2008 and 2009, B paid approximately $180 million to acquire hundreds of thousands ofacres of minerals and lease interests in West Virginia, Pennsylvania,...
Signed And Completed "RAR" Constitutes An "Initial Determination"
May 14, 2021 - Bulletin Print Report
On November 28, 2011, an I.R.S. examining agent, ("EA"), sent petitioners a revenue agent's report, ("RAR"), attached to a Letter 4121 regarding petitio...
"Formal Declarations" Not Sufficient To Establish New Domicile
May 14, 2021 - Bulletin Print Report
Petitioners, ("Ps"), filed Form IT-203 for 2013. The form reflects that Ps moved out of New York State on June 11, 2013. Ps filed Form IT-203 for 2014. Ps' Florid...
ADS Announces A "Leveraged" Spin-Off
May 13, 2021 - Bulletin Print Report
Alliance Data Systems Corporation, ("ADS"), announced its intention to spin-off its LoyaltyOne segment, comprising its Canadian AIR MILEsReward Program and its...
Damages For Lost Rental Income
May 13, 2021 - Volume 15 Issue 91 Print Report
During a taxable year, the taxpayer, a land holding company whose income is primarily derived from the business of renting its land,granted a pipeline right-of-...
Excess Social Security Benefits Includible In Gross Income
May 13, 2021 - Bulletin Print Report
For a number of years before 2016, Petitioner, ("P"), was eligible for, and in fact received, Social Security disability benefits. Her eligibility ended sometime in 2...
Regulatory Measures Attract Less Scrutiny Under The Commerce Clause
May 13, 2021 - Bulletin Print Report
G is a North Carolina-based corporation engaged in the business of selling tobacco products and related items. The products are delivered to G's Florida customers by common...
What If Sycamore Acquired Victoria's Secret?
May 12, 2021 - Bulletin Print Report
The beleaguered L Brands, Inc., ("LB"), announced that its Board of Directors has unanimously approved a plan to separate the company into two independent public comp...
Child Tax Credit Not "A Public Assistance Benefit"
May 12, 2021 - Volume 15 Issue 90 Print Report
Debtor, (D),filed a petition for relief under Chapter 13 of the bankruptcy code. On her Schedule C, D claimed exempt, as a "public assistance benefit,"...
Sellers Of Stock Were California Residents
May 12, 2021 - Bulletin Print Report
APPs were residents of Californiathrough 2007. APPs owned all of the shares of J. On February 25, 2008, APPsdrove to Henderson, Nevada and stayed for three days. AP...
Lessee-User Tax Not Properly Assessed
May 12, 2021 - Bulletin Print Report
The center is owned by the foundation and is used as a fitness center. The foundation hired the management company to manage the operations of the fitness center. The Managemen...
Merger Consideration Measured By Foregone Dividends
May 11, 2021 - Bulletin Print Report
Bonanza Creek Energy, Inc., ("BCEI"), and Extraction Oil & Gas, Inc., ("XOG"), announced that they have entered into a definitive agreement to combine i...
"COBE" Applies to 'B' Reorganizations
May 11, 2021 - Volume 15 Issue 89 Print Report
T Corporation, (T) sold all of its assets for cash to Z Corporation, (Z). T and Z were unrelated. The sale was made "as part of a plan" in connection with&n...
Determining The "Source" Of An IRA Contribution
May 11, 2021 - Bulletin Print Report
TPs are residents of State-1. In 2016, TPsearned W-2 wages. All of the wages were earned in Utah. TPs filed a Utah tax return as non-residents, reporting this income. Als...
Comptroller's Selection Of Apportionment Method Upheld
May 11, 2021 - Bulletin Print Report
The Partners are headquartered in Massachusetts. Each of the Partners is a corporation. Each of the Partners is a limited or general partner in T, a limited partnership. T'...
City Of Hampton's BPOL Tax On Internet Access Is Grandfathered
May 10, 2021 - Bulletin Print Report
The court must determine whether the gross receipts that Cellco, ("C"), earns through providing "internet access services" can be included in the "BPOL...
Dividend Income Is Subject To Tax Under Sec. 1411
May 10, 2021 - Bulletin Print Report
TP is a shareholder in a C corporation. It was determined that the corporation paid TP'spaid TP's personal expenses from corporate accounts, and the payments were...
Reducing Redemption Indebtedness
May 10, 2021 - Volume 15 Issue 88 Print Report
Y, a newly formed corporation, purchased all of the stock of X from A for cash and debt, including a subordinated debenture. Shortly after the acquisition of X stock,...
Shipping And Delivery Charges Subject To Sales Tax
May 7, 2021 - Bulletin Print Report
Petitioner sells and distributes terrazzo flooring supplies and natural stone countertop materials to customers in New York State. It is undisputed that these flooring supplies...
Remote Work Deemed Performed At Principal Place Of Business
May 7, 2021 - Bulletin Print Report
On March 22, 2020, Ohio's State Director of Health issued an Order directing that "all individuals currently living within the State of Ohio...stay at their home or at...
Bid-In Price Did Not Represent Fair Market Value
May 7, 2021 - Volume 15 Issue 87 Print Report
Petitioners owned real property in Austin, Texas (the "DCP"). The DCPwas not used in any trade or business of petitioner. The mortgage on the DCP, whi...
Sales Of Hydrogen Fuel Not Subject To Sales Tax
May 7, 2021 - Bulletin Print Report
Petitioner intends to establish a "hydrogen distribution network" using high-pressure hydrogen supply and charging stations in New York State to supply vehicles power...
Does ODP's Spin-Off Portend Or Deter Its Acquisition?
May 6, 2021 - Bulletin Print Report
The ODP Corporation, ("ODP"), announced that its Board of Directors has approved a plan "to pursue a separation of the Company into two independent, publicly tra...
Investment Club Not Engaged In A Trade Or Business
May 6, 2021 - Volume 15 Issue 86 Print Report
An "investment club," a partnership for Federal income tax purposes, was formed by a group of 20 individuals solely for the purpose of investing in securities. The me...
Deferred Compensation Not New York Source Income
May 6, 2021 - Bulletin Print Report
Petitioner, ("P"), retired in 2014 and became a resident of California on March 31, 2014. Prior to his retirement, P was a resident of New York State. P was employed...
A Shooting Range Falls Under The "Amusement" Category
May 6, 2021 - Bulletin Print Report
S operates an indoor shooting range in Phoenix, Arizonaunder the name "Shooter's World." The transaction privilege tax is an excise tax on the privilege or...
Foreign Corporation's Capital Gain Subject To NYC "GCT"
May 5, 2021 - Bulletin Print Report
Petitioner, ("P"), is owned by two limited partnerships, OLP and QOLP, (the "POEs"). The POEs' investment strategy is to buy equity interests in alterna...
Unclaimed Deposits Constitute Income To Bank
May 5, 2021 - Volume 15 Issue 85 Print Report
The taxpayer, a national bank, acquired various assets and assumed certain liabilities of a liquidated national bank (the predecessor bank). Among such liabilities were certain...
"Unitary" NOL Not Eligible For Carryover
May 5, 2021 - Bulletin Print Report
Maine applies the "unitary business/formula apportionment approach" to identify the portion of income that is fairly taxable by Maine. If a group of corporations meet...
Investors Denied Theft Loss Deduction
May 4, 2021 - Bulletin Print Report
Petitioners, ("Ps"), filed Schedules C for wife's realty business and husband's consulting business, ("H"). H entered into a stock purchase agreemen...
Payments To Settle Civil Antitrust Lawsuit Are Deductible
May 4, 2021 - Volume 15 Issue 84 Print Report
T is a railroad that transports coal throughout various central and southern states. In 1973, Competitor ("C") was formed to develop, build, and operate the pipeline....
MDP Unveils A "Morris Trust" Transaction
May 4, 2021 - Bulletin Print Report
Meredith Corporation, ("MDP"), is engaged in the active conduct of two separate and distinct trades or businesses:a "Local Media" business and a "...
District Court Does Not Have Jurisdiction Over Overpayment Interest Claim
May 4, 2021 - Bulletin Print Report
The Ps are victims of Bernie Madoff'sPonzi scheme and "paid millions of dollars in taxes on income that they later learned was fictitious." The Ps filed mul...
Legal Expenses In Defending Infringement Claims Ruled Deductible
May 3, 2021 - Bulletin Print Report
Mylan, Inc., ("M"), is a manufacturer of brand name and generic pharmaceutical drugs. It incurred significant legal expenses in preparing "notice letters" a...
Realty Income Corporation Will Acquire VEREIT, Inc.
May 3, 2021 - Bulletin Print Report
Realty Income Corporation, ("R"), and VEREIT, Inc. (V), each a real estate investment trust, ("REIT"), announced that the two companies have entered into a...
When Is A Dividend "Distributed?"
May 3, 2021 - Volume 15 Issue 83 Print Report
T is a REIT. T has outstanding one class of stock which is traded on a national stock exchange. T owns "x%" of the stock of A. T acquired the stock in Month 1 as rent...
Storage Tanks Exempted From Personal Property Tax
April 30, 2021 - Bulletin Print Report
AG manufactures power drive gear systems. The manufacturing process requires AG to use special furnaces. The parties do not dispute that the furnaces constitute "machinery...
New Jersey's "AMA" Is Preempted By P.L. 86-272
April 30, 2021 - Bulletin Print Report
S, located in California, is a canner of tomato products. The taxpayer employs a representative in New Jersey. S did not maintain an inventory of products in N.J. The Director...
I.R.S. Explains How to Correct a Pension Reporting Error
April 30, 2021 - Volume 15 Issue 82 Print Report
A taxpayer, TP, commenced pension benefits on August 31, 2002. TP is entitled to a monthly amount payable for his life. If TP's spouse, B, survives after his deat...
Attorney's Fees Were Miscellaneous Itemized Deductions
April 30, 2021 - Bulletin Print Report
Petitioners timely filed a joint income tax return for 2016 reporting wages of $53,875 and a $14,000 loss on Schedule E, Supplemental Income and Loss. Petiti...
Royalty Income Exclusion Again Found To Be Unavailable
April 29, 2021 - Bulletin Print Report
On P's amended form CT-3A for 2009, P subtracted $273,090,225 on line 15. Of the total amount, $259,649,019 represents royalty payments received by P pursuant to license ag...
Calculating A QSF's Modified Gross Income
April 29, 2021 - Volume 15 Issue 81 Print Report
In Year 1, the S.E.C. filed a civil action against Entities and certain individual defendants alleging violation of federal securities laws. The court granted the S.E...
Will FSM's Acquisition Of Roxgold Be A Reorganization?
April 29, 2021 - Bulletin Print Report
Fortuna Silver Mines, Inc., ("FSM"), and Roxgold, Inc., ("R"), each a Canadian corporation, announced that they have entered into a definitive agreement &qu...
Trucks Not Part Of The Manufacturing Process
April 29, 2021 - Bulletin Print Report
C is a sugar cane milling and manufacturing company. C argued that the trucks and trailers it used to transport cut cane to the sugar mill are "an integral part of the sug...
JCOM Announces A Spin-Off
April 28, 2021 - Bulletin Print Report
J2 Global, Inc., ("JCOM"), "a leading internet information and services company," announced its plan to separate the company into two independent publicly t...
President Biden Releases Certain Details Of His "American Families Plan"
April 28, 2021 - Bulletin Print Report
In advance of tonight's address before a joint session of Congress, President Biden and his staff have published a "fact sheet" that provides certain details of h...
Night Worker Is the "Custodial" Parent
April 28, 2021 - Volume 15 Issue 80 Print Report
Petitioner, (P), timely filed his 2009 and 2010 Idaho income tax returns. Subsequent to P filing his incometax returns, the Tax Commission received a second pai...
Honey Bees Constitute "Livestock"
April 28, 2021 - Bulletin Print Report
The question presented is the following: Are sales of honey bees exempt from the sales and use tax as "livestock" under South Carolina Code Section 12-36-2120(4)? The...
Who Owns Residential And Commercial Waste?
April 27, 2021 - Bulletin Print Report
The use-tax assessments at issue relate to N's purchases of (1) a 2015 P truck, (2) a 2013 P truck, and (3) a 2013 L truck. The L truck is designed to pick up and haul resi...
Owner Of A Foreign Bank Account Has A "Financial Interest" Therein
April 27, 2021 - Bulletin Print Report
Regulations implementing the Bank Secrecy Act require that "each person subject to the jurisdiction of the United States...having a financial interest in...a...financial a...
Characterizing Income From Surrender Of Insurance Contract
April 27, 2021 - Volume 15 Issue 79 Print Report
TP, a corporation headquartered in State A, is a distributor of Product 1 and a producer of Product 2. On Date 1, TP purchased from C1 contracts that provided approxi...
The FTC's Ability To Seek Equitable Monetary Relief Is Circumscribed
April 26, 2021 - Bulletin Print Report
The petitioner, ST, controlled several companies that provided borrowers with short-term "payday" loans. In 2012, the Federal Trade Commission, (the "FTC" o...
11th Circuit Reverses District Court On Tax Refund Issue
April 26, 2021 - Volume 15 Issue 78 Print Report
NB is the parent of a number of subsidiaries, including B. NB filed consolidated income tax returns on behalf of itself and its subsidiaries pursuant to a tax sharing...
Cannabis Business Cannot Enlarge Its "COGS"
April 26, 2021 - Bulletin Print Report
H operates a retail cannabis dispensary. H sold several categories of products, including "buds." H purchased the buds from its patients-growers and did not grow any...
Reasonable Cause For Failure To File Not Shown
April 26, 2021 - Bulletin Print Report
Mr. A operates a construction business as a sole proprietorship. Mrs. A handles the business paperwork. Plaintiffs, ("Ps"), regularly hire subcontractors as needed fo...
The Willens Deal Survey April 2021
April 23, 2021 - The Deal Survey: April 2021 Print Report
Welcome to our summary of deals for April 2021. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
MLHR To Annex KNL In A Taxable Transaction
April 23, 2021 - Bulletin Print Report
Herman Miller, Inc., ("MLHR"), and Knoll, Inc., ("KNL"), announced that they have entered into a definitive agreement pursuant to which MLHR will acquire KN...
Partnerships Need Not Reduce Their Depletion Deductions
April 23, 2021 - Bulletin Print Report
TPs are engaged in the business of mining and thus both are subject to the Minnesota occupation tax. See Minn. Stat. section 298.01 subd. 4. The occupation tax, which is impose...
Prepayment Of Mortgage At A Discount
April 23, 2021 - Volume 15 Issue 77 Print Report
In order to reduce the number of its low-interest mortgages, a financial institution offered a 10-percent discount to each individual with an existing low-interest mo...
MIDD Agrees To Acquire WBT
April 23, 2021 - Bulletin Print Report
The Middleby Corporation, ("MIDD"), and Welbilt, Inc., (WBT), announced that they have entered into a definitive agreement "under which MIDDwill acquire WB...
The Limits of Sec. 1033
April 22, 2021 - Volume 15 Issue 76 Print Report
In 1936, petitioner, (W), bought a tract of land in Port Arthur, Texas, on which was situated a building known as the LC. W's basis in the property was $47,015.13...
NASCAR's Broadcast Revenues Allocated To Ohio
April 22, 2021 - Bulletin Print Report
NASCAR Holdings, Inc., ("N"), is headquartered in Daytona Beach, Florida and sanctions races at tracks in more than 30 states, Canada, Mexico, and Europe. During the...
CNI Makes "Blowout" Bid For KCS
April 22, 2021 - Bulletin Print Report
Just a few weeks ago, Canadian Pacific Railway, Ltd., ("CP"), and Kansas City Southern, ("KCS"), entered into a definitive agreement pursuant to which CP wa...
Derivative Commodity Instruments Are Intangible Assets
April 22, 2021 - Bulletin Print Report
P and its subsidiaries "engage in fully integrated petroleum operations, chemicals operations, mining operations, power generation, and energy services." P uses deriv...
Sec. 246(c)(1)A) Applies To RIC-Designated Dividends
April 21, 2021 - Volume 15 Issue 75 Print Report
X qualifies as a regulated investment company (RIC). Y, a domestic corporation that held shares of X stock, received a distribution from X. Y did not meet the holding...
Special Assessment Found To Be Valid
April 21, 2021 - Bulletin Print Report
The City Code authorizes special benefit assessments against any building to which the city of W provides water and sewer service. For warehousing, the charges are calculated b...
DELL's Exchange Offer Not A Taxable Event
April 21, 2021 - Bulletin Print Report
Dell International LLC and EMC Corporation, affiliates of Dell Technologies, Inc., ("DELL"), are offering to exchange outstanding notes for "exchange notes."...
Thoughts On VMW's "Special Cash Dividend"
April 21, 2021 - Bulletin Print Report
An important aspect of the transaction pursuant to which VMW will be separated from DELL via a tax-free spin-off, is that, at closing, "VMW will distribute a 'special...
Qualifying For a New Trade or Business
April 20, 2021 - Volume 15 Issue 74 Print Report
In 1964, ER was qualified as a licensed practical nurse, (LPN), in Minnesota. She has been engaged in the nursing field since 1964....
Shared Responsibility Payment Is Not Entitled To Priority
April 20, 2021 - Bulletin Print Report
On November 15, 2019, J filed for relief under Chapter 13 of the Bankruptcy Code. The United States claims a tax and interest for a total priority claim attributable to the sha...
PepsiCo Shell Subsidiary Properly Included In Unitary Group
April 20, 2021 - Bulletin Print Report
Under Illinois law, business income from a unitary business group which is properly attributable to Illinois is subject to income taxation. Illinois allows...
Sales To A Fraternity Are Subject To Meals And Rooms Tax
April 19, 2021 - Bulletin Print Report
Petitioner, ("P"), provides meals and management services to a fraternity, on the premises of a fraternity house at a public university, through a meals and managemen...
Lavish Spending Prevents Discharge Of Tax Debts
April 19, 2021 - Bulletin Print Report
H appeals the district court's determination that his federal tax debts were not dischargeable in bankruptcy because H had willfully evaded paying them. H has been a self-e...
KIM And WRI Plan A Two-Party Merger
April 19, 2021 - Bulletin Print Report
Kimco Realty Corporation, ("KIM"), and Weingarten Realty Investors, ("WRI"), each a real estate investment trust, ("REIT"), announced that they ha...
Worthless Loan Is a Nonbusiness Bad Debt
April 19, 2021 - Volume 15 Issue 73 Print Report
Petitioner is a software engineer. He developed software and licensed it to NPGS and NPS. During the year in issue, petitioner, age 51, was the C.E.O. and owned 48.3...
Site Fees Subject To Sales Tax
April 16, 2021 - Bulletin Print Report
P owns a special events venue in Suffolk County, New York. It offers facilities for events and celebrations... The venue can be rented to customers with or without catering. Re...
Split-Off Not Recast as a Shareholder-Level Exchange
April 16, 2021 - Volume 15 Issue 72 Print Report
X Corporation, (X), and Y Corporation, (Y), were each engaged in the construction business. Mr. A and Mr. B each owned, for more than five years, 50 percent of the st...
Yogurt Cups Not Subject To Sales Tax
April 16, 2021 - Bulletin Print Report
P is a convenience store chain with numerous locations throughout New York State. These locations have both indoor and outdoor seating for customers. P locates the individual 8...
DELL Announces Eagerly Anticipated Spin-Off Of VMW
April 15, 2021 - Bulletin Print Report
With the five year anniversary of Dell Technologies Inc.'s acquisition of EMC Corporation rapidly approaching, such anniversary beingthe date on or after which a spin...
Maintenance Of Citizenship Does Not Prevent Change Of Domicile
April 15, 2021 - Bulletin Print Report
Taxpayer, ("TP"), filed a Virginia Special Non-Resident Claim for Individual Income Tax Withheld for the 2019 taxable year for taxes withheld on a distribution from a...
Deed In Lieu Of Foreclosure
April 15, 2021 - Volume 15 Issue 71 Print Report
Appellant and her former spouse, JDO, were separated on August 29, 1988, and were subsequentlydivorced on August 22, 1991. &nb...
The I.R.S. Non-Acquiesces To The Schieber Decision
April 15, 2021 - Bulletin Print Report
In Schieber v. Commissioner, T.C. Memo. 2017-32, the issue was whether, and to the extent to which, the taxpayer was "insolvent" for tax purposes....
Lawyer's Fines Not Deductible
April 14, 2021 - Volume 15 Issue 70 Print Report
Petitioner, (P), is a licensed attorney. Amonghis clients is his brother's business. P is a cash basis taxpayer. In...
Inventories Are Valued At "Cost"
April 14, 2021 - Bulletin Print Report
TP has a single trade or business in which it purchases and resells units of tangible personal property ("goods") that constitute merchandise in the hands of TP. TP d...
Federal Incentive Payments Are Not Contributions Or Donations
April 14, 2021 - Bulletin Print Report
TP is a medical services provider. TP operates health clinics and surgery centers. TP received federal incentive payments to upgrade its physical medical records to electronic...
"SPAC" Warrants Invite S.E.C. Scrutiny
April 13, 2021 - Bulletin Print Report
The Acting Chief Accountant of the Division of Corporate Finance of the S.E.C. has disclosed that, in certain circumstances, warrants issued by special purpose acquisition comp...
Reduction of Amount of Nonrecourse Debt
April 13, 2021 - Volume 15 Issue 69 Print Report
In 1988, A borrowed $1 million from C and signed a note payable to C for $1 million that bore interest at a fixed market rate payable annually. A had no personal liab...
Costs Related To Egg Donation And Surrogacy Are Not Deductible
April 13, 2021 - Bulletin Print Report
TPs are a male same sex couple legally married in State. TPs wish to have a child who has as much representative DNA from the couple as possible. TPA will donate sperm and TPB&...
Insurance Agent Engaged In A Qualified Trade Or Business
April 13, 2021 - Bulletin Print Report
P was formed in Year 1. In exchange for stock in P, TP and certain other shareholders contributed cash to P on Date 2. P converted into a limited liability company on Date 3 an...
"Made In America" Tax Plan Seeks To Raise U.S. Corporate Tax Revenue
April 12, 2021 - Bulletin Print Report
Because the foreign source income of a foreign corporation is not subject to United Statestaxation, U.S. corporations have always found it advantageous to conduct their f...
I.R.S. Rules On DD's "Reverse Morris Trust" Transaction
April 12, 2021 - Bulletin Print Report
LTR202114017, January 21, 2021, addresses the "leveraged"Reverse Morris Trust transaction in which DuPont de Nemours, Inc., ("D"), combined its...
Preferred Stock Dividends Not "Extraordinary"
April 12, 2021 - Bulletin Print Report
Taxpayer (whom we are assuming is a domestic corporation)acquired newly issued preferred stock of Corporation, (the "Preferred Stock"). The Preferred Stock is n...
"Open Transaction" Method Rejected
April 12, 2021 - Volume 15 Issue 68 Print Report
Plaintiff, (P), was established in the last will and testament of BP, who died onJanuary 5, 1981. P formerly owned 25 percent of the stock of W and B. In 1990,...
A Trust And Its Creators Are Separate Entities
April 9, 2021 - Bulletin Print Report
D and G owned a Chevrolet titled in their collective names. D and G also serve as grantors, trustees, and beneficiaries for the "D and G Joint Revocable Trust," (the...
"Wrongful Act" Insurance Premiums Are Deductible
April 9, 2021 - Volume 15 Issue 67 Print Report
A corporation engaged in the business of banking purchased two group liability insurance policies. The first policy indemnifies the bank against damages sustained as...
All Employees Contribute To GLG's Receipts
April 9, 2021 - Bulletin Print Report
This petition concerns the proper method for calculating petitioner's receipts for purposes of determining its general corporation tax and tax obligation to the City of New...
Determining The "Character" of "Boot" Gain
April 9, 2021 - Bulletin Print Report
Many reorganizations feature a mix of consideration paid to the target company's shareholders. It is not uncommon, for example, for the merger consideration to consist of e...
Deductions Allowed For "Business Meal Expenses"
April 8, 2021 - Bulletin Print Report
I.R.S. Notice 2001-25, (April 8, 2021), provides guidance regarding one of President Trump's last initiatives, i.e., the institution of a temporary 100-percent deduction fo...
CODI Or Gain?
April 8, 2021 - Volume 15 Issue 66 Print Report
B is a limited partnership. During 1983 and 1984, B acquired a three-acre parcel of land ("property") and constructed a 12-story office building on the prop...
Determining The Classification Of A "Foreign Eligible Entity"
April 8, 2021 - Bulletin Print Report
1. On Date 1, S1 and S2, each a non-resident alien individual, form X, a foreign business entity that is eligible to make a classification election described in Reg. Sec. 301.7...
Fire Detection Systems Are Not Mill Machinery
April 8, 2021 - Bulletin Print Report
Taxpayer, ("TP"), manufactures spun yarns. TP purchases special fire detection and suppression systems, ("Systems"). Systems are designed and used for prote...
Notification Service Is Subject To Sales Tax
April 8, 2021 - Bulletin Print Report
Petitioner sells two automated services related to government requests for proposals, ("RFPs"). The first is its Procurement Service. A governmental customer creates...
Liquidation Disregarded
April 7, 2021 - Volume 15 Issue 65 Print Report
Corporation, ("C"), is a State W professional corporation. C has been an 'S' corporation since 1985. C is authorized to issue 200 shares of common stock of wh...
Marshall Island Shippers To Combine
April 7, 2021 - Bulletin Print Report
International Seaways, Inc., ("I"), and Diamond S Shipping, Inc., ("D"), are each organized under the laws of the Marshall Islands. D and I announced that t...
Purely Public Charity Is Not A "Business"
April 7, 2021 - Bulletin Print Report
GS is a Pennsylvania non-profit corporation with its principal office in the City of Allentown, (the "City").GS is a tax-exempt organization under Sec. 501(c)(3...
No Willful Attempt To Evade Or Defeat Tax
April 7, 2021 - Bulletin Print Report
Plaintiff, ("P"), and her former husband, WH, were 50/50 owners of the Farm and SF. P and WH filed their 2012, 2013, and 2014 tax returns. The amount owed was $81,107...
Hertz's Net Operating Losses
April 6, 2021 - Bulletin Print Report
Hertz Global Holdings, Inc., ("HGH"), announcedlate last week that it has selected "an enhanced proposal" from Centerbridge Partners, Warburg Pincus,...
Goodwill Proceeds Excluded From Sales Factor
April 6, 2021 - Volume 15 Issue 64 Print Report
TP is in the business of developing and selling test, measurement, and monitoring equipment. During its 1999 tax year, TP sold its printer division to another corporation for a...
Repurchase Analogized To An Open Market Repurchase
April 6, 2021 - Bulletin Print Report
D is a State A corporation the stock of which is publicly traded and widely held. On Date 1, D formed C. D contributed assets and liabilities to C representing the operations o...
Clothing Designer Not Entitled To Research Credits
April 6, 2021 - Bulletin Print Report
M was the sole shareholder of LMI, an 'S' corporation. LMI designed, developed, produced, and sold clothing under many different brands or clothing lines. LMI followed...
The "SRP" Is Entitled To Priority Treatment
April 5, 2021 - Bulletin Print Report
In 2018, RS had not obtained health insurance. Consequently, the I.R.S. assessed a shared responsibility payment, ("SRP"), against him. On July 19, 2019, Ds jointly f...
Nurse Denied Education Expense Deduction
April 5, 2021 - Bulletin Print Report
O became licensed as a registered nurse, ("RN"), in 1999. Starting in 2005, O worked as an RN for WVC. In 2016, O's employer encouraged, but did not require, her...
Spouse's Home Ownership Deprives Couple of FTHBC
April 5, 2021 - Volume 15 Issue 63 Print Report
Before both the year in issue and her marriage to MG, MH purchased a home (the SRWDH) and used such home as her principal residence. MG and...
Municipal Corporation May Only Tax Income Earned Therein
April 5, 2021 - Bulletin Print Report
During 2017, APP was a resident of Louisville, Ohio, employed by the United States Postal Service, ("USPS"). APP reported to work at the USPS office located within th...
Update on ICLR/PRAH Deal
April 1, 2021 - Bulletin Print Report
ICLR has entered into a definitive agreement to acquire PRAHin a cash and stock transaction in which the per share merger consideration consists of (i) $80 in cash, and (...
Non-Resident Aliens And Citizens Are Not "In The Same Circumstances"
April 1, 2021 - Bulletin Print Report
Plaintiff, ("P"), and his wife are Canadian citizens who reside in Windsor, Ontario, Canada. They are both non-resident aliens who work in the United States under &qu...
Payments In Settlement Of A Fraud Judgment Are Deductible
April 1, 2021 - Volume 15 Issue 62 Print Report
In 1965, petitioner, (P), and two others formed PAP (the Company). P owed 10 percent of the Company's stock and was its president and general manager.  ...
Charges For Recycling Oily Waste Not Subject To Sales Tax
April 1, 2021 - Bulletin Print Report
Petitioner, ("P"), owns and operates a recycling terminal in New Jersey, where it recycles "oily waste." When P obtains oily waste, it recycles it through a...
News Corporation Secures A "Cost" Basis In HMH Assets
March 31, 2021 - Bulletin Print Report
Houghton Mifflin Harcourt Company, ("HMH"), owns all of the stock of Houghton Mifflin Harcourt Publishing Company, ("PC"). PC has entered into an "Asse...
Transaction Structured To Avoid The Purposes Of Sec. 1031(f)
March 31, 2021 - Volume 15 Issue 61 Print Report
Sec. 1031(f) provides that an exchange will not qualify for nonrecognition treatment when a taxpayer exchange like kind property with a related person, and when either party th...
Form 1099-C Does Not Actually Discharge Debt
March 31, 2021 - Bulletin Print Report
This putative class action stems from a consumer installment loan taken out by G prior to 2012. In early 2012, SB obtained a judgment against G. The judgment was levied against...
Administrative Remedies Must Be Exhausted Before Courts Will Act
March 31, 2021 - Bulletin Print Report
Petitioner owns commercial real estate in Charleston, West Virginia, known as the Charleston Marriott property. On February 21, 2019, petitioner filed a Notice of Intent to Fil...
Computing Entire Net Income
March 30, 2021 - Volume 15 Issue 60 Print Report
Petitioner, (P), timely filed a New York General Business Corporation Franchise Tax Return for the tax year ended December 31, 2007. In com...
Disbursements To Shareholders Found To Be Distributions
March 30, 2021 - Bulletin Print Report
SU is an 'S' corporation. SU owns an apartment building in Manhattan. SM and EM, brother and sister, own 75 percent and 25 percent of the outstanding capital stock of&n...
"Knowledge" Factor Served To Deny "Innocent Spouse" Relief
March 30, 2021 - Bulletin Print Report
When their 2005 joint tax return came due, L and D could not pay the taxes owed. D was forced to set up an installment agreement with the I.R.S. Little changed in 2006. A simil...
Property Tax Exemptions Were "Substantially Similar"
March 30, 2021 - Bulletin Print Report
Petitioner, ("P"), has lived in his LC home since 1990. P's wife owns two rental properties in Utah, but she sold one in 2018. Neither P nor his wife ever resided...
Supreme Court Lays Out The Criteria For "Specific Jurisdiction"
March 29, 2021 - Bulletin Print Report
Ford Motor Company, ("F"), is incorporated in Delaware and headquartered in Michigan. But its business is everywhere. Accidents involving two of F's vehicles are...
Cancellation Of Debt Owed To A Shareholder
March 29, 2021 - Bulletin Print Report
Foreign Parent is a publicly traded Country Y entity that is treated as a corporation for U.S. federal income tax purposes. Foreign Parent is the parent of a worldwide group of...
MSGE To Acquire MSGN
March 29, 2021 - Bulletin Print Report
Madison Square Garden Entertainment Corporation, ("MSGE"), and MSG Networks, Inc., ("MSGN"), announced that they have reached a definitive agreement for MSG...
Isolated Recapitalization Avoids Sec. 305(b)(3)
March 29, 2021 - Volume 15 Issue 59 Print Report
X corporation, (X), has 3,000 shares of voting common stock outstanding. A plan of recapitalization was adopted pursuant to which X agreed to theissuance...
Taxpayer Committed Only One Non-Willful Violation Of Sec. 5314
March 26, 2021 - Bulletin Print Report
B had a financial interest in 14 financial accounts in the U.K. with an aggregate balance in excess of $10,000. B did not disclose the accounts to the I.R.S. The I.R.S. conclud...
No Sec. 847 Deduction On An Amended Return
March 26, 2021 - Volume 15 Issue 58 Print Report
At the heart of this case is Sec. 847, a statute that allows insurance companies to take an optional tax deduction, provided that they also make a corresponding speci...
Deduction Of Interest Proves That The Loan Is A "QEL"
March 26, 2021 - Bulletin Print Report
Between 2000 and 2007, D took on loans (both federal and private) each semester to attend college. After graduating in 2007, D consolidated her various loans into two loans: (1...
COHR Is Terminating Its Merger Agreement With LITE
March 26, 2021 - Bulletin Print Report
One of the more heated takeover battles of the recent past appears to have come to a conclusion. Coherent, Inc., ("COHR"), announced that its board of directors has d...
Refunds Claims Dismissed For Lack Of Jurisdiction
March 25, 2021 - Bulletin Print Report
Plaintiffs, ("Ps"), seek a refund of certain federal income tax paid during tax years 2016 and 2017. Ps retained the services of a tax accounting firm--CC--to prepare...
Foreign Partnership Must File a Sec. 754 Election
March 25, 2021 - Volume 15 Issue 57 Print Report
TP is a North Carolina corporation. On January 1, 1973, TP acquired a 1/3 interest in a German partnership, known as KG. The interest acquired was equivalent to a lim...
Maximum FBAR Penalty Was Warranted
March 25, 2021 - Bulletin Print Report
K is a citizen of the United States.K's parents opened an investment account at UBS and designated K as a joint owner. Following her father's death, K signed vari...
Theft Loss Deduction Denied
March 24, 2021 - Volume 15 Issue 56 Print Report
AAA marketed itself as an investment company. In 1999, V, an individual, decided to invest in two of AAA's programs. On F...
"Temporary Storage Rule" Eliminates Use Tax
March 24, 2021 - Bulletin Print Report
PS is primarily engaged in the business of furnishing and installing custom curtain wall on buildings. PS assembles and glazes the curtain walls at its facility, (the "Fac...
A Rental Or License Is A Retail Sale Of Tangible Personal Property
March 24, 2021 - Bulletin Print Report
Petitioner, ("P"), is a casual dining company with restaurant locations nationwide, including in New York. It has entered into a contract with Company X, ("X&quo...
Canadian Pacific And Kansas City Southern To Join Forces
March 23, 2021 - Bulletin Print Report
Canadian Pacific Railway Ltd., ("CP"), and Kansas City Southern, ("KCS"), announced that they have entered into a merger agreement under which CP has agreed...
Federal Employee Entitled To "Subtraction Modification"
March 23, 2021 - Bulletin Print Report
Petitioner, ("P"), was employed by the Social Security Administration, ("SSA"), and was a member of the Federal Employees' Retirement Service,(&qu...
A Credit Is Not A "Payment"
March 23, 2021 - Volume 15 Issue 55 Print Report
A died in 1982. A's interest in X Corporation, (X), a closely held business, exceeded 35 percent of the adjusted gross estate and A's personal representative...
IBM Is Not Entitled To The "Royalty Income Exclusion"
March 23, 2021 - Bulletin Print Report
International Business Machines Corporation, ("IBM"), owns 100 percent of the stock of WTC. IBM operates in over 170 countries, primarily through locally incorporated...
Excise Tax On Billboard Owners Passes Constitutional Muster
March 22, 2021 - Bulletin Print Report
In June 2013, the Baltimore City Council enacted an ordinance, (the "Ordinance"), that imposed an excise tax "on the privilege of exhibiting outdoor advertising...
Casinos Need Not Treat Business Expenses As Wagering Losses
March 22, 2021 - Bulletin Print Report
Y requested advice on whether the Tax Cuts and Jobs Act, ("TCJA"), amendment to the deduction for wagering losses under Sec. 165(d) of the Code applies only to indivi...
Withholding Tax For CTB's Foreign Shareholders?
March 22, 2021 - Bulletin Print Report
Goodyear Tire & Rubber Co., ("GT"), and Cooper Tire & Rubber Co., ("CTB"), have entered into a definitive merger agreement pursuant to which GT will...
The Willens Deal Survey March 2021
March 22, 2021 - The Deal Survey: March 2021 Print Report
Welcome to our summary of deals for March 2021. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
Transfer Of Identical Assets Does Not Result In Diversification
March 22, 2021 - Volume 15 Issue 54 Print Report
A, B, T1, and T2 propose to form a limited partnership, P. A, B, T1, and T2 will each contribute to P shares of X common stock, stock that istraded on the New Y...
Maintenance And Repairs Of Rental Vehicles Not Subject To Sales Tax
March 19, 2021 - Bulletin Print Report
Petitioner is engaged in the business of passenger car rentals. Petitioner states that its fleet of rental cars requires, not surprisingly, "frequent maintenance and occas...
New Jersey Court Endorses The "Per Form" FBAR Penalty Approach
March 19, 2021 - Bulletin Print Report
Regulations require the annual filing of an "FBAR" form for covered individuals who have "a financial interest in a financial account in a foreign country."...
Exempt Organization Acted As A "Co-Vendor" For Sales Tax Purposes
March 19, 2021 - Bulletin Print Report
Petitioner is an exempt organization under Sec. 501(c)(3) of the Internal Revenue Code; and is registered as an exempt organization for New York State Sales Tax purposes. Petit...
Power To Terminate Life Estate Not Property
March 19, 2021 - Volume 15 Issue 53 Print Report
In a prior year, a taxpayer entered into a trust agreement pursuant to which the taxpayer transferred common stock to the trustee. The trust agreement provides that the income...
Why Does New York Like Assigned Long-Term Vehicle Leases?
March 18, 2021 - Bulletin Print Report
In some instances, a New York customer of P who entered into a long-term motor vehicle lease agreement with P seeks to assign that lease to another person. The assignee does no...
LBO Is A QSP
March 18, 2021 - Volume 15 Issue 52 Print Report
H is a State X corporation organized to hold all of the stock of P. H has an authorized capitalization of 10 million shares which are owned as follows: (i) 18.25 percent by cer...
Per Capita Payments To Tribe Members Are Taxable
March 18, 2021 - Bulletin Print Report
The Miccosukee Tribe, (the "Tribe"), is a federally recognized American Indian tribe under the Indian Reorganization Act of 1954. C and O, a married couple with five...
Separation From Service Exception To Sec. 72(t) Not Applicable
March 18, 2021 - Bulletin Print Report
P worked for Home Depot and participated in its section 401(k) plan. In 2014, he retired from Home Depot and transferred his section 401(k) plan account balance to a traditiona...
Late Transfer Not "Incident To The Divorce"
March 17, 2021 - Volume 15 Issue 51 Print Report
TP and Former Spouse (FS) jointly purchased the House, which they used as their marital home during their marriage. TP and FS were divorced pursuant to a Judgment of...
General Electric Company To Propose "Reverse Stock Split"
March 17, 2021 - Bulletin Print Report
General Electric Company, ("GE"), has an inordinately large number of shares outstanding, approximately 8.8 billion at last count. Its board of directors hasexp...
Property Not Used Exclusively For Charitable Purposes
March 17, 2021 - Bulletin Print Report
The subject property, for which a real property tax exemption is sought, is improved with the "DRAC," which contains an indoor swimming facility, locker rooms, storag...
Upkeep Of A Certified Historic Structure Is Permissible
March 17, 2021 - Bulletin Print Report
If a donor of an easement on a building in a registered historic district installs an accessibility ramp in order to comply with the Americans With Disabilities Act, ("ADA...
ESA And ESH Will Go Private
March 16, 2021 - Bulletin Print Report
Extended Stay America, Inc., ("ESA"), and Extended Stay Hospitality, Inc., ("ESH"), have had a unique relationship that will soon be ending. The companies f...
Complete Liquidation Recast To Partial Liquidation
March 16, 2021 - Volume 15 Issue 50 Print Report
X was engaged in the business of land development. X's assets consisted of contract receivables, developed land, and undeveloped land. Y is a wholly owned subsidi...
Contractor Did Not Purchase Installation Contract
March 16, 2021 - Bulletin Print Report
Petitioner, ("P"), performs general contracting and concrete placement work, ("concrete work"), for customers in New York. P purchases concrete from supplie...
Death Of U.S. Transferor Not A Triggering Event
March 16, 2021 - Bulletin Print Report
On Date 1, SH, a U.S. person, transferred stock of a domestic corporation to a foreign corporation, ("TFC"), in exchange solely for "a" shares of TFC, (&quo...
Instructional Classes Are Exempt From Sales Tax
March 16, 2021 - Bulletin Print Report
Applicant is a woman-focused health and fitness club where woman can go to work out for health, cardio, and toning activities. Applicant offers 30 minute group workouts that in...
Converting Recyclable Material Constituted "Manufacturing"
March 15, 2021 - Bulletin Print Report
FPRprovides both employees and management of those employees to businesses in the recycling industry. During the period at issue, FPR contracted with owners of material r...
A State's Audit Was Not An "Alternate Remedy"
March 15, 2021 - Bulletin Print Report
In Illinois, the ROTA imposes a tax on retailers who sell tangible personal property. A retailer remits the retailers' occupation tax to the Department, which the retailer...
AerCap In Line For A Basis Step-Up
March 15, 2021 - Bulletin Print Report
On March 9, 2021, General Electric Company, ("GE"), entered into a transaction agreement with AerCapHoldings, N.V., ("AerCap"), pursuant to which GE w...
Equitable Ownership Lacking
March 15, 2021 - Volume 15 Issue 49 Print Report
Petitioner's brother, BP, purchased a home (San Francisco property) in South San Francisco in 2002. He made a down-payment toward the purchase price and financed...
Guard Services Are Always Subject To Sales Tax
March 12, 2021 - Bulletin Print Report
P was engaged in a project that consisted of the development of a parcel of real estate located in the City of New York, ("Project"). The Project was new construction...
Toll Increase Did Not Violate The Commerce Clause
March 12, 2021 - Bulletin Print Report
Owned by the Indiana Finance Authority, the Indiana Toll Road, (the "Toll Road"), has been operated since 2006 by a lessee, ITR. What ITR can charge depends on state...
Location Of House Determines Residence
March 12, 2021 - Bulletin Print Report
Petitioner, ("P"), and his wife own a property that straddles the Bronx/Yonkers border. P and his wife maintain their residence on the property, which has an address...
Series E Bond Interest Is IRD
March 12, 2021 - Volume 15 Issue 48 Print Report
DA, the mother of petitioner, purchased 49 Series E bonds over the years 1948 and 1953 through 1959 of an aggregate face value of $5,125, at a total cost of $3,843.75...
Composite Tax Return Filing Requirement Is Not Unconstitutional
March 11, 2021 - Bulletin Print Report
BE is a Virginia limited liability company that earned income from its business operations in a facility located in Alabama from 2008 to 2011. Sec. 40-18-24.2(b)(1), ("sec...
Virgin Islands' "Timeshare Tax" Is Constitutional
March 11, 2021 - Bulletin Print Report
At the center of these consolidated appeals is the Virgin Islands' timeshare occupancy tax, (the "Tax"). The Tax levies a $25 flat fee on each timeshare unit with...
LITE And COHR Revise Merger Agreement
March 11, 2021 - Bulletin Print Report
Lumentum Holdings, Inc., ("LITE"), announced an amendment to the previously announced definitive agreement between LITE and Coherent, Inc., ("COHR"). Under...
Contribution of Series E Bonds
March 11, 2021 - Volume 15 Issue 47 Print Report
Y owned certain Series E bonds, in her name alone, which she wished to donate to an organization to which a charitable contribution may be made pursuant to the provis...
APO And ATH Will Effect A "Double Dummy" Transaction
March 10, 2021 - Bulletin Print Report
Apollo Global Management, Inc., ("APO"), and Athene Holding, Ltd., ("ATH"), have entered into a definitive agreement to "merge" in an all-stock tr...
MCFE's Special Dividend Unlikely To Qualify As A Partial Liquidation
March 10, 2021 - Bulletin Print Report
McAfee Corporation, ("MCFE"), announced it has entered into a definitive agreement to sell its Enterprise business to a consortium led by Symphony Technology Group, (...
Series E Bonds Cannot Be Discounted For Built-In Taxes
March 10, 2021 - Volume 15 Issue 46 Print Report
Decedent purchased Series E U.S. savings bonds (Bonds) for a total purchase price of "$b." Interest totaling "$c" accrued on the Bonds to the last date of m...
Intent To Abandon Old Domicile Not Present
March 10, 2021 - Bulletin Print Report
J and M were assessed for a total amount due of $37,934.62. The Commissioner of Ohio, (the "Commissioner"),found that J and M were residents of Ohio for each of...
C.P.A. Avoids Malpractice Liability
March 9, 2021 - Volume 15 Issue 45 Print Report
In 1986, WM, an individual, won $25 million in the Ohio lottery. WM's winnings were spread out over 20 years. At the time WM won the lottery, he bothlived a...
Assumption Reinsurance Transaction Did Not Result In A "BEAT" Amount
March 9, 2021 - Bulletin Print Report
P owns all the stock of TP. TP and CA join in the filing of a consolidated return with P. P, TP, and CA are indirect subsidiaries of FC1. P, TP, CA, and FC1 offer insurance pro...
Residence Of Ordained Minister Is Exempt From Property Tax
March 9, 2021 - Bulletin Print Report
C is an ordained minister who works for petitioner, ("P"), in an administrative capacity in the church hierarchy. C does not serve any specific congregation....
Use Tax Exemption Only Partially Granted
March 9, 2021 - Bulletin Print Report
APLUX LLC, ("A"), is a Missouri limited liability company. Its sole business purpose is to own and lease aircraft. In August 2011, A purchased the "TBM" fro...
Are TYL's Senior Notes Corporate Acquisition Indebtedness?
March 8, 2021 - Bulletin Print Report
Tyler Technologies, Inc. ("TYL") announced its intention to offer...a total of $1.6 billion aggregate principal amount of "convertible senior notes," (the &...
IRA Not Exempt From Garnishment
March 8, 2021 - Bulletin Print Report
C pleaded guilty to health care fraud. The district court ordered him to pay the defrauded insurance companies $514,576.29 under the Mandatory Victim Restitution Act,(MVR...
CVX Will "Roll Up" NBLX
March 8, 2021 - Bulletin Print Report
Chevron Corporation, ("CVX"), and Noble Midstream Partners, L.P., ("NBLX"), announced that they have entered into a definitive agreement for CVX"...
"Incident To The Divorce"
March 8, 2021 - Volume 15 Issue 44 Print Report
Petitioner, (P), was divorced in 1999. P received a check in the amount of $231,499.67 from her ex-husband in 2010, in settlement of their divorce agreement. P was a resident o...
Actual And Honest Objective Of Making A Profit Lacking
March 5, 2021 - Bulletin Print Report
Team roping has become its own event, completely separate from rodeo, and is done all over the world--though it remains most popular in the United States.Muchof the...
Graduated Transfer Tax Rates Not Unconstitutional
March 5, 2021 - Bulletin Print Report
The transfer tax is an excise tax on the privilege of recording a document when ownership of real property is transferred. The transfer tax has five tiered or graduated tax rat...
Sec. 6330 Does Not Create Independent Conditions
March 5, 2021 - Bulletin Print Report
PP was an employee leasing company that provided payroll services to a private security company in 2010 and 2011. PP paid its employees' wages and issued W-2 forms to them...
Whose Purpose Counts For Sec. 265(a)(2) and Sec. 246A?
March 5, 2021 - Volume 15 Issue 43 Print Report
HEI is a Delaware corporation. From October 1, 1987 to March 9, 1994, the common stock was owned by F and trusts for the benefit of F's family members (50 percent...
FB Employee's Compensation From RSUs Allocated On A Linear Basis
March 4, 2021 - Bulletin Print Report
APP began working for Facebook, Inc., ("FB"), in California in 2007. APP has not been a California resident since he departed for Singapore in 2010. APP's compens...
Property Zoned For Residential Use Had Been "Subdivided"
March 4, 2021 - Bulletin Print Report
As of January 1, 2007, L owned an eleven acre parcel of vacant land, ("l6A"), in Lexington, Massachusetts. For FY 2008, the town issued to L a $169,788.17 property ta...
Excess Interest Is A Capital Expenditure
March 4, 2021 - Volume 15 Issue 42 Print Report
In July, 1972, A executed a loan agreement with 10 banks under which a total of "$T" was advanced on separate seven-year notes. For the first two years, interest is a...
"RAR" Was "Initial Determination" Of Assessment Of Fraud Penalty
March 4, 2021 - Bulletin Print Report
Respondent, ("R"), commenced an examination of Petitioners', ("Ps"), 2011 Form 1040 on or shortly after October 30, 2014. RARmet with Ps' cert...
CSGP Puts Its Best Foot Forward
March 3, 2021 - Bulletin Print Report
CoStar Group, Inc., (CSGP), is determined to acquire CoreLogic, (CLGX). Its determination is unmistakably evidenced by the preemptive bid it recently communicated to the CLGX&n...
Senator Warren Unveils A "Wealth Tax" Proposal
March 3, 2021 - Bulletin Print Report
True to her word, SenatorElizabeth Warren, (D-Mass.), along with several prominent co-sponsors, has proposed what she refers to as "The Ultra-Millionaire's Tax A...
"Triangular" Constructive Dividends
March 3, 2021 - Volume 15 Issue 41 Print Report
During 1974 and 1975, G, an individual, was the president and sole shareholder of J, Inc., (J), a manufacturing company. He was also a 50 percent shareholder of GHR,...
Only "Unabsorbed" NOLs Are Extended
March 3, 2021 - Bulletin Print Report
In 2002, the New Jersey Legislature enacted "Subparagraph E," ("SE"), and disallowed a deduction for net operating loss, ("NOL"), carryovers in ta...
Sales Of Sulfuric Acid Subject To Sales Tax
March 2, 2021 - Bulletin Print Report
Petitioner, ("P"), is in the business of selling sulfuric acid, ("SA"), to contractors who perform cesspool cleaning for their customers. P's position i...
Connecticut Residents Can Look Forward To Tax Credits
March 2, 2021 - Bulletin Print Report
The Connecticut House of Representatives has passed a bill, H.B. 6516, designed to insulate"remote workers" from perniciousdouble taxation during the COVI...
Accounting For Credit Sales
March 2, 2021 - Volume 15 Issue 40 Print Report
TP is an S corporation using the accrual method of accounting. It operates an automobile dealership. Mr. O is an individual owning all of the stock of TP. &...
Department Of Revenue Cannot Contradict Its Own Guidance
March 1, 2021 - Bulletin Print Report
Deere, ("D"), was a corporation that was incorporated under Delaware law. D was the sole owner of DH, a disregarded entity. D and DH collectively owned all of the equ...
Leasing Of Painting Did Not Qualify Purchaser For "Resale Exemption"
March 1, 2021 - Bulletin Print Report
Petitioner, ("P"), is a Delaware limited liability company. P is a collector of artwork that, on occasion, leases pieces of art to others. The members of P are two tr...
T Will De-Consolidate DIRECTV
March 1, 2021 - Bulletin Print Report
AT&T, Inc., ("T"), and TPG Capital announced that they have entered into a definitive agreement under which the two parties will establish a new entity(actu...
Trademark Subsidiary and Licensee Parent Are "Unitary"
March 1, 2021 - Volume 15 Issue 39 Print Report
Home Depot (HD) is a Delaware corporation headquartered in Atlanta. It operates retail stores selling home improvement products throughout the U.S. HD created Homer T...
ICLR Agrees To Acquire PRAH
February 26, 2021 - Bulletin Print Report
ICON plc, ("ICLR"), announced it has entered into a definitive agreement to acquire PRA Health Sciences Inc. ("PRAH"), "in a cash and stock transaction...
Purchase And Trade-In Did Not Occur "At The Same Time"
February 26, 2021 - Bulletin Print Report
The Bs purchased Truck 1 from CD 1 on July 11, 2017. The purchase price of Truck 1 was $51,978.27 less the value of the trade-in vehicle, valued at $29,000, for a reduced sales...
A Partnership Is Not An Individual
February 26, 2021 - Volume 15 Issue 38 Print Report
On February 27, 2009, petitioner's cousin, XZ, acquired legal title to a property in Salinas, California (the Salinas property), which was subject to a purchase m...
Retailer Not A Guarantor Of Its Customers' Debts
February 26, 2021 - Bulletin Print Report
M operates home improvement stores. M entered into an agreement with CO, under which CO agreed to issue a private label credit card branded with M's name to M's retail...
Payments After Termination Of Employment Constitute Retirement Income
February 25, 2021 - Bulletin Print Report
Petitioner, ("P"), maintains offices and transacts business in various states, including New York. P maintains a 401(k) Plan and a Pension Plan, both of which are qua...
"Retirement Income" Not Subject To New York Withholding Tax
February 25, 2021 - Bulletin Print Report
Petitioner, ("P"), is a large retailer with locations throughout the U.S. P makes payments of various types of compensation to its employees, including payments from...
Furnishing "Personal" Information Is Not Subject To Sales Tax
February 25, 2021 - Bulletin Print Report
Petitioner enters into agreements with its customers to maintain their fleets of vehicles. Petitioner also maintains data on all maintenance performed for saidcustomers,...
Payments For Participation In Medical Study Not Excludible
February 25, 2021 - Volume 15 Issue 37 Print Report
Since approximately 1983, petitioner has suffered from gout. In 2008, C announced that it was conducting a gout study in Honolulu, Hawaii, where thepetitioner r...
Asset Acquisitions Generate New York Sales Tax Obligations
February 24, 2021 - Bulletin Print Report
TheStreet.com, Inc., ("TS" or "P"), was a publicly held corporation with its principal place of business in New York City. P is in the business of providing...
Certain Credit Card "Rewards" Found To Be Taxable
February 24, 2021 - Bulletin Print Report
During 2013 and 2014, American Express, ("AE"), offered a rewards program known as Blue Cash, ("Rewards Program"). The Rewards Program paid "Reward Dol...
City Income Taxes Not Creditable
February 24, 2021 - Bulletin Print Report
Petitioners, ("Ps"), filed a 2015 Utah resident income tax return, on which they reported their federal adjusted gross income. In addition, Ps filed a 2015 State-1 no...
Release Of Escrowed Shares Not a "Payment"
February 24, 2021 - Volume 15 Issue 36 Print Report
TP and three other individuals owned all of the stock of I. On March 14, 1971, the shareholders entered into a plan of reorganization and agreement of merger (the Acq...
GT And CTB Announce A Definitive Transaction Agreement
February 23, 2021 - Bulletin Print Report
Goodyear Tire & Rubber Company, ("GT"), and Cooper Tire & Rubber Company, ("CTB"), long-time competitors, announced that they have "entered a d...
Spinco Is A Sec. 7874(b) Surrogate Foreign Corporation
February 23, 2021 - Bulletin Print Report
D is the parent of a worldwide group of domestic and foreign affiliates, (the "D Group"). D owns Sub 1, Sub 2, Sub 3, FSub 1, and FSub 2. The D Group is engaged in Bu...
No COD Income On Surrender Of Insurance Policy
February 23, 2021 - Volume 15 Issue 35 Print Report
In September, 1984, B acquired an insurance policy on his life from Guardian Life Insurance Co. (G). The policy had a cash value portion and a dividends portion. B wa...
Third Party Reimbursement Of Price Discounts Is Part Of "Sale Price"
February 22, 2021 - Bulletin Print Report
Apple, Inc., ("A"), is a manufacturer and retailer of electronic equipment, including wireless telephones marketed as iPhones, ("IPs"). A operates online st...
The Willens Deal Survey February 2021
February 22, 2021 - The Deal Survey: February 2021 Print Report
Welcome to our summary of deals for February 2021. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database....
MIC's Reorganization Will Solve Its Tax Problem
February 22, 2021 - Bulletin Print Report
Macquarie Infrastructure Corporation, ("MIC"), is faced witha tax problem that it will deftly eliminate by means ofan "internal" reorganization...
Depreciation Is An Amount "Incurred" During The Taxable Year
February 22, 2021 - Bulletin Print Report
S operated a medical cannabisdispensary pursuant to California law. S sold cannabis to individuals who held a valid doctor's recommendation to use cannabis. S also so...
Escrowed Stock Is Part Of "Amount Realized"
February 22, 2021 - Volume 15 Issue 34 Print Report
During 1970, a taxpayer exchanged shares of stock of a corporation that he had purchased in 1969 for shares of stock in another corporation. The value of the stock re...
Energy Transfer L.P. And Enable Midstream Partners LP Strike A Deal
February 19, 2021 - Bulletin Print Report
Energy Transfer L.P., ("ET"), a master limited partnership, and Enable Midstream Partners, L.P., ("EN"), another such master limited partnership, announced...
FTHBC Recapture Obligation Is A "Tax"
February 19, 2021 - Bulletin Print Report
ES, (or the "Debtor"),purchased a home with his mother and sister in 2008. In his income tax return for that year, he claimed a first-time homebuyer credit, (&q...
Malpractice Settlement Not Excludible From Gross Income
February 19, 2021 - Bulletin Print Report
In August 2007, B was admitted to a hospital for left knee replacement surgery. While there, B allegedly suffered personal injuries after being directed by an admissions clerk...
Sec. 338(h)(10) Gain Constitutes "Business Income"
February 19, 2021 - Volume 15 Issue 33 Print Report
TP provides its customers with electronic payment services. TP's wholly-owned subsidiary, FDISG, was a Massachusetts corporation with headquarters in Massachusett...
The Tribune Buy-Out Is A "Zenz" Transaction
February 18, 2021 - Bulletin Print Report
Tribune Publishing Co., ("TPCO"), and affiliates of Alden Global Capital,in particular the affiliate named Tribune Enterprises, LLC, ("TEL"), announce...
Bankrupt Corporation Engages In A Sec. 351 Transaction
February 18, 2021 - Volume 15 Issue 32 Print Report
P1 is the common parent of an affiliated group which has elected to file a consolidated return. Sub 1, a first-tier subsidiary of P, is a property and casualty insura...
Medical Equipment And Supplies For "M&M" Patients Subject To Sales Tax
February 18, 2021 - Bulletin Print Report
Petitioner, ("P"), operates for-profit nursing homes in several states. P purchases "consumable items" such as food...drugs or medicine, medical equipment.....
Imposition Of New York Mortgage Recording Tax Not Unconstitutional
February 18, 2021 - Bulletin Print Report
The plaintiff is a not-for-profit corporation incorporated in New Jersey, and a certified development company under the "504 Loan Program," which is managed by the U....
Vivendi On The Verge Of A "Spin-Off" Of UMG
February 17, 2021 - Bulletin Print Report
Vivendi Universal S.A., ("V"), is seriously considering a distribution of 60 percent of the share capitalof its subsidiary, UMG, to V's shareholders. In fac...
Preferred Stock Is Property Other Than Money
February 17, 2021 - Volume 15 Issue 31 Print Report
P owns all of the stock of S. S sold all ofthe stock of three of its subsidiaries, S-1, S-2, and S-3, to Z for cash, an interest-bearing note, and "junior...
Economic Impact Does Not Justify A City's Largesse
February 17, 2021 - Bulletin Print Report
In 2010, the City adopted strategies to spur economic development. In 2015, Huntington University, Inc., ("HU"), and the City entered into an agreement for HU to leas...
HRL's Purchase Of KHC's "Planters" Business Comes With Tax Benefits
February 17, 2021 - Bulletin Print Report
Hormel Foods Corporation, ("HRL"), announced that it has entered into a definitive agreement to acquire the Planters snack nut portfolio from the K...
Overlapping Ownership Rule Frees RXN From The Rigors Of Sec. 355(e)
February 16, 2021 - Bulletin Print Report
Regal Beloit Corporation, (RBC), and RexnordCorporation, (RXN), announced that they have reached a definitive agreement whereby RXN will separate its "PMC" segm...
Parking Space Found Subject To Real Estate Tax
February 16, 2021 - Bulletin Print Report
The issue is whether the appellant, ("APP"), is subject to a real estate tax on her interest in a parking space in the Condominium, (the "C"). By deed dated...
Only A "Filing" Starts The Statute Of Limitations
February 16, 2021 - Bulletin Print Report
The United States and the United States Virgin Islands, ("USVI"), are separate taxing entities. Bona fide USVI residents only owe 10 percent of the income tax on thei...
Tax Court Recasts Transaction At Taxpayer's Behest
February 16, 2021 - Bulletin Print Report
Petitioner, ("P"), was organized in May 2009 to participate in the transactions described below. CMH was organized in January 2008 to serve as a holding company for t...
Bonus Payment Is Ordinary Income
February 16, 2021 - Volume 15 Issue 30 Print Report
On January 24, 1996, petitioners purchased 100 acres in Pennsylvania for $47,000. This property was subject to an oil and gas lease which expired on or about March 14...
Retirement Plan Distribution Used For Restitution Is Taxable
February 12, 2021 - Bulletin Print Report
P is a former C.P.A. From 2008 to March 2014, he worked for PCGas the company's corporate accounts payable manager. During his employment, P caused PCG to issue fraud...
Permitted Or Authorized Piping Is Real Property
February 12, 2021 - Bulletin Print Report
C is an interstate pipeline company that transports refined petroleum products. C typically obtains easements from property owners, rather than buying property, to allow the co...
Property Bequeathed To A Corporation
February 12, 2021 - Volume 15 Issue 29 Print Report
The sole shareholder of a corporation died on October 1, 1972. Under the terms of his will, all of the stock was bequeathed to his surviving spouse and children and a...
Nature Of Claim Determines Character Of Settlement Award
February 11, 2021 - Bulletin Print Report
W was employed as a Human Resources Assistant at V from July 1, 2011 until January 13, 2015. On February 4, 2014, W was diagnosed with shingles. Starting May 21, 2014, her imme...
Calculating A Resident Shareholder's "Tax Factor" For QEZE Purposes
February 11, 2021 - Bulletin Print Report
BHFis a New York corporation. BHF is taxed under Subchapter S of the Internal Revenue Code. BHF was certified as a qualified empire zone enterprise, ("QEZE"). P...
KO Will Reserve Only A Fraction Of Its Potential Tax Liability
February 11, 2021 - Bulletin Print Report
The Coca-Cola Company, (KO), recently found itselfon the wrong end of a Tax Court decision that produced a massive $3.3 billion tax deficiency which, with statutory inter...
Determining The "Amount Realized"
February 11, 2021 - Volume 15 Issue 28 Print Report
TP, a domestic corporation using the accrual method of accounting, is in the business of constructing single family homes. On January 1, 1975, a home was sold for $40...
I.R.S. Takes A Narrow View of "Historic Business"
February 10, 2021 - Volume 15 Issue 27 Print Report
T is a corporation engaged in the investment business. From its inception, T's investment practice has been to maintain approximately 1/3 of the value of its inve...
Court Refuses To Pierce The Corporate Veil
February 10, 2021 - Bulletin Print Report
On April 30, 2014, W entered into a distributorship agreement ("2014 Agreement") with B. When the parties entered into the 2014 Agreement, B was a Delaware corporatio...
Sale Of Prepaid Wireless Service Subject To Sales Tax
February 10, 2021 - Bulletin Print Report
TP was an authorized dealer for Boost Mobile, ("BM"), during the audit period. BM required TP to accept customer payments for the monthly cell-phone service plans off...
Sovereigns Are Not Called To Account For "Domestic Takings"
February 9, 2021 - Bulletin Print Report
This case concerns several dozen medieval relics and devotional objects known as the "W." During the waning years of the Weimar Republic, a consortium of three art fi...
Assessing The Nature Of SHEN's Special Dividend
February 9, 2021 - Bulletin Print Report
Shenandoah Telecommunications Company, ("SHEN"), and T-Mobile US, Inc., (TM), expect to enter into a definitive asset purchase agreement during the first quarter of 2...
"Key Employee Satisfaction" Is a Good Business Purpose
February 9, 2021 - Volume 15 Issue 26 Print Report
X, a large widely held and publicly traded corporation, owned all of the stock of Y for more than five years. X and Y were each engaged in the active conduct of a sep...
Penalty Upheld For Untimely "Submission" Of Tax Forms
February 8, 2021 - Bulletin Print Report
Plaintiff, ("P"), was the owner of certain parcels of rental property located in Hamden, Connecticut, ("properties"). On February 1, 2016, the assessor asse...
Vacation Home Found To Be A Permanent Place Of Abode
February 8, 2021 - Bulletin Print Report
Petitioners, ("Ps"), are domiciled in New Jersey. Petitioner-husband, ("P"), works primarily out of his office in New York City and was present within New Y...
Consultation Services Not Subject To Sales Tax
February 8, 2021 - Bulletin Print Report
P is incorporated in Delaware and is commercially domiciled in California. P does not have an office in New York State. P is engaged in the business of providing professional c...
The Limited Scope of the N.J. Resident Tax Credit
February 8, 2021 - Volume 15 Issue 25 Print Report
During tax year 2004, plaintiffs earned $500,000 in wages. Of that amount, $117,500 was attributable to New York (NY). Plaintiffs also earned interest income of $6,125 and divi...
COVID-19 Prevention Expenses Can Be Deducted "Above The Line"
February 5, 2021 - Bulletin Print Report
The term, "adjusted gross income," means...gross income minus the following deductions: The deductions allowable by this chapter...which are attributable to a trade o...
Ascertaining The "True Object" Of A Bundled Transaction
February 5, 2021 - Bulletin Print Report
APP is a corporation that operated two prenatal imaging centers in California. APP's prenatal imaging centers provided 3D and 4D ultrasound services to pregnant women and t...
Income From Sale of "GWPs" Is Qualifying Income
February 5, 2021 - Volume 15 Issue 24 Print Report
X is a limited partnership. X owns and operates timberland properties and timber processing operations in the U.S. X's business consist...
Fabricating Machine Not Exempt From Sales Tax
February 5, 2021 - Bulletin Print Report
P is a dentist who is purchasing a Sirona CerraMilling Machine for the fabrication of crowns, inlays, outlays, and veneers. The machine also has the capability to mill de...
A Lease Is A Sale When "Possession" Is Transferred
February 4, 2021 - Bulletin Print Report
P is a full-service teleprompter company that provides teleprompting services for corporate and entertainment events... A teleprompting service package includes a complete tele...
"Competitive" Charitable Organization's Sales Are Subject To Sales Tax
February 4, 2021 - Bulletin Print Report
R is a non-profit organization that works in conjunction with the City "to promote and add life to our downtown." One of the ways we do this "is by producing a v...
Outbound Liquidation Qualifies For Sec. 337 Protection
February 4, 2021 - Volume 15 Issue 23 Print Report
P is a Country A corporation. P conducts Business in the U.S. through USC, a State B entity treated as a corporation. P's interest in USC constitutes a U.S. Real Property I...
'B' Reorganization Accompanied By An Exchange Of Securities
February 3, 2021 - Volume 15 Issue 22 Print Report
X acquired all of the stock of Y in exchange for voting stock of X. Y has an issue of six percent 15-year debentures outstanding. Pursuant to the plan, X acquired all of the de...
Liberty Media Plans To "Consolidate" Sirius XM
February 3, 2021 - Bulletin Print Report
Liberty Media Corporation, ("LM"), on February 1, 2021, entered into a "tax sharing" agreement with Sirius XM Holdings, Inc., ("SXM"), "gover...
The Pandemic Is Not A Catastrophe For Real Estate Tax Purposes
February 3, 2021 - Bulletin Print Report
By Consent Order and judgment entered on November 2, 2017, Ps' 2017 Article 7 challenge to the assessment of their Property was resolved pursuant to an agreement whereby th...
"Usage Agreements" Are Not Sales Of Tangible Personal Property
February 3, 2021 - Bulletin Print Report
P is a publicly traded Delaware corporation that develops, manufactures, and commercializes products for the treatment of dermatological disorders. In June 2015, P acquired a l...
Short-Term Rentals Subject To Sales Tax
February 2, 2021 - Bulletin Print Report
R operates retail stores and markets tangible personal property on a "rent-to-own" basis. Customers select an initial rental term of monthly, semi-monthly, or weekly....
Applying Sec. 306(b)(4)(B)
February 2, 2021 - Volume 15 Issue 21 Print Report
C is a domestic corporation. C has outstanding shares of voting common stock. A holds 88.88 percent of the common stock. Seven other shareholders hold the rest.
Sale Of Assets Not Eligible For The "Liquidation Exception"
February 1, 2021 - Bulletin Print Report
In 2002, E was wholly owned by EPLC. In May 2000, EPLC acquired TLC. After the acquisition, EPLC merged TLC with and into E. The acquisition of TLC marked EPLC's entry into...
FCA And PSA Complete Historic Cross-Border Merger
February 1, 2021 - Bulletin Print Report
On January 16, 2021, Fiat Chrysler Automobiles N.V., ("FCA"), and Peugeot S.A., ("PSA"), were finally permitted to consummate their long-awaited business co...
Litigation Proceeds Are Massachusetts Sales
February 1, 2021 - Bulletin Print Report
S is a Delaware corporation that has a commercial domicile in Massachusetts, ("M"). S holds numerous patents on its technology. Prior to the tax years at issue, S bro...
"Opportunity" Costs Are Not Deductible
February 1, 2021 - Volume 15 Issue 20 Print Report
In 2007, the taxpayer, (TP), an individual, was the owner of a Web site business. TP and his wife, on their joint Federal income tax return for 2007, on Schedule C, d...
Fire Protection System Is a "Structural Component"
January 29, 2021 - Volume 15 Issue 19 Print Report
A taxpayer purchased and installed a fire protection system in a building used in the taxpayer's business. The system is designed to detect fire at any point in t...
Advertising Analyst Furnished Taxable Information Services
January 29, 2021 - Bulletin Print Report
DL (or "P") provides services to its clients that measure advertising effectiveness. DL measures advertising effectiveness by surveying consumers or internet users wh...
Lodging Expenses Ruled Non-Deductible
January 29, 2021 - Bulletin Print Report
P is an attorney and is licensed to practice in both Minnesota, ("M") and Washington, D.C., ("W"). During the year at issue, P maintained solo law practices...
Impairment Charges Do Not Necessarily Foreshadow Tax Losses
January 28, 2021 - Bulletin Print Report
Over the past few days, we have had announcements from companies as diverse United Parcel Service, Inc., AT&T, and Office Depot regarding plans to exit businesses that have...
Determining Holding Period For Purposes Of Sec. 857(b)(6)(C)
January 28, 2021 - Volume 15 Issue 18 Print Report
TP is a REIT. TP is an "a%" partner in Operating Partnership, (OP),which owns numerous real properties throughout the U.S. "Property," the r...
Mixture Credits Reduce Excise Tax Liability
January 28, 2021 - Bulletin Print Report
Sec. 6426 of the Code provided: "There shall be allowed as a credit--Against the tax imposed by Sec. 4081, an amount equal to the sum of the credits described in subsectio...
Notice Of Determination Was Timely Issued
January 28, 2021 - Bulletin Print Report
After Appellants, ("APPs"), filed their 2015 Minnesota, ("M"), individual income tax return and property tax refund claim, the Commissioner received a repor...
Taxpayer's "Investment In The Contract" Was Zero
January 27, 2021 - Volume 15 Issue 17 Print Report
On July 1, 1958, petitioner, (P), purchased a "Thirty Premium Life" insurance policy from NY Life. The policy required P to make quarterly premium payments...
Racking Equipment Not Eligible For Construction Costs Exemption
January 27, 2021 - Bulletin Print Report
TP designs, develops, and operates automated cold storage warehouses within the United Statesand Europe. TP provided information regarding its plans to construct a new co...
New Orleans Sales Tax Preempted By Louisiana Constitution
January 27, 2021 - Bulletin Print Report
TP seeks a redetermination of the assessment of sales and/or use tax in connection with the furnishing of meals to students and staff of M, a non-profit educational institution...
AJRD Characterizes Its "Pre-Closing Dividend"
January 26, 2021 - Bulletin Print Report
In December 2020, Aerojet Rocketdyne Holdings, Inc., ("AJRD"), announced that it had entered into a definitive agreement to be acquired by Lockheed Martin Corporation...
The Sec. 72(t) "Exaction" Is A "Tax"
January 26, 2021 - Bulletin Print Report
In 2015, the year in which P turned 42, she took loans in connection with her New York State pension plan. The Retirement System sent her a Form 1099-R. P did not report any re...
"Gross Income From The Property"
January 26, 2021 - Volume 15 Issue 16 Print Report
The Black Lung Benefits Act of 1977 imposes an excise tax on the sale of coal. The excise tax applies to all coal mined in the U.S. that is sold or used after March 31, 1978. T...
New Jersey's "PFF" Is Not Unconstitutional
January 26, 2021 - Bulletin Print Report
N.J.S.A. 54A:8-6(b)(2)(A) requires "each entity classified as a partnership for federal income tax purposes," that has more than two owners, "having any income d...
Management Fees Paid To Shareholders Not Deductible
January 26, 2021 - Bulletin Print Report
P operated an asphalt paving business in Waterloo, Iowa. P had three shareholders: JEC (owning 40 percent of the stock), MEL (owning 40 percent of the stock), and D (owning 20...
Consideration Is Needed To Find A "Sale"
January 25, 2021 - Bulletin Print Report
Petitioner operates a golf course that is "open to the public." On its website, it describes itself as a "daily fee golf course." Golfers pay a fee per pers...
Foreign Corporation's Tardiness Causes It To Forfeit Deductions
January 25, 2021 - Bulletin Print Report
P is incorporated under the laws of the U.K. P's only income-producing asset was a support vessel. A U.S. firm chartered P's vessel to perform work in the Gulf of Mexic...
Disproportionate Distributions Do Not Terminate 'S' Election
January 25, 2021 - Volume 15 Issue 15 Print Report
X Corporation, (X), elected to be an 'S' corporation effective on Date 2. However, beginning in the taxable year ending on Date 3, X made disproportionate dis...
Non-Exempt Transfer Triggers Reassessment Of Home
January 22, 2021 - Bulletin Print Report
In 1999, BW and SW created the WFT, (the "trust"), and recorded a grant deed transferring their home, (the "property"), to themselves as trustees. The trust...
Spin-Off Following A Reverse Triangular Merger
January 22, 2021 - Volume 15 Issue 14 Print Report
CP acquired all the stock of Sub 1 on Date a. The acquisition qualified as a reorganization under Sec. 368(a)(1)(A) (by reason of Sec. 368(a)(2)(E)) and under Sec. 36...
Nature Of Visa Is Determinative Of Foreign Domicile
January 22, 2021 - Bulletin Print Report
In February 2016, the Department of Revenue, (the "Department"), issued to the Hs a notice of proposed deficiency. The Hs protested the deficiency determination, clai...
The Willens Deal Survey January 2021
January 21, 2021 - The Deal Survey: January 2021 Print Report
Welcome to our summary of deals for January 2021. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database. <...
LITE's Acquisition Of COHR Features Successive Mergers
January 21, 2021 - Bulletin Print Report
LumentumHoldings, Inc., ("LITE"), and Coherent, Inc., ("COHR"), announced that they have entered into a definitive agreement "under which LITE wi...
Private Foundation Does Not Have "Excess Business Holdings"
January 21, 2021 - Volume 15 Issue 13 Print Report
Y is a private foundation within the meaning of Sec. 509(a) of the Internal Revenue Code. Y was created to receive the assets of the Estate. Those assets included, in...
Pfizer, Inc. And Mylan N.V. Collaborate To Create Viatris, Inc.
January 21, 2021 - Bulletin Print Report
Pfizer, Inc., ("PFE"), intended to effect a garden variety spin-off or split-off of its Upjohn, Inc. subsidiary. Upjohn conducted PFE's"off-patent bran...
Rental Fleet Not Considered Inventory
January 21, 2021 - Bulletin Print Report
Taxpayer, ("TP"), claimed the Inventory Tax Credit, ("ITC"), for rented machinery and equipment that was sold to third parties. La. R.S. 47:6006 provides th...
The Long Reach Of Sec. 355(b)(2)(D)
January 20, 2021 - Volume 15 Issue 12 Print Report
Rev. Rul. 74-5, 1974-1 C.B. 82, involved a distribution of the stock of a controlled corporation, Y, by a distributing corporation, X, to X's parent corporation,...
Claims For Refund Not Timely Filed
January 20, 2021 - Bulletin Print Report
On May 6, 2004, D and G closed on their purchase of SD. The purchase price was $3.7 million. D advanced the funds necessary to purchase the property. D created SD LLC. D transf...
Computing Non-Willful "FBAR" Penalties
January 20, 2021 - Bulletin Print Report
K is a U.S. citizen who has resided in Israel since 1979. During 2008-2010, K had a financial interest in several financial accounts in Israel, ("foreign financial account...
Connection/Disconnection Fees Are Subject To "URT"
January 20, 2021 - Bulletin Print Report
TP is a utility company providing electric services to customers within Indiana and outside of Indiana. The Indiana Department of Revenue, ("Department"), conducted a...
Preliminary Thoughts on Office Depot
January 19, 2021 - Bulletin Print Report
There could be a significant tax implication if Office Depot simply sold its consumer business to Staples, while retaining its other businesses and assets. Such a sale would be...
Regular Mail Provides Sufficient Notice Of A Tax Liability
January 19, 2021 - Bulletin Print Report
JO runs a farming operation and heavy construction business as a sole proprietorship. The Commissioner first sent JO a letter on April 27, 2017, to his home address, which is a...
Retention Of Estate Property Does Not Violate "Automatic Stay"
January 19, 2021 - Bulletin Print Report
Under the Bankruptcy Code, the filing of a bankruptcy petition has certain immediate consequences. A petition "creates an estate" that...comprises "all legal or...
Management Fees Treated As Not Constituting Gross Income
January 19, 2021 - Bulletin Print Report
TP elected to be a real estate investment trust,("REIT"). TP conducts substantially all of its business through OP. OP is a disregarded entity for tax purposes....
Deferred Compensation Subject To S.E. Tax
January 19, 2021 - Volume 15 Issue 11 Print Report
In 1982, P began working as an independent beauty consultant for Mary Kay, Inc. (MK). P sold MK products and recruited other individuals to join the company. <...
Partners Allocated "COD" Income
January 15, 2021 - Bulletin Print Report
In 2009, H, B, along with BO, and R formed E. E was in the business of text message advertising. E's partners entered into an operating agreement. That agreement stated tha...
I.R.S. Issues Rare Sec. 1221(a)(1) Ruling
January 15, 2021 - Volume 15 Issue 10 Print Report
TP is a REIT. TP owns and leases residential real estate to third parties. LP owns in excess of "a%" of all classes of stock of TP and all ofTP's...
Trailers Are Not Exempt "Truck Bodies"
January 15, 2021 - Bulletin Print Report
Petitioner is the owner of BT LLC, ("B"). B sells trailer-type vehicles. During the dates at issue in this matter, B sold trailer-type vehicles to non-Wisconsin resid...
Restitution And Remediation Are Deductible
January 15, 2021 - Bulletin Print Report
The I.R.S. recently issued final regulations regarding the controversial topic of the deductibility of "fines, penalties, and other amounts." The statute governing th...
"Internal" Spin-Off Not A "Disqualified Distribution"
January 14, 2021 - Volume 15 Issue 9 Print Report
P acquired Sub 1 on DateA, a date less than five years ago.Sub 1 owns all of the stock of Sub 2. Sub 2 owns all of the stock of EE. EE owns D. D is regula...
Taxpayer Retained No Substantial Rights To Research
January 14, 2021 - Bulletin Print Report
E is an 'S' corporation that designs and produces integrated controls and switchgears for custom applications in the power generation industry. In February 2009, E was h...
STE Reaches An Agreement With CMD
January 14, 2021 - Bulletin Print Report
STERIS plc, ("STE"),an Irish company, and Cantel Medical Corporation, ("CMD"), a domestic corporation, announced that STE has signed a definitive agre...
Sales Tax Refund For Utility Purchases Granted
January 14, 2021 - Bulletin Print Report
TP is an Indiana corporation which purchased an Indiana restaurant in July 2018. In July 2019, TP filed a Form ST-200 with the Department. At the same time, TP filed a Claim fo...
Taxpayer Had Constructive Receipt Of Unregistered Stock
January 13, 2021 - Bulletin Print Report
Naranda Systems, LLC, ("N"), elected to be taxed as a corporation. In January 2012, N filed a lawsuit against Violin Memory, Inc., ("V"), alleging infringem...
Sec. 86 Does Not Suffer Any Constitutional Infirmities
January 13, 2021 - Bulletin Print Report
During 2014, PK was married to GK. Before their marriage, PK and GK executed and recorded an agreement electing, under Louisiana law, a Separate Property Matrimonial Regime. In...
Do Not Rule Out A REIT Spin-Off
January 13, 2021 - Volume 15 Issue 8 Print Report
Sec. 355(h)(1) of the Code provides that: "This section (i.e., Sec. 355) shall not apply to any distribution if either the distributing corporation or the controlled corpo...
Marking The Date On Which Deficiency Interest Commences Accruing
January 13, 2021 - Bulletin Print Report
C was a Maine corporation engaged in both interstate and intrastate transportation of cargo. During 2014 and 2015, C purchased a motor vehicle, (the "Vehicle"), outsi...
Direct Deeding Of Like Kind Property Allowed
January 12, 2021 - Volume 15 Issue 7 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 Y to transfer to X property of a like kind....
Waiver Of Estimated Tax Penalty Denied
January 12, 2021 - Bulletin Print Report
During tax year 2018, APPs sold shares of stock which resulted in capital gains of over $3.8 million. APPs made estimated tax installment payments... These three installment pa...
Contribution Of Partial Interest In Property Not Deductible
January 12, 2021 - Bulletin Print Report
After LM purchased real property in Bethesda, Maryland, known as 5300 Moreland Lane, she and her husband decided to tear down the existing house on that property and build a ne...
BLUE To Benefit From I.R.S.'s Relaxed Spin-Off Policy
January 12, 2021 - Bulletin Print Report
bluebird bio, Inc., ("BLUE"), has announced its intent to "separate its severe genetic disease and oncology businesses into differentiated and independent public...
FTI's "Spin-Off" Will Give Rise To Dividend Income
January 11, 2021 - Bulletin Print Report
TechnipFMC plc, ("FTI"), announced, on January 7, 2021, the resumption of activities toward its planned separation "into two industry-leading independent, public...
Replacement Property Held Primarily For Sale
January 11, 2021 - Bulletin Print Report
L is the sole member of HQE. In early 2010, HQE exchanged a warehouse property for two replacement properties. The first replacement property was a residential property, and th...
Can Boeing Deduct Any Amounts Paid (Or To Be Paid) Under Its "DPA?"
January 11, 2021 - Bulletin Print Report
The Boeing Co., ("BC" or the "Company"), the Department of Justice's Fraud Section, and the United StatesAttorney's Office recently entered in...
Conveyance of "QRP" To A "CRUT" Does Not Trigger Deferred Gain
January 11, 2021 - Volume 15 Issue 6 Print Report
TPs, husband and wife, are shareholders of C. C maintains an employee stock ownership plan (ESOP). TPs sold "x" shares of C's common to the ESOP and reinvested &q...
TDY And FLIR Propose A "Forward Merger"
January 8, 2021 - Bulletin Print Report
Teledyne Technologies, Inc., ("TDY"), and FLIR Systems, Inc., ("FLIR"), recently announced that they have entered into a definitive agreement under which TD...
Processing and Marketing Methanol Produces Qualifying Income
January 8, 2021 - Volume 15 Issue 5 Print Report
X is a limited partnership. X intends to become a publicly traded partnership (MLP or PTP). X will operate two facilities that will process natural gas into methanol and synthe...
Sole Member Of LLC Not Liable For Gross Receipts Tax
January 8, 2021 - Bulletin Print Report
New Mexico, ("NM"), imposes gross receipts tax on all "entities that engage in business in NM." The Department requires taxpayers subject to gross receipts...
Partnership Merger Qualifies As A Reorganization
January 7, 2021 - Bulletin Print Report
When can a partnership merger qualify as a reorganization for tax purposes? When the partnerships elect to be treated as corporations for federal income tax purposes. Navios Ma...
Expenses Paid With "Covered Loans" Are Deductible
January 7, 2021 - Bulletin Print Report
On January 6, 2021, the Internal Revenue Service issued Rev. Rul. 2021-2, a pronouncement of more than passing importance. This ruling renders obsolete each of Notice 2020-32,...
Insurance Premiums Cannot Be Deducted
January 7, 2021 - Bulletin Print Report
On Date 1, Member, ("M"), began circulating a private placement memorandum, ("PPM"), to potential investors. M's purpose was to acquire a membership int...
Redemption Does Not Give Rise To a Constructive Dividend
January 7, 2021 - Volume 15 Issue 4 Print Report
B and C, who are brothers, each owned 50 percent of the stock of a corporation. C died. B was a party to a stockholders' agreement which provided that, upon the death of ei...
Ownership Includes "Equitable Title" To Property
January 6, 2021 - Bulletin Print Report
International American Education Federation, Inc., ("IAEF"), operates charter schools in Texas. In 2016, IAEF leased real property, (the "Property"), from a...
Loss Of Access Is Not A Physical Loss
January 6, 2021 - Bulletin Print Report
Plaintiff, ("P"), owns and operates a full-service salon and medical spa in Miami Beach, Florida. On December 19, 2019, Defendants, ("Ds"), issued an all-ri...
Receipts Not "Interest" For Purposes of Sec. 165(g)(3)
January 6, 2021 - Volume 15 Issue 3 Print Report
TP is the parent of a group of domestic and international entities. TP, through certain of its subsidiaries (the Group), provides specialty financial services to individuals th...
DD To Shed Nutrition & Biosciences, Inc.
January 5, 2021 - Bulletin Print Report
DuPont de Nemours, Inc., (DD), will be disposing of its subsidiary, Nutrition & Biosciences, Inc., (NB), in a so-called "Reverse Morris Trust," (RMT), transaction...
Notes Excluded From Numerator Of Property Factor Ratio
January 5, 2021 - Bulletin Print Report
On June 17, 2015, P filed three refund claims for corporate franchise tax paid. The Department denied each claim. The issue is the proper method of apportionment of P's fra...
NOL Limits Ruled Unconstitutional
January 5, 2021 - Bulletin Print Report
Corporations can join with groups of affiliated corporations to file consolidated income tax returns with the I.R.S. On these consolidated returns, groups can claim consolidate...
Determining REIT Taxable Income
January 5, 2021 - Volume 15 Issue 2 Print Report
Advice has been requested on whether amounts of a REIT's income, which are used to pay the amortization of mortgages and amounts required by FHA regulations to be kept in c...
Sale Gain Belonged In The Denominator Of The Revenue Ratio
January 4, 2021 - Bulletin Print Report
DL is Texas corporation doing no business in Louisiana, ("L"). DL's only business activities consisted of holding its interest in LLC, a Texas limited liability c...
SL Green Realty Corporation Will Be Making Stock Distributions
January 4, 2021 - Bulletin Print Report
On December 4, 2020, the board of directorsof SL Green Realty Corporation, ("SLG"), declared an ordinary dividend and a special dividend, each payable on Januar...
I.R.S. Had "Clear And Concise" Notice Of An Address Change
January 4, 2021 - Bulletin Print Report
In 2016, the I.R.S.sent a notice of deficiency to the Gs' former address, which their CPA had incorrectly listed on their 2014 tax return. The Gs had subsequently lis...
Aggregation Of Costs Of Blocks Of Stock Prohibited
January 4, 2021 - Volume 15 Issue 1 Print Report
MC owned a high-rise apartment building. The taxpayers acquired 52 percent of the corporation's stock in 1949 at a cost of $1,040. The remaining 48 percent of the stock was...
Facility Did Not Qualify As A "Distribution Center"
December 31, 2020 - Bulletin Print Report
TP is a nationwide retailer and operates retail stores across the U.S. In addition, TP accepts orders and makes retail sales via its catalogs and the Internet. TP operates regi...
Sales Tax Levied On "Gross Proceeds Of Sales"
December 31, 2020 - Bulletin Print Report
Under a tobacco company "buy-down" contract with retailers, the tobacco company agrees to pay the retailer a specified amount for each pack of cigarettes sold by the...
Loss From Destruction of "Illegal" Home Allowed
December 31, 2020 - Volume 14 Issue 252 Print Report
In Year 1, TPs purchased an N1-acre parcel of property jointly with another couple, the A. TPs built a home on the property and lived in the home since early Year 2....
Interest Expense Safe Harbor For Residential Living Facilities
December 30, 2020 - Bulletin Print Report
Sec. 163(j) of the Code limits the amount of "business interest expense" that can be deducted for taxable years beginning after December 31, 2017. Under Sec. 163(j)(1...
Carved-Out Leasehold Is Property
December 30, 2020 - Volume 14 Issue 251 Print Report
M will be formed as a general partnership. M will have three general partners, O, a corporation; P, a general partnership comprised of three individuals; and Q, a cor...
Unlimited Use Phone Cards Subject To Special Charge
December 30, 2020 - Bulletin Print Report
Applicant is a retailer that sells prepaid wireless telecommunications services. One of the ways that the customers of Applicant purchase these services is through "unlimi...
Sale Or Service?
December 30, 2020 - Bulletin Print Report
In 1984, O began operating Gott's To Go, ("G"), a business engaged in providing portable toilet services. O purchased portable toilets from a Michigan business. W...
MIC Sets Record Date For Special Dividend
December 29, 2020 - Bulletin Print Report
Macquarie Infrastructure Corporation, ("MIC"), announced that it has successfully completed the sale of its "IMTT" business for $2.67 billion, including ass...
Litigation Award Is "Business Income"
December 29, 2020 - Volume 14 Issue 250 Print Report
C is a corporation that files as part of an Arizona consolidated return with its parent, P. C develops, manufactures and sells products to customers. As part of its r...
Marketing Analytics Firm Rendered Non-Taxable Consulting Services
December 29, 2020 - Bulletin Print Report
Petitioner, MarketShare Partners, LLC, ("P"), is a marketing analytics firm headquartered in Los Angeles, California, with offices in New York City. P had four lines...
Electronic Information Services Subject To Sales Tax
December 29, 2020 - Bulletin Print Report
CF operates several banks in Cincinnati. Several years ago, it began using Fiserv, ("F"),banking software for its online banking system. F is "a premier pr...
A Utility Is A "Manufacturer" Of Electricity
December 29, 2020 - Bulletin Print Report
D is a regulated public utility engaged in the generation, transmission, distribution, and sale of electricity in North Carolina and in South Carolina. The Department of Revenu...
Attorney's Fee Portion Of Qui Tam Award Is Taxable In N.J.
December 28, 2020 - Bulletin Print Report
TP is a medical doctor who initiated a qui tam , ("QT"), action against the Cooper Health System, ("C"). TP alleged that C had paid physicians...
Wheeler REIT To Redeem Convertible Preferred Stock
December 28, 2020 - Bulletin Print Report
Wheeler REIT has run into some financial difficulties. These difficulties will become insuperable if Wheeler does not take decisive actionbefore the date on which its Ser...
Arkansas "PBM" Law Not Preempted By ERISA
December 28, 2020 - Bulletin Print Report
Pharmacy benefit managers, ("PBMs"), serve as intermediaries between prescription-drug plans and the pharmacies that beneficiaries use. When a beneficiary of a prescr...
Cousins Not Dependents
December 28, 2020 - Volume 14 Issue 249 Print Report
Petitioner, (P), is an immigrant from Kenya and has lived in the U.S. since 2007. P's aunt and cousins emigrated from Kenya to Arizona in April, 2009. &...
Sec. 1060 Allocation Does Not Represent "True And Fair Value"
December 24, 2020 - Bulletin Print Report
TP is a Washington corporation that previously engaged in the business of producingpulp and paper products at a mill located in Washington, ("M"), as a subsidia...
Transfer Of Installment Notes Lacked Substance
December 24, 2020 - Volume 14 Issue 248 Print Report
A is the sole shareholder of TP. TP has two divisions, Y and Z (the "Dealers"), which operate used car dealerships. Dealers finance all of their sales. Deal...
Foundation Denied Abatement Of "UBIT"
December 23, 2020 - Bulletin Print Report
P is a tax-exempt private foundation under Sec. 501(c)(3) of the Internal Revenue Code. P retained Northern Trust Company,("NTC"),to prepare its tax retur...
Qui Tam Recoveries Not Taxable In Pennsylvania
December 23, 2020 - Bulletin Print Report
In June 2014, the taxpayer, ("TP"),filed a qui tam , ("QT"), action in federal court alleging that a certain financial institution, (the...
Short-Term Investment In Municipal Bonds Allowed
December 23, 2020 - Volume 14 Issue 247 Print Report
X is engaged in the development, ownership, and operation of plants and facilities throughout the U.S. X has a number of plants under development. X expects to reach...
The Service Will Follow Holsey
December 22, 2020 - Volume 14 Issue 246 Print Report
The Internal Revenue Service will follow the decision rendered by the Third Circuit Court of Appeals in a case entitled Holsey v. Commissioner , 258 F.2d 865...
What To Make Of AJRD's Special Dividend
December 22, 2020 - Bulletin Print Report
Aerojet Rocketdyne Holdings, Inc., ("AJRD"), announced that it has entered into a definitive agreement to be acquired by Lockheed Martin Corporation, ("LMT"...
Taxpayer Found To Be A "Publicly Offered REIT"
December 22, 2020 - Bulletin Print Report
TP is a real estate investment trust,('REIT"). PR is a REIT. PR is listed on Exchange. TP represents that PR has been a "publicly offered REIT" at all...
How The Pros Effectuate A Spin-Off Or Split-Off
December 22, 2020 - Bulletin Print Report
D, which is Pfizer, Inc., ("PFE"), is the parent of worldwide group of entities, (the "D Worldwide Group"), and is the common parent of a group of affiliate...
Merger Of Lower-Tier Banks Should Qualify As A Reorganization
December 21, 2020 - Bulletin Print Report
Huntington Bancshares, Inc., ("HBAN"), the parent of Huntington National Bank, ("HNB"), and TCF Financial Corporation, ("TCF"), the parent of TCF...
Retention Of Place Of Abode Decisive Of Domicile Issue
December 21, 2020 - Bulletin Print Report
Based on the audit of P and the determination that he was a domiciliary of New York City, ("NYC"), during 2012, the Division issued a statement of proposed audit chan...
The Willens Deal Survey December 2020
December 21, 2020 - The Deal Survey: December 2020 Print Report
Welcome to our summary of deals for December 2020. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database....
Service Approves "Retention" of Spun-off Subsidiary's Stock
December 21, 2020 - Volume 14 Issue 245 Print Report
D is a State E corporation and is the common parent of a consolidated group. D has outstanding "g" shares of common stock. These shares are widely held and...
Absence Of Sales-Related Activity Does Not Prevent Finding Of Nexus
December 21, 2020 - Bulletin Print Report
TP is an out-of-state corporation that developsand publishes a multiplayer, online video game, ("Game"). Game is free to play. TP's source of income is excl...
Pluralsight, Inc. Is Going Private
December 18, 2020 - Bulletin Print Report
Pluralsight, Inc., ("PS"), recently announced that it has entered into a definitive agreement to be acquired by affiliates of Vista Equity Partners in an all-cash tra...
Equinox Gold Corporation Will Acquire Premier Gold Mines Ltd.
December 18, 2020 - Bulletin Print Report
Equinox Gold Corporation, ("E") and Premier Gold Mines, Ltd., ("P"), announced that the companies, each organized under the laws of Canada, have entered int...
Sovereign Immunity Bars Transportation Excise Tax Refund Lawsuit
December 18, 2020 - Bulletin Print Report
JP sells credit card processing services to merchants and banks. DA was a charter airline that contracted with JP to process credit card transactions for its customers. Purchas...
Bargain Sale Did Not Result In A Gift
December 18, 2020 - Volume 14 Issue 244 Print Report
WJSC was owned prior to 1928 by WJS. He sold the common stock in 1928 to WMF and at that same time the corporation issued 1,000 shares of its six percent cumulative p...
Canadian Cannabis Companies To Engage In Business Combination
December 17, 2020 - Bulletin Print Report
Aphria, Inc., ("APHA"), and Tilray, Inc., ("TLRY"), each organized and existing under the laws of Canada, announced that they have entered into a definitive...
Taxpayer Found To Change Accounting Method
December 17, 2020 - Volume 14 Issue 243 Print Report
TP, a financial institution employing an accrual method of accounting, computes its interest on installment loans under the "sum of the months-digits method.&quo...
"Actual Knowledge" Does Not Constitute A "Filing"
December 17, 2020 - Bulletin Print Report
The United States, ("U.S."), and the United States Virgin Islands, ("USVI"), are separate taxing entities. Under the USVI's Economic Development Program...
TCP Will Be "Rolled Up"
December 17, 2020 - Bulletin Print Report
TC Energy Corporation, ("TRP"), a Canadian corporation announced it has entered into a definitive agreement and plan of merger "to acquire all the outstanding Co...
Start-Up Expenses Not Deductible
December 16, 2020 - Volume 14 Issue 242 Print Report
Petitioners purchased a single-family house in Virginia on August 25, 2008. Petitioners made repairs and reported other expenses relating to the property on Schedule...
LLY's Acquisition Of PRVL Features A Regulatory Approval CVR
December 16, 2020 - Bulletin Print Report
Eli Lilly and Company, ("LLY"), and Prevail Therapeutics, Inc., ("PRVL"), announced a definitive agreement for LLY to acquire PRVL"for $22.50 in...
Assessment Of Back-Up Withholding Tax Time-Barred
December 16, 2020 - Bulletin Print Report
James Quezada, ("Q"),works as a stone mason and owns Quezada Masonry, ("QM"). General contractors hire him for masonry work, and he hires subcontracto...
Advertising Services Are Not Subject To Sales Tax
December 16, 2020 - Bulletin Print Report
Petitioner, ("P"), is a digital marketing services business. It provides consulting, managed services, and technical services, and acts as a reseller of advertising-a...
The Latest Variety Of "CVRs"
December 15, 2020 - Bulletin Print Report
Where there are disagreementsabout the value of a target corporation, the parties may decide to make a portion of the merger consideration contingent on the outcome of pr...
Film Research Expenses Not Deductible
December 15, 2020 - Volume 14 Issue 241 Print Report
Petitioner, (P), is an attorney. In 2006, P began researching American history for the purpose ofcreating an American history film series. The film series was i...
JNJ's "Insurance Premium Tax" Refund Upheld
December 15, 2020 - Bulletin Print Report
Johnson & Johnson, ("JNJ"), is insured through MA, which is wholly owned and which provides insurance exclusively to JNJ. MA is a so-called "captive insurer....
"Tax Insurance" Premiums Are Not Deductible
December 15, 2020 - Bulletin Print Report
Can a partnership deduct the cost of premiums paid for an insurance policy that contemplates reimbursing the partners for an adjustment that reduces the tax benefits they are e...
Alexion and AstraZeneca To Join Forces
December 14, 2020 - Bulletin Print Report
Alexion Pharmaceuticals, Inc., ("API"), and AstraZenecaPLC, ("AZ"), have entered into a definitive agreement for "AZ to acquire API." The tr...
Real Property Tax Classification Is Controlling For "RPTT" Purposes
December 14, 2020 - Bulletin Print Report
The "Property" consists of a two-family house with a ten-car garage. From the time Y purchased the Property until its sale by the LLC for $1,080,000, the house and th...
LLC Debt Is Non-Recourse With Respect To Its Member
December 14, 2020 - Bulletin Print Report
D is the common parent of a business group that includes corporations and disregarded entities, (the "D Group"). The D Group is engaged in Business, which included&nb...
Damages For "Loss Of Consortium" Are Excluded From Gross Income
December 14, 2020 - Bulletin Print Report
Years before the Taxable Year, H was struck by an automobile while riding his bicycle, (the "collision"). H suffered severe and permanent injuries to his body, includ...
Minority Interest Is Part Of Controlling Interest
December 14, 2020 - Volume 14 Issue 240 Print Report
A owned 600 shares of the common stock of X corporation, (X). The 600 shares represented 60 percent of the outstanding stock of X. &...
Clothing Rentals Not Subject To Sales Tax
December 11, 2020 - Bulletin Print Report
Petitioner operates a clothing rental business in New York State. Rental subscriptions are set up on a monthly basis, with the monthly charge based exclusively upon the number...
GAAP Informs The Scope Of Perrigo's Privilege Waiver
December 11, 2020 - Bulletin Print Report
PerrigoCo., PLC, ("P"), is facing an unusual number of tax "headwinds." It is fighting tax deficiency assessments on two continents, both in Ireland a...
When Does The "Testing Period" Begin?
December 11, 2020 - Volume 14 Issue 239 Print Report
TP began incurring losses and generated a net operating loss (NOL) carryover in its taxable year ending Year 1. On Date 1, TP...
Dog Storage Charges Are Subject To Sales Tax
December 10, 2020 - Bulletin Print Report
Petitioner, ("P"), provides "safe and secure climate-controlled doghouses, ('units'), at varying locations throughout Brooklyn for dog owners to store th...
Taxpayer Converts Capital Gain Into Capital Loss
December 10, 2020 - Bulletin Print Report
In 2002, Appellant, ("APP"), while a Canadian citizen and resident, co-founded Westwind Capital Corporation, ("W"), an international investment bank headqua...
Change In Accounting Practice Not Change In Accounting Method
December 10, 2020 - Volume 14 Issue 238 Print Report
T pays commissions to its employees. Currently, T is deducting these commissions twice for federal income tax purposes. First, T deducts the amount of the commissions at the ti...
"Voting Stock" And "Stock" Are Not Interchangeable
December 10, 2020 - Bulletin Print Report
The "Corporation" held title to two pieces of real property, (the "Property"), in Los Angeles. All of the Corporation's voting stock was issued to the &...
The (Capital Gain) Rates, They Are a-Changin'
December 9, 2020 - Bulletin Print Report
It turns out that one of the biggest financial news stories of the year, at least based on the volume of coverage it received, was the great Bob Dylan's decision to sell hi...
Convertible Notes Not "Stock" For Purposes of Sec. 382
December 9, 2020 - Volume 14 Issue 237 Print Report
C is the common parent of an affiliated group that files a consolidated tax return (C Group). C has one class of stock outstanding---publicly traded common stock....
Credible Testimony Establishes Material Participation
December 9, 2020 - Bulletin Print Report
P practices medicine through his wholly owned C corporation, IC. P would typically work at IC for approximately three 8-hour workdays and two 4-hour workdays, Monday through Fr...
"Reckless" Taxpayer Found To Have Acted "Willfully" In FBAR Matters
December 9, 2020 - Bulletin Print Report
This case deals with the relatively arcane topic of tax litigation, arising out of a taxpayer being assessed a penalty for failure to file an I.R.S. form, commonly referred to...
The I.R.S. Finds a 'G' Reorganization
December 8, 2020 - Volume 14 Issue 236 Print Report
T is a consumer finance company. T has common and preferred stock outstanding. ACQ is a financial institution as defined in Sec. 581 of the Internal Revenue Code. It has one cl...
Disposing Of Waddell & Reed's "Unwanted" Assets
December 8, 2020 - Bulletin Print Report
Macquarie Management Holdings, Inc., ("MMI"), the asset management division of Macquarie Holdings Pty Ltd.,and Waddell & Reed Financial, Inc., ("WDR&qu...
"FBAR" Articles Found To Be Admissible Evidence
December 8, 2020 - Bulletin Print Report
This case raises a single issue: whether B's failure to file a Form TD F 90-22.1, ("FBAR"), disclosing his offshore UBS bank account was willful. A finding of wil...
WORK's Net Operating Losses Should Be Of Value To CRM
December 7, 2020 - Bulletin Print Report
Last week, salesforce.com, inc., ("CRM"), and Slack Technologies, Inc., ("WORK"), announced that they had entered intoa definitive agreement for CRM t...
Restitution Order Measures Theft Loss
December 7, 2020 - Bulletin Print Report
Plaintiff, ("P"), owned and operated a "factoring" business during 2015. P became the unwitting victim of fraud during 2015 when an individual diverted paym...
Beneficial Ownership Counts For Purposes Of Sec. 1504
December 7, 2020 - Bulletin Print Report
Parent wholly owns Sub; and Sub owns all of the interests in Management Co., ("MC"). MC is a State Y limited liability company.Parent is the common parent of an...
Annuity Exempt From Creditors' Claims
December 7, 2020 - Volume 14 Issue 235 Print Report
Debtor, (D), filed a Chapter 7 bankruptcy case on June 6, 2012. D claimed the Annuity as exempt under 11 U.S.C. Sec. 522(b)(3)(C), and the Trustee (T) objected to the claimed e...
AMC's Stock Issuance Should Not Give Rise To An Ownership Change
December 4, 2020 - Bulletin Print Report
AMC Entertainment Holdings, Inc., ("AMC"), as much any company has seen its business ravaged by the pandemic. AMC, not surprisingly, is a "loss corporation."...
Reinstated Employee Not Entitled To Tax "Gross-Up"
December 4, 2020 - Bulletin Print Report
In April 2009, the Department hired G in the position of Pharmacy Services Chief II. On September 14, 2012, the Department discharged G based on her "insubordination and r...
Valuing Minority Interests
December 4, 2020 - Volume 14 Issue 234 Print Report
Prior to decedent's death in 1991, the decedent and his son owned 100 percent of the stock in a corporation. The decedent owned 48.59 percent of the stock and the...
Delivery of Note Is Not A "Payment"
December 3, 2020 - Volume 14 Issue 233 Print Report
Petitioner, (P), owned 66.67% of T. On April 8, 1982,T entered into an agreement with C to purchase equipment for $4.825 million. C financed the sale of the equ...
"Contractors" Are Subject To Sales Tax
December 3, 2020 - Bulletin Print Report
APP is Missouri funeral home that, as part of its service, sells burial container/vaults, ("Vs"), to its customers. When the customer purchases a V from APP, APP orde...
Non-Resident 'S' Corporation Taxed On Massachusetts Capital Gains
December 3, 2020 - Bulletin Print Report
Prior to October 31, 2011, APP was a subchapter S corporation organized under the laws of Illinois and headquartered in Illinois. APP was the sole shareholder of VAS USA, an Il...
CRM And WORK Have Agreed To A "Two-Step" 'A' Reorganization
December 2, 2020 - Bulletin Print Report
Slack Technologies, Inc., ("WORK"), and salesforce.com, inc., ("CRM"), have entered into a definitive agreement pursuant towhich CRM will acquire WORK...
Directly Used Or Consumed In The Production Of Natural Resources
December 2, 2020 - Bulletin Print Report
AR Corporation, ("A"), is engaged in the exploration, development and acquisition of natural gas and oil from properties located in the Appalachian Basin. A has been...
Transferring Minority Interests To Family Members
December 2, 2020 - Volume 14 Issue 232 Print Report
P owned all of the single class of outstanding stock of Xcorporation (X). P transferred all of P's shares by making simultaneous gifts of 20 percent of the...
Cell Towers Found To Be Improvements To Real Property
December 2, 2020 - Bulletin Print Report
Petitioner, ("P"), is a communication construction company. P primarily provides antenna, line, and microwave installations on raw land and existing sites throughout...
SPGI Will Annex INFO
December 1, 2020 - Bulletin Print Report
S&P Global, Inc., ("SPGI"), and IHS MarkitLtd., ("INFO"), a "Bermuda exempted company limited by shares," announced they have entered in...
Trading Activity Not "Substantial"
December 1, 2020 - Volume 14 Issue 231 Print Report
During 2005 and 2006, petitioner executed certain trades of certain securities on an investment account that she maintained at TDA ("petitioner's investment...
Amended Statute Of Limitations Could Not Be Given Retroactive Effect
December 1, 2020 - Bulletin Print Report
Claimant pays sales tax to the Oklahoma Tax Commission, ("OTC"), each and every month. Due to an error in computation, Claimant made "significant overpayments of...
Mortgage Lender Not Doing Business In Tennessee
December 1, 2020 - Bulletin Print Report
The Fund is organized as a limited partnership formed and domiciled outside the U.S. The Fund's only business activity is owning mortgages and receiving payments on those m...
LORL Shareholders Can Elect Different Forms Of Merger Consideration
November 30, 2020 - Bulletin Print Report
Loral Space & Communications, Inc., ("LORL"), owns a 62.7 percent economic interest, and a 32.6 percent voting interest, in Telesat Canada, ("TC"). The...
Tax Felons Cannot Possess Firearms
November 30, 2020 - Bulletin Print Report
F pled guilty in 2011 to a federal felony: willfully making a materially false statement on her tax returns. F's conviction left her subject to 18 U.S.C. section 922(g)(1),...
House Was Used As A Residence
November 30, 2020 - Bulletin Print Report
Plaintiff, ("P"), owns two houses: one in G, where he lives, and the other on TR in S, (the "TR property").The TR property is 19.7 acres with a house,...
Blocks of Stock Aggregated For Purposes of Sec. 2031
November 30, 2020 - Volume 14 Issue 230 Print Report
In 1962, the decedent created a trust and transferred a block of stock of C, along with other property, to the trust. The decedent retained the power to alter the ben...
Coca-Cola Failed To Charge "Arm's-Length" Royalties To Affiliates
November 27, 2020 - Bulletin Print Report
The Internal Revenue Service, ("I.R.S."), in connection with its examination of The Coca-Cola Company's, ("KO"), tax returns for 2007-2009, made adjustm...
Theater Owner's Customers "Bore" Disputed Sales Tax
November 27, 2020 - Bulletin Print Report
Petitioner, ("P"), owns and operates several movie theaters in Michigan and sells food and beverage items at concession stands. Respondent argues that the Michigan Ta...
No Deduction For Payment of Another Taxpayer's Debt
November 27, 2020 - Volume 14 Issue 229 Print Report
In 1978, DH, an engineer, and his colleague, DS, formed an engineering consulting company called MTI. In 2000, MTI began to p...
Distributions From Madoff Securities Were Not Income
November 25, 2020 - Bulletin Print Report
In 2001, petitioners, ("Ps") received distributions from Madoff Securities, ("MS"). MS later filed bankruptcy after the discovery of the now-infamous Madoff...
Sec. 1031 Only Applies To Exchanges Of Certain "Real Property"
November 25, 2020 - Bulletin Print Report
Sec. 1031(a)(1) of the Internal RevenueCode provides: No gain or loss shall be recognized on the exchange of real property held for productive use in a...
PNC Will Not Obtain A Basis Step-Up For Its Acquisition Of BBVA
November 25, 2020 - Bulletin Print Report
PNC Financial Services Group, Inc., ("PNC"), and Banco Bilbao Vizcaya Argentaria, S.A., ("S"), recently announced that they have signed a definitive agreeme...
Easements Constitute An "Interest In Real Property"
November 25, 2020 - Volume 14 Issue 228 Print Report
Through a series of corporate transactions, the plaintiffs came into ownership of two natural gas pipelines within the State of New York, together with the easeme...
Unwanted Assets In A Sec. 338(h)(10) Transaction
November 24, 2020 - Volume 14 Issue 227 Print Report
S, a corporation incorporated in Delaware, owns 100 percent of the stock of T, a New York corporation. S is a taxpayer under Article 9-A of the Tax Law of New York.
Payments To Home Buyers Are Purchase Price Adjustments
November 24, 2020 - Bulletin Print Report
TP is a corporation headquartered in State X. S, wholly owned by TP,is a real estate brokerage company in State Y. S provides online platforms where potential buyers may...
Willfulness Is Not A Consideration In PFIC Cases
November 24, 2020 - Bulletin Print Report
S immigrated to the United States from Canada in the mid-'90s. He became a naturalized U.S. citizen "during 2005-2007." Beginning in 2007 and continuing for sever...
Purchases Of Rock Salt Subject To Sales Tax
November 24, 2020 - Bulletin Print Report
P is a property services provider for primarily commercial, medical, and industrial clients. P performs snow and ice management for businesses in the Glen Falls, New York, area...
Income From Leasing Signs Not Excluded From Rents From Real Property
November 23, 2020 - Bulletin Print Report
TP is a real estate investment trust, ("REIT"). Through partnerships, TP owns real property, including buildings, located at Address A and Address B. Affixed to the e...
Retained Stock Distributed On A Tax-Free Basis
November 23, 2020 - Bulletin Print Report
D, a publicly traded corporation, is the parent of a worldwide group, (the "D Group"). Before the Proposed Transaction, D directly will own DRE 1, 2, 3, 4, Sub 1, 2,...
Qurate Retail's Special Dividend Appears To Be "Extraordinary"
November 23, 2020 - Bulletin Print Report
Qurate Retail, Inc., ("Q"), a Liberty company, announced that its Board of Directors declared a "special cash dividend" in the amount of $1.50 per common sh...
Periodic Redemption Plan Exempted From Sec. 305(b)(2)
November 23, 2020 - Volume 14 Issue 226 Print Report
X Corporation, (X), wished to acquire all of the stock of Y Corporation, (Y). X and Y were unrelated except that shareholders of X owning 10 percent of its stock owne...
West Fraser Timber Ltd. To Acquire Norbord, Inc.
November 20, 2020 - Bulletin Print Report
West Fraser Timber Co. Ltd., (WFT), and Norbord, Inc., (OSB), each a Canadian corporation,announced that they have entered into a "strategic business combination&quo...
The Willens Deal Survey November 2020
November 20, 2020 - The Deal Survey: November 2020 Print Report
Welcome to our summary of deals for November 2020. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database....
The Mandatory Repatriation Tax Is Constitutionally Valid
November 20, 2020 - Bulletin Print Report
The Tax Cuts and Jobs Act, ("TCJA"), broadened the types of controlled foreign corporation, ("CFC"), income subject to subpart F. The TCJA also enacted a on...
Exercise of Warrants Is A Prohibited Transaction
November 20, 2020 - Volume 14 Issue 225 Print Report
The Plan is a defined benefit plan. As of December 31, 1976, the Plan held 97,000 shares of Employer (E) common stock. In July, 1976, E offered to holders of its comm...
Liberty Broadband To Issue Exchangeable Debentures
November 19, 2020 - Bulletin Print Report
Once Liberty Broadband, ("LB"),and GCI Liberty complete their recently announced business combination, the former will be the owner of approximately 26 percent...
Reasonable Expectation Of Repayment Precludes Deduction Of Expenses
November 19, 2020 - Bulletin Print Report
1. During the period beginning on February 15, 2020, and ending on December 31, 2020, ("covered period"), A paid expenses that are described in Sec. 161 of the Code a...
Defective Liquidation Crystallizes Worthless Stock Deduction
November 19, 2020 - Volume 14 Issue 224 Print Report
TP is the domestic parent of an affiliated group that joins in the filing of a consolidated return. TP is wholly owned by Vivendi. H is directly owned by TP, except t...
When Does A Lease Commence?
November 19, 2020 - Bulletin Print Report
Petitioner signed a commercial space lease for property, (the "Premises"), located in lower Manhattan. The Premises are located in an area that has been granted certa...
Presence Of Swimming Pool Does Not Exempt Gym From Sales Tax
November 18, 2020 - Bulletin Print Report
Petitioner, ("P"), operates a national health and wellness business. P has one New York City facility and anticipates opening additional New York City locations. P...
Latest SPAC Transaction Structured As A "Global" Sec. 351 Exchange
November 18, 2020 - Bulletin Print Report
In the latest installmentof the "SPAC Chronicles,"Roth CH Acquisition I Co., ("ROCH"), and PureCycleTechnologies LLC, ("PCT"), a...
Transfer of Encumbered Property To Partnership Not a Disguised Sale
November 18, 2020 - Volume 14 Issue 223 Print Report
On "x," T entered into an agreement with S to purchase real estate. Approximately 75 percent of the purchase price will be borrowed by T from an unrelated l...
Aggregation Of Non-Operating Mineral Interests Permitted
November 18, 2020 - Bulletin Print Report
TP is a subsidiary of HC. TP owns A, a disregarded entity. B is a wholly-owned subsidiary of TP. HC is wholly-owned by C. C is an international mineral resource and investment...
"Earn-Outs" A Staple Of "SPAC" Transactions
November 17, 2020 - Bulletin Print Report
The most recent "SPAC" acquisition, like the vast majorityof its predecessors, is structured to qualify as a tax-free reorganization; and features the use of &q...
Only Installation Sales Tax On Solar Equipment Is Refundable
November 17, 2020 - Bulletin Print Report
TP filed an Application for Sales Tax Refund on Purchases and Installation of Qualified Renewable Energy Equipment," ("Application"), on November 9, 2017. On Dec...
IRA Beneficiary Found To Engage In a Prohibited Transaction
November 17, 2020 - Volume 14 Issue 222 Print Report
By 2005, E had accumulated a substantial amount in his Sec. 401(k) account from his many years of service as an employee of AP. &nbs...
Aerospace Product Developer Not Entitled To Preferential Tax Rate
November 16, 2020 - Bulletin Print Report
TP is a Washington limited liability company that develops and sells aerospace products. TP does not engage in manufacturing activity. The majority of TP'...
Tax Imposed On Exported Oil Is Not Merely A User Fee
November 16, 2020 - Bulletin Print Report
T is an independent commodity trading and logistics house. As part of its business, T purchases and exports domestic crude oil from the United States by vessel and truck. From...
Casual Gambler Can Use The "Per Session" Method
November 16, 2020 - Bulletin Print Report
During 2019, TP, a resident of another state, visited a casino in Indiana and recreationally played the slot machines. TP had some wagering gains and some wagering losses. TP r...
Sec. 1248(b) Limitation Applied To 'S" Corporation Shareholder
November 16, 2020 - Volume 14 Issue 221 Print Report
A is an individual investor who owns "D%" of the stock of B, an 'S' corporation. B's sole asset is "E%" of the outstanding shares of C...
Taxpayer Never Abandoned Brooklyn Domicile
November 13, 2020 - Volume 14 Issue 220 Print Report
Petitioner, TV, filed Form IT-203 for each of 2004-2006 as a non-resident of New York, with a filing status of head of household. &n...
Jaws Acquisition Corporation Chooses An "Up-C" Structure
November 13, 2020 - Bulletin Print Report
Jaws Acquisition Corporation, ("J"), a special purpose acquisition company, ("SPAC"), and a Cayman Islands exempted company, and Cano Health LLC, (&qu...
Taxpayer Did Not Act As Agent For IRA Fiduciary
November 13, 2020 - Bulletin Print Report
During 2012 and 2013, Petitioner, ("P"), participated in a SEP-IRA, the custodian of which was J.P. Morgan Chase Bank, N.A., ("C"). On two occasions in 2012...
Mitten Clips Are Not Clothing
November 13, 2020 - Bulletin Print Report
Petitioner sells mitten clips. Petitioner states that the mitten clips are used to attach the gloves or mittens of infants and toddlers to their coats so they will not lose the...
Redemption Of Partnership Interests Differs From Redemption Of Stock
November 12, 2020 - Bulletin Print Report
While corporate self-tender offers are hardly unusual, the same cannot be said for tender offers mounted by publicly traded partnerships, commonly known as MLPs. Such a tender...
Unsigned Notice Of Deficiency Is Valid
November 12, 2020 - Bulletin Print Report
In 2016, Petitioner had an individual retirement account, ("IRA"),with National Financial Services, LLC, ("NFS"), from which he received a distributio...
"QEZE" Claimant Failed To Increase Its Workforce
November 12, 2020 - Bulletin Print Report
The Empire Zones Program is an incentive program implemented by the New York State Legislature to encourage economic development in disadvantaged areas of the state. Petitioner...
An Item Is "Permanent" If Removal Would Cause "Functional" Damage
November 12, 2020 - Volume 14 Issue 219 Print Report
Petitioner, (P), owns an amusement park. P entered into a contract with CCI to design, engineer, and construct a roller coaster on its premises, known as the "Si...
Stock Owned By Trust Attributed To Present Beneficiaries
November 11, 2020 - Volume 14 Issue 218 Print Report
The Hs, a husband and wife, were the sole shareholders of A from the date it was incorporated until all ofits stock was transferred to the trustees of the trust...
Transfer Of "Excess" Assets To "QRP" Is Not A "Reversion"
November 11, 2020 - Bulletin Print Report
Taxpayer, ("TP"), is a publicly traded corporation. TP sponsors two plans qualifiedunder Sec. 401(a), Plan X and Plan Y. Plan X is a defined benefit pension pla...
Sales Commission Not Excluded From "Total Revenue"
November 11, 2020 - Bulletin Print Report
During the period at issue, Claimant, ("C"), provided audiovisual equipment and services to hotel customers. It contracted with the hotels to provide the equipment an...
Can "Boot" Gain Be Treated As A Dividend?
November 10, 2020 - Bulletin Print Report
BridgeBio Pharma, Inc., ("BB"), owns approximately 64 percent of the outstanding stock of Eidos Therapeutics, Inc., ("ET"). A definitive merger agreement wa...
"Specified Income Tax Payments" Not Subject To "SALT" Limitation
November 10, 2020 - Bulletin Print Report
Sec. 164(a) of the Internal Revenue Code generally allows a deduction for certain taxes for the taxable year within which paid or accrued, including: State and local, and forei...
Seller Of Wine Must Collect Sales Tax
November 10, 2020 - Volume 14 Issue 217 Print Report
Petitioner, (P), is incorporated under the laws of California. It is a retailer of bottled wine, which it sells through its website and on-line catalogs. P possesses...
Spin-Off Preceded By "Unifying" Brother/Sister Merger Passes Muster
November 10, 2020 - Bulletin Print Report
Shareholder One and Shareholder Two own all of the outstanding stock of Distributing in equal proportions. Distributing is a State A corporation and is the common parent of a g...
Dredging Company Not Engaged In The "Transportation Of Freight"
November 9, 2020 - Bulletin Print Report
M owns a fleet of heavy marine construction and dredging equipment that includes 60 specialized vessels and over 50 barges. M claimed that some of its vessels were exempt from...
I.R.S. Waives Attribution Rules
November 9, 2020 - Bulletin Print Report
FP owns all of the stock of FH, and directly and indirectly through its wholly owned foreign entities owns all the stock of US Sub 1. FH owns all of the stock of F Sub 1. F Sub...
Late Filing Penalty Could Not Be Abated
November 9, 2020 - Bulletin Print Report
Though April 15th is a statutorily fixed yearly deadline, the I.R.S. provides taxpayers with a mechanism by which to obtain an extension of the deadline to file their tax retur...
Charitable Contribution Recast
November 9, 2020 - Volume 14 Issue 216 Print Report
A corporation, (CORP), furnishes free lodging....to train crews that are away from home overnight. Free lodging is furnished either in bunkhouses owned and operated b...
Foreign Corporation Does Not Have A Substantial Nexus In Tennessee
November 6, 2020 - Bulletin Print Report
TP is a foreign entity that is classified as a corporation for federal income tax purposes. TP is registeredto do business in Tennessee, ("TN"). TP's busine...
How Ballot Measures With Tax Implications Fared On Election Day
November 6, 2020 - Bulletin Print Report
It is frequently the case that voters, in addition to electing individuals to serve in Congress, state legislatures, and of course the White House, are routinelyasked to...
Indebtedness Not "Secured Debt"
November 6, 2020 - Volume 14 Issue 215 Print Report
On October 31, 2001, petitioners purchased real property ("MRP") for $365,000. On January 1, 2003, petitioners signed a document described as a "mortga...
Pet Sitters Are Common Law Employees
November 5, 2020 - Bulletin Print Report
PS is a residential pet care operation offering services such as feeding, walking, entertainment, medication administration, and general household chores. PS advertises for pro...
Singer Changes His Domicile
November 5, 2020 - Volume 14 Issue 214 Print Report
TP was born and raised in Alabama. He graduated from Auburn University in 2006. He moved to Missouri in that year and began work as a professional singer. &...
Telenav, Inc. LBO Sets The Stage For A Sec. 338 Election
November 5, 2020 - Bulletin Print Report
We have written about how ownership changes experienced by loss corporations in the current environment of exceedingly low interest rates can wreak absolute havoc on the loss c...
Perrigo: Bruised But By No Means Beaten
November 4, 2020 - Bulletin Print Report
PerrigoCompany plc, ("PRGO"), received a Notice of Assessment from its friends at Irish Revenue in December 2018. The Notice assessed an Irish corporation...
Severing A Tenancy In Common Is Not A "Conveyance"
November 4, 2020 - Volume 14 Issue 213 Print Report
Owners owned the property in Manhattan (the "Property"). On March 26, 2006, Owners and Developer executed a contract (the "Contract") and deeds wh...
Merger Price Not Indicative Of "Fair Market Value" Of Stock
November 4, 2020 - Bulletin Print Report
The value of unlisted stock is best determined by considering actual sales at arm's length in the normal course of business within a reasonable time before or after the val...
Prosus N.V. To Purchase Naspers Ltd.'s Stock
November 4, 2020 - Bulletin Print Report
The board of directors of Prosus N.V., with a view towards closing the massive disparity (approximately $60 billion according to Bloomberg ) between Prosus N.V....
Accounting For Asset Retirement Costs
November 3, 2020 - Volume 14 Issue 212 Print Report
The assets of X, a telephone company, include telephone polls A and B. X placed A in service in 1979 on land it owned. X placed B in service in 1982 on land owned by...
"MAGI" Includes Retirement Plan Distributions
November 3, 2020 - Bulletin Print Report
Petitioners, ("Ps"), filed a joint federal income taxreturn for 2014. Ps reported their adjusted gross income, ("AGI"), as $122,948. They deducted a l...
Ambiguity In Credit Statute Resolved Against The Taxpayer
November 3, 2020 - Bulletin Print Report
Duke Energy Corporation, ("D"), is a utility company providing electrical power to South Carolina citizens and, as such, is allowed to claim certain investment tax cr...
Sale Of Environmental Credits Not A Unique Event
November 2, 2020 - Bulletin Print Report
American Honda Motors Co., Inc., ("AH"), distributes a fleet of vehicles designed to conserve natural resources and reduce pollution. The EPA and the NHTSAdevel...
Sec. 1603 Grant Dispute Must Proceed To Trial
November 2, 2020 - Bulletin Print Report
The Facility is a PV power plant located in Nevada. The Facility is designed to produce electricity through solar energy. Plaintiff, ("P"), was owned by NextEra Energ...
Dividend Waiver Revisited
November 2, 2020 - Volume 14 Issue 211 Print Report
Under a plan of merger between X corporation, (X), and Y corporation, (Y), Mr. C, the majority shareholder of X, surrendered his stock and received in exchange Class...
MRVL And IPHI Will Combine Using A "Double Dummy" Format
November 2, 2020 - Bulletin Print Report
Marvell Technology Group, Ltd., ("MRVL"), a Bermuda exempted company, and Inphi Corporation, ("IPHI"), announced a definitive agreement under which MRVL&nbs...
Foreign LLC With California Employee "Doing Business" Therein
October 30, 2020 - Bulletin Print Report
Appellant is a foreign limited liability company, ("LLC"), that is not registered to do business in California with the Secretary of State. It is classified as a part...
Compulsive Gambler Adequately Substantiated Gambling Losses
October 30, 2020 - Bulletin Print Report
P is a compulsive gambler. P acknowledges that his gambling has adversely affected his financial circumstances and his family life. P has been receiving treatment for his gambl...
ELY Will Acquire The Rest Of Topgolf
October 30, 2020 - Bulletin Print Report
Callaway Golf Company, ("ELY"), and Topgolf International, Inc., ("TGO"), a privately held corporation in which ELY owns a 14.3 percent stake, announced tha...
Taxpayer Not Engaged In Business In New York
October 30, 2020 - Volume 14 Issue 210 Print Report
Petitioner, (P), is a domestic corporation whose only facility is located in Stamford, Connecticut. P has 12 employees, all of whom work out of the Stamford facility....
DHIL's Special Dividend Should Not Be "Extraordinary"
October 29, 2020 - Bulletin Print Report
Diamond Hill Investment Group, Inc., ("DHIL"), has rewarded its shareholders with special dividends in past years. This year is no exception. The company announced th...
SPAC Forced To Surrender Its BVI Tax Status
October 29, 2020 - Bulletin Print Report
Alberton Acquisition Corporation, ("ALAC"), a British Virgin Island company, and a special purpose acquisition company, ("SPAC"). announced that it will be...
Location Of Family Confirms Change Of Domicile
October 29, 2020 - Bulletin Print Report
In 2007, F and his family moved to Oregon where he worked as a store manager at his employer's Eugene, Oregon location. On September 26, 2014, F was promoted to district ma...
Principal Method of Accounting Did Not Clearly Reflect Income
October 29, 2020 - Volume 14 Issue 209 Print Report
TP is primarily engaged in Business X, as was Subsidiary, (S). TP uses an accrual method as its overall method of accounting. S merged with and into TP in a transacti...
A Redemption Of "Straight" Preferred Should Always Be An "Exchange"
October 28, 2020 - Bulletin Print Report
SLM Corporation, ("SLM"), is offering to purchase, for cash, up to two million shares of its Floating Rate Non-Cumulative Preferred Stock, Series B, (the "Securi...
The I.R.S. Will Rule On Dividend Waivers
October 28, 2020 - Volume 14 Issue 208 Print Report
In Rev. Rul. 56-431, 1956-2 C.B. 171, a majority shareholder of a corporation whose relatives owned an additional 25 percent of the stock attempted to waive his right...
Fees To Access Instructional Videos Not Subject To Sales Tax
October 28, 2020 - Bulletin Print Report
P is an online learning company that helps people learn new skills on various topics. Such skills include business, software, technology, and creative skills. Through subscript...
Is The Husky Energy Acquisition A Reorganization?
October 27, 2020 - Bulletin Print Report
Cenovus Energy, Inc., ("CVE"), and Husky Energy, Inc., ("HSE"), each a Canadian corporation, announced a transaction to create "a new integrated Canadi...
Water Slide Is a Permanent Improvement
October 27, 2020 - Volume 14 Issue 207 Print Report
Petitioner (P) owns a water amusement park on real property that it leases. In 2008, P entered into a contract with a manufacturer for the design of a water slide and...
A "Reckless" Violation Is A "Willful" One In The Civil Context
October 27, 2020 - Bulletin Print Report
The Bank Secrecy Act of 1970 requires that U.S. citizens who maintainforeign bank accounts report the accounts to the government on an annual basis by filing a Report of...
Jeopardy Does Not Have "Minimum Contacts" With Louisiana
October 26, 2020 - Bulletin Print Report
Jeopardy, ("J"), is a part of the television division of Sony Entertainment Group, which oversees game shows such as "Jeopardy!" J's principal place of...
The "SRP" Is Not Afforded Priority Status
October 26, 2020 - Bulletin Print Report
The Hs commenced a chapter 13 bankruptcy case on August 31, 2017. The I.R.S. filed a proof of claim for unpaid taxes. A portion of the claim relates to the amount the I.R.S. co...
New York Throws Down The Gauntlet On Working From Home
October 26, 2020 - Bulletin Print Report
New York State issued, or more accuratelyreiterated, its views on the manner in which residents and non-residents are taxed in light of the COVID-19 pandemic. It did so i...
Abandonment Loss Not A "Business" Loss
October 26, 2020 - Volume 14 Issue 206 Print Report
From prior to 1950 through 1975, Petitioner, (P), was a practicing physician and surgeon. In 1964, P purchased a parcel of land for the purpose of constructing a rent...
CVRs Are Not Voting Stock
October 23, 2020 - Bulletin Print Report
Continuing a trend that shows no signs of slowing down, another special purpose acquisition company, or "SPAC," Acamar Partners Acquisition Corporation, ("Acamar...
Surviving Spouse Of Disabled Vet Not Entitled To Property Tax Exemption
October 23, 2020 - Bulletin Print Report
On July 29, 2019, Plaintiff, ("P"), filed a fully executed "Claim for Property Tax Exemption." As part of her application, she included proof of her marriag...
Royalty Income Is Not Business Income
October 23, 2020 - Volume 14 Issue 205 Print Report
A taxpayer is engaged in the business of farming. He also owns a royalty interest in one producing oil and gas lease. In the taxable year at issue, the taxpa...
Sale Of Advertising Services Subject To "Gross Receipts" Tax
October 23, 2020 - Bulletin Print Report
The business seeking a ruling owns "dividers" employed at grocery stores to separate customer orders on the conveyor belt in the checkout line. The business sells adv...
The Willens Deal Survey October 2020
October 22, 2020 - The Deal Survey: October 2020 Print Report
Welcome to our summary of deals for October 2020. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database. <...
Pioneer Will Score A Basis Step-Up In A Tax-Free Reorganization
October 22, 2020 - Bulletin Print Report
Pioneer Natural Resources Co., ("PNR"), and Parsley Energy, Inc., ("PAR"), announced that they have entered into a definitive agreement in connection with w...
Finder's Fee Is Not Business Income
October 22, 2020 - Volume 14 Issue 204 Print Report
In 1972 and 1973, Petitioner, (P), was in the business of raising horses. In 1967, H was the chairman of W. That year, P heard H tell people that he might be interest...
Potential Tax Costs Of Debt Forgiveness Not Grounds For Discharge
October 22, 2020 - Bulletin Print Report
In 2002, D enrolled at TMC Law School. She was academically dismissed therefrom and never returned to law school. D paid for law school by taking out "Stafford Loans,"...
Taxpayers Denied "Safe Harbor" Theft Loss Deductions
October 22, 2020 - Bulletin Print Report
MG and WG are brothers who worked together in the mortgage business. On March 1, 1999, the brothers formed P, a federally chartered stock institution. The brothers owned P thro...
CIT's Net Operating Loss Will Be Of Little Use To FCNCA
October 21, 2020 - Bulletin Print Report
First Citizens BancShares, Inc., (FCNCA), and CIT Group, Inc., (CIT), recently announced that they have entered into a definitive agreement "under which the companies will...
"REAP" Credits Available To Successor Entity
October 21, 2020 - Bulletin Print Report
TP is an Illinois limited liability partnership that is registered as a foreign limited liability partnership with the New York Secretary of State's office. TP is currently...
Income Derived From Sale Of Paintings Is Not "IRD"
October 21, 2020 - Volume 14 Issue 203 Print Report
B died on "X." B, during his lifetime, was a professional artist. At the time of B's death, B owned a number of paintings that B had created. These pain...
How Can News Corporation Spin-Off Its Digital R.E. Segment?
October 20, 2020 - Bulletin Print Report
News Corporation, ("NC"),is engaged in several trades or businesses, one of which is referred to as its "Digital Real Estate Services" segment, (the &...
Characterizing An "FBAR" Penalty
October 20, 2020 - Bulletin Print Report
Plaintiff brings this action against CW in her capacity as Fiduciary of the Estate of LZ and against AW and DG who inherited LZ's beneficial interests in a foreign trust an...
Contributions To "Victim's Fund" Are Deductible In Year Made
October 20, 2020 - Volume 14 Issue 202 Print Report
C is a life insurance company that sells life insuranceand annuity products. I is a life insurance company domiciled in State X and, since Year 1, has been unde...
Non-Business Income Allocated To State Of Commercial Domicile
October 20, 2020 - Bulletin Print Report
In 2003, the FCC auctioned licenses granting the right to broadcast in the 700 MHz frequency of the electromagnetic spectrum in specific geographic areas. VNT purchased two FCC...
A Voluntary Sale Can Be An "Involuntary Conversion"
October 19, 2020 - Bulletin Print Report
TP provides wire line and wireless services to consumers. On Date B, Year 1, TP acquired all of the stock of Sub 1. Sub 1 owned Sub 2. Sub 2 owned L1, a single member limited l...
Chance Dominates The Outcome Of A "DFS" Transaction
October 19, 2020 - Bulletin Print Report
Daily fantasy sports, ("DFS"), are a type of fantasy sports game. A traditional fantasy sports league is comprised of participants that select players from profession...
Qualified Foreign Corporation
October 19, 2020 - Volume 14 Issue 201 Print Report
HC is a corporation organized under the laws of Cyprus. TP, a U.S. resident, owns a portion of the outstanding shares of HC. The remaining shares are owned by persons...
Contractor Exempt From Sales Tax On Glue Purchases
October 16, 2020 - Bulletin Print Report
Petitioner is a construction company that is about to obtaina contract to install ceramic tile at a terminal in John F. Kennedy International Airport, ("JFK")....
Accrued Production Costs Were Not "Incurred"
October 16, 2020 - Bulletin Print Report
T and L are each taxed as partnerships. The partnerships provide bulk-packaged tomato products to food processors and customer-branded finished products to the food service and...
Income In Respect of a Decedent
October 16, 2020 - Volume 14 Issue 200 Print Report
Decedent (D) sold common stock in 1977, and received the agreed upon payment before her death in 1978. D's estate was closed in 1979....
Missouri Is A "Strict Title State"
October 15, 2020 - Bulletin Print Report
1. The Ss, MAS and MS, are married and have been married at all relevant times. 2. The Ss file their taxes jointly and share equally in the burden of paying for their taxable p...
Lease Agreement Creates A Usufruct
October 15, 2020 - Bulletin Print Report
On August 23, 2006, J entered a 50-year lease agreement with the Commission which allowed for the construction and operation of a hotel on land owned by the Commission. The Boa...
Qualified Lending and Finance Business
October 15, 2020 - Volume 14 Issue 199 Print Report
Decedent (D) died on Date 1. At the time of his death, he owned shares of C1, a closely-held corporation organized in State 1 that had approximately "#1" fu...
Foreign Distributor Earnings Is From Performance of Personal Services
October 14, 2020 - Volume 14 Issue 198 Print Report
TP produces and sells products to U.S. and foreign distributors. A distributor's income is dependent on several criteria, including the amount of products the dis...
Option Does Not Create Equitable Ownership
October 14, 2020 - Bulletin Print Report
On September 1, 2016, SW entered into an Option Agreement with J that granted SW "the exclusive right and option...to acquire" certain real property...in exchange for...
Willful Violation Attracts Maximum "FBAR" Penalty
October 14, 2020 - Bulletin Print Report
In 1993, D began selling Swiss annuities. In 1998, D became concerned with asset protection when he was sued by an individual in the United States. To protect his substantial a...
Billboards May Be Considered In Valuing Real Property
October 13, 2020 - Bulletin Print Report
Taxpayers, ("TPs"), allowed the placement on their land of outdoor advertising signs and the signs' supporting structures, (the "billboards"). The Schoo...
Foreign Corporations Can Engage In An 'A' Reorganization
October 13, 2020 - Bulletin Print Report
HUYA, Inc., ("H"), and DouYu International Holdings Limited, ("DY"), announced that they have entered into an Agreement and Plan of Merger,
Indemnity Agreement Did Not Deprive Aggrieved Plaintiff Of "Standing"
October 13, 2020 - Bulletin Print Report
Sec. 1603 of the American Recovery and Reinvestment Act of 2009, (the "Recovery Act"), allows the Treasury to provide "Grants for Specified Energy Property In Li...
Tort Liabilities Deductible Only When Paid
October 13, 2020 - Volume 14 Issue 197 Print Report
TP has engaged in the oil and gas business and used the accrual method of accounting to report his income from such business....
Alliance Bernstein and Cedar Fair Enjoy A Unique Tax Status
October 12, 2020 - Bulletin Print Report
Partnerships are "pass-through" entities, meaning that they are not taxed, at the entity level, on their taxable income. Instead, such taxable income is "passed-...
Presence Of Office Did Not Preclude Residential "RPTT" Rate
October 12, 2020 - Bulletin Print Report
The taxpayer, ("TP"), is a limited liability company and the owner of record of the Property by deed dated XXX. X is the sole member of TP having originally purchased...
Alternative Apportionment Method Allowed By Illinois
October 12, 2020 - Volume 14 Issue 196 Print Report
C was in the business of manufacturing and renting industrial equipment as well as stamping automotive equipment. C owned three manufacturing plants in State 1 and on...
The Indiana "URT" Is Not A "Franchise" Tax
October 12, 2020 - Bulletin Print Report
During the relevant tax period, BS operated in Massachusetts, ("M"), and was subject to the M corporate excise tax. Through two of its affiliates, it also operated in...
MS And EV Will Undertake A "Forward" Merger
October 9, 2020 - Bulletin Print Report
Morgan Stanley, ("MS"), and Eaton Vance Corporation, ("EV"), have entered into a definitive agreement under which "MS will acquire EV for an equity val...
Livongo Has No Earnings and Profits
October 9, 2020 - Bulletin Print Report
The Livongo Health, Inc. sa...
Fines Found Deductible Under Sec. 162(a)
October 9, 2020 - Volume 14 Issue 195 Print Report
In 1984, Petitioner, (P), was a member of the Chicago Mercantile Exchange (CME). P conducted two separate trades or businesses as a member of the CME, acting as a &qu...
ArcelorMittal SA Will Repurchase Notes
October 9, 2020 - Bulletin Print Report
ArcelorMittal SA, ("AMS"), recently announced the launch of its tender offer, (the "Offer"), to purchase, for cash, "any and all" of its outstandi...
SPAC Deal Features Unusual "Earn-Out" Mechanism
October 9, 2020 - Bulletin Print Report
Momentus, Inc.,("MI"), a privately held entity, announced that it has signed a definitive merger agreement with Stable Road Acquisition Corporation, ("SRAC...
Sale of Stock Preceded Change of Domicile
October 8, 2020 - Volume 14 Issue 194 Print Report
In 2004, Petitioner, (P), filed a New York part-year resident income tax return identifying herself as a resident of New York from January 1, 2004 to March 31, 2004....
Grantor Trust And Grantor Are Separate "Persons"
October 8, 2020 - Bulletin Print Report
1. On January 2, 2004, the Cs purchased a 2004 Chevrolet, ("Chevy"). 2. On February 17, 2013, the Cs established, by written agreement, a joint revocable trust, (the...
"SPAC" Will "Domesticate" Prior To Acquisition
October 8, 2020 - Bulletin Print Report
Clover Health Investments Corporation, ("CHI"), is justthe latest in a long line of private companies"going public" via the SPAC "reverse m...
Conducting Business Through A Partnership
October 7, 2020 - Volume 14 Issue 193 Print Report
LLC is classified as a partnership for tax purposes. For more than five years, LLC has owned several commercial office buildings that are leased to unrelated third pa...
Lease Termination Payments Not Subject To Commercial Rent Tax
October 7, 2020 - Bulletin Print Report
On December 19, 2019, TP and their landlord entered into a lease termination agreement for the premises, through a Third Lease Amendment, (the "agreement"). Under the...
Transfer Of A "USRPI" Secures Non-Recognition Treatment
October 7, 2020 - Bulletin Print Report
FPS is a Country X limited partnership that directly engages in Business A in Country X; and owns and manages a group of foreign and domestic affiliates that engage in Business...
Latest SPAC Deal Features Eclectic Mix Of Merger Consideration
October 6, 2020 - Bulletin Print Report
Hims, Inc., ("H"), will be "going public" by means of a business combination with Oaktree Acquisition Corporation, ("OAC"), a special purpose acqu...
When Is A Trade Or Business "Actively Conducted"
October 6, 2020 - Volume 14 Issue 192 Print Report
For many years, D has been engaged in Business A, serving both large and smaller clients. D has outstanding solely common stock, all of which is held by A, B, and C o...
Renunciation Of Homestead Credit Clinches Change Of Domicile
October 6, 2020 - Bulletin Print Report
Taxpayers, ("TPs"), are married individuals who own homes in each ofFlorida and Indiana. TPsfiled a joint 2019 IT-40PNR ("Non-Resident") Indiana...
Short-Term Rental Activity Found To Be Passive
October 5, 2020 - Bulletin Print Report
During the years in issue, 2014 and 2015, L owned a short-term rental property, ("SRp"), that is several hours from petitioners, ("Ps") home. L rented...
Identifying The "Servicer" Responsible For Making A Tax Payment
October 5, 2020 - Bulletin Print Report
In April 2005, H bought a single-family residential property in Alexandria, Virginia, with a mortgage from NYCB. Later, as a result of a decline in mortgage rates, H refinanced...
Sale Of Partnership Interest Not Subject To NYC "UBT"
October 5, 2020 - Bulletin Print Report
In 2015, D entered into negotiations with T for the construction and subsequent leasing of a commercial facility. D formed I in May 2016 and I purchased the land on which the f...
A Bike Sharing Program Is Not A "QTF"
October 5, 2020 - Volume 14 Issue 191 Print Report
Under Sec. 132(a)(5), employers that provide their employees with transportation benefits can exclude those benefits from their employees' gross incomes i...
Deferred Bonus Not A "Retirement Plan Or Arrangement"
October 2, 2020 - Bulletin Print Report
B employed A as a sales representative for approximately 33 years. A and his employer entered into an Employment Agreement on January 1, 2013, ("Original Agreement")....
Sec. 721 Or Sec. 741?
October 2, 2020 - Volume 14 Issue 190 Print Report
A, an individual, owns four units of P1, a limited partnership that provides janitorial services. In order to become a partner in a real estate limited partnership, A...
Receipts From Sale Of Contracts Not Subject To Ohio's "CAT"
October 2, 2020 - Bulletin Print Report
ADT provides security services to residential and commercial property owners throughout the country. ADT enters into alarm-services contracts with its customers and provides re...
Underpayment Interest Properly Assessed
October 1, 2020 - Bulletin Print Report
On April 13, 2020, the court issued an order granting the first Motion for Summary Judgment by the United States finding that the $26,252,741.22 disputed amount, (the "Dis...
"Used Primarily For Manufacturing Activities"
October 1, 2020 - Bulletin Print Report
Petitioner, ("P"), is the owner of property, (the "site" or "property"). P is a "business incubator" under the START-UP NY program autho...
Federal Excise Tax Not Subject To Pennsylvania Sales Tax
October 1, 2020 - Volume 14 Issue 189 Print Report
Pursuant to Sec. 4051 of the Internal Revenue Code, a Federal excise tax isimposed on the retail sale of automotive truck chassis' and automotive truck bodi...
Observations on LVGO's Pre-Merger Dividend
September 30, 2020 - Bulletin Print Report
While one can never be sure about earnings and profits, or the lack thereof, the retained earnings deficit at LVGO certainly is persuasive(albeit not conclusive)evid...
Distributing A Note In Partial Liquidation
September 30, 2020 - Volume 14 Issue 188 Print Report
C is a domestic corporation engaged in ongoing business activities. As of May 31, 1984, C had issued and outstanding "p" shares of common stock which were h...
WPX Energy Will Undergo An Ownership Change
September 30, 2020 - Bulletin Print Report
Devon Energy, ("DVN"), and WPX Energy, ("WPX"), announced that they have entered into an agreement to combine in an "all-stock merger of equals" t...
Trustee-To-Trustee Transfer Is Not A "Distribution"
September 30, 2020 - Bulletin Print Report
Decedent maintained two IRAs, IRA X and IRA Y. Decedent died on Date N, after his required beginning date, as defined in Sec. 401(a)(9). Decedent was unmarried at the time of h...
Berkshire Hathaway's Role In SSP's Transformational Acquisition
September 30, 2020 - Bulletin Print Report
The E.W. Scripps Company, ("SSP"), will be purchasing the stock of ION Media Networks, Inc., ("IMN") for a total of $2.65 billion. The market has endorsed t...
SBE To Acquire Electric Vehicle Charging Network
September 29, 2020 - Bulletin Print Report
The latest "SPAC" acquisition is very much "of the moment" since the private company that will be going public through the combination with the SPAC operate...
Financing Agreements Are Not "Other Securities"
September 29, 2020 - Volume 14 Issue 187 Print Report
Petitioner, (P), is a New York corporation that manufactures and sells office equipment and supplies and provides related services. It sells its goods and services ou...
Cable TV Provider Not Entitled To A "COGS" Deduction
September 29, 2020 - Bulletin Print Report
Petitioner, ("P"), offers broadband communications services for Texas residential and business customers. P's services include internet access and telecommunicati...
Texas Premium Tax Is Not Unconstitutional
September 29, 2020 - Bulletin Print Report
APP brokered insurance policies with various Texas warehouses to insure bales of cotton temporarily stored at their facilities. APP received premiums from the Texas warehouses...
Tax Reform Bonus Payment Ruled A Gift
September 25, 2020 - Bulletin Print Report
Plaintiffs, who are all former employees of Lowe's Home Centers, LLC, ("L"), assert that L violated the Fair Labor Standards Act, ("FLSA"). Plaintiffs&#...
The Willens Deal Survey September 2020
September 25, 2020 - The Deal Survey: September 2020 Print Report
Welcome to our summary of deals for September 2020. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database....
Withholding On Parent Stock Transferred To Subsidiary's Employees
September 25, 2020 - Volume 14 Issue 186 Print Report
Rev. Rul. 80-76, 1980-1 C.B. 15, holds that when a corporation's majority shareholder transfers stock in that corporation to an employee of such corporation's...
Record-Breaking SPAC Deal Structured As A JV
September 25, 2020 - Bulletin Print Report
United Wholesale Mortgage, a closely-held entity,and Gores Holdings IV, Inc., ("GHI"), a publicly traded and widely heldspecial purpose acquisition compan...
Liquidating Trust Maintains Its Status
September 24, 2020 - Volume 14 Issue 185 Print Report
D filed a voluntary petition under Chapter 11 of the Bankruptcy Code (Title 11 of the United States Code)on Date 1. The Bankruptcy Court confirmed the plan on D...
Merger Results In Loss Of Tennessee NOLs
September 24, 2020 - Bulletin Print Report
The TP companies are affiliates with common ownership. The TP companies have elected Subchapter S status for federal income tax purposes. Some of the companies have substantial...
"UFI" Payments Are Currently Deductible
September 23, 2020 - Volume 14 Issue 184 Print Report
S provides electric service to a diverse group of retail, commercial, industrial, and public sector customers in the city and suburbs of City. S is subject to the reg...
Cooking Lessons Not Subject To New York Sales Tax
September 23, 2020 - Bulletin Print Report
Petitioner intends to teach private cooking and baking lessons in peoples' homes. Petitioner will offer her customers one of three services: One such service includes Petit...
I.R.S. Waives "PPP" Reporting Requirements
September 23, 2020 - Bulletin Print Report
Section 1102 of the "CARES" Act, Pub. L. No. 116-36, established the so-called "Paycheck Protection Program," ("PPP"). The PP...
Non-Profit Corporations Do Not Have Shareholders
September 23, 2020 - Bulletin Print Report
W was organized on May 8, 2012 as a non-stock, non-profit corporation under the Kentucky Non-Profit Corporation Act, ("Act"). The articles of incorporation state: &qu...
Liberty Latin America Ltd. Distributes "Bargain Rights"
September 22, 2020 - Bulletin Print Report
Liberty Latin America Ltd., ("LLA"), is an international provider of telecommunications services. LLA recently distributed subscription rights to the holders of its C...
Refurbishment Resulted In New Or Different Tractor
September 22, 2020 - Bulletin Print Report
SNL is wholly owned by SNI. SNI, through its subsidiaries, (collectively, "S"), has operated a truck load freight transport business since 1935. S uses truck tractors...
Converting Under a "Formless" Conversion Statute
September 22, 2020 - Volume 14 Issue 183 Print Report
On January 1, 2003, A is organized in State as an unincorporated entity that is classified as a partnership for federal tax purposes. &nbs...
An Amended Return Is Not An Original Return
September 21, 2020 - Bulletin Print Report
On October 3, 2016, Plaintiffs mailed their 2015 Oregon tax return to Defendant, and Defendant processed Plaintiffs' return on October 6, 2016. Plaintiffs did not select th...
Rent Received From A TRS Can Be Qualifying Income
September 21, 2020 - Bulletin Print Report
TP is a real estate investment trust, ("REIT"). TP invests primarily in real estate serving the health care industry. TP owns a portfolio of Facilities. Each Facility...
Does The Pandemic Permit A N.Y. Non-Resident To Apportion Wages?
September 21, 2020 - Bulletin Print Report
Tax Law Sec. 601(e) imposes a personal income tax on a New York non-resident individual's taxable income that is "derived from New York sources." The tax is equal...
Equitable Owner of Property Can Deduct Mortgage Interest
September 21, 2020 - Volume 14 Issue 182 Print Report
In 2003, Mr. M and Ms. Z transferred legal and equitable title to the ED property, for a five year period, to EHC, as trustee for the ED Trust, (EDT). According to th...
Eighth Amendment Does Not Apply To "FBAR" Penalties
September 18, 2020 - Bulletin Print Report
Defendant, ("D"), has been a citizen of the United Statessince 1988. D resided here during the 2007 calendar year. In 1999, D signed paperwork to open the "...
Dividends On REIT Stock Is "Good" REIT Income
September 18, 2020 - Volume 14 Issue 181 Print Report
TP, a State A corporation, is a publicly traded REIT. TP owns a diverse portfolio of Properties in Country A. TP's Country A operations are conducted through vari...
Property "Used In Manufacturing" Is Not Exempt From "PP" Tax
September 18, 2020 - Bulletin Print Report
MG is a company specializing in the procurement, aging, and distribution of cheese...with a full line of cheese and cheese-related products. MG was a "manufacturer" a...
Income From Storing Natural Gas Is Qualifying MLP Income
September 17, 2020 - Volume 14 Issue 180 Print Report
X is the common parent of a consolidated group. PRS is a limited partnership. PRS' general partner is Y, a member of X's consolidated group. &...
The Opioid Stewardship Payment Is A Tax
September 17, 2020 - Bulletin Print Report
New York appeals from judgments of the District Court invalidating the State's Opioid Stewardship Act, ("OSA"). Part of the OSArequires opioid manufacturers...
AIV Is Planning A "Reverse" (Taxable) Spin-Off
September 16, 2020 - Bulletin Print Report
Apartment Investment and Management Company, ("AIV"), has announced a plan to separate its business into two separate and distinct publicly traded companies, Apartmen...
Provider of Fractionation Fluids Has Qualifying MLP Income
September 16, 2020 - Volume 14 Issue 179 Print Report
X is a limited partnership. X intends to consummate an initial public offering (IPO). X expects to be treated as a publicly traded partnership (PTP or MLP). X provide...
Tax Benefits Permitted For "Non-Traditional" Medical Care
September 16, 2020 - Bulletin Print Report
Petitioner, ("P"), claimed $14,722 in medical expenses on his application for property tax reduction benefits. P explained that the amount represented the costs of &q...
IPOB Lands An Attractive Target
September 16, 2020 - Bulletin Print Report
In just the latest of what has become almost a daily occurrence, Opendoor Labs, Inc., ("OLI"), a privately-held corporation, has entered into a definitive business co...
Parking Revenue Constitutes Rents From Real Property
September 15, 2020 - Volume 14 Issue 178 Print Report
TP is a REIT. It operates its business through OP. OP is a State B limited partnership. TP, OP, and lower-tier entities wholly owned by OP, collectively, are referred...
Taxpayer Outside Of California For A "Temporary Or Transitory Purpose"
September 15, 2020 - Bulletin Print Report
In February 2013, H moved from California, ("C"),to Malaysia, ("M"), for the purpose of employment for S. The contract stated that the duration of emp...
Passive Investor Found To Be Doing Business In California
September 15, 2020 - Bulletin Print Report
APP is a limited liability company, (LLC), that is classified as a partnership for both federal and California income tax purposes. It is a "foreign" LLC formed in De...
Global Indemnity Ltd. Is Re-Domiciling
September 14, 2020 - Bulletin Print Report
Global Indemnity Ltd., ("GI Cayman), will be re-incorporating in the United States. It cites the 2017 tax law, (the "TCJA"), as a motivating factor in its decisi...
Yoga Classes Exempt From Sales Tax
September 14, 2020 - Bulletin Print Report
YS is a yoga instruction and fitness franchisor. YM is a YS franchisee. YM's customers will be charged a fee to participate in yoga classes. YM intends to offer classes tha...
Foreign Limited Partner Subject To New Jersey CBT
September 14, 2020 - Bulletin Print Report
Throughout the audit years, Pulte Group Inc.,("P"),was the "apex parent" at the top of the corporate hierarchy that owned approximately 200 subs...
"Loan Funding" Fees Do Not Constitute Interest
September 14, 2020 - Volume 14 Issue 177 Print Report
A real estate investment trust (REIT) invests in construction loans. Under an agreement between the trust and a borrower, the trust agreed to advance funds to the bor...
Fiat/Peugeot Merger Is Intended To Qualify As A Reorganization
September 11, 2020 - Bulletin Print Report
Late last year, Fiat Chrysler Automobiles N.V., ("FCA"), and Peugeot S.A., ("PSA"), entered into a "combination agreement" providing for the combi...
Notice Of Deficiency Issued After Expiration Of Limitations Period
September 11, 2020 - Bulletin Print Report
Petitioner, ("P"), e-filed the 2013 Form 1040 on October 15, 2014, (the "10/15 submission"). P e-signed Form 8879 to authorize BTL to file a return on his b...
CDs Are "Cash and Cash Items"
September 11, 2020 - Volume 14 Issue 176 Print Report
Sec. 851 and Sec. 856 prescribe certain requirements that an entity must meet to qualify as a regulated investment company (RIC) or as a real estate investment trust...
Taxpayer Not A "Qualified Individual"
September 10, 2020 - Bulletin Print Report
The appellants say that JH's work in Afghanistan, ("A"), in 2011-2012 qualified them for a foreign income tax exclusion under Sec. 911 of the Internal Revenue Cod...
Guaranteed Payments For Capital Not Part of a Sale
September 10, 2020 - Volume 14 Issue 175 Print Report
PRS is a limited partnership. PRS owns and operates the Property, which has a fair market value of approximately "a" and is subject to mortgage debt of &quo...
"Soft Drinks" Are Subject To Sales Tax
September 10, 2020 - Bulletin Print Report
Petitioner is a wholesale manufacturer of orgeat almond syrup, (the "product"). Petitioner sells the product online, as well as in grocery stores. The orgeat almond s...
Substantial Compliance With "Qualified Appraisal" Requirement Sufficient
September 10, 2020 - Bulletin Print Report
On December 9, 1999, E acquired 197 acres of real property in Westford, Massachusetts for $470,000. The property was purchased through GHE LLC and is referred to as the "G...
Certain Sales Of Beer Exempt From "ABT"
September 9, 2020 - Bulletin Print Report
Petitioner is a New York State manufacturer of beer with a manufacturing facility situated in New York City. Petitioner also sub-contracts some of its manufacturing to faciliti...
LUB Is Completely Liquidating
September 9, 2020 - Bulletin Print Report
Luby's, Inc., ("LUB"), announced that its board of directors, (the "Board"), "adopted and approved a plan of liquidation and dissolution, (the &quo...
Variable Interest Found To Be Qualifying REIT Income
September 9, 2020 - Volume 14 Issue 174 Print Report
In order to restructure J's debt, J proposes to form a trust, (X). X will offer its shares to investors, and with the proceeds of the sale of X's shares J wil...
Absence Of Revenue Does Not Preclude Finding Of "ATB"
September 9, 2020 - Bulletin Print Report
Parent, ("P"), is a publicly-traded State A corporation. P wholly-owns each of Sub 1, ACQ, and D2. D2 owns LLC1, a disregarded entity. LLC1 owns all of the stock of D...
Sec. 465 Is A Method Of Accounting
September 8, 2020 - Bulletin Print Report
For tax years 2009 and 2010, S was a member of several entities which were taxed as partnerships. One such entity was SSY. For tax year 2009, S received income from other partn...
Cleaning Equipment Not "Used Directly" In The Production Process
September 8, 2020 - Bulletin Print Report
S is a U.S. subsidiary of SI, a Canadian dairy company. S operates facilities at various locations in Wisconsin. S manufactures cheese. The only type of personal property at is...
Internet Access Provider "Offered" Screening Software
September 8, 2020 - Bulletin Print Report
In 1998, Congress enacted the Internet Tax Freedom Act, ("ITFA"), which prohibited State and local governments from imposing any taxes on Internet access. Congress ma...
Contribution to Capital vs. Exchange
September 8, 2020 - Volume 14 Issue 173 Print Report
Corporation C, (C), directly owns all of the stock of Corporation B, (B). The latter owns all of the stock of Corporation A, (A), which owns all of the stock of Corpo...
Livongo/Teledoc Proxy Materials Address Special Dividend
September 4, 2020 - Bulletin Print Report
Teledoc Health, Inc. ("T"), and Livongo Health, Inc. ("L"), have entered into a definitive agreement pursuant to which T will acquire all of the stock of L....
Post-Contribution Redemption Not Attributed To Donor
September 4, 2020 - Bulletin Print Report
PH was the C.F.O. and a shareholder of GCI, a privately held corporation. The GCI board of directors, (the "Board"), authorized shareholders to donate GCI shares to F...
Accountant's Settlement Payment Not Excluded From Gross Income
September 4, 2020 - Bulletin Print Report
Grant Thornton, ("GT"), recommended that M structure his consulting business as an 'S' corporation. GT also recommended that the 'S' corporation be wh...
Step Transaction Doctrine Produces a Reorganization
September 4, 2020 - Volume 14 Issue 172 Print Report
TP, an individual, and I, also an individual, each own 50 percent of the stock of T. TP arranged for Investors (Is) to form a corporation, ACQ, on TP's behalf, fo...
Skillz Will "Go Public" Via "SPAC" Merger
September 3, 2020 - Bulletin Print Report
Skillz, Inc., ("S"), a leading, closely-held, mobile games platform, and Flying Eagle Acquisition Corporation, ("FEAC"), a publicly traded special purpose a...
Prearranged Series Of Transactions Lacked Economic Substance
September 3, 2020 - Bulletin Print Report
Petitioners, ("Ps"), organized D LLC, TSC, an 'S' corporation, ILP, and DT. Ps each owned 50 percent of TSC. Each P held a one percent general partnership int...
Manufactured Homes Constitute "Real Estate Assets"
September 3, 2020 - Volume 14 Issue 171 Print Report
Company, (C), is in the business of purchasing, pooling, selling, and servicing conditional sales contracts for manufactured housing. C also originates manufactured h...
Processing Natural Resources Gives Rise To Qualifying MLP Income
September 2, 2020 - Volume 14 Issue 170 Print Report
X corporation, (X), intends to form a publicly traded partnership (PTP or MLP) within the meaning of Sec. 7704(b) of the Internal Revenue Code....
A Right Of First Refusal Is Not An Option
September 2, 2020 - Bulletin Print Report
PS is a limited partnership organized under New York law to develop the Apartment Complex, ("AC"). Defendants SHF and SLP are Limited Partner and Special Limited Part...
I.R.S. Overlooks Failure To File Form 1122
September 2, 2020 - Bulletin Print Report
P owned Sub 1; Sub 1 owned Sub 2; and Sub 2 owned Sub 3. Sub 3 operates Business A. In Year, the following series of transactions occurred: (i) On Date 3, P was formed on behal...
Ligand Using "CVRs" To Compensate Pfenex Shareholders
September 1, 2020 - Bulletin Print Report
Ligand Pharmaceuticals, Inc., ("LPI"), recently unveiled the details of its agreement to acquire all of the outstandingstock of Pfenex, Inc., ("PFI"),...
Classifying Mixed-Use Property
September 1, 2020 - Volume 14 Issue 169 Print Report
In Date 1, TP purchased Property located at "D" for "$E", and placed the property in service during the taxable year ending Date 2. &nbs...
Convertible Virtual Currency Received For "Micro-tasks" Is Gross Income
September 1, 2020 - Bulletin Print Report
A variety of digital platforms now enable individuals or entities to "crowd source" jobs by using the Internet to outsource assignments to an undefined and often larg...
Cincinnati's Definition Of "Affiliated Group" Is Rejected
September 1, 2020 - Bulletin Print Report
Time Warner Cable, Inc., ("TWC"), amended its 2013 Cincinnati, ("C") income tax return in 2015. The Department of Finance, (the "Department"),&nbs...
Residential Property Not Converted To Business Use
August 31, 2020 - Bulletin Print Report
On July 20, 2005, Appellants, ("APPs"), purchased a residential property in Pleasanton, California, (the "property"), for $2,295,000. On May 17, 2012, APPs...
Minor Children Are Neither Qualifying Children Or Relatives Of Taxpayer
August 31, 2020 - Bulletin Print Report
DB is the mother of ADB and JNB. MB is not the biological or adoptive father of those children. In 2016, ADB was age seven and JNB was age 11. The children did not reside with...
Telecommunication Infrastructure Assets Are Real Property
August 31, 2020 - Bulletin Print Report
TP is a REIT. TP constructs and/or acquires telecommunication infrastructure assets, (the "Systems"), and then leases, licenses and/or otherwise grants the use of the...
Liquidating Sales Are Not "Prohibited Transactions"
August 31, 2020 - Volume 14 Issue 168 Print Report
TP is a REIT. TP primarily owns and leases residential real estate to third parties. LP, a State B limited partnership, owns a "Y%" interest in TP. <...
Replacement Property Not Timely Identified
August 28, 2020 - Bulletin Print Report
On April 30, 2012, Appellant, ("APP"), entered into a deferred exchange agreement with ANIto facilitate a like-kind exchange of APP's property, (the "r...
Counsel Casts Doubt On Reorganization Status of Noble/Chevron Merger
August 28, 2020 - Bulletin Print Report
Chevron Corporation, ("C"), and Noble Energy, Inc., ("N"), have entered into a definitive agreement pursuant to which C will acquire all of the outstanding...
CFC Qualifies For "Manufacturing" Exception
August 28, 2020 - Volume 14 Issue 167 Print Report
TP is a leading global provider of General Products. TP owns FC, an entity formed under the laws of Country. FC owns Disregarded Entity 1 (DE1). DE1 owns DE2. FC, DE1...
Transfer Of Title To Disregarded Entity Exempt From "RETT"
August 27, 2020 - Bulletin Print Report
Petitioner proposes to transfer three parcels of real estate owned by petitioner personally to N LLC, a New Hampshire single member LLC, which is owned by H LLC, which is in tu...
Determining The True Value Of Comcast's Capital In Mississippi
August 27, 2020 - Bulletin Print Report
Comcast, ("C"), provides cable-network and related services in Mississippi, ("MS"), C holdsinvestments in more than 50 subsidiaries that, like C, are...
The Time Limit For Filing A Petition Is Jurisdictional
August 27, 2020 - Bulletin Print Report
Respondent, ("R"), mailed a notice of deficiency by certified mail to Petitioner, ("P"), on May 21, 2019. The notice was sent to both P's last know addr...
Decline In Value Does Not Give Rise To a Deductible Loss
August 27, 2020 - Volume 14 Issue 166 Print Report
From August, 1969 until November, 1973, petitioner (P) served as asenior vice-president and a director of GDC, a publicly held corporation. &nbs...
Construction Site Safety Services Are Subject To Sales Tax
August 26, 2020 - Bulletin Print Report
Petitioner is a company that is engaged by contractors to provide site safety managers, fire safety managers, and "emergency action watchmen" for work on construction...
Accounts Receivable Not Property Held For Investment
August 26, 2020 - Volume 14 Issue 165 Print Report
XY is a partnership. Prior to the formation of XY, the business was run through X, an 'S' corporation, and Y, a partnership. A, B, C, D, and E were the shareh...
"TOD" Status Is Not Ownership
August 26, 2020 - Bulletin Print Report
On October 24, 2011, SB purchased a 2007 Chevrolet, ("Chevy"). SB titled the Chevy as SB "TOD" (i.e., "transfer on death") TB. On January 5, 2016,...
Liberty Broadband To "Monetize" Part Of Charter Stake
August 25, 2020 - Bulletin Print Report
Recently, Liberty Broadband Corporation, ("LBB"), announced a transaction in connection with which it willacquire, in a "downstream merger," the asset...
The BPOL Is A Tax On Internet Access
August 25, 2020 - Bulletin Print Report
This is an appeal from a ruling by the Tax Commissioner. C initially sought a determination from the City, challenging a portion of the City's BPOLassessment on the b...
TRS Effects "Internal" Spin-Off
August 25, 2020 - Volume 14 Issue 164 Print Report
P is a real estate investment trust (REIT). P's stock is bothpublicly-traded and widely held. P owns all of the membership interests in LLC1, a disregarded...
Spouses Can Have Separate Domiciles
August 24, 2020 - Bulletin Print Report
S and M were married in 1971. M and S each retired in 2012. LZ, their daughter, was born in 1982. In 1985, LZ was seriously injured in a sledding accident. LZ suffers from seve...
System Located On Cornell's Land Not Tax-Exempt
August 24, 2020 - Bulletin Print Report
Petitioner, ("P"), is challenging tax assessments on a solar photovoltaic electrical system ("system") that is located on its land. P has entered into an ag...
Reimbursement of Expenditures Escapes "Disguised Sale" Rule
August 24, 2020 - Volume 14 Issue 163 Print Report
C is a REIT. C proposes to sponsor the formation of a new partnership that would own and operate real estate properties for long-term investment. C plans to contribut...
Installation Services Merely Incidental To Sale Of Personal Property
August 21, 2020 - Bulletin Print Report
B is a retailer of consumer electronics and appliances. B also sometimes installs appliances in the purchasers' homes. When a customer purchases an appliance, the customer...
Nonresident Alien Not Engaged In a U.S. Trade or Business
August 21, 2020 - Volume 14 Issue 162 Print Report
The taxpayer, a nonresident alien individual, owned real property situated in the U.S. that was subject to long-term leases, referred to as "net leases."
Improper Double Taxation Not Found
August 21, 2020 - Bulletin Print Report
D erects towers, builds lines and antennas, and installs roads and fences for wireless tower sites. D pays sales tax or use tax as a consumer when it purchases building materia...
The Willens Deal Survey August 2020
August 20, 2020 - The Deal Survey: August 2020 Print Report
Welcome to our summary of deals for August 2020. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
Boat Not A Place Of Amusement
August 20, 2020 - Bulletin Print Report
A is a Missouri corporation. G is A's sole shareholder. A engaged in the sale and rental of fly fishing equipment and supplies and took customers on guided fly fishing trip...
Air Conditioning Units Are Structural Components Of a Building
August 20, 2020 - Volume 14 Issue 161 Print Report
TP is the owner of a shopping center. It provides rooftop heating and air conditioning units to six of the center's store tenants. &nb...
Post-Violation Conduct Does Not Establish Reasonable Cause
August 20, 2020 - Bulletin Print Report
The Hs were married on November 22, 1992. They moved to Nebraska in 1996. In 2000, C accepted a position that required him to relocate to the United Kingdom, ("U.K.")...
Only Receipts From Enumerated Services Are Subject To Sales Tax
August 19, 2020 - Bulletin Print Report
Petitioner is a New York Federal Firearms Licensee, ("FFL"). Petitioner also is a New York sales tax vendor that sells firearms from its own inventory. A New York res...
The Go-To Structure For SPAC Acquisitions
August 19, 2020 - Bulletin Print Report
There have been a plethora of "SPAC" acquisitions, or at least announcements thereof, over the recent past. As we delve into the agreements with respect to these acqu...
Classifying The "Astro Needle"
August 19, 2020 - Volume 14 Issue 160 Print Report
BI was an electing small business corporation. In 1968, BI entered into a contract with Universal Design, Ltd. (U), whereby U undertook to construct, erect, and insta...
"Open To The Public"
August 19, 2020 - Bulletin Print Report
The taxpayer, ("TP"), operates a shooting range with seven outdoor firing ranges. When the facility first opened, Gintended it to be a private shooting range. H...
Sewage System Is A Structural Component
August 18, 2020 - Volume 14 Issue 159 Print Report
Petitioners owned a small shopping center. The shopping center consisted of two buildings. Prior to 1968, the sewage generated by the shopping center was handled by t...
Split-Up Satisfies Continuity Of Interest Requirement
August 18, 2020 - Bulletin Print Report
Distributing, ("D"), is an 'S' corporation which is engaged primarily in Business A. D has outstanding "A" shares of stock all of which are held by...
Gain From Sale Of Assets Classified As "Business Income"
August 18, 2020 - Bulletin Print Report
Y is an Arizona 'S' corporation. Its principal place of business and commercial domicile is in Arizona. RP was its sole shareholder. Y operated an internet-based busine...
Disney May Not Deduct Related Member Royalties
August 18, 2020 - Bulletin Print Report
P's operations are comprised of five business segments: Media Networks, Parks and Resorts, Studio Entertainment, Consumer Products, and Interactive Media. P is The Walt Dis...
Use Of Property Is Not "Rental Activity"
August 17, 2020 - Bulletin Print Report
For the 2007, 2008, and 2009 tax years, Appellants, ("APPs"), sought refunds on their federal income taxes based on losses incurred in connection with three vacation...
Motor Vehicles Were Purchased "At Retail"
August 17, 2020 - Bulletin Print Report
TP offers car rental services under the trade names "Enterprise Rent-A-Car," "Alamo Rent-A-Car," and "National Car Rental." TP buys vehicles for t...
Corporate Partner Found To Be "Doing Business" In New York City
August 17, 2020 - Bulletin Print Report
On April 8, 1953, MA, the predecessor to Petitioner, ("P"), incorporated in the State of New York. In 1954, MA joined with NCCto form a joint venture, M/N, to a...
Demise of the "Functional" Or "Equivalency" Test
August 17, 2020 - Volume 14 Issue 158 Print Report
Rev. Rul. 67-67, 1967-1 C.B. 6, holds that a floating dock that is attached by rings to fixed pilings driven into a harbor bottom is inherently permanent property
Senators Call For Revocation Of Rev. Rul. 73-201
August 14, 2020 - Bulletin Print Report
Advice has been requested whether certain expenditures made to prevent conception and childbirth or to terminate pregnancy are amounts paid for "medical care" as that...
The I.R.C. Supersedes State And Local Tax Rules
August 14, 2020 - Bulletin Print Report
On January 10, 2018, the court converted this case to a case under chapter 7 and appointed JP as the chapter 7 trustee, ("T"). T filed this Motion, requesting that th...
Relocatable Property Classified As Real Property
August 14, 2020 - Volume 14 Issue 157 Print Report
In 1975, the taxpayer purchased a number of relocatable classroom units that it then leased to the local school district. Eac...
Claim For Refund Not "Duly Filed"
August 13, 2020 - Bulletin Print Report
The Gs timely filed their original return for 2015 on or about April 15, 2016, which claimed a refund... In late 2018, CA timely filed the Gs' 2015 amended return (Form 104...
Depreciating Special Handling Devices
August 13, 2020 - Volume 14 Issue 156 Print Report
Taxpayer, (TP), is a State X corporation. TP is engagedprincipally in the production of food products for distribution in grocery, food service, restaurant and...
Literary Club Not An Educational Or Charitable Institution
August 13, 2020 - Bulletin Print Report
The Literary Club, ("Club"), is a private organization whose primary function, as described in its constitution, is to "provide a forum for its members to read o...
Uber Is Enjoined From Classifying Drivers As Independent Contractors
August 12, 2020 - Bulletin Print Report
On May 5, 2020, the Attorney General of California filed this action on behalf of the People of the State of California, (the "People"), seeking injunctive relief...a...
Management Activities Found To Be "Usual and Customary"
August 12, 2020 - Volume 14 Issue 155 Print Report
Company, (C), which intends to elect REIT status, contributed its leasing service company assets and cash to Operating Partnership, (OP), in exchange for units in OP....
Application Of "Series-Qualifier" Rule Denies Deduction
August 12, 2020 - Bulletin Print Report
In 1980, the Washington legislature enacted former RCW 82.04.4297, which created a B&O tax exemption for "amounts received from the United States" or "from t...
Third Point's Acquisition Of Sirius Feature Eclectic Mix Of Consideration
August 11, 2020 - Bulletin Print Report
One of the more complex deals we have encountered is the proposed acquisition by Third Point Reinsurance Ltd., ("TP"), of Sirius International Insurance Group, ("...
Taxpayers Cannot Challenge "EEFVTR" Data Or Methodology
August 11, 2020 - Bulletin Print Report
Petitioners, ("Ps"), were shareholders of PP, an 'S' corporation. PP was certified as a "QEZE" effective June 28, 2008. On or about December 1, 2002...
Distribution Not In Liquidation Of Partner's Interest
August 11, 2020 - Bulletin Print Report
In 2012, W owned a 2.24 percent interest in BS, a partnership. BS owned a 19.63 percent membership interest in H. In 2012, H was acquired by DV. Under the merger agreement, mem...
Taxpayer's Gain Was a Short-Term Capital Gain
August 11, 2020 - Volume 14 Issue 154 Print Report
Petitioner, ("P"), on June 19, 1945, purchased 50,000 bushels of rye, for his own account, on a grain futures contract. He sold it on December 19, 1945, rea...
Daily Fantasy Sports Entry Fees Are Taxable "Wagers"
August 10, 2020 - Bulletin Print Report
Traditionally, fantasy sports have been typically played among a group of people...over the course of a league's season. Around 2007, companies began offering a new form of...
GCI Liberty And Liberty Broadband Announce A "Downstream" Merger
August 10, 2020 - Bulletin Print Report
GCI Liberty, Inc., ("GCI"), a company that was split-off from Qurate, owns approximately 23.5 percent of the stock of Liberty Broadband Corporation, ("LBB")...
Exceptions To The "Disguised Sale" Rules
August 10, 2020 - Volume 14 Issue 153 Print Report
M is a corporation formed in State S. Two of M's major lines of business are B and C. The B business is conducted by D, an unincorporated division of M. The C bus...
Acquisition Of LVGO Features Special Dividend
August 7, 2020 - Bulletin Print Report
Teladoc Health, Inc., ("T"), and Livongo Health, Inc., ("L"), announced that they have entered into a definitive merger agreement, the objective of which is...
Rentals And Provision Of Services Are Separate Transactions
August 7, 2020 - Bulletin Print Report
Taxpayer, ("TP"), provides wedding and party entertainment services. TP provides disc jockeys, coordination services, visual packages, photo booths and other services...
Alternate Week Employee Does Not Pass "QEZE" Muster
August 7, 2020 - Bulletin Print Report
Petitioners, ("Ps"), filed Forms IT-203 for the years 2012-2016 on which they claimed the "QEZE" Real Property Tax Credit, ("RPTC"), allegedly ear...
Holding Period Of Stock Acquired Pursuant To An Option
August 7, 2020 - Volume 14 Issue 152 Print Report
On January 1, 1948, Petitioner, (P), together with his father and brother, formed a partnership by equal contributions of capital for the purpose of conducting a lumb...
The "True Object" Test Provides Exemption From Sales Tax
August 6, 2020 - Bulletin Print Report
Taxpayer operates a bowling alley in Virginia. One of the "products" offered by Taxpayer is a bowling package called "Cosmic Bowling," ("Package")...
Payments Made To Former Spouse Did Not Increase Basis
August 6, 2020 - Bulletin Print Report
S, in 1973, formed DCA, a partnership for Federal income tax purposes. On January 1, 2008, S assigned his 70 percent membership interest in DCA to SRM, an 'S' corporati...
Depreciating Furniture and Fixtures
August 6, 2020 - Volume 14 Issue 151 Print Report
Petitioner, (P), is engaged in the banking and financial services business. During 1987-1989, P placed in service furniture and fixtures at its facilities throughout...
Damages Not Excluded From Gross Income
August 6, 2020 - Bulletin Print Report
Between 2002 and 2013, H held dual appointments at the U.C.L.A. David GeffenSchool of Medicine as Associate Professor and as the attending surgeon at the West Los Angeles...
Likelihood of Repurchase Negates Loss From Prior Sale
August 5, 2020 - Volume 14 Issue 150 Print Report
HF, an experienced investment banker, established two trusts for his two sons and in 1969 the trusts had large capital gains from the sale of certain stock. To offset...
Unauthorized Insurance Company Exempt From MD Corporate Income Tax
August 5, 2020 - Bulletin Print Report
Leadville Insurance Company, ("L"), appealed the assessment of corporate income tax in the amount of $23,831,054.34...for the years 1996-2003. The Comptroller imposed...
E-Mails Constitute A Written Separation Agreement
August 5, 2020 - Bulletin Print Report
Petitioner, ("P"), and his former spouse, ("FS"), were married on June 11, 2009. They had one child during their marriage. They separated on November 4, 201...
Farm Optional Method Income Is Not "Earned Income"
August 5, 2020 - Bulletin Print Report
Petitioner, ("P"), an unmarried individual, age 57, filed her 2017 Wisconsin Homestead Credit tax claim on February 26, 2018. The Department of Revenue, (the "De...
7-Eleven To Acquire Speedway From MPC
August 4, 2020 - Bulletin Print Report
7-Eleven, Inc., ("7E"), announced that it has entered into an agreement to acquire Speedway, ("SP"),a leading convenience store chain, from Marathon P...
Not Essentially Equivalent to a Dividend
August 4, 2020 - Volume 14 Issue 149 Print Report
TP, his wife, son, and daughter, each owned 25 percent of the common stock of X Corporation, (X). TP owned all 1,000 shares of X's non-voting preferred stock. X r...
Dissolution And Entity Classification Election Is An 'F' Reorganization
August 4, 2020 - Bulletin Print Report
Taxpayer was incorporated in State A on Date 1. Taxpayer filed "Articles of Domestication" in State B on Date 2. Taxpayer was dissolved in State A on the &qu...
State Tax Credits Constitute "Property"
August 3, 2020 - Bulletin Print Report
TP purchased three Oregon Business Energy Tax Credit, ("BETC"), certificates over the course of several years, each time for a discounted purchase price that was 33 p...
Floating Docks Bounding Boat Slips Are Real Estate Assets
August 3, 2020 - Bulletin Print Report
TP is a real estate investment trust, ("REIT"). TP intends to acquire an interest in C. C is a partnership for federal income tax purposes. C owns and leases the &quo...
Property Used In the Trade or Business
August 3, 2020 - Volume 14 Issue 148 Print Report
In April, 1956, a manufacturing corporation entered into an agreement to purchase a parcel of land and certain buildings thereon for the specific purpose of using the...
EE Pays A "Stub Period" Dividend
July 31, 2020 - Bulletin Print Report
On July 29, 2020, pursuant to an Agreement and Plan of Merger that was entered into approximately 13 month earlier, Merger Sub, a newly-created, wholly owned subsidiary of Sun...
When Does Holding Period Begin To Accrue?
July 31, 2020 - Volume 14 Issue 147 Print Report
A small group of investors, "the Lessor," has leased a parcel of land to a corporate taxpayer, "the Lessee." Under the terms of the lease arrangem...
Replacement Cannot Precede Casualty Loss
July 31, 2020 - Bulletin Print Report
On July 26, 2019, JEGbought a 2018 Cadillac, (the "Cadillac"), for $38,897. JEG paid $2,432.34 in state and local sales taxes when she titled the Cadillac. On N...
Not All "Property" Is a Capital Asset
July 30, 2020 - Volume 14 Issue 146 Print Report
On Date 1, TP, a corporation, purchased contracts that provided life insurance on the lives of its employees. The contracts were individual whole life fixed premium c...
When Are "Straddle" Year Taxes Incurred?
July 30, 2020 - Bulletin Print Report
Prior to filing for bankruptcy, the Debtors had sold or otherwise disposed of substantially all of their material assets. On October 14, 2015, the Debtors filed a voluntary pet...
Storage Satisfies "Actual Use" Requirement
July 30, 2020 - Bulletin Print Report
Christian Mission, ("CM"), owned a building and an adjacent parking lot in Passaic, New Jersey. In 2009, CM purchased the property at issue here, a commercial warehou...
Material Participation In Rental Endeavor Not Found
July 29, 2020 - Bulletin Print Report
L's father died in 1989, leaving 96 acres of property to each of L and her brother, T, as tenants in common. The property consisted of 96 acres of farm land and a three-acr...
Relocation Incentive Payments Not Contributions To Capital
July 29, 2020 - Bulletin Print Report
In 1996, New Jersey, ("NJ"), created the "Incentive Program" to "grow NJ's economy..." For a company to be eligible for grants three condition...
Monsters Of The Midway No Match For Cook County's Amusement Tax
July 29, 2020 - Volume 14 Issue 145 Print Report
All of the home games played by the Chicago Bears of the National Football Leaguewere played at historic Soldier Field during the tax periods at issue. Soldier Field has...
Payment of a Taxpayer's Expenses Produces Gross Income
July 28, 2020 - Volume 14 Issue 144 Print Report
The taxpayer, an official of an organization, was involved in certain litigation which was of a personal nature but which "focused national attention" on th...
Exemption From Petroleum Business Tax Denied
July 28, 2020 - Bulletin Print Report
P is a New York not-for-profit corporation exempt from sales and use tax under Sec. 1116(a)(4). P's purposes are religious and charitable. P filed a claim for refund of tax...
A Corporation Is Separate From Its Members
July 28, 2020 - Bulletin Print Report
On September 29, 2015, Kansas City Contracting, Inc., ("KCC"), purchased a 2015 GMC truck, ("GMC"). On December 31, 2019, KCC sold the GMC for $42,400. On J...
CNX Will "Roll Up" CNXM
July 28, 2020 - Bulletin Print Report
CNX Resources Corporation, ("CNX"), and CNX Midstream Partners, L.P., ("CNXM"), announced that they have entered into a definitive merger agreement, (the &q...
"Readily Ascertainable" Tax Planning Strategies Are Not A "Trade Secret"
July 27, 2020 - Bulletin Print Report
TLS Management and Marketing Services, LLC, ("TLS"), was a tax planning and consulting firm based in Puerto Rico, ("PR"). TLS alleged that it generated two...
Surplus Foreclosure Sales Proceeds Belong To The Property Owner
July 27, 2020 - Bulletin Print Report
R purchased a rental property in Southfield, Michiganfor $60,000 on August 15, 2011, but failed to pay the 2011 taxes due on the property. This delinquency was never paid...
Retention Of Control Gives Rise To A Use Tax Liability
July 27, 2020 - Bulletin Print Report
Petitioner is an Indiana-based company that manufactures and markets orthopedic implants, such as prosthetic joints.It also provides its customers with medical instrument...
Conversion and Replacement Are Separate Transactions
July 27, 2020 - Volume 14 Issue 143 Print Report
P is a general partnership of five individuals. In 1969, P purchased a building for commercial use. Through depreciation and other adjustments and distributions, the...
"Purchase" Buy-Down Payments Not Subject To S.C. Sales Tax
July 24, 2020 - Bulletin Print Report
Under a tobacco company "buy-down" contract with retailers, the tobacco company agrees to pay the retailer a specified amount for each pack of cigarettes sold by the...
Room Occupancy Excise Does Not Apply To "Room Comps"
July 24, 2020 - Bulletin Print Report
Company, ("C"), is licensed by the Massachusetts Gaming Commission to operate a gaming establishment in Massachusetts, ("M"). C owns and operates a hotel an...
Property Not Partnership Property
July 24, 2020 - Volume 14 Issue 142 Print Report
The taxpayer is a general partner of a firm which consists of both limited partnersand general partners. The limited partners are entitled to a fixed return on...
eBay To (Partially) Exit The Classifieds Business
July 23, 2020 - Bulletin Print Report
eBay, Inc., ("EBAY"), and AdevintaASA, ("ADE"), announced that they have entered into a definitive agreement for EBAY to transfer its classifieds busi...
"Buy Down" Payment Included In Receipts Subject To NY Sales Tax
July 23, 2020 - Bulletin Print Report
Petitioner is a retail dealer of cigarettes and tobacco products with various locations throughout New York State. Some cigarette manufacturers provide cigarette retailers with...
The Willens Deal Survey July 2020
July 23, 2020 - The Deal Survey: July 2020 Print Report
Welcome to our summary of deals for July2020. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database....
"Captive" Is An Insurance Company
July 23, 2020 - Volume 14 Issue 141 Print Report
W is an Ohio corporation actively engagedin the business of operating restaurants throughout the U.S., including Illinois. W is Wendy's International, Inc.<...
Grantor/Trustee And Trust Are Not The Same Person
July 22, 2020 - Bulletin Print Report
On June 28, 2019, JJG, an individual, purchased a 2008 Chevrolet Cobalt, ("Chevy"). JJG is a trustee and grantor of the Trust. On October 16, 2019, the Trust purchase...
Satisfying An Obligation With Property
July 22, 2020 - Volume 14 Issue 140 Print Report
Partnership, (PS), purchased property, (B), for $500x. A, a partner in PS, is entitled to a guaranteed payment under Sec. 707(c) of $800x. Subsequently, when the fair...
Say Yes To The Dress
July 22, 2020 - Bulletin Print Report
Petitioner owns and operates a bridal shop. A customer has two options when purchasing a wedding dress: (1) pay a 50 percent non-refundable down-payment on the purchase of a dr...
Partner Received A Distribution of Money
July 21, 2020 - Volume 14 Issue 139 Print Report
Partnership, (PS), owned a large parcel of "X" in State X. Taxpayer, (TP), held a total of "z%" interest in PS. Most of the partners, including TP...
Prior Payment Of Sales Tax Eliminates Necessity Of Paying Use Tax
July 21, 2020 - Bulletin Print Report
Taxpayer is a limited liability company. Taxpayer sells and installs industrial storage materials... The Department of Revenue, (the "Department"), issued an assessme...
Non-Willful FBAR Penalties Are On A "Per-Form" Not "Per-Account" Basis
July 21, 2020 - Bulletin Print Report
Congress enacted the Bank Secrecy Act, ("BSA"). Sec. 5314 provides that: "...the Secretary shall require a resident or citizen...to keep records, file reports......
Massachusetts Investor Must Adhere To The "Duty Of Consistency"
July 21, 2020 - Bulletin Print Report
In January 2006, P and his business partner formed H. P owned 75 percent of H. H was the sole member of SLLC, a disregarded entity. In February 2006, SLLC purchased a residenti...
Revisiting The Eldorado/Caesars Business Combination
July 20, 2020 - Bulletin Print Report
It appears that the last remaining obstacle to the acquisition of Caesars Entertainment Corporation, ("C"), by Eldorado Resorts, Inc., ("E"), has been surmo...
TRS Can Own (But Not Manage Or Operate) Health Care Facilities
July 20, 2020 - Bulletin Print Report
TP is a real estate investment trust, ("REIT"). TP owns a portfolio of senior housing and health care properties. F is a Region A limited partnership that owns "...
Real Property Not Used In A Trade Or Business
July 20, 2020 - Bulletin Print Report
In January 2000, petitioners, ("Ps"), purchased a 14,400 square-foot historic waterfront mansion and property in Newport, Rhode Island for $1.35 million with the inte...
Collection of Receivables Produces "RBIG"
July 20, 2020 - Volume 14 Issue 138 Print Report
Petitioner, (P), is an 'S' corporation engaged in providing medical services. P is a cash receipts and disbursementsmethod taxpayer, wholly owned...
Canceled Debt Was Not "QPRI"
July 17, 2020 - Bulletin Print Report
In 2006, W worked at SR as vice president of product and marketing. On December 13, 2006, W accepted KS's employment offer and in January 2007 she began working there. KS g...
Converted 'S' Corporation Avoids "RBIG"
July 17, 2020 - Volume 14 Issue 137 Print Report
Company, (C), owns, leases, and manages residential and commercial real estate. C reported its taxable income as a C corporation for all taxable years ending on or be...
Dell Confirms Potential For Spin-Off Of VMwawe
July 16, 2020 - Bulletin Print Report
Dell Technologies, Inc., ("DTI"), has now confirmed what was previously only rumored, i.e., that it is "exploring potential alternatives with respect to its owne...
Charging Station Operator Must Collect And Remit Sales Tax
July 16, 2020 - Bulletin Print Report
123 Company, ("123") owns and operates electric vehicle charging stations in South Carolina. Customers of 123 pay for electricity based on charging time, a "sess...
Diesel Fuel Not "Subject To" Fuel Taxes
July 16, 2020 - Bulletin Print Report
Arizona, ("AZ"), law imposes one of two distinct taxes on all diesel fuel sales--fuel tax or use tax--depending on how the diesel fuel is used. The law requires vendo...
License Fees Not Subject To "BIG" Tax
July 16, 2020 - Volume 14 Issue 136 Print Report
Company, ("CO"), a C corporation, owns "X" which it copyrighted. C also has the rights to other "X" which also has been copyrighted by a...
Apple Scores Unsurprising EC Tax Victory
July 15, 2020 - Bulletin Print Report
In 2016, the European Commission announced its decision that, as AAPL reports in its SEC filings, "Ireland granted (illegal) state aid to AAPL through the issuance of tax...
Expenses For Naturopathic Treatments Are "Medical" Expenses
July 15, 2020 - Bulletin Print Report
Petitioner claimed $13,572 in medical expenses. The Division removed therefrom$10,196 in "naturopathic" medical expenses. The Division denied the medical expens...
Estate Tax Imposed On "QTIP" Assets
July 15, 2020 - Bulletin Print Report
This case concerns whether the intangible assets in a "QTIP" trust which was created by the pre-deceasing spouse in New York, are subject to the Massachusetts, ("...
Depreciating Pipelines
July 15, 2020 - Volume 14 Issue 135 Print Report
Between 1988 and 1990, the plaintiffs constructed a steel pipeline network which linked S's gas fields to S's natural gas processing plant, (the "K facil...
Treatment Of NOLs Arising In Post-'17 Years
July 15, 2020 - Bulletin Print Report
Sec. 172 was amended by the "CARES" Act," (the "Act"). As amended, Sec. 172(a)(1) generally allows in the case of a taxable year beginning before Janua...
Gain From The Disposition of Property Is UBTI
July 14, 2020 - Volume 14 Issue 134 Print Report
M is an exempt hospital under Sec. 501(c)(3) of the Internal Revenue Code. During "u," M entered into a contract for the purchase of an undeveloped parcel o...
Installation Of Insulation Is An Exempt Capital Improvement
July 14, 2020 - Bulletin Print Report
Petitioner performs energy audits of existing homes and commercial buildings. It sometimes finds no insulation or insufficient insulation in attics or in basement rim or joist...
Tour Service Not Subject To New York Sales Tax
July 14, 2020 - Bulletin Print Report
The Petitioner provides pedal bus bike ("vehicle") sightseeing tours. Passengers book the vehicle for a group tour at a specific date, time, and location. The Petitio...
POTUS Not Immune From State Criminal Subpoenas
July 14, 2020 - Bulletin Print Report
Presidents have uniformly testified or produced documents in criminal proceedings when called upon by federal courts. This case involves the first state criminal subpoena direc...
PG&E Begins The Next Phase Of Its Troubled Existence
July 13, 2020 - Volume 14 Issue 133 Print Report
PG&E Corporation, ("PGE"), and its operating subsidiary, Pacific Gas & Electric Co., ("PAC"), have, now that their complicated bankruptcy plan, (&qu...
OXY Announces Warrant Distribution
July 13, 2020 - Bulletin Print Report
Occidental Petroleum Corporation, ("OXY"), recently announced that its Board of Directors has declared a distribution to holders of its common stock of warrants to pu...
Timely "Rollover" Not Effected
July 13, 2020 - Bulletin Print Report
P is the mother of two boys, the elder of whom was scheduled to graduate from high school in 2016 and matriculate at Morehouse College, ("M"), that fall. P anticipate...
Supreme Court Rules On Congressional Subpoenas Of POTUS Records
July 10, 2020 - Bulletin Print Report
In April 2019, three committees of the House of Representatives issued four subpoenasseeking information about the finances of President Trump, ("PT"), his chil...
Property Tax Value Not Permitted To Be Used To Fix "Just Compensation"
July 10, 2020 - Bulletin Print Report
The Kentucky Transportation Cabinet, Department of Highways, filed a petition to condemn certain real property owned by Borders Self-Storage & Rentals, LLC, ("B")...
Aon/WTW: Snatching Victory From The Jaws Of Defeat
July 10, 2020 - Bulletin Print Report
Aonplc, which recently "re-incorporated" from England to Ireland, has agreed to acquire "the entire issued ordinary share capital" of Willis Towers Wa...
Intermediary Does Not Earn "Royalty" Income
July 10, 2020 - Volume 14 Issue 132 Print Report
The organization is exempt from federal incometax as a charitable organization under Sec. 501(c)(3) of the Internal Revenue Code. Its resources are dedicated to...
Oregon's Intangible Personal Property Tax Is Discriminatory
July 9, 2020 - Bulletin Print Report
Oregon law generally taxes real and tangible personal property situated within its borders. But certain commercial and industrial entities, including railroads and other inters...
ALL Agrees To Acquire FGHC
July 9, 2020 - Bulletin Print Report
The Allstate Corporation, (ALL), has agreed to acquire the outstanding commonstock of National General Holdings, (NGHC), "for approximately $4 billion in cash or $34...
Sale of Business Gives Rise To Indiana "Business Income"
July 9, 2020 - Volume 14 Issue 131 Print Report
Under IC Sec. 6-3-2-2(a), business income of a corporation is subject to apportionment to Indiana, while nonbusiness income is generally allocable to the state from w...
Government's "SRP" Claim Accorded Priority In Chapter 13 Case
July 8, 2020 - Bulletin Print Report
S has objected to a portion of the U.S. Government's tax claim in his chapter 13 case. The portion to which he objects is the priority claim of approximately $2,000 for the...
Treasury Notes Found To Be "Debt-Financed" Property
July 8, 2020 - Volume 14 Issue 130 Print Report
Petitioner, (P), received a low-interest federal loan to finance an improvement to its facilities. At the time of construction, P withdrew only 1/2 of the approved lo...
Overpayment Interest Cases Cannot Be Heard By The District Court
July 8, 2020 - Bulletin Print Report
In January 2009, Bank of America, ("BA"), acquired Merrill Lynch, ("ML"). In October 2013, ML was merged with and into BA. In September 2017, BA filed a cla...
Sec. 338(h)(10) Deemed Sale Gain Is Not Business Income
July 7, 2020 - Volume 14 Issue 129 Print Report
In 1997, AS, a foreign corporationbut an Illinois taxpayer, was owned by ASFC. More than 80 percent of ASFC's stock was owned by L, an Indiana corporation.<...
Renter Retains Full Homestead Tax Exemption
July 7, 2020 - Bulletin Print Report
R was the sole owner of his home and used it as his permanent residence. In 1996, R applied for and received a homestead exemption on 100 percent of his residence, and he conti...
Montana's "No-Aid" Provision Is Unconstitutional
July 7, 2020 - Bulletin Print Report
In 2015, the Montana Legislature sought "to provide parental and student choice in education" by enacting a scholarship program for students attending private schools...
Best Buy Is A Retailer Of Appliances
July 6, 2020 - Bulletin Print Report
Best Buy is a retailer of consumer electronics and appliances. BB also sometimes installs appliances in the purchasers' homes. If the customer has Best Buy deliver and inst...
Charitable Contribution Not Allocable To Tax-Exempt Income
July 6, 2020 - Bulletin Print Report
An organization described in Sec. 501(c)(3) of the Code, ("Organization"), files a Return of Organization Exempt From Income Tax (Form 990). Organization also files a...
COVID-19 Disinfecting Activities Are "Cleaning Services"
July 6, 2020 - Bulletin Print Report
There appear to be two principal approaches to disinfecting coronavirus: (1) Wiping surfaces or spraying and wiping surfaces with disinfectant by hand; and (2) Using an electro...
Equipment Used To Produce X-Rays Qualifies For ITC
July 6, 2020 - Volume 14 Issue 128 Print Report
Petitioners filed a joint New York State personal income tax return for 1984. On the return, petitioners claimed an investment tax credit (ITC) in the amount of $10,8...
Deed Did Not Effect A "Transfer Of Ownership"
July 2, 2020 - Bulletin Print Report
On April 25, 1996, RZ, the owner of the property at issue in this case, executed a quitclaim deed, which conveyed title to herself and her five children as joint tenants with f...
Damages Partially Excluded From Gross Income
July 2, 2020 - Bulletin Print Report
P was employed by G as a certified nursing assistant beginning in January 2009 until her termination in January 2012. P suffered from epileptic seizures while at her workplace....
Sec. 338 Election Not a PSA "Triggering Event"
July 2, 2020 - Volume 14 Issue 127 Print Report
Between 1958 and 1983, thetax law permitted life insurance companies to accumulate, retain and defer taxes on 50 percent of undistributed profit in policyholder...
Trust Taxed On California Source Income
July 1, 2020 - Bulletin Print Report
RS established the Paula Trust, ("PT"), for the sole benefit of his daughter, M, a California resident. The PT has two co-trustees, a California resident and...
Processing Is A Qualified Activity For New York ITC Purposes
July 1, 2020 - Volume 14 Issue 126 Print Report
On March 3, 1977, the Department of Taxation and Finance, (the "Department"), issued a Notice of Deficiency against petitioner, (P), arising out of the Depa...
Vehicle Charger Does Not Sell Electricity
July 1, 2020 - Bulletin Print Report
The taxpayer owns and operates electric vehicle charging stations in Georgia. Customers pay for charging time, plus a session fee. Additional charges are imposed for "idli...
Expenses Of Producing Oil And Gas
June 30, 2020 - Bulletin Print Report
A person's taxable income under the Michigan Income Tax Act, ("MITA") is generally based on the federally adjusted income tax. Sec. 162 of the Internal Revenue Co...
Disability Benefits Are New York Source Income
June 30, 2020 - Volume 14 Issue 125 Print Report
Petitioner, (P), was at all timesa resident of New Jersey. From 1998-2010, P worked for a corporation, (C), that had locations throughout the world, including N...
Failure To File Escheat Reports Is Not "A False Record Or Statement"
June 30, 2020 - Bulletin Print Report
Delaware, ("D") requires the holders of abandoned property to file annual escheat reports with the "SE" and pay or deliver to the SE the abandoned property...
ABC Found To Be An "Interstate Broadcaster"
June 30, 2020 - Bulletin Print Report
Plaintiff, ("P"), is a diversified worldwide entertainment company with operations in five business segments: (1) Media Networks, (2) Parks and Resorts, (3) Studio En...
Without Restoration There Can Be No Rescission
June 29, 2020 - Bulletin Print Report
In 1998, petitioners reorganized their business. Prior to that year, petitioners were the owners and operators of a group of corporations and limited liability companies known...
"Superseding" Return Does Not Restart The Limitations Period
June 29, 2020 - Bulletin Print Report
When a return is filed and then a second return is subsequently filed before the return due date (i.e., a superseding return), which return constitutes "the return" f...
Rewritten Sales Eligible For Sales Tax Holiday
June 29, 2020 - Bulletin Print Report
In 2010-2012, the Massachusetts Legislature passed legislation creating sales tax holiday weekends, such that sales of personal property costing $2,500 or less were exempt from...
Taxpayer Denied Real Property Tax Credits
June 29, 2020 - Volume 14 Issue 124 Print Report
In April, 2000, a New York limited liability company, known as WL, was formed. Petitioners were partners of WL. The Division of Taxation ("Division") certif...
Bayer And Monsanto Resolve Most Litigation Regarding Roundup
June 26, 2020 - Bulletin Print Report
Bayer, presumably on behalf of its subsidiary, Monsanto, announced a series of agreements "that will substantially resolve major outstanding Monsanto litigation, including...
The Willens Deal Survey June 2020
June 26, 2020 - The Deal Survey: June 2020 Print Report
Welcome to our summary of deals for June 2020. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
Personal Or Individual Information Service Not Subject To Sales Tax
June 26, 2020 - Bulletin Print Report
P's customers are businesses that advertise on the internet. Typically, a business that advertises on the internet must monitor the effectiveness and performance of its adv...
Royalties Or Fees For Services?
June 26, 2020 - Volume 14 Issue 123 Print Report
The organization is exempt from Federal income tax under Sec. 501(c)(3) of the Internal Revenue Code. It was formed to promote scientific investigation and research a...
"Equitable Tolling" Does Not Apply To Tax Refund Claims
June 25, 2020 - Bulletin Print Report
On February 5, 2020, TPsfiled their 2016 non-resident Alabama income tax return. The return claimed a refund of tax paid by estimated payment in 2016. The original due da...
Law Firm Entitled To Opportunity Zone Benefits
June 25, 2020 - Bulletin Print Report
D, a law firm, leases space from B, a REIT, in the CC in Philadelphia. CC is an office complex within a now expired KOIZ ("Expired Zone"). D received tax benefits und...
TMUS's Rights Offering Has Unusual Tax Profile
June 25, 2020 - Bulletin Print Report
SoftBank Group Corporation, ("SB"), the owner of approximately 24.6 percent of the stock of T-Mobile U.S., Inc., ("TMUS"), is embarking on a program to &quo...
Ascertaining The Useful Life Of A Baseball Player's Contract
June 25, 2020 - Volume 14 Issue 122 Print Report
TP operates a professional baseball team. TP is affiliated with several minor league teams. Two of these teams are included on TP's tax return. The other affiliat...
Dell Pondering Spin-Off Of VMware
June 24, 2020 - Bulletin Print Report
The Wall Street Journal is reporting that Dell Technologies, Inc., ("DTI"), "is exploring options, including a spin-off, for its stake in VMwa...
When Is Solar Energy Equipment Placed In Service?
June 24, 2020 - Volume 14 Issue 121 Print Report
Petitioner has several clients that are currently building new homes and are purchasing and installing qualified eligible solar energy systems for these homes at the...
An Easement's Conservation Purpose Was Not Adequately Protected
June 24, 2020 - Bulletin Print Report
H granted a conservation easement over 257 acres to C, through a deed of conservation easement. The deed provides for the allocation of proceeds from an involuntary extinguishm...
Lack Of Employees Means No "Payroll Factor"
June 24, 2020 - Bulletin Print Report
The three taxpayers are affiliates under the parent corporation,FNIS, (the "Parent"). All operate in Alabama and numerous other states. FISMprovides servi...
Golf Club Dues Subject To Sales Tax
June 23, 2020 - Bulletin Print Report
The Club is a for-profit entity owned by member-stockholders and organized to promote golf. The Club owns a building that is used as a combination pro shop, club storage, and c...
Supreme Court Will Not Wade Into The "Altera" Quagmire
June 23, 2020 - Bulletin Print Report
Sec. 482 of the Internal Revenue Code grants the Secretary (of the Treasury) broad powers to allocate income and deductions between two or more organizations, trades, or busine...
Repetitive Audits Are Not Permitted
June 23, 2020 - Bulletin Print Report
TP purchased a vineyard. A notice of proposed adjustment, ("NOPA"), was issued to TP disallowing all expenses and depreciation related to the vineyard. The NOPA deter...
Maker of Countertops Eligible for New York ITC
June 23, 2020 - Volume 14 Issue 120 Print Report
Petitioner, (P), is a New York 'S' corporation that operates a granite and marble business. P purchases raw slabs of marble and granite and prepares those mat...
Existing Leasehold Interest Not Subject to S.F. Transfer Tax
June 22, 2020 - Bulletin Print Report
In 2009, 731 Market Street Owner, LLC, ("731"), the owner of a commercial building leased part of the building to CVS for 20 years plus five successive options to ext...
New York Non-Resident Limited Partners Unfairly Denied Loss Deductions
June 22, 2020 - Bulletin Print Report
While a New York "resident individual" (including both a New York domiciliary as well as a "statutory" resident) is taxed on his or her "worldwide"...
Deposit Arrangement Is Not "Insurance"
June 22, 2020 - Volume 14 Issue 119 Print Report
The taxpayer, (FW), is a consolidated group of corporations that provide temporary staffing services. FW purchased two insurance policies from AHAC; one was for worke...
A Specific Provision Defeats A General Provision
June 19, 2020 - Bulletin Print Report
T sells and leases "reverse-vending machines," the bottle and can recycling machines commonly found in grocery stores. The machines sort the bottles and cans, which a...
Sec. 381 Transferee Inherits Transferor's Sec. 707 Status
June 19, 2020 - Volume 14 Issue 118 Print Report
P owns all of the stock of S. S has only one asset, rental property, that is encumbered by a nonrecourse loan of $40x originally incurred by S on January 1, 1995. S i...
Workers Found To Be "Independent Contractors"
June 18, 2020 - Bulletin Print Report
P owned and operated CC, an unincorporated business, to provide cleaning services. CC had contracts with apartment complexes to do "Unit Turnover Cleaning," and contr...
Loss On Liquidation Not Derived From New York Sources
June 18, 2020 - Bulletin Print Report
P is a limited partnership formed under the laws of another state as an affiliated investment entity of a national real estate investor and investment manager. P was formed to...
"Frozen" Earnings and Profits
June 18, 2020 - Volume 14 Issue 117 Print Report
Distributions by an 'S' corporation which has accumulated earnings and profits constitute dividends (up to the amount of such earnings and profits) in cases w...
Hertz's NOLs Might Be Imperiled By Its Planned Public Offering
June 17, 2020 - Bulletin Print Report
On May 22, 2020, Hertz Global Holdings and several of its affiliates, (the "Debtors"), filed voluntary petitions for relief Chapter 11 of the Bankruptcy Code. The Deb...
G.M.'s Tax Credits Need Not Be Disclosed
June 17, 2020 - Bulletin Print Report
In 1995, the Michigan Legislature enacted the Michigan Economic Growth Authority, ("MEGA"), Act...to promote economic growth and job creation within the state. The ME...
Real Property Used In The Trade Or Business
June 17, 2020 - Volume 14 Issue 116 Print Report
Petitioner is engaged in the business of distributing tobacco products in North and South Carolina on a wholesale basis. It was incorporated in 1917. At that time, it...
Self-Created Intangible Asset Eligible For Amortization
June 17, 2020 - Bulletin Print Report
TP is a holding company. TP owns P1. P1 is regulated by C1 and C2. On Date 1, State enacted the Act to address the Event in State and the liabilities of the Companies, includin...
Trust Assets Included In Calculation Of Inheritance Tax
June 16, 2020 - Bulletin Print Report
Decedent created an irrevocable trust in June 2007 funded with cash and securities. He relinquished the right to "alter, amend, revoke or terminate any Trust provision or...
Foreign GP Was Doing Business In California
June 16, 2020 - Bulletin Print Report
APP is a Washington corporation. APP did not file a timely California return for its 2011 tax year. APP was the sole general partner in two limited partnerships in California,...
Percentage Rents Constitute Qualifying REIT Income
June 16, 2020 - Volume 14 Issue 115 Print Report
An unincorporated trust, otherwise qualifying as a real estate investment trust, (REIT), under Sec. 856 of the Internal Revenue Code, leases space to a tenant in a bu...
Sec. 481 Adjustment Properly Excluded From REIT's Gross Income
June 15, 2020 - Bulletin Print Report
Taxpayer, ("TP"), has elected to be taxed as a real estate investment trust,('REIT"). TP's primary business is the leasing of space on and at telec...
JET Wins The GRUB Sweepstakes
June 15, 2020 - Bulletin Print Report
On June 10, 2020,Just Eat Takeaway.com N.V., ("JET"), entered into an Agreement and Plan of Merger between and amongJET, Grubhub, Inc., ("GRUB")...
Coins Are Property (Other Than Money)
June 15, 2020 - Volume 14 Issue 114 Print Report
L owned and operated a sole proprietorship, PO, whose business was to trade such items as gold and silver coins, diamonds, jewelry and oriental rugs....
I.R.S. Defines "Real Property" For Like Kind Exchange Purposes
June 12, 2020 - Bulletin Print Report
Thanks to the TCJA, Public Law 115-97, the "like kind" exchange provisionswere substantially narrowed. Only qualifying exchanges of "real property" ar...
Training and Consulting Services Create "Nexus"
June 12, 2020 - Volume 14 Issue 113 Print Report
TP, an entity headquartered outside Virginia, has an employee located in Virginia. The employee will travel to consult with customers in the U.S. The consulting servi...
Unilever To Simplify Its Corporate Structure
June 11, 2020 - Bulletin Print Report
Unilever announced plans to unify "its Group legal structure under a single parent company, Unilever PLC, creating a simpler company with greater strategic flexibility, th...
TCO's Damages (If Any) Will Not Jeopardize REIT Status
June 11, 2020 - Bulletin Print Report
Simon Property Group, Inc. ("SPG"), announced that it has exercised its contractual rights to terminate its merger agreement with Taubman Centers, Inc., ("TCO&qu...
Refund Not Found To Be A "Rebate"
June 11, 2020 - Bulletin Print Report
1. On October 3, 2018, S purchased a 2018 Tesla. 2. The net purchase price was $70,200. 3. On October 29, 2018, S titled the Tesla and paid $5,355 in sales tax. 4. Subsequent t...
Plan of Liquidation
June 11, 2020 - Volume 14 Issue 112 Print Report
The issue is whether the taxpayer, SCI, a corporation, received the property of its wholly-owned subsidiary, FG, in a tax-free liquidation. The answer was yes. See
Poorly Structured U.K. Buyout Leads To Double Taxation
June 10, 2020 - Bulletin Print Report
In the United States, the buyer(s) of a closely-held corporation will frequently,in what is sometimesreferred to as a "bootstrap" acquisition, decide to&n...
Capital Of SMLLC Included In Member's Tax Base
June 10, 2020 - Bulletin Print Report
W is a Delaware corporation with several subsidiary companies doing business in Mississippi, ("M"), including single member limited liability companies, ("SMLLCs...
"Care" Days Spent In New York Count For Residency Purposes
June 10, 2020 - Volume 14 Issue 111 Print Report
Petitioners have been married since 1976. They own a one-family house in Pennsylvania. In 2006, petitioners filed Pennsylvania and federal income tax returns. Petitio...
Electronic Gaming Devices Found Subject To The "A&A Tax"
June 10, 2020 - Bulletin Print Report
This appeal concerns electronic gaming devices placed by C in various bars, restaurants, and convenience stores throughout Baltimore. A 2010 audit showed that C had not paid &q...
Donor's Reticence Dooms Donee's Gift Claim
June 9, 2020 - Bulletin Print Report
Throughout his career, P has worked extensively in the discounted cash flow industry. In the early '90s, P met and developed a business relationship with DH, a high net wor...
Percentage Rent Does Not "Taint" Fixed Rent
June 9, 2020 - Volume 14 Issue 110 Print Report
A real estate investment trust, (REIT), leased office space in a building that it owned to 10 different tenants under 10 separate leases, with nine ofsuch tenan...
Auxiliary Soil And Plant Substances Are Not "Fertilizers"
June 9, 2020 - Bulletin Print Report
Appellants, ("APPS"), sold Grow-Plex, ("GP"), and Menefee Humate, ("MH"), to consumers. APPS' customers applied these products to land use for...
Kraft Denied Use Of Alternative Apportionment Formula
June 8, 2020 - Bulletin Print Report
On March 1, 2010, Kraft Foods Group, ("K"), sold its entire frozen pizza business to Nestle USA, Inc.for $3.693 billion. On its federal consolidated income tax...
Super Bowl Champs Not Liable For Sales Or Use Tax
June 8, 2020 - Bulletin Print Report
The "team" is a professional football club and member of the N.F.L. The team is the defending Super Bowl champions.The team plays its home games at Arrowhead St...
"Inbound" Reorganizations Produce Deemed Dividends
June 8, 2020 - Volume 14 Issue 109 Print Report
Oldco, (O), was incorporated under the laws of Country on Date 1. Trust 1 and Trust 2 were the owners of O. On Date 2, Trust 1 and Trust 2 were domesticated as trusts...
Petitioner Never Incurred "Acquisition Indebtedness"
June 5, 2020 - Bulletin Print Report
P is a C.P.A. and holds an M.B.A. For many years, he has been friends with R. In 1991, R purchased as his residence a beach house in Hermosa Beach, California, (the "Hermo...
"Used In The Trade Or Business"
June 5, 2020 - Volume 14 Issue 108 Print Report
Petitioner, (P), was primarily engaged in business as an architect. During 1957, P ownedsixrental business properties which were eachpurchased, impr...
No Reduction Of Depletion Deductions Required
June 4, 2020 - Bulletin Print Report
APP is a JV that owns and operates a taconite mine in Minnesota. UT, (and together with APP, "APPS"), is a limited liability company that owns and operates a taconite...
Transfer Of Property Was "Incident To Divorce"
June 4, 2020 - Bulletin Print Report
APP and D were married in 1984. In1988, APP loaned $1 million to 3-V Fasteners, Inc., ("3V"). APP's loan was later converted into a capital contribution in...
Interest On Valid Debt Not Deductible
June 4, 2020 - Volume 14 Issue 107 Print Report
The deductions at issue arise out of an illegitimate tax shelter. An individual would borrow a sum of money and use it to buy gold. He would simultaneously enter into...
Transfer Of Property To Grantor Trust Did Not Produce Losses
June 3, 2020 - Bulletin Print Report
S owned IDG, an 'S' corporation in the business of buying land and developing it into finished lots. By 2007, IDG had acquired three parcels of real property, V, P, and...
The "Boot" Went In The Wrong Direction
June 3, 2020 - Bulletin Print Report
LTR 201948001, August 30, 2019, describes a rather garden variety"leveraged" spin-off which the I.R.S. later determined, well after the ruling was issued, was a...
Property Not Used In a Trade Or Business
June 3, 2020 - Volume 14 Issue 106 Print Report
Prior to 1967, each petitioner had been a shareholder in R, which was activelyengaged in the business of owning and operating a motel-restaurant and cocktail lo...
Income From a Limited Partnership Interest Is UBTI
June 2, 2020 - Volume 14 Issue 105 Print Report
The taxpayers were established as profit sharing trusts qualified under Sec. 401(a) by SBNC, SBNA, and SBNP. On July 1, 1974,...
Retroactive Tax Provision Violates Due Process Clauses
June 2, 2020 - Bulletin Print Report
P was a non-resident of New York during 2009-2011. Prior to July 31, 2009, P owned 50 percent of the shares of ESPI, a New York domestic corporation that had in place a valid e...
Pension Plan Participants Cannot Sue For Breach Of Fiduciary Duties
June 2, 2020 - Bulletin Print Report
Plaintiffs are retired participants in U.S. Bank's retirement plan. The plan is a defined-benefit plan, not a defined-contribution plan. In a defined-benefit plan, retirees...
Scheme To Elongate Holding Period Fails
June 1, 2020 - Bulletin Print Report
Various provisions of the Internal Revenue Code provide favorable treatment when taxpayers dispose of capital assets with holding periods that exceed designated periods of time...
Gain From Sale Of Passive Investment Not "Business Income"
June 1, 2020 - Bulletin Print Report
In 1993, MN incorporated NI in Virginia to develop and sell combat and tactical gear. In 2003, NI transferred its assets to B, a limited liability company, in exchange for a 78...
Lack Of "Reasonable Prospect Of Recovery" Proven
June 1, 2020 - Bulletin Print Report
In September 1997, the As began investing in securities with OK. In late 1999, the As opened investment accounts at D. D was operating a "pump and dump" scheme. To me...
Accounting For a Bargain Sale of Property To a Charity
June 1, 2020 - Volume 14 Issue 104 Print Report
During the taxable year, an individual taxpayerconveyed unimproved real property subject to an outstanding mortgage in the amount of $10x to an organization des...
Altaba's Liability Reserves
May 29, 2020 - Bulletin Print Report
In Altaba's"Petition for Determination," recently filed with the Delaware Chancery Court, in which the companyenumerates the various actual and contin...
TUP Seeks To Retire Notes At A Steep Discount To Their Principal Amount
May 29, 2020 - Bulletin Print Report
Tupperware Brands Corporation, ("TUP"), recently announced the commencement of an offer, (the "Tender Offer"), to purchase, for cash, up to $175 million agg...
Litigation Support Agreements Did Not Give Rise To Loans
May 29, 2020 - Bulletin Print Report
Petitioner, ("P"), practiced law in Chicago with a focus on class action litigation. He executed "litigation support agreements." Under these agreements, th...
Electricity Is Tangible Personal Property
May 29, 2020 - Bulletin Print Report
Taxpayer, ("TP"), owns and operates electric vehicle charging stations. Customers pay for charging time, plus a $1.00 session fee. Additional charges are applied ...
Accelerating a Sec. 481 Adjustment
May 29, 2020 - Volume 14 Issue 103 Print Report
PRS, a partnership, commenced business in 1965 and established two separate businesses, a "P" business and a "T" business. &...
The Willens Deal Survey May 2020
May 28, 2020 - The Deal Survey: May 2020 Print Report
Welcome to our summary of deals for May 2020. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
Below Market Sale Does Not Give Rise To a Deduction
May 28, 2020 - Volume 14 Issue 102 Print Report
Fischer, (F),was the president and a member of the board of directors of Medalists Industries, Inc., (M).He owned 12,015 shares of M's common stock an...
Development Fees Not A Reliable Indicator Of Cost
May 28, 2020 - Bulletin Print Report
Sec. 1603 of the American Recovery and Reinvestment Tax Act of 2009, ("ARRA"), requires the Secretary of the Treasury to provide a grant to each person who places in...
Tax Allocation Agreement Created An Agency Relationship For Refunds
May 27, 2020 - Bulletin Print Report
This matter is before the court upon remand from the Supreme Court. Two entities claim ownership of the federal tax refund that is at the heart of this case. The first is UWBI,...
Royalties Are Excluded From UBTI
May 27, 2020 - Volume 14 Issue 101 Print Report
The organization is exempt from tax under Sec. 501(c)(3). Its purposes are to improve the economic and working conditions of its members, all ofwhom are profess...
Lessee Was The Owner Of Leasehold Improvements
May 27, 2020 - Bulletin Print Report
The County owns and leases land to the Airport Authority to operate the Sedona (Arizona) Airport. In 1982, the Airport Authority subleased several acres to Sky Ranch to build a...
South Carolina Discriminates Against Railroads
May 26, 2020 - Bulletin Print Report
Congress enacted the "4-R" Act to "restore the financial stability of the railway system of the United States," and sought to achieve this goal by targeting...
Extracting Cash In Connection With a Spin-Off
May 26, 2020 - Volume 14 Issue 100 Print Report
D is a State A corporation and is the common parent of an affiliated group of corporations that join in the filing of a consolidated income tax return (the "D Gr...
Property Used As A Daycare Center Not Exempt From Tax
May 22, 2020 - Bulletin Print Report
Defendantappeals from the circuit court's order reversing the Department's decision that plaintiffs, the University of Chicago, ("UC"), and Bright Horiz...
Detroit Has Adopted An Origin Test For Services
May 22, 2020 - Bulletin Print Report
H is a law firm that operates offices within and outside Detroit. Each year H apportions its net profit using a three-factor formula, known as the "business allocation per...
Computing Impermissible Tenant Service Income
May 22, 2020 - Volume 14 Issue 99 Print Report
Y, a real estate investment trust, (REIT), owns a high rise apartment building, Building P. Building Pcontains 100 apartments, of which 95 are standard, unfurni...
Exemption From Tax Not Fixed On The Valuation Date
May 21, 2020 - Volume 14 Issue 98 Print Report
Until March 4, 2011, the land occupied by the Arizona Center was owned by the City of Phoenix, and therefore was covered by the constitutional exemption from taxation...
Involuntary Conversion Not A "Sale"
May 21, 2020 - Bulletin Print Report
On May 14, 2018, Mr. E purchased a 2018 Chevrolet Malibu, ("Chevy"). On October 5, 2019, Mr. E purchased a 2019 Ram Truck, ("Truck"). On October 31, 2019, M...
FBAR Penalties Need Not Run The Gauntlet Of The Eighth Amendment
May 20, 2020 - Bulletin Print Report
The statute at issue in this case states as follows: "In the case of any person willfully violating...any provision of Sec. 5314---the maximum penalty...shall be increased...
Stock of Former 'S' Corporation Eligible for Sec. 1042
May 20, 2020 - Volume 14 Issue 97 Print Report
Company, (C), has never had any stock outstanding that was "readily tradable on an established securities market". TP has owned all of the outstanding stock...
Coupons Can Reduce The Purchase Price Of Taxable Items
May 20, 2020 - Bulletin Print Report
On June 24, 2015, TP filed a petition with the BOA requesting a refund of sales tax paid on purchases made at BJ's Wholesale Club, ("BJ's"), with coupons. BOA...
An Estate Is Not an Individual
May 19, 2020 - Volume 14 Issue 96 Print Report
The decedent died testate on July 4, 1955. Included in her gross estate were 2,500 shares of stock of LBC, Inc., (LBC); the remaining stock was owned by the decedent&...
TRS Can Render Tenant Services
May 19, 2020 - Bulletin Print Report
TP is a REIT. TP's business consists of the acquisition, financing, and owning of real property to be leased to third-party tenants in the healthcare sector. TP primarily i...
PNC's Contribution To Reducing The Nation's Deficit
May 18, 2020 - Bulletin Print Report
PNC Financial Services Group, Inc., ("PNC"), owned nearly 35 million shares of the capital stock of BlackRock, Inc., ("BR") for a considerable period of tim...
IPO Costs Are Netted Against The Proceeds Therefrom
May 18, 2020 - Bulletin Print Report
In Year 1, TP was a privately-held corporation. In Year 2, TP began planning an IPO and completed the offering and became a publicly traded company. TP incurred a number of cos...
Equitable Tolling Doctrine Does Not Apply to Sec. 6511
May 18, 2020 - Volume 14 Issue 95 Print Report
In each case, a taxpayer paid the I.R.S. several thousand dollars that he did not owe. In each case, the taxpayer filed an administrative claim for refund several yea...
Liberty Media Is Distributing "Bargain" Rights
May 15, 2020 - Bulletin Print Report
Liberty Media Corporation, ("LMC"),in order to raise funds with which to repay a loan, is hopingto raise thosefunds from its shareholders. In partic...
Trust Formed By New York Grantor Is A "Resident Trust"
May 15, 2020 - Bulletin Print Report
Trust, ("T"), is an irrevocable, non-grantor trust that was established by G for the benefit of G's descendants, some are which are domiciled in New York. G was d...
Decline In Conversion Ratio Does Not Precipitate "Deemed Distribution"
May 15, 2020 - Volume 14 Issue 94 Print Report
Company, (C), has outstanding "x" shares of Common Stock and "y" shares of Preferred Stock. The Preferred Stock pays a per share dividend substant...
Storage Of Aircraft Does Not Constitute Use Or Consumption
May 15, 2020 - Bulletin Print Report
AL is a certificated air carrier engaged in the business of transporting passengers and cargo within the U.S. and throughout the world. As a result of the COVID-19 pandemic and...
"Available" Deduction Is An "Allowable" Deduction
May 14, 2020 - Volume 14 Issue 93 Print Report
Prior to 1978, petitioners purchased land in San Bernardino, California. During 1978 and 1979, they caused seven one-story office buildings to be constructed on the p...
Express Allocation In Settlement Agreement Governs Taxation
May 14, 2020 - Bulletin Print Report
NCA is a real estate development and investment firm. DZ owned NCA. DZ worked with DN and RC to find properties to develop in the Los Angeles area. In 2005, they connected with...
Exempt Property Can Offset Pre-Petition Debt
May 14, 2020 - Bulletin Print Report
On May 29, 2014, the Cs filed a bankruptcy petition under Chapter 7 of the bankruptcy code. In their petition, the Cs listed the I.R.S. as a priority creditor, and identified p...
I.R.S. Issues Proposed Regulations Regarding Fines And Penalties
May 13, 2020 - Bulletin Print Report
In an effort to implement the changes enacted by the TCJA to the Internal RevenueCode (see Sec. 162(f)) regarding the deductibility of "fines, penalties, and other a...
Sec. 351 Transaction Can Terminate A Partnership
May 13, 2020 - Volume 14 Issue 92 Print Report
S, a corporation, is wholly owned by a taxpayer. The taxpayer also owned a 50 percent interest in the capital and profits of PYZ, a partnership.  ...
Electricity Generator Was A "Qualified NY Manufacturer"
May 13, 2020 - Bulletin Print Report
Petitioner, ("P"), a Delaware corporation, provides wholesale energy through its wholly owned limited liability companies, R and C. P acquired R on August 26,2008 fro...
"At The Time Of The Transfer" Means Just That
May 13, 2020 - Bulletin Print Report
Ohio employers are required to pay into the state's unemployment compensation fund. An employer's annual unemployment-contribution rate is based in part on the amount o...
"Financial Disability" Not Shown To Exist
May 12, 2020 - Volume 14 Issue 91 Print Report
R seeks a refund of federal income tax. He filed his 2005 tax return and paid taxes for that year on April 15, 2006. On June 28, 2010, after realizing the alternative...
Merger Involving Only Foreign Corporations Can Be An 'A' Reorganization
May 12, 2020 - Bulletin Print Report
On May 11, 2020, SSR Mining, Inc., ("SSRM"), and Alacer Gold Corporation, ("ASR"), announced that they have entered into a definitive agreement to combine &...
Income From Receipt Of Carbon Credits Excluded From Gross Receipts
May 12, 2020 - Bulletin Print Report
TP is exempt from tax under Sec. 501(c)(7) of the Code. It owns acres...in which its members hike, hunt, and fish. State enacted a statute that sets limits on greenhouse gas em...
Split-Off Preceded By Equity-For-Debt-Exchange
May 11, 2020 - Bulletin Print Report
Prior to the proposed transaction, which is Danaher Corporation's split-off of Envista Holdings Corporation, "D" and its subsidiaries will be engaged in the D Bus...
The "TMT" Is Not A Creditable Tax
May 11, 2020 - Bulletin Print Report
APP was a partner with KPMG, an accounting firm doing business in multiple states. Because KPMG did business in multiple states, KPMG partners owed taxes in those states based...
Withdrawal From A Partnership
May 11, 2020 - Volume 14 Issue 90 Print Report
L is a limited partner in partnership GL to which he contributed $10,000 in cash upon its formation. His distributive share of partnership items of income and loss is...
The "BPOL" Tax Is A Tax On Internet Access
May 8, 2020 - Bulletin Print Report
The issues to be decided are (1) whether Virginia's "BPOL" tax is a tax on internet access, making it preempted by the Internet Tax Freedom Act, ("ITFA"...
How Do NOLs Fare In Bankruptcy?
May 8, 2020 - Bulletin Print Report
Several prominent retailers have already filed for bankruptcy and the economic numbers are telling us that many more bankruptcy filings seeminevitable. There are usually...
Boot in a Sec. 351 Transaction
May 8, 2020 - Volume 14 Issue 89 Print Report
X Corporation, (X), operated its business in two separate divisions, (D1 and D2), keeping a separate bank account and a separate set of books for each division....
Positive "AAA" Prevents Dividend Income
May 7, 2020 - Bulletin Print Report
M corporation, ("M"),which was originally organized as a C corporation, made an 'S' election several years later. M has followed Sec. 168(k), allowing S...
Receipts From Texas Satellite Radio Subscribers Apportioned Thereto
May 7, 2020 - Bulletin Print Report
Texas imposes a franchise tax on each taxable entity that does business in this state. Generally, a taxable entity's franchise tax liability is calculated by first determin...
No Deduction For Donation of "Facade Easement"
May 7, 2020 - Volume 14 Issue 88 Print Report
In December, 2003, the taxpayer, (K), entered into an agreement with the National Architectural Trust, (NAT), pursuant to which K gave to NAT a facade easement
Tax Cuts & Jobs Act Does Not Disturb Closing Agreement
May 6, 2020 - Bulletin Print Report
In Year 1, S and other "Ws" of Product 1 executed Agreement A with the "Xs" to resolve claims by the Xs for...relief. Agreement A requires each W to remit a...
Coffee And Tea Brewers Were Used To Process "TPP"
May 6, 2020 - Bulletin Print Report
The Alabama legislature has imposed an excise tax on the...use...in this state of tangible personal property, ("TPP"), at the rate of four percent of the sales price...
Marijuana Purveyor Found To Be A "Reseller"
May 6, 2020 - Bulletin Print Report
In 2010, R obtained a license from the city of Richmond, California, ("RI"),to open a medical marijuana facility. During the years in issue, R operated a medica...
Contribution of a Partnership Interest
May 6, 2020 - Volume 14 Issue 87 Print Report
L became a limited partner in a partnership upon its formation in 1971. In 1974, he contributed his partnership interest to a charitable organization described in Sec...
I.R.S. Temporarily Reduces A REIT's "Cash Limitation Percentage"
May 5, 2020 - Bulletin Print Report
In recognition of the need "for enhancing liquidity during the current period of economic disruption," the I.R.S. has issued a revenue procedure, Rev. Proc. 2020-19,...
Physical Presence Required For Imposition of Premiums Tax
May 5, 2020 - Volume 14 Issue 86 Print Report
Prior to 2001, United Parcel Service, Inc., (UPS), included the income of UPINSCO and UPS Re on the affiliated group's Indiana corporate income tax return. In 200...
The FBAR Penalty Is Primarily Remedial
May 5, 2020 - Bulletin Print Report
In 1970, Congress enacted the Bank Secrecy Act, ("BSA"), in order to combat money laundering in the U.S. Pursuant to the BSA, U.S. "persons" are required to...
Theater Workers Found To Be Statutory Employees
May 5, 2020 - Bulletin Print Report
WPPis a non-profit off-Broadway theater company that produces plays written and directed by women. The Department of Labor concluded that WPP owed additional tax contribu...
Loral To Pay Special Dividend
May 4, 2020 - Bulletin Print Report
On April 30, 2020, Loral Space & Communications, Inc., ("L"), announced that its Board of Directors has declared a "special dividend" in the amount of $...
Receipts From F-16 Sales Are Not "Texas Gross Receipts"
May 4, 2020 - Bulletin Print Report
The Arms Export Control Act restricts sales of U.S.-manufactured military goods to foreign governments. Defense articles of greater military sensitivity, including the F-16 fig...
COD Income Can Arise From A "Significant Modification" Of Debt
May 4, 2020 - Bulletin Print Report
We have recently seen some prominent companies engage in acts that, unless ameliorativecorrective action is taken, could lead to a finding that they have "defaulted&...
Contingent Interest Is Good REIT Income
May 4, 2020 - Volume 14 Issue 85 Print Report
A REIT entered into a loan agreement with X. Under the agreement, X borrowed $4,500,000 from the REIT for a term of five years to be used solely to acquire 200 acres...
Book Seller's Club Membership Fees Subject To Sales Tax
May 1, 2020 - Bulletin Print Report
B operates a discount book retail business headquartered in Birmingham, Alabama. B sells books, magazines, collectible supplies, cards, and other gifts in retail stores through...
Expenses Funded By "Covered Loans" Not Deductible
May 1, 2020 - Bulletin Print Report
Easily the most controversial aspect of the CARES Act, (the "Act"), is the well-publicized Paycheck Protection Program, ("PPP"), which was enacted by Sec. 1...
Inadvertent Termination of 'S' Election
May 1, 2020 - Volume 14 Issue 84 Print Report
X was formed in State on Date 1. X made an election to be treated as an 'S' corporation, effective Date 1. X's ma...
Ford's Isolated Recapitalization
April 30, 2020 - Volume 14 Issue 83 Print Report
Corporation, (C), which is Ford Motor Company, is primarily engaged in Business A. C has two classes of stock, Class A Common Stock and Class B Common Stock. The Clas...
Sign Support Components Constitute Tangible Personal Property
April 30, 2020 - Bulletin Print Report
TP designs, manufactures, and installs signs and building fascia used in facility branding. The Department's auditor assessed sales tax on TP's sale and installation of...
The Willens Deal Survey April 2020
April 29, 2020 - The Deal Survey: April 2020 Print Report
Welcome to our summary of deals for April 2020. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
The Government's "Risk Corridor" Obligations Must Be Satisfied
April 29, 2020 - Bulletin Print Report
In 2010, Congress passed the Patient Protection and Affordable Care Act, ("ACA"). The ACA called for the creation of "Health Benefit Exchanges" in each Stat...
Structural Components As Real Property
April 29, 2020 - Volume 14 Issue 82 Print Report
An unincorporated trust, otherwise qualifying as a real estate investment trust,(REIT), plans to invest in obligations secured by mortgages on real property, in...
Partnership Distributions Found To Be "Dividends"
April 29, 2020 - Bulletin Print Report
Deere & Company, ("D"), is the sole member of the limited liability company, JDH-US. D and JDH-US formed the partnership, JDH-Lux. The Partnership Agreement named...
Will Loews Wreak Havoc On Diamond Offshore's NOLs?
April 28, 2020 - Bulletin Print Report
On April 26, 2020, Loews Corporation's, ("LC"), 53 percent owned subsidiary, Diamond Offshore Drilling, Inc., ("DOD") (and certain of DOD'ssub...
Exchanging Timberlands
April 28, 2020 - Volume 14 Issue 81 Print Report
TP owned 50 acres of timberland in fee which he held for investment purposes. Over the previous ten years TP had sold most of the merchantable timber growing on its l...
Rental Property Not Used Primarily For "Commercial" Purposes
April 28, 2020 - Bulletin Print Report
Plaintiffs each purchased property in a Chicago enterprise zone with the intent to continue operating it as affordable housing under section 8 of the United States Housing Act...
Installment Sale Gain Escapes Virginia Taxation
April 27, 2020 - Bulletin Print Report
TP is a Virginia, ("V"), resident who owns stock in an 'S' corporation that apportions approximately 10 percent of its income to V. TP intends to sell all of...
Bank Denied NOL Deduction
April 27, 2020 - Bulletin Print Report
In 2010, NBSC merged with CBT and was renamed SynovusBank, ("P"). CBT reported net operating losses, ("NOLs") for 2009; NBSCreported NOLs for 20...
Bona Fide Losses Are Deductible
April 27, 2020 - Volume 14 Issue 80 Print Report
The question is whether trusts may recognize capital losses generated by stock sales between themselves. The answer is yes. See Widener et al. v. Commissioner
Assessing The Tax Treatment Of Payments To CT Homeowners
April 24, 2020 - Bulletin Print Report
In August 2015, agencies of the State of Connecticut, ("CT"),began investigating complaints by homeowners concerning the premature deterioration of the concrete...
NOL Provisions Of The "CARES" Act
April 24, 2020 - Bulletin Print Report
We are expecting numerous corporations to sustain net operating losses, ("NOLs"), in 2020 for obvious reasons. An NOL arises when a corporation's allowable deduct...
Sec. 1031(f)(4) Denies Taxpayer Nonrecognition Treatment
April 24, 2020 - Volume 14 Issue 79 Print Report
A owns real property (P1) with a fair market value of $150x and an adjusted basis of $50x. B owns real property (P2) with a fair market value of $150x and an adjusted...
Double Taxation Of Undistributed Capital Gains Of RICs
April 23, 2020 - Bulletin Print Report
The taxpayer, a regulated investment company, ("RIC"), for federal income tax purposes, requests a ruling regarding whether it is permitted to subtract its shareholde...
Pension Plan Imposed An "Active Service" Requirement
April 23, 2020 - Bulletin Print Report
The General Court of New Hampshire, ("legislature"), enacted the Plan as "a defined benefit plan providing disability, death, and retirement protection to member...
Daily Fantasy Sports Contests Are Not "Gambling"
April 23, 2020 - Bulletin Print Report
On April 4, 2016, DB filed a complaint against W. The complaint alleged that DB and W had engaged in a daily fantasy sports, ("DFS"), contest on a website known as Fa...
Retailers Denied Sales Tax Refunds
April 23, 2020 - Volume 14 Issue 78 Print Report
Plaintiffs, as retailers, entered into agreements with financing companies to issue "private label credit cards" (PLCC). When a customer makes a purchase wi...
Rent Free Use Of Railroad Track Not A Gift Of Public Funds
April 22, 2020 - Bulletin Print Report
During the Second World War, the War Department of the U.S. government used its eminent domain powers to acquire hundreds of square miles near the Columbia River (in the State...
Taxpayer Not Eligible For "Separation From Service" Exception
April 22, 2020 - Bulletin Print Report
Petitioner, ("P"), worked for R until 1987. He later worked for N until 1999. P has been "generally unemployed" since 2002, when he was 46 years of age. In...
I.R.S. Will "Reconsider" Liberal FTC Ruling
April 22, 2020 - Bulletin Print Report
The I.R.S. has decided to reconsider a revenue ruling it issued nearly 50 years ago regarding the limitations period for filing claims for refund (or credit) ofoverpaymen...
Timber Is "Part of the Land"
April 22, 2020 - Volume 14 Issue 77 Print Report
TP is an individual who was married to K. Together, they acquired substantial acreage in timberlands for investment. They divorced in Year 1, but continued holding th...
Conservation Purposes Not Protected "In Perpetuity"
April 21, 2020 - Bulletin Print Report
H owns the historic Tremaine Building in Cleveland, Ohio. H donated an easement in the facade of the building and certain airspace restrictions associated with the building to...
Governmental Grants Included In Gross Income
April 21, 2020 - Bulletin Print Report
TP is a municipal corporation formed under the laws of State. TP established Program. Program provides grants on behalf of eligible homeowners with adjusted gross inco...
Is Liberty TripAdvisor Holdings, Inc. Preparing To End Its Existence?
April 21, 2020 - Bulletin Print Report
Last week, amid unprecedented peregrinationsin its stock price, Liberty TripAdvisor Holdings, Inc. ("LTRPA") was forced to report that "it is not aware of...
When Is a Guarantee Fee "Incurred"
April 21, 2020 - Volume 14 Issue 76 Print Report
TP was formed as a limited liability partnership for the purpose of constructing and operating a residential housing project. In order for TP to receive a lower inter...
Energy Transfer L.P. Is Not An "Investment Company"
April 20, 2020 - Bulletin Print Report
X, which we believe is Energy Transfer L.P., is a publicly-traded partnership within the meaning of Sec. 7704(b) of the Code that is classified as a partnership for federal inc...
Solar Energy System Exempt From Property Tax
April 20, 2020 - Bulletin Print Report
The school district adopted a resolution to opt out of a tax exemption for the value of solar energy systems subsequently installed on real property within the school district....
When Does A Private Equity Business Begin?
April 20, 2020 - Bulletin Print Report
In 2007, PH formed GSEas a sole proprietorship. PH intended for GSEto operate as a holding company for insurance businesses he hoped to acquire and nurture. In late...
Depreciation Of Automobile Not Deductible
April 20, 2020 - Volume 14 Issue 75 Print Report
During 1974, JE was required to make 48 trips between his residence and his physician in order to receive needed medical treatment. In making these trips, JE and his...
Lawn Care Business Not Exempt From Use Tax
April 17, 2020 - Bulletin Print Report
Michigan's use tax exempts property consumed in the "tilling, planting, caring for or harvesting things of the soil..." The question presented is whether the Legi...
Property "Damaged" By COVID-19 Not Eligible For Texas Tax Exemption
April 17, 2020 - Bulletin Print Report
Sec. 11.35 of the Texas Tax Code, enactedin response to the physical damage Hurricane Harvey caused to property in the coastal region in 2017, creates...
Exhibiting At Trade Show Created Substantial Nexus
April 17, 2020 - Bulletin Print Report
TP is a California-based company that did not have any employees located in Washington until November 2012. In 2010, 2011, and 2012, however, TP sent employees to Seattle, ...
Disgorging E&P of an 'S' Corporation
April 17, 2020 - Volume 14 Issue 74 Print Report
C was incorporated in 1946 and its principal business activity is leasing improved real property. On December 29, 1986, C elected to be treated as an 'S' corp...
Berkshire Hathaway's Stock Dividends From OXY Will Be Taxable
April 16, 2020 - Bulletin Print Report
Berkshire Hathaway, as it is known to do, came to Occidental Petroleum's rescue in the latter's efforts to acquire AnadarkoPetroleum Corporation. Crucial funding...
University Basketball Games Escape Connecticut "Admission" Tax
April 16, 2020 - Volume 14 Issue 73 Print Report
The University (most likely the University of Connecticut, or UConn) is an entity exempt from federal income tax under Sec. 501(c)(3) of the Internal Revenue Code. Th...
Interest Paid On Appraisal Award Is Taxable As Such
April 16, 2020 - Bulletin Print Report
On August 22, 1997, SMC was merged into S, a privately-held Delaware corporation. At the time of the merger, G held 120,000 shares of the common stock of S. As a result of the...
Change In Method Of Accounting Invokes Sec. 481
April 16, 2020 - Bulletin Print Report
During 2012, petitioners owned and rented two real estate properties in Hawaii. They purchased the first property, ("BH"), in September 2003 for $1,600,000. They purc...
Provider Of "VOIP" Services Required To Collect "E911" Tax
April 15, 2020 - Bulletin Print Report
TP is a foreign corporation with its commercial domicile in California. TP provides Voice over Internet Protocol, ("VOIP"), services. TP's VOIP equipment allows O...
Baker Hughes Will Write-Off 75 Percent Of Its Goodwill Balance
April 15, 2020 - Bulletin Print Report
Baker Hughes, ("BKR"), in light of the "significant decline in oil and gas prices and the COVID-19 Pandemic," decided it could not wait until July 1st to pe...
Split-Off Preceded By Property Exchange
April 15, 2020 - Volume 14 Issue 72 Print Report
D has outstanding a single class of stock. A and B own all shares of D stock, each owning "a" shares. D is engaged in Business A and in Business B. <...
Lack Of Intent To Deceive Prevents Theft Loss Deduction
April 15, 2020 - Bulletin Print Report
On June 1, 2006, the Ss and MRSL closed the escrow for the "P" property. Shortly after moving into the P property, petitioners had problems with the well-water system...
Xperi And TiVo Have A Number Of Tax Hurdles To Surmount
April 14, 2020 - Bulletin Print Report
The merger of Xperi Corporation, ("XC"), with TiVo Corporation, ("TV"), seems to be on schedule with a second quarter closing anticipated. The merger is str...
Determining Sec. 304's "Value Test"
April 14, 2020 - Volume 14 Issue 71 Print Report
I owned all ofthe outstanding stock of Y. I and C, a person not related to I, together owned all of the outstanding stock of X. I owned the Class B stock (44 sh...
Purchases By Utility Of Electricity Subject To Sales Tax
April 14, 2020 - Bulletin Print Report
Petitioner, ("P"), is a New York public utility that provides telecommunication services to consumers nationwide. In November 2013 and August 2014, P applied for refu...
A Blog Is Not An "Other Publication"
April 14, 2020 - Bulletin Print Report
The City requests an advisory opinion regarding the exemption for newspapers, magazines, newsletters and other publications for purposes of the Business, Professional and Occup...
UBS Executive Denied Connecticut Resident Tax Credits
April 13, 2020 - Bulletin Print Report
MRC and MRSC, husband and wife, were domiciled in, and residents of, Connecticut, ("CT"), for the tax years 2005, 2007, and 2008. During the tax years, MRC, an execut...
Roof Replacement Expenses Must Be Capitalized
April 13, 2020 - Bulletin Print Report
Plaintiffs, ("Ps"), purchased the CD property, ("CDP"), on June 8, 1977 for $43,000. The CDP has a "steep roof" or a "steep pitch roof."...
Subordination Payments Are Rents From Real Property
April 13, 2020 - Volume 14 Issue 70 Print Report
An unincorporated trust, otherwise qualifying as a real estate investment trust, (REIT), under Sec. 856 of the Internal Revenue Code, acquired the fee interest only i...
Correction Instrument Not Effective To Eliminate Real Estate Transfer Tax
April 9, 2020 - Bulletin Print Report
S is a limited liability partnership. On January 12, 2016, an Electronic Real Estate Transfer Return, ("eRETR"), was filed reporting the December 29, 2015 conveyance...
Lottery Winnings Not Constructively Received
April 9, 2020 - Volume 14 Issue 69 Print Report
In 1989, J was employed as a clerk at Nigeria's New York City Consulate. After purchasing 12 $1 lottery tickets, he hit the jackpot, winning a grand total of $26,...
Substance Over Form Doctrine Informs Insolvency Determination
April 9, 2020 - Bulletin Print Report
MRH borrowed more than $150,000 to pay costs associated with medical school for his son. These loans were fully discharged in 2011. That same year, MRHreceived a non-taxa...
Child Contingency Turns Deductible Alimony Into Child Support
April 8, 2020 - Bulletin Print Report
Petitioner, ("P"), and his former spouse were married for 14 years and had four children together before they officially dissolved their marriage on April 19, 2010. T...
Taxpayer Eligible For Wholesale Sales Exemption From Use Tax
April 8, 2020 - Bulletin Print Report
PF purchases meals from a third party, HSG, without paying sales tax; provides the meals to its residents as a component of its nursing home services; and includes the cost of...
Real Estate Taxes Paid By Lessee Are Rents From Real Property
April 8, 2020 - Volume 14 Issue 68 Print Report
In its operations, an unincorporated trust, otherwise qualifying as a real estate investment trust, (REIT), purchased the land underlying an apartment complex and acq...
Environmental Credit Sales Give Rise To Business Income
April 8, 2020 - Bulletin Print Report
American Honda Motor Company, Inc., ("AH"), is the principal United Statessubsidiary of Honda Motor Co., a Japanese corporation. AH has a long-standing traditio...
UTX And RTN Have Combined To Form RTX
April 7, 2020 - Bulletin Print Report
On Friday, April 3, 2020, Raytheon Technologies Corporation, ("RTX"), was born. RTX is the product of the highly touted "merger of equals" transaction in wh...
Repurchasing Escrowed Stock
April 7, 2020 - Volume 14 Issue 67 Print Report
Under a plan of reorganization, Y Corporation, (Y), acquired all ofthe properties of X Corporation, (X), solely in exchange for 40,000 shares of voting common s...
Film Exhibition Costs Are Not "Cost Of Goods Sold"
April 7, 2020 - Bulletin Print Report
Since 1893, the State of Texas has imposed a franchise tax on most domestic and foreign corporations operating in this State. Determining a taxable entity's franchise tax l...
Rental Fees Are Not Tax-Exempt "Demurrage"
April 7, 2020 - Bulletin Print Report
Airgas, ("AG"), sells industrial, medical, and welding gases. Its customers take delivery of the gases in steel cylinders that AG owns. AG charges a rental fee of 12...
The "SRP" Is Not An "Excise Tax On A Transaction"
April 6, 2020 - Bulletin Print Report
Debtor, ("D"), filed a voluntary petition for relief under Chapter 13 of the U.S. Bankruptcy Code on August 12, 2019. The I.R.S. filed a proof of claim, ("Claim&...
Undistributed 'S' Corporation Income Is Not Debt
April 6, 2020 - Bulletin Print Report
Atek was an 'S' corporation formed in 1996 by AT and EK. Atek was a construction company. In 2002, AT gave 10 percent of his stock to MT. For tax years 2002 and 2003, A...
Lawsuit Settlement Agreements Are Binding Contracts
April 6, 2020 - Bulletin Print Report
D appealed the local property tax assessments on his commercial properties. On February 21, 2019, the parties entered into a stipulation of settlement reducing saidassess...
When Is Cosmetic Surgery Medical Care?
April 6, 2020 - Volume 14 Issue 66 Print Report
TPA undergoes mastectomy surgery that removes a breast as part of treatment for cancer and pays a surgeon to reconstruct the breast.  ...
Investment Adviser Relegated To Place Of Performance Sourcing
April 3, 2020 - Bulletin Print Report
P is incorporated under the laws of New York. P is a wholly owned subsidiary of BTG S.A. BTG S.A. is a wholly owned subsidiary of BSA. P is the sole member of US BD and US AM....
Tardy Taxpayer Denied Adoption Tax Credit
April 3, 2020 - Bulletin Print Report
S's adoption of her son, a child with "special needs," was finalized in 2003, but S did not claim a credit for "qualified adoption expenses" for the 200...
Calculating a REIT's NOL
April 3, 2020 - Volume 14 Issue 65 Print Report
TP is a REIT. For its taxable year ended Date 2, TP had a net capital gain of approximately "$a." For the same taxable year, TP generated a net operating lo...
T-Mobile And Sprint Complete Their Business Combination
April 2, 2020 - Bulletin Print Report
Ironically, April 1, 2010 is now officially the date on which the long-awaited, and seemingly doomed, business combination of T-Mobile US, Inc., ("T"), and Sprint Cor...
MSG Board Approves Spin-Off
April 2, 2020 - Bulletin Print Report
On March 31, 2020, the Board of Directors of Madison Square Garden, Inc., ("Registrant"), approved the distribution to its shareholders of the common stock of a newly...
Real Estate Partnership Is Not An Exempt "Investment Partnership"
April 2, 2020 - Bulletin Print Report
1. Partnership, ("PS"), is a Limited Partnership owned by six limited partners. 2. PS owns real estate in North Carolina, ("NC"). 3. One of the partners res...
Services Did Not "Taint" Otherwise Qualifying Rents
April 2, 2020 - Volume 14 Issue 64 Print Report
X is a REIT. X had contracted with an independent contractorto provide services and perform managerial and operational functionswith respect toits c...
Are Stock Dividends In The Offing For REITs?
April 1, 2020 - Bulletin Print Report
In order for a real estate investment trust, ("REIT"), to maintain its tax status it must, among other things, distribute to its shareholders at least 90 percent of i...
Indefinite Assignment Shifts Location Of "Tax Home"
April 1, 2020 - Bulletin Print Report
B operates a "concierge CFO" business called "Project Next," ("PN"), in which he contracts with companies to manage their finances and to lead and...
Where Do LendingTree's Customers Receive The Benefit Of Its Service?
April 1, 2020 - Bulletin Print Report
LendingTreeLLC, ("L"), operates an online loan marketplace that matches prospective borrowers with potential lenders. Interested borrowers can complete an onlin...
Terminating the Two-Person Partnership
April 1, 2020 - Volume 14 Issue 63 Print Report
In 1946, Mr. McClausen, (M), and his brother, (B), formed a partnership to engage in the floral business. On October 17, 1956, M and B executed an agreement which pro...
Convenience And Order Processing Fees Not Subject To Sales Tax
March 31, 2020 - Bulletin Print Report
The taxpayer, ("TP"), operates the Event Center in Salt Lake City, Utah. The Utah Jazz play their home games at the Event Center. TP sells tickets to the events held...
When Is A Dividend Includible In Gross Income?
March 31, 2020 - Volume 14 Issue 62 Print Report
P is a wholly-owned subsidiary of FW, a publicly held resident foreign corporation organized under the laws of the U.K. . P owns all of the stock of E, a Canadian cor...
Parking Revenues Qualify As "Rents From Real Property"
March 31, 2020 - Bulletin Print Report
TP and REIT A, (together, "Companies"), have each elected to be taxed as a REIT. REIT A and LLC, a REIT,plan to develop an unimproved parcel in Area, ("Par...
When Can A Delaware Corporation Repurchase Its Stock?
March 31, 2020 - Bulletin Print Report
At the risk of incurring the wrath of certain politicians, those corporations who are not participating in government loan programs (and are therefore temporarily barred from r...
Termination Of A Trust Is Not Analogous To A Merger
March 30, 2020 - Bulletin Print Report
Per Illinois Code, a tax is imposed on the privilege of using any motor vehicle acquired by...transfer... Similar language is used for the Aircraft and Watercraft Use Tax. In 2...
Supreme Court Approves Use Of "But For" Causation Test
March 30, 2020 - Bulletin Print Report
Mr. B.A. owns Entertainment Studios Network, ("ESN"), the operator of seven television networks. ESN sought to have Comcast, ("C"), carry its channels. C re...
Airbnb, Inc. Does Not Exercise A Taxable Privilege
March 30, 2020 - Bulletin Print Report
The Companies each manage an online platform that permits property owners or their agents, ("Owners"), to list and advertise their properties for short-term accommoda...
Guaranteed Payments Deductible For NYC UBT Purposes
March 30, 2020 - Volume 14 Issue 61 Print Report
Petitioner, an Ohio limited partnership, owns and operates the New York Yankees. Five limited partners withdrew from the partnership and, pursuant to the partnership...
Cruise Lines Appear To Be Ineligible For Loan Guarantees
March 27, 2020 - Bulletin Print Report
The cruise line companies are able, for the most part, to avoid U.S. tax consequence with respect to the income they earn "from the international operation of ships...&quo...
A Mixture Of Butane And Gasoline Is Not An "Alternative Fuel Mixture"
March 27, 2020 - Bulletin Print Report
Plaintiff, ("P"), alleges that it is a producer of a mixture of butane and gasoline. P filed amended returns that claimed the alternative fuel mixture credit, ("...
Another Victory For Fannie Mae and Freddie Mac
March 27, 2020 - Volume 14 Issue 60 Print Report
Hall County, Georgia, argues that it is entitled to collect taxes from theDefendants pursuant to O.C.G.A. Sec. 48-6-1. That statute imposes a tax "on each...
The Senate COVID-19 Bill Features Certain Significant Tax Provisions
March 26, 2020 - Bulletin Print Report
While tax relief is hardly the principal focus of the Senate's attempt to soften the economic blow that COVID-19 is visiting on the country, there are certain interesting a...
Bakery Had No "Nexus" With Florida
March 26, 2020 - Bulletin Print Report
TP is an "X" corporation. It is a bakery solely dedicated to the exclusive manufacture and sale of brownies, cookies, and bars for human consumption. At times, TP'...
Casualty Loss Does Not Generate Sales Tax Refund
March 26, 2020 - Bulletin Print Report
On December 22, 2010, DG purchased a 2008 Toyota Camry. On June 10, 2019, DG and her husband, PG, purchased a 2016 Toyota Prius. On August 30, 2019, DG suffered a "compreh...
Classifying Expenses Incurred By a Bankruptcy Trustee
March 26, 2020 - Volume 14 Issue 59 Print Report
M Corporation, (M), reported its income under the accrual method. During 1973, M filed a petition for a reorganization under Chapter X of the Bankruptcy Act. A was ap...
Butane Classified As A "Taxable Fuel"
March 25, 2020 - Bulletin Print Report
In 1954, Congress enacted Sec. 4081, which imposesa tax on the removal, entry, or sale of a taxable fuel . Sec. 4083 defines taxable fuels subject to Sec. 40...
Foreign Commerce Qualifies As "Interstate" Commerce
March 25, 2020 - Bulletin Print Report
Company, ("C"), is a foreign corporation. C has neitheroffices nor "presence" in Illinois. C is global aircraft leasing company. C engages in buying,...
Conveyance of Condominium Units Not Subject To The "Mansion Tax"
March 25, 2020 - Volume 14 Issue 58 Print Report
Petitioner, (P), is the sponsor of the "X" Hotel New York (Hotel). The Hotel is a high-rise luxury hotel condominium located in Manhattan, consisting of app...
The Allure Of "Market Discount" Preferred Stock
March 24, 2020 - Bulletin Print Report
On March 23, 2020, in Barron's, the always informative Andrew Barypointed out that many preferred securities, issued in many cases by household names such as Wells Fa...
Treating Myopia Constitutes Medical Care
March 24, 2020 - Volume 14 Issue 57 Print Report
A has an optical disorder known as "myopia" (nearsightedness) and is considering undergoing a procedure to correct this condition. Myopia occurs when the ey...
Limestone Purchases Exempt From Sales And Use Tax
March 24, 2020 - Bulletin Print Report
Nelson Industrial Steam Company, ("N"), produces electricity by burning petcoke to create steam that turns turbines to generate electricity for its own use and for re...
No "Prior Transfer Credit" Against Illinois Estate Tax
March 24, 2020 - Bulletin Print Report
SM died on May 21, 2015, leaving behind an estate valued at approximately $6.57 million. SM's parents preceded her in death. In 2007, SM's mother, LM, died, leaving SM...
The Willens Deal Survey March 2020
March 23, 2020 - The Deal Survey: March 2020 Print Report
Welcome to our summary of deals for March 2020. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
Claim For Reimbursement Prevents Theft Loss Deduction
March 23, 2020 - Bulletin Print Report
Petitioner, ("P"), amended her 2017 income tax return to claim a theft loss on Schedule A for money she invested in KAI, a "Ponzischeme." The auditor...
WalMart Entitled To The "Freeport" Exemption
March 23, 2020 - Bulletin Print Report
WalMart, ("W"), filed with the Fayette County Board of Tax Assessors, (the "Board"), a business personal property tax return on March 24, 2017, for two cate...
Taxpayer Found To Be An Investor
March 23, 2020 - Volume 14 Issue 56 Print Report
M incorporated C in December, 1982, to oversee money managers charged with investing certain of his assets. M was the sole shareholder and president of C. &...
Automatic Filing (And Payment) Extension Instituted By Treasury Dept.
March 21, 2020 - Bulletin Print Report
Sec. 7508Aof the Internal Revenue Code provides the Secretary of the Treasury, or his delegates, ("Secretary"), with authority to postpone the time for performi...
BNY's Lien Was Not "Choate"
March 20, 2020 - Bulletin Print Report
ALL issued a homeowner's insurance policy, (the "Policy"), to the Cs for their home in Southampton, New York. On March 6, 2015, the property sustained damage and...
Land Surveying Is Within The "Field of Engineering"
March 20, 2020 - Volume 14 Issue 55 Print Report
The taxpayer, Kraatz & Craig Surveying, Inc., (KCS), is in the business of surveying land. KCS does not have any employees who are licensed engineers. At issue is...
Cincinnati Bell Finally Chooses A Suitor
March 20, 2020 - Bulletin Print Report
Cincinnati Bell, ("CB"), proved to be a very attractive target. After being pursued by several suitors, it has now entered into an Agreement and Plan of Merger with R...
Room Furnishings Not Resold To Hotel Guests
March 20, 2020 - Bulletin Print Report
DHC owned DIS and managed several dozen hotels in Missouri, ("DH"). DIS sells furnishings and supplies, ("room furnishings"), to the hotels managed by DHC....
April 15th Federal Tax Payments Are Postponed
March 19, 2020 - Bulletin Print Report
On March 13th, the President issued an emergency declaration, ("Emergency Declaration"). The Emergency Declaration instructed the Secretary of the Treasury "to p...
"Recognized" Losses Reduce E&P Of a CFC
March 19, 2020 - Volume 14 Issue 54 Print Report
P owns all of the voting stock of S, a controlled foreign corporation (CFC) within the meaning of Sec. 957(a). S owns all of the voting stock of S1, a foreign corpora...
Aircraft Found Subject To California Use Tax
March 19, 2020 - Bulletin Print Report
Appellant, ("APP"), purchased the aircraft in question on December 30, 2004 in California. The aircraft was first functionally used in California. The seller of the a...
BEP Plans To Roll Up TERP
March 19, 2020 - Bulletin Print Report
From what we can gather, Brookfield Renewable Partners, L.P., ("BEP"), is owned by Brookfield Asset Management, Inc., ("BAM"), and by the public. BEP, in tu...
Sec. 351(a) Supersedes The "Assignment of Income" Doctrine
March 18, 2020 - Volume 14 Issue 53 Print Report
A conducted a medical practice as a sole proprietorship, the income of which was reported on the cash receipts and disbursements method of accounting.  ...
FLWS Will Be Buying A "Disregarded Entity"
March 18, 2020 - Bulletin Print Report
Recently, 1-800-FLOWERS.COM, ("FLWS"), announced the signing of a definitive agreement to acquire PERSONALIZATIONMALL.COM, ("PM"). PM is a limited liability...
Legal Fees Allocable To Tax-Exempt Income Not Deductible
March 18, 2020 - Bulletin Print Report
In July 2011, JK appointed D to serve as a Circuit Court judge. In November 2012, D was elected to a six-year term. His term of office expired on January 7, 2019. The OCJFD&nbs...
Intuit Cannot Compel Arbitration
March 18, 2020 - Bulletin Print Report
Intuit, Inc., ("II"), owns TurboTax, ("TT"), an online tax preparation service. In 2002, II and several other tax preparation services entered into an agree...
Statutory Apportionment Formula Found To Be Unconstitutional
March 17, 2020 - Bulletin Print Report
MLI was an 'S' corporation headquartered in Big Lake, Minnesota. At no time did MLImaintain a permanent business location in Michigan or retain permanent employee...
Taxation Of "FHPs" Is Not Unconstitutional
March 17, 2020 - Bulletin Print Report
Appellants, ("APPs"), filed applications for refunds of sales tax they paid for feminine hygiene products, ("FHPs"). Their claims for refund were denied. Th...
Broker's Tax Home Was The Location Of His Clients
March 17, 2020 - Bulletin Print Report
Z is a broker specializing in helping high technology companies meet their needs for what he terms the "necessary evil" of office space. Most of his clients are headq...
Amounts Paid For Diagnostic Procedures Are Deductible
March 17, 2020 - Volume 14 Issue 52 Print Report
TPA undergoes an annual physical examination, which is performed by a physician. TPA pays for the physician's services and for laboratory tests. &...
Equitrans Midstream Corporation To "Roll Up" EQM
March 16, 2020 - Bulletin Print Report
Equitrans Midstream Corporation, ("EMC"), was spun-off from EQT on November 12, 2018. In fact, only 80.1 percent of the stock of EMC was distributed by EQT on that da...
California Resident Runs Afoul Of The "Duty Of Consistency"
March 16, 2020 - Bulletin Print Report
From 2000 through 2004, appellants, ("APPs"), acting through Trust, purchased 157 shares of stock of Kiwi for $3,198,862. According to Annual Information Statements i...
State Acted As A Market Participant Not As A Regulator
March 16, 2020 - Bulletin Print Report
The Indiana East West Toll Road is one of several east-west routes across Indiana from the Illinois Border to the Ohio Border, but it is Indiana's only toll road. The India...
Depreciation Is Not A Medical Expense Deduction
March 16, 2020 - Volume 14 Issue 51 Print Report
The issue is whether petitioners are entitled to deduct depreciation as a medical expense under Sec. 213. Petitioners' so...
PEP'S Acquisition Of Rockstar Energy Beverages Has "Up-C" Overtones
March 13, 2020 - Bulletin Print Report
Pepsico, Inc., ("PEP"), announced that it has entered into an agreement to acquire Rockstar Energy Beverages, ("REB"), "the popular energy drink maker,...
Termination Payments Are Not Eligible For Capital Gain Treatment
March 13, 2020 - Volume 14 Issue 50 Print Report
B worked as an insurance agent for State Farm Insurance Company (SFIC) from 1963 to 1997 and conducted business as the WLBIA....
Tenants By The Entirety Are "One Person In Law"
March 13, 2020 - Bulletin Print Report
On April 30, 2018, Husband, ("H"), sold an automobile. In May 2018, Wife, ("W"), purchased an automobile. The discrepancy in titled owners was later noticed...
USPS Postmark Trumps A Private One
March 13, 2020 - Bulletin Print Report
On November 30, 2017, respondent mailed petitioners, ("Ps"), by certified mail to their last known address, a notice of deficiency for tax year 2015. The notice of de...
Tesco plc Announces Massive "Special Dividend"
March 12, 2020 - Bulletin Print Report
Tesco plcmade a stunning announcement recently regarding certain transformative transactions it has agreed to pursue. Thus, the company announced that it has entered into...
California Residents Not Allowed An "OSTC" For Arizona Taxes
March 12, 2020 - Bulletin Print Report
Appellants, ("APPs"), were California residents in 2014. In 2014, APPs, sensing a market opportunity, sold property situated in Arizona, which resulted in them recogn...
Sec. 72(t) Withstands "Rational Basis" Scrutiny
March 12, 2020 - Bulletin Print Report
Petitioner, ("P"), was a resident of Wisconsin. In 2008, when she was not yet 59 1/2 years of age, was not disabled, and was not eligible for any of the exceptions de...
Treatment For Obesity Is Medical Care
March 12, 2020 - Volume 14 Issue 49 Print Report
Taxpayer A is diagnosed by a physician as obese . Taxpayer B, by contrast, is not obese but suffers from hypertension. Taxpayer B has been directed by a physi...
CODI To Acquire A "Pass-Through" Entity
March 11, 2020 - Bulletin Print Report
Compass Diversified Holdings, ("CODI"). announced that it has entered into a definitive agreement to acquire Baton Rouge, Louisiana-based Marucci Sports, LLC, ("...
Limited Deduction for Charitable Contribution of "Sec. 306" Stock
March 11, 2020 - Volume 14 Issue 48 Print Report
In a tax-free reorganization, the petitioner, (CP), a individual, merged his six controlled corporations with andinto L Corporation, (L). In the merger, among o...
No Transfer Of Possession Or Control Of Gymnasium Equipment
March 11, 2020 - Bulletin Print Report
G owns and operates health clubs in Texas that sell memberships subject to a Membership Agreement. G purchased items for its health clubs on which it paid sales and use tax. Th...
Services Performed By JV Are Treated As Performed By TRS
March 10, 2020 - Volume 14 Issue 47 Print Report
R is a real estate investment trust, (REIT). R owns and operates rental apartment properties in several major metropolitan areas. In 2002, R formed T to provide servi...
Aon To Combine With Willis Towers Watson
March 10, 2020 - Bulletin Print Report
Aon plc, ("AON"), and Willis Towers Watson plc, ("WLTW"), announced a definitive agreement to combine "in an all-stock transaction" with an implie...
Real Property Found To Be A Commercial Hotel
March 10, 2020 - Bulletin Print Report
During the years at issue, B owned a four-story building that contained 124 private rooms and was situated on approximately two acres of land in Fort Wayne, Indiana. Each room...
Sales Tax Is Imposed On "Retail Sales" Of Tangible Personal Property
March 10, 2020 - Bulletin Print Report
PC LLC is an automobile sales and service group that wholly owns a number of luxury car dealerships, each of which is organized as a limited liability company. Petitioner, (&qu...
Dividends Eligible For The DRD Constitutes "Income Not Taxable"
March 9, 2020 - Bulletin Print Report
G is a New York corporation headquartered in St. Louis, Missouri. G filed as a C corporation for both federal and North Carolina, ("NC"), tax purposes. G is the paren...
Separated Spouse Not Entitled To Interest And Property Tax Deductions
March 9, 2020 - Bulletin Print Report
In 2015, MRV and MSV were separated while a divorce proceeding was pending in the Circuit Court. Throughout that year, MSVlived in the marital home. The parties had a not...
MCK Sets Final Exchange Ratio For Split-Off Of PF2 SpinCo, Inc.
March 9, 2020 - Bulletin Print Report
McKesson Corporation, ("MCK"), is in the final stages of one of the more interesting transactions we have encountered, involving a "split-off" of the stock...
Is Income Derived From Selling Call Options UBTI?
March 9, 2020 - Volume 14 Issue 46 Print Report
An organization which is exempt from income tax under Sec. 501(c)(3) regularly sells call optionson certain securities held in itsin...
Real Estate Transfer Fee Applied To "Deed In Lieu" Transaction
March 6, 2020 - Bulletin Print Report
On or about December 31, 2014, a real estate transfer return was filed reporting the conveyance of real estate, (the "Property"), from W to MSCvia Specialty War...
Commitment Fees Are Not Interest
March 6, 2020 - Volume 14 Issue 45 Print Report
A real estate investment trust, (REIT), invests in construction and development first mortgage loans. In connection with making aconstruction loan,the REI...
Non-Defendant Spouse's IRA Available For Garnishment
March 5, 2020 - Bulletin Print Report
G pled guilty and was convicted of wire fraud, mail fraud, and falsifying a tax return, all in connection with the ongoing theft of funds from her employers. She was ordered to...
Homestead Exemption Denied Disabled Veteran
March 5, 2020 - Bulletin Print Report
On March 24, 1995, a trial court in Wayne County, Michigan sentenced the defendant, SM, to three life sentences for one count of second-degree murder...and two counts of assaul...
Expanding An Existing Business
March 5, 2020 - Volume 14 Issue 44 Print Report
TP was incorporated on "a." TP manufactures and sells fragrances and cosmetics, and imports and distributes ready-to-wear clothing and accessory items. TP i...
Air Carrier Did Not Qualify As A Statutory "Hub Facility"
March 4, 2020 - Bulletin Print Report
The Wisconsin Department of Revenue, (the "Department"), assesses the total market value of the property of the air carrier companies, and then calculates the percent...
Lodging Expenses Are Not Medical Care
March 4, 2020 - Volume 14 Issue 43 Print Report
The taxpayer was an attorney practicing law in Newark, New Jersey. In December, 1943, when he was 43 years of age and had suffered four heart attacks during the previ...
Gain From Sale Of Intangible Assets Is "Business Income"
March 4, 2020 - Bulletin Print Report
X corporation, ("X"), is a wholly-owned subsidiary of Y corporation, ("Y"). X operated a pork business as part of its portfolio of agricultural products. X...
Xerox Launches Tender Offer (To Be Followed By A Merger) For HP
March 3, 2020 - Bulletin Print Report
Xerox Holdings Corporation, ("Xerox"), has made good on its threat to take its acquisition offer directly to the shareholders of HP, Inc., ("HP"). Thus, XHC...
Debt Retirement In a Sec. 332 Liquidation
March 3, 2020 - Volume 14 Issue 42 Print Report
The question is whether upon the liquidation of its subsidiary in 1940 the corporation (D) of which the petitioner is the transferee realized taxable income of $310,9...
Loss Limitation Rules Apply For Purposes Of Computing "NESE"
March 3, 2020 - Bulletin Print Report
LLC elected to be treated as a partnership. LLC has three members, MA, MB, and MC. All three are general partners. During the tax year X, LLC had a current year operating loss....
New York Court Declines To Apply "Federal Conformity Principle"
March 3, 2020 - Bulletin Print Report
Petitioner, ("P"), filed a New York resident income tax return for tax year 2012. Line 71 showed "other refundable credits" of $783,807.00. In 2012, P owned...
Collection Of Income Not A Prerequisite To A "Trade Or Business"
March 2, 2020 - Bulletin Print Report
Distributing, ("D"), is publicly traded and owns all of the stock of Sub 1. D is an "Industry A" corporation. Industry A corporations seek to create "I...
Broker-Dealer's Registered Representatives Belong In Payroll Factor
March 2, 2020 - Bulletin Print Report
Seattle's "B&O" Tax uses a two-factor apportionment method to calculate taxable revenue for service related businesses. One of these factors, the "payrol...
Private Companies Did Not Qualify As "Common Carriers"
March 2, 2020 - Bulletin Print Report
Petitioner, ("P"), purchases and delivers Yellow Pages telephone directories throughout the United States, including New York. The directories are delivered to busine...
Is Money Property?
March 2, 2020 - Volume 14 Issue 41 Print Report
The question is whether the term, property, includes money within the purview of the predecessor of Sec. 332 which reads: no gain or loss shall be recognized upon the...
Single Member LLC Is A Distinct Legal Entity
February 28, 2020 - Bulletin Print Report
On or about October 28, 2019, the taxpayer, ("TP"), an individual, purchased a motor vehicle. On December 9, 2019, the Department of Finance and Administration (the &...
Loss Distributed To Single Member LLC Is Considered A Partnership Loss
February 28, 2020 - Bulletin Print Report
S formed B as a single member limited liability company. B is a disregarded entity for federal income tax purposes. B is a 50 percent partner in FS. FS is classified as a partn...
Expenses Found To Be "Pre-Opening" Expenses
February 28, 2020 - Volume 14 Issue 40 Print Report
B is the parent of several subsidiaries, one of which owned KI. KI was incorporated in Florida in July 1973 for the purpose of operating a marina. KI bought a marina...
Can Liberty Media Redeem Its SiriusXM Tracking Stock Tax Efficiently?
February 28, 2020 - Bulletin Print Report
Liberty Media's Sirius XM tracking stock is trading at a substantial discount to the "asset based" stock, i.e., the stock of Sirius XM Holdings, Inc., that the tr...
L Brands To Dispose Of A Majority Stake In Victoria's Secret
February 27, 2020 - Bulletin Print Report
L Brands, Inc., ("LB"), and Sycamore Partners, ("Sycamore"), recently announced a "strategic transaction." Under the terms of the transaction, Vic...
Disclosure Not Sufficient To Start The ERISA Statute Of Limitations
February 27, 2020 - Bulletin Print Report
Retirement plans governed by ERISAmust have at least one named fiduciary who must manage the plan "prudently" and "solely in the interests of participants...
Supreme Court Eliminates "Bob Richards" Rule
February 27, 2020 - Bulletin Print Report
United Western Bank, ("UWB"), entered receivership and the Federal Deposit Insurance Corporation, ("FDIC"), took the reins. Not long after, UWB's parent...
Husband Denied First-Time Homebuyer Credit
February 27, 2020 - Volume 14 Issue 39 Print Report
T purchased a home in July, 2009 and filed Form 5405 in that year to receive the $8,000 tax credit for first-time homebuyers....
Distribution of Encumbered Property By a Partnership
February 26, 2020 - Volume 14 Issue 38 Print Report
A and B are general partners in M, a general partnership, which was formed for the purposes of owning and operating shopping centers. &nbs...
Guard Services Are Always Subject To New York Sales Tax
February 26, 2020 - Bulletin Print Report
Petitioner, ("P"), was engaged in a project that consisted of the development of a parcel of real estate located in the City of New York, (the "Project"). T...
Intuit To Annex Credit Karma
February 26, 2020 - Bulletin Print Report
Intuit, Inc., in one of the larger deals of the past few years, announced that it has agreed to acquire a privately held entity, named Credit Karma, for approximately $7.1 bill...
No Statute Of Limitations On Assessment Of "ESRP"
February 26, 2020 - Bulletin Print Report
Sec. 4980Hof the Code creates two assessable penalties, one that is applicable when an Applicable Large Employer, ("ALE"), fails to offer its full-time employee...
WFC Cannot Take A Tax Deduction For The "Settlement Amount"
February 25, 2020 - Bulletin Print Report
Recently, Wells Fargo & Company, ("WFC"), entered into a settlement agreement, (the "Settlement Agreement"), in which it was able to resolve certain cla...
Distribution In Anticipation of Future Profits Is a Return of Capital
February 25, 2020 - Volume 14 Issue 37 Print Report
The Partnership owned all of the stock of the Corporation. Prior to the end of the Corporation's 1969 tax year, the Partnership held the Corporation's note fo...
Back Wages Properly Excluded From Gross Income
February 25, 2020 - Bulletin Print Report
Are payments in the form of back pay made to U.S. military service members following the reversal of a court martial conviction considered a civil damage, restitution, or other...
Guaranteed Debt Treated As Recourse To The Guarantor
February 25, 2020 - Bulletin Print Report
B owned a medical services company, AHM. AHMwas a C corporation during 2008 and 2009 and an 'S' corporation beginning in 2010. In addition, B owned MLLC, a disreg...
CVRs Will Be Treated As "Boot" In Lantheus/Progenis Reorganization
February 24, 2020 - Bulletin Print Report
LantheusHoldings, Inc., ("LHI"), and Progenis Pharmaceuticals, Inc., ("PPI"), have entered into an Amended and Restated Agreement and Plan of Merger....
MS's Acquisition Of EFTC Will Qualify As A Reorganization
February 24, 2020 - Bulletin Print Report
Morgan Stanley, ("MS"), and E*TRADE Financial Corporation, ("EFTC"), have entered into a definitive agreement under which MS will acquire EFTCin an &q...
No Bankruptcy Priority For Unpaid "Shared Responsibility" Delinquency
February 24, 2020 - Bulletin Print Report
The Affordable Care Act, ("ACA"), requires most Americans to "ensure" thatthey carry qualifying health insurance. This requirement is commonly known a...
Late Filing Penalty Upheld
February 24, 2020 - Volume 14 Issue 36 Print Report
Petitioner, (P), filed his tax return for 2010 on May 20, 2011, about a month after the due date for such return. The return showed a refund due of $25. The I.R.S. di...
Option Had No Readily Ascertainable Value
February 21, 2020 - Volume 14 Issue 35 Print Report
P received a nonqualified stock option in 1977 as partial compensation for underwriting a stock offering on behalf of I. At the time of receipt, I options were not pu...
XBIT Announces The Results Of Its "Partial Liquidation" Tender Offer
February 21, 2020 - Bulletin Print Report
XBiotech, Inc., ("XBIT"), announced the final results of its "modified Dutch auction" tender offer which, from the company's viewpoint, was an unmitigat...
Constitutional Language Renders Implementing Statutory Provision Invalid
February 21, 2020 - Bulletin Print Report
B is a widow who owns and resides on real property located in HillsboroughCountry, Florida. She was married to a member of the U.S. Army who was killed in action in Iraq...
Amended Federal Return Not Required For Filing Virginia Amended Return
February 21, 2020 - Bulletin Print Report
Corporation A and Corporation B are affiliates wholly owned by Taxpayer. Corporation A and Corporation B jointly owned CLLC, a limited liability company treated as a partnershi...
No Deductible Loss on Settlement of Forward Contract
February 20, 2020 - Volume 14 Issue 34 Print Report
Corporation A, (CA), agreed to buy back a certain number of its ownshares for a set price on various dates. Each contract could be settled in one of three ways:...
Alstom's Acquisition Of Bombardier Transportation Not Eligible For "Bump"
February 20, 2020 - Bulletin Print Report
Alstomrecently inkeda Memorandum of Understanding, ("MOU"), with the shareholders of Bombardier Transportation, ("BT"), Bombardier Inc. and CDPQ...
Deferred Compensation Payments Are Subject To "SE" Tax
February 20, 2020 - Bulletin Print Report
D received $115,260.96 in payments from Mary Kay Cosmetics, Inc., ("MK"), during each of 2014 and 2015. MK issued Form 1099-MISC for each year, designating the income...
Stepping Up The Basis Of A REIT's Assets
February 20, 2020 - Bulletin Print Report
Amherst Residential LLC, ("AMH"),and Front Yard Residential Corporation, ("FY"), a real estate investment trust, ("REIT"), recently announce...
The Willens Deal Survey February 2020
February 19, 2020 - The Deal Survey: February 2020 Print Report
Welcome to our summary of deals for February 2020. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database....
Refunds Of Overpayments Of Excise Taxes
February 19, 2020 - Volume 14 Issue 33 Print Report
A U.S. company imports sports fishing equipment from a foreign country. The equipment, which is subject to excise tax under Sec. 4161, was made in the foreign country...
Omission Of Basis Information Causes Loss Of Charitable Deduction
February 19, 2020 - Bulletin Print Report
Before August 2007, A owned thousands of acres of undeveloped forest property in Georgia. On August 1, 2007, A sold 1,895 acres to HRH. O is a partnership. On December 1, 2009,...
Which Spouse Owns A Tax Refund?
February 19, 2020 - Bulletin Print Report
M owned S, (the "Debtor"). The Debtor's largest creditor was T, to which it owed more than $3 million. T's loans were secured by a blanket lien on most of the...
Non-Profit Corporation Not An "Arm Of The State"
February 19, 2020 - Bulletin Print Report
ARUPis a pathology laboratory located in Utah. It receives bodily fluid and tissue samples from medical providers in all 50 states and performs tests on the samples. Medi...
MGM Will Use Its "Levpar" Proceeds To Repurchase Stock
February 18, 2020 - Bulletin Print Report
MGM Resorts International, ("MGM"), in pursuing what the company has referred to as an "asset-light" strategy, has recently "monetized" many of it...
Ascertaining The Basis Of A Life Insurance Contract
February 18, 2020 - Bulletin Print Report
Sec. 1011 and 1012 of the Internal Revenue Code provide that the adjusted basis for determining gain or loss is generally the cost of property, adjusted as provided in Sec. 101...
PG&E's Disclosure Statement Provides A Wealth Of Tax Information
February 18, 2020 - Bulletin Print Report
PG&E Corporation, ("PCG"), and Pacific Gas & Electric Co., ("PGE"), PCG's"utility" subsidiary, are the "Debtors" in a...
Loan Fees Not UBTI
February 18, 2020 - Volume 14 Issue 32 Print Report
Trust X (TX) funds a pension plan that is qualified under Sec. 401(a) and is therefore tax exempt under Sec. 501(a). Company...
BLK To Donate "Appreciated Property" To The BLK Foundation
February 14, 2020 - Bulletin Print Report
BlackRock, Inc., ("BLK"), it seems safe to say, surprised investors with itsannouncement of a charitable contribution, not in the form of cash, but, instead, in...
Captive Automobile Finance Company Escapes Ohio's "CAT"
February 14, 2020 - Bulletin Print Report
HCA is a captive automobile finance company that "provides indirect retail vehicle loan and lease financing by purchasing retail installment sale contracts, ("RISCs&q...
Sec. 351 Bars a Qualified Stock Purchase
February 14, 2020 - Volume 14 Issue 31 Print Report
The stock of X Corporation, (X), was owned by individuals A, B, C, D, E, and F. In May, 1976, A retired and had all of his stock redeemed for cash. On or about June 1...
A Notice From The "AUR" Program Is Not An "Examination"
February 14, 2020 - Bulletin Print Report
In 2013, petitioner's mother died, and he inherited an IRA that she had inherited from petitioner's father. After petitioner inherited the IRA, he took distributions fr...
Interstate Pipeliner Taxed On Instrastate Receipts
February 13, 2020 - Bulletin Print Report
R is an interstate pipeline used for transporting natural gas. The pipeline is roughly 1,700 miles long and crosses through no fewer than eight states, including Ohio. R is reg...
Court Approves Sprint/T-Mobile Combination
February 13, 2020 - Bulletin Print Report
It now appears, thanks to a recent District Court ruling, that the long-awaited combination of Sprint Corporation, ("S"), and T-Mobile US, Inc., ("TMUS"), w...
The "MTAETL" Is Constitutional
February 13, 2020 - Volume 14 Issue 30 Print Report
In 2009, the New York State Legislature passed the Metropolitan Commuter Transportation Mobility Tax Law (the "MTAETL"). The tax was imposed on employers an...
SPG And TCO Will Undertake A "Forward Cash Merger"
February 12, 2020 - Bulletin Print Report
Simon Property Group, Inc., ("SPG"), and Taubman Centers, Inc. ("TCO"), each a real estate investment trust, ("REIT"), whose activities are conduc...
Personal Residence Not Qualified Replacement Property
February 12, 2020 - Volume 14 Issue 29 Print Report
In Rev. Rul. 70-466, 1970-2 C.B. 165, the taxpayer, an individual, owned a residence that was rented for residential purposes.  ...
Deed Restrictions Prevent Qualified Conservation Contribution
February 12, 2020 - Bulletin Print Report
RCH is treated as a partnership for federal income tax purposes. On September 23, 2013, Mr. A transferred a 51 percent undivided interest in the subject property to RCM. Mr. A...
"BEA" Payments Are Not Contributions to Capital
February 11, 2020 - Volume 14 Issue 28 Print Report
The "BEA" program, which isadministered by the U.S.Department of the Treasury,encourages financial institutions to open savings accounts,...
No Second Ownership Change For Bristow Group, Inc.
February 11, 2020 - Bulletin Print Report
Bristow Group, Inc., ("B"), emerged from bankruptcy last October with approximately $145 million in net operating losses that the company ishoping to utilize in...
Residence Subject To N.J. Estate Tax Upon Death Of Surviving Spouse
February 11, 2020 - Bulletin Print Report
New Jersey, ("N.J."), is one of a handful of states with an inheritance tax. A common estate planning strategy adopted by married couples, in light of that tax, is a...
Fantasy Sports Contests Constitute Prohibited "Gambling" In New York
February 10, 2020 - Bulletin Print Report
In August 2016, the New York Legislature amended the Racing,Pari-Mutuel Wagering and Breeding Law, (the "Law"), by adding an article related to the registration...
Reimbursement Payments Constitute Qualifying Income
February 10, 2020 - Bulletin Print Report
Taxpayer, ("TP"), is a real estate investment trust, ("REIT"). TP owns "a%" of a joint venture, ("JV"), which is treated as a partnershi...
FNF Will Acquire The Balance Of FG
February 10, 2020 - Bulletin Print Report
FGLHoldings, ("FG"), a Cayman Islands annuity and life insurance company, announced that it has entered into a merger agreement pursuant to which Fidelity Natio...
Exchanging Gold Bullion For Silver Bullion
February 10, 2020 - Volume 14 Issue 27 Print Report
Y owns "x" ounces of gold bullion which Y acquired on the spot market over a period of years and which itholds for investment purposes. The gold bulli...
Cleveland Can Tax A Non-Resident's Option Income
February 7, 2020 - Bulletin Print Report
W was employed by the Sherwin-Williams Company, ("S"), in Cleveland from 1980 until she retired in 2009 and moved to Florida. In 2007, S granted her options to purcha...
Only Partners Can Benefit From Carryovers Allowed By Sec. 704(d)
February 7, 2020 - Volume 14 Issue 26 Print Report
S entered PPP as a limited partner in December, 1967. S contributed $135,000 tothe partnership and received a 33.5 percent interest in the partnership. <...
Transfer Of Rights To Use Software Subject To Massachusetts Sales Tax
February 7, 2020 - Bulletin Print Report
During the relevant taxable periods, Citrix Systems, Inc., ("C"), sold subscriptions for three online software products. A shared attribute of these online products i...
Membership Fees Found Subject To Sales Tax
February 6, 2020 - Bulletin Print Report
Taxpayer, ("TP"), a business league exempt from federal income tax under Sec. 501(c)(6) of the Internal Revenue Code, is a not-for-profit professional membership asso...
MRK To Pursue "Leveraged" Spin-Off
February 6, 2020 - Bulletin Print Report
Merck, ("MRK"), surprised the market with theannouncement of its intention to effectuate a spin-off, in which MRKwill separate those of its businesses wit...
Expenses Incurred To Obtain Donated Eggs Are 'Medical Care'
February 6, 2020 - Volume 14 Issue 25 Print Report
Y has unsuccessfully undergone repeated assisted reproductive technology procedures to enable Y to conceive a child using her own eggs. &n...
Expenses Incurred Prior To Marketing Or Selling Are Not Deductible
February 6, 2020 - Bulletin Print Report
P is a practicing attorney. He practiced law through an 'S' corporation of which he is the sole owner. From 2005 to 2016, P was awarded seven patents in connection with...
Capital Is Not An "Exhausting" Asset
February 5, 2020 - Volume 14 Issue 24 Print Report
Petitioner is a mining corporation organized under the laws of the State of Colorado, in January, 1926, with a fixed period of existence of 20 years....
McKesson Will Be Undertaking A Split-Off "RMT" Transaction
February 5, 2020 - Bulletin Print Report
In March, 2017, McKesson Corporation, ("MCK"), and Change Healthcare, Inc., ("C"), formed a joint venture, treated as a partnership for tax purposes, called...
EPP And ETP Did Not Form An "Accidental" Partnership
February 5, 2020 - Bulletin Print Report
In March 2011, Enterprise Products Partners, L.P., ("E"), approached Energy Transfer Partners, L.P., ("ETP"), about convertinga pipeline, called "...
Tax Profile Of WLN/ING And PPBI/OPB Deals
February 5, 2020 - Bulletin Print Report
WorldlineSA, ("WLN"), and Ingenico Group SA, ("ING"), announced that their respective Boards of Directors have unanimously approved a business combina...
Assets Excluded From The "Substantially All" Determination
February 4, 2020 - Volume 14 Issue 23 Print Report
P Corporation, ("P"), formed S Corporation, ("S"), as a wholly owned subsidiary for the purpose of effectuating a merger of S with and into T Corp...
Probate Litigation Expenses Are Not Deductible
February 4, 2020 - Bulletin Print Report
Mr. E's grandmother passed away in 2014. She died testate, i.e., she left a will. Mr. E pursued litigation relating to the division of his grandmother's assets. In 2015...
I.R.S. Applies Its Sec. 856(c)(5)(J) Powers To A REIT's Tax Credits
February 4, 2020 - Bulletin Print Report
Taxpayer, ("TP"), has elected to be taxed asa real estate investment trust, ("REIT"). TP holds indirect interests in Company, ("C"), which h...
New York Gains Another "Statutory Resident"
February 4, 2020 - Bulletin Print Report
Petitioner, Mr. Chewee Chew, ("P"), was a New Jersey domiciliary during 2012, the year at issue. P filed joint New York non-resident and part-year resident income tax...
Lease Acquisition Costs Must Be Capitalized
February 3, 2020 - Bulletin Print Report
TP and various dealerships entered into master agreements that provide TP the opportunity to purchase vehicle lease contracts originated by the dealership if they meet TP's...
Assessing NAV's Net Operating Losses
February 3, 2020 - Bulletin Print Report
Last week, Navistar International Corporation, ("NAV"), received an unsolicited proposal from TRATON SE regarding a proposed transaction to acquire NAV "for $35...
Wal-Mart Is Not A "Dealer" Required To Collect Sales Tax
February 3, 2020 - Bulletin Print Report
Wal-Mart.com USA, LLC, ("W"), operates an online marketplace at which website visitors can procureproducts from either W or third-party retailers. In connection...
"Term Permits" Are Interests in Real Property
February 3, 2020 - Volume 14 Issue 22 Print Report
Company, (C), is considering electing to be treated as a REIT. C owns and operates ski resorts. C conducts a major portion of its ski resort activities on federally o...
SSB Will Be "The Accounting Acquirer" Of CSFL
January 31, 2020 - Bulletin Print Report
Earlier this week, CenterStateBank Corporation, (CSFL), and South State Corporation, (SSB), jointly announced that they had entered into a definitive agreement under whic...
Outdoor Advertising Tax Does Not Violate First Amendment
January 31, 2020 - Bulletin Print Report
In 2013, Ordinance 13-139 was signed into law imposing an excise tax on the privilege of exhibiting outdoor advertising displays in the City (of Baltimore). The tax is levied u...
No Capital Loss Carryover In N.J.
January 31, 2020 - Volume 14 Issue 21 Print Report
In 1981, TG and her husband (the "Gs") owned a 40 percent interest in a partnership. During 1981, when the Gs were Pennsylvania residents, the partnership s...
Santander's Strategic Stock Buyback
January 30, 2020 - Bulletin Print Report
Santander Consumer USA Holdings, Inc., ("SC"), is offering to purchase, for cash (which it has on hand), up to $1 billion of its issued and outstanding stock, using a...
BWA To Acquire DLPH In A "Scheme Of Arrangement"
January 30, 2020 - Bulletin Print Report
We have witnessed the repatriation of several previously "inverted" companies since the enactment of the 2017 tax law, one of the goals of which was to encourage that...
Medical Marijuana Is A "Prescription Drug"
January 30, 2020 - Bulletin Print Report
Taxpayer, ("TP"), is licensed producer authorized to dispense medical marijuana, ("MM"), to qualified patients consistent with the Compassionate Use Act, (t...
Assets Securing Multiple Liabilities
January 30, 2020 - Volume 14 Issue 20 Print Report
TP is an 'S' corporation with two unrelated shareholders. SH owns 98 percent of the stock of TP and is its president....
Project Manager's EMBA Expenses Are Not Deductible
January 29, 2020 - Bulletin Print Report
In 2015, R had been an employee of IL for over 10 years. She had been promoted from Business Systems Analyst to Lead Consultant in October 2014. As a lead consultant, her princ...
Electricity Powering HVAC Units Exempt From Sales Tax
January 29, 2020 - Bulletin Print Report
SWB operates transmission and switching equipment to create telecommunication signals. This equipment runs continuously, generating significant heat. Excessive heat renders the...
Exchanging Gold Bullion Bars For Coins
January 29, 2020 - Volume 14 Issue 19 Print Report
X Corporation, (X), represents that it presently owns a substantial amount of gold bullion in the form of bars which are being held for investment purposes. The bars...
Vehicle Seller Failed To Purchase Replacement Vehicle
January 29, 2020 - Bulletin Print Report
On January 2, 2014, T and L (the "Rs"), purchased a 2014 Dodge. On August 15, 2018, the Rs sold the 2014 Dodge to their son, JR. On August 13, 2018, the Rs leased a 2...
Numismatic Coins Cannot Be Exchanged Tax-Free For Bullion Coins
January 28, 2020 - Volume 14 Issue 18 Print Report
An individual taxpayer who is not a dealer in coins purchased U.S. $20 gold coins as an investment. After the coins had substantiallyappreciated in value, the t...
No Refund Of Taxes Paid By Settlors From Unauthorized Stock Sale
January 28, 2020 - Bulletin Print Report
The Hs established the trust in 2004. The trust is governed by Wisconsin law. BMO is the successor trustee. The trust is a revocable living trust, treated as a "grantor&qu...
Sales Of Prescription Drugs Not Eligible For Preferential Tax Rate
January 28, 2020 - Bulletin Print Report
P is a institutional pharmacy that contracts with institutional health care providers such as nursing homes, assisted living facilities...and other long-term care facilities, (...
FB Financial Corporation Will Acquire Franklin Financial Network
January 27, 2020 - Bulletin Print Report
FB Financial Corporation, ("FB"), and Franklin Financial Network, Inc., ("FFN") announced that they have entered into a definitive merger agreement pursuant...
"Facilitative" Merger Costs Do Not Create A Separate Intangible Asset
January 27, 2020 - Bulletin Print Report
Taxpayer, ("TP"), is engaged in Business. In Year 1, TP acquired the stock of Target, ("T"), a manufacturer of Products, in a taxable reverse triangular mer...
Exchange of Coins Falls Within Sec. 1031
January 27, 2020 - Volume 14 Issue 17 Print Report
In 1972, an individual taxpayer purchased five lots of Mexican 50-peso gold coins as an investment. The taxpayer was not a dealer in foreign or domestic currency....
J.C. Penney Extends NOL Preservation "Rights Plan"
January 24, 2020 - Bulletin Print Report
J.C. Penney Co. Inc., ("JCP"), in its most recent 10-K, is reporting a Federal net operating loss, ("NOL"), of approximately $2.1 billion. These NOLsa...
Timely Disclaimer Does Not Give Rise To a Gift
January 24, 2020 - Volume 14 Issue 16 Print Report
Grantor created Trusts several years before his death on Date 1, a date before January 1, 1977, for the benefit of the lineal descendants of his daughter. Daughter...
"TFRPs" Are "Penalties" (Not Taxes)
January 24, 2020 - Bulletin Print Report
Petitioner, ("P"), was the sole member of ICN and N, each a limited liability company. Both companies failed to pay employment taxes for several quarters. ROC determi...
Broadcast Fax Service's Receipts Are Mostly Allocable To New Jersey
January 23, 2020 - Bulletin Print Report
X corporation, ("X"), is a broadcast fax service incorporated in Delaware with headquarters in New Jersey. Users of X's services send their customer lists and doc...
Successor Corporation Avoids a "Disguised Sale"
January 23, 2020 - Volume 14 Issue 15 Print Report
P Corporation, (P), owns S Corporation, (S). S has only one asset, rental property that is encumbered by a non-recourse loan of $40x incurred by S on January 1, 1995....
The Commissioner's "Kickback" And "Bribe" Burden
January 23, 2020 - Bulletin Print Report
Taxpayer, ("TP"), is engaged in the manufacture, promotion, and sale of Product. TP's managers allegedly encouraged sales representatives to persuade Individuals...
Retroactive Application Of Tax Statute Violated Due Process Rights
January 23, 2020 - Bulletin Print Report
Petitioner, ("P"), is a power producer that owns and operates power plants. P is the sole member of OHP, the entity that owns the "Plant." P was issued a ce...
Commercial Use Of Airport Does Not Cause Loss Of Tax Exemption
January 22, 2020 - Bulletin Print Report
The subject property consists of roughly 325.6 acres of land with various improvements, and is known as The Ohio State University Airport, (the "airport"). The subjec...
Pre-Death Option Grant Does Not Spoil "Basis Step-Up"
January 22, 2020 - Volume 14 Issue 14 Print Report
An option agreement provided that the option is exercisable only after the death of the grantor by giving notice to the proper person within a certain period of time follow...
Physician's Home Was Not Her Principal Place Of Business
January 22, 2020 - Bulletin Print Report
During 2012, Dr. Gambhir, ("G"), worked as a "hospitalist" for Northeast Georgia Medical Center, "NGMC." She was paid on a per-shift basis, rather...
Rayonier To "Roll Up" Pope Resources
January 22, 2020 - Bulletin Print Report
Rayonier, Inc., ("R"), a real estate investment trust, ("REIT"), and Pope Resources, ("PR"), a master limited partnership, ("MLP"), anno...
The Willens Deal Survey January 2020
January 21, 2020 - The Deal Survey: January 2020 Print Report
Welcome to our summary of deals for January 2020. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database. <...
BAE Systems Will Enjoy Tax Benefits
January 21, 2020 - Bulletin Print Report
BAE Systems, Inc.,("BAE"), announced that it has reached definitive agreements for the proposed acquisitions of Collins Aerospace's military Global Position...
Protective Services Are Subject To Sales Tax
January 21, 2020 - Bulletin Print Report
Petitioner, ("P"), was engaged in a project that consisted of the development of a parcel of real estate located in the City of New York, (the "Project"). T...
Guarantor's Bad Debt Deduction Permits Sales Tax Credits
January 21, 2020 - Bulletin Print Report
Lowe's, ("L"), contracted with two banks to offer private label credit cards to Washington customers. The banks offered credit to cardholders who purchased L'...
When Does "COD" Income Arise?
January 21, 2020 - Volume 14 Issue 13 Print Report
The petitioner, (M), borrowed $19,986.72 from the Connecticut Student Loan Foundation, (CSLF), in order to finance his college education. M became delinquent in his l...
Ascertaining A Taxpayer's Principal Residence
January 17, 2020 - Bulletin Print Report
In 2016, Mr. O sold his house in Portland, Oregon. He excluded gain from that sale from his gross income under Sec. 121(a). However, at audit and conference, Defendant denied M...
Restoring Property To Its Source
January 17, 2020 - Volume 14 Issue 12 Print Report
P is a limited partnership. GP is the general partner of Pand A-E are P's limited partners. A-E each own "N" shares of X. The X shares were held i...
MGM To Monetize Hotel Properties Tax-Efficiently
January 17, 2020 - Bulletin Print Report
MGM Resorts International, Inc., ("MGM"), is in the process of converting its largest and most valuable assets, its hotels, into cash that the company has indicated i...
"PFL" Payment Excluded From California Gross Income
January 17, 2020 - Bulletin Print Report
Appellants, ("As"), filed a timely California resident tax return (Form 540) for 2013, reporting federal adjusted gross income, ("AGI"), of $1,587,007, and...
Anixter Accepts Wesco's Offer
January 16, 2020 - Bulletin Print Report
After a lengthy battle, WescoInternational, Inc. ("W"), has bagged its prize, AnixterInternational, Inc., ("A"). Earlier this week, W and A anno...
Gambling Disorder Does Not Render The Taxpayer "Disabled"
January 16, 2020 - Bulletin Print Report
G began taking Mirapexin the early 2000s. Mirapexis a medication for "restless leg syndrome." After a large dosage increase in 2010, G began to exhibit co...
Distribution Will Reduce State Taxes
January 16, 2020 - Volume 14 Issue 11 Print Report
P is a holding company. P's stock is bothwidely held and publicly traded. D is a domestic corporation all of whose outstanding stock is held by P. D is enga...
System Indirectly Utilizing Solar Energy Does Not Earn Tax Credit
January 16, 2020 - Bulletin Print Report
In 2012, Petitioners, ("Ps"), installed a ground source heat pump system to heat, cool, and provide hot water for their home. A ground source heat pump system functio...
XBiotech Is "Partially Liquidating"
January 15, 2020 - Bulletin Print Report
We have found through the years that many companies whose distributions to shareholders seemed to qualify as distributions in "partial liquidation," a characterizatio...
Intragroup Purchase In Anticipation of a Spin-Off
January 15, 2020 - Volume 14 Issue 10 Print Report
P wholly owns LLC1. LLC1 wholly owns LLC2 and LLC3, and indirectly owns S. S wholly owns LLC4. Each of LLC1-LLC4 is a disregarded entity....
Spouse Is A "Member Of The Household"
January 15, 2020 - Bulletin Print Report
On December 6, 2000, HLEand EIAconveyed the real property to MCE.... The Assessor assessed the property for $1,540,655 for tax years 2016, 2017, and 2018. During th...
COT And PRMW To Undertake A Multi-Step Reorganization
January 15, 2020 - Bulletin Print Report
Cott Corporation, ("COT"),a Canadian corporation, recently announced that it has entered into a definitive agreement pursuant to which "COT will acquire Pr...
Cost of Printing Prospectus Cannot Be "Recovered"
January 14, 2020 - Volume 14 Issue 9 Print Report
Promoter P formed limited partnership LP to purchase and manage hotels. As part of a public offering of limited partnership interests in LP, P arranged for the printi...
Taxpayer Successfully Avoids Late Payment Penalties
January 14, 2020 - Bulletin Print Report
Smith International, Inc., ("S"), is engaged in the oil and gas equipment services business in the State of Louisiana, ("L"). S timely filed its L corporate...
Standard Flash Is Not "Any Game Of Bingo"
January 14, 2020 - Bulletin Print Report
TP is an organization described in Sec. 501(c)(3) of the Internal Revenue Code. TP engaged in two activities: (1) Conducting two sessions per day at a gaming hall operated by T...
Affiliate Of Investment Advisor Can Be An "EIK"
January 14, 2020 - Bulletin Print Report
TP is a REIT. TP owns "a" hotel properties that are leased to TP'sTRSsand are managed by eligible independent contractors, ("EIKs&qu...
I.R.S. Transition Rule Allows Wider Use Of The "Sec. 338 Approach"
January 13, 2020 - Bulletin Print Report
Where a loss corporation experiences an "ownership change," the "Sec. 382 limitation" comes into play. Under the Sec. 382 limitation, the loss corporation&#...
Decommissioning Activities Were Conducted Within The U.S.
January 13, 2020 - Bulletin Print Report
P is incorporated under the laws of the United Kingdom, ("UK"). P is the registered owner of a multipurpose support vessel, (the "CV"), which was placed in...
Coordinating Deductions
January 13, 2020 - Volume 14 Issue 8 Print Report
For its 1975 tax year, the taxpayer had taxable income of $470,980. Subject to percentage limitations, the taxpayer was entitled to deductions from taxable income (a)...
NLOK Declares "Special Dividend"
January 10, 2020 - Bulletin Print Report
NortonLifeLock, (NLOK), announced that its Board of Directors "has declared a special one-time cash dividend of $12 per share of NortonLifeLock, Inc. common stock, returni...
Defective Appraisal Summary Eliminates Charitable Contribution Deduction
January 10, 2020 - Bulletin Print Report
On or about July 1, 2013, petitioners, ("Ps") purchased real property in Potomac, Maryland. The property was purchased for $795,000 and consisted of 0.38 acres of lan...
Visiting Teams Are Taxed in California
January 10, 2020 - Bulletin Print Report
1. TP is a professional athletic team. TP's home territory is located outside of California. The league in which TP plays has a season that begins in October of Year 1 and...
Apportioning Income To South Carolina
January 10, 2020 - Volume 14 Issue 7 Print Report
ABC provides engineering consulting services for the development of product designs for the automotive and consumer electronic market. ABC has approximately 15 employ...
Start-Up Expenditures Were Found To Be Non-Deductible
January 9, 2020 - Bulletin Print Report
Petitioner, ("P"), lived in New York, where he worked as an accountant at a large accounting firm. During 2010 and 2011, P viewed several properties for sale in Quebe...
Failure To Elect Under Sec. 709(b)
January 9, 2020 - Volume 14 Issue 6 Print Report
G contributed $100x for a partnership interest in GL. In its firstyear, GL incurred legal fees of $20x for services incident to the organization of the partners...
Hudson's Bay Alters Its Privatization Plan
January 9, 2020 - Bulletin Print Report
Hudson's Bay Company, ("HBC"), recently announced that it has entered into an "amended arrangement agreement" with a group of its existing shareholders,...
Why Did Xerox Grant Voting Rights To Convertible Preferred Holders?
January 8, 2020 - Bulletin Print Report
Earlier this year, Xerox Corporation, ("XC"), engaged in an "internal" reorganization in connection with which a holding company structure was put into plac...
Tribune Loses Round One Of Its "LevPar" Litigation
January 8, 2020 - Bulletin Print Report
Tribune Media Company's predecessor, Tribune Company & Affiliates, ("T"), engaged in a transaction, popularly known as a "leveraged partnership," th...
Loss From Sale of Partnership Interest Is a Capital Loss
January 8, 2020 - Volume 14 Issue 5 Print Report
Petitioner, (P), is a management consultant who was associated with a large New York City consulting firm. P sought and accepted outside consulting work unassociated...
Stock Issuance Costs Are Never Deductible
January 7, 2020 - Volume 14 Issue 4 Print Report
TP is a holding company organized as a C corporation. TP's subsidiaries provide various Business F services. Prior to Dat...
Motion Picture Exhibitor Subject To Use Tax
January 7, 2020 - Bulletin Print Report
American Multi-Cinema, Inc., ("A") generates revenue by exhibiting motion pictures and selling admission tickets to the public. A's master licensing agreements, (...
Sales Prompted By "Spectrum Act" Are Involuntary Conversions
January 7, 2020 - Bulletin Print Report
The taxpayer, ("TP"), is a partnership. TP is a television and broadcasting company that previously operated Station. TP owned an FCC license to broadcast as well as...
Collection Of Competitor Information Is Not Ancillary To Solicitation
January 6, 2020 - Bulletin Print Report
Blue Buffalo Co., Ltd., ("BB"), is a Delaware corporation that is commercially domiciled in Connecticut. BB is in the business of formulating and selling premium pet...
Worthless Debt Not Owed "To The Taxpayer"
January 6, 2020 - Bulletin Print Report
Menard, Inc., ("M"), operates a chain of home improvement retail stores in several states, including Minnesota, ("MI"), M entered into agreements with "...
Sec. 852(b)(6) Applies To a Closed-End Fund
January 6, 2020 - Volume 14 Issue 3 Print Report
Fund, (F), is a closed-end management investment company, registered under the Investment Company Act of 1940. Its shares are listed and traded on a major exchange. F...
Apple Dispensed Back To School Gift Cards For Free
January 3, 2020 - Bulletin Print Report
Petitioner, ("P"), is a corporation organized under the laws of California that designs and markets consumer electronics, software, and personal computers. P's on...
Diet Beverages Do Not Promise Weight Loss
January 3, 2020 - Bulletin Print Report
In October 2017, B filed her initial complaint, alleging that Dr. Pepper's naming and marketing of Diet Dr. Pepper, ("DDP"), violated various provisions of Califo...
Court Rejects "Last Resort" Business Purpose Test
January 3, 2020 - Volume 14 Issue 2 Print Report
Prior to December 31, 1954, H-M was engaged primarily in the sale of new and used cars at retail and related services. It also provided financing and owned the real property on...
Equitable Tolling Of The Statute Of Limitations Barred
January 3, 2020 - Bulletin Print Report
ARC created a new fuel that combines natural gas with diesel fuel. Beginning in 2009, ARC applied to the I.R.S. to be a taxable fuel registrant and was granted both a "UV&...
I.B.M. Cannot Exclude Royalty Payments From New York "ENI"
January 2, 2020 - Bulletin Print Report
International Business Machines Corporation, ("IBM"), is a New York corporation. IBM World Trade Corporation, ("WTC"), is a Delaware corporation. IBM owns 1...
Substance Over Form Doctrine Is Only Available To I.R.S.
January 2, 2020 - Bulletin Print Report
The Tax Court correctly concluded that the taxpayers, ("TPs"), in calculating K and M's debt basis in CO, improperly relied on a debt that CO owed toKMGI, a...
REIT Shares Do Not Constitute Qualified Replacement Property
January 2, 2020 - Volume 14 Issue 1 Print Report
MM and SM, individuals, were the joint owners of a building used for commercial and residential purposes in Milwaukee, Wisconsin. &n...
WPX Energy Will Get A Basis Step-Up
December 31, 2019 - Bulletin Print Report
WPX Energy, Inc., ("Purchaser"), and Felix Investment Holdings II, LLC, ("Seller"), have entered into an agreement in connection with which Seller will sell...
Condominium Units Are Real Estate Assets
December 31, 2019 - Volume 13 Issue 250 Print Report
A Real Estate Investment Trust, ("REIT"), acquired, through foreclosure proceedings, upon the default of an indebtedness, the unsold units in a particular&n...
"Price Protection" Amount May Be An "Eligible Rollover Distribution"
December 31, 2019 - Bulletin Print Report
1. The employer is an 'S' corporation. The employer maintains an ESOP that previously acquired a portion of the shares of the employer using funds obtained from the emp...
Petition For Review Not Timely Filed
December 31, 2019 - Bulletin Print Report
On March 7, 2018 and on March 14, 2018, Petitioner, ("P"), filed claims for the (Wisconsin) veterans and surviving spouse credit for the tax years 2009 through 2014....
Hedge Fund Manager Denied New York Resident Tax Credit
December 30, 2019 - Bulletin Print Report
Petitioners, ("Ps"), were domiciled in New York until September 30, 2009; and were domiciled in Connecticut during the period October 1, 2009 through December 31, 201...
N.Y. Non-Residents Penalized By Sec. 338(h)(10) Election
December 30, 2019 - Bulletin Print Report
LePage, Inc., ("L"), elected to be treated, for federal income tax purposes, as a subchapter S corporation, effective as of September 26, 1999. L never filed a separa...
APY And ECL To Engage In An "RMT" Transaction
December 30, 2019 - Bulletin Print Report
Apergy Corporation, ("APY"), and Ecolab, Inc., ("ECL"), recently announced that the Boards of Directors of the two corporations have entered into a definiti...
REIT Can Deduct Distribution and Dealer Manager Fees
December 30, 2019 - Volume 13 Issue 249 Print Report
TP is a REIT. TP is externally managed by Advisor. Previously, shares of a single class of common stock of TP were issued to accredited investors in a private offerin...
Anixter And CD&R Revise Merger Agreement
December 27, 2019 - Bulletin Print Report
Anixter International, Inc., ("AII"), and Clayton, Dubilier& Rice, ("CDR"), announced an Amended and Restated Merger Agreement on December 24, 201...
Worthless Debt Not Deductible For New Jersey GIT Purposes
December 27, 2019 - Volume 13 Issue 248 Print Report
The worthless nonbusiness debt at issue was HW's January 15, 2002 loan in the amount of $14,769,320 to his brother, SW. (SW is Sam Waskal, theformer head of...
Illinois Use Tax Triggered By Transfer Of Aircraft To Revocable Trust
December 27, 2019 - Bulletin Print Report
In 2008, Michael L. Shakman, ("S"), bought an aircraft and paid corresponding general use tax. Several years later, using a bill of sale, he changed the legal o...
DraftKings Is Going Public
December 26, 2019 - Bulletin Print Report
DraftKings, Inc., known primarily for its fantasy sports operation, has entered into a definitive agreement with Diamond Eagle Acquisition Corporation, ("DEAC"), a pu...
Kirkland Lake Gold Will Acquire Detour Gold
December 26, 2019 - Bulletin Print Report
Recently, Detour Gold Corporation, ("DGC"), and Kirkland Lake Gold Corporation, ("KLG"),each a Canadian corporation, entered into an arrangement agree...
FASB Moves To Simplify The Accounting For Income Taxes
December 26, 2019 - Bulletin Print Report
The Financial Accounting Standards Board, ("FASB"), in its continuing quest to reduce complexity in applying accounting standards, has taken steps, with the issuance...
Virginia's "Add-Back" of License Fee Deductions
December 26, 2019 - Volume 13 Issue 247 Print Report
TP is engaged in the business of manufacturing. TP pays royalties to its parent for the use of patents, trademarks, and other intangible assets used in the manufactur...
Sec. 754 Election Property Eligible For Investment Tax Credit
December 24, 2019 - Bulletin Print Report
In 2009, Lehman Brothers (LB) affiliate entities transferred their ownership interests in various entities to designated K affiliates. The K affiliates obtained the interests o...
Credit Sales Gains Are "Business Income"
December 24, 2019 - Bulletin Print Report
Petitioner is a California corporation and wholesale dealer of Honda products. Petitioner is subject to two Federal programs regulating the environmental attributes of its moto...
Beneficial Ownership Counts For Purposes of Sec. 269
December 24, 2019 - Volume 13 Issue 246 Print Report
Ten partners owned approximately 48 percent of H, a partnership. H managed the affairs of two investment companies, Corporation A, (CA), and Corporation B, (CB). The...
Employer Found Liable For "Reversion" Excise Tax
December 24, 2019 - Bulletin Print Report
TP sponsors two qualified defined benefit pension plans, (the "Plans"), in its capacity as contractor for Agency and successor employer with respect to the Plans. The...
The Willens Deal Survey December 2019
December 23, 2019 - The Deal Survey: December 2019 Print Report
Welcome to our summary of deals for December 2019. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database....
Passed-Through Income Of 'S' Corporation Sourced To California
December 23, 2019 - Bulletin Print Report
Pabst Corporate Holdings, Inc., ("P"), a Delaware 'S' corporation, sold all of its shares of its qualified subchapter Ssubsidiary, Pabst Holdings, Inc.,...
IAC Discloses Separation Plan
December 23, 2019 - Bulletin Print Report
IAC/Interactive Corporation, ("IAC"), recently filed the eagerly anticipated "Transaction Agreement" in which it describes, in great detail, the manner in w...
Defective Administrative Complaint Precludes Article 7 Proceeding
December 23, 2019 - Bulletin Print Report
In a net lease dated October 10, 2007, the owner of 700 Waverly Avenue in Mamaroneck, New York, ("M"), leased it to petitioner, ("P"), for a period of 20 ye...
Losses Not Part of Gross Income
December 23, 2019 - Volume 13 Issue 245 Print Report
TP is a management investment company registered under the Investment Company Act of 1940 that elected to be taxed as a regulated investment company (RIC)....
Special Allocation Of Tax Credits By Partnership Permitted
December 20, 2019 - Bulletin Print Report
Investor, ("I"), is a limited liability company that was in existence during 2018. I intends to purchase, through its wholly-owned subsidiary, ("P"), certai...
Wages Found To Be Exempt Under U.S.-Russia Tax Treaty
December 20, 2019 - Bulletin Print Report
Petitioner, ("P"), is a Russian citizen. He was invited by UCLA to participate in an exchange visitor program as a research scholar. At some point, the UCLA program w...
Musician Engaged In A Trade Or Business
December 20, 2019 - Volume 13 Issue 244 Print Report
Petitioner, (P), began performing on the saxophone at the age of eight. He has played professionally since the age of 16. He attended Indiana University where he stud...
TIVO Takes Steps To Protect Its NOLs
December 19, 2019 - Bulletin Print Report
XperiCorporation, ("X"), and TiVo Corporation, ("T"), announced that they haveentered into a definitive agreement to combine "in an all-sto...
DD RMT Update
December 19, 2019 - Bulletin Print Report
Now that the "Separation and Distribution Agreement" has been filed, we have some more details with respect to the mechanics of the Reverse Morris Trust transaction t...
Split-Off Cannot Be A Device
December 19, 2019 - Volume 13 Issue 243 Print Report
In 1968, X corporation, (X), acquired all of the stock of Y corporation, (Y), which was owned by two shareholders, Mr. A and Mr. B, in a transaction qualifying as a r...
Lessee Of Pallets Liable For Sales Tax
December 19, 2019 - Bulletin Print Report
Tyson Fresh Meats, Inc., ("T"), is a beef manufacturing corporationthat processes and sells meat in Washington. H20, ("H"), is a corporation that manu...
Tallgrass Energy Is Being Acquired
December 18, 2019 - Bulletin Print Report
Tallgrass Energy L.P., ("TGE"), announced that it has entered into a definitive merger agreement pursuant to which affiliates of Blackstone Infrastructure Partners (a...
"Relator" Fee Includible In Gross Income
December 18, 2019 - Volume 13 Issue 242 Print Report
C was awarded and received a net $5.25 million qui tam payment from the government as a relator in two lawsuits settled against government contracto...
Absence Of Signed Plan Document Will Lead To Disqualification
December 18, 2019 - Bulletin Print Report
In Val Lanes Recreation Center v. Commissioner, T.C. Memo. 2018-92, the court found that the I.R.S. abused its discretion by revoking the Sec. 401(a) qualifi...
Excluded Shareholder Remained Beneficial Owner of Stock
December 17, 2019 - Volume 13 Issue 241 Print Report
K is a physician who specializes in radiation oncology. Around April, 1996, K and W agreed to provide radiation oncology services to patients in Florida through three...
Partnership Interest Bereft Of Liquidating Value And Future Value
December 17, 2019 - Bulletin Print Report
M is a limited liability company treated as a partnership for Federal income tax purposes. On April 1, 1998, the McMillin family formed C, a Delaware LLC. C was in the real est...
Speculative Notes Are Not "Cash Equivalents"
December 17, 2019 - Bulletin Print Report
In total, the Js and JFLPhave purchased at least 16 parcels of land consisting of over 2,300 acres and have subdivided the land into over 400 lots. At first, JFLP sold on...
DD To Engage In A Reverse Morris Trust Transaction
December 16, 2019 - Bulletin Print Report
International Flavors & Fragrances, Inc., ("IFF"), and DuPont, ("DD") announced that they have entered into a definitive agreement "for the merger...
Power Corporation Of Canada Announces A Restructuring Plan
December 16, 2019 - Bulletin Print Report
Power Corporation of Canada, ("POW"), owns approximately 64 percent of the common stock of Power Financial Corporation, ("PWF"). PWFalso has preferred...
Danaher Completes Tax-Efficient Divestiture Of Envista
December 16, 2019 - Bulletin Print Report
Danaher Corporation, ("D"), is on the precipice of completing a tax-efficient divestiture of EnvistaHoldings Corporation, ("E"), a subsidiary recently...
General Obligations Do Not Produce REIT Qualifying Income
December 16, 2019 - Volume 13 Issue 240 Print Report
An unincorporated trust, otherwise qualifying as a real estate investment trust, (REIT), invests in obligations of the Federal National Mortgage Association (FNMA), t...
Failure To File A Return Not Covered By Sec. 7434
December 13, 2019 - Bulletin Print Report
F (and the class of which he was a member) brings this action against NYTex Care, Inc., ("NYT"), alleging that Defendants willfully filed fraudulent tax information f...
Altria Seeks To Deduct Punitive Damages
December 13, 2019 - Bulletin Print Report
Altria Group, Inc., (AGI), timely field its 2012 tax return and timely and fully paid its tax liability. The I.R.S. audited AGI's return and made certain adjustments. A pai...
Court Sets Reasonable Compensation For 'S' Corporation Shareholder
December 13, 2019 - Volume 13 Issue 239 Print Report
In 2002, at the age of 54, after spending his entire career in the computer industry,M obtained a California real estate sales license and began to earn commiss...
California "DLPs" Are Exempt From Tax And Filing Requirements
December 12, 2019 - Bulletin Print Report
Taxpayer-Partner is a entity recognized for federal income tax purposes and is a partner, under local law, in a domestic (U.S.) limited partnership, (LP 1). The only other part...
Banking Fees Not Deductible Under Sec. 212
December 12, 2019 - Volume 13 Issue 238 Print Report
A, an individual taxpayer, maintains an interest-bearing checkingaccount with BK, a domestic bank. A is paid interest on amounts on deposit in the checking acco...
Independent Contractor Allowed To Deduct Some Commuting Expenses
December 12, 2019 - Bulletin Print Report
On September 17, 2013, P signed an "Independent Contractor Service Agreement," ("contract"), with FT. The contract stated that P would "provide tempora...
NLOK Rumors Can Have An Impact On Tax Treatment Of Special Dividend
December 11, 2019 - Bulletin Print Report
It has been reported that NortonLifeLock, Inc., ("N"), formerly known as Symantec Corporation, has attracted "deal interest" from a handful of companies, in...
Gain From Sale of Foreign Property Subject to Formula Apportionment
December 11, 2019 - Volume 13 Issue 237 Print Report
Petitioner, (P), is a New Jersey resident and is the owner and president of S. S is a New Jersey corporation. S does business in a number of states, including New Yor...
Land Use Restriction Credits Are Qualifying REIT Income
December 11, 2019 - Bulletin Print Report
Taxpayer, ("TP"), is a real estate investment trust, ("REIT"). TP owns an"a%" limited partnership interest in S. M owns a "b%" gen...
I.R.S. Cannot Waive Payment Of "Excess" APTC
December 11, 2019 - Bulletin Print Report
TP received a lump sum Social Security Disability payment in Year which included amounts allocated across...Years. For the taxable year, TP also received the benefit of advance...
Presence Of Non-Employees Does Not Preclude An "ATB"
December 10, 2019 - Bulletin Print Report
Distributing, ("D"), is owned in equal proportions by each ofSH1, SH2, and SH3, (the "Shareholders"). D is directly engaged inBusiness A. The Sh...
Cash And Accounts Receivable Are Assets
December 10, 2019 - Bulletin Print Report
Delcon Partners, LLC, ("D"), purchased assets valued at $1,150,000 from Seller, ("S"), an HVAC services business. D did not purchase S's cash, checking...
Income Derived From Procurement Activities Not FBCSI
December 10, 2019 - Volume 13 Issue 236 Print Report
TP andits subsidiaries form a U.S. based multinational company with operations around the world. TP indirectly owns FSub, a company organized under the laws of...
Chuck E. Cheese Denied A Sales Tax Refund
December 10, 2019 - Bulletin Print Report
CEC Entertainment, Inc., ("CEC"), owns and operates Chuck E. Cheese restaurants in Texas. These restaurants provide food, beverages, and entertainment. The entertainm...
VRNT Announces Separation Plan
December 9, 2019 - Bulletin Print Report
Verint Systems, Inc., ("VRNT"), the successor (by merger) to Comverse Technology, Inc., announced that its Board of Directors has approved "proceeding with a pla...
MoneyGram's Bank Aspirations Are Dashed
December 9, 2019 - Bulletin Print Report
MoneyGram International, Inc., ("MG"), is incorporated in Delaware and is headquartered in Texas. It is the parent of a group of companies that operate a global payme...
PG&E Reaches A Settlement Agreement With Tort Claimants
December 9, 2019 - Bulletin Print Report
PG&E Corporation and Pacific Gas & Electric Co., ("PGE"), haveagreed to a settlement with the "Official Committee of Tort Claimants" who susta...
CDs Are "Cash Items"
December 9, 2019 - Volume 13 Issue 235 Print Report
Sec. 851 and Sec. 856 of the Internal Revenue Code prescribe certain requirements that an entity must meet in order to qualify as a regulated investment company (RIC)...
Sale Of A Business Not A Non-Taxable Sale
December 6, 2019 - Bulletin Print Report
L entered into an agreement to sell an oil and gas equipment fabrication business and business assets, as well as real property located in Wyoming, to MM. The sale assets const...
A "Downstream" Merger Will Not Be Recast as a Liquidation
December 6, 2019 - Volume 13 Issue 234 Print Report
On July 12, 1972, C Corporation, (CC), was incorporated for the express purpose of acquiring the stock of NYFA, Inc., (NYFA). CC acquired all of the stock of NYFA own...
Shareholder Was True Borrower On Loan To Corporation
December 6, 2019 - Bulletin Print Report
Plaintiffs, ("Ps"), are the sole shareholders of CC, an 'S' corporation. MS is the proprietor of LLC, which owns the property upon which CC conducts its opera...
Blackstone's Incorporation Governed By Sec. 351
December 5, 2019 - Bulletin Print Report
Several high profile MLPshave converted, or are in the processof converting, to C corporation status, none more high profile than The Blackstone Group L.P. The impe...
RIC Stock Is Not QRP
December 5, 2019 - Volume 13 Issue 233 Print Report
Mr. A sold a number of shares of common stock of X corporation, (X), to the X employee stock ownership plan (ESOP). A written...
The Same Or Similar Trades Or Businesses
December 4, 2019 - Volume 13 Issue 232 Print Report
The taxpayer elected to be treated as a regulated investment company (RIC). The taxpayer owned 24 percent of the voting stock of X, a foreign holding company, and 100...
Cleveland-Cliffs To Acquire AK Steel
December 4, 2019 - Bulletin Print Report
On December 3, 2019, Cleveland-Cliffs, Inc., ("CC"), and AK Steel Holding Corporation, ("AK"), announced the execution of an Agreement and Plan of Merger by...
No Deduction For Abandonment of a Mutually Exclusive Alternative
December 3, 2019 - Volume 13 Issue 231 Print Report
The taxpayer is primarily engaged in Business A. The value of the taxpayer's stock remained stagnant between Year 1 and Year 2. In Date 1, the taxpayer engaged Co...
Parent-Child Exclusion Does Not Prevent Reassessment Of A Home
December 3, 2019 - Bulletin Print Report
A trust named H as both the grantor and trustee of such trust. R wasdesignated the successor trustee upon H's death. As successor trustee, the trust directs R to dist...
Husband's Sale Cannot Be Netted Against Wife's Purchase
December 3, 2019 - Bulletin Print Report
On August 13, 2018, CF purchased a 2018 Chevrolet for $30,789, minus a rebate of $2,519. On September 10, 2018, CF sold a 2008 Chevrolet for $4,700. On September 11, 2018, CF a...
Pain Management Center Does Not Market Compounded Drugs
December 2, 2019 - Bulletin Print Report
Center, ("C"), is a Missouri medical office that treats and manages patients' pain. This includes the medical service of injecting pain-relieving drugs administer...
State Tax Credits Constitute "Good" REIT Income
December 2, 2019 - Bulletin Print Report
TP has elected to be taxed as a real estate investment trust, ("REIT"). TP has over a "v%" general partnership interest in OP. OP is engaged in the ownershi...
Who Is The "Issuer" Of An Exchange Traded Option?
December 2, 2019 - Volume 13 Issue 230 Print Report
TP is a newly organized corporation that is registered with the S.E.C. as a management, open-end diversified investment company under the Investment Company Act of 19...
Schwab/TD Merger Not Assured Of Reorganization Status
November 29, 2019 - Bulletin Print Report
The Charles Schwab Corporation, ("S"), and TD AmeritradeHolding Corporation, ("T"), recently announced that they had entered into a definitive agreeme...
FBAR Penalties Apply On A Per-Account Basis
November 29, 2019 - Bulletin Print Report
B is a U.S. citizen. During 2010, B had a financial interest in, signature authority over, and/or otherwise controlled 14 financial accounts in the U.K. The U.K. accounts had c...
Sales Tax Rate In Effect Upon Purchase Is Controlling
November 29, 2019 - Bulletin Print Report
Petitioners, ("Ps"), purchased a Ford motor vehicle on September 25, 2018 for $51,796.24. On October 1, 2018, a one percent tax increase went into effect. The combine...
Annuity Does Not Pass Muster
November 29, 2019 - Volume 13 Issue 229 Print Report
Taxpayer A and Taxpayer B, (the TPs)are each life insurance companies. The TPs plan to issue non-qualified single premium immediate annuity contracts (the Contr...
Chemical Purchases Not Eligible For Use Tax Exemption
November 27, 2019 - Bulletin Print Report
Horsehead Corporation, ("H"), is a Delaware corporation with its primary place of business in Pittsburgh, Pennsylvania. It has a manufacturing facility located in Ill...
EBAY Positioned For A Partial Liquidation Distribution
November 27, 2019 - Bulletin Print Report
eBay, Inc., ("EBAY"), and viagogorecently announced that they have entered into a definitive agreement for EBAY to sell StubHub, ("SH"), to viagogo&nb...
No Deduction For Theft Of Untaxed Funds
November 27, 2019 - Volume 13 Issue 228 Print Report
B claimed a theft loss on his 2008 Minnesota tax return for funds misappropriated from his "traditional" IRA. The Commissioner of Revenue (the Commissioner)...
Mixed Use Building Is "Primarily Residential"
November 26, 2019 - Bulletin Print Report
The Property consists of one building with four floors and a cellar. The Property was purchased in 1962. The ground floor was used as a medical office by the owner from 1962 th...
Conveyance Of Multiple Units Eligible For Special "RPTT" Rate
November 26, 2019 - Bulletin Print Report
In 2012 TP purchased condominium unit XXX in the building located at XXXXX in New York City. In 2015, TP purchased the adjacent smaller condominium unit XXXX. Also in 2015, TP...
Foreign Currency Is Not "Securities"
November 26, 2019 - Volume 13 Issue 227 Print Report
On June 1, 1973, the taxpayer purchased currency of foreign country "M" in a transaction which wasentered into for profit.  ...
Preserving PCG's NOLs
November 25, 2019 - Bulletin Print Report
PG&E Corporation, ("PCG"), and the utility of which it is the parent, commenced their Chapter 11 cases with the Bankruptcy Court on January 29, 2019, and are pres...
Private Equity Funds Did Not Form A "Partnership-In-Fact"
November 25, 2019 - Bulletin Print Report
Sun Capital Advisors, Inc., ("SCAI"), is a private equity firm. SCAIestablished at least eight funds. Two of them, Sun Fund III and Sun Fund IV are the investor...
Value of Real Estate Contract Is Part of "Amount Realized"
November 25, 2019 - Volume 13 Issue 226 Print Report
On "d" the Taxpayers entered into a contract for the sale of a four family rental unit to P. The contract provided that , on the closing date, the Taxpayers...
Bad Debt Deductions Conditioned On The Existence Of Bona Fide Debt
November 22, 2019 - Bulletin Print Report
BJPconducted fracking services in Russia. It operated through a Russian subsidiary, BJR. In 2006, BJRentered into a three-year contract with T to provide fracking s...
Gain On Sale Of Subsidiaries Is Apportioned To Minnesota
November 22, 2019 - Bulletin Print Report
Holdings, ("H"), is an Arizona Subchapter S corporation that was doing business as Go Daddy, ("GD"). Mr. P was H's sole shareholder. Through domestic an...
Receipt Of Common Stock For Preferred Stock Not An "Acquisition"
November 22, 2019 - Volume 13 Issue 225 Print Report
Fund, (F), has qualified to be taxed as a regulated investment company (RIC). F seeks long-term capital appreciation by making venture capital investments in private...
COTY Purchases A Controlling Interest In King Kylie LLC
November 21, 2019 - Bulletin Print Report
Although by no means the largest deal of the year, one of the most scrutinized transactions of the recent past is Coty, Inc.'s investment in Kylie Jenner's burgeoning c...
Foreign Trust Owner Avoids Late Filing Penalties
November 21, 2019 - Bulletin Print Report
Mr. Joseph A. Wilson, ("W"),established an offshore trust in 2003. W named himself the grantor of the trust and was its sole owner and beneficiary. The purpose...
Basis of Property Received In Liquidation
November 21, 2019 - Volume 13 Issue 224 Print Report
Plaintiffs were shareholders in WFT which owned"the plantation" and other assets. On December 30, 1936, the corporation was liquidated and 1/2 of the...
CDs Are Not "QRP"
November 20, 2019 - Volume 13 Issue 223 Print Report
X is a domestic corporation that has no stock outstanding that is readily tradable on an established securities market. A owns 62.5 percent of the common stock of X;...
Lack Of Billing Statement Does Not Mitigate "PTC" Tax
November 20, 2019 - Bulletin Print Report
In November 2013, P was unemployed and did not have health insurance. P accessed theHealth Insurance Marketplace, ("M"), website and applied for health insuranc...
Buyer Of Assets Not Responsible For Seller's Tax Liabilities
November 20, 2019 - Bulletin Print Report
P and SW entered into a Royalty Agreement, ("Agreement"), on March 30, 2016 for the purchase of certain assets. Texas Tax Code Sec. 31.081 provides: (a) This section...
Software Executive Did Not Abandon Massachusetts Domicile
November 19, 2019 - Bulletin Print Report
On October 14, 2011, Appellant, ("APP"), filed a Form 1-Nonresident/Part-Year Resident Income Tax Return ("F1") as a resident from January 1, 2010 to June 1...
School Buses Are Not "For Hire"
November 19, 2019 - Bulletin Print Report
First Student, Inc., ("FS"), owns and operates school buses. These buses are primarily used to provide transportation services for schoolchildren through contracts wi...
"Simplified Method" of Basis Recovery Upheld
November 19, 2019 - Volume 13 Issue 222 Print Report
In 1991, Mrs. Zedaker, (MZ), returned to the profession of teaching and deposited $149,553.01 in her California State Teachers' Retirement System (CalSTRS) accoun...
Hedge Fund Manager Scores Connecticut Resident Tax Credit
November 18, 2019 - Bulletin Print Report
Plaintiff, ("P"), and his brother, PS, were the sole members of a limited partnership, LAM LLC, which acted as the general partner of two limited partnerships, LAM LP...
The Willens Deal Survey November 2019
November 18, 2019 - The Deal Survey: November 2019 Print Report
Welcome to our summary of deals for November 2019. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database....
VAT Is Included In The Sales Factor
November 18, 2019 - Bulletin Print Report
Value Added Tax, ("VAT"), is an indirect tax imposed by, and remitted to, many foreign jurisdictions as a consumption tax on the provision of both goods and services,...
Lack of Liquidation Value Establishes Worthlessness
November 18, 2019 - Volume 13 Issue 221 Print Report
On July 1, 1929, petitioner purchased 325 shares of common stock of FIC, an investment trust, dealing in securities, to a substantial extent on borrowed money. The st...
Built-In Gain Update
November 15, 2019 - Bulletin Print Report
The I.R.S. has now acknowledged that, as regards the pending elimination of the "Sec. 338 Approach"* to the determination of "recognized built-in gains," &q...
The "SRP" Cannot Be A Priority Claim
November 15, 2019 - Bulletin Print Report
Debtors filed their petition for relief on February 16, 2019. The I.R.S. filed a proof of claim and later amended it, ("Amended Claim"). Of the total amount, the Serv...
Agent Did Not Have Unreported Gross Income
November 15, 2019 - Volume 13 Issue 220 Print Report
Petitioner was 22 years old during 2003, and he intended to pursue a career in the construction business. Petitioner was generally familiar with his father's cons...
AOBC's Spin-Off Appears To Be Motivated By "Adverse Market Perception"
November 14, 2019 - Bulletin Print Report
American Outdoor Brands Corporation, ("AOBC"), announced that its board of directors has unanimously approved a plan to spin-off its outdoor products and accessories...
Invalid Regulation Does Not Control Size Of "FBAR" Penalty
November 14, 2019 - Bulletin Print Report
N opened a foreign bank account with UBS in 1999. She opened a "numbered" account, as opposed to a "named" account. From 2001 through 2008, her account bala...
When Can The N.Y. Knicks Be Acquired?
November 14, 2019 - Bulletin Print Report
The Madison Square Garden Company, ("MSG"), announced that its board of directors has approved "pursuing a revised plan for the proposed separation of its sports...
"Securing The Benefit" of a Deduction
November 14, 2019 - Volume 13 Issue 219 Print Report
The taxpayer, E, a C corporation,incurred losses while engaged in the business of selling home appliances. It disposed of all its assets and the shares were sol...
Loss Corporations Seek "Grandfathering" Of "Sec. 338 Approach"
November 13, 2019 - Bulletin Print Report
Where a "loss corporation" experiences an "ownership change," certain limitations are placed upon the amount of taxable income, for any taxable year ending...
Life Beneficiaries' Interest In Land Constitutes Replacement Property
November 13, 2019 - Volume 13 Issue 218 Print Report
Under the will of a decedent, several tracts of land were held in trust by a trustee for investment purposes. The income from the land was payable to designated indiv...
Petition For Refund Found To Be Untimely
November 13, 2019 - Bulletin Print Report
Sec. 3003.1(a) of the Tax Reform Code of 1971 (Pennsylvania) provides: "For a tax collected by the Department of Revenue...a taxpayer who has actually paid tax...may petit...
Split-Off Of A "QSub"
November 12, 2019 - Bulletin Print Report
D is an 'S' corporation. A, B, C1, and D1 collectively own 50 percent of the stock of D. B, C1, and D1 are the children of A. E, F, G, and H collectively own the remain...
Advisory Fees Are An Expense Of The Annuity Contract
November 12, 2019 - Bulletin Print Report
TP is a life insurance company and is a subsidiary of Parent. TP intends to offer three non-qualified deferred annuity contracts, (the "Contract"). The Contract will...
SunPower's Spin-Off Will Feature An Equity Infusion
November 12, 2019 - Bulletin Print Report
SunPower, (SPWR), hasannounced ambitious plans to separate itselfinto two "independent, complementary, strategically-aligned, and publicly-traded companies--Su...
The Attribution Rules Do Not Apply to Sec. 269
November 12, 2019 - Volume 13 Issue 217 Print Report
Mr. A directlyowned 100 percent of the stock of M Corporation, (M), and 10 percent of the stock of X Corporation, (X). M directlyowned 45 percent of the s...
I.R.S. Approves Retention Of "Spinco" Securities
November 11, 2019 - Bulletin Print Report
Distributing, ("D"), a widely held State A corporation, is the common parent of an affiliated group that files a consolidated federalincome tax return, (the &qu...
Employer Debt Contributed To Pension Plan
November 11, 2019 - Bulletin Print Report
Company, ("C"), provides insurance productsand financial services, and uses a calendar year accounting period and accrual method of accounting for federal incom...
Income Derived From Sand Constitutes Qualifying Income
November 11, 2019 - Volume 13 Issue 216 Print Report
X is a limited liability company organized under the laws of State. X intends to contribute all or a portion of its assets to a new limited partnership, Y. After the...
Purchases Of Natural Gas Not Deductible
November 8, 2019 - Bulletin Print Report
The taxpayer, ("TP"), co-owns, L, a power plant in New Mexico. TP purchases natural gas from various third parties for use in producing electricity at the plant. TP a...
Deducting Accrued Interest on Convertible Debentures
November 8, 2019 - Volume 13 Issue 215 Print Report
TP issued debentures which bear interest that is payable semi-annually on Date Y and on Date Z of each year. The debentures are convertible at the option of the holde...
Asset Purchase Agreement Did Not Shift Burden Of Sales Tax
November 8, 2019 - Bulletin Print Report
In 2016, pursuant to an asset purchase agreement, Plaintiffs sold Defendants the "GM" for a total of $6 million. The sale included...all real property and assets--bot...
Taylor Morrison And William Lyon To Join Forces
November 7, 2019 - Bulletin Print Report
Taylor Morrison Home Corporation, ("TMHC") and William Lyon Homes, ("WLH"), have entered into a definitive agreement pursuant to which TMHC"will...
Bulk Sales and the NYC RPTT
November 7, 2019 - Volume 13 Issue 214 Print Report
Under the New York City (NYC) Real Property Transfer Tax (RPTT), transfers of real property are taxable provided the consideration for the transfer is more than $25,0...
Sourcing Investment Advisory Receipts For Illinois Tax Purposes
November 7, 2019 - Bulletin Print Report
TP is an investment advisor located in Illinois and is designated as a C corporation. TP earns the majority of its revenue for services it performs as the investment advisor fo...
Travel To Timber Properties Found To Be Deductible
November 6, 2019 - Bulletin Print Report
P, during the early 1980s, inherited from his mother more than 100 acres of Washington State land. The land was in two counties and P traveled substantially every week to take...
Gain From Taxable Liquidation Is "Business Income"
November 6, 2019 - Volume 13 Issue 213 Print Report
TP, which is incorporated in Ohio but commercially domiciled in North Carolina, manufactures waste handling and recycling equipment for residential and commercial use...
Pre-'B' Dividends Not Treated as Consideration For the Stock
November 5, 2019 - Volume 13 Issue 212 Print Report
Operating Company, (OC), is owned by BB, a group offormer employees, and a KSOP. The board of directors of OC has determined that creating a public market for i...
Cycle Bar Classes Are "Taxable Commercial Recreation"
November 5, 2019 - Bulletin Print Report
CBFis an indoor, stationary cycling fitness franchisor of over 400 CB studios in the U.S., Canada, and the U.K. Petitioner CJHis the franchisee of a studio that it...
"Merchant" Not Eligible For Sales Tax Exemption
November 5, 2019 - Bulletin Print Report
The taxpayer, ("TP"),contracts with land owners for the right to obtain pine straw. The pine trees that eventually produced the pine straw were not planted by T...
Corporate Disbursements Gave Rise To "Constructive Dividends"
November 5, 2019 - Bulletin Print Report
S is the owner of SESP. Throughout 2010, S maintained a business checking account in his name; and another such business checking account in the name of SESP. S never filed inc...
Reverse Inversion Of Wright Medical Group N.V.
November 4, 2019 - Bulletin Print Report
This morning, another so-called "reverse inversion" was announced. We may have something of a trend at work here, when oneconsiders the recent reverse inversion...
Boat Slips Are Real Property
November 4, 2019 - Bulletin Print Report
TP has elected to be treated as a real estate investment trust, ("REIT"). TP owns substantially all of the interests in a limited liability company that is classified...
Gain On Sale Of Vacant Land Excluded Under Sec. 121
November 4, 2019 - Bulletin Print Report
TP 1 purchased Property 1 as a principal residence on Date 1 for Amount 1. TP 1 and TP 2 were married on Date 2. TPs used Property 1 as their principal residence from Year 1 to...
Litigation Award Sourced To Massachusetts
November 4, 2019 - Bulletin Print Report
APP was a Delaware corporation whose principal place of business was in Massachusetts, ("M"). APP was classified as a manufacturing corporation for M corporate excise...
Intervening Merger Will Not Taint Previously Announced Split-Off
November 4, 2019 - Volume 13 Issue 211 Print Report
The Prior Ruling Letter (issued to Viacom) concerned a proposed split-off transaction, (the "Split-off Transaction"). The Proposed Split-off has not, as yet, been con...
End-Users Of Microsoft Software Were Not Its Licensees
November 1, 2019 - Bulletin Print Report
Microsoft Corporation, ("M"), is engaged in the business of developing, distributing, and licensing computer software. OEMs are businesses, for example Dell or Hewlet...
Parent Surrendered Beneficial Ownership of Sub Stock To Creditor
November 1, 2019 - Volume 13 Issue 210 Print Report
For the fiscal year ended March 31, 1971, X elected to file, and did file, a consolidated income tax return which included M....
Cannabis Operating Costs Not Deductible in Illinois
November 1, 2019 - Bulletin Print Report
Company, ("C"), is a medical cannabis dispensary. C's principal operationis the sale of "Product" to serve the medical needs of registered patient...
Digital Realty Trust Will Expand Abroad
October 31, 2019 - Bulletin Print Report
Digital Realty Trust, a real estate investment trust, ("REIT"), and InterXion N.V. announced that they have entered into a definitive agreement "to combine their...
Gross Receipts From Deemed Sale of Assets Not In Sales Factor
October 31, 2019 - Volume 13 Issue 209 Print Report
TP was owned by P. P sold the stock of TP to an unrelated third party purchaser. The parties, TP and the purchaser, executed an election under Sec. 338(h)(10) with re...
Absence Of Utility Company Metering Prevents Solar Tax Credit
October 31, 2019 - Bulletin Print Report
JR resides in Des Moines, Iowa. He installed an eight-panel solar array on his property in 2015. The array was connected to a Mid-American Energy bi-directional meter located o...
RSUs And DCPs Are "Paid In Illinois"
October 31, 2019 - Bulletin Print Report
M is a retired full time Illinois resident who will continue to receive "RSU" and "DCP" income from Illinoisthat Company, i.e., the company from which...
Prologis, Inc. To Acquire Liberty Property Trust
October 30, 2019 - Bulletin Print Report
Prologis, Inc. and Liberty Property Trust, each of which are real estate investment trusts, ("REITs"), announced that the companies have entered into a definitive mer...
Qualifying Child Need Not Be A Dependent
October 30, 2019 - Bulletin Print Report
On February 1, 2015, P timelyfiled a New York State and City tax return on which wage income and Schedule C income was reported. P filed as "head of household"...
A Reorganization Needs a Non-Tax Business Purpose
October 30, 2019 - Volume 13 Issue 208 Print Report
ACQ, a domestic corporation, and its U.S. subsidiaries ("the Group") file a consolidated income tax return. In 1983, the Group reported a loss of nearly $2...
Texas Franchise Tax Is Not An "Occupation" Tax
October 30, 2019 - Bulletin Print Report
Claimant, ("C"), is a registered motor carrier that provides passenger transportation services. Its headquarters are in Ohio, but it operates throughout the United St...
Eaton Avoids Underpayment Penalties
October 29, 2019 - Bulletin Print Report
On July 26, 2017, the court filed its opinion in this case, known as "Eaton II," which stated at the end: "Decision will be entered under Rule 155." The par...
Exercise of Rights Rescinded
October 29, 2019 - Volume 13 Issue 207 Print Report
The stock of X consisted of a single class of common stock. In 1973, the directors of X distributed to its common shareholders transferable rights to subscribe, on or...
Member Of LLC Treated As "Doing Business" In California
October 29, 2019 - Bulletin Print Report
APP is a foreign single-member LLC domiciled in Georgia. It was not, and has never been, registered to do business in California. During 2013, APP held a 50 percent interest in...
Merger Of Family Corporations Produces A "Disguised" Gift
October 29, 2019 - Bulletin Print Report
In 1979, the Cs (MRS and MR), incorporated K. MRS owned 51 percent of K's stock and MR owned 49 percent thereof. Years later,KE, P, and J, the sons of MRS and MR, inc...
Deemed Partnership Distributions Produce Partner Level Gains
October 28, 2019 - Bulletin Print Report
TT5is a California limited liability company, (LLC), owned, as of the beginning of 2007, by B (72.5 percent), APP (22.5 percent), and 1251 LLC (five percent). During 2007...
Repurchases Of Stock Following A Spin-Off
October 28, 2019 - Bulletin Print Report
D2 was the parent of a worldwide group of domestic and foreign entities. Pursuant to transactions described in PLR-1300090-15 (February 24, 2016), D2 effectuated the distributi...
Stock Received In Merger Is "Acquired" On the Merger Date
October 28, 2019 - Volume 13 Issue 206 Print Report
X, a dealer in securities, has, for many years, engaged in the purchase and sale of Y stock. On July 31, 1973, in a transaction qualifying as a reorganization under S...
Installation Of Cabling Constitutes A "Construction Contract"
October 25, 2019 - Bulletin Print Report
During a rehabilitation of its headquarters in Columbus, Ohio, Nationwide Mutual Insurance Company, ("N"), engaged contractors to install communications lines, which...
Temporary Suspension Of Voting Rights
October 25, 2019 - Volume 13 Issue 205 Print Report
A owned100 percent ofthe stock of X. On March 13, 1977, M acquired all the X stock from A solely in exchange for 100,000 shares of M voting stock. The exc...
Allocating Earnings and Profits
October 24, 2019 - Volume 13 Issue 204 Print Report
The corporation, (C), had a deficit in accumulated earnings and profits of $60x as of January 1, 1973. However, C had $60x of earnings and profits of the taxable year...
Sec. 280E Is Not A Penalty Provision
October 24, 2019 - Bulletin Print Report
P is a California corporation owned by DRF. P does not dispute that its business consists of operating a medical marijuana dispensary. Sec. 280E of the Internal Revenue Code pr...
Purchase Of Business Not Exempt From Sales Tax
October 24, 2019 - Bulletin Print Report
D purchased assets valued at $1.15 million from S, an HVAC services business. D did not purchase any of S's cash, checking and savings accounts, accounts receivable, promis...
Club Membership Fees Subject To California Sales Tax
October 23, 2019 - Bulletin Print Report
APP, a California limited liability company, operated Tower Club, (the "club"), a members-only facility located in Oxnard, California, from April 2011 until it was so...
CBS/Viacom--"Like A Pooling"
October 23, 2019 - Bulletin Print Report
On August 13, 2019, CBS Corporation, ("CBS"), and Viacom, Inc., ("V"), entered into an Agreement and Plan of Merger which is now on the brink of being consu...
The Willens Deal Survey October 2019
October 23, 2019 - The Deal Survey: October 2019 Print Report
Welcome to our summary of deals for October 2019. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database. <...
Non Wash Sale Loss Disallowed
October 23, 2019 - Volume 13 Issue 203 Print Report
Petitioner, (P), has been a member of the New York Coffee and Sugar Exchange (the "Exchange")since 1925. P's activities consisted of acting as a b...
Gain From Short Sale Not UBTI
October 22, 2019 - Volume 13 Issue 202 Print Report
Employer M maintains Plan X, a qualified plan under Sec. 401(a) of the Internal Revenue Code. Plan X intends to engage in certain 'short sale' transactions.
"Clean Rooms" Are Not Fixtures
October 22, 2019 - Bulletin Print Report
The taxpayer specializes in the design, manufacturing, installation, and services associated with modular "clean rooms" for their customers. The purpose of a clean ro...
Event Tickets Are Not "Services"
October 22, 2019 - Bulletin Print Report
G operates Parx Casino. G distributes complimentary event tickets to patrons as a result of their table game and slot machine play. The Commonwealth of Pennsylvania, (the "...
"Straddle" Tax Years Must Be Bifurcated
October 22, 2019 - Bulletin Print Report
The Debtors provided "non-standard" personal automobile insurance policies to individual consumers who were unable to obtain insurance from "standard" autom...
Hudson's Bay Company To Be "Taken Private"
October 21, 2019 - Bulletin Print Report
Hudson's Bay Company, ("HBC"), announced, on October 21, 2019, that, "following an extensive review and analysis," it has entered into a definitive &quo...
Alexion To Acquire Achillion
October 21, 2019 - Bulletin Print Report
Alexion Pharmaceuticals, Inc., ("AL"), entered into an Agreement and Plan of Merger with "Merger Sub," a newly formed, wholly-owned subsidiary of AL, and Ac...
Non-Profit Entities Are Corporations
October 21, 2019 - Bulletin Print Report
Sec. 6621(a)(1) of the Internal Revenue Code requires the I.R.S. to apply a lower interest rate for refunds owed to "corporations," than for refunds owed to other typ...
Directors' Fees Not Sourced To California
October 21, 2019 - Bulletin Print Report
Company, ("C"), is commercially domiciled outside of California in the state of "X." The business of C is managed under the direction of its Board of Direct...
Income From Mining and Processing Kaolin Is Qualifying Income
October 21, 2019 - Volume 13 Issue 201 Print Report
X is a limited liability company organized under the laws of State. X intends to contribute all or a portion of its assets to a new limited partnership, Y. After an i...
Statutory Liens Cannot Be Avoided
October 18, 2019 - Bulletin Print Report
Debtor filed a Petition for relief under Chapter 13 on March 8, 2019. The Internal Revenue Service, ("I.R.S."), filed its Proof of Claim on June 11, 2019. The I.R.S....
Misappropriated Income Is Nevertheless Included In Gross Income
October 18, 2019 - Bulletin Print Report
N's husband died in 2002, leaving behind substantial assets to provide for her care for the remainder of her life. N's son, C, was named the executor of N's husband...
Managing One's Investments Is Not "Carrying On a Trade or Business"
October 18, 2019 - Volume 13 Issue 200 Print Report
Petitioner, with extensive investments in real estate, bonds, and stocks, devoted a considerable portion of his time to the oversight of his interests and evenh...
MGM To Engage In A Tax Efficient "Leveraged Partnership" Transaction
October 17, 2019 - Bulletin Print Report
MGM Resorts International, ("Parent"), announced that it has entered into a definitive agreement to form a joint venture, BCore Paradise JV LLC,("JV")...
Valuable Consideration Renders Aircraft Eligible For Use Tax Exemption
October 17, 2019 - Bulletin Print Report
BA purchased an aircraft from Cessna Finance Corporation in Kansas. That same day, BA entered into an aircraft lease agreement with B, a common carrier that provides charter tr...
Finder's Fee Ruled Nondeductible
October 17, 2019 - Bulletin Print Report
Plano Molding Co., ("P"), specializes in the manufacture of plastic storage equipment for outdoor sports. In February 2007, Tinicum Capital Partners, ("T"),...
CFC Does Not Generate Foreign Base Company Income
October 17, 2019 - Volume 13 Issue 199 Print Report
TP is the "x%" owner of USS, a domestic corporation which indirectly owns "y%" of a controlled foreign corporation (CFC). CFC, in turn, owns "...
PE To Acquire JAG
October 16, 2019 - Bulletin Print Report
Parsley Energy, Inc., ("PE"), and Jagged Peak Energy, Inc., ("JAG"), announced, on October 14, 2019, that they have entered into a definitive merger agreeme...
Book Value of Inventory Constitutes Personal Property Tax Base
October 16, 2019 - Volume 13 Issue 198 Print Report
Rich's Department Stores, Inc., (R),employed the "retail inventory method" to account for its merchandise inventory. &...
Refund Of "RPTT" Denied
October 15, 2019 - Bulletin Print Report
Petitioner, ("P"), is a tax-exempt organization, recognized as such by Internal Revenue CodeSec. 501(c)(3) and City Administrative Code Sec. 11-2106(b)(2). P is...
Virginia Does Not Allow A Deduction For "Creditable" Expenses
October 15, 2019 - Bulletin Print Report
The taxpayers were shareholders of a subchapter S corporation, (the "Corporation"). On its 2016 federal income tax return, the Corporationclaimed a credit pursu...
A Tax Exempt Organization's Subpart F Inclusion Is Not UBTI
October 15, 2019 - Volume 13 Issue 197 Print Report
A is the exempt domesticholding company of B, a hospital exempt from federal income tax under Sec. 501(c)(3) of the Internal Revenue Code. A has formed a contro...
What Does IAC Have In Mind?
October 14, 2019 - Bulletin Print Report
IACbeneficially owns 16,402,602 shares of Common Stock of Match Group, Inc., ("MGI"), representing approximately 23 percent of the total outstanding shares of M...
Whiskey Barrels Are Exempt From Property Tax
October 14, 2019 - Bulletin Print Report
The subject property consisted of previously-unused whiskey barrels Brown-Forman Corporation, ("BF"), either built or acquired. Once the barrels arrived at the local...
Effect of Contribution to Capital Upon Basis of Contributor's Stock
October 14, 2019 - Volume 13 Issue 196 Print Report
N is incorporated under the laws of State X. All of the outstanding common stock of N is owned by M, an individual. M desires...
RIC Stock Dividend Not Taxable
October 11, 2019 - Volume 13 Issue 195 Print Report
X Corporation, (X), distributed, pro-rata, shares of its preferred stock to the holders of its common stock. The preferred st...
"Airdrops" Of Cryptocurrency Result In Gross Income
October 11, 2019 - Bulletin Print Report
Virtual currency is a digital representation of value that functions as a medium of exchange, a unit of account, and a store of value other than a representation of the United...
NAP To Be Acquired In A "Two-Tier" Deal
October 10, 2019 - Bulletin Print Report
Impala Platinum Holdings Limited, ("IMP"), announced that it has entered into a definitive agreement to acquire 100 percent of the outstanding shares in Canadian PGM&...
Contingent Voting Rights Are Disregarded
October 10, 2019 - Volume 13 Issue 194 Print Report
A is the common parent of a group of affiliated corporations. A owns "h" shares of the common stock and "i" shares of the voting preferred stock o...
Wisconsin's Tax On Railroad Property Is Discriminatory
October 10, 2019 - Bulletin Print Report
Chapter 70 of the Wisconsin Tax Code governs the taxation of manufacturing and commercial companies aside from railroads and utilities companies. Chapter 76 governs the taxatio...
District Court Cannot Adjudicate An Overpayment Interest Dispute
October 10, 2019 - Bulletin Print Report
Federal courts, it goes without saying, must have a statutory basis to exercise jurisdiction. Plaintiffs bring this lawsuit against the government seeking to recover interest b...
Transitory Ownership Does Not Terminate 'S' Election
October 8, 2019 - Volume 13 Issue 193 Print Report
Corporation, ("C"), is an 'S' corporation. The "continuing shareholders" collectively own "a%" of the total stock of C. The &quo...
Distributions To Shareholder/Employees Characterized As Dividends
October 8, 2019 - Bulletin Print Report
Shore Building Contractors, Inc., ("SB"), is a closely-held corporation that acts as general contractor in the construction industry. J and C, unrelated individuals,&...
Are "LIHTCs" Considered In Determining Fair Market Value Of Realty?
October 8, 2019 - Bulletin Print Report
OCGA Sec. 48-5-2(3) defines the phrase, fair market value of property, for purposes of ad valorem real property taxation, as "the amount a knowledgeable buyer would pay fo...
CJ's Dividend Should Not Be "Extraordinary"
October 7, 2019 - Bulletin Print Report
C&J Services, Inc., ("CJ"), announced, on October 4, 2019,that its Board of Directors has declared, "contingent on further action by the Board to estab...
Hess Midstream Partners To Restructure
October 7, 2019 - Bulletin Print Report
Hess Corporation, ("HC"), and Global Infrastructure Partners, ("GIP"), each owns an approximate 34 percent limited partnership interest in Hess Midstream Pa...
SIX/FUN - Updated 10/7/19
October 7, 2019 - Bulletin Print Report
We thought it would be a good idea to address several of the quest...
Alternative Investments Are Not Jeopardizing Investments
October 7, 2019 - Volume 13 Issue 192 Print Report
Y is exempt from tax under Sec. 501(c)(3) and is classified as a private foundation under Sec. 509(a). Y provides grants to charities in furtherance of its charitable...
NOLs Of Acquired Corporations Reduce Maryland Modified Income
October 4, 2019 - Bulletin Print Report
Petitioner, ("P"), challenges the Comptroller of Maryland'sposition of denying P's federal net operating losses, ("NOLs"), for Maryland corpor...
Reliance On Revenue Ruling Does Not Avoid Negligence Penalty
October 4, 2019 - Bulletin Print Report
BMEis contesting the I.R.S.'s assessment of Black Lung Excise Taxes, ("ET"). The ET is imposed by Sec. 4121 of the Internal Revenue Code which provides: &qu...
Redemption of Stock Acquired In Satisfaction of a Monetary Bequest
October 4, 2019 - Volume 13 Issue 191 Print Report
A decedent bequeathed outright to his wife "an amount sufficient to utilize the marital deduction to the maximum extent allowed by Sec. 2056 after taking into co...
Shipping Goods Into Ohio Led To Imposition Of "CAT"
October 3, 2019 - Bulletin Print Report
Mia Shoes, Inc., ("MS"), is a wholesaler of footwear headquartered in Miami, Florida. MS designs and manufactures footwear, then distributes such footwear to customer...
Taxpayer's Altruism Does Not Net A Dependency Exemption Deduction
October 3, 2019 - Bulletin Print Report
During 2012, petitioner-wife, ("PW"), worked at MTC, and petitioner-husband, ("PH"), worked at the USPS. Sometime before 2012, PW met LT. In late 2011, LT a...
Partnership Not Entitled To S.C. Infrastructure Tax Credit
October 3, 2019 - Volume 13 Issue 190 Print Report
CH is a general partnership that operates in South Carolina and is wholly owned by CII's three corporate affiliates. CII is a corporation. CH acquires and develop...
Grantor Trust Is A Separate Entity
October 3, 2019 - Bulletin Print Report
The Rs, husband and wife, are the sole grantors, trustees, and beneficiaries of the R Family Trust, ("Trust"). The Rs are treated, for federal income tax purposes, as...
Transfer of Stock to Executor Not a "Sale Or Other Disposition"
October 2, 2019 - Volume 13 Issue 189 Print Report
A taxpayer, who was not a dealer in securities, purchased shares of stock of a corporation in 1968 for $30 per share. The tax...
"AAA" Is Eliminated Following Expiration Of The "PTTP"
October 2, 2019 - Bulletin Print Report
Plaintiffs are shareholders in three family-owned corporations: LSWARE, LSWASH, and LSB, (the "Corporations"). Throughout their history, these companies toggled betwe...
Disability Benefits Are "Wages" Subject To Withholding
October 2, 2019 - Bulletin Print Report
These motions, the court explained, arise from a settlement of an action to collect disability benefits under various sections of ERISA. According to the Plaintiff, ("P&qu...
Determining A REIT's "Capital Interest" In A Partnership
October 2, 2019 - Bulletin Print Report
Taxpayer, ("TP"), a limited liability company, intends to elect to be a real estate investment trust, ("REIT"). Government Entity and one or more non-govern...
Minority Partner Not Doing Business In California
October 1, 2019 - Bulletin Print Report
APP is a foreign LLC formed in Washington State. For the years in issue, it was not registered to do business with the California Secretary of State, ("SOS"). In Dece...
Taxpayer Denied Nonbusiness Bad Debt Deduction
October 1, 2019 - Volume 13 Issue 188 Print Report
During 2008, petitioner sold an apartment building and realized a significant capitalgain on the sale. She reported this gain under the installment method....
Fannie Mae Is Not A Governmental Body
October 1, 2019 - Bulletin Print Report
Plaintiff, ("P"), filed a complaint alleging that she was improperly assessed Chicago's transfer tax on property transferred to her by Fannie Mae, ("FM"...
The Value Of Stock Must Take Into Consideration A Pending Merger
October 1, 2019 - Bulletin Print Report
Donor, ("D"), is a co-founder and Chairman of the Board of Directors of Corporation A, ("CA"), a publicly traded corporation. On Date 1, D transferred Share...
Tax Credit Denied to Producer Of Alternative Fuel Mixture
September 27, 2019 - Bulletin Print Report
Sec. 6426(e) of the Code allows taxpayers to obtain a credit for producing any alternative fuel mixture for sale or use in a trade or business of the taxpayer.
Redemption of Interest In an Investment Trust
September 27, 2019 - Volume 13 Issue 187 Print Report
TR is an arrangement created under a trust instrument and classified as a trust under Reg. Sec. 301.7701-4(c). TR holds a fixed portfolio consisting of common stock i...
Johnson & Johnson Scores A Refund Of NJ "Insurance Premium Tax"
September 26, 2019 - Bulletin Print Report
Johnson & Johnson, ("J"), is a New Jersey corporation headquartered in New Brunswick, New Jersey.In 1970, J formed Middlesex Assurance Company, ("MA&qu...
Avoiding Exposure To Environmental Liabilities Drives A Spin-Off
September 26, 2019 - Volume 13 Issue 186 Print Report
Distributing, ("D"), a State X corporation, has two classes of stock outstanding, Class A and Class B. The Class A shares are voting shares while the Class B shares a...
"Tax Gross-Up Award" Denied Aggrieved Party
September 25, 2019 - Bulletin Print Report
S is a limited partnership formed by G and P to manage housing properties. Each partner owned a 2.5 percent general partnership interest and a 47.5 percent limited partnership...
Seller Of Multiple Motor Vehicles Denied A Sales Tax Credit
September 25, 2019 - Bulletin Print Report
On February 26, 2017, the Ks sold a Ford truck for $10,500. Two weeks later, the Ks sold a Kawasaki motorcycle for $3,900. On March 14, 2017, the Ks purchased a Dodge truck for...
Elliott Management's Plan For Marathon Is Tax-Efficient
September 25, 2019 - Bulletin Print Report
Elliott Management, (EM), has come out with a comprehensive and obviously well thought out plan for the restructuring of Marathon Petroleum Corporation (MPC). EM has some histo...
Patent Infringement Payments Constitute Business Income
September 25, 2019 - Volume 13 Issue 185 Print Report
Client, (C), is a corporation that files as part of an Arizona consolidated return with its Parent (the "Arizona Affiliated Group"). &...
Lessor Not Entitled To Solar Energy Device Tax Credit
September 24, 2019 - Volume 13 Issue 184 Print Report
Company, (C), is a solar equipment leasing company. C is organized as a limited liability company (LLC)and istaxed as a partnership. C desires to install,...
"ATVs" And "UTVs" Are "Motor Vehicles"
September 24, 2019 - Bulletin Print Report
Petitioner, ("P"), sells all-terrain vehicles, ("ATVs"), side-by-side vehicles or utility task vehicles, ("UTVs"), motorcycles, and utility traile...
Massachusetts Tax Credit Allowed For CT "Pass-Through Entity" Tax
September 24, 2019 - Bulletin Print Report
Massachusetts, ("M"), law generally provides for a credit (the "Sec. 6(a) credit") against taxes imposed under chapter 62 on M residents for taxes due any o...
The Willens Deal Survey September 2019
September 23, 2019 - The Deal Survey: September 2019 Print Report
Welcome to our summary of deals for September 2019. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database....
Overstock.com To Declare "Unusual" Stock Dividend
September 23, 2019 - Bulletin Print Report
Overstock.com, Inc., ("OSTK"), announced, on July 30, 2019, that its Board of Directors has declared a dividend "payable in shares of its Digital Voting Series A...
Unfinished House Not Eligible For Florida's Homestead Exemption
September 23, 2019 - Bulletin Print Report
In July 2013, the Baldwins, (the "Bs"),sold their residence and abandoned their homestead. On July 10, 2013, the Bs purchased another property with a house on i...
PIK Interest Income Was "Unitary" Income
September 23, 2019 - Bulletin Print Report
Petitioner, ("P"), is a packaged food company. Prior to March 2008, P operated in three distinctsegments: consumer foods, international foods, and food and ingr...
Basis Of "QRP" Is Determined Under Sec. 1014
September 23, 2019 - Volume 13 Issue 183 Print Report
Shareholder, (SH), owns 100 percent of the common stock of X, a Massachusetts corporation. SH will sell "qualified securities" to an employee stock ownershi...
"Durable" Power Of Attorney Prevents Tolling Of Limitations Period
September 20, 2019 - Bulletin Print Report
In October 2005, H and his father, C, executed a written "durable" power of attorney, (the "DPA"). H requested the DPAto better assist C in the manage...
IRA Withdrawal Is Not Recast
September 20, 2019 - Bulletin Print Report
On October 29, 2014, a Judgment and Property Order Attachment to Judgment, ("Property Order"), was entered that dissolved P's marriage to his former spouse. It pr...
Clear and Convincing Evidence Lacking
September 20, 2019 - Volume 13 Issue 182 Print Report
Petitioner, (P), is the founder and president of a consulting engineering firm located in Orange County (New York). In 1977 or 1978, P announced his intention to grad...
Can AT&T Spin-Off DTV?
September 19, 2019 - Bulletin Print Report
The Wall Street Journal is reporting that AT&T, Inc. ("T") is considering parting ways with DIRECTV, ("DTV"), and has explored, among other options, a s...
Last Hurrah For "Sec. 338 Approach"
September 19, 2019 - Bulletin Print Report
Sec. 382(a) of the Internal Revenue Code provides that, after an "ownership change," within the meaning of Sec. 382(g), the amount of a loss corporation's taxable...
Outbound Liquidation
September 19, 2019 - Volume 13 Issue 181 Print Report
Parent, (P), is a Country X corporation engaged in the banking business worldwide. P conducts the banking business within the U.S. through a State A branch. P owns al...
Unbroken String Of Losses Does Not Negate Profit Motive
September 19, 2019 - Bulletin Print Report
WPR is a Texas limited partnership. It operates as the owner and developer of Whistling Pines Golf Club, ("WP"). O is the general partner of WPR and owns a onep...
District Court Had No Jurisdiction Over Overpayment Interest Claim
September 18, 2019 - Bulletin Print Report
Pfizer, Inc., ("P"), filed its 2008 Federal income tax return on September 11, 2009. The return depicted an overpayment of $769,665,651, and P asked the I.R.S. to ref...
SemGroup Shareholders Will Engage In A "Disguised Sale"
September 18, 2019 - Bulletin Print Report
Energy Transfer L.P., ("ET"), a Delaware limited partnership, announced on September 16, 2019that it has entered into a "definitive merger agreement whereb...
Risk Reduction Is A Good Business Purpose For A Spin-Off
September 18, 2019 - Volume 13 Issue 180 Print Report
Distributing, (D), has two classes of stock outstanding: Class A and Class B. Each classis imbued withequal rightswith respectto dividends and...
Another CVR Sighting
September 17, 2019 - Bulletin Print Report
H. Lundbeck A/S, ("HL"), and Alder BioPharmaceuticals, Inc., ("AB"), announced a definitive agreement for "HL to acquire AB." HL will form an indi...
Deferred Compensation Constitutes "Pensions and Annuities"
September 17, 2019 - Volume 13 Issue 179 Print Report
The Plan is an unfunded contractual agreement between Petitioner and his former Employer under which Petitioner provided services to Employer in exchange for Employer...
JEF To Pay An "In-Kind" Dividend
September 17, 2019 - Bulletin Print Report
Jefferies Financial Group, Inc., ("JEF"), is engaging in a rather unusual transaction--it will be distributing "property" (other than money) to its sharehol...
Money Lender Sustains A Business Bad Debt Deduction
September 17, 2019 - Bulletin Print Report
B was a licensed real estate broker. He was also a co-founder andthe majority shareholder of A, an 'S' corporation. A was engaged in making mortgage loans secured...
Amazon Owes South Carolina Sales Tax On "Merchant" Sales
September 16, 2019 - Bulletin Print Report
Amazon Services, ("AS"), is an Amazon.com, Inc. subsidiary that operates the website amazon.com, (the "Marketplace"), which lists various products for sale,...
Zimmer Liable For Illinois Use Tax
September 16, 2019 - Bulletin Print Report
The Illinois Retailers' Occupation Tax Act imposes a tax upon persons engaged in this State in the business of selling tangible personal property to purchasers for use or c...
Contract Buy-Out Payment Not New York Source Income
September 16, 2019 - Volume 13 Issue 178 Print Report
Petitioner is a professional sports player, almost certainly a hockey player, carries a foreign passport, and is a domiciliary of X-Country (XC). In 1993, petitioner...
Prizes And Awards Are Included In Income
September 13, 2019 - Bulletin Print Report
In 2016, C was a high school student in Columbia, Tennessee. That year, a local car dealership, CCD, held its annual "Strive to Drive" competition. Strive to Drive is...
"Snowbird" Did Not Abandon NY Domicile
September 13, 2019 - Volume 13 Issue 177 Print Report
In 1971, petitioners were married and purchased a home in Queens, New York, (MH). In 1993, petitioners created a retained interesttrust which provided for them...
A "Checked" Entity Is A Corporation For Tax Purposes
September 12, 2019 - Bulletin Print Report
Petitioner, ("P"), is a Delaware corporation that manufactures and markets agricultural equipment.... P owned the single membership interest of JDH-US, a limited liab...
G.E. Will Deconsolidate Baker Hughes
September 12, 2019 - Bulletin Print Report
Baker Hughes, a GE company, ("BHGE"), as expected, announced recently that its controlling shareholder, General Electric Company, ("GE"), has commenced a se...
Obligation To Pay For Redeemed Shares Is Other Property
September 12, 2019 - Volume 13 Issue 176 Print Report
The decedent died in 1981 owning 2,600 shares of the 7,500 outstanding shares of a closely held corporation. The executor ele...
OTCs Are In The Business Of Operating Hotels
September 11, 2019 - Bulletin Print Report
Online travel companies, ("OTCs"), develop, operate, and maintain websites that offer "travel facilitation" services. One of these services allows travelers...
Certain Redemptions Count For "Substantially All" Purposes
September 11, 2019 - Volume 13 Issue 175 Print Report
AF is a State A corporation registered under the Investment Company Act of 1940 as a diversified, open-end management investment company. AF has elected to be treated...
I.R.S. Proposed Regulations Will Reduce NOL-Absorbing "RBIGs"
September 10, 2019 - Bulletin Print Report
The Internal Revenue Service has issued proposed regulations "regarding the items of income and deduction which are included in the calculation of 'built-in gains and...
No Sales Tax On Golf Cart Rentals
September 10, 2019 - Volume 13 Issue 174 Print Report
PFG owned and operated the Golf Club at Peveley Farms, (PF). PFG purchased and paid sales tax on golf carts for use at the PF course. PFG requires its customers to pa...
Charter Schools' Ad Valorem Funding Is Constitutional
September 10, 2019 - Bulletin Print Report
Under the Mississippi Charter Schools Act of 2013, (the "Act"), a charter school receives its funding from two sources: (1) local ad valorem taxes...
Private Equity Firms Seek To Remedy Symantec's Tax Inefficiency
September 9, 2019 - Bulletin Print Report
The Wall Street Journal is reporting that "Symantec Corporation, ("S"), has received interest from a pair of private-equity suitors seeking to buy the firm for m...
The "Absolute Priority" Rule Applies In Individual Chapter 11 Cases
September 9, 2019 - Bulletin Print Report
The Debtors filed a Chapter 11 Plan that provides for the secured claim of the I.R.S., in the amount of $225,884.28, to be reduced to $41,905. The reduced number represents the...
Payments In Lieu Of Liquidating Dividends
September 9, 2019 - Bulletin Print Report
AABAhas declared a liquidating distribution in the amount of $51.50 in cash per share of its common stock. The distribution will be paid on September 23, 2019 to holders...
Bankruptcy Does Not Affect Affiliation
September 9, 2019 - Volume 13 Issue 173 Print Report
X is the common parent of an affiliated group filing a consolidated income tax return on a calendar year basis. Y has been a wholly-owned subsidiary of X since its or...
AABA Declares A Liquidating Distribution
September 6, 2019 - Bulletin Print Report
Altaba, Inc., ("AABA"), announced that its Board of Directors has declared a "liquidating distribution" of $51.50 in cash per share of its common stock. The...
Date of Acquisition Excluded In Determining Holding Period
September 6, 2019 - Volume 13 Issue 172 Print Report
Plaintiffs are husband and wife. On November 30, 1972, they purchased certain commodity futures contracts, which they sold on May 31, 1973, resulting in a gain of $1,...
PRU To Make "Earn-Out" Payments
September 6, 2019 - Bulletin Print Report
Prudential Financial, Inc., ("PRU"), has signed a definitive agreement to acquire a closely held corporation named Assurance I.Q., Inc., ("AIQ"). AIQ is an...
Abercrombie & Fitch's California Challenge Yields No Damages
September 6, 2019 - Bulletin Print Report
Abercrombie & Fitch, ("A"), is a Delaware corporation. A engages in a multi-state "unitary" business that consists primarily of selling clothing at reta...
Passage of Title Fixes Sales Tax Obligation
September 5, 2019 - Volume 13 Issue 171 Print Report
Applicant, (AP), is an out-of-state distributor of engines, generators, and other types of equipment. AP maintains distribution facilities in several different states...
Activity Not Considered A Rental Activity
September 5, 2019 - Bulletin Print Report
The Es owned numerous rental properties including the three at issue here. The Es treated the three properties as "rental activity." The I.R.S. disallowed this approa...
"System" Not An Exempt Orthopedic Or Prosthetic Device
September 5, 2019 - Bulletin Print Report
APP is a California based corporation that is in the business of manufacturing and selling certain medical devices. APP produces the "System," which consists of three...
Will Caesars' Foreign Shareholders Be Subjected To Withholding Tax?
September 5, 2019 - Bulletin Print Report
Eldorado Resorts, Inc., ("ERI"), has entered into a definitive agreement with Caesars Entertainment Corporation, ("CEC"),pursuant to which the former...
Avoiding Sec. 332 Nonrecognition Treatment
September 4, 2019 - Volume 13 Issue 170 Print Report
Y owned all of the stock of Z. On February 20, 1979, Y sold 333 of the 1,000 shares of Z stock to an unrelated party, W. The purchase price and terms of the transacti...
Loan Not A Non-Dischargeable "Educational Loan"
September 4, 2019 - Bulletin Print Report
Debtor, ("D"), began attending college at the University of New Haven in the fall of 2009. D financed her studies with student loans, ("SLs"), other grants,...
A Contribution To A Qualified Trust Must Be Actually "Paid"
September 4, 2019 - Bulletin Print Report
Sec. 404(a) of the Code governs the deductibility of a contribution to the trust of a deferred compensation plan maintained by an employer for its employees that satisfies the...
Adherence To Proposed "Device" Regs. Required For Ruling Purposes
September 4, 2019 - Bulletin Print Report
Distributing, ("D"), is the common parent of an affiliated group of corporations. The group is engaged in both Business A and Business B, each of which it has carried...
The New "Nexus" Rules Ensnare "Remote" Baker
September 3, 2019 - Bulletin Print Report
Company, which is located outside of Colorado, manufactures and sells pre-packaged "bakery food products," such as brownies, cookies, and bars. Company's bakery i...
I.R.S. Ruling Regarding Invesco's Acquisition Of OAC From MMLIC
September 3, 2019 - Bulletin Print Report
USP is the common parent of an affiliated group of corporations that files a consolidated federal income tax return. USP is Massachusetts Mutual Life Insurance Company. UST is...
MSG Spin-Off Update
September 3, 2019 - Bulletin Print Report
The Madison Square Garden Company, ("MSG"), in its recently filed Form 10-K, has, seemingly, confirmed the fact that it is actively pursuing a spin-off of a newly cre...
How To Determine Holding Period
September 3, 2019 - Volume 13 Issue 169 Print Report
The question is whether the profit of $95,168.75 realized by the taxpayer on the sale in 1927 of certain real estate is to be taxed as ordinary income or as capital g...
Vacation Home Found To Be Permanent Place Of Abode
August 30, 2019 - Bulletin Print Report
Petitioners, ("Ps"), husband and wife, are domiciled in the State ofNew Jersey. Petitioner-husband, ("P"), is the Chief Investment Officer of Wynnefie...
Tallgrass Energy L.P. Is A Corporation
August 30, 2019 - Bulletin Print Report
On August 7, 2019, Tallgrass Energy L.P., ("TGE"), announced that the board of directors of its general partner had received a proposal from Blackstone Infrastructure...
Determining Holding Period For Long-Term Capital Gain Purposes
August 30, 2019 - Volume 13 Issue 168 Print Report
The debentures in question are two of a series issued by K&S on October 1, 1963, bearing interest at the rate of six percent per annum payable in cash, maturing o...
Son Does Not "Inherit" His Father's Interest Expense Classification
August 29, 2019 - Bulletin Print Report
W is the son of M, who passed away in October 2013 at the age of 95. M participated in partnerships with CC, "a legendary real estate entrepreneur in the Washington D.C. a...
The "AOC" Lasts For Only Four Years
August 29, 2019 - Bulletin Print Report
The issue for decision is whether petitioners, ("Ps"), are entitled to the American Opportunity Credit, ("AOC"), related to their daughter, ET. Ps have two...
Worthless Debt Classified as "Nonbusiness"
August 29, 2019 - Volume 13 Issue 167 Print Report
In 1970, petitioner owned 50 percent of the stock of DAI. PAG was a California corporation owned 30 percent by petitioner. In...
Bookseller Had Substantial Nexus With Washington
August 28, 2019 - Bulletin Print Report
T is based in Oregon and it purchases and sells textbooks over the internet from and to schools and students across the United States. T receives orders on its internet site, w...
FTI Will Pursue A Tax-Free Spin-Off
August 28, 2019 - Bulletin Print Report
In early 2017, Technip S.A., ("TEC"), and FMC Technologies, Inc., ("FTI"), engaged in an "inversion" transaction in which (i) TEC was merged with...
Waiver Of Waiting Period For Reconsolidation Denied
August 28, 2019 - Volume 13 Issue 166 Print Report
Prior to Date 1, P was the common parent of an affiliated group that filed a consolidated federal income tax return on a calendar year basis (the "Old Group"...
AMGN Will Acquire Otezla
August 27, 2019 - Bulletin Print Report
In order to secure neededapproval from the Federal Trade Commission, ("FTC"),for the Bristol-Myers-Squibb, ("BMY"), acquisition, Celgene Corpora...
Decedent's IRA Not Classified As An "Inherited" IRA
August 27, 2019 - Bulletin Print Report
Decedent died after he was required to begin receiving required minimum distributions from his individual retirement account, ("Decedent's IRA"). At the time of h...
Seller Of Telecommunications Services Cannot Deduct "COGS"
August 27, 2019 - Bulletin Print Report
M sells electrical, light, and radio signals to customers who then use these signals to make phone calls or access the internet. In Texas, a franchise tax is imposed on each ta...
Right to Policy Dividends Is Not An "Incident of Ownership"
August 27, 2019 - Volume 13 Issue 165 Print Report
Decedent and Former Spouse were married on Date 1. In Year, Former Spouse instituted an action for divorce in State Court. On Date 2, Decedent and Former Spouse execu...
States Need Not Grant Foreign Tax Credits
August 26, 2019 - Bulletin Print Report
The Steiners, (the "Ss"), filed joint tax returns as Utah residents in 2011, 2012, and 2013. Mr. S, ("S"), is a shareholder of SL, which is taxed as an '...
An Electric Vehicle's Battery Is Not A "Fuel Tank"
August 26, 2019 - Bulletin Print Report
The taxpayer, (KK), owns and operates a plastic surgery business in Metarie, Louisiana. In 2016, KK decided to spread his wingsand did so by installing a row of Electric...
Characterizing ADR Program Payments
August 26, 2019 - Volume 13 Issue 164 Print Report
Corporations use Depositary Receipts programs to make their stock more attractive to investors in foreign markets. Depositary Receipts programs that make stock of for...
Location Of Residence Determined Site Of "Domicile"
August 26, 2019 - Bulletin Print Report
Petitioner and his wife owned a property that straddles the Bronx/Yonkers border. Petitioner and his wife maintaintheir residence on the property, which has an address in...
Pembina Pipeline Corp. Will Acquire Kinder Morgan Canada Ltd.
August 23, 2019 - Bulletin Print Report
Kinder Morgan Canada Limited, ("K"), announced that it has reached an agreement with Pembina Pipeline Corporation, ("P"), under which P has agreed "to...
VMware To Annex Pivotal Software and Carbon Black
August 23, 2019 - Bulletin Print Report
VMware, Inc., ("VMW"), is controlled by Dell Technologies, ("DT"). From what we can gather, DT wholly owns EMC and the latter owns approximately 97 percent&...
Damages For "Psychological Harm" Excluded From Gross Income
August 23, 2019 - Volume 13 Issue 163 Print Report
Before Year 1, Mr. Y suffered personal physical injuries within the meaning of Sec. 104(a)(2) of the Internal Revenue Code. I...
Retired Taxpayer Did Not Qualify As A "Real Estate Professional"
August 23, 2019 - Bulletin Print Report
At some time before 2013, petitioners, ("Ps"), purchased two contiguous rental properties in Glenn DaleMaryland. Each rental property consists of a single-famil...
Defaulted Plan Loan Is A Deemed Distribution Therefrom
August 23, 2019 - Bulletin Print Report
Mr. M was 51 years of age during the year at issue. He had been employed for about 15 years in the "SCA." As an SCA employee, Mr. M participated in the New York City...
The Willens Deal Survey August 2019
August 22, 2019 - The Deal Survey: August 2019 Print Report
Welcome to our summary of deals for August 2019. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
Lack Of Competent Appraisal Bars Hurricane Ike Casualty Loss Deduction
August 22, 2019 - Bulletin Print Report
In 1998, petitioner, ("P") purchased the property known as "HH for $9.25 million. The sale price consisted of P's then-current residence in the famed Rivers...
Sec. 301 Distributions By a "Converted" 'S' Corporation
August 22, 2019 - Volume 13 Issue 162 Print Report
X corporation, (X), was incorporated on Date 1. X elected to be treated as an 'S' corporation, effective Date 2. Prior to Date 2, X was taxed as a C corporati...
'S' Corporation Not Agent of Tax-Exempt Shareholder
August 21, 2019 - Volume 13 Issue 161 Print Report
Y is tax-exempt under Sec. 501(c)(3) of the Internal Revenue Code, and a Sec. 509(a) supporting organization of the Center and its School of Medicine. Through Y, the...
Marathon Oil Corporation Bests The I.R.S. In Tax Court
August 21, 2019 - Bulletin Print Report
In a case with only a "bare bones" opinion, one thing emerges very clearly, Marathon Petroleum Corporation, ("MRO"), scored an impressive victory over the I...
Nonresident Of Kentucky Taxed On Severance Pay
August 21, 2019 - Bulletin Print Report
From 2005 until 2015, SR maintained employment with Fruit of the Loom, ("FOL"), in Bowling Green, Kentucky. SR ended his employment with FOL effective December 31, 20...
Charitable Activities Not Considered In Determining Residency
August 20, 2019 - Volume 13 Issue 160 Print Report
X has been a Florida domiciliary since 1985. He owns a permanent place of abode in New York but does not spend more than 183 days in New York during any taxable year...
G.E.'s Accounting For BHGE Is Sound
August 20, 2019 - Bulletin Print Report
The "Markopolos Report," (the "Report"),which alleged serious accounting improprieties being committed by General Electric, ("GE"), initiall...
RIC Dividends Derived From Municipal Bond Interest Are Taxable
August 20, 2019 - Bulletin Print Report
Taxpayers, ("TPs"), reside in California. They held shares in the Blackrock Insured Municipal Term Trust, Inc., ("BMT"), a regulated investment company, (&q...
Prescription Drugs Includes Medical Devices
August 20, 2019 - Bulletin Print Report
The Louisiana Legislature passed Acts 25 and 26 which went into effect April 1, 2016 and were to expire on June 30, 2018. The Acts suspended nearly all exclusions and exemption...
Illinois Resident Denied Credits For Taxes Paid To New Jersey
August 19, 2019 - Bulletin Print Report
On July 14, 2014, the taxpayers filed a Form IL-1040 that included a Schedule CR, "Credit for Tax Paid to Other States." To calculate the credit, the taxpayers took t...
Amazon's "Residual-Business Assets" Are Not "Intangibles"
August 19, 2019 - Bulletin Print Report
In 2005 and 2006, Amazon.com, Inc., ("A"), restructured its European businesses in a way that would shift a substantial amount of its income from U.S. entities to Eur...
Payment by Parent of Sub's Expenses
August 19, 2019 - Volume 13 Issue 159 Print Report
Where all the stock in a subsidiary is sold to another corporation and, as part of the contract of sale, the former parent agrees to pay, and does pay, a contingent l...
When Do Taxes Reduce E&P?
August 16, 2019 - Volume 13 Issue 158 Print Report
A corporation maintained its books of account and filed its Federal income tax returnutilizing the cash receipts and disbursements method of accounting....
Failure To Cash Distribution Checks Is Of No Significance
August 16, 2019 - Bulletin Print Report
Employer M, ("EM"), is the plan administrator of Plan X, a qualified retirement plan under Sec. 401(a) of the Code. A distribution of $900 is required to be made from...
Symantec's "Special Distribution" And The "Redemption" Requirement
August 15, 2019 - Bulletin Print Report
A distribution in partial liquidation is a distribution "in redemption" of the distributing corporation's stock that satisfies the requirements set forth in Sec....
Siblings Are Not Family Members
August 15, 2019 - Volume 13 Issue 157 Print Report
GI, Inc., (GI), was incorporated in December, 1982. CG, an individual, owned 68 percent of the stock and his brother, KG, owned 26 percent of the stock. &nb...
Football Players Are Not Employees Of The NCAA
August 15, 2019 - Bulletin Print Report
D played football forthe University of Southern California, a Division I, ("DI"), FBS member of the NCAA's, ("N"),PAC-12 Conference, ("...
Charity-Owned LLC Not Exempt From Property Tax
August 14, 2019 - Bulletin Print Report
Pursuant to Sec. 58.1-3606 of the Code of Virginia, property "owned by" incorporated colleges or other institutions of learning not conducted for profit and used prim...
New York Abode Not Deemed Permanent
August 14, 2019 - Volume 13 Issue 156 Print Report
The taxpayer, A, is domiciled in Nebraska and will maintain his domicile there. He has entered into an employment contract with a U.S. corporation which has its princ...
Symantec Partial Liquidation Update
August 13, 2019 - Bulletin Print Report
--We are now hearing, from many sources, that the company believes "it is more likely than not," that its special dividend will be reported as such and not as a distribution in partial li...
Liberty Global's "Circuitous" Self-Tender Offer
August 13, 2019 - Bulletin Print Report
Liberty Global plc, a public limited company organized under the laws of England and Wales, "invites our shareholders to tender" (i) up to $625 million in value of ou...
Individual Not Employed Full Time "For At Least 1/2 Of The Year"
August 13, 2019 - Bulletin Print Report
Petitioners, ("Ps"), filed joint New York nonresident and part-year resident tax returns on which they claimed, on a flow through basis, the "QEZE" Real Pro...
"Boyle" Remains Relevant In The E-Filing Era
August 13, 2019 - Bulletin Print Report
Plaintiffs, ("Ps"), seek refund of a tax penalty imposed as an addition to tax under Secs. 6651, 6601 in the amount of $120,607.27. The Internal Revenue Service impos...
When Is An LLC "Formed"?
August 13, 2019 - Volume 13 Issue 155 Print Report
On July 6, 2006, the taxpayer, (TP),filed its articles of organization, as an LLC, with the Secretary of State of Vermont. On May 21, 2007, some 10 months later...
Early Distributions From A Sec. 401(k) Plan Are Penalized
August 12, 2019 - Bulletin Print Report
Petitioners, ("Ps"), are husband and wife residing in the State of New York. In 2015, the taxable year in issue, they were both under 55 years of age. During 2015, pe...
Executor's Impairment Does Not Excuse Late Refund Claim
August 12, 2019 - Bulletin Print Report
Plaintiff, ("P"), serves as the personal representative of the Estate of Frances E. P. Roper, ("R").Rdied on September 21, 2007. At the time of...
LBO Not Derailed By Sec. 269
August 12, 2019 - Volume 13 Issue 154 Print Report
The issue, in Cromwell Corporation, et al. v. Commissioner , 43 T.C. 313 (1964), is whether the I.R.S. erred in determining that petitioners were not entitled...
Will Symantec's "Special Dividend" Be A Distribution In Partial Liquidation?
August 9, 2019 - Bulletin Print Report
Symantec Corporation, ("S"), announced that it has entered into a definitive agreement to sell its Enterprise Security assets, which includes the S name, to Broadcom,...
Swap of U.S. Realty For Virgin Islands Realty Can Be Tax-Free
August 9, 2019 - Volume 13 Issue 153 Print Report
A owns a rental house in State X and would like to exchange that property for a condominium unit, also rental property, in St. Thomas, U.S. Virgin Islands in a like k...
When Is An Amended Return An "Original" Return?
August 9, 2019 - Bulletin Print Report
A tax return was electronically filed with the Oregon Department of Revenue on April 17, 2018, for tax year 2017 that did not claim the pass-through entity, ("PTE"),...
Mayo Clinic Is An "Educational Organization"
August 8, 2019 - Bulletin Print Report
Mayo Clinic, ("M"), is a Minnesota nonprofit corporation and tax-exempt organization under Sec. 501(c)(3) of the Internal Revenue Code. M is the parent organization o...
Calculating Virginia "Fixed Base Percentage"
August 8, 2019 - Volume 13 Issue 152 Print Report
The Company has been in business since 2010 and has been in business in Virginia since 2011. The Company submitted Form RDC, "Application forResearch and D...
Fiber Optic Installations Are Taxable Real Property
August 8, 2019 - Bulletin Print Report
Petitioners commenced this proceeding and action seeking...a determination that the subject properties, which include fiber optic cables and accompanying equipment ("fiber...
REMICs and CMOs Not "Secured" By Mortgages
August 7, 2019 - Volume 13 Issue 151 Print Report
Cashmere Valley Bank, (C), challenges the denial of an interest income deduction for income derived from REMIC and CMO investments....
Private Foundation Not A Government Agency Or Instrumentality
August 7, 2019 - Bulletin Print Report
Petitioner, ("P"), is the executor of Estate and the trustee of Trust. The purposes of the Trust are "to provide for the care of neglected and homeless animals a...
Gannett Merger Will Not Qualify As A Reorganization
August 7, 2019 - Bulletin Print Report
New Media Investment Group, Inc., ("NEWM"), and Gannett Co., Inc., ("GCI"), announced that NEWM and GCIhave entered into a definitive agreement "...
Accounting For Dividends Received From An "80/20" Corporation
August 6, 2019 - Bulletin Print Report
In Montana, multinational corporations may elect to file their tax returns by apportioning their income attributable to Montana from their domestic subsidiaries while excluding...
'D' Reorganization Ownership Will Not Defeat An 'S' Election
August 6, 2019 - Bulletin Print Report
Distributing, ("D"), is a State A corporation that was organizedon Date 1 and made an election under Sec. 1362(a) to be an 'S' corporation effective as...
Deducting Certain Stock Issuance Expenses
August 6, 2019 - Volume 13 Issue 150 Print Report
There are two general types of open-end investment companies. The first typeis one that imposes a sales charge on the shares sold. It sells its shares to an und...
Just Eat plc Will Undertake A "Scheme Of Arrangement"
August 5, 2019 - Bulletin Print Report
The boards of each of Takeaway.com N.V. and Just Eat plcannounced that they have reached agreement on the terms of a recommended "all-share combination" to be e...
Chevron's Q2 Earnings Contain Some Tax "Noise"
August 5, 2019 - Bulletin Print Report
Chevron Corporation, ("CVX"), recently reported its second quarter earnings. They were much improved vis a vis the second quarter of 2018. In fact, the current quarte...
"QTIP" Assets Included In Surviving Spouse's Estate
August 5, 2019 - Bulletin Print Report
MRTpredeceased MST (his wife) on December 1, 1989. At the time of death, MRT and MST were each residents of Michigan. MRTdied with a valid will. The will directed t...
The "Last Resort" Formulation of the Business Purpose Test
August 5, 2019 - Volume 13 Issue 149 Print Report
X Corporation, (X), and Y Corporation, (Y), have been engaged in the active conduct of a warehousing business and a transportation business, respectively, for the las...
Minnesota R&D Credit Incorporates Federal Principles
August 2, 2019 - Bulletin Print Report
Minnesota's R&D tax credit is calculated by subtracting a "base amount" of qualified research expenses, ("QREs') from the QREs for the taxable year....
Substantial Intercorporate Transactions Lacking
August 2, 2019 - Volume 13 Issue 148 Print Report
Knowledge Learning Corporation, (KLC), operates pre-K learning centers and after-school care for children ages six weeks to 12 years. &nbs...
The Wash Sale Rules Have a Long Reach
August 1, 2019 - Volume 13 Issue 147 Print Report
The taxpayer, who was employed by X corporation, ("X"), was a participant in X's incentive compensation plan. As a participant in such plan, the taxpaye...
No "Conveyance" Of Property Found
August 1, 2019 - Bulletin Print Report
On April 25, 1996, RMZ, the owner of the property at issue, executed a quitclaim deed, which conveyed title to herself and her children as joint tenants with full rights of sur...
Roth IRA Not Exempt From Creditors
July 31, 2019 - Bulletin Print Report
Prior to filing his petition for relief, Debtor, ("D"), entered into an agreement with Signature Bank, ("SB"), in connection with which he guaranteed an SBA...
GHDX Shareholders Will Be Taxed On The EXAS Stock They Receive
July 31, 2019 - Bulletin Print Report
Exact Sciences Corporation, (EXAS), and Genomic Health, Inc., (GHDX), have entered into a definitive agreement under which EXASwill combine with GHDX"for $72.0...
Contract Purchaser Has Standing To Challenge Property Tax Levy
July 31, 2019 - Volume 13 Issue 146 Print Report
The property at issue was assessed by the Township at a total of $1,747,000 for tax year 2012. At the time of this assessment, the property was owned by LS, but event...
BANC Tenders For Depositary Shares
July 30, 2019 - Bulletin Print Report
Banc of California, Inc., ("BANC"), announced the commencement of a cash tender offer, (the "Offer"), to purchase, using up to $75 million,its Deposit...
No Sale Or Exchange Without Consideration
July 30, 2019 - Bulletin Print Report
In 2012, Appellants, ("As"), transferred commercial property located in Orlando, Florida to the Temple of Israel of Hollywood, a qualified Sec. 501(c)(3) organization...
MYL And PFE To Undertake A "Reverse Morris Trust" Transaction
July 30, 2019 - Bulletin Print Report
MylanN.V., ("MYL"), and Pfizer, Inc., ("PFE"), announced a definitive agreement "...to combine MYL with Upjohn, PFE's off-patent branded and...
Taxpayer Can Deduct Lawsuit Settlement Payments
July 30, 2019 - Volume 13 Issue 145 Print Report
Foreign Parent, (FP), is a bank. TP is part of FP's private banking division and TP services "high net worth" individuals of a specific geographic area....
Dusting Off The Sprint/T-Mobile Merger
July 29, 2019 - Bulletin Print Report
It now appears, since the Department of Justice has signed off on the deal, that the historic combination of T-Mobile US, Inc., ("T"), and Sprint Corporation, ("...
Floating Docks Found To Be "Real Estate Assets"
July 29, 2019 - Bulletin Print Report
Taxpayer, ("TP"), an indirect owner of interests in Company, ("C"), intends to be taxed as a real estate investment trust, ("REIT"). C, a partners...
Date of "Sale" For Wash Sale Purposes
July 29, 2019 - Volume 13 Issue 144 Print Report
On July 1, 1958, the taxpayer purchased 100 shares of common stock. On October 1, 1958, he entered an agreement for the sale of this stock at a loss and to deliver it...
Verizon Cannot Avoid California Use Tax
July 26, 2019 - Bulletin Print Report
During the tax periods from July 1, 2000 through December 31, 2011, Verizon, ("V"), purchased various completed telephone cables, conduit, and poles. V either install...
Renting a "Place of Abode"
July 26, 2019 - Volume 13 Issue 143 Print Report
A Connecticut domiciliary owns a place of abode in East Hampton, New York, where he spends three to five months a year with his family. The individual works in New Yo...
FB's Q2 Earnings Reflect "Altera" Loss And FTC Accrual/Sprint's NOLs
July 25, 2019 - Bulletin Print Report
Facebook Inc.'s second quarter earnings reflecta "provision for income taxes" in the amountof $2.216 billion, contributing to a depressed net income f...
The Willens Deal Survey July 2019
July 25, 2019 - The Deal Survey: July 2019 Print Report
Welcome to our summary of deals for July 2019. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
Dissolved Corporation Not Subject to New York State Tax
July 25, 2019 - Volume 13 Issue 142 Print Report
HRC was incorporated in New York State on January 9, 1947. It was a family corporation whose sole equalshareholders in 1976 were HO and IH. The corporation had...
Gambling Losses Relegated To Schedule A
July 25, 2019 - Bulletin Print Report
The parties are in agreement that petitioner, ("P"), is entitled to $16,841 in deductible gambling losses for 2015. The principal issue for decision is whether P is e...
The Interaction of Sec. 303 and Sec. 304
July 24, 2019 - Volume 13 Issue 141 Print Report
Decedent, who was bothan officer and director of X Corporation, (X), and Y Corporation, (Y), died in 1970. After the de...
Genotyping Is Medical Care
July 24, 2019 - Bulletin Print Report
TP has a healthcare flexible spending account, ("FSA"), and seeks to use the FSA to purchase genetic testing services and resultant reports offered by X. X is 23andMe...
Transfer of Portion of IRA Triggers Sec. 72(t) Tax
July 23, 2019 - Volume 13 Issue 140 Print Report
Taxpayer A, (TPA), age 58, maintained IRA B with Company C. TPA began receiving distributions from IRA B in the monthly amount of Amount 1 which was intended to be a...
How Is A "Sub-servicer's" Income Apportioned?
July 23, 2019 - Bulletin Print Report
TP, a federally chartered savings bank, provides mortgage loan servicing and sub-servicing. While TP has several customers located within Washington, TP does not have any prope...
Tissue Bank Is Not An Exempt Service Business
July 23, 2019 - Bulletin Print Report
TP is a human tissue bank that provides services associated with the processing, storage, preparation and transportation of tissue specimen to clients for medical research and...
Equifax Will Establish A Qualified Settlement Fund
July 23, 2019 - Bulletin Print Report
Equifax, Inc., ("E"), the victim of a well-publicized "cyber-security incident" in 2017 in connection with which consumer information was compromised, has e...
A Grant Is Qualifying Income For A REIT
July 22, 2019 - Bulletin Print Report
Taxpayer is a real estate investment trust, ("REIT"). Taxpayer owns and operates retail space in the eastern half of the United States. Taxpayer is the sole general p...
CMH's "Going Private" Transaction Will Produce Deemed Dividends
July 22, 2019 - Bulletin Print Report
On February 1, 2019, Carmanah Technologies Corporation, (TSX: CMH), completed the sale of a substantial portion of its assets to SPX. Since then, the company has been pondering...
Sen. Warren Seeks To Transform The Private Equity Business
July 22, 2019 - Bulletin Print Report
Senator Elizabeth Warren, the Democratic presidential candidate, has been the most prolific of the hopefuls whenit comes to detailed policy proposals, all of which are&nb...
No Maintenance of a "Permanent Place of Abode"
July 22, 2019 - Volume 13 Issue 139 Print Report
Petitioner is a resident of New Jersey and regularly commutes to his job in New York City. In addition to his New Jersey home, Petitioner maintains a summer home in Q...
"Double Drop Downs" Are Separate Transactions
July 19, 2019 - Volume 13 Issue 138 Print Report
P Corporation, ("P"), and its wholly-owned subsidiary, S1, are each incorporated in State A. State A has "advantageous" corporate laws....
Seattle's "High Earner" Tax Is Unconstitutional
July 19, 2019 - Bulletin Print Report
Seattle enacted an ordinance in July 2017 imposing an income tax on high-income residents. Seattle "imposed a tax on the total income of every resident taxpayer in the amo...
Determining A College Professor's "Tax Home"
July 18, 2019 - Bulletin Print Report
TP maintains a residence in Lowell, Massachusetts, which is the home of his wife and two children. In 2006, he began working as a professor at DC. Each school year he signed a...
Hillenbrand's "RTM" Will Be Taxable
July 18, 2019 - Bulletin Print Report
Hillenbrand, Inc., ("H"), and Milacron Holdings Corporation, ("M"), recently announced that they have entered into a definitive agreement "under which...
No Vested Property Right To Tax Credits
July 18, 2019 - Volume 13 Issue 137 Print Report
Prior to June, 2004, BASF owned a parcel of real property ("S40"). The S40 was polluted. Plantiffs entered an agreement with BASF, whereby the S40 would be...
Deduction For Degree Program Permitted
July 17, 2019 - Bulletin Print Report
K was a high school social studies teacher for 25 years. He taught a course entitled "20thCentury World History" as part of the School District's Internatio...
Will "Digital" Taxes Be Creditable?
July 17, 2019 - Bulletin Print Report
France has now committed to imposing what is being referred to as a "digital tax" on certain "tech" companies doing business in France; and with digital sal...
Sec. 162(m) Does Not Apply To Compensation Paid By The "OP"
July 17, 2019 - Volume 13 Issue 136 Print Report
Corporation, (C), owns approximately an "x%" general partnership interest (as common unit ownership) in Partnership, (PS). C also owns "y%" of the...
Independent Contractors Do Not Preclude An "Active Business"
July 16, 2019 - Bulletin Print Report
Decedent died on Date 2. At the time of death, Trust, a revocablegrantor trust, held shares of C1. C1 is currently composed of six operating units: OU 1-6. Under Sec. 616...
Appraisal Expenses Are Capital Expenditures
July 16, 2019 - Volume 13 Issue 135 Print Report
Taxpayers owned or controlled a majority of the common stock of TH. On June 9, 1960, the taxpayers voted their controlling share of the stock of the corporation in fa...
Cooperative Dividends Will Not Imperil A REIT Election
July 16, 2019 - Bulletin Print Report
Taxpayer, ("TP"), is a limited liability company that has elected to be classified as an association taxable as a corporation. TP will elect to be taxed as a real est...
Waiver Fees Not Subject To Sales Tax
July 15, 2019 - Bulletin Print Report
Rent-A-Center East, Inc., ("RAC"), offers household items, such as furniture and electronics, to the public on a "rent to own" basis whereby a customer obta...
Taxpayer's Charitable Contribution Carryovers Found To Expire
July 15, 2019 - Bulletin Print Report
TP is a corporation that had several years of net operating loss, ("NOL"), carryovers and charitable contribution carryovers, ("charitable carryovers"), tha...
Tissue Provider Need Not Collect And Remit Sales Or Use Tax
July 15, 2019 - Bulletin Print Report
Company, ("C"), accepts whole-bodydonations. People donate knowing that C will remove tissues or other parts from the bodies. The people know that these parts w...
No Resident Credit For Tax Imposed On Gambling Winnings
July 15, 2019 - Volume 13 Issue 134 Print Report
The issue is whether a New York State resident individual may claim a resident tax credit, pursuant to Sec. 620(a) of the Tax Law, for income taxes paid to another st...
Will Withholding Tax Be Imposed On The OXY Merger Consideration?
July 12, 2019 - Bulletin Print Report
The transactioninvolving Occidental Petroleum Corporation, ("OXY"), and Anadarko Petroleum Corporation, ("APC"), is relatively straightforward, i.e.,...
Subpart F Income Treated As Dividend Income
July 12, 2019 - Bulletin Print Report
Taxpayer, ("TP"), is a global corporation with various subsidiaries doing business in countries throughout the world. TP is organized as a U.S. corporation under the...
Husband Successfully Changed Virginia Domicile
July 12, 2019 - Volume 13 Issue 133 Print Report
Two classes of residents, a domiciliary resident and an actual resident, are set forth in Virginia Code Sec. 58.1-302. The domiciliary residence of a person means the...
Pipeline Classified As Tangible Personal Property
July 12, 2019 - Bulletin Print Report
MPL is a subsidiary of MPLX, a master limited partnership. MPLoperates pipeline systems that move crude oil to Marathon refineries and also transport refined products. MP...
Vice President Biden Cited For Common Tax Planning Technique
July 11, 2019 - Bulletin Print Report
Former Vice President Biden, after leaving office, conducted his lucrative speaking and writing activities through an electing small business corporation, i.e., an 'S'...
No Change Of Domicile Without Intent
July 11, 2019 - Bulletin Print Report
Petitioner, ("P"), had been domiciled in New York since about 1970. In July 2009, P accepted a position with the VA located in Michigan, ("M"). P obtained a...
Transfer Restrictions Do Not Impair Value Of Gifted Property
July 11, 2019 - Volume 13 Issue 132 Print Report
The "donors", Mr.and Mrs. Holman,created a limited partnership and funded itwith stock in Dell, Inc. and then gifted limited partnership &...
Late Rollover Was Due To A Bookkeeping Error
July 10, 2019 - Bulletin Print Report
In 2014, petitioner, ("P"), had an IRA with CG with an account number ending in 0946, and she had a financial adviser at CG. PE was the custodian of the account. On J...
Breathing Equipment Is Not An Exempt "Prosthetic" Device
July 10, 2019 - Bulletin Print Report
TP is an independent respiratory equipment provider. TP sells sleep apnea, ventilator and oxygen equipment. TP has offices in Washington. TP referenced its "ASVs" und...
Resident Alien Deemed To Have Made Sec. 453(d) Election
July 10, 2019 - Volume 13 Issue 131 Print Report
A was a resident of Canada in 1986. In that year, A and her mother, who wasalso a resident of Canada, sold jointly owned real property located in Canada to an u...
Encana To Engage In A Dutch Auction Buyback
July 9, 2019 - Bulletin Print Report
Encana Corporation, ("EC"), is inviting its shareholders to tender common shares of the corporation pursuant to "auction tenders" in which the shareholders...
Shareholders Seek Deduction for Corporation's Expenses
July 9, 2019 - Volume 13 Issue 130 Print Report
Canterbury Holdings LLC, (C),a partnership owned by three individuals, is engaged in the "private equity" business. C formed Canterbury Holdings, Ltd....
"Compensation" Includes Payments For Lost Wages
July 9, 2019 - Bulletin Print Report
Mr. Munoz, ("M"), sued his employer, Norfolk Southern Railway Company, ("NS"), under the FELA, claiming negligence for injuries he incurred at work. A jury...
Diversion Of Plan Surplus Does Not Trigger Excise Tax
July 8, 2019 - Bulletin Print Report
TP sponsors TrustA which holds assets that are used to provide post-retirement medical benefits under Plan A for TP's retired, non-bargaining unit employees. Trust A...
Management Fees Are Qualifying Income
July 8, 2019 - Bulletin Print Report
X, a publicly traded partnership, is in the business of owning and managing businesses in the "upstream" oil and gas sector. X indirectly owns an "a%" inter...
Sec. 83(b) Elections Deemed Signed by Taxpayers
July 8, 2019 - Volume 13 Issue 129 Print Report
Employer granted restricted property to certain of its employees (the "Employees")in connection with their performance of services. The grants all&nbs...
Government Pension Plan Loses Its Identity After Rollover
July 5, 2019 - Bulletin Print Report
Applicant has been an employee with the City Fire District for 28 years, and has actively participated in the City Fire District governmental defined benefit (pension) plan. Up...
New Jersey Tax Court Strikes Down The "AMA"
July 5, 2019 - Bulletin Print Report
Congress enacted P.L. 86-272 in order to preclude the states from imposing a net income tax on certain out-of-state sellers of tangible goods. In New Jersey, the net income tax...
Taxpayer Rendered Taxable Data Processing Services
July 5, 2019 - Bulletin Print Report
At issue are certain online management solutions Instill Corporation, ("I"), provided to customers in the food-service industry. These solutionsvaried by custom...
Class Action Settlement Costs Were Deductible
July 5, 2019 - Volume 13 Issue 128 Print Report
TP is engaged in the business of "a." TP's division, Ca, is engaged in the business of "b." On Date a, actions were filed in Court A as securi...
Debtor's I.R.A. Not Exempt From Chapter 7 Creditors
July 3, 2019 - Bulletin Print Report
When a debtor files for chapter 7 bankruptcy, his or her assets become property of the bankruptcy estate, to be distributed among his or her creditors. The debtor may, however,...
Use Of "Qualified Property" Determines Amount of "1603" Grant
July 3, 2019 - Bulletin Print Report
In 2009, President Obama signed the "Recovery Act" into law to encourage investments in clean energy property. Congress enacted Sec. 1603 of the Recovery Act to creat...
Expenses Not Considered "Start-Up Expenditures"
July 3, 2019 - Bulletin Print Report
Since earning his Ph.D. in 1997, petitioner, ("P"), has worked as a full-time professor of management at various universities, including Southern Connecticut State Un...
Royalties Not New York Source Income
July 3, 2019 - Volume 13 Issue 127 Print Report
Petitioner, (P), was employed as a professor at University, (U), for a number of years until his retirement in 1997. While no...
When Is Commercial Information "Confidential?"
July 2, 2019 - Bulletin Print Report
Argus Leader, ("AL"), a South Dakotanewspaper, filed a Freedom of Information Act, ("FOIA"), request for data collected by the U.S. Department of Agri...
Information Found Not "Personal Or Individual In Nature"
July 2, 2019 - Bulletin Print Report
New York Tax Law Sec. 1105(c)(1) imposes a sales tax on certain information services, but excludes the furnishing of information which is "personal or individual in nature...
Declaration Date Controls For Assignment of Income Purposes
July 2, 2019 - Volume 13 Issue 126 Print Report
On April 17, 1953, the directors of a personal holding company, a New Jersey corporation, declared a dividend to be paid on May 10, 1953, to the shareholders the...
Members Of A Partnership Are Not Employees
July 1, 2019 - Bulletin Print Report
Sec. 301.7701-2(c)(2)(i) of the regulations specifies that, except as otherwise provided, a business entity that has a single owner and is not a corporation under Sec. 301.7701...
SunCoke Energy, Inc. "Rolls Up" SunCoke Energy Partners LP
July 1, 2019 - Bulletin Print Report
Sun Coke Energy, Inc., ("SC"), and its affiliates owned approximately 62 percent of the interests in SunCoke Energy Partners, L.P., ("SXCP"). On June 28, 20...
Property Acquired In Anticipation of a Like Kind Exchange
July 1, 2019 - Volume 13 Issue 125 Print Report
Y, a corporation, desired to acquire a tract of land and a factory owned by X, an unrelated corporation engaged in the business of manufacturing certain products. Y e...
Distribution of Partnership Interests In Partial Liquidation
June 28, 2019 - Volume 13 Issue 124 Print Report
X is a corporation engaged in a variety of businesses. It has outstanding one class of common stock which is publicly traded. S is a corporation engaged in the oil an...
AABA Shareholders Approve Plan Of Liquidation
June 28, 2019 - Bulletin Print Report
Altaba, Inc., ("AABA"), announced that its stockholders have, overwhelmingly, voted to approve the voluntary liquidation and dissolution of AABA pursuant to the Plan...
New Jersey Permits Income To Be Taxed Twice
June 28, 2019 - Bulletin Print Report
In 2003 and 2004, plaintiff, ("P"), lived and worked in Pennsylvania, ("PA"). During those years, she had compensation deferred to future years. A portion o...
Supreme Court Finds Trademark Registration Bar Unconstitutional
June 28, 2019 - Bulletin Print Report
Mr. B founded a clothing line that uses the trademark "FUCT." Under the Lanham Act, (the "Act"), the U.S. Patent and Trademark Office, ("PTO"), ad...
Purchaser Bound By Original Allocation Schedule
June 27, 2019 - Volume 13 Issue 123 Print Report
P is engaged in the business of poultry processing. P, through two of its subsidiaries, PFMI and PFML, acquired two poultry processing plants in Mississippi. <...
Chicago Transfer Tax Applies To Residential Property
June 27, 2019 - Bulletin Print Report
The Chicago Municipal Code imposes the Chicago real property transfer tax, ("transfer tax"), on "the privilege of transferring title to, or beneficial interest i...
ABBV And AGN To Join Forces
June 26, 2019 - Bulletin Print Report
AbbVie, Inc., ("ABBV"), and Allergan plc, ("AGN"), have announced that the companies have entered into a definitive transaction agreement pursuant to which...
Sales Agreement With Exchange Option
June 26, 2019 - Volume 13 Issue 122 Print Report
A entered into a written agreement with B to sell B for $1,000x a ranch (the "first ranch") consisting of land and buildings used by A in the business of ra...
U.S. Ecology And NRC Group To Form A Holding Company
June 25, 2019 - Bulletin Print Report
U.S. Ecology, Inc., ("U"), announced that it has entered into a definitive merger agreement with NRC Group Holdings Corporation, ("N"), "in an all-stoc...
Ownership Determines Entitlement To Property Tax Rebate
June 25, 2019 - Volume 13 Issue 121 Print Report
For 2008, M filed a timely Homestead Benefit Application for a rebate or credit for local property taxes of $10,840.50 paid on his home. The Application recited M'...
Haunted Attractions Are "Places Of Amusement"
June 25, 2019 - Bulletin Print Report
Petitioner, ("P"), doing business as Eerie Productions, operates a haunted attraction known as "Fright-World" ("FW")in Buffalo, New York. FW...
An Experience Is Not Property
June 25, 2019 - Bulletin Print Report
Texas levies franchise taxes against a taxable entity's "taxable margin." The Tax Code allows a taxpayer to calculate its taxable margin as the lesser of: (i) 70...
CZR To Combine With ERI
June 24, 2019 - Bulletin Print Report
Eldorado Resorts, Inc., ("ERI"), and Caesars Entertainment Corporation, ("CZR"), announced that they have entered into a definitive merger agreement "t...
Non-Resident Taxed On Electing 'S' Corporation's Deemed Sale Gain
June 24, 2019 - Bulletin Print Report
Petitioner, ("P"), was a nonresident of New York during 2009, 2010, and 2011. Prior to July 31, 2009, P owned 50 percent of the shares of ESPI, a New York corporation...
Beneficiary's Residence Not Sufficient To Support Taxation Of Trust
June 24, 2019 - Bulletin Print Report
North Carolina, ("NC"), imposes a tax on any trust income that "is for the benefit of" a North Carolina resident. A trust is created when one person (a &quo...
Florida LLC Is An "American Employer"
June 24, 2019 - Volume 13 Issue 120 Print Report
Petitioner, ("P"), is a limited liability company organized in the state of Florida whose sole member is a corporation, DCL, organized in the Cayman Islands. During t...
Itemized Deduction Cap Applies To Non-Residents
June 21, 2019 - Bulletin Print Report
Petitioners, ("Ps"), were residents of Florida in tax year 2011. From 2006 to 2011, BL owned, through a single member limited liability company, a 50 percent membersh...
Mandatory Convertibles Not a Second Class of Stock
June 21, 2019 - Volume 13 Issue 119 Print Report
In Year, X joined Company, (C). C and X agreed that as part of X's employment with C, X would provide financing of approximately "$n." In addition, C de...
The Willens Deal Survey June 2019
June 20, 2019 - The Deal Survey: June 2019 Print Report
Welcome to our summary of deals for June 2019. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
Balloons Are "Places Of Amusement"
June 20, 2019 - Bulletin Print Report
A is a Missouri corporation that offers un-tethered hot-air balloon rides. The ride lasts 45 minutes to an hour, ending with a champagne toast once the balloon has safely lande...
Cancellations of APAs Are Reviewed For "Abuse of Discretion"
June 20, 2019 - Volume 13 Issue 118 Print Report
Petitioner, (P), is an industrial manufacturer that licensed technology to its Puerto Rican and Dominican Republic subsidiaries to manufacture breaker products. P pur...
CJ And FRAC Will Engage In A "Merger Of Equals"
June 20, 2019 - Bulletin Print Report
C&J Energy Services, ("CJ"), and Keane Group, Inc., ("FRAC"), announced that they have entered into a definitive agreement whereby the companies "w...
Insurance Is A "Service"
June 19, 2019 - Bulletin Print Report
P was a wholly-owned subsidiary of AonCorporation. P is a holding company and the parent of the "Cs." The Cs are premium finance companies that make loans to bu...
"Arrowsmith" Losses Are Eligible For Sec. 1341 Relief
June 19, 2019 - Volume 13 Issue 117 Print Report
A, an individual, owned 75 percent of the stock of X. X was the common parent and owned all of the stock of three domestic corporations that were engaged in the sale...
Consequences of a "Defective" Sec. 351 Transaction
June 18, 2019 - Volume 13 Issue 116 Print Report
A and B each owned an "x%" interest in S Corporation ("SC"), an 'S' corporation. SC owned Subs 1-11, each a QSub for federal income tax pu...
Tax Preparation Is Not A "Professional" Service
June 18, 2019 - Bulletin Print Report
P's business is tax preparation. P did not collect sales tax on its service of tax preparation. The failure to collect was due to P's belief that its activities were &q...
"GLTI" Regulations Adopt "High Foreign Tax" Exception
June 18, 2019 - Bulletin Print Report
One of the more controversial aspects of the Tax Cuts and Jobs Act was the provision popularly known as "GLTI." GILTI stands for "Global Intangible Low-Taxed Inc...
Threat Of "Repacking" Is A Threat Of "Condemnation"
June 18, 2019 - Bulletin Print Report
TP1 is a diversified media and entertainment business. TP2 is a wholly owned subsidiary of TP1. TP2was the owner of the spectrum-based content distribution rights associa...
Overlapping Ownership Rule Protects EchoStar From Gain Recognition
June 17, 2019 - Bulletin Print Report
On May 19, 2019, DISH Network Corporation, ("D"), and BSS Merger Sub, Inc., ("MS"), entered into a "Master Transaction Agreement" with EchoStar&nb...
Publicly Offered REIT Cannot Dispense A "Preferential" Dividend
June 17, 2019 - Bulletin Print Report
TP is a real estate investment trust, ("REIT"). PR is a State B REIT that is an Exchange listed company. TP represents that PR is a "publicly offered REIT"...
Separate and Distinct Business
June 17, 2019 - Volume 13 Issue 115 Print Report
Taxpayer, ("TP"), entered into an Asset Purchase Agreement, ("APA"), with the Seller to purchase the assets related to a franchised motor vehicle...
Lease Termination Not Equivalent To Cancellation Of Sale Contract
June 14, 2019 - Bulletin Print Report
On May 15, 2014, Mr. G entered into an agreement for the lease of an automobile with BMW Financial Services. At the time he entered into the lease agreement, Mr. G paid sales t...
Surviving Spouse Permitted To Roll Over Decedent/Husband's IRA
June 14, 2019 - Bulletin Print Report
Decedent was married to TP until his death at which time both Decedent and TP were over 70 1/2 years of age. At the time of his death, Decedent owned an individual retirement a...
Potential Reconveyance Does Not Defeat Sec. 1031
June 14, 2019 - Volume 13 Issue 114 Print Report
The taxpayers, referred to as "mineral owners," collectively own an undivided fee interest in minerals, including oil, gas, and casinghead gas, holding the&...
Taxpayer Without "Logs" Proves Material Participation
June 13, 2019 - Bulletin Print Report
In 2008, the Hs opened a restaurant in New Mexico, named "A Taste of Buffalo," ("ATOB"), with the help of the Bs, the petitioners in this case. ATOB opened...
Tax Treatment Of "R&D" Expenditures Slated To Change
June 13, 2019 - Bulletin Print Report
Sec. 174(a) of the Code provides that a taxpayer may treat "research or experimental" expenditures which are paid or incurred by him during the taxable year "in...
Right to Receive Pension Payments Is Not a Prohibited "Interest"
June 13, 2019 - Volume 13 Issue 113 Print Report
Mr. A and his children owned all of the stock of X Corporation, (X). Upon Mr. A's retirement, X redeemed its stock held by Mr. A for cash. Mr. A, in connection wi...
Foreign Corporation's Redemption Gain Not U.S. Source Income
June 12, 2019 - Bulletin Print Report
G is a privately held corporation organized under the laws of Greece. It conducts its business in Greece. In 2001, G acquired a 15 percent interest in P. P is headquartered in...
Regulations Prevent Avoidance Of The "SALT" Deduction Limit
June 12, 2019 - Bulletin Print Report
As is now well-known, the Tax Cuts and Jobs Act imposes limitations on the amount of state and local income taxes and real property taxes an individual can deduct in taxable ye...
Exchange of Coal Leases For a Fee Interest Is Governed by Sec. 1031
June 12, 2019 - Volume 13 Issue 112 Print Report
The Partnership, a general partnership engaged in the coal mining business, has acquired various interests in land and coal. The Partnership desires to exchange certa...
LyondellBasell NV Launches A Self-Tender Offer
June 12, 2019 - Bulletin Print Report
LyondellBassell Industries NV, ("LYB"), is inviting its shareholders to tender up to 37 million of its ordinary shares, (the "Offer"), for purchase by LYB&n...
UTX Will Combine With RTN
June 11, 2019 - Bulletin Print Report
Raytheon Co., ("RTN"), and United Technologies Corp., (UTX), have entered into an agreement to combine "in an all-stock merger of equals." At the Effective...
No Nexus With West Virginia
June 11, 2019 - Volume 13 Issue 111 Print Report
The "Printer" is an out-of-state corporation which has acquired a plant site in West Virginia for the purpose of constructing and operating a commercial pri...
Disney Cannot Exclude Alien Royalty Payments From Entire Net Income
June 11, 2019 - Bulletin Print Report
The Walt Disney Company's, ("P"), New York State corporation franchise tax return filed for the audit period included all affiliates in P's consolidated feder...
A Trust Is Found To Be A "Qualified Settlement Fund"
June 11, 2019 - Bulletin Print Report
The Agency filed a complaint in the Court alleging that the Defendants violated certain provisions of the Act with regard to the manufacture and design of Product Z. State X fi...
Foreign Parent Spin-Off Qualifies Under Sec. 355
June 10, 2019 - Bulletin Print Report
Foreign Parent, ("FP"), is a Country Z publicly traded corporation with subsidiaries in multiple countries engaged in Business A and Business B. FP owns all of the st...
Parties To A "QSCA" Must Allocate Stock Based Compensation
June 10, 2019 - Bulletin Print Report
This appeal presents the question of the validity of Reg. Sec. 1.482-7A(d)(2). The parties agree that, under the governing tax statute, Sec. 482 of the Code, the "arm'...
Liabilities Assumed Are Not "Other Property"
June 10, 2019 - Volume 13 Issue 110 Print Report
As of January 19, 1970, C had outstanding 1,517,536 shares of $5 par value voting common stock. P is a corporation. As of February 19, 1970, P had outstanding 3,389 s...
"Rollover" Exception Requires A Timely Rollover
June 7, 2019 - Bulletin Print Report
In 2010, petitioner, ("P"), terminated her employment with the Department of Family and Protective Services to become a full-time student at the University of Phoenix...
Swapping a Leasehold For a "Fee"
June 7, 2019 - Volume 13 Issue 109 Print Report
Y is engaged in the business of hauling, handling, and storage of furniture. Y leased from individual A 10 acres of land improved by an office building and several sm...
Ascertaining The Length of a Leasehold
June 6, 2019 - Volume 13 Issue 108 Print Report
The Partnership is engaged in the general practice of law. The Partnership occupies several floors of an office building under a lease dated January 16, 1977. The com...
Payments For An Author's "Brand" Are Subject To "SE" Tax
June 6, 2019 - Bulletin Print Report
Petitioner, ("P"), hasworked since the 1990s to establish herself as a "brand author."* A brand author is one who provides prestige or reliable profit...
Land and Improvements Thereon Are Not "Like Kind"
June 5, 2019 - Volume 13 Issue 107 Print Report
Land which the taxpayer hadheld for investment was condemned by a governmental authority. In the same year, the taxpayer expended the proceeds of the condemnati...
"Conversion Transactions" Following Spin-Offs Will Be Penalized
June 5, 2019 - Bulletin Print Report
Any hope that "opco/propco" spin-offs, transactions that were briefly popular in the early part of this decade, would be resuscitated has now been conclusively elimin...
Infineon Technologies To Acquire Cyress Semiconductor
June 4, 2019 - Bulletin Print Report
Infineon Technologies AG, ("IT"), and Cypress Semiconductor Corporation, ("CY"), announced that the companies have signed a definitive agreement pursuant to...
Expenses Allocable To Exempt Income
June 4, 2019 - Volume 13 Issue 106 Print Report
Plaintiffs operate a residential adult foster care facility. In 2009, three of the residents receiving care were "privately funded" and the other two reside...
Comcast Fails To Identify Its "Earnings Producing Activities"
June 4, 2019 - Bulletin Print Report
Comcast is headquartered in Philadelphia. The Comcast entities in this case, ("C"), provided internet, cable television, and phone service to customers in Tennessee,...
No Participatory Sports Exclusion From NYC Sales Tax
June 3, 2019 - Bulletin Print Report
SoulCycle, Inc., ("P"), operates facilities in New York City and elsewhere with its headquarters located in New York City. P provides instructor-led indoor cycling cl...
The Interaction of Sec. 351 and Sec. 453B(a)
June 3, 2019 - Volume 13 Issue 105 Print Report
Mr. A sold certain business assets for $710x to X, a corporation in which Mr. A owned 78 percent of the outstanding stock. Mr...
Renewal Options Are Taken Into Account
May 31, 2019 - Volume 13 Issue 104 Print Report
Mr. A, an individual, was the owner of real property located in State X. This property was both unimproved and held by Mr. A for investment purposes....
AABA Files Its Definitive Proxy Statement
May 31, 2019 - Bulletin Print Report
Altaba, Inc., ("AABA"), is proceeding,with all deliberate speed, with its plan to completely liquidate. At this point, AABAis, for all intents and purpose...
The "SRP" Is Neither An Excise Nor An Income Tax
May 30, 2019 - Bulletin Print Report
The Debtors filed a voluntary petition for relief under Chapter 13 of the Bankruptcy Code on July 2, 2018. The Internal Revenue Service filed a proof of claim, ("Claim&quo...
Short-Term Leasehold Not Of "Like Kind" To a Fee Interest
May 30, 2019 - Volume 13 Issue 103 Print Report
V's wholly owned subsidiaries include the following C corporations: PH and VH. Before June 7, 2002, VH was named VMI. PH owns 100 percent of IMI. IMI and VH own o...
Holding Company Not Properly Included In Colorado Combined Return
May 29, 2019 - Bulletin Print Report
Agilent Technologies, Inc., ("A") is a Delaware corporationheadquartered in California, and is the parent of a worldwide family of affiliated corporations. A ma...
Crimson Tide Tailgate Service Not Subject To Alabama Rental Tax
May 29, 2019 - Bulletin Print Report
The taxpayer, ("TP"), was formed in 2007, and it initially operated as a tailgating business at University of Alabama Crimson Tide home football games in a large area...
Holder of Voting Trust Certificate Is "Direct Owner" of Stock
May 29, 2019 - Volume 13 Issue 102 Print Report
P is the common parent of an affiliated group of corporations that files a consolidated Federalincome tax return. T was previously the common parent of an unrel...
Premiums Paid To Captive Insurance Company Not Deductible
May 28, 2019 - Bulletin Print Report
Petitioner, ("P"), is a New York corporation that owns and operates convenience stores and gas stations in upstate New York and Vermont. P was subject to the corporat...
"Tools" Are Not "Accessories" To Prosthetic Devices
May 28, 2019 - Bulletin Print Report
Petitioner, ("P"), is an Indiana-based manufacturer of prosthetic implant devices, such as artificial hips, knees, and elbows. P marketsand sells prosthetic dev...
Reorganization Satisfies Installment Obligation
May 28, 2019 - Volume 13 Issue 101 Print Report
The plaintiff, NSC, in 1944, sold certain assets to YRC and ROC, payments to be made on the installment basis. On July 31, 19...
Food Service Provider Engaged In Wholesale Sales
May 24, 2019 - Bulletin Print Report
During the time at issue, the Colorado School of Mines, ("M"), loaded each meal-plan student's "BlasterCard," ("BC"), with an individual meal...
Substitution of Obligors and Sec. 453B(a)
May 24, 2019 - Volume 13 Issue 100 Print Report
Taxpayer, ("TP"), an individual, sold a parcel of real property to unrelatedMr. A for a total purchase price of $670x in Year 1. Of this amount, $70x...
Avon Will Expatriate
May 23, 2019 - Bulletin Print Report
Natura & Co., ("N"), a Brazilian corporation announced that it is acquiring Avon Products, Inc., ("API"), "in an all-stock transaction." As pa...
Taxpayer Not In Actual or Constructive Receipt of "RQ" Proceeds
May 23, 2019 - Volume 13 Issue 99 Print Report
TP rents equipment to customers for use in farming, construction, manufacturing, and warehousing. In 2003, TP initiated a Like Kind Exchange Program (LKE Program) thr...
Debtor Can Exclude Only A Portion Of "COD" Income
May 23, 2019 - Bulletin Print Report
On June 1, 1981, petitioner, ("P"), her former spouse, and three other persons purchased a single-family residence in San Jose, California, ("RRP"), for $15...
IRA Funds Used To Purchase Home Are Deemed Distributed
May 22, 2019 - Volume 13 Issue 98 Print Report
During 1987, petitioners invested $23,611 as a down-payment on a home intended for their retirement years, by utilizing funds from their IRA. Neither petitioner had r...
Damages For Lost Wages Are Not Compensation
May 22, 2019 - Bulletin Print Report
M injured his shoulder and his neck when a train he was working on in N's Calumet Yard came to a sudden stop. M sued N for negligence under the Federal Employers' Liabi...
The Willens Deal Survey May 2019
May 21, 2019 - The Deal Survey: May 2019 Print Report
Welcome to our summary of deals for May 2019. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
DISH And SATS Announce An "RMT" Transaction
May 21, 2019 - Bulletin Print Report
DISH Network Corporation, ("DISH") and EchoStarCorporation, ("SATS"), have entered into a "Master Transaction Agreement" in connection with...
Holding Period of Property Formerly Owned By Partnership
May 21, 2019 - Volume 13 Issue 97 Print Report
D and E, individuals, were equal partners in a two-man partnership engaged in the wholesale produce business. Upon D's death, E purchased, pursuant to a "buy...
Massachusetts Estate Tax Properly Imposed On "QTIP" Assets
May 21, 2019 - Bulletin Print Report
C died on August 14, 2011. C was a Massachusetts resident at the time of her death. C's husband, M, had died on July 11, 1993, while domiciled in New York. His will establi...
"App" Purchasers May Sue Apple, Inc. Under "Illinois Brick"
May 21, 2019 - Bulletin Print Report
In 2007, Apple, Inc., ("A"), started selling iPhones. The next year, A launched the retail App Store, an electronic store where iPhone owners can purchase iPhone appl...
I.R.S. Issues First "No Revenue" Spin-Off Ruling
May 20, 2019 - Bulletin Print Report
For purposes of Sec. 355 of the Internal Revenue Code, a spin-off (or split-off), in order to be tax-free, must, among many other requirements, meet the &q...
Puerto Rican Refunding
May 20, 2019 - Bulletin Print Report
While we have not seen the ruling, it has been reliably reported that "a...
Computer Software Is Found To Be Tangible Personal Property
May 20, 2019 - Bulletin Print Report
M sold R, (the "taxpayer"), computer software and accompanying equipment which M contracted to install in a hospital operated by the taxpayer. M charged sales tax whi...
Madoff IRAs Had Value
May 20, 2019 - Volume 13 Issue 96 Print Report
On May 27, 2006, decedent died. At that time he had owned an IRA with Bernard L. Madoff Investment Securities (BLMIS). During decedent's lifetime, he had invested...
Docking Fees Are Subject To Sales Tax
May 17, 2019 - Bulletin Print Report
Petitioner, ("P"), is New York not-for-profit corporation. P is a social and athletic club owning water-adjacent land off of the Genesee River. Clubhouse facilities a...
"Waiver" Payments Are "Includible" In Gross Income
May 17, 2019 - Bulletin Print Report
Petitioner Wife, ("PW"), was issued, for the 2015 tax year, a Form W-2, Wage and Tax Statement, which reflected $7,353 in wages.... This amount qualifies as a Medicai...
License Fees Are Not "Royalties" For Purposes of Sec. 165(g)(3)
May 17, 2019 - Volume 13 Issue 95 Print Report
TP, a State A corporation, is the common parent of a U.S. consolidated tax group. TP develops, manufactures, and markets B products for the C markets.  ...
ESOPs Are "Trusts" For Purposes Of Sec. 267
May 16, 2019 - Bulletin Print Report
The taxpayers, ("TPs"), were the majority shareholders in PI, (the "Corporation"), an 'S' corporation. For 2009 and most of 2010, TPs owned 79.6 per...
"Short Against the Box" Does Not Trigger "Constructive Sale"
May 16, 2019 - Volume 13 Issue 94 Print Report
On January 1, 2002, Mr. A owns 100 shares of stock in X Corporation, (X). The shares have a value in excess of Mr. A's adjustedbasis in such shares, and thu...
Sec. 457 Distribution Not Eligible For Public Pension Subtraction
May 16, 2019 - Bulletin Print Report
In 2011, petitioner, ("P"), received a lump sum distribution of $133,349 from a Sec. 457 deferred compensation plan administered by F for P's employer, the City o...
Edgewell Personal Care Will Effect A "Qualified Stock Purchase"
May 15, 2019 - Bulletin Print Report
Edgewell Personal Care Company, ("EPC") and Harry's, Inc., ("H"), a private company, announced that they have entered into a definitive agreement under...
Railroad Properties Are Real Estate Assets
May 15, 2019 - Volume 13 Issue 93 Print Report
Under a plan of reorganization, an unincorporated trust acquired the properties of a domestic railroad which, prior to the reorganization, had been leased to another...
Supreme Court Confirms States Are Immune From Private Lawsuits
May 14, 2019 - Bulletin Print Report
In 1998, Mr.Gilbert Hyatt, ("H"), sued the Franchise Tax Board of California, (the "Board"), in Nevada state court for torts he alleged the agency com...
Sears Not a 'Vendor' Entitled To Sales Tax Reimbursement
May 14, 2019 - Volume 13 Issue 92 Print Report
Sears provided its customers the option of purchasing its products on credit with a private-label credit card issued by Citibank. As a vendor registered with the Mass...
G.E. Was Going To Satisfy Sec. 355(a) But Flunk Sec. 355(e)
May 14, 2019 - Bulletin Print Report
In some cases, spin-offs have a dual character. They can be tax-free at the shareholder level, but taxable at the distributing corporation level. General Electric Company, (&qu...
Non-Custodial Parent's Daughter Not His "Qualifying Child"
May 14, 2019 - Bulletin Print Report
Petitioner, ("P"), and TT have never been married to each other. They do, however, have a minor child, "CDC." CDC lived with TT throughout 2012 and did not...
OXY Wins The Battle For APC
May 13, 2019 - Bulletin Print Report
Occidental Petroleum Corporation, ("OXY"), has won the battle it was waging with Chevron Corporation, ("C"),with respect to the acquisition of Anadark...
Buckeye Partners LP To "Go Private"
May 13, 2019 - Bulletin Print Report
IFM Investors and Buckeye Partners LP, ("BPL"), announced a definitive agreement under which the IFM Global Infrastructure Fund will acquire all of the outstand...
Credit Union's "Credit Insurance" Income Not UBTI
May 13, 2019 - Volume 13 Issue 91 Print Report
Pursuant to Sec. 501(c)(14)(A) of the Internal Revenue Code, Bellco Credit Union, (B), is generally exempt from federal income tax. However, B, like all otherwise tax...
Sec. 301 Redemption Comes Out Of "AAA"
May 10, 2019 - Bulletin Print Report
X corporation is a corporation that once was a C corporation and later elected to be an 'S' corporation. However, X corporation's 'S' election terminated un...
Inherited IRA Constitutes "Retirement Funds"
May 10, 2019 - Volume 13 Issue 90 Print Report
Mr. B filed a petition for Chapter 13 protection on March 15, 2013. Mr. B has lived in South Carolina since May, 2012, when he moved there from Indiana. &nb...
Private Prison Company Not A Governmental Agent
May 10, 2019 - Bulletin Print Report
Petitioner, ("P"), operated a federal prison pursuant to a contract it had entered into with the Federal Bureau of Prisons, ("BOP"). P housed, fed, monitore...
Superfluous Guarantee Gives Rise To Deemed Repatriation
May 9, 2019 - Bulletin Print Report
The issues before us, the Third Circuit Court of Appeals noted, "boil down to whether a United States entity incurs taxes on income made by its controlled foreign corporat...
MPLX And ANDX To Combine
May 9, 2019 - Bulletin Print Report
Marathon Petroleum Corporation, ("MPC"), and MPLX LP, and Andeavor Logistics LP, ("ANDX"),announced that the two midstream companies, MPLX and ANDX, h...
Royalties Are Not "Rents From Real Property" For REIT Purposes
May 9, 2019 - Volume 13 Issue 89 Print Report
The X trust (XT) owns the fee to certain iron ore-bearing lands which are subject to outstanding leases running to various lessees....
Pass-Through Losses Were Limited To Debt Basis
May 8, 2019 - Bulletin Print Report
Mr. ME, ("ME"), held 49 percent of the stock of M, an 'S' corporation. ME obtained a personal loan and transferred $4,985,035 of the loan proceeds to MG, an &...
IRA Exempt From Chapter 7 Creditors
May 8, 2019 - Volume 13 Issue 88 Print Report
D opened an individual retirement account (IRA) with Merrill Lynch (ML) by rolling over $64,646 from another financial institution. Before doing so, D signed a "...
Johnson Controls Launches Buyback/OXY Revises Its Offer
May 7, 2019 - Bulletin Print Report
Johnson Controls International plc, ("JCI"), recently completed...
Stock Not Included In a Non-Resident's New York Gross Estate
May 7, 2019 - Volume 13 Issue 87 Print Report
Petitioner, (P), wants to know the estate tax consequences for the estate of a non-resident decedent of forming a "single member" limited liability company...
Liberty Expedia Holdings' I.R.S. Ruling Issued
May 7, 2019 - Bulletin Print Report
LTR201918015, January 30, 2019, is the private letterruling secured by Liberty Expedia Holdings, ("HC"), with respect to its merger with and into Expedia...
Redemption of Voting Preferred Stock Meets Sec. 302(b)(2)
May 6, 2019 - Volume 13 Issue 86 Print Report
X Corporation, (X), had outstanding 5,100 shares of voting common stock and 4,900 shares of voting preferred stock. Each share of common and preferred stock possesses...
Sinclair Will Secure A "Cost" Basis In The Disney RSNs
May 6, 2019 - Bulletin Print Report
Sinclair Broadcast Group, Inc., ("S"), and The Walt Disney Company, ("D"), announced that they have entered into a definitive agreement under which S will a...
"Membership Amount" Not Gross Income For Golden State Warriors
May 6, 2019 - Bulletin Print Report
TP is a partnership. LLC, a disregarded single member limited liability company of TP, owns and operates the Team, a professional sports franchise that is a member of the Leagu...
VNO's Appeal For Relief From NYC "RPTT" Fails
May 6, 2019 - Bulletin Print Report
Parent, D-REIT and F-REIT, were, respectively,the grantor and grantees in a transfer that occurred on March 1, 2011, ("Transfer"). Before the Transfer, Parent o...
"Old And Cold" Transfer Escapes N.J. Estate Tax
May 3, 2019 - Bulletin Print Report
On July 24, 2013, the Decedent, then age 87, executed a deed transferring his interest in the Subject Property (a two-family home located in Lodi, New Jersey) to the Heirs for...
Gift of Bonds By a Cash Basis Taxpayer
May 3, 2019 - Volume 13 Issue 85 Print Report
An individual who computes his taxable income under the cash receipts and disbursements method of accounting established a trust and transferred certain corporate bon...
COGS Deduction Must Be Reduced By Depreciation
May 3, 2019 - Bulletin Print Report
R provides furniture, electronics, appliances, and computers to consumers, either through immediate, outright purchase or, more commonly, through "rent to own" agreem...
Berkshire Hathaway Is A Fan Of Preferred Stock
May 2, 2019 - Bulletin Print Report
It was bound to happen. Occidental Petroleum Corporation, ("O"), announced that, in connection with the financing of its proposal to acquire Anadarko Petroleum Corpor...
Perrigo Encounters More Tax Issues/Apollo Will Become A C Corporation
May 2, 2019 - Bulletin Print Report
One thing we can say about Perrigo Co. plc's"inversion" with Elan Corp. plcis that it brought the company unwanted tax scrutiny, both here and in Irel...
Guarantor of 'S' Corporation's External Debt Does Not Earn Basis
May 2, 2019 - Volume 13 Issue 84 Print Report
UDI was an 'S' corporation in which each ofhusband (H) and wife (W) were shareholders. LLC began operations on April 2, 2007. LLC was treated as a partn...
Taxpayer's Marriage Causes Repayment Of "APTC"
May 2, 2019 - Bulletin Print Report
In December 2014, CF submitted an application to the Exchange. CF purchased a health insurance policy through the Exchange after it determined she was eligible for an advance p...
Comcast's Franchise Agreements Were Its Income-Producing Activities
May 1, 2019 - Bulletin Print Report
This appeal concerns the corporate excise tax liability of 13 subsidiaries that provided video, Internet, and telephone services in Massachusetts between 2003 and 2008. In thei...
Who Is Taxed On Assigned Dividend Income?
May 1, 2019 - Volume 13 Issue 83 Print Report
The residue of the Estate of A, who passed away on November 2, 1973, was bequeathed to a trustee to pay the income to B for her life and upon her death to deliver the...
GDI And IR To Engage In An "RMT" Transaction
April 30, 2019 - Bulletin Print Report
Gardner Denver Holdings, Inc., ("GDI"), approximately 35 percent of the stock of which is owned by KKR, and Ingersoll-Rand plc, ("IR"), an "inverted&qu...
Partnership Property Not Limited To "Alternative" Depreciation
April 30, 2019 - Volume 13 Issue 82 Print Report
TP is a State limited liability company. TP has two members: A, a State corporation, holds a "D%" interest in TP, and B, also a State corporation, holds a &...
R.I.P. "Common Law Mailbox Rule"
April 30, 2019 - Bulletin Print Report
The Bs' 2007 Federal income tax return reported a net operating loss, ("NOL"), of approximately $2.5 million. They wanted to carry that loss back to 2005. Based o...
Supreme Court Limits Incidence Of "Class" Arbitration
April 29, 2019 - Bulletin Print Report
In 2016, a hacker tricked a Lamps Plus, ("LP"), employee into disclosing the tax information of approximately 1,300 LP employees. Soon after, a fraudulent federal inc...
Celadon Group Should Get A Tax Deduction For Its "Restitution"
April 29, 2019 - Bulletin Print Report
Celadon Group, Inc., ("CGIP" or "the Company"), announced that it has reached resolutions with the U.S. Department of Justice, Criminal Division, Fraud Sect...
Gift of Encumbered Property Triggers NYC RPTT
April 29, 2019 - Volume 13 Issue 81 Print Report
The Property, a commercial building located in Queens, New York, was originally conveyed to JS, individually, by deed, on or about May 27, 1993. The Property was indi...
Brownfield Credit Is Properly Included In Gross Income
April 26, 2019 - Bulletin Print Report
In New York, taxpayers can receive a tax credit for the redevelopment of a "brownfield" site as part of a brownfield cleanup program. If the amount of the credit allo...
Pregnancy Can Constitute "Sickness Disability"
April 26, 2019 - Volume 13 Issue 80 Print Report
As part of its general sick pay plan, a company has a plan that provides for salary or wage continuation benefits to employees who are absent from work because of pre...
Pension Distribution Is Taxable In Virginia
April 25, 2019 - Bulletin Print Report
While the taxpayer, ("TP"), was a resident of Texas, ("State A"), she borrowed money from a retirement account. TP moved to Virginia in May 2015. In July 20...
Shareholder's Payment Of Corporation's Expenses
April 25, 2019 - Bulletin Print Report
RFI is a C corporation of which F was the majority shareholder. P was an 'S' corporation of which F was also the majority shareholder. In 2005, RFI contracted with &quo...
Recalculating Installment Gain After a Purchase Price Reduction
April 25, 2019 - Volume 13 Issue 79 Print Report
In 1969, a taxpayer sold shares of stock having a basis of $40,000 for $100,000 and elected to report his gross profit from the sale on the installment method of acco...
OXY Will Top CVX's Offer For APC
April 25, 2019 - Bulletin Print Report
Occidental Petroleum Corporation, ("OXY"), delivered a letter to the Board of Directors of Anadarko Petroleum Corporation, ("APC"), "setting forth the...
The Willens Deal Survey April 2019
April 24, 2019 - The Deal Survey: April 2019 Print Report
Welcome to our summary of deals for April 2019. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
Can Liberty Media Spin-Off Sirius XM?
April 24, 2019 - Bulletin Print Report
From time to time, the question arises whether Liberty Media Corporation, ("L"), can effectuate a tax-free spin-off of the stock of its affiliate, Sirius XM, ("S...
QOF Converts Building Into "QOF Business Property"
April 24, 2019 - Bulletin Print Report
In September 2018, Qualified Opportunity Fund A, ("QOFA"), purchases, for $800x, Property X, ("PX"), which is located within the boundaries of a Qualified O...
Taxpayer Liable For NYC Real Property Transfer Tax
April 24, 2019 - Volume 13 Issue 78 Print Report
The Property is a residential property in Brooklyn, New Yorkwith four dwelling units. The Property was purchased by MW in her name alone on May 2, 2005. In orde...
Video Game Retailer Failed To Collect Sales Tax
April 23, 2019 - Bulletin Print Report
GSI and S are wholly-owned affiliates of GameStop Corporation, ("GS"). GS operates approximately 82 retail stores in the state ofWashington. GS is a retailer of...
Cash Payment Does Not Spoil 'C' Reorganization
April 23, 2019 - Volume 13 Issue 77 Print Report
In Year 1, a foreign corporation (ACQ) entered into a plan of acquisition (Merger Agreement) with a U.S. corporation (T). The parties treated the acquisition as a reo...
Liberty Expedia Holdings Will Merge With And Into Expedia Group
April 22, 2019 - Bulletin Print Report
Liberty ExpediaHoldings, Inc., (LEH),was "split-off"from Liberty Interactive in 2016. See The Willens Report, Opportunity Zone Update
April 22, 2019 - Bulletin Print Report
The Internal Revenue Servicehas published an additional set of proposed regulations regarding Opportunity Zones which fill in manyof the blanks left open from the f...
The "Inclusionary" Component of the "Tax Benefit Rule"
April 22, 2019 - Volume 13 Issue 76 Print Report
Q operated as a C corporation until its 1986 tax year. Effective with its 1986 tax year, Q made an election to be treated as an 'S' corporation. T and C each...
BX Will Become A C Corporation
April 18, 2019 - Bulletin Print Report
The Blackstone Group L.P., (BX), has decided to abandon its MLPformatand join the ranks of certain of its competitors in converting to C corporation status. The arg...
Successor Lessee Not Entitled To Sales Tax Refund Or Credit
April 18, 2019 - Bulletin Print Report
On July 18, 2015, JS leased a 2015 Lexus IS 250 for a period of 27 months. At the lease inception, JS paid $1,116.57 in sales tax on the motor vehicle to New York State.<...
Tax Court Applies The "Cohan" Rule
April 18, 2019 - Bulletin Print Report
In 1972, petitioner, ("P"), married MR. In 1976, P and MR moved to New York City. In 1977, P and MR divorced. Despite their divorce, they continued to live together,...
Redeeming Community Property Stock
April 18, 2019 - Volume 13 Issue 75 Print Report
H and C each owned 50 percent of the stock of X corporation, ("X"),since its incorporation. H is the husband of W and C is their son....
I.R.A. Rollover Funds Are Exempt From Judgment
April 18, 2019 - Bulletin Print Report
On April 16, 2018, D withdrew $50,000 dollars from an I.R.A. D deposited $49,000 of the funds in his checking account and retained $1,000 to purchase lottery tickets. Over time...
Merger of Mutual Savings Banks Is a Reorganization
April 17, 2019 - Volume 13 Issue 74 Print Report
X corporation, (X), and Y corporation, (Y), have operated continuously for many years as mutual savings banks. Neither had anycapital stock outstanding....
Publicis Will Enjoy A Basis Step-Up For Epsilon
April 17, 2019 - Bulletin Print Report
Publicis GroupeS.A., ("PG"), announced it has entered into an agreement with Alliance Data Systems Corporation, ("ADS"), in connection with which PG &...
Expensed Assets Not Eligible For New York ITC
April 17, 2019 - Bulletin Print Report
Refraction Technologies Corporation, ("R"), is an 'S' corporation. R is certified as an Empire Zone, ("EZ"), enterprise. Mr. RS, ("RS"),&n...
No Disposition or Satisfaction of Installment Obligation Found
April 16, 2019 - Volume 13 Issue 73 Print Report
TP is engaged in the ownership and operation of retail stores. Holder, (H), is an individual who owned "d" debentures (the "Old Debentures") in th...
The "SRP" Is Entitled To Priority Status
April 16, 2019 - Bulletin Print Report
On March 26, 2018, Debtors filed a petition for relief under Chapter 13 of Title 11 of the United States Code. On April 27, 2018, the I.R.S. filed a proof of claim, ("Clai...
Oregon LLC Is Commercially Domiciled In California
April 16, 2019 - Bulletin Print Report
Appellant, ("A"), was organized in Oregon in 2007. During 2014, most of A's members, including most notablyMR, lived in California. A's sole business ac...
Chevron And Anadarko To Combine
April 15, 2019 - Bulletin Print Report
Chevron Corporation, ("C"), announced, on April 12, 2019, that it has entered into a definitive agreement with AnadarkoPetroleum Corporation, ("A"), &...
Excess FICA Taxes Not Deductible For NYC Tax Purposes
April 15, 2019 - Bulletin Print Report
Under Sec. 45B of the Internal Revenue Code, an eligible employer may claim a credit against its federal income tax for FICA taxes paid with respect to certain tip income of it...
Relocation Grants Are Nontaxable Contributions To Capital
April 15, 2019 - Bulletin Print Report
Petitioner, ("P"), was a voice and electronic broker-dealer operating out of offices in lower Manhattan. G and FB were subsidiaries of P. On September 11, 2001, G had...
Dividends On Restricted Stock
April 15, 2019 - Volume 13 Issue 72 Print Report
On May 3, 1982, X established a restricted stock plan for the benefit of certain key employees in connection with services rendered to the corporation. At the time th...
Trades Of Player Contracts And Draft Picks Can Be Tax-Free
April 12, 2019 - Bulletin Print Report
Sec. 1031(a) ofthe Internal Revenue Code provides that no gain or loss shall be recognized on the exchange of real property held f...
RAD's Reverse Stock Split
April 12, 2019 - Bulletin Print Report
Rite Aid Corporation, ("RAD"), announced that its board of directors hasapproved a "reverse stock split" of the company's common stock at a ratio...
Non-Professional Fiduciary Not Carrying On a Trade or Business
April 12, 2019 - Volume 13 Issue 71 Print Report
The plaintiff's aunt died testate on June 9, 1955, leaving an estate valued at $123,284.05. The plaintiff was appointed executor of her aunt'sestate.
Separate Contracts Viewed As A Single Conveyance
April 12, 2019 - Bulletin Print Report
On February 11, 2015, petitioners entered into a contract to purchase vacant land from FH, a New York corporation, for $2.5 million. On the same day, petitioners entered into a...
BioScrip, Inc. Will Engage In A 'D' Reorganization
April 11, 2019 - Bulletin Print Report
BioScrip, Inc., ("BS"), and Option Care Enterprises, ("O"),a private entity, announced that they have entered into a definitive merger agreement. Unde...
AABA's Foreign Tax Credit Mechanics
April 11, 2019 - Bulletin Print Report
Apparently, the fourgreat imponderables, as regards the aggregate amount of liquidating distributions Altaba, Inc., ("AABA" or the "Fund"), will be ma...
New York "Pensions and Annuities"
April 11, 2019 - Volume 13 Issue 70 Print Report
Petitioner, (P), was employed by American Express Corporation ("Employer") from 1984 through August, 2007, when he retired at the age of 56. P was a partici...
When Is a "Sales Tax" Deductible?
April 10, 2019 - Volume 13 Issue 69 Print Report
On November 17, 2004, the taxpayers, Mr. and Mrs. Naso, (N), entered into a purchase contract with DH, a home builder, toconstruct a home on unimproved vacant l...
Leo Holdings Corporation To "Domesticate"
April 10, 2019 - Bulletin Print Report
CEC Entertainment, Inc., ("CEC"), and Leo Holdings Corporation, ("LHC"), a publicly traded "SPAC," announced that LHC and QuesoHoldings, Inc...
"Concierge CFO" Denied Traveling Expense Deductions
April 10, 2019 - Bulletin Print Report
B views himself as operatinga "concierge CFO" business. He has had clients for his CFO business since at least 1998. During the examination years, he made a hom...
Versum Materials To Pay "Termination Fee"
April 9, 2019 - Bulletin Print Report
Versum Materials, Inc., ("V"), and Entegris, Inc., ("E"), had entered into a definitive merger agreement pursuant to which V was to have merged, in a "...
Fees To Fund PCOR Are Deductible
April 9, 2019 - Volume 13 Issue 68 Print Report
Secs. 4375-77 of the Internal Revenue Code were added by the Affordable Care Act (ACA). The ACA provides for the establishment of the private, non-profit corporation,...
Use Of LLC Does Not Preclude Tax Relief
April 9, 2019 - Bulletin Print Report
RTC Sec. 69.5 allows qualified homeowners over 55 years of age to transfer the property tax basis of their principal residence to a replacement dwelling of equal or lesser valu...
Yacht Charter Business Not Engaged In For Profit
April 8, 2019 - Bulletin Print Report
Petitioner husband, ("PH"), is a highly successful businessman and a certified public accountant. PH and his wife, ("Ps") have been boating since the 1970s...
LLY Completes Highly Successful Split-Off
April 8, 2019 - Bulletin Print Report
Eli Lilly & Co., ("LLY"), owned 80.2 percent of the stock of ElancoAnimal Health, Inc., ("ELAN"). For good and valid business reasons, LLY decided...
Homeowner Realized a Gain Upon Foreclosure
April 8, 2019 - Volume 13 Issue 67 Print Report
Petitioner, (P), resided in California. During 2005, she purchased a residence in Sacramento. She resided there until sometime during 2006, when she moved to San Fran...
Coal Act Premiums Are "Taxes"
April 5, 2019 - Bulletin Print Report
Nearly 30 years ago, Hillsborough Holdings and thirty of its subsidiaries filed for chapter 11 bankruptcy. This proceeding centers on just two of those subsidiaries: USPa...
No Deduction If Services Not Actually Rendered
April 5, 2019 - Volume 13 Issue 66 Print Report
Petitioner, (P), is a dental practice. The Es (Dr. E and his wife)were P's sole shareholders. The Es were also salaried employees for P. Dr. E also owned an...
Remarriage Terminates New Jersey Property Tax Exemption
April 4, 2019 - Bulletin Print Report
N.J.S.A. 54:4-3.30(b)(2) provides: "...The surviving spouse of any citizen and resident of this State who was honorably discharged and, after the citizen and resident'...
Taxpayer Ineligible for FEI Exclusion
April 4, 2019 - Volume 13 Issue 65 Print Report
Petitioner, (P), is a U.S. citizen. He began working for L3 in April 1982 as a full-time employee and remained there until June 1989. P returned to work for L3...
MGM Resorts International/MGM Growth Properties, LLC—Is A Taxable Spin-off Viable?
April 4, 2019 - Bulletin Print Report
MGM Resorts International, (“MGM”), owns 100 percent of the Class B stock of MGM Gro...
How Long Is a Day?
April 3, 2019 - Volume 13 Issue 64 Print Report
In 1983, the New York State Department of Taxation and Finance issued two notices of deficiency to "decedent"pertaining tothe tax years 1979 thr...
Altaba, Inc. Will Completely Liquidate
April 3, 2019 - Bulletin Print Report
There will be no "cash rich" split-offs or "downstream mergers" (in which Alibaba Group Holding Ltd. acquires the stock of Altaba, Inc. in exchange for Alib...
Claim Did Not Arise From "Profit-Seeking" Activities
April 3, 2019 - Bulletin Print Report
C is the CEO and sole shareholder of JKI, a commercial cleaning franchisor operating as an 'S' corporation. In November 2002, C went on vacation to the island of St. Ma...
Spin-Off Facilitates Equity Offering
April 2, 2019 - Volume 13 Issue 63 Print Report
P is a closely-held corporation that develops and markets computer software. P has, for more than five years, owned all of the stock of S, a corporation that owns and...
FASB Proposes More "Robust" Income Tax Disclosures
April 2, 2019 - Bulletin Print Report
The Financial Accounting Standards Board, ("FASB"), has been attempting,for quite some time, to reach a consensus on what everyone agrees is a glaring problem:...
Rate Relief Does Not Prevent Utility's Abandonment Loss
April 2, 2019 - Bulletin Print Report
Parent, ("P"), is a public utility holding company. P's largest subsidiary is Taxpayer, ("T"). T is a regulated utility. T generates, transmits, and dis...
"County" Payments Constitute Qualifying REIT Income
April 2, 2019 - Bulletin Print Report
TP is a real estate investment trust, ("REIT"). TP is an "UPREIT." It owns "A%" of the interests in a partnership, PS. PS owns DE 1. DE 1 owns DE...
When Is A State Tax Refund Included In Gross Income?
April 1, 2019 - Bulletin Print Report
The taxpayers are each unmarried individuals whose filing status is "single" and who itemized deductions on their federal income tax returns for 2018 in lieu of using...
"Forthright And Honest Testimony" Does Not Carry The Day
April 1, 2019 - Bulletin Print Report
In 2007, petitioner was a Florida domiciliary but, as an executive in the magazine publishing industry that required frequent travel between Florida and New York, he also maint...
I.R.S. Releases Fortiv's "RMT" Ruling
April 1, 2019 - Bulletin Print Report
D (FortivCorporation) has a single class of voting common stock outstanding. D directly owns all of the equity interests in DRE 1, Sub 1, Sub 2, and Sub 3. DRE 1 owns all...
Assets Accessory To The Operation of a Business Are Not Real Estate
April 1, 2019 - Volume 13 Issue 62 Print Report
A trust makes mortgage loans for the construction of systems for the transmission and reception of audio, voice, and other electrical signals between communities by m...
PBM Company Not Merely An Agent Of Pharmacies
March 29, 2019 - Bulletin Print Report
Express Scripts, Inc., ("E"), is a PBM company headquartered in Missouri. Clients hire E to manage the clients' prescription drug benefit programs. E negotiates w...
Utility Denied New York State ITC
March 29, 2019 - Volume 13 Issue 61 Print Report
Petitioners are regulated public utilities engaged in the business of providing natural gas to customers in New York City and Long Island. Starting in 2000, petitione...
The Beneficial Owner of an 'S' Corporation Is Taxed On Its Income
March 29, 2019 - Bulletin Print Report
MB was married to the former Pittsburgh Pirates and New York Mets star, Bobby Bonilla, ("RB"), in 1986. RB incorporated BBI. As of February 23, 1994, RB was the sole...
Stock of Lower-Tier Domestic Corporation Not a Passive Asset
March 28, 2019 - Volume 13 Issue 60 Print Report
Taxpayers, a married couple, own shares in X. X is a Country M corporation that was formed in Year 2, and is a passive foreign investment company (PFIC). Since its fo...
Roth IRA Distribution Included In Income
March 28, 2019 - Bulletin Print Report
The AUsapplied for a real property tax credit, claiming that their total income was below the $60,000 cap. BFS denied their application, stating that, when including the...
CNC To Acquire WCG In A "Two-Step" Merger
March 28, 2019 - Bulletin Print Report
Centene Corporation, ("CNC"), and WellCare Health Plans, Inc., ("WCG"), announced, on March 27, 2019,that "CNC will acquire WCG in a cash and sto...
Destruction of a Principal Residence
March 27, 2019 - Volume 13 Issue 59 Print Report
Taxpayer's property was severely damaged as a result of a natural disaster. The property was damaged to such an extent that it must practicably be rebuilt. Althou...
I.R.S. Updates "Dividend" Regulations
March 27, 2019 - Bulletin Print Report
The I.R.S. recently issued proposed regulations, updating Reg. Sec. 1.301-1 in particular, to reflect the statutory changes made to Sec. 301(b)(1) and Sec. 302(d) by the 1988 A...
Novartis AG Will Soon Spin-Off Alcon, Inc.
March 26, 2019 - Bulletin Print Report
Novartis AG, a Swiss resident corporation, will be distributing to its shareholders, including holders of itsADRs, all of the stock of its newly-formed subsidiary, Alcon,...
I.R.S. Regulations Punish "Objectionable" REIT Conversions
March 26, 2019 - Bulletin Print Report
In general, if property owned by a C corporation becomes the property of a real estate investment trust, ("REIT"), in a conversion transaction , (the qua...
Interests In Mortgages On Real Property
March 26, 2019 - Volume 13 Issue 58 Print Report
Company, (C), will elect to be taxed as a REIT. The Taxpayer expects C to finance Structural Improvements secured by the Structural Improvements and the underlying bu...
Gross Income Not Reduced By Selling Expenses
March 26, 2019 - Bulletin Print Report
TP originates residential first mortgages on "non-transient real property." TP's corporate headquarters are located out-of-state. TP originated mortgages through...
Sports Agent Can Deduct Settlement Payments
March 25, 2019 - Volume 13 Issue 57 Print Report
X is an attorney whose practice is devoted exclusively to the representation of professional athletes with respect to contract negotiations and other financial matter...
Nexstar To Sell Assets To Be Acquired From Tribune Media
March 25, 2019 - Bulletin Print Report
Nexstar Media Group, ("N"), will acquire, pursuant to a "reverse subsidiary cash merger," all of the Class A and Class B stock of Tribune Media, ("TM&q...
I.R.S. Provides Relief To "Underpaid" Taxpayers
March 25, 2019 - Bulletin Print Report
Notice 2019-25 supersedes the guidance in Notice 2019-11. See The Willens Report,Tax Allocation Agreement Does Not Contravene "Bob Richards" Rule
March 25, 2019 - Bulletin Print Report
This appeal concerns the ownership of a federal tax refund. The tax refund was issued by the Internal Revenue Serviceto United Western Bancorp, Inc., ("UWBI"),...
Service Inches Closer To Deleting The Income Requirement For An "ATB"
March 22, 2019 - Bulletin Print Report
Rev. Rul. 2019-09, issued on March 21, 2019, suspends two rather "ancient" revenue rulings, Rev. Rul. 57-464, 1957-2 C.B. 244 and Rev. Rul. 57-492, 1957-2 C.B. 247, p...
No Bond Premium With Respect to Convertibles
March 22, 2019 - Volume 13 Issue 56 Print Report
M Corporation, (M), formed N Corporation, (N). N sold "$a" face value "x%" guaranteed debentures and sold "$b" face value "y%"...
The Willens Deal Survey March 2019
March 21, 2019 - The Deal Survey: March 2019 Print Report
Welcome to our summary of deals for March 2019. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.
Property Tax Exemption Permitted For Improved Home
March 21, 2019 - Bulletin Print Report
Mr. L served during the Vietnam War as a member of the U.S. Air Force. He was honorably discharged from service in 1969. In 1998, Mr. L and his spouse purchased a summer camp i...
Service Permits Current Deduction of Certain Litigation Settlements
March 21, 2019 - Volume 13 Issue 55 Print Report
In 1973, the taxpayer (TP) entered into a franchise agreement with M. The terms of the agreement provided that M would grant TP its trade name and expertise in the bu...
The Fox/Disney Deal Finally Closes
March 20, 2019 - Bulletin Print Report
The historic"Morris Trust" transaction involving 21st Century Fox, ("21CF"), and The Walt Disney Co., ("DIS"), has finallyclosed. The...
State Tax Preempted By 19th Century Treaty
March 20, 2019 - Bulletin Print Report
A State of Washington statute requires each "fuel importer" to obtain a license, and it says that a fuel tax will be "levied and imposed upon...licensees" f...
Calculating New Jersey "AAA"
March 20, 2019 - Volume 13 Issue 54 Print Report
MC is a 25 percent shareholder in CS which became a New Jersey (NJ) 'S' corporation in 1995. The period of assessment at issue was January, 2003--December, 20...
Fidelity National Information Services And Worldpay To Combine
March 19, 2019 - Bulletin Print Report
Fidelity National Information Services, Inc., ("FIS"), and Worldpay, Inc., ("WP"), announced that they have entered into a definitive merger agreement. At c...
Final Regulations Treat "RIC" Income Inclusions Less Harshly
March 19, 2019 - Bulletin Print Report
A regulated investment company, ("RIC"), is allowed to claima deduction for the dividends it pays to its shareholders. Thus, a RIC is, effectively, exempt from...
Consulting Firm's Receipts Not Subject To Sales Tax
March 19, 2019 - Volume 13 Issue 53 Print Report
Nerac, Inc., ("N"), is a research and advisory firm providing technical, scientific, and engineering research and tracking services to its clients. Clients contact pe...
Website Host Is A "Vendor"
March 19, 2019 - Bulletin Print Report
Petitioner develops and markets a wide range of software, services, and digital products. Petitioner operates online marketplaces on which independent software vendors, ("...
Investment Advisor May Not Use Broker-Dealer Sourcing Rules
March 18, 2019 - Buletin Print Report
Petitioner, ("P"), is incorporated under the laws of the State of New York. P is a wholly-owned subsidiary of BTG S.A. BTG S.A. is a wholly-owned subsidiary of Banco...
Lessor Of Energy Infrastructure Assets Earns Qualifying Rents
March 18, 2019 - Bulletin Print Report
TP is a corporation that has elected to be taxed and has operated as a real estate investment trust, ("REIT"). TP principally invests in U.S. energy infrastructure as...
Franchisee Can Deduct Payments Made To Franchisor
March 18, 2019 - Volume 13 Issue 52 Print Report
TP is in the business of distributing "Products" and similar products from a wide variety of suppliers through a specific group of retailers under contract...
Airline Did Not Operate A "Hub Facility"
March 15, 2019 - Bulletin Print Report
Pursuant to Sec. 76.075, Stats. (2015-2016) (Wisconsin), plaintiffs seek adjustments of their 2013 and 2014 property assessments, and therefore refunds on their property taxes,...
Administrative Claim For Refund Not Timely Filed
March 15, 2019 - Bulletin Print Report
The United States and its agencies may be sued only to the extent that they consent to waive their sovereign immunity. With respect to a suit for a tax refund, that waiver is c...
Circumventing the 100 Shareholder 'S' Corporation Limitation
March 15, 2019 - Volume 13 Issue 51 Print Report
A 'small business corporation' may elect to be treated as an 'S' corporation. An election shall be valid only if all persons who are shareholders in s...
Circular Flow of Cash Is Disregarded
March 14, 2019 - Volume 13 Issue 50 Print Report
X Corporation, (X), a state-charteredbanking institution, had outstanding 2,000 shares of common stock which were publicly-held. X decided that its stock should...
Post-Death Events Are Taken Into Account In Valuing Donated Property
March 14, 2019 - Bulletin Print Report
The D family owns DPI, a closely held corporation that manages commercial and residential property.... Before V's death, the only shareholders of DPI were V, E, and P. V ow...
BAM Will "Roll Up" OAK
March 13, 2019 - Bulletin Print Report
Brookfield Asset Management, Inc., ("BAM"), and Oaktree Capital Group, LLC, ("OAK"), announced an agreement whereby BAM "will acquire approximately 62...
Electing 'S' Corporation Status
March 13, 2019 - Volume 13 Issue 49 Print Report
Sec. 1362(a)(1) of the Internal Revenue Code provides that "a small business corporation may elect to be an 'S' corporation." Sec. 1362(a)(2) provid...
"MAGI" Includes All Social Security Benefits
March 13, 2019 - Bulletin Print Report
In 2014, petitioner, ("P"), received $26,180 of Social Security benefits, of which $11,902 was attributable to a lump sum payment relating to 2013 and $14,278 was att...
Brookfield's Self-Tender Offers
March 12, 2019 - Bulletin Print Report
Brookfield Property REIT, ("BPR") if offering to purchase for cash up to $95 million in value of shares of its Class A stock (such stock was issued in the acquisition...
Baseball Hall of Famer Was a California Resident
March 12, 2019 - Volume 13 Issue 48 Print Report
Gloria Morgan (GM) was born and raised in California and Joe Morgan, (JM),the baseball hall of famer, spent most of his childhood in California.
"OTCs" Are Not "Operators" Of Hotels
March 12, 2019 - Bulletin Print Report
The defendants are online travel companies, ("OTCs"). OTCs use either the "agency" or the "merchant" model to conduct business. Under the merchant...
Property Damage Required For Casualty Loss
March 12, 2019 - Bulletin Print Report
In 2004, M was diagnosed with Parkinson's disease. In 2006, Dr. Lew, ("DL"), prescribed Pramipexole, ("PR"). The medicine worked, and M's symptoms i...
The "Silver Lining" In A Failed Spin-Off
March 11, 2019 - Bulletin Print Report
A spin-off that otherwise satisfies the requirements of Sec. 355 of the Code, is, nevertheless, taxable, at the corporate level, if it is part of a plan (or series of related t...
A Revered Kansan Is Not A "Resident" Of The State
March 11, 2019 - Bulletin Print Report
Domicile is a relationship that the law creates between an individual and a location or a country. Domicile is the place where a person resides, where the person has an intenti...
BAC's Investment In CCB Not Integral To Its Business
March 11, 2019 - Bulletin Print Report
The California Board of Equalization, ("BOE"), determined that, for 2008, dividend income received by Bank of America, ("BAC"), from its investment in China...
Purchase of Stock Precludes a 'C' Reorganization
March 11, 2019 - Volume 13 Issue 47 Print Report
P corporation (P) owned all the stock of S1 and S2. It was P's desire that S1 acquire substantially all the properties of unrelatedX. In order to elim...
Medical Center Is A Corporation
March 8, 2019 - Bulletin Print Report
WC is a charitable organization incorporated under the laws of Kansas. In 2010, after the I.R.S. determined that medical school students were not subject to FICA taxes, the Ser...
Lessee of Land Not Entitled to Homestead Exemption
March 8, 2019 - Volume 13 Issue 46 Print Report
This case concerns property held in the name of Chicago Resort Company, a Michigan corporation (the "corporation"). The corporation is the owner of record o...
Property Not Purchased For Resale
March 7, 2019 - Bulletin Print Report
N is a provider of credit card and debit card processing services. N's customers are merchants and N provides them with card readers or card processing terminals that commu...
Ascertaining the Date of Sale
March 7, 2019 - Volume 13 Issue 45 Print Report
In 1968, the plaintiff, (HJ), negotiated the sale of its assets to CW. Each of HJ and CW was a C corporation. The sale requir...
Taxpayer Found To Be Operating A "Dating Service"
March 6, 2019 - Bulletin Print Report
The taxpayer, ("TP"), operates a website that allows individuals to register for scheduled "speed dating" events held in several cities throughout the U.S....
Holding Property For Investment Purposes Not a Trade or Business
March 6, 2019 - Volume 13 Issue 44 Print Report
X corporation, ("X"), is both a broker and dealer in stocks and bonds. Y corporation, ("Y"), a wholly-owned subsidiary of X, is engaged in the own...
Foreign Derived Intangible Income ("FDII") Can Lower Effective Tax Rates
March 6, 2019 - Bulletin Print Report
The Tax Cuts and Jobs Act contained a provision which allows for a lower tax rate to be imposed on a U.S. corporation's intangible income derived from serving non-U.S. mark...
"Compensation" Includes Payment For "Time Lost"
March 5, 2019 - Bulletin Print Report
L was injured while working at BNSF's rail yard. L sued BNSF and gained a $126,212.78 jury verdict. Of that amount, the jury ascribed $30,000 to wages lost during the time...
No "Material Participation" In Farming Business
March 5, 2019 - Bulletin Print Report
Mr. and Mrs. C, ("the Cs"), filed a joint Iowa income tax return for calendar year 2006 reporting the sale of agricultural real estate located in W County, Iowa. Thei...
Split-Off Not Affected By the Granting of an Option
March 5, 2019 - Volume 13 Issue 43 Print Report
D corporation, (D), is engaged in Business qq and in Business rr. D has VV shares of voting common stock outstanding of which Shareholder Group A (SGA) owns approxima...
Interest Is Neither Investment Interest Nor Personal Interest
March 5, 2019 - Bulletin Print Report
During each of the years in issue, Petitioner, ("P"), was the sole proprietor of Pi. Pi was engaged in the business of software development. The business was conducte...
PG & E Gets A "Going Concern" Opinion
March 4, 2019 - Bulletin Print Report
PG & E is a holding company whose principal operating subsidiary is Pacific Gas & Electric Company, a public utility, (the "Utility"). On January 29, 2019, PG...
Lorillard Escapes New Jersey Add-Back Of Royalty Expense
March 4, 2019 - Bulletin Print Report
Parent, ("P"), is a Delaware corporation which manufactures, markets, distributes, and sells cigarettes throughout the United States. It maintains its headquartered i...
Dividend Waiver Respected
March 4, 2019 - Volume 13 Issue 42 Print Report
X Corporation, (X), is a publicly-traded corporation. Each share of X'sClass A common stock has one vote per share and each share of X's Class B common...
Uniti's Dividend Payment Obligations
March 1, 2019 - Bulletin Print Report
Uniti Group, Inc., ("U"), is a real estate investment trust, ("REIT") engaged in the acquisition and construction of infrastructure in the communications in...
Sales Tax Not Barred By Internet Tax Freedom Act
March 1, 2019 - Bulletin Print Report
PixiusCommunications, LLC, ("P"), is an internet service provider, ("ISP"), engaged in the business of providing its customers with wireless access to...
Forgivable Loan Is Income When All Events Test Is Met
March 1, 2019 - Volume 13 Issue 41 Print Report
TP considered closing its factory in State X and consolidating the business in another state. To discourage this, State X provided a loan to TP. In return, TP was req...
Ascertaining The Nature Of The "Shared Responsibility Payment"
February 28, 2019 - Bulletin Print Report
On June 18, 2017, JC filed for Chapter 13 Bankruptcy Protection. The Internal Revenue Service filed a proof of claim for $5,795.10 in priority debt payments, with $695 being de...
CFOs Are Not Covered Employees
February 28, 2019 - Volume 13 Issue 40 Print Report
TP is a publicly held corporation. A and B each served as the principal financial officer of TP during a portion of Year 1. Pursuant to the executive compensation dis...
Sec. 312 Principles Apply In Determining A CFC's Earnings and Profits
February 27, 2019 - Bulletin Print Report
Eaton Corporation, ("E"), was the parent of an affiliated group of corporations, ("Eaton Group"), that filed consolidated Federal income tax returns. (Subse...
PCG To Seek Restrictions On Trading In Its Securities
February 27, 2019 - Bulletin Print Report
It has been reported that Pacific Gas & Electric Co., ("PCG"), in an effort to "preserve" its copious net operating loss carryovers, will seek the bankr...
Gains Are No Longer PHC Income
February 27, 2019 - Volume 13 Issue 39 Print Report
M is a domestic corporation. All of the stock of Mis owned by A and B, two individual taxpayers. M manages parcels of real property on a management fee basis.
Danaher Will Secure a Cost Basis in GE's Assets
February 26, 2019 - Bulletin Print Report
Danaher Corporation announced that it has entered into an agreement with General Electric Company to acqu...
Reimbursement Is Not Gross Income
February 26, 2019 - Bulletin Print Report
RP1is a foreign corporation and the common parent of RP2, a foreign corporation, and P, a U.S. corporation. P is the common parent of an affiliated group which includes P...
Forward Merger Constitutes Purchase of Assets
February 26, 2019 - Volume 13 Issue 38 Print Report
Pursuant to an agreement, T merged into PU, a wholly owned subsidiary of P. The shareholders of T received cash and promissory notes in exchange for their T stock. By...
A Bankrupt Debtor Can Avoid The Sec. 382 Limitation
February 26, 2019 - Bulletin Print Report
In general, where a loss corporation undergoes an ownership change, certain limitations, known as the "Sec. 382 limitation," will be imposed on the amount of taxable...
Perrigo's Irish Tax Dispute Will Be Heard By The "High Court"
February 26, 2019 - Bulletin Print Report
We previously reported that PerrigoCo. plc's subsidiary, Elan Pharma, ("EP"), was served with a Notice of Assessment by "Irish Revenue." See The W...
The Willens Deal Survey February 2019
February 25, 2019 - The Deal Survey: February 2019 Print Report
Welcome to our summary of deals for February 2019. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database....
Housing "Subsidy Payment" Found To Be "Good" REIT Income
February 25, 2019 - Bulletin Print Report
Taxpayer, ("TP"), is a real estate investment trust, ("REIT"). TP owns an "A%" general partnerinterest directly in Operating Partnership, (&...
Corporation Found To Be A "PHC"
February 25, 2019 - Volume 13 Issue 37 Print Report
P is a corporation organized under the laws of Indiana. During 1970 and 1971, P engaged in the business of residential house rental from which it received gross renta...
"Rent-To-Own" Property Is Not Inventory
February 22, 2019 - Bulletin Print Report
The taxpayer, ("TP"), is a multi-state business which offers for sale or lease property such as furniture, appliances.... TP derives the vast majority of its revenue...
Amounts Not Paid "In Cancellation" Of Lease
February 22, 2019 - Volume 13 Issue 36 Print Report
In 1971, the GJV ("partnership"), in which TP owned a 90 percent interest, entered into separate lease and management contracts with H. &nbs...
Supreme Court Strikes Down West Virginia Tax Statute
February 21, 2019 - Bulletin Print Report
Mr. D, ("D"), workedin the U.S. Marshals Service. His home state, West Virginia, ("WV"), does not tax the pension benefits of certain former state law...
Acquiring A Prohibited "Interest" In The Redeeming Corporation
February 21, 2019 - Volume 13 Issue 35 Print Report
Company, (CO), is a closely-held State N corporation. Stock in CO was held by family members A, B, C, and D and by Trusts 1-9 established by the family. &nb...
Investment Strategist Never Abandoned His New York Domicile
February 20, 2019 - Bulletin Print Report
On August 6, 2013, the New York State Division of Taxation, (the "Division"), issued to petitioner, ("P"), a noted Wall Street investment strategist, a noti...
Florida Is A "Consumer" State
February 20, 2019 - Bulletin Print Report
The taxpayer has headquarters in "X." X is somewhereoutside of Florida.The taxpayer has requestedguidance with respect tothe proper sourcing o...
Payment In Cancellation of Lease Is Not "Rent"
February 20, 2019 - Volume 13 Issue 34 Print Report
C1, a domestic corporation, is 78.68 owned by X, a U.S. citizen. The remaining 21.32 percent ofC1is owned by seven U.S. citizens who are not related to X....
Rental Of Karaoke Rooms Does Not Reduce "Base Rent"
February 19, 2019 - Bulletin Print Report
TP operates a karaoke, ("K"), business within leased premises below 96thStreet in Manhattan. The premises have been sub-divided into individual "K rooms&qu...
Sears' Net Operating Losses Will Survive Bankruptcy
February 19, 2019 - Bulletin Print Report
Sears Holdings Corporation, ("SHC"), has accumulated a $1.76 billion "NOL DTA" and a nearly $1 billion "Credit DTA." The NOL DTA implies a net ope...
Molson Coors Brewing Company Restates Earnings
February 19, 2019 - Bulletin Print Report
Molson Coors Brewing Company, ("MCBC"), for periods prior to October 11, 2016, owned a 42 percent economic, and 50 percent voting, interest in a partnership named Mil...
Involuntary Presence Does Not Count For NY Residence Purposes
February 19, 2019 - Volume 13 Issue 33 Print Report
Petitioner, (P), is the executor under the last will and testament of BSH who died at Sloane Kettering Memorial Hospital in the City of New York on September 19, 1973...
Reversing Pre-Redemption Transfer of Stock Does Not Invoke "(c)(2)(B)"
February 15, 2019 - Volume 13 Issue 32 Print Report
X, ("X"), is a corporation engaged in an ongoing business whose shares of its sole class of common stock were held by A and byA's child, B. A owne...
Cell Phone Retailer Cannot Avoid Use Tax
February 15, 2019 - Bulletin Print Report
Plaintiff, ("P"), is a Michigan corporation engaged in the business of selling cell-phone service contracts, cell phones, and related equipment. P sold Verizon cell-p...
WCC's "Magnanimous" Tender Offer
February 14, 2019 - Bulletin Print Report
Westmoreland Coal Company Asset Corporation, ("TS"), a wholly owned subsidiary of Westmoreland Coal Company, ("WCC"), is offering to purchase all of the out...
Accounting For Disproportionate Liquidations
February 14, 2019 - Volume 13 Issue 31 Print Report
Mr. A formed X Corporation, (X), to engage in a business enterprise. X issued 70,000 shares of common stock to Mr. A at a price of $1 per share. Shortly thereafter, X...
Georgia Firm Has "Substantial Nexus" With Ohio
February 14, 2019 - Bulletin Print Report
G is a Georgia corporation. It does have any locations in Ohio; and does not employ any agents, representatives, or employees in the Buckeye State. G's primary customers ar...
Apportioning Income Of A "Transportation Broker"
February 13, 2019 - Bulletin Print Report
BLX, Inc., ("BLX"), is incorporated in Iowa and headquartered in Cedar Rapids. The corporation has elected to file as an 'S' corporation. BLX describes itself...
Charitable Trust Does Not Hold Real Estate "Primary for Sale"
February 13, 2019 - Volume 13 Issue 30 Print Report
TP is a charitable trust created under the will of N. TP educates large numbers of individuals annually. At the end of TP'...
Business Activities Are Needed For a "Contraction"
February 12, 2019 - Volume 13 Issue 29 Print Report
X corporation, ("X"), owned two parcels of real property, each such parcel consisting of land and a building thereon. Both of the parcels, Parcel A and Parc...
Expectation Of Tax Deduction Not A "Quid Pro Quo"
February 12, 2019 - Bulletin Print Report
In April 2011, the Ms purchased real property, (the "Property"),in Bethesda, Maryland. At the time the Ms purchased the Property, it included a remodeled coloni...
Investment Advisor Not A Sec. 382 "Entity"
February 12, 2019 - Bulletin Print Report
LossCo, ("L") is a publicly traded State A corporation. L is a holding company whose major asset is the stock of Subsidiary, ("S"), a State B corporation. O...
Transfer Of Condominium Units Is A "Bulk Sale"
February 12, 2019 - Bulletin Print Report
Pursuant to two separate contracts of sale, Unit 1 and Unit 2 (which are noncontiguous, separate units in the same residential building) are being sold by Seller, ("S"...
Double Taxation Not Enough To Invalidate VA's Apportionment Method
February 11, 2019 - Bulletin Print Report
The Corporate Executive Board Company, ("CEB"), is a corporation headquartered in Arlington, Virginia. Most of CEB's revenue comes from an annual fixed fee subscr...
The Tax Court Finds A "Genuine Contraction"
February 11, 2019 - Volume 13 Issue 28 Print Report
WF was organized for the primary purpose of providing passenger and automobile ferry service across the Potomac River between Maryland and Virginia. From April 8, 195...
LLY Will "Split-Off" ELAN
February 11, 2019 - Bulletin Print Report
Eli Lilly and Company, ("LLY"), announced that it will initiate an "exchange offer" to divest its remaining interest in Elanco Animal Health, ("ELAN&qu...
Food Service Management Operator Taxed At Higher Rates
February 8, 2019 - Bulletin Print Report
From 2005 through 2014, Aramark Educational Services LLC, ("A"), contracted with schools to provide "dining services." At issue is the classification of A&#...
Fixing The Date of Debt Discharge
February 8, 2019 - Volume 13 Issue 27 Print Report
TP's shareholder relies on Gitlitz v. Commissioner , 531 U.S. 206 (2001), to claim additional basis in shares of 'S' corporation stock from exclud...
Physical Presence Necessary For "Nexus" Found
February 7, 2019 - Bulletin Print Report
TP is a foreign corporation with its principal place of business located outside of the State of Washington. TP sells sports apparel, equipment, and accessories to consumers th...
California Taxpayer Cannot Avoid NOL Suspension
February 7, 2019 - Volume 13 Issue 26 Print Report
On July 15, 2010, Appellant, (AP), filed a California Form 100 for the 2008 taxable year. AP reported thereona sale of land, equipment, and buildings. The sale...
Mortgage Lien Survived Non-Judicial Foreclosure Sale
February 7, 2019 - Bulletin Print Report
The Ks owned real property in Richlands, Virginia. The Ks executed a credit line deed of trust, (the "Deed of Trust"), on September 26, 2007 for the benefit of First...
POST Has The Ability To "Spin-Off" 8th Avenue
February 6, 2019 - Bulletin Print Report
Last fall, Post Holdings, Inc., ("POST), entered into an interesting transaction with Thomas H. Lee Partners, Inc., ("THL"), in which POST and THL formed a joint...
The Execution of a Note Does Not Create Basis
February 6, 2019 - Volume 13 Issue 25 Print Report
On November 1, 1979, Mr. A, the owner of all of the outstanding stock of X corporation, ("X"), an electing small business corporation (an 'S' corpor...
Liberty Expedia Holdings And Expedia Explore A "Downstream Merger"
February 6, 2019 - Bulletin Print Report
Several years ago, Liberty Interactive, ("LI"), in a "split-off" transaction, distributed to its shareholders its stock inLiberty Expedia Holdings, In...
Inventor Entitled To Capital Gains Treatment
February 6, 2019 - Bulletin Print Report
AM began his career with American Express, eventually rising to the level of "project manager." In December 2001, he joined HIG as vice president of business developm...
Can A Partial Liquidation Be Non Pro Rata?
February 5, 2019 - Volume 13 Issue 24 Print Report
X corporation, ("X"), has outstanding 100 shares of a single class of votingcommon stock, 90 shares of which were owned by Mr. A and 10 shares of whic...
Pollution Control Equipment Exempt From Property Tax
February 5, 2019 - Bulletin Print Report
Personal property is generally exempt from taxation in Minnesota, ("M"). Personal property which is part a pipeline system transporting or distributing water, gas, cr...
Intercompany Payments Are Not "Taxes"
February 5, 2019 - Bulletin Print Report
There are, generally, two types of corporation income tax reporting methods used by the States. Non-separate reporting permits a designated entity to file one tax return on beh...
Pension Plan Is Creditor Of "Remainco"
February 5, 2019 - Bulletin Print Report
Distributing, ("D"), is a publicly traded corporation and is the common parent of a consolidated group engaged in each of Business A and Business B. D maintains two q...
Identifying The Accounting "Acquirer"
February 4, 2019 - Bulletin Print Report
In most business combinations, it is obvious which of the parties is properly treated as the accounting "acquirer." The accounting acquirer applies "acquisition...
Coach Nick Saban Secures (Part Of) A Worthless Debt Deduction
February 4, 2019 - Bulletin Print Report
Mr. Joseph Spinoza, ("S"), is a successful real estate developer. S organized two companies, PR I and PR II, (collectively, "PR"), to acquire and develop tw...
ZAYO Comparable Will Earn "Rents From Real Property"
February 4, 2019 - Bulletin Print Report
The taxpayer, ("TP"), a domestic corporation, elected to be taxed as a real estate investment trust, ("REIT"). TP leases systems composed of permanently aff...
Florida Publisher Denied Sales Tax Refund
February 4, 2019 - Volume 13 Issue 23 Print Report
The issue, in a recent State of Florida administrative tax proceeding, was whether the taxpayer, (TPC), showed, by a "preponderance of the evidence", that i...
Unambiguous Election Cannot Be Disavowed
February 1, 2019 - Bulletin Print Report
Appellants employed a tax professional toprepare their joint federal incometax returns. In 2013 and 2014, the preparer made significant errors affecting Appellants&...
State Court Judges Can Allocate Dependency Exemptions
February 1, 2019 - Volume 13 Issue 22 Print Report
I and H were married in 2004 and were separated in 2010. By a judgment of divorce dated April 27, 2011, I, the wife, was awarded physical custody of the children. The...
Wage And Salary Tax Not An "Income" Tax For FTC Purposes
January 31, 2019 - Bulletin Print Report
Petitioners, AF and RF, were residents of Guam in 2013. AF (the petitioner husband) had income from employment with a company based in the Commonwealth of the Northern Mariana...
The Long Reach of Sec. 83
January 31, 2019 - Volume 13 Issue 21 Print Report
GDC (the "company") was formed in 1970. A joined the company as vice-presidentfor finance and administration. The company agreed to sell A 40,000 shar...
Hotel "Consumables" Not Eligible For "Sale-For-Resale" Exemption
January 30, 2019 - Bulletin Print Report
Alamo Building Management L.P., ("A"), owns the Drury PlazaHotel San Antonio Riverwalk, ("DPH"), in San Antonio, Texas. A charges its customers for th...
Stock Subject To a Right of First Refusal Is Common Stock
January 30, 2019 - Volume 13 Issue 20 Print Report
X corporation, (X), issued shares of new voting common stock and shares of new nonvoting common stock pro rata to its shareholders in exchange for shares of its outst...
Government Proves Timely Existence And Mailing Of "90-Day Letter"
January 29, 2019 - Bulletin Print Report
Mr. M failed to file timely federal income tax returns for tax years 2002 and 2009, and the Government levied tax assessments. Mr. M maintains that those assessments are invali...
REITs and Partnerships
January 29, 2019 - Volume 13 Issue 19 Print Report
TP is a Real Estate Investment Trust, (REIT). TP owns a portfolio of commercial properties on its own behalf as well as through joint ventures, each of which are trea...
Retail Copy Shops Are Not Manufacturers
January 29, 2019 - Bulletin Print Report
The taxpayer, ("TP"), provides equipment loans and leases to small businesses and middle market companies, including "retail copy shops." In most instances,...
Adjusting The Three-Factor Apportionment Formula Not Warranted
January 28, 2019 - Bulletin Print Report
TP is in the business of lending money to customers across the country, primarily through credit cards and other personal loan products. The vast majority of TP's activitie...
Contract Driver Not Taxpayer's Employee
January 28, 2019 - Bulletin Print Report
Q is a business that connects drivers with customers who need too-large-to towvehicles driven to them. Q contracted with D to pair him with customers needing this service...
"DSM" Expenditures Can Be Deducted
January 28, 2019 - Volume 13 Issue 18 Print Report
X corporation, (X), a public utility, is primarily engaged in generating and distributing electrical energy. In 1995, X provi...
Fertilizers Are Not "Propagative Material"
January 25, 2019 - Bulletin Print Report
WE is a California limited liability company that sells fertilizers and pesticides to Arizona farmers. WE argues that the sales are exempt (from Arizona's "transaction...
G.E.'s Distribution Of Spinco's Stock Will Now Be Taxable
January 25, 2019 - Bulletin Print Report
WabtecCorporation, ("WAB"), and General Electric Company, ("GE"), announced today they have modified the terms of their merger agreement in a manner t...
Rate Increase Is Not "Insurance Or Otherwise"
January 25, 2019 - Volume 13 Issue 17 Print Report
TP, a public utility, abandoned a partially completed nuclear generating plant. The state commission with rate-making authority over TP, in determining to grant TP a...
"Foreign" Corporation Subject To NYC Tax On Sale Of Passive Holding
January 24, 2019 - Bulletin Print Report
Petitioner, ("P"), is a Delaware corporation. P's stock is owned by two entities: 96.42 percent by OLP, and 3.58 percent by QPOLP, (collectively, "POE")...
Option Granted In Connection With The Performance Of Services
January 24, 2019 - Volume 13 Issue 16 Print Report
C is an 'S' corporation operating a very successful"pay-day" loan business. D is actively involved in C's operations. In 2001, when his fo...
Rights Distribution Excluded From Gross Income
January 23, 2019 - Volume 13 Issue 15 Print Report
X corporation, (X), believed to be AT&T,issued Rights to its shareholders. Upon exercise of 35 Rights and the payment of $100 in cash, the holder will recei...
Oil Tanks Are "Immovable" Property
January 23, 2019 - Bulletin Print Report
The Collector audited TP for sales and use tax for the periods beginning December 31, 2012 and ending October 31, 2015. As a result of this audit, the Collector issued a Notice...
Kentucky Affiliated Group Not Found
January 23, 2019 - Bulletin Print Report
WA is a South Carolina corporation. It owns all of the voting power and all of the ownership interest in WFK. WFK conducts business throughout the Commonwealth of Kentucky. WFK...
Can Mastercard, Inc. Deduct Its EC Fine?
January 23, 2019 - Bulletin Print Report
The European Commission, ("EC"), has fined "the card scheme" Mastercard, Inc., ("M") over 570 million euros "for limiting the possibility for...
FDC Will Likely Undergo An "Ownership Change"
January 22, 2019 - Bulletin Print Report
Fiserv, ("FISV"), and First Data Corporation, ("FDC"), announced that their boards of directors have unanimously approved "a definitive merger agreemen...
A Rental Real Estate Enterprise Can Be A Trade Or Business
January 22, 2019 - Bulletin Print Report
Sec. 199A was enacted on December 22, 2017, as part of the Tax Cuts and Jobs Act, Public Law 115-97.Congress enacted Sec. 199Ato provide a deduction to non-corporat...
Tax-Withholding Transaction Does Not Invoke Sec. 16(b)
January 22, 2019 - Bulletin Print Report
WPX Energy, Inc., ("WPX"), established an Incentive Plan, (the "Plan"), that allows officers and employees to acquire or increase their equity ownership in...
The Willens Deal Survey January 2019
January 22, 2019 - The Deal Survey: January 2019 Print Report
Welcome to our summary of deals for January 2019. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database. <...
Sec. 332 Gain Is Not "An Item of Income"
January 22, 2019 - Volume 13 Issue 14 Print Report
TPs elected 'S' corporation status for P Corporation, (P). TPs contributed to P all of the shares of a C Corporation, (S), they owned. P filed an election to...
Sales "To The Public" Are Taxable
January 18, 2019 - Bulletin Print Report
MGC operates corporate cafeterias throughout the Kansas City metropolitan area. The Federal Reserve Bank of Kansas City, (the "Bank"), contracted with MGC to operate...
PCG's Potential Tax Deductions
January 18, 2019 - Bulletin Print Report
We have been asked whether some sort of "public policy" doctrine or rule would prevent Pacific Gas & Electric Co., ("PCG"), from securing tax deductions...
Absence of Consent Permits Theft Loss Deduction
January 18, 2019 - Volume 13 Issue 13 Print Report
The taxpayer, (H), had a stormy relationship with her boyfriend. The relationship was marked by intimidation and physical abuse. &nb...
I.R.S. To Waive Certain Underpayment (Of Estimated Tax) Penalties
January 17, 2019 - Bulletin Print Report
Sec. 6654 of the Internal Revenue Code provides that, in the case of an individual, estimated income tax is required to be paid in four installments and the amount of any requi...
Taxpayer Not First-Time Homebuyer
January 17, 2019 - Volume 13 Issue 12 Print Report
On January 1, 2008, petitioner ("P")requested a withdrawal of $20,000 from herMorgan Stanley retirement account. P listed the KC property as the...
Inherited IRA Found To Be Exempt From Attachment
January 16, 2019 - Bulletin Print Report
MA's mother, NA, owned an IRA, and MA was designated at the "Transfer on Death" recipient. After NA passed away, MA caused a trustee-to-trustee transfer to occur...
Accrued Dividends In Redemptions
January 16, 2019 - Volume 13 Issue 11 Print Report
Plaintiff is a wholly-owned subsidiary of CEC. Plaintiff ("C") serves as the sales outlet for its parent, operating through branches scattered across the co...
Can New Disney Spin-Off The RSNs?
January 16, 2019 - Bulletin Print Report
Apparently, the Justice Department will permit New Disney to divest the regional sports networks, ("RSNs"), it will be acquiring in the Fox acquisition by means of a...
CQH's Merger With LNG Constituted A Reorganization
January 15, 2019 - Bulletin Print Report
Cheniere Energy, Inc., ("LNG"), several years ago, created CheniereEnergy Partners LP Holdings, ("CQH"), as a vehicle through which institutional inve...
"Time Phased Voting" Successfully Used In An "RMT" Transaction
January 15, 2019 - Volume 13 Issue 10 Print Report
Distributing, ("D"), conducts Business A and Business B. D has a single class of voting common stock outstanding. D also has two classes of preferred stock outstandin...
Newmont Mining Corporation "Gives Its Two Cents"
January 15, 2019 - Bulletin Print Report
Newmont Mining Corporation, ("NEM"), a corporation existing under the laws of Delaware, and Goldcorp, Inc., ("GG"), a corporation existing under the laws of...
Gain Included In Sales Factor Ratio
January 15, 2019 - Bulletin Print Report
For 2011, Davis Lynch Holding Co. Inc., ("DL"), was a Texas corporation that did not conduct any direct business in the state of Louisiana, ("L"). DL owned...
Equity Method Income Included In Sales Factor Ratio
January 15, 2019 - Bulletin Print Report
Boyd Gaming Corporation, ("B"), is incorporated in Nevada. B owns two Louisiana, ("L"), subsidiaries, BK and BLR. BK owns and operates the Treasure Chest Ca...
Maxar Technologies Has "Domesticated" To The U.S.
January 14, 2019 - Bulletin Print Report
Recently, MaxarTechnologies, Inc., ("MUS"), a newly-created Delaware corporation, became the ultimate parent corporation of MaxarTechnologies, Ltd., (&quo...
How Are Service Receipts Apportioned To Texas?
January 14, 2019 - Bulletin Print Report
TP provides an online service allowing customers to search, select, and reserve spaces at airport parking facilities in both the United States and Canada. A third-party web hos...
No Change In Domicile Without Physical Presence
January 14, 2019 - Volume 13 Issue 9 Print Report
Two classes of residents for Virginia income tax purposes are domiciliary residents and actual residents, as set forth in Virginia Code Sec. 58.1-302.  ...
Sec. 505 Does Not Address Tax Liabilities Of A Non-Debtor
January 11, 2019 - Bulletin Print Report
AWA, ("Debtor," or "D"), filed a petition in bankruptcy pursuant to Chapter 11 of the Bankruptcy Code onMay 30, 2013. The case was later converted to...
New York "Decouples" From Tax Cuts And Jobs Act
January 11, 2019 - Bulletin Print Report
Since New York State's individual income tax return is based on federal taxable income, the changes made by the Tax Cuts and Jobs Act, ("TCJA"), "may affect...
Some Environmental Remediation Costs Must Be Capitalized
January 11, 2019 - Volume 13 Issue 8 Print Report
X corporation, (X), owns and operates a manufacturing plant that produces property that is inventory in X's hands. X's manufacturing operations discharge haza...
Congressional Staffer's "Tax Home" Was In Washington D.C.
January 10, 2019 - Bulletin Print Report
MS was a Deputy Chief of Staff for Congressman Chip Cravaack. In a typical month, she spent 12-15 working days in Washington D.C. and 6-10 in Minnesota. On Schedule A of the Fo...
Minor Children and the "548 Day Rule"
January 10, 2019 - Volume 13 Issue 7 Print Report
P is a New York domiciliary who intends to live and work in a foreign country. P is married and has one minor child but hewill be legally separated from his spo...
Liquidation Of Sears Holdings Corporation Will Produce Capital Losses
January 9, 2019 - Bulletin Print Report
Apparently, the odds have substantially increased that Sears Holdings Corporation, ("SHC"), will not be reorganized but, instead, will be completely liquidated in a t...
Capital Loss Not "Sourced" In New York
January 9, 2019 - Volume 13 Issue 6 Print Report
Petitioner (P) was a resident of Colorado in 2005. He filed a New York State nonresident and part-year resident personal income tax return. &nbs...
Fox Corporation Files Form 10--Spin-Off Tax Treatment Remains Murky
January 8, 2019 - Bulletin Print Report
The Form 10 for Fox Corporation, ("New Fox"), was filed yesterday. The filing describes in detail the first part of the Walt Disney Co./Twenty-FirstCentury Fox,...
Voluntary Surrender Of Stock By A "Dominant" Shareholder
January 8, 2019 - Bulletin Print Report
On December 27, 2018, Mr. EddieLampert, of ESL Investments, Inc., "returned to Sears Holdings Corporation, ("SHC"), 1,327,137 shares of common stock of the...
Form and Substance in Sec. 332
January 8, 2019 - Volume 13 Issue 5 Print Report
Minority shareholders owned 25 percent of the stock of X Corporation, (X). The remaining 75 percent of the stock was owned by Y Corporation, (Y). Y desired to liquida...
BMY Will Acquire CELG
January 7, 2019 - Bulletin Print Report
Bristol-Myers Squibb Co., ("BMY"), and Celgene Corporation, ("CELG"), announced that they have entered into a definitive merger agreement in connection with...
Does Sec. 1234A Apply To CVRs?
January 7, 2019 - Bulletin Print Report
The transaction in which Bristol-Myers Squibb, Co.,("BMY"), will acquire all of the stock of CelgeneCorporation, ("CELG"), features, as an integ...
Dividends on Nonvoting Stock Carry Foreign Tax Credits
January 7, 2019 - Volume 13 Issue 4 Print Report
X is a domestic corporation. Y is a foreign corporation organized under the laws of Country Z. Y will have two classes of stock, voting and nonvoting. All shares of s...
Malt Product Properly Taxed At "Wine" Rates
January 4, 2019 - Bulletin Print Report
P is a malt based beverage alcohol product which C1 manufactures in Illinois. In 2010, the Food and Drug Administration, ("FDA"), acknowledged that P is a "malt...
Conversion Ratio Alterations Have Tax Consequences
January 4, 2019 - Bulletin Print Report
On August 9, 2018, Microchip Technology, Inc. declared a quarterly cash dividend to the holders of its common stock in the amount of $0.364 per share. As a result of the declar...
Sec. 269 Does Not Deny Statutory Benefits
January 4, 2019 - Volume 13 Issue 3 Print Report
Husband and Wife have operated a hog farm since 1949. On January 1, 1988, Husband, Wife, and Son (TPs)exchanged their dwellings, automobiles, crops and farming...
Farmer Not "Agent" Of The Federal Government
January 3, 2019 - Bulletin Print Report
APP purchased sheet metal for a feed barn that was constructed on its farmland. The feed barn will be employedby APP to feed meat producing cattle and store excrement for...
Has ESL Investments Given Up On Acquiring Sears' NOLs?
January 3, 2019 - Bulletin Print Report
On December 28, 2018, ESL Investments, Inc., the vehicle controlled by the legendary investor Eddie Lampert, floated a revised proposal for the acquisition of Sears Holdings Co...
Fiduciaries Can Execute "Triple Eye" Agreements
January 3, 2019 - Volume 13 Issue 2 Print Report
X corporation, (X), has outstanding a single class of commonstock 1/2 of which was owned by a father and the other 1/2 by his son. Under the constructive owners...
AMT Credits Will Provide Cash Infusions Beginning In 2019
January 2, 2019 - Bulletin Print Report
One of the lesser known elements of the Tax Cuts and Jobs Act, ("TCJA"), was the outright repeal, for corporate taxpayers, of the Alternative Minimum Tax for taxable&...
Wal-Mart.com Is A "Dealer" Responsible For Sales Tax
January 2, 2019 - Bulletin Print Report
Wal-Mart.com USA, LLC, ("W"), operates an online marketplace, (the "M"), where it, along with third-party retailers, sell their goods. W sells inventory it...
Qualified Plan Not a "Conduit" Entity
January 2, 2019 - Volume 13 Issue 1 Print Report
In 1990, L established a defined-benefit plan which he converted in 1996 into a profit-sharing plan, both of which were qualified plans under Sec. 401 of the Internal...
Payments To Local Governments May Be Deducted Under Sec. 162
December 31, 2018 - Bulletin Print Report
Sec. 162(a) of the Internal RevenueCode allows a deduction for all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade o...
Extinguishment Of "Forgivable" Loan Produces Ordinary Income
December 31, 2018 - Bulletin Print Report
Robert A. Connell, ("C"), has been a financial adviser since 1974. In 1980, C joined Smith Barney, remaining there until 2009. By 2009, C and his team had assets unde...
Dell Technologies Completes The "Class V" Transaction
December 31, 2018 - Bulletin Print Report
On December 28th, Dell Technologies, Inc., ("DTI") announced "the successful completion of the Class V transaction following approval of the transaction by its s...
Related Party Exchange Not Obscured by Presence of "QI"
December 31, 2018 - Volume 12 Issue 250 Print Report
Dealer, (D), sells a certain type of equipment at retail. Taxpayer, (TP), leases that sametype of equipment to unrelated customers. TP and D are related parties...
Court Calculates "QEZE" Credits Of 'S' Corporation Shareholder
December 28, 2018 - Bulletin Print Report
PCC is an 'S' corporation. PCC constructs commercial buildings, primarily in New York and Virginia. It was certified as a qualified empire zone enterprise, ("QEZE&...
Taxpayer Denied Dependency Exemptions and Child Tax Credits
December 28, 2018 - Volume 12 Issue 249 Print Report
The taxpayer, (P), was married to MS until March 17, 2005. P and MS had two children, MMS and MAS, who were born in 2000 and 2002, respectively. On March 17, 2005, P...
Inventory Liquidation Proceeds Can Be Distributed in Partial Liquidation
December 27, 2018 - Volume 12 Issue 248 Print Report
X operated a full line department store which offered a comprehensive selection of brand merchandise and a number of services, and also offered a variety of credit ar...
New Jersey's "MLP Fee" Is Constitutional
December 27, 2018 - Bulletin Print Report
Under the Gross Income Tax ("GIT") Act, an entity classified as a partnership for federal income tax purposes is required to file an informational return showing all...
Wash Sale Considerations For Year-End Tax Loss Sellers
December 26, 2018 - Bulletin Print Report
The market's swoon has left many investors with unrealized losses that, if they were recognized, could shelter from taxation capital gains recognized earlier in the year. (...
New Jersey's Enlightened Approach To "GILTI" And "FDII"
December 26, 2018 - Bulletin Print Report
The Tax Cuts and Jobs Act, ("TCJA"), (P.L. 115-97), was signed into law by President Trump on December 22, 2017. The TCJA added Sec. 951A and Sec. 250 to the Internal...
Express Scripts/Cigna...One More Thing
December 26, 2018 - Bulletin Print Report
New Cigna, (NC), recently completed its "double dummy" acquisition of the stock of Old Cigna, (OC), and Express Scripts, (ES). NC, through the mechanism of twin rever...
'S' Election Constitutes "Reasonably Equivalent Value" For a Transfer
December 26, 2018 - Volume 12 Issue 247 Print Report
N is a Georgia corporation that operated approximately 150 Waffle House restaurants in Georgia, Florida, and Virginia. On March 1, 1991, S, a shareholder of N, execut...
T-Mobile's "Outside Plant" Is Taxable Real Property
December 24, 2018 - Bulletin Print Report
T-Mobile, ("TM"), owns large cellular datatransmission equipment that it has installed on the exterior of buildings in Mount Vernon, New York. The installations...
Perrigo Co. plc Hit With Irish Tax Assessment
December 24, 2018 - Bulletin Print Report
EP, a subsidiary of Perrigo Co. plc, will file an appeal with the Irish Tax Appeals Commission regarding a Notice of Assessment issued to EP by "Irish Revenue." The N...
Training Costs Are Deductible
December 24, 2018 - Volume 12 Issue 246 Print Report
Sec. 162 and Reg. Sec. 1.162-1(a) allow a deduction for all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or b...
Foreign Partners Taxed On Disposition Of U.S. Partnership Interests
December 21, 2018 - Bulletin Print Report
The Tax Cuts and Jobs Act, ("TCJA"), added Sec. 864(c)(8) to the Internal Revenue Code. That section effectively overturns the taxpayer-friendly decision handed down...
Express Scripts And Cigna Engage In A "Double Dummy" Transaction
December 21, 2018 - Bulletin Print Report
Cigna Corporation, ("CC"), has finally completed its businesscombination with Express Scripts Holding Co., ("ESH"), effective December 20, 2018. The t...
"Dormant" License Used In The Regular Course Of Business
December 21, 2018 - Bulletin Print Report
Y and Y's wholly-owned subsidiaries are telecommunications companies headquartered outside of the State of Michigan that provide "landline and wireless services."...
Personal Service Contracts and PHCs
December 21, 2018 - Volume 12 Issue 245 Print Report
M is engaged in the business of music recording. M has issued and outstanding 1,020 shares of common stock and each of M's six individual shareholders own 170 sha...
Withholding Tax Should Not Be Imposed On The "New Fox" Distribution
December 20, 2018 - Bulletin Print Report
The Fox/Disney transaction features a substantial distribution, by Fox, to its shareholders with respect to its stock. The question has arisen whether, with respect to foreign...
Use Of Private Vehicles Permitted By P.L. 86-272
December 20, 2018 - Bulletin Print Report
Is delivery of tangible personal property via private vehicles, instead of a common carrier, considered a protected activity under P.L. 86-272? The answer is yes. P.L. 86-272 s...
Extracted Asset Not Part of the Consideration Received For Stock
December 20, 2018 - Volume 12 Issue 244 Print Report
For many years prior to December 20, 1955, petitioner (P) owned and controlled all of the 8,243 outstanding shares of stock of W-M....
The Willens Deal Survey December 2018
December 19, 2018 - The Deal Survey: December 2018 Print Report
Welcome to our summary of deals for December 2018. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database....
"MFP" Payments Are To Be Included In Gross Income
December 19, 2018 - Bulletin Print Report
The United States Department of Agriculture, ("USDA"), "Trade Aid Package" is a temporary assistance program designed to assist farmers who experience a fin...
"Sale-For-Resale" Exception Not Met
December 19, 2018 - Bulletin Print Report
P is a single-member limited liability company. P's sole member is M. The president of M is S. In December 2011, P purchased an aircraft from an Indiana-based vendor for $1...
Futures Contracts Generate RIC Qualifying Income
December 19, 2018 - Volume 12 Issue 243 Print Report
Fund, (F), intends to file an election to be taxed as a regulated investment company (RIC). F's objective is to achieve broad equity exposure while reducing risk...
DISC Commission Payments Are Not Constructive Dividends
December 18, 2018 - Bulletin Print Report
The tax code allows companies to avoid corporate tax on export income up to four percent of gross export receipts, by paying that amount as tax-deductible commissions to a DISC...
Gifts Deemed Made In Contemplation Of Death
December 18, 2018 - Bulletin Print Report
In 2001, C executed a last will and testament. In 2012, $5.1 million was transferred by her. A federal gift tax return was prepared for 2012. Almost all of the $5.1 million was...
Son's Purchase Does Not Cause Acquisition Of Prohibited Interest
December 18, 2018 - Volume 12 Issue 242 Print Report
A and his son, B, each owned 50 percent of the stock of a corporation since the date of its incorporation. The corporation re...
"RBIGs" Can Arise Even When The Asset Is Not Disposed Of
December 17, 2018 - Volume 12 Issue 241 Print Report
Sec. 382 of the Internal Revenue Code provides that, after an "ownership change," the amount of a loss corporation's taxable income for any post-change year that...
CVS Health Corp. Completes Its Acquisition Of Aetna, Inc.
December 17, 2018 - Bulletin Print Report
On November 28, 2018, CVS Health Corporation, ("CVS"), completed its historic acquisition of Aetna, Inc., ("AET"). The transaction was structured as a "...
The "Individual Mandate" Is Ruled To Be Unconstitutional
December 17, 2018 - Bulletin Print Report
The Affordable Care Act, ("ACA"), was signed intolaw by President Obamaon March 23, 2010. The ACA established a requirement to maintain "minimum esse...
Are AABA And BABA Substantially Identical?
December 14, 2018 - Bulletin Print Report
Investors who purchased shares in Alibaba Group Holding, Ltd., ("BABA"), within the last six months or so will probably have sustaineda "paper" loss w...
Taxable "Employment Service" Not Provided
December 14, 2018 - Bulletin Print Report
In a 2003 contract, S agreed to "furnish, manage and supervise" supplemental staffing to KK's parent company, a division of M. In October 2009, M and S entered in...
"Covered Transactions"
December 14, 2018 - Volume 12 Issue 240 Print Report
On Date 5, the following steps were taken to effectuate the merger transaction (the "Transaction"): (1) C1 formed P, and P formed Sub 1 and Sub 2; (2) Sub 1...
Debtor's "Managed" I.R.A. Exempt From Creditors' Claims
December 13, 2018 - Bulletin Print Report
P was employed by Charles River Associates, ("CRA"), from July 22, 2015 to May 15, 2016. Upon termination of P's employment, CRA made a demand that P return a sum...
Dell Shareholders Overwhelmingly Approve The "Class V Transaction"
December 13, 2018 - Bulletin Print Report
Dell Technologies, Inc., ("DTI"), has several classes of stock outstanding. It has 409.5 million Class A common shares outstanding; 136.9 million Class B common share...
Rents and Royalties Not Passive Investment Income
December 13, 2018 - Volume 12 Issue 239 Print Report
Company, (C), elected to be an 'S' corporation, effective on Date "B." C has C corporation earnings and profits. C owns and operates radio stations...
Out-Of-State Delivery Does Not Avoid Imposition Of Sales Tax
December 12, 2018 - Bulletin Print Report
R is an Indiana corporation that owns and operates an RV dealership. Many of its sales happen online. In typical online sales, once the parties agree on a price, R sent a purch...
Prohibited Transaction Ends IRA Deferral
December 12, 2018 - Volume 12 Issue 238 Print Report
In 2001, F identified AFS as an "attractive business opportunity." F and P engaged B to assist in structuring the purchase of AFS's assets. B presented...
Sec. 338(h)(10) Election Leads To Partial Liquidation
December 11, 2018 - Volume 12 Issue 237 Print Report
S is a closely-held corporation that has a single class of stock outstanding. S has directly engaged in a variety of businesses, and before 1996, Business C and Busin...
TVTY To Acquire NTRI
December 11, 2018 - Bulletin Print Report
Tivity Health, Inc., ("TVTY"), and Nutrisystem, Inc., ("NTRI"), announced that they have entered into a definitive agreement under which TVTY"wil...
Five-Factor Allocation Formula Cannot Be Justified
December 11, 2018 - Bulletin Print Report
Plaintiff, ("P"), is a financial services company headquartered in Mt. Laurel, New Jersey. It is a wholly-owned subsidiary of Canon U.S.A., Inc., ("CUSA"),...
Altria Group, Inc. To Invest In Cronos Group, Inc.
December 10, 2018 - Bulletin Print Report
Altria Group, Inc., ("AGI"), announced recently that it has entered into an agreement to acquire newly-issued shares in Cronos Group, Inc., ("CGI"), &...
Louisiana's Tax Credit System Is Unconstitutional
December 10, 2018 - Bulletin Print Report
TPs own an interest in several LLCsand 'S' corporations, (the "Pass-Through Entities"), that transact business in Texas, Arkansas, and Louisiana. TPs pa...
Electronic Version Of A Book Not QPP
December 10, 2018 - Volume 12 Issue 236 Print Report
TP is a publisher of books. TP's activities with respect to its books allow TP to create an electronic version of a book....
ESL Is Proposing A 'G' Reorganization For Sears
December 7, 2018 - Bulletin Print Report
Funds affiliated with ESL Investments, ("ESL"), not surprisingly, have made an "Indicative Bid" to extricate Sears Holdings Corporation, ("Sears")...
Adjustment of Option Terms Not a "Modification"
December 7, 2018 - Volume 12 Issue 235 Print Report
Corporation, (C), owns approximately "X%" of the common limited partnership units of PS and also owns preferred units of PS. C elected to be taxed as a REIT...
Pell Grants Are "Nontaxable Scholarships"
December 6, 2018 - Bulletin Print Report
In 2014, Charles and Anita Waters, ("W"), applied for, and eventually received, a property tax refund which was predicatedentirely upon the "household inco...
Notice of Deficiency Valid But Motion To Dismiss Granted
December 6, 2018 - Volume 12 Issue 234 Print Report
Petitioner, (P), was incorporated in California on April 2, 1986. The California Franchise Tax Board suspended the powers, rights, and privileges of P on March 1, 200...
Tribune Media Co. To Be Acquired By Nexstar Media Group, Inc.
December 5, 2018 - Bulletin Print Report
It appears that Tribune Media Company, ("TMC"), has now found a home. On November 30, 2018, TMCentered into an Agreement and Plan of Merger in connection with w...
Working Capital Can Be Distributed In Partial Liquidation
December 5, 2018 - Volume 12 Issue 233 Print Report
M corporation, (M), was actively engaged in conducting a wholesale appliance distributorship and an outlet for the retail sale of appliances for more than 30 years.
Charge Based On Energy Cost Savings Is "Qualifying" Rent
December 4, 2018 - Bulletin Print Report
TP has elected to be taxed as a real estate investment trust, ("REIT"), under Secs. 856 through 859.TP's activities primarily occur through Operating Partne...
Statute Of Limitations Withstands Constitutional Challenge
December 4, 2018 - Bulletin Print Report
MK worked for Entergyin New York, and he received stock options as part of his compensation. The Ks were relocated to Mississippi, ("M"), in May 2007. The Ks ti...
TESARO Will Have Undergone Multiple Ownership Changes
December 4, 2018 - Bulletin Print Report
GlaxoSmithKline, plc, ("GSK"), and TESARO, Inc., ("T"), have entered into a definitive agreement pursuant to which GSK(through a lower-tier subsidiary...
Divorced Father Not Entitled To Dependency Exemption Deductions
December 4, 2018 - Volume 12 Issue 232 Print Report
S was married to JP, and they had three minor children, M, W, and L. They divorced in 2003. The family court's "Judgment of Absolute Divorce" provided t...
U.S.'s Largest Marijuana Dispensary Denied Tax Deductions
December 3, 2018 - Bulletin Print Report
Under federal law, marijuana, ("M"), is a "Schedule I controlled substance." This means that, under federal law, the manufacture, distribution, dispensation...
CPLP Will Engage In The Partnership Version Of An "RMT" Transaction
December 3, 2018 - Bulletin Print Report
Capital Product Partners, L.P., (CPLP), and DSS Holdings L.P., ("DSS"), a privately held company...have entered into a definitive transaction agreement pursuant to wh...
No Need To Waive Family Attribution
December 3, 2018 - Volume 12 Issue 231 Print Report
X corporation, (X), has outstanding one class of stock consisting of 100 shares of votingcommon stock. Mr. A owned 30 shares and held positions as president and...
Pan American Silver's Plan Of Arrangement Will Be A Reorganization
November 30, 2018 - Bulletin Print Report
As previously reported, Pan American Silver Corporation, ("P"), and Tahoe Resources, Inc., ("T"), both Canadian corporations, have entered into a definitive...
Deemed Paid Foreign Tax Credits On Dividends From Lower-Tier Subs
November 30, 2018 - Volume 12 Issue 230 Print Report
A domestic corporation, P, owns all of the outstanding voting stock of foreign corporation, S1, which, in turn, owns 50 percent of the outstanding voting stock of for...
Retroactive Application Of Tax Law Amendments Was Constitutional
November 29, 2018 - Bulletin Print Report
Petitioner is a power producer that owns and operates power plants. Petitioner is the sole owner and sole member of OHP, LLC, the entity that owns and operates "the Plant....
Trust Found To Materially Participate In Loss Business
November 29, 2018 - Volume 12 Issue 229 Print Report
CT is a testamentary trust established in 1986 under the Last Will and Testament of MKC. F has been the trustee of CT since 1984. The Carter Ranch ("ranch")...
I.R.S. Unveils "Interest Disallowance" Regulations
November 28, 2018 - Bulletin Print Report
One of the signature elements of the Tax Cuts and Jobs Act was the replacement of relatively mild "earnings stripping" rules with a provision that would be much more...
Transfer of Warrants Not Governed By Sec. 83
November 28, 2018 - Volume 12 Issue 228 Print Report
MK is an investment banker and an 87 percent shareholder of ST. KP is a partnership. MK is the sole general partner with a one percent interest. The remaining interes...
UTX Will Separate Its Businesses Via Tax-Free Spin-Offs
November 27, 2018 - Bulletin Print Report
United Technologies Corporation, ("UTX"), announced the completion of the acquisition of Rockwell Collins, Inc., (COL), and, perhapsmore importantly, the compan...
Amusement Device Is An Inherently Permanent Structure
November 27, 2018 - Volume 12 Issue 227 Print Report
BI isa South Carolina corporation with its principal place of business in Virginia. BI is an 'S' corporation. I...
Massachusetts Follows Rev. Rul. 99-5
November 27, 2018 - Bulletin Print Report
In 2006, the appellant and a partner, ("P2"), utilized a lower-tier, disregarded entity, ("S"), to purchase a building located in Quincy, Massachusetts. S w...
United Technologies Poised To Complete Rockwell Collins Deal
November 26, 2018 - Bulletin Print Report
It appears that the last regulatory hurdle has now been cleared and the United Technologies/Rockwell Collins transaction will be consummated within the next few business days....
Relocation Benefits Excluded From Taxable Compensation
November 26, 2018 - Bulletin Print Report
Railroads and their employees are not part of the Social Security system and do not participate in the FICA taxes that fund Social Security. Instead, Congress has established a...
Sec. 351 Is Mandatory
November 26, 2018 - Volume 12 Issue 226 Print Report
Appellants, in 1971, were all shareholders in LC. Appellants B and C were also shareholders in W, each owning 44.44 percent of the stock of that corporation. <...
Settlement For "Lost Profits" Included In Nonresident's New York Income
November 23, 2018 - Bulletin Print Report
Petitioner was a member of RLLC, an insurance company that did business in New York. In 1999, he assigned his interest in RLLC to his wife, M. This assignment resulted in litig...
The Cincinnati Reds Are Not Liable For Use Tax On Bobbleheads
November 23, 2018 - Bulletin Print Report
Major league baseball "has experienced challenges in getting fans to attend games." One enticement is the opportunity to receive unique merchandise--such as bobblehea...
The "All E&P Amount"
November 23, 2018 - Volume 12 Issue 225 Print Report
On Date D, ACQ contributed ACQ stock to S1. T1 and T2 were domestic corporations owned by P. T1 and T2 each transferred substantially all of their assets and liabilit...
Entity Engaged In Mortgage Servicing Is Not A "Financial Corporation"
November 21, 2018 - Bulletin Print Report
The taxpayer, ("TP"), is a specialty financial services company focused on originating, purchasing, selling, and servicing U.S.residential mortgage loans. TP ac...
A "Rebate" Can Lead To a Forfeiture of RIC Status
November 21, 2018 - Volume 12 Issue 224 Print Report
R and S are eachregulated investment companies (RICs). During 1973, R entered into an investment advisory contract agreement with X, an investment adviser, unde...
The Willens Deal Survey November 2018
November 20, 2018 - The Deal Survey: November 2018 Print Report
Welcome to our summary of deals for November 2018. Full reports on some of these transactions can be found via the link in the description, or by searching the company...
Donation of Sec. 1250 Property
November 20, 2018 - Volume 12 Issue 223 Print Report
TP is a State 1 corporation. TP owns certain improved real property (the "B Property"). The B Property contains certain depreciable real property that is &q...
Kerosene Used In "Commercial Aviation" Is Taxed At Lower Rates
November 20, 2018 - Bulletin Print Report
The issue is whether kerosene used in a flight subject to tax under Sec. 4261 or Sec. 4271, ("air transportation taxes"), is taxed at the commercial or noncommercial...
Indiana "URT" Not Deductible In Massachusetts
November 20, 2018 - Bulletin Print Report
Appellant conducted a natural gas distribution operation in Massachusetts and was subject to the Massachusetts corporate excise. Two of the affiliates included in the appellant...
Colfax To Benefit From DJO Global's NOLs
November 20, 2018 - Bulletin Print Report
Colfax Corporation, ("CFX"), announced that it has entered into a definitive agreement to acquire DJO Global, Inc., ("DJO"), "from private equity funds...
I.R.S. Concessions Should Reduce Borrowing Costs
November 19, 2018 - Bulletin Print Report
A U.S. shareholder of a controlled foreign corporation, ("CFC"), is required to include in its gross income "the amount determined under Sec. 956" with resp...
PAAS To Issue CVRs To The TAHO Shareholders
November 19, 2018 - Bulletin Print Report
One of the more interesting deals we have encountered will involve two Canadian mining corporations who are seeking to join forces. Thus, Pan American Silver Corporation, (&quo...
AAPL's Sales Tax Deficiency Is Upheld
November 19, 2018 - Bulletin Print Report
In 2011, the MAC App Store, ("MAS"), was launched. In order to raise awareness of the MAS, Apple, Inc., ("P"), offered a Back to School, ("BTS"),...
Purchase of "Primary" Shares Does Not Spoil a 'B' Reorganization
November 19, 2018 - Volume 12 Issue 222 Print Report
X Corporation, (X), acquired all of the outstanding stock of unrelatedY Corporation, (Y), from the shareholders of Y, in exchange for voting stock of X. X was i...
Gift Of Option Not a "Disposition" Thereof
November 16, 2018 - Volume 12 Issue 221 Print Report
TP is employed by X Corporation, (X). In 1992, X adopted a stock ownership incentive plan (the "Plan"). Under the Plan, the compensation committee of the Bo...
Sec. 304 Will Rarely Turn A Capital Gain Into A Dividend
November 16, 2018 - Bulletin Print Report
Certain recent deals, including the landmark Disney/Fox transaction and the Takeda/Shire transaction, have been structured as acquisitions by the acquiring corporation of the s...
Dell Sweetens Its Offer For Its Class V Stock
November 16, 2018 - Bulletin Print Report
Some of the most prominent and successful investors in the country have exerted pressure on Dell Technologies, Inc., ("DTI") to sweeten the terms of its so-called &qu...
IPO And Mergers Produce "Global" Sec. 351 Transaction
November 15, 2018 - Volume 12 Issue 220 Print Report
ACQ was formed in Year 1 as a State A corporation. Its goal was to become "a leading consolidator and operator of Business 1 and Business 2." &nbs...
Taxpayer Did Not Conclusively Abandon His Virginia Domicile
November 15, 2018 - Bulletin Print Report
In the state of Virginia, as in most states, two classes of "residents" exist--a "domiciliary" resident and an "actual" (or statutory) resident, a...
Is Altaba Planning To Completely Liquidate?
November 15, 2018 - Bulletin Print Report
It is now, based on our informal survey, generally believed that Altaba, Inc., ("AABA"), is headed towards a complete liquidation; and that the possibility of engagin...
G.E. To Sell Down Its BHGE Stake
November 14, 2018 - Bulletin Print Report
Baker Hughes, a GE company, ("BHGE") announced that General Electric Company, ("GE"), BHGE's principal shareholder, has commenced a secondary offering o...
Permanent and Total Disability
November 14, 2018 - Volume 12 Issue 219 Print Report
Under certain circumstances, Virginia Code Sec. 58.1-322(C)(4)(b) provides an individual income tax subtraction for up to $20,000 of "disability income" as...
Deemed Repatriation Under Sec. 965 Excluded From Sales Factor
November 14, 2018 - Bulletin Print Report
The question presented is "can sales factor representation" be given to accumulated post-1986 deferred foreign income of foreign corporations included in federal taxa...
State Taxes Are Deductible In Kentucky (For Corporate Taxpayers)
November 14, 2018 - Bulletin Print Report
The Kentucky Department of Revenue has issued a "technical advice memorandum" regarding the deductibility of "state" taxes. For the most part, with some not...
Sec. 351 Is Not Elective
November 13, 2018 - Volume 12 Issue 218 Print Report
G is an individual who for many yearshad been engaged in the typesetting and composition business. In April, 1950, several ofG's employees organized C...
Right To Receive "Brownfield" Credits Is A "Receivable"
November 13, 2018 - Bulletin Print Report
The taxpayer, ("TP"), will elect to be taxed as a real estate investment trust, ("REIT"). TP is the sole member of Subsidiary, a disregarded entity. Charity...
Sales Of "Standardized" Software Are Subject To Sales Tax
November 13, 2018 - Bulletin Print Report
Citrix Systems, Inc., ("C"), is a publicly traded Delaware corporation that did business in Massachusetts, ("M"), during the periods at issue. The tax at is...
Takeda's Taxable Acquisition Of Shire
November 12, 2018 - Bulletin Print Report
Takeda has published the "scheme document" in connection with its acquisition of Shire. The acquisition is to be implemented by way of a Court-sanctioned "scheme...
A Parent And Its FSC Are Not "The Same Taxpayer"
November 12, 2018 - Bulletin Print Report
Interest accrues at a higher rate on corporate taxpayers' underpayments than on their overpayments. In 1996, Congress enacted Sec. 6621(d)--"To the extent that, for an...
When Does a Redemption Occur?
November 12, 2018 - Volume 12 Issue 217 Print Report
B owned 37.5 of 50 outstanding shares of stock in A. Sometime during 1966, B representatives and the other A shareholder reached an agreement by which B would surrend...
WGP To "Roll Up" WES
November 12, 2018 - Bulletin Print Report
Western Gas Partners, L.P., ("WES"), and Western Gas Equity Partners, L.P., ("WGP"), announced that they have entered into a merger agreement pursuant to wh...
Disregarded Entity Found To Be A Member Of An Affiliated Group
November 9, 2018 - Bulletin Print Report
The taxpayer provided administrative services to insurersof extended service contracts. The taxpayer was a limited liability company, ("LLC"), and a "disre...
Metal Contracts Not Investment Capital
November 9, 2018 - Volume 12 Issue 216 Print Report
A was in the business of providing financial advisory services, including a newsletter, to its clients. A frequently invested for its own account in various securitie...
ZAYO To Engage In A "Taxable" Spin-Off
November 8, 2018 - Bulletin Print Report
ZayoGroup Holdings, Inc., ("ZAYO"), announced that it plans "to separate into two publicly traded corporations: one to focus on providing core communicatio...
Country Music Venue Not Operated For Profit
November 8, 2018 - Bulletin Print Report
JF, together with her husband, bought a music venue called Bell Cove, ("BC"), in 1986. They operated BC until JF's husband died in 1999. JF re-opened BC in 2008....
ESOP Fails To Meet Minimum Coverage Requirement
November 8, 2018 - Volume 12 Issue 215 Print Report
AZ was a surgeon and was the sole owner of GG. Aside from AZ, GG employed five other people. In late 1998, AZ acquired 100 percent of the stock of PSS, a new 'S' corpor...
LL.M. Expenses Not Deductible
November 7, 2018 - Bulletin Print Report
Petitioner, ("P"), earned his law degree from CU, in Spain, in September 2006. That same month he began working as a full-time associate at the Madrid office of PwC....
Taxpayer Not Bound By Form
November 7, 2018 - Volume 12 Issue 214 Print Report
Petitioner, (P), and his brother, W, each owned 50 percent of the outstanding stock in RBB and RIC (the "corporations"). &...
Income From Covered Call Options Is Business Income
November 6, 2018 - Volume 12 Issue 213 Print Report
Petitioner, an investment company, computed its New York State franchise tax report for the fiscal year ending February 28, 1981 on the basis of its allocated busines...
Qui Tam Action Founders On "Tax Bar"
November 6, 2018 - Bulletin Print Report
Appellant initiated a qui tam action under the Minnesota False Claims Act, ("MFCA"), alleging that respondents have intentionally failed to pay fee...
Yoga Classes Constitute "Physical Fitness Services"
November 6, 2018 - Bulletin Print Report
Taxpayer, ("TP"), runs three exercise gyms in downtown Seattle, Washington. TP reports all of its income from its "Fitness Classes" under the "service...
Encana's Stock Will Be Taxable To Newfield's Shareholders
November 5, 2018 - Bulletin Print Report
Encana Corporation, ("ECA"), a Canadian corporation, and NewfieldExploration Company, ("NFX"), announced that they have entered into a definitive agre...
Sales Pursuant To Liquidation Plan Not "Prohibited Transactions"
November 5, 2018 - Bulletin Print Report
The taxpayer, ("TP"), is a real estate investment trust, ("REIT"). JV holds "a%" of the stock of TP. TP owns PortfolioA. PortfolioA co...
When Does A Trust "Materially Participate"
November 5, 2018 - Volume 12 Issue 212 Print Report
Trust A and Trust B are complex trusts that were each created on Date 1. Each owned an interest in X, an 'S' corporation. A owns the remaining interests in X....
GameStop's Trade-Ins Not Excluded From Sales Tax
November 2, 2018 - Bulletin Print Report
GameStop Corporation, ("GS"), is a retailer of new and used video game software, hardware, and accessories.... GS offers its customers a trade-in program in which a c...
Accounting For Franchise Termination Payments
November 2, 2018 - Volume 12 Issue 211 Print Report
TP is a U.S. corporation and a subsidiary of P. On Date 2, TP entered into a franchise agreement with PR, the predecessor in interest to F, whereby PR acquired exclus...
The Mixture Credit Is Not A "Payment" Of Excise Tax
November 2, 2018 - Bulletin Print Report
Since 1932, the United States has imposed an excise tax on various types of fuel, including gasoline. Under Sec. 4081 of the Code, the United States imposes an excise tax on th...
BHP Billiton's Historic Distribution
November 1, 2018 - Bulletin Print Report
BHP Billiton Limited, ("BHP"), recently disposed of its "Onshore US assets" in a transaction in which it realized net proceeds of approximately $10.4 billio...
I.R.S. Will Allow "Deemed" Dividends To Enjoy A DRD
November 1, 2018 - Bulletin Print Report
Before the Revenue Act of 1962, "U.S. shareholders" of controlled foreign corporations, ("CFCs"), were sitting pretty. They were not subject to U.S. tax on...
Debt of Corporation "To The Shareholder"
November 1, 2018 - Volume 12 Issue 210 Print Report
ER is an electing "small business corporation" under Subchapter S of the Internal Revenue Code. TP owns 2/3 of the stock of ERfor which he paid $20,00...
Offer In Compromise Requires Forfeiture Of Loss Carryovers
November 1, 2018 - Bulletin Print Report
Petitioner, ("P"),and his wife submitted an "Offer in Compromise," ("OIC"), to the New York State Department of Taxation and Finance, (the &...
Intellectual Property Is Not Tangible Personal Property
October 31, 2018 - Bulletin Print Report
Sec. 7202 of the Pennsylvania Tax Reform Code of 1971, (the "Code"), provides--(a) There is hereby imposed upon each separate sale at retail of tangible personal prop...
CHK Will Acquire WRD
October 31, 2018 - Bulletin Print Report
Chesapeake Energy Corporation, ("CHK"), and WildHorse Resource Development Corporation, ("WRD"), announced that CHK"has entered into a definitive...
Fantasy Sports Contests Ruled Unconstitutional In New York
October 31, 2018 - Bulletin Print Report
A group of plaintiffs, "who have gambling disorders," brought an action in New York State's Supreme Court requesting that Chapter 237 of the Laws of 2016 of the S...
Sec. 1031 "Identification Letter" Not Timely Delivered
October 31, 2018 - Volume 12 Issue 209 Print Report
After selling certain property in 2003, the Ss purchased additional properties, including the MRP. The Ss claimedthat the transactions were part of a tax deferred exchang...
Taxation Of Benefits Flowing From A "Split-Dollar" Arrangement
October 30, 2018 - Bulletin Print Report
Petitioners, the Ms, were the sole shareholders of MI, an 'S' corporation. JM was also an employee of MI. In 2002, MI adopted the "Sterling Benefit Plan." Pur...
I.B.M./Red Hat--Accounting For Deferred Revenue
October 30, 2018 - Bulletin Print Report
International Business Machines Corporation, ("IBM"), and Red Hat, Inc., ("RHI"), have, as everyone is now aware, entered into a definitive agreement pursua...
Bank Denied An NOL Deduction
October 30, 2018 - Bulletin Print Report
In 2010, NBSC merged with CBT and was renamed SB, ("P"). CBT reported net operating losses ("NOLs") for 2009; NBSCreported NOLs for 2009 and 2010; and...
An "In-House" Qualified Stock Purchase
October 30, 2018 - Volume 12 Issue 208 Print Report
P is the common parent of a consolidated group that conducts a number of businesses, including Business A. S1 is a domestic corporation, 99 percent of the stock of wh...
Office Not A "Permanent Place Of Abode"
October 29, 2018 - Bulletin Print Report
Petitioner, ("P"), and his wife are domiciled in Washington D.C. P is an executive with a New York-based investment management firm that maintains offices on Long Isl...
Incidental Revenue Included In The "TPT" Tax Base
October 29, 2018 - Bulletin Print Report
RTSwas engaged in the business of renting traffic control equipment for use at construction sites and other locations. At times, RTSalso provided traffic control pe...
Some Call Options (Received in a Reorganization) Constitute "Boot"
October 29, 2018 - Volume 12 Issue 207 Print Report
M Corporation, (M), owned seven percent of the outstanding commonstock of Y Corporation, (Y). All of M's preferred stock, which was non-convertible (into co...
More "CVRs"
October 26, 2018 - Bulletin Print Report
Another deal in the healthcare space is using "contingent value rights," ("CVRs"), to provide the selling shareholderswith additional consideration, b...
Invesco Will Acquire Oppenheimer From MMLIC
October 26, 2018 - Bulletin Print Report
Invesco, Ltd., ("IVZ"), has announced an agreement to acquire, from Massachusetts Mutual Life Insurance Company, ("MMLIC"), Oppenheimer Acquisition Corporat...
Abandoning a Partnership Interest--Is the Loss Capital or Ordinary?
October 26, 2018 - Volume 12 Issue 206 Print Report
PRS is a general partnership in which A, B, and C were equal partners. During 1993, PRS became insolvent, and C abandoned C's partnership interest. At the time C...
Corporation Not Disregarded
October 25, 2018 - Volume 12 Issue 205 Print Report
Petitioner, (P), was organized by UT in 1928 to be used as a "security device" in connection with certain Florida realty owned by him. UT conveyed the prope...
The Willens Deal Survey October 2018
October 24, 2018 - The Deal Survey: October 2018 Print Report
Welcome to our summary of deals for October 2018. Full reports on some of these transactions can be found via the link in the description, or by searching the company n...
Periodic Visits By Employees Does Not Constitute 'Doing Business'
October 24, 2018 - Volume 12 Issue 204 Print Report
Petitioner X, (PX), is a corporation with its headquarters and principal place of business in Y. PX sells women's apparel, accessories, and footwear to customers...
ENLK Will "Roll-Up" Into ENLC
October 24, 2018 - Bulletin Print Report
The demise of MLPs, brought on by the reduction in the corporate tax rateand certain regulatory actions, continues apace. The latest MLP to be "rolled-up" into...
D.C. Taxes Due On Transfer Of Realty From Individual To LLC
October 24, 2018 - Bulletin Print Report
Appellant purchased real property in 2002 for $505,000 and recorded the deed in the name of...his sole proprietorship. Ten years later, in order to refinance a mortgage on the...
Grant Of An Option Found To Be A Gift
October 23, 2018 - Volume 12 Issue 203 Print Report
On January 2, 1978, A transferred to B, his son, an option to purchase real property located in State X and owned by A. B paid A $10 upon receipt of the option....
"Sale" Of "Carryout" Bags Not Subject To New York Sales Tax
October 23, 2018 - Bulletin Print Report
The Suffolk County (N.Y.) Legislature recentlyenacted Local Law No. 27-2016.... This Local Law took effect on January 1, 2018. The Local Law was passed to "encourage...
Personal Exemption Deductions And Sec. 36B
October 23, 2018 - Bulletin Print Report
Sec. 11041 of the Tax Cuts and Jobs Act, ("TCJA"), added Sec. 151(d)(5) to the Internal Revenue Code. Sec. 151(d)(5) reduces the amount of the personal exemption dedu...
No Deduction Under Sec. 166 For Debts Owed By "Political Parties"
October 23, 2018 - Bulletin Print Report
An organization files a Return of Organization Exempt From Income Taxation, (Form 990), for each of the taxable years Year 1, Year 2, and Year 3 as an organization described in...
DWDP Provides Information On Spin-Offs
October 22, 2018 - Bulletin Print Report
DowDuPont, (DWDP), is making progress on its promise to separate itself into three publicly traded corporations, each conducting a separate and distinctelement of DWDP...
Drug Wholesaler Not Entitled To Preferential Tax Rate
October 22, 2018 - Bulletin Print Report
AventisPharmaceutic, Inc., a Delaware corporation, transferred all of its business activities and employees to Sanofi-AventisUS LLC, ("Sanofi), a Delaware limi...
Capital Gains Invested In "Opportunity Funds" Can Be Deferred
October 22, 2018 - Bulletin Print Report
One of the more intriguing provisions of the Tax Cuts and Jobs Act, ("TCJA"), is the one that permits certain taxpayers to avoid reporting gains from the sale or exch...
Purchase of Assets Not a "De facto Merger"
October 22, 2018 - Volume 12 Issue 202 Print Report
Between 1999 and 2001, CL incurred a debt to CP of approximately $240,000 for services rendered by CP to CL. On February 7, 2001, A entered into an agreement with CL...
Corporation Denied Investment Tax Credits
October 19, 2018 - Bulletin Print Report
Taxpayer is a corporation and is an owner/member of a limited liability company, ("LLC"). The LLC has installed battery storage cells for storage of electricity. Taxp...
Club's Losses Cannot Offset Its Investment Income
October 19, 2018 - Bulletin Print Report
L is a private country club in Ohio operating as a Sec. 501(c)(7) tax-exempt organization. L derives income from several sources: membership dues and membe...
Repayment of Disallowed T&E Is Deductible
October 19, 2018 - Volume 12 Issue 201 Print Report
The taxpayer and his two brothers are officers and sole and equal shareholders of the Corporation, (C). During an audit of C&...
Inherited I.R.A. Not "Retirement Funds"
October 18, 2018 - Volume 12 Issue 200 Print Report
11 U.S.C. Sec. 522(b)(3)(C) and (d)(12) are identical. Each exempts from creditors' claims any retirement funds to the extent thatthose funds are i...
Why Are There Limitations On HRS's Buyback Capacity?
October 17, 2018 - Bulletin Print Report
Harris Corporation, (HRS), and L3 Technologies, Inc., (LLL), have agreed to combine in an "all-stock merger of equals." After the merger is completed, the combined co...
Accounts Received In A Property Settlement Are Not Exempt
October 17, 2018 - Bulletin Print Report
Mr. L retained S to represent him in his divorce proceeding.... The state court order dissolving the marriage...awarded Mr. L 1/2 of the value in his ex-wife's Wells Fargo...
Incorporation of Proprietorship Does Not Trigger LIFO "Recapture"
October 17, 2018 - Volume 12 Issue 199 Print Report
A proprietorship, (P), manufactures and distributes the "B" brand of Products. P uses the LIFO inventory method and complies with the uniform capitalization...
What About SHLD's NOLs?
October 16, 2018 - Bulletin Print Report
Sears Holdings Corporation, ("SHLD"), as everyone is by now aware, has filed for bankruptcy protection. It does not appear that SHLDis headed for liquidation. I...
Redevelopment Grant Is Qualifying REIT Income
October 16, 2018 - Bulletin Print Report
The taxpayer, ("TP"), has elected to be a real estate investment trust, ("REIT"). TP owns "a%" of the interests in Operating Partnership, ("O...
Texas Still Requires Physical Presence
October 16, 2018 - Bulletin Print Report
The taxpayer, ("TP"), is a California-based company that operates an online platform through which third-party software developers, ("Developers"), make the...
Return of Excessive Compensation Is Deductible
October 16, 2018 - Volume 12 Issue 198 Print Report
V was thepresident and majority shareholderof E, a Pennsylvania corporation. His compensation from E for its fiscal year ended October 31, 1960,cons...
Can Dell Spin-Off (Or Split-Off) VMware?
October 15, 2018 - Bulletin Print Report
Dell Technologies, Inc., ("D"), has two groups of common stock, the DHI Group Common Stock; and the Class V Common Stock. The Class V Common Stock is intended to &quo...
Payments To Minister Found To Be Income
October 15, 2018 - Bulletin Print Report
In 2000, Reverend Wayne R. Felton, ("RF"), and his wife established the Holy Christian Church in West St. Paul, Minnesota. The church relies on contribution envelopes...
Lump Sum Payment Is "Retirement Income"
October 15, 2018 - Volume 12 Issue 197 Print Report
Petitioner, (P), is anonresident of New York. In 2002, Washington Mutual Bank, (WMB), acquired Dime Savings Bank of New York, (D). D was a New York corporation...
New York City Follows Rev. Rul. 99-6 For "UBT" Purposes
October 12, 2018 - Bulletin Print Report
LLC is treated as a partnership for federal tax purposes. The members of LLC are selling their membership interests to PUR. The sale will bestructured as a merger of a wh...
Accounting For Pre-Need Burial Contracts
October 12, 2018 - Volume 12 Issue 196 Print Report
T operates approximately 30 cemeteries in 11 states. T sells burial rights on a both a current need and a pre-need basis. The...
Investment Activities Do Not Create A "Real Estate Professional"
October 11, 2018 - Bulletin Print Report
During the years at issue, Husband, ("H"), was an engineer who worked full time for LKC. Wife, ("W"), held herself out as the property manager of petitioner...
Taxpayer Not Domiciled in Virginia
October 11, 2018 - Volume 12 Issue 195 Print Report
TP contends that she was not a "resident" of Virginia during the 2008 taxable year and should not be subject to Virginia's income tax. The Virginia Depa...
Assignment Of Lease Does Not Permit Refund Of Sales Tax
October 10, 2018 - Bulletin Print Report
On May 15, 2014, petitioner, a resident of New York State, entered into an agreement for the lease of an automobile with BMW Financial Services. The lease was a "36-month...
The Arm's Length Standard Is Alive And Well In Utah
October 10, 2018 - Bulletin Print Report
See's Candies, Inc. ("S"), and Columbia Insurance Company, ("C"), are each wholly owned subsidiaries of Berkshire Hathaway, Inc., ("BH"). In 1...
Income From Derivatives Is Qualifying Income
October 10, 2018 - Volume 12 Issue 194 Print Report
C is a publicly traded partnership (PTP or MLP). C engages in terminaling and storage services for petroleum products and by-products and natural gas services....
The Child Tax Credit Is Not A "Public Assistance Benefit"
October 9, 2018 - Bulletin Print Report
Debtor was owed a federal tax refund as well as a State of Illinois tax refund. A portion of the federal tax refund was generated by a Child Tax Credit, ("CTC"), clai...
ESV And RDC Announce A Business Combination
October 9, 2018 - Bulletin Print Report
Ensco plc, ("ESV"), and Rowan Companies plc, ("RDC"), jointly announced, on October 8th, that "the companies have entered into a definitive transaction...
Net Assets New Hampshire Style
October 9, 2018 - Volume 12 Issue 193 Print Report
On April 11, 2011, the taxpayer filed an appeal with the City of Nashua, New Hampshire, (the City), for an "elderly exemption" for tax year 2011. The applic...
MSG Will Create A "Pure Play" Sports Company
October 8, 2018 - Bulletin Print Report
Not surprisingly, The Madison Square Garden Company, ("MSG"), has decided to actually pursue the spin-off transaction that the company had been studying over the past...
Rewritten Orders Eligible For Massachusetts Sales Tax "Holiday"
October 8, 2018 - Bulletin Print Report
Appellant, ("A"), was a large furniture retailer based in New England. During the periods at issue, the Massachusetts Legislature passed legislation mandating that ve...
Stock Ownership Does Not Require Formal Certificates
October 8, 2018 - Volume 12 Issue 192 Print Report
The question is whether an affiliated group, within the meaning of Sec. 1504(a) of the Internal Revenue Code, exists under the following circumstances. The answer is...
Capital Gains Are Part Of "MAGI"
October 5, 2018 - Bulletin Print Report
Petitioners are a widow and her deceased husband's estate. For simplicity, the court refers to O and L as petitioners. O and L filed a joint income tax return for 2014 and...
Attribution Waiver Not Thwarted by Pre-Redemption Gift
October 5, 2018 - Volume 12 Issue 191 Print Report
X Corporation, (X), has 120 shares of common stock outstanding, all of which are owned by Mr. A, X's President. Mr. A's son, B, has been employed by X for man...
SIR Announces Tax Profile Of Special Distribution
October 4, 2018 - Bulletin Print Report
Government Properties Income Trust, ("GOV"), and Select Income REIT, ("SIR"), have entered into a definitive merger agreement, (the "Merger"). The...
Ruling Requests Accepted For "Debt For Debt Swaps" In A Spin-Off
October 4, 2018 - Bulletin Print Report
In a "Divisive Reorganization," ("DR"), popularly known as a "spin-off" or "split-off," a corporation, ("D"), transfers proper...
Pledgor of Stock Loses Beneficial Ownership
October 4, 2018 - Volume 12 Issue 190 Print Report
X Corporation, (X), was incorporated on Date 1. Subsequent to the organization of X, M, N, O, and P were organized with majority ownership held by X. For the fiscal y...
Bunzl Cannot Escape California Taxes
October 3, 2018 - Bulletin Print Report
UDITPA, ("U"), provides that if the taxpayer is part of a unitary business, it is required to allocate and apportion its income (among the various states in which it...
Taxpayer Unable To Shift Incidence of Tax From Sale of Stock
October 3, 2018 - Volume 12 Issue 189 Print Report
In 1986, RV and TJ formed OSI, Inc., (OSI). In 1995, RV formed several limited liability companies (LLCs). The LLCs elected to be treated as partnerships for tax purp...
The "Shared Responsibility Payment" Is Not An Excise Tax
October 2, 2018 - Bulletin Print Report
The I.R.S. filed a proof of claim in thisChapter 13 case asserting that a portion of its claim is entitled to priority because it is for an "excise tax." Accord...
Voluntary Payments Not Alimony
October 2, 2018 - Volume 12 Issue 188 Print Report
P and R were married from March 12, 1975 through December 7, 2004. On December 7, 2004, a judgment of dissolution (JOD) was entered in the Superior Court of Californi...
Return Of "Excess" Funds Not A "Reversion"
October 2, 2018 - Bulletin Print Report
The "Sponsor" established and maintained "the Plan" for certain of its employees. The Plan is a single-employer, tax-qualified, defined benefit pension plan...
Statutory Ambiguity Works In Favor Of Dish Network LLC
October 1, 2018 - Bulletin Print Report
The principal issue in this case is the extent to which (Connecticut) General Statutes Sec. 12-256(b)(2) imposes a tax on gross earnings from a satellite television operator...
Materials Used For The Construction Of "Lines" Are Taxable
October 1, 2018 - Bulletin Print Report
GTE Communications Systems Corporation, ("GTE"), is a "procurement" company. GTE purchased telephone cables, conduit, and telephone poles from third party v...
A REIT's "Required Distribution"
October 1, 2018 - Volume 12 Issue 187 Print Report
REIT X (RX) holds a partnership interest in P1. P1's taxable year is the calendar year. RX's share of partnership items that RX would have taken into account...
Market Discount Not Affected By Sec. 451(b)
September 28, 2018 - Bulletin Print Report
The Treasury Department and the I.R.S. intend to issue proposed regulations that will "address the applicability of Sec. 451(b) of the Code" to "market discount....
Distributor Of Yellow Pages Subject To New York "Use" Tax
September 28, 2018 - Bulletin Print Report
Petitioner, ("P"), is the purchaser of printed materials, known as the "yellow pages" telephone directories, that are printed outside of New York State. The...
Energy Drink (Not Red Bull) Exempt From NYS Sales Tax
September 28, 2018 - Volume 12 Issue 186 Print Report
The taxpayer, (TP), is a California corporation that makes and distributes a line of products that it describes and labels as "dietary supplements". The pro...
"VPFC" Found To Be A "Forward Contract"
September 27, 2018 - Bulletin Print Report
A variable prepaid forward contract, ("VPFC"), is an agreement between a "short" party (usually the holder ofa highly appreciated stock position) and...
21CF To "Sell" Its Sky Shares To Comcast
September 27, 2018 - Bulletin Print Report
21st Century Fox, ("21CF"), announced, on September 26, 2018,that "it intends to either accept the recommended revised cash offer by Comcast Corporation, (...
Property Not Held "Primarily For Sale To Customers"
September 27, 2018 - Volume 12 Issue 185 Print Report
T is a real estate investment trust, (REIT). T derives interest income primarily from making construction and development loans that are secured by mortgages on real...
Dividends Received From A Foreign Corporation Were Not "QDI"
September 26, 2018 - Volume 12 Issue 184 Print Report
Petitioners, ("Ps"), owned HUS, an 'S' corporation. From January 1995 until November 18, 2008, HUS was treated as owning all the stock of MHK. MHK was incorpo...
SIRI To Acquire P
September 25, 2018 - Bulletin Print Report
Sirius XM Holdings, Inc., ("SIRI"), and Pandora Media, Inc., ("P"), have announced a definitive agreement under which SIRI"will acquire P in an a...
I.R.S. To Expand The Concept Of An "ATB"
September 25, 2018 - Bulletin Print Report
For a spin-off to qualify for tax-free treatment under Sec. 355 of the Internal Revenue Code, numerous requirements must be satisfied. Perhaps the one requirement that is most...
Barrick Gold Announces Acquisition Of Randgold Resources
September 25, 2018 - Bulletin Print Report
The boards of directors of BarrickGold Corporation, ("B"), a Canadian corporation, and Randgold Resources, Ltd., ("R"), a Jersey corporation, announce...
Asset Sale Is Not A Stock Sale
September 25, 2018 - Volume 12 Issue 183 Print Report
TP is a limited liability company formed to develop, own, and operate a private laboratory located in Colorado. In 2008, TP sold its assets. TP transferred all rights...
Termination Payment Found To Be Ordinary Income
September 24, 2018 - Bulletin Print Report
Mr. Jeff Potter, ("P"), began working with Green Country, ("GC"), in the early 1990s. In 1995, P entered into a written independent sales representative com...
Medtronic Will "Roll-Up" Mazor Robotics
September 24, 2018 - Bulletin Print Report
Medtronic plc, ("MDT"), indirectly owns approximately 15 percent of the stock of Mazor Robotics Ltd., ("MZOR"), an Israeli company. The companies have now d...
The I.R.S.'s Views On "Blockage Discount"--AABA Take Note
September 24, 2018 - Bulletin Print Report
A publicly traded U.K. corporation owned all of the stock of a domestic corporation. It disposed of its ownership interest therein through a public stock offering and a second...
"Pre-Partnership" Payments Constitute Ordinary Income
September 24, 2018 - Volume 12 Issue 182 Print Report
TP entered into an agreement on March 15, 1982 with X to form a limited partnership to develop and manage the Y building. For TP's promise to contribute the Y bui...
State Department Employee Not Eligible For Sec. 911 Benefits
September 21, 2018 - Bulletin Print Report
During 2014 and 2015, petitioner, ("P"), worked for the U.S. Department of State in Germany. He was hired in November 2013 as a "local hire civilian employee&quo...
Partnership Is An "Entity" For Purposes of Sec. 1504
September 21, 2018 - Volume 12 Issue 181 Print Report
X is a State A corporation that has made an 'S' corporation election. X actively conducts a venture capital, management and consulting business and is directl...
The Willens Deal Survey September 2018
September 20, 2018 - The Deal Survey: September 2018 Print Report
Welcome to our summary of deals for September 2018. Full reports on some of these transactions can be found via the link in the description, or by searching the company...
Court Restricts Bank's "New Markets Tax Credit"
September 20, 2018 - Bulletin Print Report
Sec. 40-16-4, Ala. Code 1975, imposes a 6.5 percent tax, known as the "FIET," on the net income of every financial institution engaged in...business within this state...
Lowe's Not Entitled To State Tax Refunds
September 20, 2018 - Volume 12 Issue 180 Print Report
Between April 1, 2001 and December 31, 2009, Lowe's, ("L"), sold merchandise at its retail stores. Many customers paid for products using private label credit car...
UNVR To Acquire NXEO
September 20, 2018 - Bulletin Print Report
Univar Inc., ("UNVR"), and Nexeo Solutions, Inc., ("NXEO"), announced that they have entered into a definitive agreement for UNVR to acquire NXEO's stoc...
Obligation Did Not Rise To The Level Of A "Liability"
September 18, 2018 - Bulletin Print Report
In 1980, J began working for the State of New York, ("S"), and was enrolled at that time as a "tier 3" participant in the New York State and Local Retiremen...
Transfer Of "QRP" To A Divorcing Spouse Is A Gift
September 18, 2018 - Volume 12 Issue 179 Print Report
The taxpayer, ("TP"), sold shares of stock in Company, ("C"), to C's employee stock ownership plan, ("ESOP"), for approximately "$C."...
GOV And SIR Will Join Forces
September 18, 2018 - Bulletin Print Report
Government Properties Income Trust, ("GOV"), a REIT, and Select Income REIT, ("SIR"), announced that they have entered into a definitive agreement to merge...
Group Trust Not A Single Qualified Trust
September 17, 2018 - Bulletin Print Report
The taxpayer, (TP), is a pension trust fund that invests in United States real estate. TP holds some of its real estate through real estate investment trusts, ("REITs"...
Allocating Fax Revenues To New Jersey
September 17, 2018 - Bulletin Print Report
Xpedite Systems, Inc., ("X"), is a Delaware-incorporated entity that is headquartered in New Jersey. Its stock is publicly traded. X delivers business advertisements/...
Calculating CODI Under Sec. 108(e)(4)
September 17, 2018 - Volume 12 Issue 178 Print Report
On January 1, Year 1, P issued indebtedness that provides for monthly interest payments of $80,000 payable at the end of each month, and a principal payment of $10,00...
A REIT's "Imputed" Income Will Be "Qualifying" Income
September 14, 2018 - Bulletin Print Report
To qualify as a real estate investment trust, "(REIT"), a domestic corporation must, among other things, annually satisfy the "gross income requirements" of...
How To Apportion Earnings and Profits Among Distributions
September 14, 2018 - Volume 12 Issue 177 Print Report
X and Y each made distributions of $15,000 to their respective shareholders on July 1, 1971, and made no other distributions during the taxable year....
Hershey's "Bargain Purchase" Of Pirate Brands
September 13, 2018 - Bulletin Print Report
The Hershey Company and B&G Foods, Inc. announced that they have entered into a definitive agreement "for Hershey to acquire Pirate Brands" (from B&G), includ...
Differential Reporting For In-State And Out-Of-State Entities Upheld
September 13, 2018 - Volume 12 Issue 176 Print Report
Harley-Davidson and its subsidiaries, ("HD"), form a multistate enterprise with numerous functionally integrated subsidiary corporations. HD contends that defendant&#...
Health Insurance Purchaser Not An "Applicable Taxpayer"
September 12, 2018 - Bulletin Print Report
In 2015, petitioner, ("P"), was enrolled in a health insurance plan offered through an "insurance exchange" created under the Patient Protection and Afforda...
Debt Not Worthless In The Year Claimed
September 12, 2018 - Volume 12 Issue 175 Print Report
From 2001 until June, 2006, Petitioner, (P), was thepresident of I. During the same period, P was also the president of N, a corporation whichI acquired i...
I.R.S. Approves "Back-To-Back" Spinoffs
September 11, 2018 - Bulletin Print Report
Foreign Parent owns all of the stock of FSub. FSub owns all of the stock of Distributing 2, a foreign corporation. Distributing 2 owns "a%" of the stock of Distributi...
"OTCs" Are Liable For Phoenix's Transaction Privilege Tax
September 11, 2018 - Bulletin Print Report
Online travel companies, ("OTCs"), operate websites that advertise travel services and allow customers to reserve and pay for hotel rooms. The OTCs do not operate any...
SAIC Will Acquire EGL (And Its Tax Assets)
September 11, 2018 - Bulletin Print Report
Science Applications International Corporation, ("SAIC"), and Engility Holdings, Inc., ("EGL"), have entered into a definitive agreement in connection with...
Transitory Corporation Given Credence
September 11, 2018 - Volume 12 Issue 174 Print Report
X Corporation, (X), produces "h." Y Corporation, (Y), unrelated to X,also produces "h."X desires to sell J, an industrial business loc...
Liquidating Sales Not Prohibited Transactions
September 7, 2018 - Volume 12 Issue 173 Print Report
TP is a REIT. TP owns the stock of various qualified REIT subsidiaries (QRSs) and taxable REIT subsidiaries (TRSs). TP, directly or indirectly, owns interests in comm...
"Origin" Based Method Of Apportionment Nets Sirius XM A Refund
September 7, 2018 - Bulletin Print Report
During 2010 and 2011, Sirius XM Radio, Inc., ("SXM"), produced music, sports, news, talk, and entertainment programming, and delivered the programming to subscr...
Transocean Ltd. To Acquire Ocean Rig UDW, Inc.
September 6, 2018 - Bulletin Print Report
TransoceanLtd., ("RIG"), and Ocean Rig UDW, Inc., ("ORIG"), announced that they have entered into a definitive merger agreement "under which RIG...
Loblaw's "Spin-Out" Will Create Tax Issues For Its U.S. Shareholders
September 6, 2018 - Bulletin Print Report
Loblaw Companies Ltd., ("L"), announced a transaction that, in our experience, is unprecedented and, for that reason, the tax consequences flowing from it, at least f...
Withholding Tax Will Be Imposed On TRI's Redemption Payments
September 6, 2018 - Bulletin Print Report
Thomson Reuters Corporation, ("TRI"), is offering to purchase a substantial proportion of its common shares, theaggregate purchase price forwhich is expec...
The Unhappy Plight of Commercial Fishermen
September 6, 2018 - Volume 12 Issue 172 Print Report
A taxpayer may deduct 100 percent of the expense for foodor beverages required by any Federal law to be provided to crew members of a commercial vessel.
Resident Credit Denied For Foreign Tax On Income Allocated To N.J.
September 6, 2018 - Bulletin Print Report
The taxpayers are residents of New Jersey. Both own shares in a family business, DWCI, located in Philadelphia, Pennsylvania. The business is incorporated under the laws of the...
Retrospective "PFIC" Gains Are Not Included In Gross Income
September 5, 2018 - Bulletin Print Report
Respondent issued to petitioners a notice of deficiency determining deficiencies in their 2006, 2007, and 2008 income tax. Petitioners contend that assessment of the deficienci...
Walgreen Found Liable For Minnesota's "LDT"
September 5, 2018 - Volume 12 Issue 171 Print Report
WSP is single-member limited liability company, organized under the laws of Delaware and having its headquarters in Florida. WSP is a wholly owned subsidiary of Walgreen Compan...
General Mills And Minnesota Clash Over R&D Credits
September 5, 2018 - Bulletin Print Report
During 2011, Sec. 41 of the Internal Revenue Code provided: The research credit shall be an amount equal to the sum of--(1) 20 percent of the excess of--(A) the qualified resea...
Whitbread PLC Will Not Be Taxed On The Sale Of Costa Ltd.
September 5, 2018 - Bulletin Print Report
Whitbread PLC, ("W"), has agreed to the sale of the capital stock of its wholly-owned subsidiary, Costa Ltd., ("CL"), to the Coca-Cola Company, ("KO&qu...
Investment Bank "Respected" As A Creditor Of "Remainco"
September 4, 2018 - Bulletin Print Report
D is a publicly traded corporation and the parent of a group of affiliated corporations that file a consolidated Federal income tax return. D has a single class of voting commo...
Cost Of "Seismic Survey" Must Be Capitalized
September 4, 2018 - Bulletin Print Report
The taxpayer, ("TP"), is engaged in offshore oil and gas drilling and development activities within the United States. Through wholly-owned subsidiaries, TP owns a wo...
Tracking Ownership Changes With Respect To Unregistered Stock
September 4, 2018 - Volume 12 Issue 170 Print Report
Company, (C or TP), is in the business of producing X and Y. C and its subsidiaries filed for bankruptcy on Date 1, Year 3. A plan of reorganization was consummated o...
Payments To Former Spouse Are Not "Alimony Or Separate Maintenance"
August 31, 2018 - Bulletin Print Report
Plaintiff, ("P"), and his former spouse, ("W"), were divorced in 2013. A Decree of Divorce, ("Decree"), was filed by a Washington state superior c...
Real Estate Assets Do Not Constitute Securities
August 31, 2018 - Volume 12 Issue 169 Print Report
TP is a REIT. TP's primary business activities are real estate lending, net leasing, and real estate investing. TP owns 100 percent of the outstanding equity of s...
I.R.S.'s Regulations Will Preserve The "Exemption Amount"
August 30, 2018 - Bulletin Print Report
Sec. 151(a) of the Internal Revenue Code allows a taxpayer to claim deductions for exemptions for the taxpayer and his or her spouse and for any dep...
Partnership Interests Not Proven To Be Worthless
August 30, 2018 - Bulletin Print Report
Petitioner, ("P"), PDG, and other real estate professionals formed multiple partnerships, ("SPEs"), to acquire and develop real property. P was a minority p...
Trust Can Perform Certain Services
August 30, 2018 - Volume 12 Issue 168 Print Report
T is a REIT. T owns "x%" of Partnership, (PS), and is its managing general partner. PS owns and operates Class A office buildings in City A and inothe...
Combining 'S' Corporations
August 29, 2018 - Volume 12 Issue 167 Print Report
LLC 1 is an 'S' corporation. LLC 1 is a holding company whose principal asset is a "b%" membership interest in LLC 3, a partnership. LLC 2, another...
Legg Mason Runs Afoul Of Sec. 162(f)
August 29, 2018 - Bulletin Print Report
On August 27, 2018, the S.E.C. announced that Legg Mason, Inc., ("LM"), will pay $34,502,494 to the S.E.C. (for transfer by the S.E.C. to the general fund of the Unit...
Particulate Filters Are "Parts" Or "Accessories"
August 29, 2018 - Bulletin Print Report
T is a semi-truck dealership, whose principal offices are located in Cedar Rapids, Iowa. T sells trucks that are equipped with diesel particulate filters, ("filters")...
The "Nimble Dividend Rule"
August 28, 2018 - Volume 12 Issue 166 Print Report
The issue is whether a cash distribution of $7,500 made by a corporation during its calendar year 1957 to its only shareholder, LM, constitutes a dividend to him, whe...
Non-Recognition Dispositions Do Not Trigger Sec. 1031(f)(1)
August 28, 2018 - Bulletin Print Report
TP is a partnership for federal income tax purposes. LLC 1 and LLC 2 are each a single member limited liability company, wholly owned by TP, that is disregarded for federal inc...
Enbridge Will Take Spectra Private
August 28, 2018 - Bulletin Print Report
Spectra Energy Partners, LP, ("SEP"), is a "publicly-traded partnership" (popularly known as an "MLP") engaged in the transmission, storage, and g...
Gross Receipts From Hedging Included In Sales Factor
August 27, 2018 - Bulletin Print Report
Petitioner is a Delaware corporation engaged in transforming raw agricultural products into intermediate products such as corn syrup, crude vegetable oil, margarine, shortening...
Spin-Off Carried Out To Facilitate Equity Offering
August 27, 2018 - Bulletin Print Report
Distributing, ("D"), is a publicly-traded State A corporation that is the common parent of an affiliated group filing a consolidated income tax return. The capital st...
"Carved-Out" Leasehold Interest Is Property
August 27, 2018 - Volume 12 Issue 165 Print Report
M will be formed as a general partnership. M will have three general partners, O, a corporation, P, a general partnership consisting of three individuals, and Q, anot...
Treasury Moves To Insure "SALT" Deduction Restrictions Not Avoided
August 24, 2018 - Bulletin Print Report
Sec. 170(a)(1) of the Internal Revenue Code generally allows an itemized deduction for any charitable contribution paid within the taxable year. Sec. 170(c)...
Privilege Tax Based On Vehicle Sales Upheld
August 24, 2018 - Bulletin Print Report
The so-called "Sec. 90" tax is a privilege tax, and it is imposed on vehicle dealers "for the privilege of engaging in the business of selling taxable motor vehi...
Advances Constitute Disguised Wages
August 24, 2018 - Volume 12 Issue 164 Print Report
Plaintiff (the "Clinic")is a personal service corporation that provides medical treatment in a variety of specialties at locations in southwest Washin...
Illegal Gains Must Be Recognized
August 23, 2018 - Volume 12 Issue 163 Print Report
TPs sold certain property to Buyer, (B), in the year Y and B took possession and assumed the benefits and burden of ownership in that year. &nbs...
No Refund Of Sales Tax Paid On A Lease Warranted
August 23, 2018 - Bulletin Print Report
In February 2014, petitioner leased a 2014 Cadillac CTS automobile from a New York automobile dealership for a term of 39 months. At the time of the first payment due under the...
"Gross Receipts From Broadcasting"
August 22, 2018 - Bulletin Print Report
Oregon's income-apportionment formula for interstate broadcasters has been based exclusively on the "sales factor." The sales factor is the fraction representing...
The Willens Deal Survey August 2018
August 22, 2018 - The Deal Survey: August 2018 Print Report
Welcome to our summary of deals for August 2018. Full reports on these transactions can be found via the link in the description, or by searching the company name in ou...
A Partnership Is An Aggregate For Purposes of Sec. 165(g)(3)
August 22, 2018 - Volume 12 Issue 162 Print Report
X is the parent of a consolidated group of corporations. X owns "a%" of both Y and Z. X and its subsidiaries derive most of their combined receipts from the...
Retiring Debt In Conjunction With A Spin-Off
August 21, 2018 - Bulletin Print Report
Distributing, ("D"), is the common parent of an affiliated group that files a consolidated income tax return. D is engaged in Business A, Business B, Business C, and...
Replacement Of "PCs" With "UMBSs" Is Not An Exchange
August 21, 2018 - Bulletin Print Report
The Federal Home Loan Mortgage Corporation, ("FM"), acquires mortgages and participation interests in residential mortgage loans, ("Ms"), that were originat...
Employees Of Subsidiary May Join Parent's ESOP
August 21, 2018 - Volume 12 Issue 161 Print Report
Company A has elected to be taxed as an 'S' corporation. ESOP A is a qualified plan under Sec. 401(a) of the Code. ESOP A holds stock in Company A. ESOP A requires a pa...
Fertilizer Is A "Mineral Or Natural Resource"
August 20, 2018 - Bulletin Print Report
X is a State law corporation. X intends to form a State law partnership, Y, the interests in which may be sold in an initial public offering or, perhaps, conveyed to an existin...
CMC To Acquire KMG In A Fully Taxable Transaction
August 20, 2018 - Bulletin Print Report
On August 14, 2018, Cabot Microelectronics Corporation, ("CMC"), entered into an Agreement and Plan of Merger with KMG Chemicals Corporation, ("KMG"), provi...
Golfer's Endorsement Income Taxed In Indiana
August 20, 2018 - Volume 12 Issue 160 Print Report
The taxpayer, ("TP"), is a professional golfer who resides in Texas. TP regularly participates in golf tournaments, such as the PGA tour, and similar events, in...
The I.R.S. Gets Another Crack At Medtronic, Inc.
August 17, 2018 - Bulletin Print Report
Medtronic, Inc., (M), is a medical device company that produces and markets class III devices, ("devices"), as well as other medical therapy devices, ("leads&quo...
Refund Claim Based On NOL Carryback Not Timely Filed
August 17, 2018 - Volume 12 Issue 159 Print Report
In 2011, TM elected to claim a deduction for foreign taxes (instead of claiming a credit) on its amended 2002 tax return, triggering a "daisy-chain of cascading adjustment...
Monsanto Should Be Able To Deduct "Roundup" Payments
August 16, 2018 - Bulletin Print Report
Monsanto has been ordered by a jury in San Francisco's Superior Court to pay $289 million in damages to an individual who contracted cancer as a result, the jury found, of...
Exception To "Cash In Lieu" Test Not Dependent On Asset Identity
August 16, 2018 - Volume 12 Issue 158 Print Report
X, a publicly held corporation, has outstanding a single class of common stock. Y, also a publicly held corporation, has outstanding one class of common stock and one...
Statute Supersedes Agency Regulation
August 16, 2018 - Bulletin Print Report
The taxpayer, ("TP"), is a commercial bank in Pennsylvania. It purchased the disputed items, i.e., computer hardware, canned software, and certain related services, f...
New Jersey Has A Message For "Remote Sellers"
August 16, 2018 - Bulletin Print Report
On June 21, 2018, the United StatesSupreme Court handed down a decision entitled South Dakota v. Wayfair, Inc., et al. , 585 U.S._ (2018), in which the Court...
Taxation In Oregon Does Not Turn On Physical Presence
August 15, 2018 - Bulletin Print Report
Capital One Auto Finance, Inc., ("TP"), filed consolidated Oregon corporate excise tax returns as part of a group that included two corporate affiliates. The issue is...
Substantial New Line of Business Not Added
August 15, 2018 - Volume 12 Issue 157 Print Report
X is a publicly traded partnership (PTP or MLP). X is an "electing 1987 partnership" under Sec. 7704(g). X is engaged in the business of acquiring, owning,...
Maryland Catches Up With Staples, Inc.
August 14, 2018 - Bulletin Print Report
In 1998, the Staples family of businesses underwent an internal reorganization, which culminated in the creation of four entities: SI, SS, SE, and SCC. SS and SCC were wholly-o...
PRGO Can Finally Entertain A Spin-Off
August 14, 2018 - Bulletin Print Report
PerrigoCompany, plc, (PRGO), came into existence in late 2013 in connection with the business combination of PerrigoCompany and Elan Corporationplc. That tran...
Suspended 'S' Corporation Losses Always Absorb Available Basis
August 14, 2018 - Volume 12 Issue 156 Print Report
The Bs, husband and wife, held a partial ownership stake in an 'S' corporation called WR. Taxpayers, can deduct 'S' corporation losses when they have...
Tax Court Endorses ITW's Tax-Free Repatriation Strategy
August 13, 2018 - Bulletin Print Report
During 2006, petitioner, ("P"), a domestic corporation, was the sole shareholder of IH, a domestic corporation. IH was the sole shareholder of PAR, a domestic corpora...
Altaba Posts The Results Of Its Historic Tender Offer
August 13, 2018 - Bulletin Print Report
Altaba, Inc., ("AABA"), offered to purchase up to 195 million shares of its common stock (approximately 24 percent of its outstanding common stock) at a price equal t...
Employee Compensation Is Not Eligible For Sec. 1043 Deferral
August 13, 2018 - Volume 12 Issue 155 Print Report
H was formerly employed by Lockheed Martin, ("LM"), an aerospace and technology company. H had deferred compensation in the Lockheed Martin Deferred Management Incent...
Exxon Mobil Denied "Double Benefit"
August 10, 2018 - Bulletin Print Report
From 2005 to 2011, Congress provided a tax incentive to gasoline producers that allowed a credit against the fuel excise tax imposed on the sale or removal of gasoline for each...
Tax Imposed By Sec. 1446 Is A "Partnership Item"
August 10, 2018 - Bulletin Print Report
YA Global Investments, LP, ("YAG"), is a partnership for U.S. Federal income tax purposes. YA reports that it is an "investor" and is not engaged in an acti...
Trusts Not Minnesota Residents
August 10, 2018 - Volume 12 Issue 154 Print Report
This appeal relates to four trusts. Each of the trusts was created on June 25, 2009, by RM, then a Minnesota domiciliary, and each trust was formed with shares of nonvoting com...
Qualified REIT Dividends And PTP Income
August 9, 2018 - Bulletin Print Report
The Treasury Department and the Internal Revenue Service haveissued proposed regulations under Sec. 199Aof the Code, concerning the deduction, introduced in last ye...
Geography and the Active Business Test
August 9, 2018 - Volume 12 Issue 153 Print Report
Beginning in 1947, Lockwood, Inc., (L), a manufacturer and distributor of farm machinery which had historically confined its business activities to the western part o...
No Resident Tax Credit For Tax Imposed On "Pass-Through" Entity
August 8, 2018 - Bulletin Print Report
Mr. and Mrs. Goggin, ("G"), were residents ofMaine. GHKCompany, LLC, ("LLC"), is a limited liability company formed in New Hampshire in 1994 to...
Dell's Class V Transaction Is A Recapitalization
August 8, 2018 - Bulletin Print Report
The S-4 regarding Dell Technologies, Inc.'s, ("DTI"), so-called "Class VTransaction" has been issued, providing some helpful guidance regarding&nb...
Cancellation of a Partner's Loans
August 8, 2018 - Volume 12 Issue 152 Print Report
X is a limited liability company formed under the laws of State that is treated as a partnership for federal incometax purposes. The onlypartners of X are...
"Hypothecation" Loans Are Real Estate Assets
August 7, 2018 - Volume 12 Issue 151 Print Report
M, a real estate investment trust, (REIT), engages in lending activities, including the making of "hypothecation" loans to developers of commercial real est...
Bemis And Amcor To Create A "Jersey" Holding Company
August 7, 2018 - Bulletin Print Report
The boards of directors of each of Amcor Ltd., ("AMC"), and Bemis Company, Inc., ("BMS"), have unanimously approved a definitive agreement "under which...
A Sec. 457 Plan Is Not A "Public Pension"
August 7, 2018 - Bulletin Print Report
In 2011, petitioner, ("P"), received a lump-sum distribution of $133,349 from a Sec. 457 deferred compensation plan, (the "457 plan") administered by F for...
Sec. 72(t) Early Withdrawal "Exactions" Are Penalties Not Taxes
August 7, 2018 - Bulletin Print Report
Mr. D made "early" withdrawals from a qualified retirement plan in each of 2012 and 2013. Pursuant to Sec. 72(t) of the Internal Revenue Code, Mr. D and his wife incu...
ETE Adopts A "Simplification" Plan For ETP
August 6, 2018 - Bulletin Print Report
Energy Transfer Partners, L.P., ("ETP"), and Energy Transfer Equity, L.P., ("ETE"), recently announced their execution of a definitive merger agreement purs...
Recovery Of Impaired Capital Is Excluded From Gross Income
August 6, 2018 - Bulletin Print Report
TP is a bankruptcy estate. TP was created in response to an unfavorable judgment against Insured, who fatally injured a party with an automobile. Insured was covered by an auto...
The "TEFA" Must Be Added Back In Calculating New Jersey "ENI"
August 6, 2018 - Volume 12 Issue 150 Print Report
R is engaged in the retail distribution of electrical energy only in New Jersey. During the year in issue, R was subject to both the Corporation Business Tax, ("CBT")...
Service Will Not Refund Or Credit "Excess" Installment Payments
August 3, 2018 - Bulletin Print Report
Sec. 6402(a) of the Internal Revenue Code authorizes the Internal Revenue Service, (the "Service"), to apply "overpayments" as credits against outstanding t...
Philadelphia "Beverage" Tax Is Legally Imposed
August 3, 2018 - Volume 12 Issue 149 Print Report
A tax, the so-called "beverage tax," applies to the supply, acquisition, delivery, or transport of beverages. It is generally collected when beverages are transferred...
QCOM Launches A Dutch Auction Self-Tender Offer
August 2, 2018 - Bulletin Print Report
QUALCOMM, Inc., ("QCOM"), is authorized to repurchase as much as $30 billion in value of its common stock. It is kicking off the process with a massive Dutch Auction...
Brookfield Affiliate Will Acquire Forest City
August 2, 2018 - Bulletin Print Report
Brookfield Asset Management, Inc., ("BAM"), and Forest City Realty Trust, Inc., ("FC"), announced, as the market was expecting, that they have entered into...
Loss Of Control By Transferors Does Not Render Sec. 351 Inapplicable
August 2, 2018 - Volume 12 Issue 148 Print Report
Corporation, ("C"), is a publicly traded corporation and is the sole general partner of Partnership, ("PS"). As of Date A, C owned an approximate combined &...
Utah "Resident" Taxed on Capital Gains
August 1, 2018 - Volume 12 Issue 147 Print Report
The Benjamins originally established domicile in Utah around 1995 after moving from California and purchasing a home in Sandy,Utah. At that time, Mr. Benjamin,...
Indirect Payment Of Property Taxes Suffices For "QEZE" Credit Purposes
August 1, 2018 - Bulletin Print Report
AB is the sole shareholder of BR, and is the sole member of BM, a real estate management company, which is certified, in New York State, as a "qualified empire zone enterp...
NEE "Deconsolidates" NEP
August 1, 2018 - Bulletin Print Report
NextEra Energy, Inc., ("NEE"), has, since inception, owned a "majority voting interest" in NextEra Energy Partners, L.P., ("NEP"). NEE currently o...
"Divisive" Transactions Cannot Be 'C' Reorganizations
July 31, 2018 - Volume 12 Issue 146 Print Report
X and Y were unrelated corporations that, for many years, were activelyengaged in the hardware business. X operated two significant lines of business, a retail...
Verizon Cannot Escape California Sales Tax
July 31, 2018 - Bulletin Print Report
Verizon Services Corporation, ("V"), is a procurement and service company located in California. V purchased various telephone cables, conduit, and poles from third p...
Purchase of Windfarms Is An "Applicable Asset Acquisition"
July 31, 2018 - Bulletin Print Report
Under Sec. 1603 of the American Recovery and Reinvestment Act, ("ARRA"), of 2009, each person who placed in service specified energy property during a designated peri...
Documentation Does Not Support Deduction Of "Success-Based" Fee
July 30, 2018 - Bulletin Print Report
The taxpayer, ("TP"), engaged Investment Banker, ("IB"), to explore a possible sale of TP and to indemnify potential buyers. The engagement letter provided...
Taxpayer's Educational Program Is Considered An "Amusement" Service
July 30, 2018 - Bulletin Print Report
Taxpayer, ("TP"), is a self-described "alternative" educational concept designed for use by children between the ages of four and fourteen. TP's staff p...
Treasury Bonds Ruled Substantially Identical
July 30, 2018 - Volume 12 Issue 145 Print Report
Advice has been requested whether or not a loss sustained by a taxpayer upon the sale on July 24, 1953 of U.S. Treasury 2 1/4 percent registered bonds of June 15, 195...
Most Termination Fees Are Deductible For Tax Purposes
July 27, 2018 - Bulletin Print Report
On October 27, 2016, an affiliate of QUALCOMM, Inc., ("QI"), entered into a Purchase Agreement, as subsequently amended, with NXP Semiconductors N.V., ("NXP"...
Who Are The "Transferors" of Property?
July 27, 2018 - Volume 12 Issue 144 Print Report
Z and a group of investors, pursuant to a binding agreement between them, transferred property to a newly organized corporation, N, in exchange for all of N's sto...
Related Parties Must Allocate Employee Stock Compensation Costs
July 26, 2018 - Bulletin Print Report
In this case, the court said, "we consider the validity of Reg. Sec. 1.482-7A(d)(2)" under which related entities must share the cost of employee stock compensation i...
When Are Sales Taxes Paid?
July 26, 2018 - Bulletin Print Report
The taxpayer, ("TP"), manufactures specialty products for further processing by other manufacturers in the solar and electronics manufacturing industry. In 2015, TP r...
Only Gains Enter Into Gross Income
July 26, 2018 - Volume 12 Issue 143 Print Report
TP is a management investment company registered under the Investment Company Act of 1940 that elected to be taxed as a regulated investment company (RIC). TP acquire...
Tenneco's Spin-Off Should Satisfy The Active Business Requirement
July 25, 2018 - Bulletin Print Report
Tenneco, Inc., ("T"), has reached an agreement to acquire, from AEP, Inc., an affiliate of IEP, all of the membership interests in a limited liability company, Federa...
Foreign Currency Not Securities
July 25, 2018 - Volume 12 Issue 142 Print Report
On June 1, 1973, the taxpayer purchased currency of foreign country M in a transaction which wasentered into for profit. On June 22, the taxpayer converted the...
DIS/FOX--Sec. 304 Is Not A Realistic Threat
July 24, 2018 - Bulletin Print Report
The acquisition of Twenty-First Century Fox, Inc., ("F"), by The Walt Disney Co., ("D"), will take the form of a so-called "horizontal double dummy.&qu...
"FBAR" Penalties Capped At $100,000
July 24, 2018 - Bulletin Print Report
W failed to file or filed inaccurate Forms TD F 90.22-1 (FBAR) for each of 2008, 2009, and 2010. As a consequence, the IRS assessed numerous penalties...many of which were flat...
"Networking" Club Is Not A Social Club
July 24, 2018 - Volume 12 Issue 141 Print Report
Petitioner, (P), was incorporated in 1935 as an incorporated association. The purpose of the association is to institute and maintain a method of exchanging and inter...
The Willens Deal Survey July 2018 (Inaugural Issue)
July 23, 2018 - The Deal Survey: July 2018 Print Report
Welcome to our summary of deals for July 2018. Full reports on these transactions can be found by searching the company name in our database.
Sec. 165(g)(3) Applied To Worthless Stock Of A Holding Company
July 23, 2018 - Bulletin Print Report
TP, a State A corporation, is an indirect wholly owned subsidiary of P. P and its related entities sell "Brand" products. TP formed HC1 on Date 1. HC1 formed HC2, whi...
Tax Warning In Debt Collection Letter Not Misleading
July 23, 2018 - Bulletin Print Report
In January 2016, K sent a letter to D seeking to collect a debt originally owed to a bank. The letter offered to settle the debt, but warned: "This settlement may have tax...
Floating Docks Are Tangible Personal Property
July 23, 2018 - Volume 12 Issue 140 Print Report
M and P were general partners in CYC (the "partnership"). The partnership's principal business activity is leasing docking facilities. &...
Unsigned Joint Return Still Valid
July 20, 2018 - Bulletin Print Report
A and P were married until P's death in 2011. On November 25, 2009, P filed joint tax returns for 2001 through 2006 on behalf of himself and A. On August 24, 2010, P filed...
Tax Court Determines Reasonable Compensation
July 20, 2018 - Volume 12 Issue 139 Print Report
Petitioner, (P), was a wholesale distributor of animal health products, lawn and garden products, farm hardware, pet supplies, and products for farm stores and relate...
GGP Sets Record Date For "Pre-Closing Dividend"
July 19, 2018 - Bulletin Print Report
GGP, Inc., ("GGP"), and Brookfield Property Partners, L.P., ("BPY"), are nearing the finish line on their highly engineered transaction, which will culminat...
No-Fault Insurance
July 19, 2018 - Volume 12 Issue 138 Print Report
Taxpayer, (TP), serves as the court appointed guardian of his adult daughter, a legally incapacitated adult. TP's daughte...
Disregarded Entities Are Not Disregarded For All Purposes
July 18, 2018 - Bulletin Print Report
A business entity that is not classified as a corporation, (an "eligible entity"), can elect its classification for federal tax purposes . An eli...
Split-Off Carried Out For a Corporate Business Purpose
July 18, 2018 - Volume 12 Issue 137 Print Report
Y is engaged in the business of commercial printing and has been so engaged for the past five years. Its outstanding stock consists of shares of common stock of which...
Subpart F Inclusions Found To Be "Good" REIT Income
July 17, 2018 - Bulletin Print Report
TP intends to qualify and elect to be treated as a real estate investment trust, ("REIT"). TP's primary business is the acquisition, ownership, and leasing of ind...
Inherently Permanent Structures Are Real Estate Assets
July 17, 2018 - Volume 12 Issue 136 Print Report
A taxpayer owns a trailer park containing housetrailers of a permanent nature and also accommodates overnight parking of housetrailers for persons who are transient....
Rents Received From A Partnership Are "Rents From Real Property"
July 16, 2018 - Bulletin Print Report
TP intends to qualify to be taxed as a real estate investment trust, ("REIT"). TP's primary business is the acquisition, ownership, and leasing of assisted living...
Banks Affected By Supreme Court's Pivot On "Nexus"?
July 16, 2018 - Bulletin Print Report
Wells Fargo & Company recently reported its earnings for the second quarter of 2018. One aspect of its report caught our eye. The company's Chief Financial Officer ackn...
Severance Payments Are Not Qualified Research Expenditures
July 16, 2018 - Volume 12 Issue 135 Print Report
The issue is whether severance payments paid by TP to certain salaried employees who voluntarily separated from the company pursuant to a Voluntary Separation Program...
First Mortgage Bonds Classified As "Securities"
July 13, 2018 - Volume 12 Issue 134 Print Report
In 1957, a corporation, which had been in "severe financial difficulties" for several years, exchanged newly-issued common stock for all of its first mortga...
I.R.S. Finalizes Obama Era "Anti-Inversion" Regulations
July 13, 2018 - Bulletin Print Report
An "inversion" occurs when a foreign corporation becomes, with respect to an "expatriated entity," a "surrogate foreign corporation." A foreign co...
Minnesota Tax Avoidance Scheme Nipped In The Bud
July 12, 2018 - Bulletin Print Report
During 2007 and 2008, AB was a nationally-chartered bank headquartered in Wisconsin, operating as a wholly-owned subsidiary of ABC, a bank holding company. AB had banking locat...
Who Owns a Tax Refund?
July 12, 2018 - Volume 12 Issue 133 Print Report
In 2002, the petitioner, (JH), an individual, and her husband filed a joint Federal income tax return with the I.R.S. All of the income on the return was attributable...
DPSG Post-Mortem
July 11, 2018 - Bulletin Print Report
One of the more unusual deals we have encountered closed yesterday and, therefore, it seems appropriate to review its equally unusual tax consequences. In the transaction, a ne...
Stock Registration Costs Are Not Deductible
July 11, 2018 - Volume 12 Issue 132 Print Report
X Corporation, (XC), has been engaged in the manufacture of precision equipment for many years. In 1965, it was required to register its stock with the S.E.C. In conn...
Trust Not Eligible For Exemption From New York State's "RETT"
July 10, 2018 - Bulletin Print Report
Petitioner, ("P"), is the executor the Estate of Phyllis Millstein, ("Estate"), and is the trustee of a trust, ("Trust"), established under the wi...
Lodging Facility Exempt From Property Tax
July 10, 2018 - Volume 12 Issue 131 Print Report
Petitioner, (P), anot-for-profit corporation engaged in the performing arts, seeks review of a city's determination that its properties are not tax-exempt p...
Disproportional Distributions Do Not Create A Second Class Of Stock
July 10, 2018 - Bulletin Print Report
Petitioner, ("P"), owned 49 percent of the shares of MR, and GM, P's brother, owned 51 percent thereof. MR is an 'S' corporation. P, GM, and MM, GM's...
FOX/DIS: The Case For "Non-Device"
July 9, 2018 - Bulletin Print Report
Tax counsel for Twenty-First Century Fox, ("21CF"), and The Walt Disney Company, ("DIS"), were unable to render an opinion "that the distribution (of t...
"Risk Diminution" Prevents Enjoyment Of Intercorporate "DRD"
July 9, 2018 - Volume 12 Issue 130 Print Report
Parent is the common parent of an affiliated group of corporations, (the "Group"). GMX is an equity-swap dealer. GMY is the Group's primary broker/dealer. GMX was...
NOL "Absorbed" In An Alternative Tax Year
July 9, 2018 - Bulletin Print Report
TD Holdings II, Inc., ("P"), was a banking corporation formed under the laws of Delaware with its principal place of business in New York City. P was subject to the b...
Government Grants Not Gross Income
July 6, 2018 - Volume 12 Issue 129 Print Report
During Year 1, TP accepted numerous grants from state and local governmental agencies to fund various railroad projects. A number of the grants were to make upgrades...
Another MLP Bites The Dust
July 6, 2018 - Bulletin Print Report
Recently, Boardwalk GP, LP, the General Partner of Boardwalk Pipeline Partners, LP, ("BWP"), and an indirect, wholly-owned subsidiary of Loews Corporation, ("L&q...
Insured Depository Institution Owned A Tax Refund
July 5, 2018 - Bulletin Print Report
This appeal concerns the ownership of a federal tax refund. The refund was issued to UWBI, a thrift holding company. The refund was the result, however, of net operating losses...
Will Visa And MasterCard Get Sec. 1341 Relief?
July 5, 2018 - Volume 12 Issue 128 Print Report
It has been reported in the Wall Street Journal and Bloomberg that Visa and MasterCard (as well as other defendants) "are close to settling an...
IPG's Basis Step Up Is "Worth" $300 Million
July 3, 2018 - Bulletin Print Report
Where a corporation purchases the stock of another corporation, the basis for the stock so acquired is the amount paid, i.e., a "cost" basis, but the acquired corpora...
AMEX's "Anti-Steering" Provisions Do Not Restrain Trade
July 3, 2018 - Volume 12 Issue 127 Print Report
American Express Company and American Express Travel Related Services Company, ("A"), provide credit card services to both merchants and cardholders. When a cardholde...
CVG/SNX Have Proposed A Tax-Free Reorganization
July 3, 2018 - Bulletin Print Report
Convergys Corporation, ("CVG"), has announced an agreement with SYNNEX Corporation, ("SNX"), pursuant to which SNX will acquire CVG "in a cash and stoc...
Footwear Designer And Marketer "Engaged In Manufacturing"
July 2, 2018 - Bulletin Print Report
The appellant, "D," was a Delaware corporation whose principal place of business was in Goleta, California. D was founded as a footwear company in 1973. During the 19...
New Jersey Budget Agreement Is Hostile To Corporations
July 2, 2018 - Bulletin Print Report
Governor Murphy of New Jersey and the Senate President and Assembly Speaker announced an eleventh hour agreement on the State's Fiscal Year 2019 Budget that averts a govern...
Dell Will Retire Its "Tracking Stock"
July 2, 2018 - Bulletin Print Report
The Special Committee of the Board of Directors of Dell Technologies, ("DTI"), "representing the holders of Dell's Class V Common Stock," i.e., Dell'...
Acquiring Basis During The "PTTP"
July 2, 2018 - Volume 12 Issue 126 Print Report
X, an 'S' corporation, merges into Y, a C corporation, in a merger qualifying as a reorganization under Sec. 368(a)(1)(A). Prior to the merger, A, an individu...
Forced Divestiture Of FOX's "RSNs" Will Result In "Tax Leakage"
June 29, 2018 - Bulletin Print Report
The Antitrust Division of the U.S. Department of Justice, ("DOJ"), has cleared the pending acquisition by The Walt Disney Company, ("DIS") of Twenty-First C...
Removal Of Spent Nuclear Fuel Is Not "Decommissioning"
June 29, 2018 - Bulletin Print Report
NextEra Energy, Inc., ("NE"), operates nuclear power plants. Nuclear reactors are powered by "fuel assemblies" that contain rods of enriched uranium. Over t...
Paying "Shareholder" Expenses Produces Constructive Dividends
June 29, 2018 - Volume 12 Issue 125 Print Report
All of the stock of X Corporation, (X), was owned by A, an individual. Y Corporation, (Y), a widely held corporation, acquired all of the stock of X in exchange for i...
MSG Eyes Another Spin-Off
June 28, 2018 - Bulletin Print Report
The Madison Square Garden Company, ("MSG"), announced the other day that its board of directors has authorized management "to explore a possible spin-off that wo...
PF Shareholders Will Be Taxed On All Of The Merger Consideration
June 28, 2018 - Bulletin Print Report
Where the acquirer in a business combination uses its stock as part of the merger consideration, the determination of whether such stock can be received on a tax-free basis dep...
Wrongful Death Damages Not a Casualty Loss
June 28, 2018 - Volume 12 Issue 124 Print Report
On December 5, 2002, Mr. Pang, (P), was involved in an automobile accident inwhich hestruck a pedestrian with his vehicle. The pedestrian later died as a...
Taxpayer Not Required To Capitalize Commitment Fees
June 27, 2018 - Bulletin Print Report
The taxpayer, ("TP"), entered into a revolving credit agreement (the "Agreement"), with a consortium of lenders for a term of five years. Under the Agreemen...
FOX/DIS Avoids Withholding By Adopting The "LaQuinta" Approach
June 27, 2018 - Bulletin Print Report
The revised S-4 Registration Statement for the historic business combination of Twenty-First Century Fox, Inc., ("FOX") and The Walt Disney Company, ("DIS")...
Greystar To Achieve A Basis Step-Up
June 27, 2018 - Bulletin Print Report
An affiliate of Greystar Real Estate Partners, GSHGIF LTP, L.P., ("G"), has entered into an agreement to acquire Education Realty Trust, Inc., ("ERT"), a co...
Law Librarian Denied Law School Education Deductions
June 27, 2018 - Volume 12 Issue 123 Print Report
Petitioner, (P), has been an academic and court law librarian for 25 years. She is currently the Dakota County Law Library Manager. As the Law Library manager, P'...
Electricity Producer Not A "Qualified New York Manufacturer"
June 26, 2018 - Bulletin Print Report
Petitioner, ("P"), provides wholesale electricity through its wholly-owned limited liability companies, R and C. R and C are each disregarded entities. R operates a g...
The S.E.C.'s Administrative Law Judges Are "Officers Of The U.S."
June 26, 2018 - Bulletin Print Report
The Securities and Exchange Commission, ("S.E.C."), has statutory authority to enforce the nation's securities laws. One way it can do so is by instituting an adm...
Membership Interests Constitute "Stock"
June 26, 2018 - Volume 12 Issue 122 Print Report
P is a State A nonprofit corporation that is exempt from Federal income taxation under Sec. 501(c)(3) of the Internal Revenue Code. P represents that it is a "pu...
Nexus No Longer Dependent Upon Physical Presence
June 25, 2018 - Bulletin Print Report
South Dakota, ("SD"), has a sales tax. It taxes the retail sales of goods and services in the State. Sellers are required to collect and remit this tax to the Departm...
Can FOX Avoid Withholding Tax For Its Foreign Shareholders?
June 25, 2018 - Bulletin Print Report
The transaction in which Twenty-First Century Fox, Inc., ("FOX"), will be absorbed by The Walt Disney Company, ("DIS"), will be preceded by a spin-off of Ne...
Taxpayer Entitled To "Bonus" Depreciation
June 25, 2018 - Volume 12 Issue 121 Print Report
Mr. G, ("G"), purchased solar equipment situated on three "host" properties. Under the purchase agreement, G agreed to buy the solar equipment on host prope...
DIS And FOX Revise The Structure Of Their Deal
June 22, 2018 - Bulletin Print Report
The Walt Disney Company's revised offer for Twenty-First Century Fox, Inc., ("Parent and the "Company," respectively), also includes a change in the structur...
Stock Options Are Not "Monetary Remuneration"
June 22, 2018 - Bulletin Print Report
Congress adopted the Railroad Retirement Tax Act, ("RRTA"), of 1937. That legislation federalized private railroad pension plans. Under the law's terms, private r...
"Mansion Tax" Found Applicable
June 22, 2018 - Volume 12 Issue 120 Print Report
On March 26, 2007, FJR, as buyer, entered into a Contract For Sale of Government Real Property for 34-44 Chestnut Hill Drive, Upper Brookville, New York with EG&G...
MCI Cannot Recoup Lost Depreciation Deductions
June 21, 2018 - Bulletin Print Report
In this appeal we are, the court said, asked to determine whether the New Jersey Corporation Business Tax Act, N.J.S.A. 54:10A-1 to -40 permits a corporate taxpayer to reduce i...
Sec. 1031 Applies to Swap of Water Rights for Farm Land
June 21, 2018 - Volume 12 Issue 119 Print Report
TP, an individual, is engaged in the business of farming. TP owns a right to pump ground waterfrom Aquifer for irrigation purposes. TP's water rights are li...
DIS Ups The Ante
June 20, 2018 - Bulletin Print Report
As expected, the Walt Disney Company, ("DIS"), in response to the overture made by Comcast, has signed an amended acquisition agreement with Twenty-First Century Fox,...
Parent's Contribution To "Troubled" Subsidiary Not Deductible
June 20, 2018 - Bulletin Print Report
BJP conducted fracking services in Russia through a Russian subsidiary, BJR. BJR agreed to provide pressure pumping services to TB in the Siberian oil fields. TB was a joint ve...
Retroactive "Volume Discounts" Do Not Reduce Sales Tax Liability
June 20, 2018 - Bulletin Print Report
Petitioner manufactured and sold asphalt to customers who picked up the material at petitioner's facility. Generally, the asphalt is sold at a "posted price" and...
Right To Have Stock Redeemed Is Not "Boot"
June 20, 2018 - Volume 12 Issue 118 Print Report
Company, (C), is a domestic corporation engaged in the business of holding and developing real estate. C has outstanding one class of common stock of which 50 percent...
Tax Court Countenances Double Taxation
June 19, 2018 - Bulletin Print Report
Palisades Health Care IN, ("PA"), is an 'S' corporation organized under the laws of Colorado. Petitioners, ("Ps"), were the sole owners of PA. Color...
Determining the Basis of "Demutualized" Shares
June 19, 2018 - Volume 12 Issue 117 Print Report
Plaintiffs purchased life insurance policies with "the Companies" all of which were mutual insurance companies. Mutual insurance companies issue no stock an...
Taxation Of Debt For Debt Exchanges
June 18, 2018 - Volume 12 Issue 116 Print Report
In 1973, a domestic corporation issued, at face value of $1,000x each, bonds, ("old bonds"), that were convertible into 30x shares of common stock at the election of...
Leveraged Partnerships Are "Back On The Table"
June 18, 2018 - Bulletin Print Report
One of the more popular techniques for divesting assets on a tax-advantaged basis was the so-called "leveraged partnership" strategy. The most well-known leveraged pa...
SUPERVALU Attempts To "Monetize" Its Capital Loss Carryover
June 18, 2018 - Bulletin Print Report
SUPERVALU, Inc., ("SU"), recently announced a complex transaction which, apparently, has as its aim (i) the eventual divestiture of its Retail operations, and (ii) th...
"Green" Couple Denied NYS Solar Energy System Equipment Credit
June 18, 2018 - Bulletin Print Report
Petitioners, New York State residents, claimed a tax credit for "qualified solar energy system equipment expenditures" on their 2012 New York State tax return. The ex...
Filing Status Choice Deprives Taxpayer Of "Insolvency Exception"
June 15, 2018 - Bulletin Print Report
For 2012, the taxpayer, ("TP"), and her spouse, ("H"), elected "married filing separately" status to report their income for federal and Indiana i...
Fixed Obligation To Pay Interest Found
June 15, 2018 - Volume 12 Issue 115 Print Report
In accordance with a plan of reorganization,the taxpayerissued to creditors $2,836,400 16-year, five percent Cumulative Convertible Income Debentures (the...
AT&T And Time Warner Are Now Poised To Merge
June 14, 2018 - Bulletin Print Report
It looks as though the transformative AT&T, Inc., ("T"), acquisition of Time Warner, Inc., ("TWI"), can now proceed. We do not believe that there have b...
Corporation Cannot Transfer "Personal" Goodwill
June 14, 2018 - Volume 12 Issue 114 Print Report
On April 14, 1982, B, an individual, organized BT. B owned 100 percent of the stock of BT. B did not have an employment contract with BT; and he never signed a noncompete agree...
Lockheed Martin's Receipts From Sales Of F-16s Sourced To Texas
June 13, 2018 - Volume 12 Issue 113 Print Report
The Arms Export Control Act, ("AECA"), restricts sales of U.S.-made military goods and services to foreign nations "so as to ensure consistency with U.S. foreign...
Telecom "Products" Found To Be "Services"
June 13, 2018 - Bulletin Print Report
NTS Communications, Inc., ("NTS"), is a telecommunications provider based in Lubbock, Texas. It offers its customers Internet access, landline telephone service, and...
Guaranteeing Exchange Treatment For AABA's Redemption
June 13, 2018 - Bulletin Print Report
Altaba, Inc., ("AABA"), as everyone is well aware, is offering to repurchase approximately 24 percent of its outstanding stock. Unlike a conventional self-tender offe...
Hedge Fund Manager Denied Deduction For Legal And Professional Fees
June 12, 2018 - Bulletin Print Report
Mr. Sky M. Lucas, ("P"), formed Vicis Capital, LLC, ("V"), with two other partners in 2004; each such partner owned a one-third interest in V. V was an inve...
Tuition Waiver Benefit Included In Gross Income
June 12, 2018 - Volume 12 Issue 112 Print Report
Petitioner, ("P"), worked in the computer information services department of Tulane University, ("TU"), from February 8, 1985 to June 7, 1991. TU was forced...
North Carolina Cannot Tax The Income Of A "Foreign" Trust
June 12, 2018 - Bulletin Print Report
The Joseph Lee Rice, III Family 1992 Trust was created in New York in 1992 for the benefit of the children of Joseph Lee Rice. Mr. Rice, of course, is the legendary co-founder...
I.R.S. Finalizes "May Department Store" Regulations
June 11, 2018 - Bulletin Print Report
Where a corporation distributes appreciated property to a shareholder in a distribution to which subpart A applies, the corporation must recognize gain as if the distributed pr...
AABA Still Positioned To Effect A "Tax Efficient" Transaction
June 11, 2018 - Bulletin Print Report
Although Altaba, Inc., ("AABA"), will be engaging in a taxable disposition of nearly 100 million shares of its Alibaba Group, ("BABA") stock, we are encoura...
Valuing a Covenant Not To Compete
June 11, 2018 - Volume 12 Issue 111 Print Report
CL owned and operated BDC, a wholesale beer distributorship in northern Minnesota. In 1992, CL sold BDC to BBL for $2,017,461. The parties allocated the purchase pric...
"Usufruct" Not Subject To Real Estate Taxation
June 8, 2018 - Bulletin Print Report
The City of Atlanta, which owns the Hartsfield-Jackson Atlanta International Airport, (the "Airport"), entered into two seven-year agreements, one with each plaintiff...
AABA Still Mulling A "RIC" Conversion
June 8, 2018 - Bulletin Print Report
Buried within Altiba, Inc.'s, ("AABA" or the "Fund"), tender offer document was the revelation that AABA, apparently, is still considering the possibili...
Foreign Owned U.S. Corporation Not Subject to "AET"
June 8, 2018 - Volume 12 Issue 110 Print Report
C is a wholly-owned subsidiary of H. Each of C and H is a domestic corporation. C owns a 50 percent interest as general partner in a U.S. general partnership which owns and man...
Altaba Opts For "Tax Leakage"
June 7, 2018 - Bulletin Print Report
Has Altaba, Inc., ("AABA"), given up the ghost as respects the "tax-efficient" monetization of its holdings in Alibaba Group Holding Ltd., ("BABA"...
Stock Offering Does Not Affect Qualification Of Spin-Off
June 7, 2018 - Volume 12 Issue 109 Print Report
Distributing, a Country entity, is widely held and publicly traded. Distributing, directly and indirectly, owns foreign and domestic entities, including Controlled, that are en...
Earn-Out Consideration Must Consist Primarily Of Voting Stock
June 6, 2018 - Volume 12 Issue 108 Print Report
Parent owns all of the stock of Merger Sub, ("M-S"), and C1. C1 owns all of the stock of C2. C2 owns all of the stock of C3. C3 owns all of the interests in LLC1 and...
Another MLP "Rollup" Planned
June 6, 2018 - Bulletin Print Report
One of the central themes of the Tax Cuts and Jobs Act, (the "Act"), has been the incorporation of MLPs, an event apparently precipitated by the large gap between cor...
When Does An Exchange Have "The Effect" of a Dividend?
June 5, 2018 - Volume 12 Issue 107 Print Report
The taxpayer, (TP), was the sole shareholder of Basin Corporation, (B). An agreement providing for a "forward triangular merger",in whichB would...
"Statement Respecting Financial Condition" Of Debtors
June 5, 2018 - Bulletin Print Report
Respondent, ("R"), hired Petitioner, ("P"), a law firm, to represent him in a business litigation. R fell far behind on his legal bills. R, however, told P...
Kinder Morgan To Sell Pipelines To The Canadian Government
June 5, 2018 - Bulletin Print Report
Kinder Morgan, Inc., ("KMI"), and Kinder Morgan Canada, Ltd., ("KML"), are affiliated, but in an unconventional way. KMI owns "special voting shares&qu...
KLXI Will Not Assert The "Integrated Transaction Doctrine"
June 4, 2018 - Bulletin Print Report
KLX, Inc., ("KLX"), recently entered into a definitive merger agreement to be acquired by The Boeing Company, ("B"). A wholly-subsidiary of B will be newly...
DIS/FOXA Deal Hinges On "Skadden Opinion"
June 4, 2018 - Bulletin Print Report
The proxy materials issued in connection with the historic "Morris Trust" transaction involving The Walt Disney Company, ("Disney"), and Twenty-First Centur...
"Statutory Employees" Can Use Schedule C
June 4, 2018 - Bulletin Print Report
In 2012, Mr. F worked as a consultant for Space Systems Loral, ("L"). He entered a contract to provide consulting services to L through WV, a temporary employment age...
Spinco Stock Not "Other Property Or Money"
June 4, 2018 - Volume 12 Issue 106 Print Report
X corporation has been engaged in the active conduct of two separate and distinct businesses--(i) toy manufacturing; and (ii) hand tool manufacturing--for well in excess of fiv...
Truck Exempt From "Transaction Privilege Tax"
June 1, 2018 - Bulletin Print Report
Empire Southwest LLC, ("E"), is an equipment retailer operating in Arizona. In 2014, E sold a truck, (the "Truck"), to the Pinto Valley Mine, (the "Min...
Ineligible Shareholder Terminates 'S' Corporation Status
June 1, 2018 - Volume 12 Issue 105 Print Report
KH died on January 30, 2000. KH was the grantor of the HLT, a revocable trust. Upon KH's death, the HLT became irrevocable and known as the HLT-AT ("AT"...
Supreme Court Upholds Federal Arbitration Act
May 31, 2018 - Volume 12 Issue 104 Print Report
Ernst & Young and one of its junior accountants, SM, entered into an agreement providing that they would arbitrate any dispute that may arise between them. After his employ...
Dealer's Motor Vehicles Subject To Massachusetts Corporate Excise
May 31, 2018 - Bulletin Print Report
Dealer is a "QSub." Dealer is a wholly owned subsidiary of Parent, which is an 'S' corporation for both federal and Massachusetts tax purposes. Parent is subj...
Broadcaster's Sale Was Under Threat Or Imminence Of Condemnation
May 31, 2018 - Bulletin Print Report
Company, ("C"), is a global media and entertainment company. TP, C's wholly owned subsidiary, is a member of an affiliated group filing a consolidated federal inc...
Private Equity Firm Not Doing Business In Detroit
May 30, 2018 - Bulletin Print Report
A private equity firm, Huron Capital Partners LLC, ("Huron"), solicited investors to acquire partnership interests in a limited partnership, The Huron Fund II, L.P.,...
Update On Renren Inc.'s Unusual Spin-Off
May 30, 2018 - Bulletin Print Report
Renren, Inc., ("RENN"), a Cayman Islands corporation, is preparing to distribute, to certain of its shareholders, the stock of a newly-created Cayman Islands subsidia...
California 'S' Corporation Cannot Avoid "Gains" Tax
May 30, 2018 - Volume 12 Issue 103 Print Report
In June, 1989, Golden West Health Plan, Inc. (GW) filed an election to be treated as an 'S' corporation. The income of an 'S' corporation is not taxed...
Control Means Direct Ownership of Stock
May 29, 2018 - Volume 12 Issue 102 Print Report
X's common stock consists of shares of Class A stock and shares of Class B stock, evenly divided. These shares have equal voting and liquidation rights. They diff...
Plan To Avoid New York's "RETT" Thwarted
May 29, 2018 - Bulletin Print Report
Petitioner, ("P"), and SLG acquired real estate in New York City (located at 2 Herald Square in Manhattan) in 2007 as tenants-in-common. P held an undivided 45 percen...
What Disney Can Learn From The Shire/Baxalta Experience
May 29, 2018 - Bulletin Print Report
On July 1, 2015, Baxter International, Inc. distributed slightly more than 80 percent of the stock of Baxalta, Inc., ("B"), to its shareholders in a transaction inten...
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....
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),...
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...
Optionee Constructively Owns Stock Owned By Adoptive Relatives
May 24, 2018 - Volume 12 Issue 100 Print Report
This case presents the novel issue of whether or not a taxpayer who has received a stock option from a corporation should be considered as owning the stock held by an adoptive...
Fifth Third Bancorp Will Acquire MB Financial, Inc.
May 23, 2018 - Bulletin Print Report
Fifth Third Bancorp, ("FTB"), has entered into a plan and agreement pursuant to which it will acquire the properties (not the stock) of MB Financial, Inc., ("MBF...
Financial Counseling Fees Paid By Employer Are Gross Income
May 23, 2018 - Volume 12 Issue 99 Print Report
TP, an executive of a large corporation, was provided with financial counseling by a professional financial counseling firm that was engaged by the corporation for th...
Payment For Waiver Of Right Of First Offer Is "Good" REIT Income
May 22, 2018 - Bulletin Print Report
Taxpayer, ("TP"), intends to operate in a manner that qualifies as a real estate investment trust, ("REIT"). TP owns 100 percent of GP, a disregarded entity...
Depletion Requires an "Economic Interest" in Minerals In Place
May 22, 2018 - Volume 12 Issue 98 Print Report
The taxpayer, (TP), an individual, is employed by Company, (C). C has created a "Bonus Pool plan" fora number of itskey employees. &nb...
Wyndham Worldwide Corporation To Separate Its Businesses
May 21, 2018 - Bulletin Print Report
Wyndham Worldwide Corporation, ("D"), is engaged in the active conduct of two separate businesses, hotel franchising and management, and the development and marketing...
Spirit Realty Capital Will Be Engaging In A "Taxable" Spin-Off
May 21, 2018 - Bulletin Print Report
On May 31, 2018, Spirit Realty Capital, ("SRC"), a real estate investment trust, ("REIT"), will be distributing to its shareholders all of the stock of its...
Dramatic and Musical Arts Performances
May 21, 2018 - Volume 12 Issue 97 Print Report
Petitioner, (P), is a trapeze artist who performs "aerial skills" under the following circumstances-- --when hired as an independent contractor by...
Basis Denied A Guarantor Of 'S' Corporation's Debt
May 18, 2018 - Bulletin Print Report
S was a 50 percent shareholder in OA, an 'S' corporation specializing in real estate development. R, S's husband, was an employee of OA. OA obtained bank loans to f...
Barter Transactions
May 18, 2018 - Volume 12 Issue 96 Print Report
Company, (C), is engaged in the newspaper business in City. C plans to conducta "food drive." Canned and dried foods will be solicited from clubs, org...
NLY/MTGE To Engage In A "Cash-Option" Merger
May 17, 2018 - Bullletin Print Report
Annaly Capital Management, Inc., ("NLY"),, a REIT, and MTGE Investment Corporation, ("MTGE"), recently announced the signing of a definitive merger agreemen...
WMB And ENB To "Roll Up" Their MLPs
May 17, 2018 - Bulletin Print Report
Williams, (WMB), and Williams Partners, L.P., (WPZ), announced an agreement (similar to their May 2015 agreement that, because of the intervention of the ill-fated ETE transact...
"Enhanced" Delivery Services Produce "Physical Presence"
May 17, 2018 - Bulletin Print Report
"Enhanced" delivery services...generally includes any activity that "significantly exceeds the basic delivery of goods to the buyer thereof." For example, a...
Fulfillment Services Exemption Not Applicable
May 17, 2018 - Volume 12 Issue 95 Print Report
P is a Virginia corporation with headquarters in Pennsylvania. P uses asales force of approximately 16 independent contractors located in New York State, (NYS)....
Manufacturer's Receipts "Sitused" To Ohio
May 16, 2018 - Bulletin Print Report
SMK Industries, Ltd., ("SMKI"), after an audit, was assessed a deficiency by the Ohio Department of Taxation for unpaid commercial activity taxes, ("CAT"),...
Exchanging Stock For Voting Trust Certificates
May 16, 2018 - Volume 12 Issue 94 Print Report
TP was one of the original organizers of M Corporation, (M), and received "6Y" shares of no par value common stock of M for services he rendered to M....
I.R.S. To Address "GILTI" Foreign Tax Credit Issue
May 15, 2018 - Bulletin Print Report
One of the provisions contained in the Tax Cuts and Jobs Act, which was specifically designed to arrest the "erosion of the U.S. tax base," was the aptly named "...
Flight Attendant's Reach Exceeded Her Grasp
May 15, 2018 - Volume 12 Issue 93 Print Report
Petitioner, (P), was a U.S. citizen and a bona fide resident of Hong Kong. She worked as a flight attendant for United Airlines, (UA), on international flights based...
Shire's Scheme Of Arrangement Will Not Qualify As A Reorganization
May 14, 2018 - Bulletin Print Report
Takeda Pharmaceutical Company, Ltd., ("TPC"), and Shire plc, ("SH"), have agreed to engage in a business combination that will see the former TPC shareholde...
Unsolicited Property Is Includible In Gross Income
May 14, 2018 - Volume 12 Issue 92 Print Report
Tserves on the Board of Supervisors of County. Among the duties of the Board of Supervisors is the supervision of a stadium owned by County. The principal tenan...
Massachusetts Follows Sec. 338(h)(10) Fiction
May 11, 2018 - Bulletin Print Report
P and T both manufacture "X." On Date 1, P acquired 100 percent of the stock of T. Prior to the transaction, T took Massachusetts economic opportunity area credits (&...
Redemption of Preferred Stock Is Equivalent To a Dividend
May 11, 2018 - Volume 12 Issue 91 Print Report
TP is an irrevocable trust and holds shares of C, a family owned corporation. As of November 2, 1995, C had three classes of stock outstanding; nonvoting common stock...
IFF's Stock Will Be Taxable
May 10, 2018 - Bulletin Print Report
International Flavors & Fragrances, Inc., ("IFF"), and Frutarom Industries Ltd., ("FRUT"), a company organized under the laws of Israel, have entered in...
Wife Denied Virginia Preservation Tax Credit
May 10, 2018 - Volume 12 Issue 90 Print Report
The Taxpayers, a husband and wife, claimed $100,000 of Virginia Land Preservation Tax Credit (the "Credit") on the joint 2009 Virginia income tax return. Th...
Bonus Depreciation Not A Factor In Determining "RBIGs"
May 9, 2018 - Bulletin Print Report
Sec. 382 of the Internal Revenue Code addresses the problem of "trafficking" in losses. The section provides that, after an ownership change (withi...
Tax Implications Of A Comcast Deal For Twenty-First Century Fox
May 9, 2018 - Bulletin Print Report
The deal struck by Twenty-First Century Fox, Inc., ("FOX"), and The Walt Disney Company, ("DIS"), is relatively tax-efficient. It features a preliminary spi...
Prior Business Found To Have Been Discontinued
May 9, 2018 - Volume 12 Issue 89 Print Report
In 1945, SRC was formed to own and manage rental property, including a property called the WS property, in Milwaukee, Wisconsin. The father of petitioner, (P), owned...
Tax Profile Of Recently Announced Transactions
May 8, 2018 - Bulletin Print Report
1. KLX, Inc./Boeing--KLX will spin-off "unwanted assets," i.e., the "ESG" business, and, as part of the overall plan, Boeing will acquire the stock of KLXI...
How Will Nestle And Starbucks Be Taxed?
May 8, 2018 - Bulletin Print Report
Nestle SA and Starbucks Corporation announced a momentous agreement which dramatically alters the business profile of each corporation. Nestle will be granted "perpetual r...
Direct Ownership Not Compromised By "SSA"
May 8, 2018 - Volume 12 Issue 88 Print Report
USP is the common parent of an affiliated group of corporations that join in filing a consolidated income taxreturn. USP is a wholly owned subsidiary of Foreign...
Deferred Foreign Income Inclusion Does Not Terminate MLP Status
May 7, 2018 - Bulletin Print Report
X was organized on Date 1 as a limited partnership. X is a "publicly traded partnership," i.e., an "MLP." On Date 2, X acquired a substantial, but non-contr...
New York Expands The Definition Of "New York Source Income"
May 7, 2018 - Bulletin Print Report
The definition of "New York source income" of a nonresident individual was recently expanded in two ways.* First, the definition was expanded to include the gain or l...
When A Debtor Merges Into Its Creditor
May 7, 2018 - Volume 12 Issue 87 Print Report
In a prior transaction unrelated to the present statutory merger, X purchased from certain banks, at a cost of $20,000, outstanding notes of Y in the unpaid face amou...
KKR Will Become A C Corporation
May 4, 2018 - Bulletin Print Report
The Tax Cuts & Jobs Act, (the "Act"), dramatically reduced corporate tax rates, from 35 percent to 21 percent. By contrast, individual tax rates, at the highest l...
Grantors and Fiduciaries and Sec. 267
May 4, 2018 - Volume 12 Issue 86 Print Report
P Corporation, (P), establisheda pension plan for its employeesas well as forthose of its affiliated corporations. The plan and the accompanying tru...
Walmart Will Realize A Loss On the "Sale" Of Asda Group
May 3, 2018 - Bulletin Print Report
Walmart, Inc., ("W"), owns all of the stock of Asda Group Ltd., ("AGL"). Recently, W announced its intention to dispose of its investment in AGL, but will d...
Pre-Spin Off Control Annexation Respected
May 3, 2018 - Volume 12 Issue 85 Print Report
X and Y were corporations engaged in manufacturing. A and B each own 50 percent of the X stock. A owned 25 percent of the Y stock, and X owned the remaining 75 percen...
ILG To Be Acquired Nearly Two Years After Its "RMT" Transaction
May 2, 2018 - Bulletin Print Report
On May 11, 2016, Starwood Hotel & Resorts Worldwide, Inc., ("Starwood"), spun off the stock of its subsidiary, Vistana Signature Experiences, Inc., ("Vistana...
KLXI To Undertake A "Cash" Morris Trust Transaction
May 2, 2018 - Bulletin Print Report
KLX, Inc., ("KLXI"), is selling its "ASG" business to The Boeing Company, ("B"). However, B has no interest in acquiring or operating KLXI's o...
Bulk Sale of Inventory Does Not Produce "Business Receipts"
May 2, 2018 - Volume 12 Issue 84 Print Report
The petitioner, (P), a Rhode Island 'S' corporation, was a family-owned corporation engagedin the business of distributing products from its warehouse i...
Merger Agreement Discloses Unusual Format For S/TMUS Combination
May 1, 2018 - Bulletin Print Report
The historic combination of Sprint Corporation, ("S"), and T-Mobile US, Inc., ("TMUS"), will be accomplished in an unorthodox manner. It is the overriding o...
MPC And ANDV To Engage In A "Two-Step" Merger
May 1, 2018 - Bulletin Print Report
Marathon Petroleum Corporation, ("MPC"), and Andeavor, ("ANDV"), have entered into a definitive merger agreement "under which MPC will acquire all of A...
Who Is Entitled To A Tax Refund?
May 1, 2018 - Volume 12 Issue 83 Print Report
At the time the petition in bankruptcy was filed, the bankrupt was a wholly owned subsidiary of WDM and WDM was an unsecured creditor of the bankrupt in the sum of $4...
Is A "Cross-Border" RMT Transaction A Device?
April 30, 2018 - Bulletin Print Report
Distributing, ("D"), a publicly traded State A corporation, is the parent of a worldwide group of corporations. Prior to the Transaction, D and its subsidiaries were...
What Becomes Of Sprint's Net Operating Losses?
April 30, 2018 - Bulletin Print Report
As everyone knows by now, Sprint Corporation, ("S"), the parent of Sprint Communications, Inc., and T-Mobile US, Inc., ("TMUS"), have agreed to a merger (we...
"Untimely" Liquidation Qualified For Sec. 332 Non-Recognition
April 30, 2018 - Volume 12 Issue 82 Print Report
CB, Inc., (CB), owned all of the outstanding preference shares and 80 percent of the common shares of CB, Ltd., (CBL), an English corporation. &...
"CAT" Credit Unaffected By Excluded COD Income
April 27, 2018 - Bulletin Print Report
Ohio's 2005 tax reform provided for a phase out of the franchise tax and a phase in of its replacement, the commercial activity tax, ("CAT"). Because the CAT is a...
A Sale and Purchase Within 30 Days Is Not a Wash Sale
April 27, 2018 - Volume 12 Issue 81 Print Report
Advice has been requested from the I.R.S.whether the provisions of Sec. 1091 of the Internal Revenue Code, the so-called "wash sale rules," will opera...
Art Is Not Fungible
April 26, 2018 - Volume 12 Issue 80 Print Report
A fire occurred in the residence then occupied by the taxpayers. There was substantial damage visited upon an art collection maintained by the taxpayers consisting of 3,000 lit...
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 &...
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...
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.
"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...
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...
LUK To Deconsolidate National Beef
April 10, 2018 - Bulletin Print Report
Leucadia National Corporation, ("LUK"), has announced "strategic transactions involving several of its investee companies; a proposal to change the name of the c...
Gain From Sale of Encumbered Building Is Not "UBTI"
April 10, 2018 - Volume 12 Issue 68 Print Report
The taxpayer, (TP), is exempt from Federal incometax under Sec. 501(a) of the Internal Revenue Code as an organization described in Sec. 501(c)(3) of such Code....
NYS Tax Assessment Barred By ERISA "Preemption" Rule
April 9, 2018 - Bulletin Print Report
The activity that gave rise to a New York State notice of deficiency was the sale of real property, ("P"), located at 948 Second Avenue in Manhattan, for $5.5 million...
Inability To "Group" Activities Produces A "Passive" Loss
April 9, 2018 - Bulletin Print Report
Petitioner, ("P"), is a real estate developer. In 2005, P purchased, through one of his affiliates, a large property in Oakley, California, a community northeast of O...
Voting Stock Found To Be "Other Than Common Stock"
April 9, 2018 - Volume 12 Issue 67 Print Report
X Corporation, (X), has outstanding 1,000 shares of common stock all of which were held by five related individuals. X issued...
Avoiding The Sec. 306 "Taint"
April 6, 2018 - Volume 12 Issue 66 Print Report
A, B, and C owned all of the common stock of X Corporation, (X). X required funds for expansion and contemplated issuing stock for public sale. Underwriter, (U), advi...
SJM Will Reap Tax Benefits From Ainsworth Acquisition
April 5, 2018 - Bulletin Print Report
The J.M Smucker Company, ("SJM"), has announced the signing of a definitive agreement to acquire Ainsworth Pet Nutrition, LLC, ("A"), "in a transaction...
Doing Business In California
April 5, 2018 - Volume 12 Issue 65 Print Report
WK incorporated appellant (AP) in Delaware on May 20, 2003. According to AP's website, AP possesses a portfolio of approximately 30 "developing" brands...
Is The CBI/MDR Combination A Reorganization?
April 4, 2018 - Bulletin Print Report
McDermott International, Inc., ("MDR"), and Chicago Bridge & Iron Co. N.V., ("CBI"), are engaging in a business combination that features several steps...
A Fiduciary May Be Awarded a Tax Refund
April 4, 2018 - Volume 12 Issue 64 Print Report
TP is the common parent of an affiliated group of corporations filing a consolidated tax return (TPG). One of TP's subsidiaries is Subsidiary, (S). For the years...
I.R.S. Previews "Interest Disallowance" Regulations
April 3, 2018 - Bulletin Print Report
One of the more controversial provisions of the Tax Cuts and Jobs Act, (the "Act"), is the one which places a cap on the amount of "business interest" that...
Taxpayer Did Not Change His "Domicile"
April 3, 2018 - Volume 12 Issue 63 Print Report
Oregon imposes an income tax on every resident and every non-resident with Oregon-source income. Oregon defines a resident as an individual who is domici...
Limiting The Amount Subject To Partial Liquidation Treatment
April 2, 2018 - Volume 12 Issue 62 Print Report
For over five years, P has owned all of the outstanding stock of S and each has been engaged in the active conduct of a trade or business during that period. For seve...
When Are Royalties "Subject To A Tax"
April 2, 2018 - Bulletin Print Report
Kohl's Department Stores, Inc., ("K"), is a corporation organized under the laws of Delaware. K operates retail stores throughout the United States. Kohl's Il...
Government Grants Included In A Partnership's Gross Income
April 2, 2018 - Bulletin Print Report
U is a limited liability company...treated as a partnership for federal income tax purposes. U has two members, UNI and UQD. These members are both owned by 'S' corpora...
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;...
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,"...
BPY To Acquire GGP
March 28, 2018 - Bulletin Print Report
Brookfield Property Partners L.P., ("BPY"), a publicly traded partnership, (i.e., an MLP), organized under the laws of Bermuda, and GGP, Inc., ("GGP"), have...
Discounted Options Are Subject to Sec. 409A
March 28, 2018 - Volume 12 Issue 60 Print Report
DS and MD (petitioners or plaintiffs)are employed by MSI. Petitioners are two of the three co-founders of Marvell Technology Group, Ltd. (MTGL), the parent of M...
Inherited IRA Can Be Reached By Creditors
March 27, 2018 - Bulletin Print Report
D's mother had two IRAs. D was a beneficiary of one such IRA. After D's mother passed away, D used the funds received from her mother to establish an "inherited IR...
Late Filing Penalties Cannot Be Waived
March 27, 2018 - Volume 12 Issue 59 Print Report
Labor unions do not have to pay income or other federal taxes. However, they do have to file informational returns detailing their income, disbursements, etc....
"Customary" Services May Be Rendered By A REIT
March 26, 2018 - Bulletin Print Report
Taxpayer, ("TP"), is a real estate investment trust, ("REIT"). TP owns three separate residential properties, Property A, Property B, and Property C (the &q...
"Last Resort" Test Satisfied
March 26, 2018 - Bulletin Print Report
Sec. 355 of the Internal Revenue Code applies to a spin-off (or split-off) only if, among several other requirements, "it is carried out for one or more corporate business...
Donating Common Stock
March 26, 2018 - Volume 12 Issue 58 Print Report
C is an 'S' corporation. Its stock is held by X and Y in almost equal proportions. Buy/sell agreements exist between X and C and between Y and C. &n...
Medical Facility Days and The 183-Day Rule
March 23, 2018 - Volume 12 Issue 57 Print Report
RFF was born in New York City. She has been domiciled in Florida since she was 15 years of age. She currently resides in Miami. She has owned property and maintained...
Supreme Court Narrows The Scope Of The "Omnibus Clause"
March 22, 2018 - Bulletin Print Report
Sec. 7212(a) of the Internal Revenue Code contains two substantive clauses. The first such clause forbids "corruptly or by force or threats of force...endeavoring to intim...
CRM To Acquire MULE
March 22, 2018 - Bulletin Print Report
Salesforce.com, Inc., ("CRM"), and MuleSoft, Inc., ("MULE"), have entered into a definitive agreement pursuant to which CRM will acquire all of the stock of...
Reinvestment Power Is Fatal To Trust Status
March 22, 2018 - Volume 12 Issue 56 Print Report
The trust, whose corpus consists of a portfolio of municipal bonds, was formed to provide its investors with tax-free income. The trust will terminate upon the maturi...
Allergan Spin-Off Impeded By Tax Considerations
March 21, 2018 - Bulletin Print Report
Allergan plc's stock has performed poorly of late, and this underperformance has prompted investors to call for a separation of some of Allergan's businesses in the hop...
Investment Trust Not an Association
March 21, 2018 - Volume 12 Issue 55 Print Report
A securities broker, as sponsor, formed an investment trust with a bank as trustee. The sponsor deposited in the trust certain tax-exempt bonds and contracts to purch...
Non-Compete Covenant Is Not A Prohibited Interest
March 20, 2018 - Volume 12 Issue 54 Print Report
C is engaged in an ongoing business. C has outstanding 400 shares of common stock all of which are held by A (380 shares) and by B (20 shares)....
"Shared-Loss" Payments From FDIC Not Exempt From Tax
March 19, 2018 - Bulletin Print Report
Taxpayers, ("TPs"), are affiliates that conduct the business of financial institutions. TPs file their Indiana tax returns on a combined basis. TPs deducted $53,558,9...
Partnership Not An "Investment Company"
March 19, 2018 - Volume 12 Issue 53 Print Report
X is a publicly traded limited partnership, i.e., an MLP. LP owns limited partnership interests in X. GP, a disregarded indirect subsidiary of LP, is X's general partner. X...
TCI Fund Management Ltd. Proposes That AABA Liquidate
March 19, 2018 - Bulletin Print Report
TCI Fund Management Ltd., ("TCI"), an influential holder of a large (if not the largest) block of stock in AABA, has proposed a plan that it believes will substantial...
iHeartMedia May Spin-Off CCOH
March 16, 2018 - Bulletin Print Report
iHeartMedia, Inc., ("IH"), and certain of its subsidiaries, have entered into a plan of reorganization under chapter 11 of Title 11 of the United States Code, the ban...
Post-Death Merger Is Of No Help
March 16, 2018 - Volume 12 Issue 52 Print Report
As of the date of his death, A owned less than 20 percent of the stock of X and less than 20 percent of the stock of Y. The value of this stock was included in determ...
FERC Lowers The Boom On MLPs
March 15, 2018 - Bulletin Print Report
It took nearly two years, but the Federal Energy Regulatory Commission, ("FERC"), has now decided that its policy of permitting MLPs that operate interstate natural g...
"Short Sale" Of Dwelling Is A Single Transaction
March 15, 2018 - Bulletin Print Report
In 2005, Mr. and Mrs. Simonsen, ("S"), bought a townhouse in San Jose, California for just under $695,000. S signed an "Initial Interest Adjustable Rate Note.&qu...
Where Are Services "Rendered?"
March 15, 2018 - Volume 12 Issue 51 Print Report
Petitioner, ("P"), is a law firm with a principal office in Detroit, but with additional offices located elsewhere. P represents clients both within and outside Detro...
Bank Must Capitalize "OREO" Expenses
March 14, 2018 - Volume 12 Issue 50 Print Report
XH is a publicly traded bank holding company. X, a subsidiary of XH, is a state chartered commercial bank in State. A significant portion of X's loan portfolio is...
CSX Not Exempt From Sales Tax
March 13, 2018 - Bulletin Print Report
CSX Transportation, Inc., ("CSX"), filed refund claims totaling $7,304,470.44, plus interest, reflecting CSX's belief that it had overpaid Kentucky sales taxes on...
Baltimore's "Billboard" Tax Does Not Suppress Free Speech
March 13, 2018 - Bulletin Print Report
Petitioner, ("P"), is an "outdoor media company" which owns and operates outdoor signs nationwide and throughout the city of Baltimore, Maryland. The Baltim...
Affiliate Loans Do Not Create Shareholder Basis
March 13, 2018 - Volume 12 Issue 49 Print Report
Petitioner, ("P"), incorporated and elected 'S' status for M in 2004. P obtained a personal loan from CNB. P transferred $4,985,035 of the loan proceeds to A,...
DAN Will Effect An "Inversion"
March 12, 2018 - Bulletin Print Report
The Tax Cuts and Jobs Act, (the "Act"), reduced corporate tax rates from 35 percent to 21 percent; and instituted a "participation exemption" system which w...
CI And ESRX Will Use A "Double Dummy" Format
March 12, 2018 - Bulletin Print Report
Cigna Corporation, ("CI"), and Express Scripts Holding Company, ("ESRX"), have entered into a definitive agreement pursuant to which CI will acquire the sto...
Assignment of Income-Producing Property
March 12, 2018 - Volume 12 Issue 48 Print Report
Y has entered into an agreement with Publisher, (P), that Y will deliver a manuscript to P on or before a specified date. Y agreed to select the individual contributo...
Active Business Through a Partnership
March 9, 2018 - Volume 12 Issue 47 Print Report
D has elected to be treated as an 'S' corporation since its formation. D is owned by SHA and SHB. O is a State A limited liability company that was formed on...
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...
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...
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,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....
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...
LQ To Engage In A "Bad" Morris Trust Transaction
January 19, 2018 - Bulletin Print Report
La Quinta Holdings, Inc., ("LQ"), and Wyndham Worldwide Corporation, ("WYN"), have entered into a definitive agreement "under which WYN will acquire LQ...
Voluntary Prepayment Not Deductible
January 19, 2018 - Volume 12 Issue 13 Print Report
NV's sole asset was a shopping center. In December 1963, NV entered into a contract with LR under which LR would manage the shopping center for a fee of $24,000 per year......
The Expansion Doctrine Allows A Tax-Free Split-Off
January 18, 2018 - Volume 12 Issue 12 Print Report
Petitioners owned 50 percent of the stock of A and the Bs owned the remaining 50 percent. A owned and operated a restaurant called "ASR." A incorporated a wholly owne...
Contribution Of Property By A Trust Limited To Basis
January 17, 2018 - Volume 12 Issue 11 Print Report
In December 1993, the Greens created the Trust. The Trust instrument named Mart Green as the initial trustee (the Trustee) of the Trust. GDT is a single-member limited liabilit...
Kering S.A. Plans A "Failing" Spin-Off
January 17, 2018 - Bulletin Print Report
While foreign corporations frequently engage in "separation" transactions, in which the stock of a subsidiary, either preexisting or newly formed, is distributed to i...
Tax Act Addresses "Trafficking" In "Excess" Interest Expense
January 17, 2018 - Bulletin Print Report
One of the more controversial provisions of the Tax Cuts and Jobs Act, (the "Act"), is the provision which places a cap on the amount of "business interest"...
"Orphan" Drug Credit Available For Post-Approval Expenditures
January 16, 2018 - Bulletin Print Report
Taxpayer, ("TP"), is the legal owner of "Drug." On Date 2, the FDA granted Drug "orphan drug" designation under Sec. 526 of the FDCA. On Date 3, C...
Leveraged Spin-Off Passes Muster
January 16, 2018 - Bulletin Print Report
Distributing, ("D"), is a publicly traded corporation and is the common parent of an affiliated group of corporations that file a consolidated federal income tax retu...
Bargain Spread On "ISOs" Reduces Earnings And Profits
January 16, 2018 - Volume 12 Issue 10 Print Report
During the taxable year, the legendary quarterback of Columbia University and the Chicago Bears, the great Sid Luckman, ("L"), owned 100,000 shares of R. In 1961, he...
Not Essentially Equivalent to a Dividend
January 12, 2018 - Volume 12 Issue 9 Print Report
Company, (C), had outstanding 926,155 shares of voting common stock, which are held by 125 shareholders. Mr. A, the seventh l...
Why Isn't CDI's Redemption A Partial Liquidation?
January 11, 2018 - Bulletin Print Report
Churchill Downs, Inc., ("CDI"), is offering to purchase common stock for cash up to an aggregate purchase price of $500 million, at a price not greater than $265 and...
FASB Addresses Deferred Tax Adjustments Resulting From "The Act"
January 11, 2018 - Bulletin Print Report
It is by now quite well known that ASC 740, derived from SFAS No. 109, Accounting For Income Taxes , requires that deferred tax liabilities and deferred tax assets...
In-State Representative Created The Requisite "Nexus"
January 11, 2018 - Bulletin Print Report
The taxpayer, ("TP"), handcrafts glassware and tableware for retail and wholesale sale across the U.S. It transacts all of its retail sales through the internet. TP a...
Active Participant Denied I.R.A. Deduction
January 11, 2018 - Volume 12 Issue 8 Print Report
Petitioner, (P),lost her job in 2008. She received, upon leaving, a distribution of the entirety of her 401(k) retirement account. Petitioner did not "roll...
Indemnity Payments Are Capital Expenditures
January 10, 2018 - Volume 12 Issue 7 Print Report
Before December 31, 2000, V Corporation, (V), owned 67 percent of the outstanding stock of AG Corporation, (AG). The remainder of the stock was owned by certain S fam...
Altice N.V. Will Effect A "Taxable" Spin-Off
January 10, 2018 - Bulletin Print Report
Altice N.V., ("ATC"), owns approximately 73 percent of the total outstanding capital stock, and approximately 98 percent of the total voting power of all classes of s...
Termination of Option Produces Ordinary Loss
January 9, 2018 - Volume 12 Issue 6 Print Report
In 1997, petitioner, (P), received an M.B.A. In 2003, he accepted employment as the general manager of G, a real estate development companylocatedin Calif...
Stock Buybacks Permitted After "RMT" Transaction
January 8, 2018 - Bulletin Print Report
Acquiring and Distributing are each publicly traded corporations. Controlled was formed to effectuate the Distribution and was wholly owned by Distributing until Date 2. Merger...
The Tax Cuts And Jobs Act Benefits Owners Of "Pass-Throughs"
January 8, 2018 - Bulletin Print Report
The most scrutinized provision of the Tax Cuts and Jobs Act, (the "Act"), is, arguably, its most complex provision as well. The Act taxes "qualified business inc...
Spouse's Mortgage Payments Constitute Deductible "Alimony"
January 8, 2018 - Volume 12 Issue 5 Print Report
On January 26, 1994, a husband, (C), and wife, (N), signed a mortgage note for a loan from a credit union, (CU), to purchase the CL residence. C and N later divorced....
Sec. 304 Gives Way To Step Transaction Doctrine
January 5, 2018 - Volume 12 Issue 4 Print Report
1. P owns all of the stock of S and T. P, S, and T are members of a consolidated group. As part of an integrated plan, S purchases all the stock of T from P for cash...
Gross Receipts Reduced In Year In Which "Fuel Rewards" Are Earned
January 5, 2018 - Bulletin Print Report
The taxpayer, ("TP"), is a grocer. TP offers a "fuel reward" program to its customers. The money earned is electronically loaded to an enrolling customer...
Some Reduction of Proportionate Interest Is Necessary
January 4, 2018 - Volume 12 Issue 3 Print Report
X Corporation, (X), had 1,000,000 shares of voting common stock outstanding which are widely held and publicly traded. X offered to purchase 25,000 shares of its comm...
HRG/Spectrum--NOLs Needed To Shelter "GBA" Gain
January 4, 2018 - Bulletin Print Report
HRG Group, Inc., (HRG), owns approximately 60 percent of the stock of Spectrum Brands Holdings, Inc., (SPB). While the companies prepare consolidated financial statements (sinc...
Goldman Sachs Group Reports On Impact Of Tax Bill
January 3, 2018 - Bulletin Print Report
Goldman Sachs Group, Inc., ("Goldman"), like many other companies with (i) net deferred tax assets; and (ii) deferred foreign income, has disclosed the charges it wil...
Qualified Appraisal Lacking
January 3, 2018 - Volume 12 Issue 2 Print Report
HE owned shares in a corporation known as TCAI, (C). C's sole assets were two apartment buildings in Tucson, Arizona: SS and LS.  ...
Withholding (Temporarily) Not Required On Purchase Of MLP Interests
January 2, 2018 - Bulletin Print Report
The Tax Cuts and Jobs Act introduced new Sec. 864(c)(8) into the Internal Revenue Code. That section provides that a nonresident alien individual's or foreign corporation&#...
Tax Act Makes MLPs Acquisition Targets
January 2, 2018 - Bulletin Print Report
The Tax Cuts and Jobs Act, (the "Act"), improves bonus depreciation in several ways. Most notably, in the case of "qualified property," the depreciation ded...
Contractual Arrangement Creates a Separate Entity
January 2, 2018 - Volume 12 Issue 1 Print Report
TP is a corporation organized under the laws of State, and is a wholly-owned subsidiary of Parent. Affiliate is an entity organized under the laws of Country A and is...
Prepaying Real Estate Taxes Mired In Controversy
December 29, 2017 - Bulletin Print Report
The Tax Cuts and Jobs Act substantially restricts an individual taxpayer's ability to claim a federal income tax deduction for state and local real property taxes, personal...
Coca-Cola's Mexican Taxes Were "Compulsory Levies"
December 29, 2017 - Volume 11 Issue 250 Print Report
The Coca-Cola Company, ("P"), is the parent of a group of companies that manufacture, sell, and distribute beverages in more than 200 countries. To support its intern...
Accrual Of Tuition Reduction Not Permitted
December 28, 2017 - Volume 11 Issue 249 Print Report
The taxpayer, ("TP"), offers academic programs. Its educational institutions offer students the opportunity to earn undergraduate and graduate degrees. TP implemented...
"Intrinsic" Activities Generate MLP Qualifying Income
December 27, 2017 - Bulletin Print Report
X intends to form a publicly traded partnership ("P"). P will generate income from: (A) the supply and transportation of fluids...for use in fracturing and drilling o...
S.E.C. Provides Implementation Guidance On "Cuts And Jobs" Act
December 27, 2017 - Bulletin Print Report
The Securities And Exchange Commission, ("SEC"), has provided some useful guidance on exactly how harried corporate finance personnel will be expected to comply with...
Online University Not Taxable In Indiana
December 27, 2017 - Volume 11 Issue 248 Print Report
The University of Phoenix, Inc., (the "University"), a wholly owned subsidiary of Apollo Education Group, Inc., is headquartered in Phoenix, Arizona. The University s...
Carbon Emission "Units" Do Not Constitute Real Estate Assets
December 26, 2017 - Bulletin Print Report
The taxpayer, ("TP"), is a real estate investment trust, ("REIT"). TP is an international forest products company that is "primarily engaged in activit...
Tax Reform's Impact On Tax Assets And Liabilities
December 26, 2017 - Bulletin Print Report
President Trump's signing of the Tax Cuts and Jobs Act, (the "Act"), on December 22nd, about ten days earlier than expected, means that 2017 financial statements...
Walgreen Escapes Minnesota's "Legend Drug Tax"
December 26, 2017 - Volume 11 Issue 247 Print Report
Walgreen Specialty Pharmacy, LLC, ("WSP"), is a single-member limited liability company organized under the laws of Delaware and headquartered in Florida. WSP w...
Fannie Mae Can Retain Some Of Its Earnings
December 22, 2017 - Bulletin Print Report
Thanks, apparently, to the new tax bill, Fannie Mae and the U.S. Department of the Treasury, (the "Department"), entered into a letter agreement that will have the ef...
Post-Divorce Payment Obligation Means No Alimony Deduction
December 22, 2017 - Volume 11 Issue 246 Print Report
Petitioner, ("P"), resided in the United Kingdom, ("U.K."), when his petition was filed. P and his ex-wife were divorced on January 24, 2006 pursuant to a d...
DDR's Spin-Off Will Be Taxable
December 21, 2017 - Bulletin Print Report
DDR Corporation, ("DDR"), is a real estate investment trust, (REIT), specializing in the leasing of shopping centers. It announced, on December 14, 2017, that its Boa...
Receipts Are Rents From Real Property
December 21, 2017 - Volume 11 Issue 245 Print Report
An unincorporated trust, otherwise qualifying as a real estate investment trust, (REIT), acquired the fee interest only in land, exclusive of any improvements thereon...
Qualified Creditors Own 50 Percent Of LossCorp's Stock
December 20, 2017 - Bulletin Print Report
LossCorp, ("LC"), was the parent of an affiliated group filing a consolidated income tax return. Prior to Date 5, members of the LossCorp Group, ("LCG"), op...
True Lease or Financing Agreement?
December 20, 2017 - Volume 11 Issue 244 Print Report
Petitioner, (P), leases equipment. After a customer has identified a piece of equipment itwishes to acquire, P purchases the equipment from the supplier thereof...
Butane Is Not An "Alternative Fuel"
December 19, 2017 - Bulletin Print Report
Producer mixes gasoline and butane and sells it for use as a fuel. Producer claims the alternative fuel mixture credit for an open tax period ending on or before December 31, 2...
Escalator Provisions in Lease Agreements
December 19, 2017 - Volume 11 Issue 243 Print Report
The Trust, a real estate investment trust, owns a group of retail establishments leased to 23 tenants. The existing leases provide for monthly rental payments with th...
Fox's Failed Spin-Off Will Produce A Basis Step-Up
December 18, 2017 - Bulletin Print Report
Last week, FOX announced a transformative transaction in connection with which it will transfer a large part of its business to DIS while retaining the remainder. The transacti...
Tax Cut And Jobs Act--Selected Individual And Corporate Provisions
December 18, 2017 - Bulletin Print Report
A consolidated tax bill, The Tax Cut and Jobs Act, has been crafted and it seems certain to become law within the next two weeks or so. The synthesized bill skews heavily in fa...
Tax Cut And Jobs Act--International And Base Erosion Provisions
December 18, 2017 - Bulletin Print Report
The Tax Cut and Jobs Act devotes a great deal of attention to the taxation profile of multinational corporations. In particular, the bill introduces a "participation exemp...
Matching Purchases With Loss Sales
December 18, 2017 - Volume 11 Issue 242 Print Report
During 1967, the taxpayer, on each of three separate occasions, purchased 100 shares of stock in M Corporation. He paid $158 per share for the first block of stock; $...
"Family Office" Is Engaged In A Trade Or Business
December 15, 2017 - Bulletin Print Report
Lender Management LLC, ("LM"), elected to be treated as a partnership for Federal income tax purposes. Harry Lender, ("H"), founded Lender's Bagels. His...
"Moline Properties" Should Apply To 'S' Corporations
December 15, 2017 - Volume 11 Issue 241 Print Report
Moline Properties v. Commissioner , 63 S. Ct. 1132 (1943), is the case most often cited for the treatment of corporations as entities separate from their owners fo...
FOX/DIS Choose A "Failed" Morris Trust Structure
December 14, 2017 - Bulletin Print Report
The Walt Disney Company, ("DIS"), and Twenty-First Century Fox, Inc., ("FOX"), have entered into a definitive agreement for DIS to acquire FOX...for approxi...
'S' Corporation Status Not An Interest In Property
December 14, 2017 - Bulletin Print Report
HDL filed for protection under Chapter 11 of Title 11 of U.S. Code. On February 16, 2009, HDL filed an election to be classified as an 'S' corporation under Sec. 1362 o...
Solar Energy Equipment Credit
December 14, 2017 - Volume 11 Issue 240 Print Report
Petitioner, (P), proposes to install solar energy equipment at his principal residence in two stages. The first project stage will involve installing 10 pole-mounted...
Facebook To Change Tax Reporting Model
December 13, 2017 - Bulletin Print Report
Facebook, Inc., (FB), succumbing to the pressures being exerted on multinational U.S. based technology companies to pay higher taxes in the various countries in which they do b...
Feeder Organizations
December 13, 2017 - Volume 11 Issue 239 Print Report
Petitioner, (P), was organized under the laws of Nebraska on October 21, 1981, to raise funds for the furtherance of charitable groups, religious groups, and nonprofi...
State Tax Credit Not a "Return Benefit"
December 12, 2017 - Volume 11 Issue 238 Print Report
Contributions of money or property to the "W Fund", maintained by State, qualify for a credit against State income tax. The amount of the credit is "a%...
Colorado Cannot Reach Oracle's $6 Billion Gain
December 11, 2017 - Bulletin Print Report
Oracle Corporation, ("O"), is a Delaware corporation with headquarters in California. O is the parent of a worldwide group of affiliated corporations. Oracle Corporat...
New Star Financial's "CVRs" Are A Casualty Of Tax Reform
December 11, 2017 - Bulletin Print Report
First Eagle Holdings, Inc., ("FE"), and New Star Financial, Inc., ("NS") have entered into a definitive agreement in connection with which FE is to acquire...
Taxpayer Fails To Qualify For Tax-Exempt Status
December 11, 2017 - Volume 11 Issue 237 Print Report
Petitioner, (P), was organized as a California nonprofit corporation in March, 2010. P's articles of incorporation state: The sole purpose of this corporation is...
Special Dividends Are Not "Preferential"
December 8, 2017 - Volume 11 Issue 236 Print Report
TP is a real estate investment trust, (REIT). TP regularly distributes 100 percent of its taxable income for each taxable year. &nbs...
The "Next Day" Rule
December 7, 2017 - Volume 11 Issue 235 Print Report
ACQ is a calendar year taxpayer and the common parent of a consolidated group ("the ACQ Group"). On November 30, 20xx, a subsidiary in the ACQ Group merges...
CVS/Aetna Is Taxable And What Are Fox's Options?
December 6, 2017 - Bulletin Print Report
CVS Health Corporation and Aetna, Inc. have entered into a definitive agreement pursuant to which the former will acquire all of the stock of the latter. Structurally, CVS will...
Adversity Begets "Business Reality"
December 6, 2017 - Volume 11 Issue 234 Print Report
In 1992, petitioners, Y and his spouse, S,purchased an empty lot (LP) for $27,000. Petitioners constructed a residential home on the property. Petitioners also...
Existence Of Local Office "Tainted" All "Inbound" Sales
December 5, 2017 - Volume 11 Issue 233 Print Report
Avent, Inc., ("AV"), is one of the largest distributors of electrical components, computer products, and embedded technology, serving customers globally. AV has an of...
New Jersey "ENI" Begins With Federal Taxable Income
December 5, 2017 - Bulletin Print Report
Plaintiff, ("I"), is headquartered and incorporated in India. It has 33 branches worldwide, including one in the United States. As a foreign corporation, I reported i...
Stock Repurchases After A Spin-Off Do Not Implicate Sec. 355(e)
December 5, 2017 - Bulletin Print Report
Distributing 2, ("D2"), is the common parent of an affiliated group of corporations that join in the filing of a consolidated federal income tax return. D2 proposed t...
Senate Passes Tax Bill
December 4, 2017 - Bulletin Print Report
The full Senate has now passed the Senate Finance Committee's version of H.R. 1, with certain changes designed to placate the fiscal concerns of selected Republican senator...
Disgorgement Is "Punitive" And Not Deductible
December 4, 2017 - Bulletin Print Report
Does Sec. 162(f) prohibit a deduction under Sec. 162(a) for an amount paid as disgorgement for violating a federal securities law? Sec. 162(f) provides that...
Exchange of Insurance Contracts
December 4, 2017 - Volume 11 Issue 232 Print Report
On Date a, Old Issuer, (OI), a life insurance company, issued Old Policy, (OP), to A and B, husband and wife. On Date b, A and B established Old Trust, (OT), an irrev...
Consignment Sales Create Washington Nexus
December 1, 2017 - Bulletin Print Report
Taxpayer, ("TP"), is an out-of-state diamond and gold wholesaler. The state in question is Washington. When a customer of a retailer orders a custom piece of jewelry,...
Municipal Bond Interest Is Subpart F Income
December 1, 2017 - Volume 11 Issue 231 Print Report
TP is the sole U.S. shareholder of FC, a Cayman Islands corporation. During the years ended December 31, 1998, 1999, and 2000, FC was a controlled foreign corporation...
Price Reports Not Taxable Information Service
November 30, 2017 - Bulletin Print Report
Petitioner, ("P"), is a retail supermarket chain with approximately 50 locations throughout New York State. As part of its business operations, P monitors the retail...
Proceeds From Sale of Stock Ruled "Wages"
November 30, 2017 - Volume 11 Issue 230 Print Report
In November, 1982, the Lane Companies, (LC), and their owners, the Lanes, filed for bankruptcy. In July, 1985, the Lanes relinquished all control over LC to the Lane...
Determining Whether a "U.S. Shareholder" is a PHC
November 29, 2017 - Volume 11 Issue 229 Print Report
C is a domestic corporation. There has been an increase in earnings invested in U.S. property by foreign corporations controlled by C, the investments consisting of U...
Taxpayer Denied Multiple Real Property Tax Exemptions
November 28, 2017 - Bulletin Print Report
Petitioner, ("P"), purchased an historic building in Buffalo, New York and promptly converted it into a mixed-use residential/commercial facility. P then applied to t...
Loss From "Indirect" Sales To Related Parties Disallowed
November 28, 2017 - Volume 11 Issue 228 Print Report
Petitioners, J and G, are husband and wife. G has "independent means," and the securities she owned on October 14, 1953 were not acquired by her directly or...
VMW's Spin-Off Prospects
November 27, 2017 - Bulletin Print Report
Effective September 7, 2016, Dell Technologies, Inc., ("DTI"), acquired all of the stock of EMC Corporation, ("EMC"), from the shareholders of EMC. As a con...
Selected Provisions Of The Senate Finance Committee's Tax Bill
November 27, 2017 - Bulletin Print Report
Later this week, the Senate will be taking up the version of the "Tax Cuts and Jobs Act" recently ratified by the Senate Finance Committee. It is by no means clear th...
Short Year Does Not Shorten Term Of "GRA"
November 27, 2017 - Bulletin Print Report
UST owns all the stock of TFD, a foreign corporation. In an exchange to which Sec. 351 of the Code applies, UST transfers all the stock of TFD to TFC, a foreign corporation, so...
Eligible Replacement Property Did Not Lose Its Status
November 27, 2017 - Volume 11 Issue 227 Print Report
TP, a domestic corporation, is primarily engaged in the broadcasting business. In 1978, TP sold the assets of television station TV1. The sale was certified by the F....
Damage Due To "Defective" Concrete Constitutes A Casualty Loss
November 24, 2017 - Bulletin Print Report
Residents in the northeastern part of the U.S. have reported problems with certain residential concrete foundations. Investigators concluded that the deterioration of the concr...
Debt Financed Portfolio Stock
November 24, 2017 - Volume 11 Issue 226 Print Report
In January, 1983, X Corporation, (X), raised $8 million in a stock issuance. The funds were originally invested in various interest-bearing accounts. In 1984, a total...
Debt Did Not Run Directly To 'S' Corporation Shareholders
November 22, 2017 - Volume 11 Issue 225 Print Report
During 2012, CO sustained an ordinary loss of $1,425,709. Of that amount, $570,284 was passed through to each of M and K. Respondent reduced the amount of losses M and K could...
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...
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...
Gainfully Employed Taxpayers Are Not "Real Estate Professionals"
November 20, 2017 - Bulletin Print Report
Petitioners filed a New York nonresident and part-year resident personal income tax return (IT-203) for 2009. Petitioners claimed a deduction of $84,934.00 from rental real est...
Highlights Of H.R. 1 As Passed By The House Of Representatives
November 20, 2017 - Bulletin Print Report
Late last week, the House of Representatives passed, in record time, a comprehensive tax bill, known as "The Tax Cuts and Jobs Act," (the "Act"). Shortly th...
The "Zenz" Doctrine Applies to the "Cash-In-Lieu" Test
November 20, 2017 - Volume 11 Issue 223 Print Report
X Corporation, (X), has outstanding 100 shares of votingcommon stock all of which are owned by Mr. A. Pursuant to an in...
Deferred Gain Triggered Into Income When Taxpayer Ceases Business
November 17, 2017 - Volume 11 Issue 222 Print Report
Petitioner, ("P"), was formed on December 21, 1993. On that date, P purchased two parcels of property, (the Property), in New York City. On November 17, 2009, P sold...
Holding Company Excluded From Combined Report
November 16, 2017 - Bulletin Print Report
To calculate the taxable income of affiliated corporations attributable to Colorado, ("C"), the Department of Revenue, (the "Department"), applies the "...
SD/BCEI Deal Appears To Be Taxable
November 16, 2017 - Bulletin Print Report
SandRidge Energy, Inc., ("SD"), and Bonanza Creek Energy, Inc., ("BCEI"), have announced that the two companies have entered into a definitive merger agreem...
Sec. 1033 Not Applicable To Purchase of Stock of New Subsidiary
November 16, 2017 - Volume 11 Issue 221 Print Report
TP is engaged in the business of manufacturing. TP's manufacturing facilities and equipment in State K were destroyed by fire. The equipment was insured and TP re...
Interest Paid On Bonds Bought "Flat"
November 15, 2017 - Volume 11 Issue 220 Print Report
STLPSC, as a result of reorganization proceedings under Sec. 77B of the Bankruptcy Act, issued in 1939 certain securities consisting of $15,865,000 25-year convertibl...
MNK Will Issue CVRs
November 14, 2017 - Bulletin Print Report
Mallinckrodt plc, ("MNK"), will be acquiring, through a subsidiary, the stock of Ocera Therapeutics, Inc., ("OTI"). The parties, however, are unable to agre...
Hewlett-Packard Denied Foreign Tax Credits
November 14, 2017 - Bulletin Print Report
The financial engineers at AIG created a Dutch company, ("FOP"), that would do little else than purchase contingent interest notes, ("CINs"), The entity'...
Sec. 1036 Exchange Not A Disposition of Option Stock
November 14, 2017 - Volume 11 Issue 219 Print Report
Company, (C), has extended incentive stock options, (ISOs), to its employees. Following the exercise by an employee of an ISO, the employee may enter into a Margin Ac...
Senate Sets Its Sights On The Cruise Industry
November 13, 2017 - Bulletin Print Report
Sec. 883(a)(1) of the Internal Revenue Code provides that the following items shall not be included in gross income of a foreign corporation and shall be exempt from taxation u...
The Tax Cuts & Jobs Act--The Senate's Proposal--Individual Provisions
November 13, 2017 - Bulletin Print Report
The Senate Finance Committee's version of the Tax Cuts & Jobs Act, (the "proposal"), parallels, in many respects, the House Ways & Means Committee's v...
No Assignment of Liquidation Proceeds
November 13, 2017 - Volume 11 Issue 218 Print Report
Company, (C), incorporated in 1947, has been primarily engaged in the business of manufacturing and selling products of a certain type but also ran its AAA division,...
The Tax Cuts & Jobs Act—The Senate's Proposal—Corporate Provisions
November 10, 2017 - Bulletin Print Report
The Senate’s version of the Tax Cuts and Jobs Act (the “proposal”) is similar in many respects to the House’s proposal but, predictably, also...
Sale of Assets Produces "Non-Business" Income
November 10, 2017 - Volume 11 Issue 217 Print Report
In 1962, Kimberly-Clark Corporation, (KC), purchased the "Coosa" properties. KC harvested the trees from the Coosa timberland to make pulp for use int...
Linde AG/Praxair Deal Passes Crucial Test
November 9, 2017 - Bulletin Print Report
Based on the “declarations of acceptance” received by the custodian banks for the Exchange Offer of Linde plc to the shareholders of Linde AG…the a...
Sec. 311(b) Gain Is "Apportionable" Income
November 9, 2017 - Volume 11 Issue 216 Print Report
TP is an out-of-state 'S' corporation that generates Virginia taxable income. On its 2010 nonresident income tax return, TP subtracted a gain resulting from t...
Option Does Not Spoil Non-Divisive 'D' Reorganization
November 8, 2017 - Volume 11 Issue 215 Print Report
Target (T) is activelyengaged in Business. T has outstanding two classes of common stock, Class A and Class B. Class A and Class B are identical except that (a)...
H.R. 1 Will Address "Carried Interest"
November 7, 2017 - Bulletin Print Report
H.R. 1, the tax proposal introduced last week by the House Ways & Means Committee, did not, initially, address the controversial "carried interest" issue. That wa...
Shared-Loss Payments From The FDIC Not Exempt From State Tax
November 7, 2017 - Volume 11 Issue 214 Print Report
The taxpayers, ("TPs"), are affiliates that conduct the business of financial institutions. TPs file their Indiana tax returns, FIT-20 forms, on a combined basis. TPs...
How Would The House Tax Bill Affect AABA?
November 6, 2017 - Bulletin Print Report
Altaba, ("AABA"), owns 383.6 million ordinary shares of Alibaba Group Holding Ltd., ("BABA"), and 2.025 billion shares of common stock of Yahoo Japan Corpor...
Forming a Holding Company
November 6, 2017 - Volume 11 Issue 213 Print Report
P Corporation, (P), is engaged in the commercial banking business. P decided that its business activities could be expanded if its banking business were conducted by...
The Individual Provisions Of The Tax Cuts and Jobs Act
November 3, 2017 - Bulletin Print Report
In addition to the business tax provisions of the Tax Cuts and Jobs Act, (the "Act"), H.R. 1, which we wrote about earlier, the individual tax provisions are equally...
A Review Of The Provisions Of The Tax Cuts and Jobs Act (H.R. 1)
November 3, 2017 - Bulletin Print Report
The Tax Cuts and Jobs Act, (the "Act"), H.R. 1, contains numerous provisions that profoundly affect the taxation of businesses and individuals. A review of, and where...
"IVF" Expenses Are Not Paid For "Medical Care"
November 3, 2017 - Volume 11 Issue 212 Print Report
M is a homosexual man. M and his partner decided to try to have children through in vitro fertilization, ("IVF"), with M serving as the biological...
Claim For Refund Is Untimely
November 2, 2017 - Volume 11 Issue 211 Print Report
In tax years 1995, 1997, and 2002, Plaintiff, ("P"), paid taxes to foreign countries and claimed a foreign tax credit on its tax returns pursuant to Sec. 901 of the C...
Chicago Real Estate Transfer Tax Does Not Violate Supremacy Clause
November 1, 2017 - Bulletin Print Report
FNMA and FHLMC, ("FM"), are federally chartered privately owned corporations. They carry out their mission by purchasing mortgages from third party lenders.... When a...
Founder Of Chiron Corporation Denied A Bad Debt Deduction
November 1, 2017 - Volume 11 Issue 210 Print Report
Petitioner, ("P"), is a world-renowned scientist in the field of biotechnology. P formed Chiron Corporation, one of the first publicly held biotechnology companies. I...
LEN And CAA To Form Housing Giant
October 31, 2017 - Bulletin Print Report
Lennar Corporation, ("LEN"), and CalAtlantic Group, Inc., ("CAA"), have entered into a definitive Agreement and Plan of Merger that will result in the creat...
LBO Gives Rise To A "Qualified Stock Purchase"
October 31, 2017 - Volume 11 Issue 209 Print Report
H is a newly-formed State X corporation. T is also a State X corporation engaged in the manufacture and marketing of a variety of products. T was a publicly-held corporation. A...
Nextel's "Pyrrhic Victory" In The Pennsylvania Supreme Court
October 30, 2017 - Volume 11 Issue 208 Print Report
In 2007, Nextel Communications, ("N"), earned $45,053,282 in taxable income on its business activities in the Commonwealth of Pennsylvania. Under the "net loss c...
Erroneous Prior Return Does Not Prevent Later Joint Return
October 30, 2017 - Bulletin Print Report
Petitioner, ("P"), and her husband, GLK, were married throughout 2014. They lived separately during that year, but were not "legally separated...under a decree o...
Deposit Plus "Dependent" Loan Recast As Direct Loan
October 27, 2017 - Volume 11 Issue 207 Print Report
FP is a corporation organized in Country X, a country that does not have in effect an income tax convention with the U.S. DS...
Education Expenses Of Doctoral Students Are Never Deductible
October 26, 2017 - Volume 11 Issue 206 Print Report
In 1994, plaintiff earned a Bachelor's of Science degree in engineering from WPI. Thereafter, plaintiff earned a Master's degree in applied mathematics from UR in 1995....
I.R.S. Relegated To "Plan" Rate On Bankrupt's Tax Deficiency
October 26, 2017 - Bulletin Print Report
The "Reorganized Debtors," ("RDs"), and the Internal Revenue Service have a dispute over the interest rate payable on a tax deficiency in 1998. Should the d...
Common Law Son Is Not A "Stepson"
October 25, 2017 - Bulletin Print Report
Petitioner, ("P"), has been residing with G for approximately 20 years. They never got married. P owned the residence in which she and G lived. G is the biological fa...
Transaction Recast As "Seller Redemption"
October 25, 2017 - Volume 11 Issue 205 Print Report
C is a State W corporation engaged in the business of processing, selling, and trucking bark and sawdust. C has outstanding 10,000 shares of voting common stock. Prio...
LIN And PX Revise Certain Terms Of Their Deal
October 25, 2017 - Bulletin Print Report
The combination of Linde AG, ("LIN"), and Praxair, Inc., ("PX"), features, most prominently, the creation of a new corporation, ("New Holdco"), or...
The Tax Advantages Of Acquiring A Sports Franchise
October 24, 2017 - Volume 11 Issue 204 Print Report
Buyers of businesses always strive to obtain a "cost" basis in the acquired assets. Securing such a cost basis can enhance the buyer's tax deductions in periods a...
DEL Will Engage In A "Conversion Transaction"
October 24, 2017 - Bulletin Print Report
Potlatch Corporation, ("PCH"), for the last 10 years a REIT in good standing, and Deltic Timber Corporation, ("DEL"), a C corporation, announced that they h...
"Solar Incentive Payment" Is Qualifying REIT Income
October 23, 2017 - Bulletin Print Report
Taxpayer, ("TP"), is a real estate investment trust, ("REIT"). TP, R2, and R3 wholly own Partnership, ("PS"). PS owns a mixed-use shopping center,...
New Inversion Disavows Any Tax Motivation
October 23, 2017 - Bulletin Print Report
Assurant, Inc., ("AIZ"), and The Warranty Group recently announced "a definitive agreement to combine operations, with AIZ shareholders retaining majority owners...
Waiving Dividends On "Hook" Stock--Part II
October 23, 2017 - Volume 11 Issue 203 Print Report
Parent, ("P), is an insurance holding company. Subsidiary, ("S"), is a life insurance company. P owns all of the common stock of S. P has elected under Sec. 1504...
Assets Of Special Purchase Vehicle Not Available To The I.R.S.
October 20, 2017 - Volume 11 Issue 202 Print Report
Edward J. Holland, ("H"), is a prolific songwriter who wrote several classic Motown compositions, including "Baby Love," "Stop In the Name of Love,&quo...
Activities In Maryland Substantially Exceed "Mere Solicitation Of Orders"
October 19, 2017 - Bulletin Print Report
Petitioner, Blue Buffalo Company, ("P"), a Delaware corporation headquartered and domiciled in Connecticut, contends that it is immune from income taxation in Marylan...
Sideways Attribution Barred
October 19, 2017 - Volume 11 Issue 201 Print Report
TP is a corporation that intends to elect to be treated as a real estate investment trust, (REIT), effective January 1, 2008....
"Facts And Circumstances" Include The "Step Transaction Doctrine"
October 18, 2017 - Volume 11 Issue 200 Print Report
On April 9, 2007, petitioner acquired a 45 percent tenant-in-common interest in real property, while SLG (an unrelated party) acquired the remaining 55 percent interest therein...
DXC To Engage In An "RMT" Transaction
October 18, 2017 - Bulletin Print Report
DXC Technology, ("DXC"), was formed on April 1, 2017. DXC is comprised of the old CSC and the Enterprise Services business of Hewlett Packard Enterprise. That busines...
When Is Property Placed in Service?
October 17, 2017 - Volume 11 Issue 199 Print Report
TP is the parent of Subsidiary, (S), a regulated public utility in State. S is developing a wind power generating facility ("the Project") that will be loca...
I.R.S. To Reassess Its Ruling Policy On Certain Issues
October 17, 2017 - Bulletin Print Report
In an unexpected announcement, the Internal Revenue Service has decided "to reconsider its views regarding certain issues as to which it has provided favorable private let...
MLP With "REIT" Income Escapes Corporate Classification
October 16, 2017 - Bulletin Print Report
Y is a limited liability company wholly owned by X, a State law corporation. Y will sell "Product A," a nitrogen-based fertilizer...to customers operating in agricult...
Lessor Of Telecommunications Infrastructure Earns Qualifying Rents
October 16, 2017 - Bulletin Print Report
Taxpayer, ("TP"), intends to elect to be treated as a real estate investment trust, ("REIT"). TP owns land and cellular communications towers and has acquir...
Abandonment Of Claim Not A Prerequisite To A Theft Loss Deduction
October 16, 2017 - Volume 11 Issue 198 Print Report
Beginning in 1997, the As began investing in securities via Donald & Company, ("D"), primarily through its employee, OK. It was later discovered that D was operat...
Cable One Is Not A "Transmission" Company
October 13, 2017 - Bulletin Print Report
Cable One, Inc., ("CO") is a Delaware corporation authorized to do business in Oklahoma as a cable television company offering cable television, internet access, and...
On-Site Sales
October 13, 2017 - Volume 11 Issue 197 Print Report
Retailer sells goods to retail customers from Sales Facility, its physical store. While physically present at Sales Facility, retail customers may select, inspect, pu...
I.R.S. Plans To Ease Requirements For Valid Sec. 754 Election
October 12, 2017 - Bulletin Print Report
Sec. 754 of the Internal Revenue Code provides that if a partnership files an election "in accordance with regulations prescribed by the Secretary," the basis of part...
Excluding "Combat Pay" From Gross Income
October 12, 2017 - Volume 11 Issue 196 Print Report
The taxpayer, H, an individual, was engaged in performing "dangerous security services" in Iraq in 2005. H was hired and paid by Blackwater Security Consult...
Interest Assessed From Date Of Revocation Of Tax-Exempt Status
October 11, 2017 - Bulletin Print Report
Petitioner, ("P), was incorporated in Florida in 1991 as a nonprofit corporation engaged principally in credit counseling. In December 1993, the I.R.S. issued P a favorabl...
Property "To Be Held" For Investment
October 11, 2017 - Volume 11 Issue 195 Print Report
In 1963, A bought a house in San Francisco for $26,000. He and his family lived in the house until 1979, when they moved to Rohnert Park, California. Shortly after mo...
Deferred Compensation Plan Found To Constitute A "Pension"
October 10, 2017 - Bulletin Print Report
Mr. William E. McDonald III, ("M"), retired from National City Corporation, ("NCC"), in 2006. As one of the bank's most senior executives, M was entitle...
COD Income Is Not Subpart F Income
October 10, 2017 - Volume 11 Issue 194 Print Report
CA is the domestic parent of a group of foreign and domestic subsidiaries engaged in Business P and Business Q. CA owns CB, a...
Dow/DuPont's I.R.S. Ruling Applies The "Overlapping Ownership" Rule
October 9, 2017 - Bulletin Print Report
LTR 201740015, February 14, 2017, is the private letter ruling that was issued to Dow and DuPont in connection with their historic business combination and the spin-offs or spl...
Pipeline And Dehydrator Are "Real Estate Assets" For REIT Purposes
October 9, 2017 - Bulletin Print Report
Taxpayer, ("TP") is a real estate investment trust, ("REIT"). TP invests in assets of certain pipeline transmission systems, ("PTSs"), by either o...
Patent Licensor Not Doing Business in Tennessee
October 9, 2017 - Volume 11 Issue 193 Print Report
CA is a non-Tennessee corporation that is primarily engaged in the business of holding, maintaining, and licensing certain patents. CA has no office or employees in T...
Gain From Sale of Property Is Not "Income in Respect of a Decedent"
October 6, 2017 - Volume 11 Issue 192 Print Report
TP entered into a contract to sell a plot of real property on Date 1, with an intended closing date of Date 2. Before Date 2, however, a gas pipeline was discovered u...
A Minor's Signing Bonus Is Taxable To Him
October 5, 2017 - Volume 11 Issue 191 Print Report
In the spring of 1960, petitioner, the great Richie (later known as Dick) Allen, was living with his mother, EA. A contract to play for the Philadelphia Phillies was signed by...
Treasury Report On Burdensome Regulations Not What We Hoped For
October 5, 2017 - Bulletin Print Report
The Treasury Department (the "Treasury") just issued its much anticipated "second report" in which it recommends actions "to eliminate and in other cas...
Taxpayers Should Have Reported "Excess" Tax Credits
October 4, 2017 - Volume 11 Issue 190 Print Report
The Ms applied for and received benefits under the Affordable Care Act, ("ACA"). On the basis of their household income, Covered California, ("CC"), a healt...
"Serial Acquisition" Regulations Were Unlawfully Issued
October 3, 2017 - Bulletin Print Report
In April 2016, the Internal Revenue Service and the Treasury Department, (the "Agencies"), issued a rule identifying stock of foreign acquiring corporations that is t...
No Nexus Without Physical Presence
October 3, 2017 - Bulletin Print Report
LI, a Nevada corporation, has since 1997 sold cosmetic products to Illinois customers via an internet website. LC is a limited liability company that, since 2004, sells cosmeti...
Incentive Payments Includible in Gross Income
October 3, 2017 - Volume 11 Issue 189 Print Report
State A has in effect a number of programs designed to attract health care professionals to perform services in underserved areas of the State....
MNK's Deferred Tax Liabilities
October 2, 2017 - Bulletin Print Report
Some investors have noticed Mallinckrodt plc's rather substantial deferred tax liabilities. In fact, as of September 30, 2016, the company had "an aggregate of $1.884...
"PFE/AGN" Regulations Set Aside
October 2, 2017 - Bulletin Print Report
The U.S. District Court for the Western District of Texas has ruled that the so-called "serial acquirer" regulations, the very regulations that rendered the...
RENN To Undertake A Most Unusual Spin-Off
October 2, 2017 - Bulletin Print Report
Renren, Inc., ("RENN" or "the Company"), "a leading real-name social networking internet platform in China," announced on September 30th that it i...
Acquisition of Control Undertaken for Good Business Reasons
October 2, 2017 - Volume 11 Issue 188 Print Report
X Corporation, (X), engaged in the sale and servicing of new and used automobiles, owned 40 percent of the outstanding stock of Z Corporation, (Z), an underwriter of...
Greenhill Will Undertake A "Leveraged Recapitalization"
September 29, 2017 - Bulletin Print Report
Greenhill & Co., Inc., ("GCI"), the firm founded by the legendary mergers and acquisitions banker, Robert Greenhill, is set to undertake a transaction that was mu...
"PIK" Interest Income Found To Be "Nonbusiness" Income
September 29, 2017 - Volume 11 Issue 187 Print Report
ConAgra Foods, Inc., ("CAF"), is a well-known packaged food company with headquarters in Omaha, Nebraska. ConAgra Foods Food Ingredient Company, Inc., ("TP"...
Observations On The "Unified Framework" For "Fixing" The Tax Code
September 28, 2017 - Bulletin Print Report
President Trump and Congressional leaders have published a broad outline, which they refer to as "The Unified Framework For Fixing Our Broken Tax Code," for tax refor...
"Transferee" Liability Is Not A "Tax" Liability
September 28, 2017 - Bulletin Print Report
From 2003-2007, D was an employee and a minority shareholder of FECP. During that period, despite generating in excess of $450 million in revenues, FECP paid no income taxes. A...
CCE's Alabama NOLs Are Not "SRLY" Limited
September 28, 2017 - Volume 11 Issue 186 Print Report
Coca-Cola Enterprises, ("CCE"), a Delaware corporation, did business in Alabama. Roddy, ("R"), a Tennessee corporation, operated a soft-drink bottling and d...
Will AVEVA's "Return Of Value" Be Taxed As A Dividend?
September 27, 2017 - Bulletin Print Report
AVEVA Group Plc, ("AV"), and Schneider Electric SE, ("SC"), have entered into an unusual agreement that will culminate in AV becoming a controlled subsidiar...
I.B.M.'s "Extraterritorial Income" Not Taxable in New Jersey
September 27, 2017 - Volume 11 Issue 185 Print Report
The New Jersey Tax Court was asked to consider the question of whether, during the period at issue, a corporation's entire net income (ENI) for New Jerse...
Whole Foods Must File Combined Return With "Trademark" Sub
September 26, 2017 - Bulletin Print Report
WFMG distributed and sold natural and organic food products at its retail stores. WFMIP, a limited partnership, owned various trademarks, trade names, and other intangible asse...
Prize Winnings Are Payments In Return For Services Rendered
September 26, 2017 - Volume 11 Issue 184 Print Report
Petitioners have several children, including C.P., who was born in 1999. At approximately nine years of age, C.P. began competing in beauty pageants "in furtherance of a p...
Executive Did Not "Willfully" Violate "FBAR"
September 25, 2017 - Bulletin Print Report
In 1973, B, who engaged in a substantial amount of international business travel, decided to open a savings account with UBS. In 2005, UBS approached B with a loan proposal tha...
Nestle S.A. Need Not Pay Tax On Disposing Of Its L'Oreal Holdings
September 25, 2017 - Bulletin Print Report
Speculation has been rampant that Nestle S.A. may, in light of the recent passing of Lilian Bettencourt, the heiress of L'Oreal founder Eugene Schueller, decide to dispose...
Interest Income Treated As "Real Estate" Income
September 25, 2017 - Volume 11 Issue 183 Print Report
Taxpayer, ("TP"), is a real estate investment trust, ("REIT"). TP is the sole owner of LLC, a disregarded entity. LLC, in turn, is the owner of Property loc...
CSFB Must "Add Back" Related Party Interest Expense
September 22, 2017 - Bulletin Print Report
The Alabama Department of Revenue, (the Department), assessed Credit Suisse First Boston U.S.A., Inc., ("TP"), for Alabama business income tax for 2006. The assessmen...
Warrior Met Coal Gets Good News Regarding Its NOLs
September 22, 2017 - Bulletin Print Report
Warrior Met Coal, ("HCC"), recently reported that the Internal Revenue Service "had issued a Private Letter Ruling" to the company. Prior to the Private Let...
Contractual Right Characterized As Stock
September 22, 2017 - Volume 11 Issue 182 Print Report
Petitioners appeal the tax court's decision assessing deficiencies in income tax due for taxable years 2008-2010. In 2008, newly formed MBA Real Estate, Inc., ("MBA&qu...
Aristea Capital Calls For Spin-Off Of Weibo By Sina
September 20, 2017 - Bulletin Print Report
In a situation that is all too reminiscent of Altaba and Alibaba/Yahoo Japan, Sina Corporation, (SC), owns, among numerous other assets, a large stake in Weibo Corporation, (WC...
Taxpayers Not Eligible For "Premium Tax Credit"
September 20, 2017 - Volume 11 Issue 181 Print Report
Petitioners enrolled in health insurance for 2014 through CC, a health insurance "Marketplace" (or "Exchange"). Petitioners were enrolled in a health insura...
Wells Fargo Denied A Deduction For Foreign Taxes Actually Paid
September 19, 2017 - Bulletin Print Report
"Structured Trust Advantaged Repackaged Securities," ("STARS"), sounds suspiciously like a tax shelter and indeed it was. STARS was a transaction that Wells...
Potential Tax Liabilities Impair Stock Value
September 19, 2017 - Volume 11 Issue 180 Print Report
Irene Eisenberg (IE) owns all 100 outstanding shares of Corporation, (C), a 'C' corporation. C's only asset was a commercial building which was leased to...
Hedge Fund's Losses Are Disallowed
September 18, 2017 - Bulletin Print Report
A, through A's "Hedge Account," and Hedge Fund, ("HF"), transferred publicly traded securities to "Trading Account." Both A and HF reported th...
South Dakota Supreme Court Adheres To "Quill"
September 18, 2017 - Bulletin Print Report
South Dakota, (SD), relies on sales and use taxes for much of its revenue. Sales tax is generally collected by sellers selling merchandise in this state at the point of sale......
Mailing a Notice of Deficiency Is an "Act"
September 18, 2017 - Volume 11 Issue 179 Print Report
Prior to the expiration of the time prescribed in Sec. 6501(a) for the assessment of tax due from petitioners for the taxable year 1978, petitioners and the Commissio...
Boot and Sec. 306 Stock
September 15, 2017 - Volume 11 Issue 178 Print Report
X has outstanding 4,000 shares of common stock and 400 shares of nonvoting preferred stock. The preferred stock, when originally issued, was "Sec. 306 stock.&quo...
Observations on D.E. Shaw's Recommendation for EQT
September 14, 2017 - Bulletin Print Report
EQT Corporation, (EQT), this morning, announced that, upon closing the Rice Energy transaction, it will form a committee to deliberate the question of how, and if, EQT's we...
Pennsylvania Court Affirms Rejection Of State's NOL Limitation Provisions
September 14, 2017 - Bulletin Print Report
Taxpayer, ("TP"), alleged that it owed no Pennsylvania ("PA") corporate net income tax ("CNIT") on a nearly $30 million capital gain profit result...
"Checking the Box" and Worthless Stock Deductions
September 14, 2017 - Volume 11 Issue 177 Print Report
P is a domestic corporation. FS is an entity that is organized under the laws of Country X. FS has only one class of equity interests outstanding, all of which is own...
An "Act" Is a Procedural Step
September 13, 2017 - Volume 11 Issue 176 Print Report
X has outstanding voting stock all of which is owned by A and A's child, B. On January 17, 1973, X redeemed all of its stock held by B. B filed the agreement spec...
Pro Forma Return Starts The Running Of The Period Of Limitations
September 12, 2017 - Bulletin Print Report
On December 4, 2002, CFI, ("OC") merged with and into a "shell" corporation, NCF, ("NC"). The merger was designed and intended to be a tax-free re...
Options Can Spoil a 'B' Reorganization
September 12, 2017 - Volume 11 Issue 175 Print Report
The shareholders of X Corporation, (XC), entered into an agreement to exchange their shares of XC stock for voting convertible preferred stock of unrelated Y Corporat...
The Tax Aspects Of A UTX Post-Acquisition Spin-Off
September 11, 2017 - Bulletin Print Report
Similar to the model pioneered by Dow Chemical and DuPont in connection with their historic merger, it has been speculated that United Technologies Corporation, ("UTX"...
Investment Advisor May Deduct Payments Made To Induce Merger
September 11, 2017 - Bulletin Print Report
TP serves as an investment advisor to ACQ. TP manages ACQ pursuant to an investment management agreement, ("IMA"). Under the IMA, ACQ agrees to pay TP a basic managem...
Pre-Arranged Sale Of Stock Of D Does Not Invoke "Device" Clause
September 11, 2017 - Volume 11 Issue 174 Print Report
Distributing, ("D"), a Country A corporation, has outstanding a single class of common stock. D has decided that it must separate Business A from Business B. The foll...
No "Push-Down" Accounting For Tax Purposes
September 8, 2017 - Volume 11 Issue 173 Print Report
TP and its wholly owned subsidiaries, S1, S2, and S3, are engaged in the business of mining coal. Prior to date a, TP was a wholly owned subsidiary of CX, which had m...
UTX And ROC Forgo "Double Dummy" Format
September 7, 2017 - Bulletin Print Report
United Technologies Corporation, ("UTX"), and Rockwell Collins, Inc. ("ROC"), have entered into an agreement pursuant to which the former will acquire all o...
Replacement Cost Method Of Valuation Rejected
September 7, 2017 - Volume 11 Issue 172 Print Report
Petitioner, ("P"), has been an ardent hunter from an early age. P preserved the remains of the animals he shot in a "trophy room" in his house. In his troph...
Kohl's Dept. Stores Cannot Deduct Intercompany Royalties In Va.
September 6, 2017 - Bulletin Print Report
Kohl's Department Stores, Inc., ("K"), is organized under the laws of Delaware. It operates retail stores throughout the United States, including in Virginia. KI,...
THC Moves To "Protect" Its NOLs
September 6, 2017 - Bulletin Print Report
Tenet Healthcare Corporation, ("THC"), had accumulated, as of December 31, 2016, approximately $1.7 billion of Federal net operating loss, ("NOL") deduction...
Sinclair Broadcast Group Can Use Its Minnesota NOLs
September 6, 2017 - Volume 11 Issue 171 Print Report
Sinclair Broadcast Group, ("S"), is the parent of a multistate, diversified, television broadcasting operation. Sinclair Television Group, Inc., ("T"), was...
Entity Found To Be A "Political Subdivision"
September 5, 2017 - Bulletin Print Report
The a-county City metropolitan area ("Metro Area") public transportation needs are served by Authority and its "b" divisions, each of which have separate re...
What Is The University Of Phoenix's "Income Producing Activity?"
September 5, 2017 - Bulletin Print Report
The University of Phoenix, (the "university"), offered degree programs focusing on the market for "nontraditional students." The university implemented what...
Payments Measured By Sales Are Dividends
September 5, 2017 - Volume 11 Issue 170 Print Report
X Corporation, (X), is engaged in the business of selling the products of its shareholders to various customers. X does not qualify as a cooperative under subchapter...
Losses Sustained In A Reorganization Cannot Be Recognized
September 1, 2017 - Volume 11 Issue 169 Print Report
T owned 75 percent of the stock of U. The remaining 25 percent of such stock was owned by a company named ACC. U's business involved owning and operating two Russian LLCs t...
The District Of Columbia Is A "State"
August 31, 2017 - Bulletin Print Report
Petitioner, ("P"), was a New York resident. P owned District of Columbia Tobacco Settlement Revenue Bonds ("DC bonds") and received interest therefrom. ...
Redemption Amounts Are Not "Applicable Dividends"
August 31, 2017 - Volume 11 Issue 168 Print Report
Corporation A, (CA), has a single class of voting common stock outstanding. CA maintains an employee stock ownership plan (ESOP) which holds stock of CA. &n...
The Cost Of Purchased Minerals Is A "Non-Mining" Cost
August 30, 2017 - Volume 11 Issue 167 Print Report
Petitioner, ("P"), is a Delaware corporation. MMC owns 67 percent of P. P's primary business activity centers around the production of cement. Most of P's sal...
ABCO To Divest Its Health Care And Education Businesses
August 29, 2017 - Bulletin Print Report
Where a corporation conducting diverse businesses seeks to sell itself, it is unlikely that a single buyer, willing to acquire each of its businesses, will appear. Instead, the...
Tax Levied On Export Goods In Transit Found To Be Unconstitutional
August 29, 2017 - Bulletin Print Report
Dulles Duty Free, LLC, ("DF"), is a retailer of duty free merchandise at Dulles Airport, in Loudon County, Virginia, where it operates several stores. For domestic tr...
COD Income Is "Investment Income"
August 29, 2017 - Volume 11 Issue 166 Print Report
TP purchased "f" shares of SC, representing an "f%" interest in the company, on October 20, 1986. The financing for the purchase was supplied by a...
I.R.S. Issues Rare "Device" Ruling
August 28, 2017 - Bulletin Print Report
Parent is a State A entity that is exempt from Federal income tax under Sec. 501(c)(3) of the Code. Parent is the parent entity to a group of corporations, (the Parent Group)....
Sec. 6041's Reporting Obligation Is Premised on "Gross Income"
August 28, 2017 - Volume 11 Issue 165 Print Report
TP, a political subdivision of State, owns and operates a C. TP wascreated by Stateto abate D. During major storms with significant rainfall, TP occasiona...
PHH Corporation Appears To Be "Partially Liquidating"
August 25, 2017 - Bulletin Print Report
PHH Corporation, ("PHH"), is offering to purchase a substantial amount of its common stock through a "Dutch Auction" tender offer procedure. It will spend a...
The Limits of a Joint Return
August 25, 2017 - Volume 11 Issue 164 Print Report
RC and MC, husband and wife, are residents of Wilmington, Delaware. They filed joint income tax returns for the years 1956 and 1957. RC and MC were married on Novembe...
Market Discount Income Does Not Constitute Interest
August 24, 2017 - Bulletin Print Report
Fidelity Bank, ("FB"), is a wholly owned subsidiary of FBI. FB acquired U.S. government bonds at a discount to face value and held those bonds until maturity, thereby...
Usual or Customary Services - Part II
August 24, 2017 - Volume 11 Issue 163 Print Report
Company, (C), has elected to be treated as a real estate investment trust, (REIT). C conducts its operations through OP, a State B limited partnership. Thus, C is an...
Maersk And Nacco Announce Transformative Transactions
August 23, 2017 - Bulletin Print Report
A.P. Moller-Maersk A/S, ("M"), recently signed an agreement to sell the stock of its subsidiary, Maersk Oil, to Total S.A. for a total of $7.45 billion. M is a Danish...
How Does a Creditor Treat a Debt Restructuring?
August 23, 2017 - Volume 11 Issue 162 Print Report
X Corporation, (X), a commercial bank, holds a U.S. dollar denominated sovereign debt of Foreign Country, (FC). The obligation evidences a loan in the principal amoun...
Underwriters' Commissions Were Capital Expenditures
August 22, 2017 - Volume 11 Issue 161 Print Report
H was the Chief Financial Officer of W. On January 29, 2009, W granted H 65,574 stock options. The exercise price was $64.96 per share, later decreased to $56.64 per share. W i...
New York Expands The Incidence Of Sales And Use Taxes
August 22, 2017 - Bulletin Print Report
Generally, tangible personal property that a purchaser intends to sell in the regular course of business is considered to be "purchased for resale" and is not subject...
Herbalife Ltd. Will Distribute "CVRs" In Its Stock Buyback
August 22, 2017 - Bulletin Print Report
Herbalife, Ltd., ("H" or the "Company") is offering to purchase a portion of its outstanding stock...for an aggregate cash purchase price of up to $600 mill...
Lawsuit Alleging Harm From Medtronic's Inversion Can Proceed
August 21, 2017 - Bulletin Print Report
This appeal, to the Supreme Court of Minnesota, requires that the court decide whether claims that respondent asserts in a class-action challenge to a merger were properly dism...
Microsoft's Royalties From "OEMs" Are Not Sourced To Wisconsin
August 21, 2017 - Bulletin Print Report
Microsoft Corporation, ("M"), is organized under the laws of Washington, and has its worldwide headquarters in that state. M, of course, was actively engaged in the b...
No Substantial Compliance With Sec. 170 Substantiation Rules Found
August 21, 2017 - Volume 11 Issue 160 Print Report
I, the owner of land and a web hosting facility in H, (the "HP"), entered into an industrial lease agreement under which it leased the HP to AT&T ("T")....
Hewlett Packard Runs Afoul Of "Anti-Pfizer" Obama-Era Rule
August 18, 2017 - Bulletin Print Report
The "reverse Morris Trust," ("RMT"), transaction involving Hewlett Packard Enterprise Co., ("HPE"), and Micro Focus International plc, ("MFI&...
Taxpayer Found to Be Domiciled in Virginia
August 18, 2017 - Volume 11 Issue 159 Print Report
In Virginia, there are two classes of residents, a domiciliary resident and an actual resident. See Virginia Code Sec. 58.1-302. &nb...
Massachusetts "Drop Shipment" Rule Upheld
August 17, 2017 - Bulletin Print Report
This case evaluates a transaction in which a Massachusetts consumer finds a product online, and purchases it from an out-of-state retailer who then orders the product from a Ma...
Lawful Seizure Not a Theft
August 17, 2017 - Volume 11 Issue 158 Print Report
In 1982, NCM immigrated to the United States from Thailand. In 2006, or inearly 2007, NCM and her husband (petitioners)delivered items of property to the...
Country Club Found To Have "UBTI"
August 16, 2017 - Bulletin Print Report
Petitioner is a Sec. 501(c)(7) "social club" incorporated in Ohio. Its facilities include an 18-hole golf course, a swimming pool, tennis courts, dining facilities......
A Jarring Pronouncement on "Tips"
August 16, 2017 - Volume 11 Issue 157 Print Report
Company (C) is engaged in retail sales of "Product" and related items for which customers often provide additional cash amounts as compensation to those ser...
Merger Of "UPREITS" Announced
August 15, 2017 - Bulletin Print Report
Invitation Homes, Inc., ("INVH"), and Starwood Waypoint Homes, ("SFR"), recently announced the signing of a definitive agreement "to combine in a 100 p...
First-Time Homebuyer Did Not "Purchase" Principal Residence
August 15, 2017 - Volume 11 Issue 156 Print Report
On September 24, 2008, petitioner's mother died leaving a will. In the will, petitioner's mother appointed petitioner and his brother as co-executors of her e...
MLP Found To Engage In "Intrinsic" Activities
August 14, 2017 - Bulletin Print Report
X, a limited partnership, intends to become a publicly traded partnership, i.e., an "MLP." X will provide a broad range of services to working interest owners who are...
I.R.S. Issues Guidelines For RIC And REIT Stock Dividends
August 14, 2017 - Bulletin Print Report
Regulated investment companies, ("RICs"), and real estate investment trusts, ("REITs"), get a tax deduction for the "dividends" they remit to thei...
Debt Cancellation Not Purchase Price Adjustment
August 14, 2017 - Volume 11 Issue 155 Print Report
Before the year in issue, petitioners intended to take advantage of adeferred interest financing arrangement offered by a credit card company in connection with...
Foreign "DRE" Included In Minnesota Combined Return
August 11, 2017 - Bulletin Print Report
Ashland, Inc., ("AI"), is a Kentucky corporation that does business in Minnesota. In November 2008, AI acquired Hercules, ("H"). H owned 100 percent of a Lu...
When Is California's "Functional" Test Applied?
August 11, 2017 - Volume 11 Issue 154 Print Report
On April 26, 2004, Fidelity National Information Service, Inc., ("F"), acquired 29 percent of the common stock of Covansys, ("C"). F also agreed, under a &q...
St. Louis Rams Were Required To Pay Sales Tax on "ELT"
August 10, 2017 - Volume 11 Issue 153 Print Report
The St. Louis Rams, now the Los Angeles Rams, sold tickets for the exhibition of NFL football games played in St. Louis. The city imposed upon the Rams an "entertainment l...
Vantiv And Worldpay Forgo An "Inversion"
August 10, 2017 - Bulletin Print Report
Vantiv, Inc., ("V"), and Worldpay Group plc, ("W), have finalized the terms of their previously announced business combination and, surprisingly, at least to som...
Securing Extension of a Regulatory Election
August 9, 2017 - Volume 11 Issue 152 Print Report
TP and its shareholders began the process of trying to sell itself in Year 1. TP was successful, and entered into a stock purchase agreement on Date A. On Date B, the...
TEPPCO's Website Deprives It Of "Wholesaler" Tax Rate
August 9, 2017 - Bulletin Print Report
On October 26, 2009, TEPPCO Partners, L.P., ("petitioner"), was merged with "Company B." Petitioner was audited for Texas franchise tax compliance for 2008-...
Using "Tax Credit Certificates" To Pay State Taxes
August 8, 2017 - Volume 11 Issue 151 Print Report
N is a partnership which isauthorized to make investments inprivate venture capital funds. N, at present,has four partners: Q (the general partner);...
I.R.S. Allows "Remainco" To Retain "Spinco" Stock Despite "Overlap"
August 7, 2017 - Bulletin Print Report
Taxpayer, ("TP"), is a publicly traded State corporation. TP is the common parent of a business group that includes corporations, disregarded entities, and partnershi...
"Spinco's" Low Vote Stock Used To Defray "Remainco" Debt
August 7, 2017 - Bulletin Print Report
D1, who we believe to be Huntsman Corporation, is a publicly traded State corporation. The D1 Group is engaged in "Business." The Group's operations are divided i...
Tenants of a Cooperative Can Deduct "Defaulted" Interest
August 7, 2017 - Volume 11 Issue 150 Print Report
X qualified as a cooperative housing corporation, (CHC), under Sec. 216(b)(1). Premises consists of "a" rental apartments located in "b" apartment...
Real Estate Merely A "Component" Of A Service Business
August 4, 2017 - Volume 11 Issue 149 Print Report
C has elected to be taxed as a real estate investment trust, (REIT). C owns, acquires, develops, constructs, and franchises miniwarehouse self-storage facilities (&qu...
Commodities Trader Subject To Ohio's "CAT" Tax
August 3, 2017 - Bulletin Print Report
Appellant appeals a final determination of the Tax Commissioner of Ohio affirming a commercial activity tax, ("CAT") assessed against it.... The court noted that &quo...
CFCs Found To Have Invested In "U.S. Property"
August 3, 2017 - Volume 11 Issue 148 Print Report
Petitioner, ("P"), is C corporation incorporated in Delaware. It had its principal place of business in New Jersey at the time it filed its petition. P is the parent...
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...
"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, ("...
"Security Agreement" Does Not Break "Affiliation"
August 2, 2017 - Volume 11 Issue 147 Print Report
USP is the common parent of an affiliated group of corporations that join in thefiling ofa consolidated income tax return. USP is a wholly-owned subsidiar...
Supreme Court Moves To Curtail "Forum Shopping"
August 1, 2017 - Bulletin Print Report
Bristol-Myers Squibb Company, ("BMS"), a large pharmaceuticals company, in incorporated in Delaware and is headquartered in New York. It maintains substantial operati...
Discovery To Acquire Scripps For "Mixed" Consideration
August 1, 2017 - Bulletin Print Report
Discovery Communications, Inc., ("DISC"), and Scripps Networks Interactive, Inc., ("SNI"), announced, on July 31st, a definitive agreement "for DISC to...
Indiana Cannot Tax DuPont's $4 Billion Gain From The Sale Of DPC
August 1, 2017 - Volume 11 Issue 146 Print Report
In 1991, DuPont, ("DP"), and Merck Pharmaceutical Company, ("MPC"), formed DMPC. DP and MPC each owned equal 50 percent interests in DMPC. DMPC "operat...
Spin-Off Of "Born To Die" Corporation Respected
July 31, 2017 - Bulletin Print Report
P is the common parent of a consolidated group. P's stock is both publicly traded and widely held. P owns LLC 1, a disregarded entity. LLC 1 owns Sub 1. Sub 1 owns D2, LLC...
I.R.S. Delays Effective Date Of Portion Of "Debt/Equity" Regulations
July 31, 2017 - Bulletin Print Report
Last year, the I.R.S. and the Treasury Department issued so-called "debt/equity" regulations, the principal purpose of which was to curtail, if not entirely eliminate...
"Swaps" Constitute "Securities" For Purposes of Sec. 851(b)(2)
July 31, 2017 - Volume 11 Issue 145 Print Report
"Funds" invest in equity securities. Funds intend to enter into "swaps" on securities or securities indices. Funds also planto enter into ce...
Rep. Levin Renews His Attack On Inversions
July 28, 2017 - Bulletin Print Report
House Ways & Means Committee member Sander M. Levin, D-Mich., has made inversions his signature issue. During the height of the inversion craze, it is safe to say that he w...
Payments To Charity Deductible Under Sec. 162
July 28, 2017 - Volume 11 Issue 144 Print Report
TP is a corporation engaged in a stock brokerage business. In order to promote business in the neighborhood in which its office is located, and in order to compete su...
A Beneficiary's "Proportionate Interest" In An Estate
July 27, 2017 - Volume 11 Issue 143 Print Report
In determining the applicability of Sec. 302(b)(2)--which provides that a distribution in redemption meeting its terms is a distribution in "part or full payment...
Noncustodial Parent Not Entitled To A Dependency Exemption
July 26, 2017 - Volume 11 Issue 142 Print Report
Petitioner and JH, his former spouse, are the parents of ZH, who was born in 1996. On September 11, 1998, in anticipation that the Iowa district court would grant the...
Sec. 108 Does Not Permit Exclusion of Gain Realized
July 25, 2017 - Volume 11 Issue 141 Print Report
The taxpayers, who are debtors in a case under Chapter 13 of the Bankruptcy Code, owned and occupied a residence that had a fair market value substantially below the...
Does The "Predecessor" Rule Threaten EQT's Potential Spin-Off?
July 24, 2017 - Bulletin Print Report
EQT Corporation, ("EQT"), and Rice Energy, Inc., ("RE"), have entered into a definitive merger agreement. The agreement envisions a merger of RE with and in...
What If Yahoo! Inc. Became A "RIC"---Part 2
July 24, 2017 - Bulletin Print Report
One "self-help" tactic that Altaba (formerly known as Yahoo! Inc.) might pursue is to transform itself into a "regulated investment company," ("RIC&quo...
Gift of Family Partnership Interests Recast
July 24, 2017 - Volume 11 Issue 140 Print Report
In November, 2002, Mr. WilliamLinton (WL) formed a "family partnership", WFLB, LLC. On January 22, 2003, WL gave his wife (SL) 50 percent of his perce...
MKC Will Acquire Reckitt Benckiser's Food "Division"
July 21, 2017 - Bulletin Print Report
McCormick & Company, Inc., ("MKC"), has caused quite a stir with its announcement of a definitive agreement to acquire the "Food Division" of Reckitt Be...
Change In Lifestyle Confirms Change Of "Domicile"
July 21, 2017 - Volume 11 Issue 139 Print Report
In 1982, petitioner, a West Point graduate, started working for Colgate-Palmolive Company, ("CP"), in its New York City, ("NYC") headquarters. He and his wi...
CCI Will Be Acquiring "Real Property"
July 20, 2017 - Bulletin Print Report
Crown Castle International Corp., ("CCI"), recently announced that it has entered into a definitive agreement to acquire LTS Group Holdings LLC, ("L"), a pr...
Capital Contributions Not Part of a Tax Avoidance Plan
July 20, 2017 - Volume 11 Issue 138 Print Report
P is the common parent of an affiliated group of corporations. P has, since its incorporation, incurred a net operating loss (NOL) every year. The P group experienced...
"Work" Tax Credits Depend on Certification
July 19, 2017 - Volume 11 Issue 137 Print Report
The taxpayer, (TP), a domesticcorporation, argues that the Commissioner improperly refused tax credits, some $3.4 million thereof, under the WOTC and WtW tax cr...
Payment To Hedge Fund Employee Taxable In Year Received
July 18, 2017 - Volume 11 Issue 136 Print Report
In January 2005, H joined Paulson & Co., Inc., (PCI), as a senior analyst in PCI's New York City office. PCI is an 'S' corporation. H received a base salary of...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
Suit To Enjoin JCI/TYC Merger Fails
February 1, 2017 - Bulletin Print Report
In January 2016, Johnson Controls, ("JC"), announced that it was going to merge with an Irish company named Tyco, ("TYC"). The merger t...
Parent Denied Worthless Stock Deduction
February 1, 2017 - Volume 11 Issue 21 Print Report
P is the common parent of a consolidated group that owns Asset 1 (basis $10, value $10) and all the stock of S1 (basis $5, value $5). &nbs...
Tesco And Booker Group To Effect A "Scheme Of Arrangement"
January 31, 2017 - Bulletin Print Report
The boards of each of Tesco PLC, ("T"), and Booker Group plc, ("BG"), have reached an agreement on the terms of a recommended "share and cash merger.&q...
What Is LQ Up To?
January 31, 2017 - Bulletin Print Report
Recently, La Quinta Holdings, Inc., ("LQ"), announced plans "to propose the separation of LQ's real estate business from its franchise and management busines...
Does Basis Disappear In a Dividend Equivalent Redemption?
January 31, 2017 - Volume 11 Issue 20 Print Report
C is a domestic corporation engaged in manufacturing. C has one class of voting stock outstanding of which approximately 36.7 percent is held directly and constructiv...
Goodwill Impairment Test Is Simplified
January 30, 2017 - Bulletin Print Report
The Financial Accounting Standards Board, ("FASB"), has taken additional steps to simplify the procedures for determining whether, and the extent to which, an entity&...
Distributing More Than "Net Contraction Proceeds"
January 30, 2017 - Volume 11 Issue 19 Print Report
X is a corporation principally engaged in the service station business in two different localities: the "d" locality and the "e" locality. X also...
Rents and Royalties Not "Passive" Income
January 27, 2017 - Volume 11 Issue 18 Print Report
D is a second-tier subsidiary within an affiliated group that files a consolidated tax return. P, the common parent of the group, is a holding company. &nbs...
JNJ To Acquire ATLN
January 26, 2017 - Bulletin Print Report
Johnson & Johnson, ("JNJ"), and Actelion Ltd., ("ATLN"), have entered into a definitive agreement pursuant to which JNJ "will launch an all-cash te...
'S' Corporation Dividends Constitute Nonbusiness Income
January 26, 2017 - Volume 11 Issue 17 Print Report
One of the more complicated determinations the tax code demands is the proper classification of distributions made by electing small business corporations, i.e., 'S' co...
SXCP Faces An Uncertain Future
January 25, 2017 - Bulletin Print Report
SunCoke Energy Partners, L.P., (SXCP), has been a master limited partnership, (MLP), and, accordingly, its taxable income has not been subjected to entity level taxation. Inste...
"Economic Presence" Alone Justifies Imposition Of Tax
January 25, 2017 - Volume 11 Issue 16 Print Report
Capital One Financial Corporation ("COFC") and its subsidiaries were incorporated, headquartered and domiciled outside of Oregon. One of COFC's subsidiaries, Capi...
Attempt To Assign Income To A Corporation Fails Miserably
January 24, 2017 - Volume 11 Issue 15 Print Report
Petitioner, ("P"), is a financial consultant developing investment portfolios for clients. P started his career with Waddell & Reed, Inc. The clients of Waddell &...
How To "Shift" Debt In A Spin-Off
January 23, 2017 - Bulletin Print Report
Over the last few years, one of the most common characteristics of spin-offs has been the wholesale "shifting" of debt from the distributing corporation to the distri...
I.R.S. Finalizes Regulations Regarding An MLP's "Qualifying Income"
January 23, 2017 - Volume 11 Issue 14 Print Report
In what may be the last set of regulations we may see for quite some time, the I.R.S. finalized regulations addressing the question of when the income earned by a publicly trad...
Excise Tax or Non-Pecuniary Loss Penalty?
January 20, 2017 - Volume 11 Issue 13 Print Report
In 1989, JS Corporation, (JS), separated its pension plan into two separate plans: one for retired employees and one for active employees. JS then liquidated the reti...
Preliminary Purchase Of Active Business Does Not Spoil Spin-Off
January 19, 2017 - Volume 11 Issue 12 Print Report
Distributing, ("D"), is a State A corporation, the stock of which is both publicly traded and widely held. D owns 100 percent of the stock of Sub 1. Sub 1 conducts Bu...
I.R.S. Shortens A Converted REIT's "Recognition Period"
January 18, 2017 - Bulletin Print Report
In order to shore up the repeal of the General Utilities doctrine, in the The Tax Reform Act of 1986, Congress enacted certain rules that subject an 'S' corporation, as...
Tax Consequences Of Reynolds American And Clayton Williams Deals
January 18, 2017 - Bulletin Print Report
On January 17th, two business combinations were announced. One involves the acquisition by British American Tobacco, p.l.c., (BATS), of the stock of Reynolds American, Inc., (R...
Community Activist Cannot Deduct Legal Fees
January 18, 2017 - Volume 11 Issue 11 Print Report
GF or petitioner was an adjunct professor of English at both Barnard College and Columbia University. Petitioner filed a New York State resident income tax return for 2009 wher...
IEG Seeks To Play David To One Main's Goliath
January 17, 2017 - Bulletin Print Report
In one of the stranger transactions we have encountered, IEG Holdings Corporation, ("IEG"), is attempting to acquire a company substantially larger than itself. In pa...
Sale Of "Spectrum" Constitutes An "Involuntary Conversion"
January 17, 2017 - Bulletin Print Report
Taxpayer, ("TP"), owns and operates a television station...that operates in the "upper 600 MHz band." TP's station operates pursuant to licenses and per...
Involuntary Sales Are Covered By Sec. 267
January 17, 2017 - Volume 11 Issue 10 Print Report
On August 2, 1960, a "notice of levy" was served on JM, an individual, for the purpose of seizing and selling his shares of NW, Inc., (NW),stock and a...
Video Game Producer Is an "Eligible Production Company"
January 13, 2017 - Volume 11 Issue 9 Print Report
Plaintiff was created for the sole purpose of producing a "Man vs. Wild" video game based on the Discovery Channel's "Man vs. Wild" television...
FASB Proposes Changes To Classification Of Indebtedness
January 12, 2017 - Bulletin Print Report
The Financial Accounting Standards Board, ("FASB"), as part of its wide-ranging simplification initiative, has now tackled the issue of how indebtedness should be cla...
Stanley Black & Decker To Purchase Assets
January 12, 2017 - Bulletin Print Report
At the risk of oversimplification, there are, essentially, two ways to acquire a "business;" (i) a purchase of the assets of the business, or (ii) a purchase of the s...
Foreign Taxes Imposed on Exempt Income Are Creditable
January 12, 2017 - Volume 11 Issue 8 Print Report
P is a U.S. corporation. S is a German limited liability company. P owns all of S's stock. S's capital was increased; a portion of the increase represented a...
SCAI Will Be Acquired By UNH In A "Reorganization"
January 11, 2017 - Bulletin Print Report
UnitedHealth Group, Inc., ("UNH"), and Surgical Care Affiliates, Inc., ("SCAI"), have announced a plan and agreement which envisions a tender offer on the p...
Crossing the "Super-Control" Line
January 11, 2017 - Volume 11 Issue 7 Print Report
X has outstanding one class of stock consisting of 1,000 shares of voting common stock. A owned 900 shares and B owned the remaining 100 shares.  ...
"Correcting" a Prohibited Transaction
January 10, 2017 - Volume 11 Issue 6 Print Report
On May 20, 1981, the Zs, husband and wife, incorporated their farming operation under the name of ZFI ("the Corporation"). Each received 670 shares of stock...
FASB Clarifies The Definition Of A "Business"
January 9, 2017 - Bulletin Print Report
The Financial Accounting Standards Board, ("FASB"), recently issued Accounting Standards Update, ("ASU"), No. 2017-01, entitled "Clarifying the Definit...
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...
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...
"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...
Determining E&P For Purposes of the REIT "Purge" Rule
December 20, 2016 - Volume 10 Issue 243 Print Report
TP is a C corporation. TP is a real estate finance corporation. TP also conducts an investment management business through S. S intends to be treated as a taxable REI...
Internal "TLAC" Will Be "Respected" As Indebtedness
December 19, 2016 - Bulletin Print Report
The current framework for bank capital is commonly known as "Basel III." In addition to the enhanced capital required by Basel III, regulators have sought to minimize...
Will Gilead Get To Deduct Its Patent Infringement Judgment?
December 19, 2016 - Bulletin Print Report
Gilead Sciences, Inc., (G), was instructed by a federal jury to pay $2.54 billion to Merck & Co., (M), for using a patented invention as the basis for its drugs for hepatit...
Can Timber Cutting Rights Be Exchanged Tax-Free?
December 19, 2016 - Volume 10 Issue 242 Print Report
TPs agreed to exchange standing timber owned by them for three tracts of timberland to be acquired from AC. On or about June...
Basis Recovery In a Contingent Payment Installment Sale
December 16, 2016 - Volume 10 Issue 241 Print Report
TP is an 'S' corporation. TP entered into an asset purchase agreement, (APA), that was structured as an installment sale. The agreement provided that, in exch...
Dell Stock Repurchase
December 15, 2016 - Bulletin Print Report
Many investors have been patiently waiting for Dell Technologies, Inc., (DTI), (formerly known as "Denali") to take steps to "capture" the discount at which...
Senior Living Facilities Are Qualified Health Care Properties
December 15, 2016 - Volume 10 Issue 240 Print Report
Taxpayer, ("TP") is a real estate investment trust, ("REIT"). TP has recently acquired two "senior housing communities," the "Properties.&quo...
Gain Can Sometimes Be Deferred Through Reinvestment
December 14, 2016 - Bulletin Print Report
Sec. 1001(a) of the Internal Revenue Code provides that "the gain from the sale or other disposition of property shall be the excess of the amount realized over the adjust...
N.J. Taxpayer Denied Capital Gain Exclusion
December 14, 2016 - Volume 10 Issue 239 Print Report
Plaintiff owned 16,970 shares of common stock in VR. In June, 2008, Plaintiff sold the shares to AI. Plaintiff filed a federal income tax return for 2008 reporting th...
Death Is Not A "Fundamentally Inconsistent Event"
December 13, 2016 - Volume 10 Issue 238 Print Report
JB married SB on October 7, 1977. Until his death, SB was a farmer who conducted his farming business as a sole proprietor. SB passed away on March 13, 2011. SB incurred certai...
Overview Of Tax Reform Proposals
December 12, 2016 - Bulletin Print Report
Individual Proposals Under current law, there are no fewer than seven different regular tax brackets with a top tax rate of 39.6 percent. The House Republican Tax Pla...
Liquidation Conclusively Fixes Worthless Stock Loss
December 12, 2016 - Bulletin Print Report
TP is the common parent of a consolidated group. TP is wholly owned by FP. FP also owns all of the stock of FS. TP owns the stock of S. Prior to its acquisition, S was publicly...
Distribution of Property Recast as a Distribution of Money
December 12, 2016 - Volume 10 Issue 237 Print Report
Due to ongoing disagreements among the partners, most of the partners in PS, including TP, liquidated their interests in PS, leaving A and A's immediate family in...
Loss Corporation Stock Issued To "Qualified Creditors"
December 9, 2016 - Volume 10 Issue 236 Print Report
Parent, ("P") is a holding company that wholly owns LossCo, ("LC"), which is engaged in Business A. P filed for title 11 bankruptcy on Date 1, and on Date 3...
FNF To "Split-Off" FNFV
December 8, 2016 - Bulletin Print Report
Fidelity National Financial, Inc., ("FNF"), is one of the few corporations that have wholeheartedly embraced tracking stock , the Liberty companies being...
Supreme Court Defines "Personal Benefit" In Insider Trading Cases
December 8, 2016 - Bulletin Print Report
Sec. 10(b) of the Securities Exchange Act of 1934 and the SEC's Rule 10b-5 prohibit undisclosed trading on inside...information by individuals who are under a duty of trust...
Contributions of Partial Interests In Property Not Deductible
December 8, 2016 - Volume 10 Issue 235 Print Report
A, an individual, is a shareholder of X. A contributes 100 shares of A's voting commonstock to Y, an organization described in Sec. 170(c). A retains the ri...
YHOO And Tax Reform
December 7, 2016 - Bulletin Print Report
In its latest Form 10-Q, Yahoo!, Inc., ("YHOO"), reported that the "cost basis" of its investment in Alibaba Group, ("AG"), was $2,713,483,000; an...
Debt Not Worthless
December 7, 2016 - Volume 10 Issue 234 Print Report
Petitioner was employed by GI, Inc., (GI), owned by G. G alsoowned various other companies or businesses ("GCs"). &n...
Direct And Indirect Investments In MLPs: An Appraisal
December 6, 2016 - Bulletin Print Report
There would appear to be two principal ways of "gaining exposure" to MLPs: a direct investment and an indirect investment therein. While a direct investment means, si...
Partner's "Distributive Share" Subject To Self-Employment Tax
December 6, 2016 - Volume 10 Issue 233 Print Report
In Year 1, F purchased franchise restaurants in the area of City and contributed the restaurants to Partnership (PS). F owns the majority of PS. F is PS's Operating Manager...
Treasury Department Frowns On "Tax-Free Repatriation"
December 5, 2016 - Bulletin Print Report
Even in the waning days of their tenure, the Treasury Department and the I.R.S. are "on the job." They have identified a transaction that they believe needs to be cur...
Modification of an Installment Obligation
December 5, 2016 - Volume 10 Issue 232 Print Report
TP sold property to a corporation in November, 1980 and received a note of the corporation. The note had a face value of $1,000x and provided that the corporation wou...
Variable Annuity Exempt From Creditors' Claims
December 2, 2016 - Volume 10 Issue 231 Print Report
D filed for relief under Chapter 7 on March 27, 2012. On Schedule B she listed "Annuity Prudential Variable Investment Plan" with a value of $12,188.23. On...
MoneyGram May Be A Bank After All
December 1, 2016 - Volume 10 Issue 230 Print Report
Sec. 582(c) of the Code provides that in the case of a bank ...the sale or exchange of a bond, debenture, note or certificate or other evidence of indebtedness sha...
Ohio's "CAT" Survives A Commerce Clause Challenge
November 30, 2016 - Volume 10 Issue 229 Print Report
Crutchfield Corporation, ("CC"), "does business" in Ohio. The business it carries on consists solely of selling goods from outside the state to its consumer...
Discharge Of "Qualified Principal Residence Indebtedness"
November 29, 2016 - Bulletin Print Report
To help distressed borrower/homeowners lower their monthly mortgage payments, FHFA directed each of Fannie Mae and Freddie Mac to implement the Principal Reduction Mortgage Pro...
Equalizing Values Tax-Efficiently
November 29, 2016 - Volume 10 Issue 228 Print Report
D Corporation, (D), is an 'S' corporation. Its stock is owned in equal proportions by SH1, SH2, and SH3, all of whom are unrelated to one another. D is engage...
Avnet's "Inbound" Sales Are Subject To Washington Tax
November 28, 2016 - Bulletin Print Report
Avnet, Inc., ("AV"), is a New York corporation with headquarters in Arizona. AV sells products through its headquarters in Arizona and through its many regional sales...
Repurchase Premium Paid In Stock Is Deductible
November 28, 2016 - Volume 10 Issue 227 Print Report
TP filed a voluntary petition on Date 1 to reorganize under Chapter 11 of Bankruptcy Code. Under the Plan, which was approved by the court,certain classes of im...
Deferred Exchange Runs Afoul Of Sec. 1031(f)(4)
November 25, 2016 - Volume 10 Issue 226 Print Report
MG was engaged in leasing commercial real estate in various States. MG filed consolidated income tax returns with its wholly owned subsidiary, MBL. MG also owned 69.97 percent...
Alcohol Fuel Mixture Credit Reduces "Cost Of Goods Sold"
November 25, 2016 - Bulletin Print Report
In the years at issue, Sunoco, Inc., (SUN), blended ethanol into its fuel and thereby qualified for a certain tax credit, the Alcohol Fuel Mixture Credit, ("Mixture Credit...
"Cash For Keys" Payment Is Part Of "Amount Realized"
November 23, 2016 - Volume 10 Issue 225 Print Report
In 2008, petitioners owned their primary residence in California ("California house") but worked in management positions requiring frequent trips to North Carolina. F...
New Spin-Off Restrictions Do Not Impact Elliott's Plan For Marathon
November 22, 2016 - Bulletin Print Report
Elliott Management, ("Elliott"), has set its sights on Marathon Petroleum Corporation, ("MPC"), and has come up with some recommendations that it would like...
SXL And ETP To Engage In Rare "Partnership Merger"
November 22, 2016 - Bulletin Print Report
While corporate mergers and other forms of business combinations are quite common, it is not often that MLPs engage in such transactions. However, now, we have a partnership me...
Rooftop Antennas Are "Real Property"
November 22, 2016 - Volume 10 Issue 224 Print Report
T-M is a provider of cellular radio telephone services. As part of its cellular network, T-M maintains antennas and other cellular radio equipment housed, among other places, o...
HRG Inches Closer To Curing A Market "Anomaly"
November 21, 2016 - Bulletin Print Report
HRG Group, Inc., ("HRG"), is a "pure" holding company. It owns stock in entities engaged in the insurance business, the energy business, the asset managemen...
Tesoro Should Not Need To Effect A "Second" Merger
November 21, 2016 - Bulletin Print Report
Tesoro Corporation, ("TC"), and Western Refining, Inc., ("WR"), have entered into a plan and agreement pursuant to which TC will acquire all of the stock of...
Options and Tax Liens
November 21, 2016 - Volume 10 Issue 223 Print Report
A taxpayer (TP) was granted options, both non-qualified options (NQOs) and Incentive Stock Options (ISOs), by his employer, A Corporation (A). Transferability of the...
WebMD Executive Will Secure "Exchange" Treatment In Latest Buyback
November 18, 2016 - Bulletin Print Report
WebMD Health Corporation, ("WMD"), generates a large amount of cash from its business and periodically uses that "surplus" cash to repurchase its stock.&nbs...
Reasonable Prospect of Recovery Bars Loss Deduction
November 18, 2016 - Volume 10 Issue 222 Print Report
BM, from 1998 until 2002 made various investments totaling $325,000 with CPR, a corporation that relied on private investors to conduct its business of buying and sel...
COD Income Can Arise From Cancellation of Shareholder's Debt
November 17, 2016 - Volume 10 Issue 221 Print Report
P, a foreign corporation, owned all the stock of S, a domestic corporation. S conducted Business A. In its business, S maintained an inventory of component parts. At...
No Basis Step-Up For Regency Centers
November 16, 2016 - Bulletin Print Report
Regency Centers Corporation, ("RCC"), and Equity One, Inc., ("EOI"), each a real estate investment trust, ("REIT"), have announced a definitive me...
Deemed Election Under Sec. 1033
November 16, 2016 - Volume 10 Issue 220 Print Report
On or about Date 1, TP's old principal residence ("Old") was involuntarily converted as it was destroyed in a presidentially declared disaster. On Date...
A Partner Has A Single Basis In A Partnership Interest
November 15, 2016 - Volume 10 Issue 219 Print Report
In 1978, Y was formed as a limited partnership for the purpose of investing and trading in stocks and securities. A contributed $50 to Y in exchange for a general par...
Subscription Packages Are Not "Qualified Films"
November 14, 2016 - Bulletin Print Report
Taxpayer, ("TP"), is a multichannel video programming distributor, (MVPD"), regulated by the Federal Communications Commission, ("FCC"), as a telecommu...
Financial Statement Implications Of Tax Rate Reductions
November 14, 2016 - Bulletin Print Report
President-elect Trump is on record as favoring a broad array of tax rate reductions. In particular, he has consistently advocated a dramatic reduction of the U.S. corporation i...
Was the Payment Primarily Motivated by Generosity?
November 14, 2016 - Volume 10 Issue 218 Print Report
During 1985, Mr. EarlVoyles retired from SCSC, Inc., (SCSC), after 46 years of loyalservice. "In consideration of his years of service," Mr. Voy...
"Investment in the Contract"
November 11, 2016 - Volume 10 Issue 217 Print Report
Petitioner owned several medical practice entities. In 2000, he organized YC, an 'S' corporation, to manage these entities. YC sponsored an employee stock own...
The Trump Tax Proposal Has Something For Everyone
November 10, 2016 - Bulletin Print Report
Reports about a President-elect's tax plan, assuming he or she has one, are quite common in the days following an election. Therefore, we would be remiss if we did not offe...
Purchaser Of Wind Facilities Did Not Acquire "Goodwill"
November 10, 2016 - Volume 10 Issue 216 Print Report
Plaintiffs are the owners of six wind farms...near Los Angeles, California. They are alleging that the Government underpaid them by over $206 million when it made a grant to th...
Is a Payment to an Employee a Gift or Compensation?
November 9, 2016 - Volume 10 Issue 215 Print Report
HP was theC.E.O. of LC, Inc., (LC). JY was hissecretary there from 1958 through hisretirement in1984. JY handled all ofHP's personal...
Who Generates GLG's Gross Receipts?
November 8, 2016 - Volume 10 Issue 214 Print Report
During the years at issue...Gerson Lehrman Group, Inc., ("GLG" or "petitioner"), provided consulting services to its clients. It employed experts, ("co...
Merger Of AXL And MPG Is Not A Reorganization
November 7, 2016 - Bulletin Print Report
American Axle & Manufacturing Holdings, Inc., ("AXL"), and Metaldyne Performance Group, Inc., ("MPG"), recently entered into a definitive merger agreeme...
"Square Corners Doctrine" Bars Taxation Of N.J. Lottery Winnings
November 7, 2016 - Volume 10 Issue 213 Print Report
In June 2000, M purchased a Big Game Lottery ticket. M held the winning ticket for the June 9, 2000 drawing entitling him to a prize of $46,000,000. M decided that the annuity...
CenturyLink/Level 3: "RBIGs" To The Rescue
November 4, 2016 - Bulletin Print Report
With the publication of the merger agreement, we now have clarity on the manner in which the business combination involving CenturyLink, Inc., (CTL), and Level 3 Communications...
Characterizing Termination Fee Income
November 4, 2016 - Volume 10 Issue 212 Print Report
On Date 1, TP and B entered into an agreement, ("Agreement 1")...to use "their best efforts" to take a series of steps...designed to lead to TP's acquis...
Assumption of New Debt Not Governed by Sec. 357(b)
November 3, 2016 - Volume 10 Issue 211 Print Report
P has been actively engaged in two separate businesses for more than five years. P transferred the assets of one of its businesses to a newly-formed subsidiary, S, so...
SXC Proposes To "Roll UP" SXCP
November 3, 2016 - Bulletin Print Report
SunCoke Energy Partners, L.P., (SXCP or the Partnership), is a publicly traded partnership (PTP). A PTP will be treated as a corporation unless at least 90 percent of its gross...
Resident Beneficiary Not Sufficient To Tax A Foreign Trust
November 2, 2016 - Volume 10 Issue 210 Print Report
In 1992, an inter vivos trust ("original trust") was established by JLR. The location or situs of the original trust was New Yor...
G.E./BHI Bears More Than A Passing Resemblance To WMB/ETE
November 1, 2016 - Bulletin Print Report
The transaction in which General Electric Company, ("GE"), and Baker Hughes, Inc., ("BHI"), will combine their oil and gas activities bears some resemblance...
Classifying Depreciable Property
November 1, 2016 - Volume 10 Issue 209 Print Report
Petitioner is engaged in the banking andfinancial services business. During 1987-1989, petitioner placed in service $57,526,417 of furniture and fixtures at its...
EFH's Spin-Off Is Part Of A 'G' Reorganization
October 31, 2016 - Volume 10 Issue 208 Print Report
EFH (the old "TXU") is the common parent of an affiliated group of corporations that join in the filing of a consolidated federal income tax return. "SH" ow...
CenturyLink/Level 3: The Potential For A Sec. 338 Election
October 31, 2016 - Bulletin Print Report
Rumors are circulating with respect to a possible business combination involving CenturyLink, Inc., (CL), and Level 3 Communications, Inc., (L3). Of particular interest is the...
Ascertaining The "Subject Matter" Of A Home Construction Contract
October 28, 2016 - Volume 10 Issue 207 Print Report
Taxpayers ("TPs") are builders and developers of planned communities. Their primary source of revenue was from the sale of houses.  ...
CenturyLink/Level 3
October 27, 2016 - Bulletin Print Report
Apparently, CenturyLink (CL) and Level 3 Communications (L3) are discussing a business combination. Questions have arisen regarding the impact, if any, the business c...
BEAV Shareholders Will Be Taxed On Receipt Of COL Shares
October 27, 2016 - Bulletin Print Report
The proposed Time Warner and AT&T merger and the one announced, on the same day, by B/E Aerospace, Inc., ("BEAV"), and Rockwell Collins, Inc., ("COL"),...
Sec. 304 Acquisition Can Be a Qualified Stock Purchase
October 27, 2016 - Volume 10 Issue 206 Print Report
A, B, and C own 40 percent, 20 percent, and 40 percent of the stock of X, respectively. B, D, and E own 45 percent, 30 percent, and 25 percent of the stock of Y, resp...
Right of First Refusal Not an "Option"
October 26, 2016 - Volume 10 Issue 205 Print Report
A is a domestic corporation. A plans to enter into a joint venture with B, an unrelated Country X corporation, to manufacture the "Y" in Country X. <...
FASB Rules On "Intra-Entity" Asset Transfers
October 25, 2016 - Bulletin Print Report
Current Generally Accepted Accounting Principles, ("GAAP"), prohibits, for unknown reasons, the recognition of current and deferred taxes for a so-called "intra-...
AMTD's "Bargain" Purchase Of Scottrade Financial Services, Inc.
October 25, 2016 - Bulletin Print Report
Scottrade Financial Services, Inc., (SFS), has two businesses only one of which is of interest to its suitor, TD Ameritrade Holding Corporation, (AMTD). This is not an uncommon...
"Three-Party" 'F' Reorganizations Not Permitted
October 25, 2016 - Volume 10 Issue 204 Print Report
P Corporation, (P), owned 99 percent of the outstanding stock of S, an operating subsidiary. P created, in order to "squeeze out" the minority shareholders...
T And TWX Are Planning A "Reorganization"
October 24, 2016 - Bulletin Print Report
AT&T, Inc., (T), and Time Warner, Inc., (TWX), in case you haven't heard, announced a merger agreement over the weekend which contemplates the acquisition by T of the a...
"Expansion Doctrine" Permits Spin-Off Of Recently Purchased Business
October 24, 2016 - Volume 10 Issue 203 Print Report
In order for Sec. 355(a) of the Code to apply to a "spin-off" or a "split-off," among other conditions, the most fundamental requirement that has to be comp...
Supplier Of Fluids For Fracturing Operations Earns Qualifying Income
October 21, 2016 - Volume 10 Issue 202 Print Report
X is a limited liability company. As part of an initial public offering (IPO) for a to-be-formed partnership, (PS), X intends to contribute assets related to its fluid handling...
Location Of Card Holder Governs "Sourcing" Of Card Issuer's Receipts
October 20, 2016 - Volume 10 Issue 201 Print Report
The taxpayers are in the credit card account business. The taxpayers' receipts are derived from interest, "interchange," and service fees. The issue is how the re...
SUPERVALU Changes Direction With Respect Save-A-Lot
October 19, 2016 - Bulletin Print Report
SUPERVALU, (SU), was poised to dispose of its Sav-A-Lot, (SAL), operation in a highly unorthodox manner. SU was going to secure an infusion of capital, in the form of non-votin...
Deal Status Updates--October 2016
October 19, 2016 - Bulletin Print Report
ABI/SAB Miller The transaction has closed. The “partial share alternative” was heavily subscribed for with the result that Altria and Bevco received fewer shares...
Temporary Investment of Loan Proceeds In Muni Bonds
October 19, 2016 - Volume 10 Issue 200 Print Report
A "sharp growth" in sales volume and rapidly increasing demands on thetaxpayer's manufacturing facilities, as well as a material increase in its w...
Royalty Income Earned After 2006 Not Exempt
October 18, 2016 - Volume 10 Issue 199 Print Report
From the 1970s to the 2000s, Congress provided tax exemptions for domestic corporations...that sold products abroad. The tax exemptions were challenged by the World Trade Organ...
Silgan Holdings Launches A Self-Tender Offer
October 18, 2016 - Bulletin Print Report
Silgan Holdings, Inc., (SHI), is engaging in a Dutch Auction self-tender offer, its second in the past two years. In this year's iteration, SHI is offering to purchase up t...
"Debt-Equity" Regulations Focus On "Earnings Stripping"
October 17, 2016 - Volume 10 Issue 198 Print Report
One of the hallmarks of an "inversion" transaction (a transaction in which the stock of a domestic corporation is acquired by a foreign corporation) is the practice o...
Gain Or Loss From Termination Fee Is Calculated
October 17, 2016 - Bulletin Print Report
A domestic corporation ("ACQ") enters into an agreement (the Contract) with another corporation (T) pursuant to which the parties agree to undertake a series of steps...
Pregnancy Is An "Unforeseen Circumstance"
October 14, 2016 - Volume 10 Issue 197 Print Report
The taxpayers were married and had one child, a daughter, when they purchased Residence 1 on Date 1. Residence 1, a condominium, contained two small bedrooms and two baths.&nbs...
Altria Will Use The Equity Method With Respect To Its AB Stake
October 13, 2016 - Bulletin Print Report
Altria Group, Inc., (MO), recently disclosed that it fared very well in the aftermath of the business combination involving AB InBev, (AB), and SABMiller.  ...
Contingent Liabilities and Insolvency
October 13, 2016 - Volume 10 Issue 196 Print Report
Mr. Dudley B.Merkel, (M), owned 25 percent of HMH, a partnership. On September 1, 1991, Great Western Bank granted forgiveness to HMH of a $1,439,000 non-recour...
Is The EpiPen Settlement Payment Tax Deductible?
October 11, 2016 - Bulletin Print Report
Mylan N.V., ("MYL"), announced, on October 7, 2016, that its domestic subsidiary, Mylan, Inc., ("MI"),* has agreed to the terms of a $465 settlement with th...
What Must Be Distributed in Partial Liquidation?
October 11, 2016 - Volume 10 Issue 195 Print Report
X Corporation, (X), has been in the poultry processing business since 1965. In 1968, X went into the chicken farming business as a separate and distinct operation.
CBS/Viacom Merger Should Not Derail Radio Split-Off
October 10, 2016 - Bulletin Print Report
CBS announced plans to divest its subsidiary, CBS Radio, Inc., ("Radio"), by means of a combination transaction involving (i) an initial public offering of a portion...
Fantasy Sports Contest Entry Fee Is Not Subject To N.J. Sales Tax
October 10, 2016 - Bulletin Print Report
The taxpayer, ("TP"), is incorporated in Delaware; and is headquartered in Texas. TP operates an online daily fantasy sports website that allows Users to enter daily...
OTC Bulletin Board Not an Established Securities Market
October 10, 2016 - Volume 10 Issue 194 Print Report
Corporation A, (A), maintains Plan X, a defined contribution plan which is qualified under Sec. 401(a) of the Internal Revenue Code. Plan X is not an employee stock o...
Met Life To Spin Its Retail Life Insurance & Annuity Operations
October 7, 2016 - Bulletin Print Report
Met Life, Inc. is in the process separating its massive retail life insurance and annuity business (which will be housed in a corporation to be formed by Met Life, known as Bri...
Taxpayer Retires "Embedded Stock" Tax Efficiently
October 7, 2016 - Volume 10 Issue 193 Print Report
P corporation, ("P"), owns S1, which owns all of the stock of S2. S2, in turn, owns all of the stock of S3; and the latter owns all of the stock of S4. S4 is, and has...
What Is the "Source" of Vacation Pay?
October 6, 2016 - Volume 10 Issue 192 Print Report
JB is a non-resident of Oregon. He began working for the U.S. Postal Service in Oregon in 1978. He worked in that office for approximately 14 years, and then moved to...
SBAC Will Elect To Become A REIT
October 5, 2016 - Bulletin Print Report
SBA Communications Corporation, ("SBAC"), recently announced its intention "to take all necessary steps for it to qualify as real estate investment trust, ("...
Business Purpose Does Not "Count" For Purposes of Sec. 302(b)(1)
October 5, 2016 - Volume 10 Issue 191 Print Report
S and E owned 60 percent and 40 percent, respectively, of the stock ofEN, Inc., (EN), and ofBA, Inc., (BA). EN ag...
Allergan To Issue "CVRs" In The Acquisition Of TBRA
October 4, 2016 - Bulletin Print Report
Allergan plc, through one of its U.S. affiliates, "Holdco," has entered into an agreement to acquire the stock of Tobira Therapeutics, Inc., ("TBRA"), in a...
JNS To Engage In A "Cross-Border" Merger
October 4, 2016 - Bulletin Print Report
Janus Capital Group, Inc., ("JNS"), and its foreign rival, Henderson Group plc, ("HGG"), have announced plans to merge in a transaction in which JNS, a dome...
Propane Is a Favored Asset
October 4, 2016 - Volume 10 Issue 190 Print Report
X is a publicly traded partnership (PTP or MLP). X is engaged in the retail and wholesale supply, marketing, and distribution of propane. X's business consists pr...
Estate's Loss "Arose From" A Theft
September 30, 2016 - Volume 10 Issue 189 Print Report
JH, a resident of New York, died testate on January 31, 2008. At that time, he owned a 99 percent interest in JHF, LLC ("JHF"). JH's daughter and son each held a...
Can "Merger Consideration" Emanate From A Third Party?
September 29, 2016 - Bulletin Print Report
One of the more interesting business combinations we have encountered is the acquisition by Ares Capital Corporation, ("ARCC"), of American Capital, Ltd., ("ACAS...
Repos Are Real Estate Assets
September 29, 2016 - Volume 10 Issue 188 Print Report
TP is a real estate investment trust, (REIT). TP's principal activity is to acquire and hold mortgage loans secured by mortgages and deeds of trust and mortgage b...
Intrafamily Transfers Can Constitute Bona Fide Debt
September 28, 2016 - Volume 10 Issue 187 Print Report
Appellants, (As), are the parents of K. K is a general contractor and the sole owner of KC, a Minnesota 'S' corporation. &nb...
CFC And PFIC Inclusions Can Only Be "Dividends" For A RIC
September 28, 2016 - Bulletin Print Report
The I.R.S. has issued proposed regulations clarifying certain requirements a corporation must adhere to in order to qualify as a "regulated investment company" ("...
Connecticut's Token Gesture
September 27, 2016 - Bulletin Print Report
A Connecticut "resident" is defined as an individual who is domiciled in Connecticut...or who is not domiciled in Connecticut, but who maintains a...
Damages Received "On Account Of" Physical Injuries of Sickness
September 27, 2016 - Volume 10 Issue 186 Print Report
Petitioner was employed by PACE. During 1996, before her employment with PACE commenced, petitioner was diagnosed with MS. Pe...
Amortizing Premium On Callable Debt Securities
September 26, 2016 - Bulletin Print Report
The Financial Accounting Standards Board, ("FASB"), has issued (on September 22, 2016) a proposed Accounting Standard Update, ("ASU"), entitled "Premiu...
Distributing a Note In Connection With a Partial Liquidation
September 26, 2016 - Volume 10 Issue 185 Print Report
C is a domestic corporation incorporated in State M. B is a new corporation incorporated in State M. C has conducted its business operations in separate divisions: D1...
The Acquisition Of WCI Should Qualify As A Reorganization
September 23, 2016 - Bulletin Print Report
Lennar Corporation, (L), and WCI Communities, Inc., (WCI), have announced that they have entered into a definitive merger agreement under which "Lennar will acquire all of...
Sears Not Entitled to a Bad Debt Sales Tax Credit
September 23, 2016 - Volume 10 Issue 184 Print Report
For the period in question, Sears, (S), paid the full amount of sales tax due on goods sold from its retail stores in Maine. S had a financing agreement with a third-...
Sec. 1231 Property Is Not A Capital Asset
September 22, 2016 - Volume 10 Issue 183 Print Report
On February 25, 2005, CL, a partnership, acquired, for $13.8 million, the RBH Hotel in Tampa, Florida. The property consisted of land and improvements thereon....
Tech Data Secures A Basis Step Up
September 21, 2016 - Bulletin Print Report
There are different ways in which a business (or other group of assets) can be acquired. Thus, an acquirer can acquire the assets used in the business directly from the seller,...
Maryland's Policy Regarding Federal Obligation Interest Is Unconstitutional
September 21, 2016 - Volume 10 Issue 182 Print Report
Between 1999 and 2008, B's federal taxable income, as reported on its Maryland returns, ranged from $109 million to $1.288 billion. B was a North Carolina state chartered c...
State Law Dissolution Does Not Terminate 'S' Corporation Status
September 20, 2016 - Volume 10 Issue 181 Print Report
X incorporated under State law on Date 1. X elected to be treated as an 'S' corporation effective for Year 1. In Year...
Will Berkshire Hathaway Exit Wells Fargo?
September 19, 2016 - Bulletin Print Report
Forbes' corporate finance columnist, the estimable Antoine Gara, on September 15, 2016, wrote a very interesting article speculating on whether, and how, in light of the We...
Tribune Media Company Settles "Newsday" Dispute
September 19, 2016 - Bulletin Print Report
One of the more interesting transactions we have encountered was Tribune's attempted "tax-efficient" divestiture of Newsday. This transaction was structured to av...
Receipts Constitute Non-Taxable Gratuities
September 19, 2016 - Volume 10 Issue 180 Print Report
The Taxation and Revenue Department of New Mexico (the Department) assessed TP for gross receipts tax, penalties, and interest. TP (also re...
Assumed Debt Not Part of Basis
September 16, 2016 - Volume 10 Issue 179 Print Report
An 'S' corporation liquidates, distributing all its assets to its shareholders. One or more suchshareholders form a new entity, either a single member d...
Endesa Americas Merger Should Qualify As A Reorganization
September 15, 2016 - Bulletin Print Report
Eneris Americas, (ENE), owns some 59.98 percent of the stock of Endesa Americas, (END). Each such corporation is a foreign corporation. ENE is interested in acquiring all of EN...
Tax Accounting for Loan Origination Fees
September 15, 2016 - Volume 10 Issue 178 Print Report
On Date 2, Y Corporation, Y, and Z Corporation, Z, were merged in a transaction to which Sec. 381 of the Internal Revenue Code applies. Z merged into Y in a transacti...
Reaction To Comments Made By Mr. Joseph Tsai Regarding YHOO and BABA
September 14, 2016 - Bulletin Print Report
At a hedge fund conference yesterday, Mr. Joseph Tsai, Vice-Chairman of Alibaba Group, made some widely-circulated comments that strongly suggested that Alibaba Group sees no pa...
Formula One Is Not An "Active" Business
September 14, 2016 - Bulletin Print Report
Some investors are hoping that Liberty Media Corporation, (LM), will spin-off Braves Holdings, (AB), the owner and operator of the Atlanta Braves National League baseball club....
"Checked" LLC Not a Corporation in Maryland
September 14, 2016 - Volume 10 Issue 177 Print Report
On August 1, 2011, SC, a District of Columbia corporation, made two filing with the Maryland State Department of Taxation and Assessments, (SDAT). The first filing wa...
"Break" Fee Treated As A Capital Loss
September 13, 2016 - Bulletin Print Report
TP, who is almost certainly AbbVie, announced, in a press release, the combination of TP and T (who is almost certainly Shire plc), a foreign corporation.  ...
YHOO Issues Proxy Materials Regarding Core Business Sale
September 13, 2016 - Bulletin Print Report
Yahoo! Inc. (YHOO) has issued preliminary proxy materials with respect to the shareholder votes it is seeking in order to proceed with the sale of its "core business"...
The S.E.C. Prefers "Pushdown" Accounting
September 13, 2016 - Volume 10 Issue 176 Print Report
In Staff Accounting Bulletin, (SAB), No. 54, Application of "Pushdown" Basis of Accounting in Financial Statements of Subsidiaries Acquired by Purchase<...
Is Taxpayer "Multistate?"
September 12, 2016 - Volume 10 Issue 175 Print Report
TP is a manufacturer of equipment whose headquarters and sole production facility are located in Virginia. A majority of TP's equipment is sold to the U.S. govern...
"Holds Substantially All"
September 9, 2016 - Volume 10 Issue 174 Print Report
P Corporation, (P), is a manufacturing corporation organized under the laws of State A. T Corporation, (T), is also a manufacturing corporation organized under the la...
HPE To Engage In A Second "RMT" Transaction
September 8, 2016 - Bulletin Print Report
Hewlett Packard Enterprise, ("HPE"), it seems safe to say, is, when it comes to divesting "extraneous" parts of its business, partial to Reverse Morris Trus...
Nonowner Of Mineral Interests Incurred "G&G" Expenses
September 8, 2016 - Volume 10 Issue 173 Print Report
Company ("C") conducted marine surveys of the outer continental shelf in the Gulf of Mexico. The surveys involved the use of geophysical techniques that detected or s...
CF Industries Adopts An NOL "Rights" Plan
September 7, 2016 - Bulletin Print Report
CF Industries Holdings, Inc., (CFI), announced that its board of directors has done what many other boards faced with similar circumstances have opted to do: CFI's board of...
Finessing NQPS Status
September 7, 2016 - Volume 10 Issue 172 Print Report
Corporation 1, (C1), is a State X professional corporation engaged in Business A. C1 has "u" shareholders, each of whom owns "v" shares.
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...
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...
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.
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...
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...
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...
TROW Will Make A Voluntary Payment To Certain Of Its Funds
June 8, 2016 - Bulletin Print Report
T. Rowe Price Group, Inc., (TROW) announced that it will be paying nearly $200 million "to compensate certain clients for a proxy voting error the firm made in connection...
Apportioning DISH's Subscription Receipts
June 8, 2016 - Volume 10 Issue 109 Print Report
Petitioner is a multistate taxpayer organized under the laws of the State of Nevada with principal executive offices located in Englewood, Colorado. Petitioner provides direct...
Treasury Attacks "Conversion Transactions" Following Spin-Offs
June 8, 2016 - Bulletin Print Report
The Treasury Department feels that Congress's efforts to discourage REIT spin-offs were too timid. Accordingly, the Department has issued temporary regulations that it beli...
New REIT Spin-off Regulations
June 7, 2016 - Bulletin Print Report
The Treasury Department has issued regulations that make it untenable for a corporation that participated in a tax-free spin-off to merge with an existing REIT. While...
Intangible Property Holding Companies and Nexus
June 7, 2016 - Volume 10 Issue 108 Print Report
In The Classics Chicago, Inc. v. Maryland Comptroller of the Treasury , Md. Ct. Spec. App., No. 2047, January 4, 2010, the issue was whether The...
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...
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...
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...
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...
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...
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...
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...
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...
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 contracts with minimum guarantee provisions during the years at issue. As part of its strategy of hedging the minimum guarantees, S purcha...
The "Evolution" of Sec. 351
November 18, 2014 - Volume 8 Issue 222 Print Report
Mr. B owned all of the stock of BC Corporation, (BC). BC, in turn, owned 2/3 of the stock of BMC Corporation, (BMC). FO Corporation, (FO), owned the remainder of BMC&...
BBT And SUSQ Will Effect A "Two-Party" Merger
November 18, 2014 - Bulletin Print Report
BB&T Corporation, (BBT) and Susquehanna Bancshares, Inc. (SUSQ) have announced the signing of a definitive agreement "under which BBT will acquire SUSQ in a cash and s...
Yahoo's Options For Its Equity Stakes
November 18, 2014 - Bulletin Print Report
With Yahoo! Inc. (Y) confirming the fact that it is exploring "tax efficient" options for the divestiture of its equity stakes in each of Alibaba (BABA) and Yahoo Jap...
Actavis Wins The Battle For Allergan
November 17, 2014 - Bulletin Print Report
Actavis plc (ACT) and Allergan, Inc. (AGN) announced that they have entered into a definitive agreement pursuant to which ACT will acquire AGN for a combination of (i) $129.22...
The Limited Scope of "Fines and Similar Penalties"
November 17, 2014 - Volume 8 Issue 221 Print Report
Mason and Dixon Lines, (MD), is a Tennessee corporation engaged in interstate trucking. During the years 1971-1975, its trucks were found to be overweighton a&n...
A "Clippings Library" Is Not a Capital Asset
November 14, 2014 - Volume 8 Issue 220 Print Report
The taxpayer, (TP), a prominentnewspaper publisher, contributed its "clippings library" to the California Historical Society. &n...
Unvested Options Do Not Constitute "Stock Ownership"
November 13, 2014 - Volume 8 Issue 219 Print Report
Mr. E, (E), was employed by Corporation A, (C), in Year Y. E was not an officer of C, nor was hea member of the group consisting of the highest paid one percent...
Berkshire To Pursue Another "Cash Rich Split-Off"
November 13, 2014 - Bulletin Print Report
Although details are sparse, it appears that Berkshire Hathaway, Inc. (BRK), this time with none other than Proctor and Gamble (PG) as the counterparty, is engaging in one of i...
"Purge" Sale Facilitates a 'B' Reorganization
November 12, 2014 - Volume 8 Issue 218 Print Report
Y Corporation, (Y), holds "d%" of the stock of X Corporation, (X). Y proposes to acquire sufficient shares of X so that it will hold at least 80 percent of...
Dow Chemical Found To Create "Sham" Partnership
November 11, 2014 - Volume 8 Issue 217 Print Report
Dow Chemical Company, (D) selected 73 patents to contribute to a partnership. D selected patents valued at roughly $867 million with 71 of the patents having zero tax basis. Ne...
Sears' Latest Rights Offering Has Unusual Tax Consequences
November 10, 2014 - Bulletin Print Report
Rev. Rul. 72-71, 1972-1 C.B. 99, addresses the tax consequences of a rights offering similar to AT&T's historic early '70s offering. Sears Holdings Corporation (Sea...
New "Propco/Opco" Transactions Announced
November 10, 2014 - Bulletin Print Report
We have always believed that the Penn National Gaming transaction, in which the company via a tax-free spin-off separated its real estate from its operating business, was one o...
Reasonable Compensation Determined for "PayDay Loan" Executive
November 10, 2014 - Volume 8 Issue 216 Print Report
CNG, an 'S' corporation, operates a "payday" loan business. CNG enjoyed "great success" and sought to expand its operations. CNG obtained...
Reacquiring a Prohibited "Interest"
November 7, 2014 - Volume 8 Issue 215 Print Report
Mr. A and his son, Mr. B, each owned exactly 50 percent of the stock of a corporation, (C). C redeemed all of the stock held by Mr. A for an amount of cash equal to t...
Wages vs. Civil Penalties
November 6, 2014 - Volume 8 Issue 214 Print Report
There are two settlement agreements involved in this case. Each of the agreements allocates the settlementawards as follows: "$X" allocated to alleged...
LH Stock Will Be Taxable To The CVD Shareholders
November 5, 2014 - Bulletin Print Report
Laboratory Corporation of America Holdings, (LH), and Covance, Inc., (CVD), have entered into a definitive agreement pursuant to which LH will acquire all of the stock of CVD.<...
MLP Ruling Update
November 5, 2014 - Bulletin Print Report
An I.R.S. official, in a speech delivered yesterday to a bar association group, had this to say regarding the status of the MLP ruling moratorium--"We have yet to write a...
Splitting An Affiliated Group's Taxable Income Not Warranted
November 5, 2014 - Volume 8 Issue 213 Print Report
AR is a "qualified personal service corporation" (QPSC) as defined in Sec. 448(d)(2) of the Code. AR owned all of the stock of OC. OC is not a QPSC. &...
Changing Interest Rate Periods Is Not a "Modification"
November 4, 2014 - Volume 8 Issue 212 Print Report
TP issued "X" Bonds on Date 1 and "Y" Bonds on Date 2. The X Bonds have a principal amount of "$A" and a final maturity date of Date 3....
What Can Treasury Do To Curtail "Earnings Stripping?"
November 3, 2014 - Bulletin Print Report
Recently, a Treasury Department tax official stated, clearly for public consumption, the following: "....We are looking at earnings stripping rules. This could either look...
Untaxed Accretion Of Assets Required For COD Income
November 3, 2014 - Volume 8 Issue 211 Print Report
In the '80s, petitioners were involved in a real estate development project called "HP." Petitioners promised to pay K $400,000 in the event HP "went under,&...
"Downstream" 'C' Reorganization Found
October 31, 2014 - Volume 8 Issue 210 Print Report
X Corporation, (X), has 100 shares of common stockoutstanding. Five of those shares are owned by Y Corporation, (Y), a holding company. The remaining 95sh...
Altria's Investment In SAB Miller Is Highly Appreciated
October 30, 2014 - Bulletin Print Report
Altria Group, Inc. (MO), accounts for its investment in SAB Miller (SAB) on the "equity method." MO currently owns 26.8 percent of the stock of SAB and has owned its...
"Retired" But Not Yet Redeemed
October 30, 2014 - Volume 8 Issue 209 Print Report
P Corporation, (P), owns 100 percent of the common stock of S Corporation, (S). S also has shares of "b" series of preferred stock and shares of cumulative...
Sec. 83 Not Limited to "Bargain" Purchases
October 29, 2014 - Volume 8 Issue 208 Print Report
As part of an employment and stock purchase agreement dated May 22, 1970, a corporation, (X), agreed to sell to Mr. A, (AL), 40,000 shares of common stock at a price...
WMGI To Engage In A "Modern" Inversion Transaction
October 28, 2014 - Bulletin Print Report
In light of the Treasury Department's issuance of Notice 2014-52, certain inversion transactions are less attractive than heretofore; and such Notice has reportedly been pr...
Comcast/QVC Not "Unitary" But "Termination Fee" Taxable
October 28, 2014 - Volume 8 Issue 207 Print Report
For taxpayers operating businesses within and outside the state, California applies the "unitary business principle." That method calculates the local tax base by fir...
Sale of State Tax Credits Produces Capital Gain or Loss
October 27, 2014 - Volume 8 Issue 206 Print Report
The Commonwealth of Massachusetts ("the state") offers a number of state tax "incentives" in the form of tax credits. In general, a taxpayer may t...
KLAC Will Pay An Extraordinary Dividend
October 24, 2014 - Bulletin Print Report
KLA-Tencor Corporation (KLAC) has announced that its board of directors has authorized the financing of a "leveraged recapitalization," a term we have not heard for q...
Reincorporation/Liquidation Is A "Genuine" Complete Liquidation
October 24, 2014 - Volume 8 Issue 205 Print Report
Fund, (F), is a diversified, closed-end management investment company. F qualified as a regulated investment company under Sec. 851 of the Code engaged in the business of inves...
Break-Up Fees Do Not Terminate REIT Status
October 23, 2014 - Volume 8 Issue 204 Print Report
TA is a publicly-traded REIT. TA is (through a wholly-owned subsidiary) the sole general partner of PSA and has an "a%" ownership interest in PSA.
KMI Discusses The Tax Consequences Of Its Annexation Of KMP
October 22, 2014 - Bulletin Print Report
Kinder Morgan, Inc. (KMI) issued proxy materials the other day in which it discussed the tax consequences the unitholders of Kinder Morgan Energy Partners, L.P. (KMP) can expec...
Sec. 351 and the Step-Transaction Doctrine
October 22, 2014 - Volume 8 Issue 203 Print Report
X is a foreign corporation. X has 19 shareholders, six of whom were citizens of Country A ("Group A shareholders") and 13 of whom were U.S. citizens ("...
Why Is Endo and BD Stock Taxable?
October 21, 2014 - Bulletin Print Report
In two recently announced business combinations, the buyer is offering, as an integral part of the consideration, its own stock. In each case, moreover, the stock component of...
Taxpayer Identified Multiple Replacement Properties
October 21, 2014 - Volume 8 Issue 202 Print Report
H and W were members in DOSA, each with a 50 percent interest. H held a 39.8 percent interest and DOSA held a 60.2 percent interest in DJBP.  ...
Affiliation Requires Ownership of "Vote and Value"
October 20, 2014 - Volume 8 Issue 201 Print Report
Affiliation is dependent upon satisfaction of the requirements of Sec. 1504(a). The following factors are generally key to determining satisfaction of those requireme...
Retroactive Adjustment To Bad Debt Reserve Limited
October 17, 2014 - Volume 8 Issue 200 Print Report
AB acquired C, a large savings and loan association, in 1988. On December 4, 1992, the Office of Thrift Supervision (OTS) seized C and placed it into conservatorship...
Can AbbVie Deduct Expenses Incurred In The Shire Deal?
October 16, 2014 - Bulletin Print Report
AbbVie, Inc.'s unexpected and abrupt termination of its proposed transaction with Shire plc, a transaction that had been touted as replete with business benefits, leads to t...
Income From Time Charters Is Qualifying Income
October 16, 2014 - Volume 8 Issue 199 Print Report
Y is a limited partnership. Y intends to become a publicly traded partnership through an initial public offering. Y's initial fleet of n1 product tankers are designed and c...
Retirement Communities Are "Residential Rental Property"
October 15, 2014 - Volume 8 Issue 198 Print Report
TP owns and operates retirement communities. TP operates these communities as either a "Type 1 Community" or asa "Type 2 Community"....
No Device Despite Pre-Arranged Sale Of Stock
October 14, 2014 - Volume 8 Issue 197 Print Report
D is the common parent of an affiliated group that files a consolidated income tax return. D is engaged directly and though subsidiaries in Business A, Business B, and Business...
STERIS Planning To Engage In An Inversion
October 13, 2014 - Bulletin Print Report
Even though there has been a marked slowdown in the pace of inversion announcements following President Obama’s attack on the technique and the Treasury Departm...
Blackstone To Spin Off Financial Advisory Business and Endo Update
October 13, 2014 - Bulletin Print Report
The Blackstone Group L.P., a publicly-traded partnership, has announced a plan to spin off to its unitholders its financial and strategic advisory services, restructuring and r...
Voting Power
October 13, 2014 - Volume 8 Issue 196 Print Report
FX has outstanding 100 shares of voting stock which aredivided into two classes: 95 shares of Class A stockand five shares of Class B stock. The Class A s...
Ford Motor Credit Can Adjust N.J. Basis
October 10, 2014 - Volume 8 Issue 195 Print Report
Ford Motor Credit Company (FMCC) is a Delaware corporation which operates a vehicle financing business in New Jersey (NJ) and elsewhere. For federal income tax purposes, FMCC d...
Liquidating Distributions and Constructive Receipt and Endo Update
October 9, 2014 - Volume 8 Issue 194 Print Report
Pursuant to a plan of complete liquidation adopted by a domestic corporation, each shareholder was dulynotified, prior to February 15, 1978, that he would be en...
Taxation Of Foster Wheeler Shareholders With Respect To AMEC Deal
October 8, 2014 - Bulletin Print Report
AMEC plc, (AM) has reached an agreement with Foster Wheeler AG, (FW), pursuant to which the latter will be acquired by the former in a multi-step transaction. Initially, a newl...
Accrued But Unpaid Interest Is An "Obligation"
October 8, 2014 - Volume 8 Issue 193 Print Report
A controlled foreign corporation (CFC) is indirectly wholly owned by a domestic corporation (B) and is treated as holding obligations of B. Obligations of B held by CFC constit...
Disqualified Debt Instruments
October 7, 2014 - Volume 8 Issue 192 Print Report
TP is a holding company that owns several insurance companies. TP plans to issue senior subordinated debt ("the Notes") and purchase put options ("the...
EFH Tax Memorandum Is Must Reading For All Creditors
October 6, 2014 - Bulletin Print Report
An "Omnibus Tax Memorandum," dated October 1, 2014 and filed with the Bankruptcy Court on that date, does a wonderful job of laying out the daunting federal income ta...
Limited Partner Found to Have "Permanent Establishment" in U.S.
October 6, 2014 - Volume 8 Issue 191 Print Report
In 1984, a Massachusetts limited partnership sold real estate located in Boston. The sale produced a long-term capital gain that was distributed among the partners.
UBS Will Become A Holding Company
October 3, 2014 - Bulletin Print Report
UBS has announced an internal restructuring which will lead to the formation of a "pure" holding company. Such holding company will own, directly and indirectly, all...
SHLD Is Planning A Rights Offering
October 3, 2014 - Bulletin Print Report
Sears Holdings Corporation, (SHLD), has a knack for devising creative ways to come up with needed capital. Its latest idea is to "sell," through a rights offering, to...
Salary Reimbursement Is Deductible
October 3, 2014 - Volume 8 Issue 190 Print Report
A father and his sons owned all of the stock of Corporation, (C). They are the only officers and directors of C. In late 1965...
Ground Rules For Acquisitions After Spin-Offs Are Liberal
October 2, 2014 - Bulletin Print Report
eBay, Inc., (E), following a strategic review by its Board of Directors, has decided, through the mechanism of a tax-free spin-off, to separate its businesses, with the result...
Merged Corporations Are "The Same Taxpayer"
October 2, 2014 - Volume 8 Issue 189 Print Report
In 1998, N acquired OWF through a forward triangular merger under Sec. 368(a)(1)(A) and Sec. 368(a)(2)(D). OWF merged into WFC, a subsidiary of N organized for purposes of the...
SARs Exempt From Sec. 457A
October 1, 2014 - Volume 8 Issue 188 Print Report
SR is a foreign corporation and a nonqualified entity for purposes of Sec. 457A(b). SP is a partnership. Income of SP is allocated to persons subject to U.S. income tax.<...
Civeo Chooses Inversion Over REIT Election
September 30, 2014 - Bulletin Print Report
Civeo Corporation, (CVEO), faced with a choice of two tried and true tax savings maneuvers, a REIT election or an "inversion," rejected the former and has chosen to p...
Sec. 357(c) Requires "Aggregation"
September 30, 2014 - Volume 8 Issue 187 Print Report
As of April 20, 1982, C and D were partners in Partnership 1 through Partnership 12 and T3, T4, and T5 were partners in Partnership 1, 2, 4, 5, 6, 9, 11, and 12. The...
Chiquita's Revised Merger Terms Keeps It Out Of Harm's Way
September 29, 2014 - Bulletin Print Report
Chiquita Brands International, Inc., (CQB), and Fyffes plc, (FFE), have announced that their respective Boards of Directors have approved a revised agreement for the proposed c...
Sec. 951 "Inclusions" Do Not Constitute "PII"
September 29, 2014 - Volume 8 Issue 186 Print Report
Corporation S, (S), elected to be an 'S' corporation, effective Date 2. S owns all of the stock of DC1 which owns all of the stock of DC2. DC2 owns all of the...
Stock Is Not An Inventory "Surrogate"
September 26, 2014 - Volume 8 Issue 185 Print Report
Cenex, Inc., (C), a cooperative,sells petroleum products to farmers and ranchers. In 1975, in order to obtain an assured supply of refined petroleum products, C...
Receipt of Warrants Is a "Closed" Transaction
September 24, 2014 - Volume 8 Issue 184 Print Report
TP is a venture capital fund the primary purposes of which are to provide lease financing to, and purchase equity interests in, "emerging growth companies"....
Treasury Notice Narrowly Focused On "Bail Outs" Of Untaxed Earnings
September 23, 2014 - Bulletin Print Report
The Treasury Department's response to the proliferation of inversion transactions was issued last night and is interesting only in the sense that it is so narrowly focused....
Cancellation of Debt Is Analogized to "Insurance"
September 23, 2014 - Volume 8 Issue 183 Print Report
Petitioners' Californiahome was damaged on February 9, 1971 as the result of an earthquake. On May 14, 1971, they applied to the Small Business Administrati...
WPG Will Secure A Cost Basis In Glimcher's Assets
September 22, 2014 - Bulletin Print Report
Glimcher Realty Trust, (GRT), and Washington Prime Group, Inc., (WPG), each a REIT, have entered into a definitive agreement pursuant to which GRT will be merged with and into...
Taxpayer Not a Maryland Resident
September 22, 2014 - Volume 8 Issue 182 Print Report
Mr. G moved into rental property in Maryland in 2006 due to a relocation for his work. Mr. G testified that although he had moved to Maryland, his move was "work...
Sec. 1031 Gain Is Not "Subpart F" Income
September 19, 2014 - Volume 8 Issue 181 Print Report
B Corporation, (B),organized under the laws of Country X, is wholly-owned by Corporation A, (CA), a domestic corporation. Accordingly, B is a "controlled f...
Closely-Held Corporation Denied Deduction for Guarantee Fees
September 18, 2014 - Volume 8 Issue 180 Print Report
During the taxable year in dispute, the stock of Tulia Feedlot, Inc., (TF), was principally owned by 13 individuals: 11 such individuals each held 280 shares; two&nbs...
Canadian Corporation Can "Double Dip"
September 17, 2014 - Volume 8 Issue 179 Print Report
L and its wholly-owned subsidiary, CBRA, were each Canadian companies. They belonged to a corporate group known as the CBRG. The parent of the CBRG was a Belgian company, CBRSA...
Determining A REIT's "Real Estate Assets"
September 16, 2014 - Volume 8 Issue 178 Print Report
For an entity to qualify as a REIT, Sec. 856(c)(4)(A) requires that, at the close of each quarter of its taxable year, at least 75 percent of the value of the entity's tota...
Instrument Similar To "Inversion" Debt Has Been Respected As Such
September 15, 2014 - Volume 8 Issue 177 Print Report
Following an inversion, in order to "shift" income from the U.S. to a more favorable foreign jurisdiction, the U.S. company might declare and pay a dividend to its ne...
Tribune's Warrants Treated As Stock For Purposes Of Sec. 355
September 15, 2014 - Bulletin Print Report
LTR 201437006, March 7, 2014 is the ruling issued to Tribune Media Company, (D), in connection with its distribution of 98.5 percent of the stock of Tribune Publishing Company,...
Interest on Convertible Debt Is Deducted on a "Cash" Basis
September 12, 2014 - Volume 8 Issue 176 Print Report
In Month X, TP, a C corporation, issued debentures whichbear interest that is payable semi-annually on Date y and Date z of each year ("the Payment Dates&q...
Disproportionate Exchanges
September 11, 2014 - Volume 8 Issue 175 Print Report
Mr. A, the founder of X Corporation, (X), owns 50 of X's 100 shares of common stock. B and C, Mr. A's sons, each owns 25 shares. &...
AngloGold Ashanti To Pursue "Partial" Spin-Off
September 11, 2014 - Bulletin Print Report
AngloGold Ashanti Limited, (AGA), a company organized under the laws of South Africa, has received the required approvals "to restructure its international mining operatio...
Florida "Nexus" Lacking
September 10, 2014 - Volume 8 Issue 174 Print Report
TP, a corporation, works with companies who wish to recognize and honor their employees' achievements. TP offers a wide variety of gifts and products. All of TP&#...
FNF Adopts Liberty Strategy With Respect To Remy International, Inc.
September 9, 2014 - Bulletin Print Report
Fidelity National Financial, Inc., (FNF), is adopting a strategy most closely identified with Liberty Media in order to efficiently divest a less than controlling stake it owns...
Service Partners In Investment Management Partnership Not "Limited"
September 9, 2014 - Volume 8 Issue 173 Print Report
MC, a State 1 limited liability company treated as a partnership for tax purposes, serves as the investment manager for MF. MF is a family of investment partnerships. MF conduc...
Sen. Schumer Seeks To Penalize "Ancient" Inversions
September 8, 2014 - Bulletin Print Report
"Earnings stripping" is a popular strategy that accompanies most, if not all, "inversion" transactions. Through intercompany debt arrangements instituted sh...
REIT Effects A Tax-Free Spin-Off
September 8, 2014 - Bulletin Print Report
D is a REIT. D is the sole general partner of OP, a State B limited partnership. D owns approximately "a" of the common limited partnership units in OP. OP has also i...
Intercompany "Loans" Not Bona-Fide Debt
September 8, 2014 - Volume 8 Issue 172 Print Report
Sysco Corporation, (SY), was a Delaware corporation that maintained its principal place of business in Houston,Texas. SY filed Combined Massachusetts Corporate...
Open vs. Closed Transaction
September 5, 2014 - Volume 8 Issue 171 Print Report
Pursuant to an agreement ("the Bank Agreement"), S Corporation, (S), became subject to possible liability to the Bank for a portion of bad debt losses of th...
LVMH Will Pay "In-Kind" Dividend
September 4, 2014 - Bulletin Print Report
LVMH Moet Hennessey Louis Vuitton SA (LVMH) offers its shares to U.S. investors using an ADR mechanism. An American Depositary Share (ADS) represents ordinary shares of a forei...
Not Compensated For "By Insurance or Otherwise"
September 4, 2014 - Volume 8 Issue 170 Print Report
TPisa regulated utility. The State in which TP is organized enacted legislation permitting utilities to recover"disaster restoration costs"...
D.C. Circuit Confirms Fannie Mae's and Freddie Mac's Tax Exemption
September 3, 2014 - Volume 8 Issue 169 Print Report
Fannie Mae and Freddie Mac (FM or the entities) are federally-chartered, privately-owned corporations currently under the conservatorship of the F.H.F.A. Each of these corporat...
Liberty's Ruling With Respect To Spin-Off Of TripAdvisor Released
September 2, 2014 - Bulletin Print Report
LTR 201435005, February 28, 2014, is the ruling issued to Liberty Interactive Corporation, (D), with respect to its spin-off of Liberty TripAdvisor Holdings, Inc., (C). Despite...
Compuware Is Going Private
September 2, 2014 - Bulletin Print Report
Compuware Corporation, (CPWR), has announced that it will be acquired by Thomas Bravo, LLC, (TB), a private equity firm, in a transaction valued at approximately $2.5 billion.<...
Circular Flow of Cash Disregarded
September 2, 2014 - Volume 8 Issue 168 Print Report
P Corporation, (P), owns all of the stock of D Corporation, (D). The latter is engaged in the active conduct of Business A. D owns all of the stock of C Corporation,...
REIT's "Settlement" Payments Do Not Jeopardize Its Status
August 29, 2014 - Volume 8 Issue 167 Print Report
TP is a Real Estate Investment Trust, (REIT). TP owns all of its assets and conducts substantially all of its operations through Partnership, (PS). TP owns approximat...
When Is A Dividend Taxed?
August 28, 2014 - Volume 8 Issue 166 Print Report
In April, 1963, the taxpayer, (M), entered into an agreement for the purchase of the stock of four corporations, SE1, SU, SE2, and SE3. The total sale price was $500,...
Most Assets Are "Capital" Assets
August 27, 2014 - Volume 8 Issue 165 Print Report
In a case entitled Arkansas Best Corp. v. Commissioner , 485 US 212 (1988), decided by the Supreme Court, the issue was whether corporate stock held by Arkans...
TRS Can Own Lodging Facility
August 26, 2014 - Volume 8 Issue 164 Print Report
TP is a Real Estate Investment Trust, (REIT). TP owns substantially all of its assets and conducts substantially all of its operations through a Partnership, (PS), in...
BKW and THI Will Effect A "Non-Abusive" Inversion Transaction
August 26, 2014 - Bulletin Print Report
Not surprisingly, given the advance publicity, Burger King Worldwide, Inc. (BKW), and Tim Hortons, Inc., (THI), announced today their intention to join forces in a transaction...
"Admission Fees" Subject To Amusement Tax
August 25, 2014 - Volume 8 Issue 163 Print Report
All home games played by the Chicago Bears were played at Soldier Field during the periods at issue. Soldier Field has approximately 62,000 seats divided into three sections: r...
BHP Biliton Will Effect A Spin-Off
August 22, 2014 - Bulletin Print Report
BHP Biliton, (BHP), plans to create an independent global metals and mining company "based on a selection of its aluminum, copper, manganese, nickel, and silver assets.&qu...
Initial Acquisitions Do Not Constitute "Owner Shifts"
August 22, 2014 - Volume 8 Issue 162 Print Report
On Date 1, prior to the issuance of any LC stock, LC entered into an agreement (the Agreement) with "First Investors." to sell them convertible preferred stock (CPS)....
Corporation Not Treated As A "Surrogate Foreign Corporation"
August 21, 2014 - Volume 8 Issue 161 Print Report
USC is State A LLC treated as a domestic corporation for tax purposes. All the shares of USC are held by FS2, a Country C entity classified as a foreign corporation for tax pur...
Installment Obligation Not Satisfied or Disposed Of
August 20, 2014 - Volume 8 Issue 160 Print Report
TP was the sole shareholder of A Corporation, (A), owning "o" shares of common stock. TP agreed to sell "p" shares to five employees ("the Ne...
When a Liquidating Distribution Consists of a Partner's Own Debt
August 19, 2014 - Volume 8 Issue 159 Print Report
During 1987, X, a C corporation, issued indebtedness without Original Issue Discount, at an issue price of $100x and a stated redemption price at maturity of $100x. T...
Spin-Off Coupled With REIT Election Approved
August 18, 2014 - Bulletin Print Report
The question of whether a spin-off coupled with a REIT election for the distributing or controlled corporation could pass muster under Sec. 355 has been, with the issuance of t...
Tax Accounting for Lease Termination Payments
August 18, 2014 - Volume 8 Issue 158 Print Report
In August, 1989, WO leased an IBM 3090 mainframe computer from IBM Credit Corporation, (ICC). During 1990, WO decided that th...
Aggregate vs. Class by Class
August 15, 2014 - Volume 8 Issue 157 Print Report
I, an individual, owned all of the outstanding stock of Y Corporation, (Y). I and C, an individual, owned all of the stock of X Corporation, (X). &nbs...
"Disqualified Interest" Never Loses Its Taint
August 14, 2014 - Volume 8 Issue 156 Print Report
TP is a wholly-owned U.S. subsidiary of P, a corporation organized under the laws of Country A. TP incurred interest expense on indebtedness guaranteed by P for the t...
Spin-Off May Be Followed By REIT Election
August 13, 2014 - Volume 8 Issue 155 Print Report
D is a holding company and the parent of a group of U.S. and foreign entities. D is also the common parent of an affiliated group filing a consolidated federal income tax retur...
Treasury Moves To Prevent Evisceration Of Notice 2010-2
August 12, 2014 - Volume 8 Issue 154 Print Report
Sec. 382 of the Code provides that the taxable income of a loss corporation for a year following an ownership change may be offset by pre-change losses only...
Lamar's I.R.S. Ruling Was Worth The Wait
August 11, 2014 - Volume 8 Issue 153 Print Report
Lamar Advertising Co., (TP), builds and maintains various types of outdoor advertising displays (OADs) and makes available space on such displays to advertisers. In addition, T...
Treasury Notices Can Raise Congressional Ire
August 11, 2014 - Bulletin Print Report
When considering the likelihood of the Treasury Department issuing preemptive Notices for the purpose of interdicting inversion transactions, the fate that befell one financial...
KMI To Abandon MLP Format
August 11, 2014 - Bulletin Print Report
Kinder Morgan, Inc., (KMI), owns a de minimis (approximately 8 percent) interest in Kinder Morgan Energy Partners, L.P., (KMI), an MLP; and a larger interest...
A Redemption's Effect on Earnings and Profits
August 8, 2014 - Volume 8 Issue 152 Print Report
A corporation, (X), had outstanding two classes of stock; common stock and 7 percent preferred stock. The preferred stock was...
GCI Proposes A Revamping
August 7, 2014 - Bulletin Print Report
Gannett Co., Inc., (GCI), is the latest "media" corporation, the last holdout in fact, to announce a restructuring in which the company's beleaguered publishing o...
High Vote and Low Vote Stock Constitute a Single Class of Stock
August 7, 2014 - Volume 8 Issue 151 Print Report
On Date 1, P Corporation, (P), acquired all of the stock of S Corporation, (S), which consisted of a single class of common stock. &...
"Failed" Reverse Triangular Merger Qualifies Under Sec. 351
August 6, 2014 - Volume 8 Issue 150 Print Report
P is a State W corporation. P has 752,000 shares of voting common stock outstanding, 6,000 shares of preferred stock ("Class 1 Preferred Stock") outstanding...
No Loss From Option Expiration
August 5, 2014 - Volume 8 Issue 149 Print Report
TP, a C corporation, created X, also a C corporation. "Investment Units" of X were sold in an IPO. Each Unit consisted of one share of callable X stock and...
Rep. Levin Readies New Anti-Inversion Legislation
August 4, 2014 - Bulletin Print Report
Rep. Levin, a vocal opponent of inversions, is preparing new legislation, to be titled "Stop Corporate Earnings Stripping Act of 2014," for imminent introduction. Thi...
CBS Outdoor America's I.R.S. Ruling Addresses "LED" Signs
August 4, 2014 - Volume 8 Issue 148 Print Report
LTR 201431020 was issued on April 16, 2014, the same day on which CBS Corporation announced that it had received its ruling from the I.R.S. confirming CBS Outdoor Americas, Inc...
Final Regulations On Basis Of Debt "Of Corporation To Shareholder"
August 1, 2014 - Volume 8 Issue 147 Print Report
Sec. 1366(d)(1) provides that the aggregate amount of losses and deductions taken into account by a shareholder of an 'S' corporation for any taxable year shall not exc...
SSP and JRN To Forge Unusual Alliance
July 31, 2014 - Bulletin Print Report
The E.W. Scripps Company (SSP) and Journal Communications (JRN) have announced an intricate, multi-step, transaction that will result in the shareholders of each such corporati...
Expense Disallowance Effects Change in Method of Accounting
July 31, 2014 - Volume 8 Issue 146 Print Report
The petitioners are the sole shareholders of two 'S' corporations, IM and HRI, making these entities 'related parties' under Sec. 267 of the Internal...
Why Can't Eaton Spin-Off Its Vehicles Business?
July 30, 2014 - Bulletin Print Report
On November 30, 2012, Eaton Corporation (EC) and Cooper Industries plc (CIP) engaged in an "inversion" transaction. A new corporation, Eaton plc (EP), was established...
Prepaid Variable Forward Contracts And Sec. 16(b) Of The Exchange Act
July 30, 2014 - Volume 8 Issue 145 Print Report
C is a shareholder of Apollo Group, Inc. (AG). JS is the Chairman of AG's Board of Directors. C sued JS and his son, PS, (the Ss), under Sec. 16(b) of the Securities Exchan...
Windstream's Announcement May Be The Tip Of The Iceberg
July 29, 2014 - Bulletin Print Report
Windstream, (WI), surprised the market, quite pleasantly, with its announcement of its intention to establish an "opco/propco" configuration--along the lines pioneere...
E&P Diminished By "Spread" On Exercise Of QSOs
July 29, 2014 - Volume 8 Issue 144 Print Report
L owned 100,000 shares of R common stock. In 1961, he received $37,245.75 in corporate cash distributions. In 1962, R advised its shareholders that such distributions...
Thoughts On Shay Article
July 28, 2014 - Bulletin Print Report
In The Tax ReformAct of1969, Congress enacted Sec. 385, a controversial provision which authorized the Secretary to promulgate regulations which would hav...
Liberty Discloses Details Of "Broadband" Spin-Off
July 28, 2014 - Bulletin Print Report
Liberty Media Corporation, (L), has provided detailed information regarding the spin-off by L of its newly-created subsidiary, Liberty Broadband Corporation, (B), a spin-off th...
Director Is Carrying on a Trade or Business
July 28, 2014 - Volume 8 Issue 143 Print Report
S was employed by KNN, Inc., (KNN), from 1938 until his retirement in 1971. Upon his retirement, S entered into a consulting agreement with KNN. The company agreed to...
Inventory Cannot Be Depreciated (or Swapped)
July 25, 2014 - Volume 8 Issue 142 Print Report
X Corporation, (X), distributes, sells, rents, services, and finances "equipment". Upon receipt of equipment, X capitalizes the cost of the equipment that h...
Accounting for "Contingencies"
July 24, 2014 - Volume 8 Issue 141 Print Report
A contingency is broadlydefined as an existing condition, situation, or set of circumstances, involving uncertainty, that may, through one or more rela...
CIT Group's Deferred Tax Assets Move Closer To Realization
July 23, 2014 - Bulletin Print Report
CIT Group, Inc., (CIT), has announced that it has entered into a plan and agreement pursuant to which, for consideration totaling some $3.4 billion ($2.0 billion in cash; and $...
Stock Possessing "Voting Power"
July 23, 2014 - Volume 8 Issue 140 Print Report
P is a electric generation and transmission cooperative incorporated under the laws of State A. P currently has 14 members all of which distribution cooperatives....
Church's Sale of "IP" Does Not Produce UBTI
July 22, 2014 - Volume 8 Issue 139 Print Report
Between 2007 and 2008, a tax-exemptchurch, (C), developed and created thecomputer software that runs "Y". Y is an interactive communication syst...
Liberty's Latest Spin-Off Secures Blessing Of I.R.S.
July 21, 2014 - Bulletin Print Report
Liberty TripAdvisor Holdings, Inc., (TC), is currently, but not for much longer, a wholly-owned subsidiary of Liberty Interactive Corporation, (L). TC's business, assets, a...
A Taxable Recapitalization
July 21, 2014 - Volume 8 Issue 138 Print Report
Company, (C), has 1,337,114 shares of common stock outstanding held by 227 shareholders. The ownership of C's shares, actually and constructively, by A, B, C, D,...
AbbVie and Shire Reach An Agreement
July 18, 2014 - Bulletin Print Report
AbbVie, Inc., (AV), and Shire plc, (SH), have entered into an agreement pursuant to which each will become a subsidiary of a newly-created Jersey corporation, New AbbVie, (NAV)...
Transitory Corporations Are Disregarded
July 18, 2014 - Volume 8 Issue 137 Print Report
T was formed in Year 1 by SH1. He and wife, SH2, owned all of T's outstanding stock in equal proportions. P, a private eq...
Warrants and Wash Sales
July 17, 2014 - Volume 8 Issue 136 Print Report
The I.R.S. was asked whether the wash sale provisions of Sec. 1091 of the Internal Revenue Code are applicable to a loss sustained (1) on the sale of common stock of...
At-the-Money Warrants Have Time Value
July 16, 2014 - Volume 8 Issue 135 Print Report
J entered into an agreement with C, the sole shareholder of CC, Inc., (CC), to purchase all of C's stock. The purchase was structured as a leveraged buy-out (LBO)...
Lorillard And Rockwood Mergers Will Have Different Tax Outcomes
July 15, 2014 - Bulletin Print Report
Although most mergers are announced on Mondays, deal activity has been so feverish lately that announcements are now regularly spilling over to later in the week. This morning,...
"De-Facto" Liquidation
July 15, 2014 - Volume 8 Issue 134 Print Report
The taxpayer, (AE), a domestic corporation, was formed,in February, 1956,by Mr. Green, (G), who at all times was its sole shareholder. AE engaged in the t...
CJES Will Undertake The Latest Variety Of Inversion Transaction
July 14, 2014 - Bulletin Print Report
Last week, Bloomberg previewed a new species of inversion transaction, the "Spinversion." In a Spinversion, a large domestic corporation spins off a business unit and...
ACM And URS To Merge
July 14, 2014 - Bulletin Print Report
AECOM Technology Corporation, (ACM), and URS Corporation, (URS), have announced the execution of a definitive agreement under which "ACM will acquire all outstanding share...
"Tax Avoidance" and Sec. 355
July 14, 2014 - Volume 8 Issue 133 Print Report
D Corporation, (D), is a publicly-traded corporation that conducts a pesticides business. D owns all of the stock of C Corporation, (C), which conducts a baby foods b...
Assuming Options and Warrants in a 'C' Reorganization
July 11, 2014 - Volume 8 Issue 132 Print Report
X Corporation, (X), acquired all of the assets of Y Corporation, (Y), in exchange solely for some of X's voting common stock. &n...
Does a Loan Constitute an "Interest" in an Entity?
July 10, 2014 - Volume 8 Issue 131 Print Report
On the date of Mr. F's death, September 6, 2001, he and his wife and his son collectively owned all of the voting and non-voting shares of commonstock of FP...
Salix Pharmaceuticals Joins The Inversion Parade
July 9, 2014 - Bulletin Print Report
While we are waiting for Abbvie and Shire to effect their landmark inversion transaction, Salix Pharmaceuticals, Ltd., (SAX), a Delaware corporation, announced that it had ente...
Reorganization Target Is Also a Sec. 351 "Transferor"
July 9, 2014 - Volume 8 Issue 130 Print Report
P Corporation, (P), is engaged in Business A and Business B. P is an 'S' corporation. P owns all of the voting preferred stock of T Corporation, (T). T is eng...
Pre-Merger Dividend Treated as "Boot"
July 8, 2014 - Volume 8 Issue 129 Print Report
Prior to September 24, 1941, P Corporation, (P), had outstanding 1,500 shares of capital stock. On September 30, 1941, there was distributed to the shareholders of P...
Solely In Exchange for Voting Stock
July 7, 2014 - Volume 8 Issue 128 Print Report
P Corporation, (P), owned all of the stock of S Corporation, (S). S owned 60 percent of the stock of T Corporation, (T). The remainder of the stock of Twas owne...
When Is a Pension Contribution "Paid"?
July 3, 2014 - Volume 8 Issue 127 Print Report
The petitioner, (DEW), keeps its books and files its tax returns on the accrual method of accounting. In November, 1963, the board of directors of DEW adopted a profi...
CBI's Acquisition Accounting Is Criticized
July 2, 2014 - Bulletin Print Report
On February 13, 2013, Chicago Bridge & Iron Company, NV (CBI) acquired the stock of Shaw for a purchase price, comprised of both cash and CBI stock, totaling $3,340,070,000...
Customer Based Intangible Assets
July 2, 2014 - Volume 8 Issue 126 Print Report
TP is engaged in the P1 business. A is also engaged in the P1 business. TP entered into an agreement with A to purchase all the inventory, hard assets, and customer a...
Fluid Handling Paves The Way To MLP Status
July 1, 2014 - Volume 8 Issue 125 Print Report
X is a publicly traded partnership. X will provide "essential fluid handling services" to oil and natural gas producers engaged in the exploration, development and pr...
Can BEAV's Spin-off Be Coupled With An Acquisition?
June 30, 2014 - Bulletin Print Report
B/E Aerospace, Inc., (BEAV), three weeks ago, announced that its board of directors has "commenced a process to separate its businesses into two independent publicly-trade...
Is Delphi A Surrogate Foreign Corporation?
June 30, 2014 - Bulletin Print Report
Delphi Automotive LLP, (DAL), a foreign partnership, was formed on August 19, 2009. Shortly thereafter, on October 16, 2009, DAL acquired the "major portion" of the b...
What Is a Gift? Part II
June 30, 2014 - Volume 8 Issue 124 Print Report
Mr. D was president of DIM, Inc., (DIM) of Dayton, Ohio. DIM had done business with MMC, Inc., (MMC) located in New York City. Mr. B was president of MMC. &...
The Long Reach of Sec. 1032
June 27, 2014 - Volume 8 Issue 123 Print Report
A, a C corporation, and B, an individual, formed AB partnership, (AB), for bona fide business purposes. A contributes 100 shares of its own stock, valued at $100x, wi...
Residual Method Does Not Capture Value Of Hotel's Goodwill
June 26, 2014 - Volume 8 Issue 122 Print Report
The California Constitution requires the assessment of property at fair market value. Intangible assets and rights are exempt from taxation and...shall not enhance or be reflec...
Iron Mountain’s Perseverance Pays Off
June 26, 2014 - Bulletin Print Report
After nearly two years of uncertainty and speculation, Iron Mountain, Inc.’s (IRM) quest to convert to REIT status has come to fruition. The I.R.S. issued the l...
Exchanging Options in a 'B' Reorganization
June 25, 2014 - Volume 8 Issue 121 Print Report
P, a widely-held and publicly traded corporation, is the common parent of a consolidated group. P has voting common stock outstanding, has no preferred stock outstand...
WEC's Acquisition Of TEG Should Constitute A Reorganization
June 24, 2014 - Bulletin Print Report
Wisconsin Energy Corporation, (WEC), and Integrys Energy Group, Inc. (TEG), have entered into a definitive agreement in connection withwhich the former will acq...
Estate And Trust Administration Expenses Subject To "2% Floor"
June 24, 2014 - Volume 8 Issue 120 Print Report
The I.R.S. has issued final regulations with respect to Sec. 67(e) of the Code. That section provides an exception to the "2-percent floor" on miscellaneous...
Spin-Off Dictated By Acquirer Invokes Sec. 355(e)
June 23, 2014 - Volume 8 Issue 119 Print Report
P was a closely-held State A corporation with a single class of common stock outstanding. The Principal Shareholders of P hold approximately "b%" of its stock. P has...
Valeant Proposes Fully Taxable Transaction
June 20, 2014 - Bulletin Print Report
Whatever the merits of the Valeant/Allergan combination from a commercial viewpoint, one thing is certain as a result of the manner in which the transaction is slated...
Inherited I.R.A. Not "Retirement Funds"
June 20, 2014 - Volume 8 Issue 118 Print Report
When an individual files a bankruptcy petition, his legal or equitable interests in property become part of the bankruptcy estate. The Bankruptcy Code allows debtors...
Unsevered Commercial Plants Are Real Property
June 19, 2014 - Volume 8 Issue 117 Print Report
TP intends to elect to be taxed as a REIT. TP owns Properties that it leases on a triple-net lease basis to unrelated tenants. The unrelated tenants use the Properties for the...
Allocation of Settlement Proceeds Not Respected
June 18, 2014 - Volume 8 Issue 116 Print Report
H, a limited partnership, is a specialty pharmaceutical company which has three divisions, including a tissue management division. &...
Stock Issued For Services Is Not Issued For "Property"
June 17, 2014 - Volume 8 Issue 115 Print Report
On January 12, 1963, Mr. Talbot, (T), entered into an agreement with aMr. James, (J), for the promotion and construction of a rental apartment project in South...
Medtronic Dips A Toe Into The "Inversion" Pool
June 16, 2014 - Bulletin Print Report
Undaunted by the specter of proposed legislation that would effectively eliminate inversion transactions consummated after May 8, 2014, one of the largest inversions to date, i...
Subsidy Payments Do Not Cause Significant Modification of Debt
June 16, 2014 - Volume 8 Issue 114 Print Report
P Corporation, (P), is the common parent of an affiliated group of corporationsthat files a consolidated income tax return. Members of the group are engaged in...
Retroactive Tax Law Violated Due Process Clause
June 13, 2014 - Volume 8 Issue 113 Print Report
Plaintiffs are the former owners and sole shareholders of TMC. TMC, which conducted some of its business in New York, was incorporated in New Jersey, and had elected to be trea...
B/E Aerospace's (BEAV) Options
June 12, 2014 - Bulletin Print Report
-Publicly announces plan to separate its businesses into two publicly-traded corporations - Manufacturing Co. ("D") and Services Co. ("C"). -"Today's announce...
CBS Announces Details Of "Split-Off" Of CBS Outdoor
June 12, 2014 - Bulletin Print Report
CBS Corporation, (CBS), owns approximately 81 percent of the stock of CBS Outdoor Americas, Inc., (COA). CBS will dispose of such stock in a novel manner, via a "split-off...
Taxpayer Not a "Trader"
June 12, 2014 - Volume 8 Issue 112 Print Report
By 2002, Mr. V had acquired substantial trading experience during his peripateticcareer as a trader at Morgan Stanley, Goldman Sachs, and Merrill Lynch. Later i...
Exchange Offer And Merger Constitute A Single Transaction
June 11, 2014 - Bulletin Print Report
Endurance Specialty Holding, Ltd. (ESH) has decided to take its quest to acquire Aspen Insurance Holdings, Ltd. (AIH) to another level. It is launching a exchange offer for AIH...
Out-Of-The-Money Options Produce New York Income
June 11, 2014 - Volume 8 Issue 111 Print Report
Petitioner, (P), was a resident of Connecticut. P was employed by American Airlines, Inc. (AA) for many years until his retirement on April 30, 2005. While so employe...
Who Are The "Historic" Shareholders?
June 10, 2014 - Volume 8 Issue 110 Print Report
D is a State X corporation actively engaged in Business A and in Business B. As of August 6, 1997, D had outstanding 200,000 shares of voting common stock owned by--(...
Latest Data Center Ruling Dispels Any Lingering Doubts
June 9, 2014 - Volume 8 Issue 109 Print Report
TP has elected to be taxed as a REIT. TP, OP, and its subsidiaries (TPG) own, acquire, manage, develop and build (data) Centers and other property (e.g., office buildings) and...
No Enhanced Deduction For Donation Of "Luxury" Items
June 6, 2014 - Volume 8 Issue 108 Print Report
TP is a corporation engaged in Business. During the taxable years ended Date 1 and Date 2, TP donated various hair care and grooming products (wrinkle creams, hair gels, perfum...
Income From Marketing "Frac Sand" Is Qualifying Income
June 5, 2014 - Volume 8 Issue 107 Print Report
X is a publicly traded limited partnership. X earns income ina variety of business lines which include the mining, processing, marketing and transportation of v...
"Outbound" Reorganizations Are Generally Taxable
June 4, 2014 - Volume 8 Issue 106 Print Report
Where a transaction involving domestic corporations qualifies as a reorganization under Sec. 368 of the Code, the shareholders of the acquired corporation who exchange their st...
Exchanging Securities in a Recapitalization
June 3, 2014 - Volume 8 Issue 105 Print Report
Prior to the year 1944, the taxpayer, (C), purchased $25,000 1st Mortgage 5 percent bonds of WPRR Company, (WPRR). At the dates of his purchases, interest on the bond...
Will DuPont And Tronox Engage In An RMT?
June 3, 2014 - Bulletin Print Report
Rumors are circulating that DuPont is considering a reverse Morris Trust (RMT) transaction in which it would spin-off or split-off its performance chemicals business, and the s...
Effect Of Mr. Ackman's Munificence On Other AGN Shareholders
June 2, 2014 - Bulletin Print Report
Valeant Pharmaceuticals International, Inc. (VRX), once again, has revised its offer for Allergan, Inc. (AGN). Under the latest offer, each AGN share would be exchanged for $72...
Recovering The Cost Of A Professional Sports Franchise
June 2, 2014 - Bulletin Print Report
The purchase of a professional sports franchise has, since 2004, provided for certain tax benefits that reduce the "effective" cost of the franchise well below its &q...
Management Fees Constitute Qualifying Income
June 2, 2014 - Volume 8 Issue 104 Print Report
X is a publicly traded partnership. X manages Y, a joint venture of which X owns an "n1%" interest, engaged in the mining of coal, and provides energy infrastructure...
Indefinite Dollars Yields Installment Sale
May 30, 2014 - Volume 8 Issue 103 Print Report
X purchased unregistered notes. X sold the notes for cash and quarterly contingent payments equal to a specified notional principal amount multiplied by LIBOR....
Non-Resident Aliens Are Liable for U.S. Estate Tax
May 29, 2014 - Volume 8 Issue 102 Print Report
The decedent (D), a resident of Belgium, died, testate , on January 31, 2002. D was born in Uganda in 1930 and was a citizen of the United Kingdom. The descen...
Chelsea Therapeutics' Shareholders Will Receive CVRs
May 28, 2014 - Bulletin Print Report
Charlie Acquisition Corporation, a Delaware corporation and a wholly-owned indirect subsidiary of H. Lundbeck A/S, a Danish corporation, is offering to purchase all of the shar...
NQSOs Are "Compensation"
May 28, 2014 - Volume 8 Issue 101 Print Report
BNSF (B) offered salaried employees and executives a combination of Incentive Stock Options (ISOs) and Non-Qualified Stock Options (NQSOs). During the years at issue,...
NorthStar Realty's Spin-Off Raises Novel Issues
May 27, 2014 - Bulletin Print Report
NorthStar Realty Finance Corporation (NSR), a real estate investment trust, (REIT), is preparing to distribute to its shareholders, in what it hopes will be a tax-free spin-off...
What Might PHH Corporation "Net" From The Sale Of "Fleet?"
May 27, 2014 - Bulletin Print Report
PHH Corporation, (PHH) is, apparently, in activediscussions to dispose of its "fleet management" business. It is unclear whether this is the first ste...
Rescinding A Stock Issuance
May 27, 2014 - Volume 8 Issue 100 Print Report
Ordinarily, a transaction that "undoes" a prior transaction is accounted for separately from such prior transaction. In most cases, the second transaction d...
'G' Reorganizations Require Creditors Holding "Securities"
May 23, 2014 - Volume 8 Issue 99 Print Report
X,a publicly-traded State R corporation, emerged from a Chapter 11 bankruptcy proceeding as the successor to Y, a State S corporation. As of Date 7, X had accum...
Combined Reporting Denied For Group "Taken Private"
May 22, 2014 - Volume 8 Issue 98 Print Report
For 2005, Sungard Data Systems, Inc. (SDS) was the common parent of a group of affiliated corporations for federal income tax purposes. For 2006, following an LBO, Sungard Capi...
OSG's CEO And CFO Acted With "Scienter"
May 21, 2014 - Volume 8 Issue 97 Print Report
Overseas Shipholding Group, Inc., (OSG), is a tanker company with a fleet of over 100 vessels operating both domestically and internationally. The international fleet is owned...
Senator Levin Targets Inversions
May 20, 2014 - Bulletin Print Report
Under current law, a foreign corporation will be treated as adomestic corporation if (i) it acquires, directly or indirectly,substantially all ofthe...
Excise Tax Imposed On Executives Of Expatriated Entities
May 20, 2014 - Volume 8 Issue 96 Print Report
A little-known aspect of the inversion process is an excise tax that is imposed on certain executives of the expatriated entity. This tax has been in the news lately because of...
T And DTV Will Effect An 'A' Reorganization
May 19, 2014 - Bulletin Print Report
DIRECTV (DTV) and AT&T, Inc., (T), as widely expected, have announced a plan and agreement pursuant to which DTV will be combined with T in a transaction that is,...
Derivium Naif Escapes Accuracy-Related Penalty
May 19, 2014 - Volume 8 Issue 95 Print Report
Derivium, (D),in connection with a purported lending arrangement, acquired stock in Veritas Software Corporation, (VSC), from the taxpayer, (CS), on July 6, 200...
Finessing the "Active Business" Test
May 16, 2014 - Volume 8 Issue 94 Print Report
X Corporation, (X), has conducted two active businesses forwell in excess offive years. X transferred the property of one of those businesses to Y Corpora...
JBS Is Free To Approach Hillshire Brands
May 15, 2014 - Bulletin Print Report
We have received a number of inquiries regarding the issue of when, should it so desire, JBS SA, which had previously expressed an interest in acquiring Sara Lee'...
Subsidiary's Purchase of Parent's Stock Not a Deemed Dividend
May 15, 2014 - Volume 8 Issue 93 Print Report
In Rev. Rul. 69-261, 1969-1 C.B. 94, a subsidiary, (S), purchased for cash some of the stock of parent, (P), S's sole shareholder, from a third party, Mr. A, the...
HSH And PF To Effect "Two Step" Reorganization
May 14, 2014 - Bulletin Print Report
The Hillshire Brands Company, (HSH), the old Sara Lee (ex the coffee business), and Pinnacle Foods, Inc., (PF), have entered into a definitive agreement pursuant to w...
"Reverting" A Pension Surplus Is Not Worth The Effort
May 14, 2014 - Volume 8 Issue 92 Print Report
Now that many pension plans have moved into a surplus position, companies might be tempted to terminate the plans (after providing for all of the benefits that have accrued to...
Integrated Transaction Doctrine Ousts Sec. 269
May 13, 2014 - Volume 8 Issue 91 Print Report
Petitioner, (RD), was incorporated in 1963. RD was engaged the business of experimenting and developing outdoor advertising devices.  ...
I.R.S. Provides Comprehensive Definition Of "Real Property"
May 12, 2014 - Volume 8 Issue 90 Print Report
One of the requirements for a taxpayer to qualify as a real estate investment trust (REIT) is that, at the close of each quarter of the taxable year, at least 75 percent of the...
Qualified Business "Safe Harbor" Applied
May 9, 2014 - Volume 8 Issue 89 Print Report
C, a State X corporation, is engaged in the business of owning and operating radio stations. The radio stations owned directly by C are: Station D--Station I. Only St...
Retiring Debt In Connection With A Spin-Off
May 8, 2014 - Volume 8 Issue 88 Print Report
D, a publicly traded State A corporation with a single class of commonstock outstanding, is the common parent of an affiliated group that files a consolidated i...
Redefining The "Acquiring" Corporation
May 7, 2014 - Bulletin Print Report
Reg. Sec. 1.381(a)-1(a) reminds us that Sec. 381 of the Code provides that a corporation which acquires the assets of another corporation in certain liquidations and...
"Marine Services" Income is Qualifying Income
May 7, 2014 - Volume 8 Issue 87 Print Report
X is a limited partnership and is a publicly-traded partnership. X owns and operates an LNG receiving terminal. X has entered...
Recalculating Qualified Basis
May 6, 2014 - Volume 8 Issue 86 Print Report
Sec. 42(c)(1)(A) provides the "qualified basis" of any qualified low-income building for any taxable year is an amount equal to the "applicabl...
Alliant Techsystems To Engage In A "Conventional" Morris Trust
May 5, 2014 - Bulletin Print Report
Although the 1997 enactment of Sec. 355(e) severely limited the ability of corporations to engage in "Morris Trust" transactions, these transactions do crop up from t...
Blimpie Founder Cannot Escape New York Taxation
May 5, 2014 - Volume 8 Issue 85 Print Report
In 1981, Blimpie, (B), became a public company. In that year, B was controlled by four officers, one of whom was the taxpayer, DLS. These officers collectively contro...
Election To Apply "Pushdown" Accounting Proposed
May 2, 2014 - Volume 8 Issue 84 Print Report
Current U.S. GAAP offers preciouslittle guidance for determining whether and when a new accounting and reporting basis ("pushdown accounting") should...
EBAY Accrues "Repatriation" Taxes
May 1, 2014 - Bulletin Print Report
eBay, Inc. (EBAY) hasreported that its "GAAP" effective tax rate for the first quarter of 2014 was a stunning 366 percent, compared to only 16 percent...
Can a Taxpayer Have Multiple NOLs?
May 1, 2014 - Volume 8 Issue 83 Print Report
A taxpayer may have a net operating loss, (NOL), that includes a portion attributable to a specified liability loss, (SLL), farming loss, (FL), or qualified disaster...
EFH Proposes A Tax-Free Spin-Off
April 30, 2014 - Bulletin Print Report
One of the issues confronting Energy Futures Holdings (EFH) with respect to any potential restructuring was how it would satisfy the debt owed to the creditors of TCE...
When Is a Liquidation Loss Sustained?
April 30, 2014 - Volume 8 Issue 82 Print Report
Amounts received by a shareholder in a distribution in complete liquidation of a corporation shall be treated "as in full payment in exchange" for the stock...
Comcast's Elaborate Divestiture Plan
April 29, 2014 - Bulletin Print Report
Comcast (CO) hasoutlined its plan to divest cable systems and subscribers in connection with the Time Warner Cable (TWC) merger and, as expected, it is both mul...
Retention of Stock Not a Bar To a Tax-Free Spin-Off
April 29, 2014 - Volume 8 Issue 81 Print Report
D Corporation, (D), has outstanding "g" shares of common stock. These shares are widely-held and publicly traded on a national stock exchange. D is actively...
I.R.S. Continues To Chip Away At Inversions
April 28, 2014 - Bulletin Print Report
A transfer of stock by a U.S. person to a foreign corporation, for example in connection with an inversion , that is described in Sec. 354 (i.e., is otherwise...
Texas Nexus
April 28, 2014 - Volume 8 Issue 80 Print Report
Mr. DavidSebbas, (S), was employed by N Corporation, (N), a Wisconsin corporation that manufactures and sells pneumatic and hydraulic cylinders and valves, as a...
New York State Will Follow The Echo Star Decision
April 25, 2014 - Volume 8 Issue 79 Print Report
In Matter of Echo Star Satellite Corporation v. Tax Appeals Tribunal , (20 NY3d 286), the Court of Appeals (New York) held that the purchase of certain equipm...
Foreclosure "Frees Up" Suspended Passive Losses
April 24, 2014 - Volume 8 Issue 78 Print Report
In Year 1, A purchases real property for $1,000,000 and A finances the purchase with a recourse mortgage of $1,000,000. A leases the property to a third party. This rental acti...
Comcast's Potential Divestiture and Allergan's Potential Merger
April 23, 2014 - Bulletin Print Report
Bloomberg is reporting that Charter Communications, Inc. (CHTR) is "...nearing a deal to acquire about 1.5 million subscribers from Comcast Corporation, (CMCSA)...
Sec. 361(c)(3) Eliminates "Trap for the Unwary"
April 23, 2014 - Volume 8 Issue 77 Print Report
X Corporation, (X), is widely-held and its stock is publicly-traded. Y Corporation, (Y), is closely-held. X acquired all of Y's assets and assumed certain of Y...
Theravance's "Defective" Spin-Off
April 22, 2014 - Bulletin Print Report
Ordinarily, a distribution by a corporation of the stock of a controlled subsidiary will meet the requirements of Sec. 355 with the result that neither the distribute...
Deferring Prepaid Income
April 22, 2014 - Volume 8 Issue 76 Print Report
A partnership, (PS), was formed to acquire, own, manage, and operate a major league baseball team. On March 24, 1995, PS and...
Actavis plc Will Not Be Treated As A Domestic Corporation
April 21, 2014 - Bulletin Print Report
Over the last few days, concerns have been expressed with respect to the proposed acquisition by Actavis plc (ACT) of Forest Laboratories, Inc. (FRX). Specifically, s...
Interest on Loan Secured by Stock Is Not "Investment Interest"
April 21, 2014 - Volume 8 Issue 75 Print Report
The petitioners, (E),purchased a personal residence in AlbuquerqueNew Mexicoin 1997 from M. E paid M $1,578,000 for the personalresidence. E f...
"Start-Up Expenditures"
April 17, 2014 - Volume 8 Issue 74 Print Report
In April, 1998, U hired an investment banker to evaluate the possibility of acquiring a trade or business unrelated to U's existing business. The investment banke...
Put and Call Exercisable On Same Future Day Not Current Sale
April 16, 2014 - Volume 8 Issue 73 Print Report
X is a domestic corporation. X has outstanding 222,139 shares of voting common stock held as follows: A--144,632; B--291; C--11,269; H--15,667; I--805; J--9,102; K--11,269; L--...
Determining Insolvency
April 15, 2014 - Volume 8 Issue 72 Print Report
On May 30, 1986, CM purchased a variable life insurance policy on her life for a single premium of $500,000. The policy allowed her to borrow against its value, using...
Gleacher & Company To Liquidate
April 14, 2014 - Bulletin Print Report
Prior to 1987, it was not uncommon for corporations to completely liquidate. In those days, under former Sec. 337(a) of the Code, a corporation that adopted a plan of complete...
Trusts May Qualify For The Sec. 469(c)(7) Exception
April 14, 2014 - Volume 8 Issue 71 Print Report
The trust is a residuary trust that owns rental real estate properties and is involved in other real estate business activities. In 1979, FA formed the trust with him as granto...
Preferred Stock Not Recast as Indebtedness
April 11, 2014 - Volume 8 Issue 70 Print Report
On September 10, 1960, Z Corporation, (Z), acquired from C Corporation, (C), 10,000 shares of newly-created$9 cumulative preferred stock. Z also acquired 200 sh...
Severance Payments Are "Wages"
April 10, 2014 - Volume 8 Issue 69 Print Report
QSI entered bankruptcy in 2001. It terminated thousands of employees. The employees received severance payments. The payments were made pursuant to one of two different plans....
"Reverse" Spin-Off Permits Retention of Borrowed Funds
April 9, 2014 - Volume 8 Issue 68 Print Report
Old Parent (OP) is the publicly-traded common parent of an affiliated group of corporations that files a consolidated income tax return. OP has a single class of common stock o...
I.R.S. Loses Another "Transfer Pricing" Case
April 8, 2014 - Volume 8 Issue 67 Print Report
During the years 2004-2007, substantial sales of furniture were made to customers located in the U.S. involving furniture made in China and shipped to the U.S. by LTD, a Hong K...
MNK To Take Advantage Of Its Irish Domicile
April 7, 2014 - Bulletin Print Report
Mallinckrodt plc (MNK) and Questcor Pharmaceuticals, Inc. (QCOR) announced that they have entered into a definitive merger agreement pursuant to which QCOR will becom...
Paper Companies "Book" Large Tax Gains
April 7, 2014 - Bulletin Print Report
Without a great deal of fanfare, the paper industry has been the beneficiary of several significant tax "incentives," one of which is reflected in their year-end fina...
A Conversion Of Convertible Debt Works A "Discharge" Thereof
April 7, 2014 - Volume 8 Issue 66 Print Report
TP established Trust for the purpose of issuing convertible preferred securities (CPSs). Trust is a grantor trust. The CPSs were convertible into shares of TP's c...
Converting an Insolvent Corporation Into a Partnership
April 4, 2014 - Volume 8 Issue 65 Print Report
X, a domestic corporation, owns 100 percent of the stock of Y, a foreign corporation. X and Y own, respectively, 80 percent and 20 percent of the stock of Z, a foreig...
NAREIT Conference
April 3, 2014 - Bulletin Print Report
The I.R.S. has opened up a new project to develop regulations containing "a comprehensive, updated definition of what constitutes real property in the REIT area....
Employee's Residence Is a Capital Asset
April 3, 2014 - Volume 8 Issue 64 Print Report
Azar Nut Company, (ANC), agreed to purchase Mr. F's residence for its fair market value upon termination of Mr. F's employment and incorporated this agreement...
Goodwill: Nothing Personal
April 2, 2014 - Volume 8 Issue 63 Print Report
Goodwill is the sum total of those imponderable qualities which attract the customers of a business--what brings patronage to the business. See Grace Brothers v....
"Poison Pill" Rights Are Not Taxable
April 1, 2014 - Volume 8 Issue 62 Print Report
X is a publicly-held domestic corporation. X's board of directors adopted a plan ("the Plan") that provides the common shareholders of X with so-called&...
Pre-Arranged Sale of Stock Does Not Sink Spin-Off
March 31, 2014 - Volume 8 Issue 61 Print Report
A corporation, (T), has been engaged in the manufacturing (M) business and the brokerage (B) business for more than five years. All of the outstanding stock of T was...
I.R.S. Commissions Another "Working Group"
March 31, 2014 - Bulletin Print Report
The I.R.S. has "temporarily" ceased considering ruling requests with respect to the question of whether a publicly-traded partnership (PTP or MLP) satisfies the "...
Retention of Control Bars The Applicability of Sec. 302(b)(1)
March 28, 2014 - Volume 8 Issue 60 Print Report
Corporation, (C), has two classes of stock outstanding: voting Class A common stock and non-voting Class B common stock. C's shareholders are individuals 1 and 2,...
Marketer of Refined Fuels Earns Qualifying Income
March 27, 2014 - Volume 8 Issue 59 Print Report
X is a limited partnership. A renewable identification number (RIN) is a 38 character code generated by the producer or importer of renewable fuel, which uniquely identifies th...
Virtual Currency Is "Property" For Tax Purposes
March 26, 2014 - Bulletin Print Report
Virtual currency (VC) may be used to pay for goods or services, or held for investment. VC is defined as "a digital representation of value that functions as a m...
Compensation For Trade Secret Misappropriation is Ordinary Income
March 26, 2014 - Volume 8 Issue 58 Print Report
C&F, an 'S' corporation, developed a process for making and freezing pre-cooked sausage. C&F obtained a patent for the process. C&F treated as &qu...
Post Spin-Off "Equity Raise" Approved By I.R.S.
March 25, 2014 - Volume 8 Issue 57 Print Report
In a supplemental ruling request (with respect to a tax-free spin-off), the I.R.S. was asked to comment on the following set of facts: Following the distribution of Class A Com...
LIN And MEG Will Engage In A "Sec. 351 Transaction"
March 24, 2014 - Bulletin Print Report
Media General, Inc., (MEG), and LIN Media LLC, (LIN), announced, on March 21st, a definitive merger agreement "that will create the second larges pure-play television broa...
S&P Is A "Financial Information Publisher"
March 24, 2014 - Volume 8 Issue 56 Print Report
McGraw-Hill Companies, Inc., (P) is engaged in the business of publishing and the provision of information services. During the tax years at issue, Standard & Poors (SP) wa...
Not All MLPs Are In The Energy Space
March 21, 2014 - Bulletin Print Report
Sec. 7704(a) of the Internal Revenue Code sets forth the general rule that all "publicly traded partnerships" (PTPs or MLPs) shall be treated as corporation...
I.R.S. Will Follow The Bobrow Decision
March 21, 2014 - Bulletin 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...
Hedging Income Excluded From REIT's Gross Income
March 21, 2014 - Volume 8 Issue 55 Print Report
C is a real estate investment trust (REIT). C uses both unsecured and secured debt to acquire, redevelop, and carry its real property. The proportion of C's fixed rate debt...
Condemnation Does Not Produce a "Genuine Contraction"
March 20, 2014 - Volume 8 Issue 54 Print Report
A corporation has been engaged in the business of quarrying limestone and manufacturing various limestone products. In 1962,...
Measuring Solvency
March 19, 2014 - Volume 8 Issue 53 Print Report
The petitioners, (Q),incurred substantial amounts of credit card debt which they could not repay. The amount by which their credit card debt exceeded their actu...
Hertz To Spin-Off HERC
March 18, 2014 - Bulletin Print Report
The Hertz Corporation, (HTZ), has announced a plan to separate into two independent publicly traded companies. The most tax-efficient method to accomplish such a goal...
Non-Voting Common Stock Is Not "Sec. 306" Stock
March 18, 2014 - Volume 8 Issue 52 Print Report
Father, (F), owned 78 percent of the voting commonstock of C Corporation, (C). F's son, (S), owned 17 percent of C's voting commonstock. The remai...
Inland American Real Estate Trust To Repurchase Shares
March 17, 2014 - Bulletin Print Report
Inland American Real Estate Trust, Inc., (IA), is offering to purchase up to $350 million of its shares of common stock at a purchase price of not greater than $6.50...
Russia/U.S. Tax Treaty Provides Tax Benefits
March 17, 2014 - Volume 8 Issue 51 Print Report
The taxpayer, (TP), is a citizen of Country A and a resident of Russia. She is a partner in the Moscow office of partnership, (PS). PS is a "service partnership&...
Shareholders Of EPL Will Be Taxed On Receipt Of Energy XXI Stock
March 14, 2014 - Bulletin Print Report
On March 12th, EPL Oil & Gas, Inc., a domestic corporation, (EPL), entered into an Agreement and Plan of Merger with Energy XXI (Bermuda) Limited, (XXI). In the t...
Disgorgement of Insider Trading Gains Allowed As A Loss Deduction
March 14, 2014 - Bulletin Print Report
From 1997 to 2001, Joseph P. Nacchio, (N), served as theCEO of Quest Communications, International, Inc. (Q). N received a large portion of his compensation in...
Rental Property Not Used As Principal Residence
March 14, 2014 - Volume 8 Issue 50 Print Report
Bentsion and Naomi Cohen ("the Cs") have lived at 119 W. 71st Street, Apartment 8A ("8A"), in Manhattan, New York, since the 1970s. In 1990, they...
Divorce Omaha Style
March 13, 2014 - Bulletin Print Report
On March 11th, Berkshire Hathaway, Inc. (BHI), and Graham Holdings Company (GHC, formerly The Washington Post Company), as expected, reached an agreement in principle...
The Ubiquity of Sec. 304
March 13, 2014 - Volume 8 Issue 49 Print Report
Husband and wife, (HW), directly owned 30 percent of the stock of NYTH. Group 1, a collection of individuals unrelated to HW, owned 60 percent of the stock and Group...
"Transfer/License Back" Transaction Fails in Bay State
March 12, 2014 - Volume 8 Issue 48 Print Report
J Corporation (J), a foreign corporation, owned all of the stock of J-USA Corporation (JU). JU, in turn, owned all of the stock of The Talbots, Inc. (T). J BV Corpora...
Foreign Currency Options Are Not "Sec. 1256 Contracts"
March 11, 2014 - Volume 8 Issue 47 Print Report
On September 21, 2002, Summitt, (SU), an 'S' corporation, purchased two 180-day major foreign currency options and sold two 180-day minor foreign currency opt...
The First Fruit Inversion
March 10, 2014 - Bulletin Print Report
Even though the President's budget proposals with respect to "inversions" roiled the market, these transactions are continuing unabated. In fact, in lig...
Home Office Deductions Are Hard to Come By
March 10, 2014 - Volume 8 Issue 46 Print Report
Mr. B has a Master's Degree in Accounting from Florida International University. Mr. B operates a tax return preparation business out of his home.  ...
SWY Shareholders Will Receive A Novel Package Of Consideration
March 7, 2014 - Bulletin Print Report
Safeway, Inc., (SWY), and Albertsons, an entity controlled by Cerberus Capital Management, L.P. (CCM), haveannounced a rather complex transaction in which, when...
A Loan Participation Is Analogized To a Guaranty
March 7, 2014 - Volume 8 Issue 45 Print Report
Mr. Thomas F.Grojean, (G), owned100 percentof the stock of Schanno Acquisition Corporation, (SAC). SAC was an electing small business corporation---...
New Approach To "Leveraged" Spin-Offs
March 6, 2014 - Volume 8 Issue 44 Print Report
D is a publicly traded corporation that directly and through subsidiary entities conducts Business A and Business B. The proposed transaction will separate Business A from Busi...
President Obama Eyes Inversions and Spin-0ffs
March 5, 2014 - Bulletin Print Report
President Obama's budget provisions, not unexpectedly, attack "inversion" transactions in a most damaging way. The good news is that most analysts have&...
Washington Mutual Rises From The Ashes
March 5, 2014 - Bulletin Print Report
Washington Mutual, Inc., one of the most prominent casualties of the financial crisis, was forced to file a petition in bankruptcy. Its plan finally became effective...
Transfer Restrictions Do Not Create "Substantial Risk Of Forfeiture" - Part II
March 5, 2014 - Volume 8 Issue 43 Print Report
Sec. 83 of the Internal Revenue Codeaddresses the tax consequences of the transfer of property "in connection with the performance of services." In ge...
Taxpayer Permitted Only One Rollover Per Year
March 4, 2014 - Volume 8 Issue 42 Print Report
Petitioner husband (ph) maintained a traditional I.R.A. and a rollover I.R.A. at Fidelity Investments (FI).Petitioner wife (pw) maintained a traditional I.R.A....
Termination Fees Are Ordinary Income
March 3, 2014 - Volume 8 Issue 41 Print Report
On Date 1, TP entered into an Agreement and Plan of Merger with B ("Agreement 1") to acquire the stock of B for stock, cash, and assumption of debt. Under t...
Sec. 108(b) Has Always Applied on a "Single Entity" Basis
February 28, 2014 - Volume 8 Issue 40 Print Report
The question is whether, for periods prior to the adoption of Reg. Sec. 1.1502-28T, under Sec. 108(b), members of a consolidated group with excluded cancellation of i...
NOLs In a "Divisive" Reorganization
February 27, 2014 - Volume 8 Issue 39 Print Report
Mr. A and Mrs. B owned all of the stock of M Corporation, (M). M was engaged in the business of farming.Serious disputes arose between the shareholders regardin...
Rep. Camp Is "Hostile" Towards REIT Conversions
February 27, 2014 - Bulletin Print Report
Although the "Tax Reform Act of 2014," introduced yesterday by Rep. Camp, the Chairman of the House Ways & Means Committee, contains certain provisions...
Skirting the "Anti-Churning" Rules
February 26, 2014 - Volume 8 Issue 38 Print Report
TP, an 'S' corporation, began operations during 1994. Mr. A and Mr. B each own 50 percent of TP's stock. TP will...
Donating Broadcast Station Licenses
February 25, 2014 - Volume 8 Issue 37 Print Report
TP is the owner of several low-power television broadcast station licenses. TP operates the low-power broadcast television stations to deliver television programming...
Liquidating Distributions Are Taxed In A Favorable Manner
February 25, 2014 - Bulletin Print Report
Black Rock Fixed Income Value Opportunities (FIVO)is a closed-end management investment company whichhas elected to be taxed as aregulated investmen...
Disallowed RBIL
February 24, 2014 - Volume 8 Issue 36 Print Report
TP, a C corporation, experienced an ownership change within the meaning of Sec. 382(g). At the time of the ownership change, TP had a net unrealized built-in loss (NU...
Unrecognized Gain From Dealings In Property Not "Item Of Income"
February 21, 2014 - Volume 8 Issue 35 Print Report
In June 1997, Trusts (Ts) acquired direct ownership of all shares of AIS with an aggregate basis in AIS stocktotaling $5,612,555. In 1999, theTs formed WR...
Narrowing The Notion Of A New York "Resident"
February 20, 2014 - Volume 8 Issue 34 Print Report
Petitioner, (P), was domiciled in New Jersey. He operated a business on Staten Island and commuted daily to work. In November 1999, he purchased a multi-family apartm...
"Hook" Stock Complicates Alliance Boots/WAG Inversion
February 20, 2014 - Bulletin Print Report
Walgreen Company, (WAG), currently owns 45 percent of the "stock" of Alliance Boots GmbH, (AB), which it acquired on or about September 1, 2012. WAG has an...
Will Safeway's Spin-Off Be Taxable?
February 20, 2014 - Bulletin Print Report
Safeway, Inc., (SWY), announced, yesterday, that it has decided to distribute the remaining 37.8 million shares it owns in Blackhawk Network Holdings (BNH) representi...
AMEC and Foster Wheeler Will Engage In a Reorganization
February 19, 2014 - Bulletin Print Report
AMEC plc, (AP), is launching a "public exchange offer" to acquire all of the shares of Foster Wheeler AG, (FW), one of the first U.S. companies to have engaged in an...
NOLs Do Not "Follow" Assets
February 19, 2014 - Volume 8 Issue 33 Print Report
P Corporation, (P), is a foreign corporation. In the United States, P conducts Business A through its U.S. Branch, (USB). USB has "effectively-connected" Ne...
Actavis Doubles Down On Inversion Strategy
February 18, 2014 - Bulletin Print Report
Last year, Actavis, Inc. and Warner-Chilcott plc engaged in an "inversion" transaction pursuant to which each ofActavis and Warnerbecame subsidi...
Berkshire Hathaway and Graham Holdings To Part Company?
February 18, 2014 - Bulletin Print Report
Graham Holdings Company (the old Washington Post Corporation) and Berkshire Hathaway, Inc. (BHI) own shares in one another. Apparently, the companies would like to dispose of e...
Qualified Real Property Business Indebtedness
February 18, 2014 - Volume 8 Issue 32 Print Report
Sec. 61(a)(12) of the Internal Revenue Code provides that gross income includes income from discharge of indebtedness. Sec. 108(a)(1)(D) excludes income from discharg...
Income From Providing "Fractionation" Fluid Is Qualifying Income
February 14, 2014 - Volume 8 Issue 31 Print Report
X is a publicly-traded partnership, (PTP). X currently earns income from two separate businesses: (i) the transportation of natural gas and products thereof and (ii)...
Lack of Separately Stated Charges Does Not Produce "ITSI"
February 13, 2014 - Volume 8 Issue 30 Print Report
R, a Real Estate Investment Trust (REIT) owns rental apartment buildings. R forms T to provide housekeeping services to tenants of its buildings. These services do no...
Can A U.S. Person Receive HudBay Stock On A Tax-Free Basis?
February 12, 2014 - Bulletin Print Report
HudBay Minerals, Inc., (HMI), is offering to "purchase" all of the shares of Augusta Resources Corporation, (ARC), other than the shares of ARC already held...
No 'B' So "QSP"
February 12, 2014 - Volume 8 Issue 29 Print Report
ACQ is the common parent of an affiliated group of corporations that files a consolidated return. ACQ owns "a%" of the voting common stock and "b%"...
"Treasure Trove" is Gross Income
February 11, 2014 - Volume 8 Issue 28 Print Report
In 1957, Mr. C, (C), purchased a used piano for $15. In 1964, while cleaning the piano, C discovered the sum of $4,467. Is this sum "gross income" to C. Bot...
Paired-Share REIT Sighting
February 10, 2014 - Bulletin Print Report
Extended Stay America, Inc. (ESA) is the largest owner/operator of company-branded hotels in North America. Its hotels are all owned by ESH Hospitality, Inc. (ESH), a real esta...
Holder of "Non-Operator Working Interest" Meets Sec. 355(b)
February 10, 2014 - Volume 8 Issue 27 Print Report
For more than five years, X has been engaged in the exploration, development, production, and marketing of petroleum products.  ...
"Second-Level" Reinsurance Not Subject To Excise Taxes
February 7, 2014 - Bulletin Print Report
In a direct insurance transaction, a person or entity contracts with an insurance company to receive protection against casualty loss or to obtain life insurance cove...
Shares Received As "Stock Price Guarantee" Were Tax Free
February 7, 2014 - Volume 8 Issue 26 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...
Taxpayer is Not an "Integrated Oil Company"
February 6, 2014 - Volume 8 Issue 25 Print Report
TP is the holding company for P's U.S. operations. Si1, Si2, Si3, S1, and S2 are all members of TP's consolidated group. Si1, Si2, and Si3 are all wholly-owne...
I.R.A. Distributions Escape The 10 Percent "Additional Tax"
February 5, 2014 - Volume 8 Issue 24 Print Report
In Benz v. Commissioner , 132 T.C. No. 15 (2009), Mrs. Benz (W) had been employedat Proctor & Gamble (PG) and during the course of her employment ha...
Will Ziggo's Shareholders Be Taxed On Liberty Global's Stock?
February 4, 2014 - Bulletin Print Report
Liberty Global, plc (LG) and Ziggo N.V., (Z) have reached an agreement pursuant to which LG will acquire Z and, at least operationally if not legally, Z's busines...
I.R.S. Moves To Rein In Leveraged Partnerships
February 4, 2014 - Volume 8 Issue 23 Print Report
A popular method for disposing of a business on a "tax-efficient" basis is the so-called "leveraged partnership" technique. In a leveraged partnership, the...
A Parent and Its Subsidiary Are Separate Entities
February 3, 2014 - Volume 8 Issue 22 Print Report
On July 1, 1953, HLM and RJS incorporated M&S, Inc., (M&S), a Montana corporation, which was engaged in the active business of road construction and related a...
JCP Moves To Protect Its NOLs
February 3, 2014 - Bulletin Print Report
J.C. Penney Company, Inc. (JCP) has accumulatedover $2 billion in net operating loss carryforwards (NOLs). Approximately $800 million of such NOLs were amassed...
Sec. 302(e)(2) Safe Harbor Requires Two Businesses
January 31, 2014 - Volume 8 Issue 21 Print Report
Company, (C), has been engaged since its incorporation in Year G in the sale and servicing of Brand X automobiles under a dealer franchise. Since Year H, C has also b...
Terminating a Business Conducted by a Subsidiary
January 30, 2014 - Volume 8 Issue 20 Print Report
X is a State X corporation. X has outstanding only common stock which is bothwidely held and publicly traded. There are no "rights" outstanding which...
Disproportionate Recapitalization Exchange
January 29, 2014 - Volume 8 Issue 19 Print Report
X is a corporation established in Y. Originally, there were three shareholders, including SHA.X borrowed funds from its shareholders. These loans ranged from th...
Purchase Of Leased Facility Is A Business Expansion
January 28, 2014 - Volume 8 Issue 18 Print Report
Distributing, (D), is a privately-held corporation with a single class of stock outstanding, voting common stock. D has "a" shares outstanding which is owned equally...
I.R.S. Rules That Partitions Constitute Real Property
January 27, 2014 - Bulletin Print Report
Taxpayer (TP) plans to own a building with certain improvements containing approximately "x" square feet located in City (the "Owned Property"). TP leases f...
Rent-A-Center's Subs Can Deduct Premiums Paid To "Captive"
January 27, 2014 - Volume 8 Issue 17 Print Report
Rent-A-Center, Inc., (RAC), is the parent of a group of approximately 15 affiliated subsidiaries (Petitioner or P). P rented, sold, and delivered home electronics, furniture, a...
Identifying Five Percent Shareholders Through S.E.C. Filings
January 24, 2014 - Volume 8 Issue 16 Print Report
C is a "loss corporation." C has outstanding a single class of common stock, which is both publicly traded and widely held. C relies on the existence and th...
NuPathe, Inc. Succumbs To "Superior" Offer
January 24, 2014 - Bulletin Print Report
NuPathe, Inc., (N), had agreed to be acquired by Endo Health Solutions, Inc. (E) in a transaction in which each N share would be converted into (i)the right to...
Taxpayer Elects To Treat Outdoor Advertising Displays As Realty
January 23, 2014 - Volume 8 Issue 15 Print Report
TP is an 'S' corporation with Mr. D as its sole shareholder. TP has been in the outdoor advertising business since Year 1. TP entered into an asset purchase agreement w...
Calculating The U.S. Shareholder "Ownership Fraction" In Inversions
January 22, 2014 - Volume 8 Issue 14 Print Report
A foreign corporation ("foreign acquiring corporation") generally is treated as a surrogate foreign corporation under Sec. 7874(c)(2)(B) if pursuan...
Who Owns An Unvested Partnership Capital Interest
January 21, 2014 - Volume 8 Issue 13 Print Report
CR was a limited liability company. CR developed and managed real estate projects. Before September 7, 2006, CR was wholly owned by DV, a limited liability company. DV was an i...
M.B.A. Candidate Not Carrying On A Trade Or Business
January 17, 2014 - Volume 8 Issue 12 Print Report
Petitioner, (P), graduated from college in 2007. In January, 2009, he enrolled in an M.B.A. program with a concentration in finance at Rollins College. From January 1...
Charter Makes Public Its Designs on Time Warner Cable
January 16, 2014 - Bulletin Print Report
Charter Communications, Inc.(CC) has gone public with its intentions vis a vis Time Warner Cable (TWC). It is offering to acquire its larger rival for a combina...
When Is An Asset "Placed In Service?"
January 16, 2014 - Volume 8 Issue 11 Print Report
On December 16, 2003, B a highly successful insurance salesman, signed a contract to buy a Bombardier Challenger 604 (the Challenger) for $22,000,000. On December 23, 2003, M s...
Cancelling a "Nonlapse" Restriction
January 15, 2014 - Volume 8 Issue 10 Print Report
The taxpayer, (T), a domestic corporation, has outstanding one class of common stock all of which is owned by T's employees. T is required to repurchase such &quo...
Trian Partners Will Not Participate In Wendy's Tender Offer
January 14, 2014 - Bulletin Print Report
The Wendy's Company (TWC)has instituted a "Dutch Auction" tender offer in which it will seek to repurchase approximately 32 million of its nearly...
Cleveland Cavalier Remained A California Resident
January 14, 2014 - Volume 8 Issue 9 Print Report
Appellant (Lamond Murray) was a professional basketball player during the years at issue. Appellant played for the L.A. Clippers from 1994-1999 until, prior to the beginning of...
Is G.E.'s Effective Tax Rate Going To Increase?
January 13, 2014 - Bulletin Print Report
From 2010 through 2012, General Electric's (G.E.)effective tax rate has ranged from 7.3 percent to 28.3 percent, far below the statutory rate of 35 percent....
No Credit For Taxes Paid On N.J. Source Income
January 13, 2014 - Volume 8 Issue 8 Print Report
B was a partner in BDO Seidman, LLP (BDO). B and his wife filed a New Jersey (NJ) resident gross income tax return for 2004 reporting $330,798 as B's distributive share of...
Acquisition of Bankrupt Corporation's Stock Is a "QSP"
January 10, 2014 - Volume 8 Issue 7 Print Report
ACQ is a State A corporation whose stock is publicly traded and widely held. ACQ is engaged in Business A. TP is a State B corporation that is the common parent of an affiliate...
California "Short Sales" and JP Morgan Update
January 9, 2014 - Bulletin Print Report
A "short sale" is a sale of real estate in which the proceeds will fall short of the balance of the debts secured by liens against the property, and the pro...
NYC's Hotel Occupancy Tax Is Constitutional
January 9, 2014 - Volume 8 Issue 6 Print Report
State law authorizes New York City (the City) to tax the "rent or charge" for hotel room occupancy. The statute provides: "Notwithstanding any other provision of...
"Tracking" Stock Is Stock of The Issuing Corporation - Part II
January 8, 2014 - Volume 8 Issue 5 Print Report
Corporation D, (D), is a holding company whose only assets are all of the stock of Sub1 and Sub2. Sub1 is actively engaged in the conduct of Business1 and Sub2 is act...
Income From Lubricating Oil is "Qualifying" Income
January 7, 2014 - Volume 8 Issue 4 Print Report
X is a limited partnership organized under the laws of State. X is a publicly-traded partnership, (PTP). X and its affiliates...
Liberty Media Outlines Bid For Remainder Of Sirius XM
January 6, 2014 - Bulletin Print Report
Liberty Media Corporation, (L), currently owns, taking into account both stock that it owns directly and stock that it has a right to acquire, approximately 53.4 percent of the...
Economic Presence Produces "Substantial Nexus"
January 6, 2014 - Volume 8 Issue 3 Print Report
M, Inc., (M), had its commercial domicile in Delaware. During 1998 and 1999, M had no real or tangible personal property and no employees located in West Virginia, (W...
'S' Corporation and ESOPs = Freedom From Taxation
January 3, 2014 - Volume 8 Issue 2 Print Report
Effective January 1, 1975, Corporation A, (CA), established an Employee Stock Ownership Plan, (ESOP), known as "Plan Y". Ten years later, CA established &qu...
I.R.S. Adopts New Ruling Policy For Outdoor Advertising Displays
January 2, 2014 - Bulletin Print Report
In Rev. Rul. 68-62, 1968-1 C.B. 365, the I.R.S. concluded that outdoor advertising displays, commonly known as billboards, are "inherently permanent structures" by th...
Taxpayer Is Not an "Insurance Company"
January 2, 2014 - Volume 8 Issue 1 Print Report
The taxpayer, (TP), is composed of several entities (the "Members"). All such Members are engaged in the business of underwriting insurance risks.
Berkshire Hathaway To Engage In A "Cash Rich" Split-Off
December 31, 2013 - Bulletin Print Report
On December 30th, Phillips 66 (PSX) and Berkshire Hathaway, Inc., (BRK) entered into an agreement pursuant to which PSX will distribute to BHI all of its stock in Phi...
The "Character" Of Income Is Determined At The Partnership Level
December 31, 2013 - Volume 7 Issue 251 Print Report
A, B, and C, individual taxpayers,were equal partners in the ABC Partnership. On June 1, 1966, the ABC Partnership acquired 300 shares of X Corporation common s...
Corporations Were Under "Common Ownership"
December 30, 2013 - Volume 7 Issue 250 Print Report
Prior to the "Applicable Period," X Corporation, (X), was wholly-owned by Y Corporation, (Y). At the beginning of the Applicable Period, Y distributed its s...
Arizona Court Rejects Liquidation Exception To Functional Test
December 27, 2013 - Volume 7 Issue 249 Print Report
Harris Corporation, (H), is a Delaware corporation with its executive offices in Melbourne, Florida. It provides voice, data, and video telecommunications products and related...
Endo Will Issue "CPRs"
December 26, 2013 - Bulletin Print Report
Endo Health Solutions, Inc., (E), has been busy. It is in the process of accomplishing an "inversion" transaction in which both it and Paladin Labs will become subsid...
"Intangible Holding Company" Is "Unitary"
December 26, 2013 - Volume 7 Issue 248 Print Report
The taxpayer, (RRD), was a Delaware corporation which operated a worldwide commercial printing business and maintained a sales office in Arizona. Rwas a Nevada...
Deducting Partnership Start-Up and Organizational Expenditures
December 24, 2013 - Volume 7 Issue 247 Print Report
Sec. 708(b)(1) provides that a partnership shall be considered terminated if...within a 12-month period there is a sale or exchange of 50 percent or more of the total interest...
Processing and Marketing Iron Ore Produces Qualifying Income
December 23, 2013 - Bulletin Print Report
X is a publicly traded partnership (MLP). X operates two cokemaking facilities which refine metallurgical coal into metallurgical coke, a substance that is used in blast furnac...
'S' Corporation Renders Its Income Free of Tax
December 23, 2013 - Volume 7 Issue 246 Print Report
In December, 1998, petitioners (PA and PK), formed, and elected 'S' status for, UMLIC-SC. Each petitioner transferred his unrestricted ownership interest in the U Entit...
ILFC Will Be Sold In Conjunction With An Election Under Sec. 338(h)(10)
December 23, 2013 - Bulletin Print Report
International Lease Finance Corporation, ("ILFC") is a subsidiary of AIG Capital Corporation which is in turn a subsidiary of AIG, Inc., ("AIG"). AIG has be...
Taxpayer Denied Use of Alternative Fuel Mixture Credits
December 20, 2013 - Volume 7 Issue 245 Print Report
May the Alternative Fuel Mixture Credit (AFMC) be claimed for a calendar quarter other than the calendar quarter in which the claimant sold or used the alternative fu...
Fed Moves To Resolve Tax Refund Controversy
December 19, 2013 - Bulletin Print Report
Over the past few months, several cases have been decided regarding the question of whether a holding company or its operating subsidiary "owns" any tax ref...
Foreign Taxes Reduced By Sec. 302(a) Redemption
December 19, 2013 - Volume 7 Issue 244 Print Report
USP owns 60 percent of the stock of a controlled foreign corporation (CFC). The other 40 percent of the stock is owned by an unrelated foreign party (FP). CFC does no...
Sec. 1234A Applies To Abandonment of Securities
December 18, 2013 - Volume 7 Issue 243 Print Report
Petitioner, (P), is a corporation organized under the laws of Delaware. It is the successor in interest to GKI, which was the successor in interest to GKC. GKC was...
Tribune To Spin-Off Tribune Publishing
December 17, 2013 - Bulletin Print Report
Tribune Company, (TC), is moving ahead with its plans to spin-off its newly-created subsidiary, Tribune Publishing, (TP). The latter will own TC's newspaper propert...
"DAD" Tax Shelter Rejected
December 17, 2013 - Volume 7 Issue 242 Print Report
This appeal challenges a decision by the Tax Court upholding the disallowance by the I.R.S. of losses claimed by Warwick, (W),and also upholding a 40 percent...
Can APC Deduct Its Damage Award?
December 16, 2013 - Bulletin Print Report
On December 12, 2013, a U.S. Bankruptcy Judge issued a Memorandum of Order in a case entitled Tronox, Inc. et al. v. Kerr McGee et al. In its Order, the court found...
Charge To Cover ACA Fee Includible In Gross Income
December 16, 2013 - Volume 7 Issue 241 Print Report
M is a U.S. corporation that is engaged in the business of providing health insurance for U.S. health risks. The Affordable Care Act (ACA) imposes an annual fee on...
Redemption vs. Sale
December 13, 2013 - Volume 7 Issue 240 Print Report
The Schneiders and their relatives, as of January 1, 1974, owned 100 percent of ANC's Class A voting stock and 99.6 percent of its Class B non-voting stock. ANC, a...
Gain From Sale Of Intangible Assets Found To Be Ordinary Income
December 12, 2013 - Volume 7 Issue 239 Print Report
On February 2, 1998, F incorporated his business as FN C, Inc. (FN C), d.b.a. FN S. FN C elected to be treated as a S corporation. On N...
The Case For A "Double Dummy"
December 11, 2013 - Bulletin Print Report
Sysco Corporation, (SYY), and U.S. Foods, (USF),recently agreed to merge. The transaction will be structured as (1) a reverse triangular merger in which a tra...
Mortgage Interest Deduction Denied
December 11, 2013 - Volume 7 Issue 238 Print Report
Beginning in 2003 and continuing through the tax year at issue, (2007), W lived with her boyfriend, AB, in a home in Worcester, Massachusetts. AB hadpurchased...
Plan of Annual Redemption Affects Non-Tendering Shareholders
December 10, 2013 - Volume 7 Issue 237 Print Report
Z Corporation, (Z), has one class of stock outstanding. The stock is held by 24 shareholders, all of whom are eitherdescendants, or spouses of descendants, of...
American Airlines Group's NOLs
December 9, 2013 - Bulletin Print Report
The merger of AMR Corporation (AMR)and U.S. Airways Group (UAG)will be consummated today. The combined entity will be called American Airlines Group, In...
"Active" Investor Does Not Attain "Trader" Status
December 9, 2013 - Volume 7 Issue 236 Print Report
The taxpayer, (K), an individual, operated a ball bearing manufacturing and distribution business which was conducted through CW, an 'S' corporation of which K was...
Qualified Long-Term Care Services
December 6, 2013 - Volume 7 Issue 235 Print Report
Decedent, (D), died on August 28, 2008 at the age of 92. MF was decedent's primary care physician. He haddiagnosed her as suffering from dementia....
Interest on Loan Associated With Tax Shelter Is Deductible
December 5, 2013 - Volume 7 Issue 234 Print Report
Petitioner, (P), entered into a "STARS transaction" (ST) with theassistance of Barclay's, (B). As part of the transaction, P created the STARS struc...
Issuance of Warrants Does Not Give Rise to an Ownership Change
December 4, 2013 - Volume 7 Issue 233 Print Report
The capital stock of TP consists of one class of common stock and three classes of preferred stock (each of which qualifies as Sec. 1504(a)(4) preferred stock), inc...
Refundable AMT Credit Not Subject to Sec. 383
December 3, 2013 - Volume 7 Issue 232 Print Report
On Date 1, TP, a C corporation, experienced an "ownership change". For its...taxable year, TP had a net operating loss and no regular tax liability. With...
Hidden Value In Gyrodyne?
December 2, 2013 - Bulletin Print Report
Gyrodyne, a corporation in the process of liquidating, will not be taxed on the gain it realized from the condemnation of its real estate. This is confirmed by a ruling the c...
Bankruptcy Court Awards Refund To Holding Company
December 2, 2013 - Volume 7 Issue 231 Print Report
DFC is a bank holding company. On or about January 23, 1995, DFC acquired all of the outstanding shares of DB. On Novemb...
U.S./Canadian Tax Treaty Affords No AMT Relief
November 29, 2013 - Volume 7 Issue 230 Print Report
Mr. and Mrs. Jamieson are United States citizens who lived in Canada in 2003, earned Canadian income, and paid Canadian taxes on that income. &nb...
Abandonment Losses
November 27, 2013 - Volume 7 Issue 229 Print Report
Three brothers controlled 72.3 percent of TP's voting stock. The public owned the remainder of the stock. TP retained Ad...
The Basis of Property Received In a Liquidation
November 26, 2013 - Volume 7 Issue 228 Print Report
Ordinarily, the basis of property is its "cost". However, that generalrule does not apply with respect to property received in a "taxable"...
Comcast--Charter--Time Warner Cable: Breaking Up Is Hard To Do
November 25, 2013 - Bulletin Print Report
Bloomberg is reporting that Comcast Corporation, (CC), and Charter Communications, Inc., (CCI), "have discussed a joint bid to acquire Time Warner Cable, Inc., (TWC), an...
Attribution From Trusts
November 25, 2013 - Volume 7 Issue 227 Print Report
One of the characteristics of the tax law that many find particularly frustrating is the fact that, more frequently than generally believed, identical language is f...
Bond Repurchase Premium
November 22, 2013 - Volume 7 Issue 226 Print Report
PR, Inc., (PR), acquired S3, Inc., (S3), in Year1. At the time of acquisition, S3 was engaged in the "b" business. When S3 was acquired, P, Inc., (P), bec...
Exclusively for Conservation Purposes
November 21, 2013 - Volume 7 Issue 225 Print Report
S, an individual, owned two properties in the Logan Circle neighborhood of Washington, D.C. The two properties are subject to the D.C. Historic Landmark and Histori...
A "Meaningful Reduction" of a Small Shareholder's Interest
November 20, 2013 - Volume 7 Issue 224 Print Report
On Date 1, X Corporation, (X), made a tender offer to purchase up to "y" shares of its common stock. Z Corporation, (Z), acquired shares of X stock on the...
Dividend Waiver Denied
November 19, 2013 - Volume 7 Issue 223 Print Report
Prior to 1960, RB was married to WB, who is the mother of the four B children. In September, 1960, RB married MB. RB owned 49.9 of the stock in BG, Inc., (BG), and...
Distribution of Lawsuit and Sale of Stock are Separate Transactions
November 18, 2013 - Volume 7 Issue 222 Print Report
H, S, and N were general partners in B, a partnershipformed for the purpose of acquiring the stock of BFI, Inc., (BFI). On December 9, 1991, BFI purchased an...
Anticipatory Assignment of Income?
November 15, 2013 - Volume 7 Issue 221 Print Report
In 1964, the petitioner, (S), became a partner in a law firm. Later, S sued his former partners for damages. The defendants cross-claimed for damages. The lawsuit w...
Receipts "From the Use of a License"
November 14, 2013 - Volume 7 Issue 220 Print Report
TGS Geophysical Company, (TGS), gathers, interprets, and markets seismic and geophysical data regarding subsurface terrains. TGS collects and stores this data in a...
Newco's Qualified Stock Purchase Respected
November 13, 2013 - Volume 7 Issue 219 Print Report
Partnership E, (PE), was formed on Date 1. On Date 2, PE formed Corporation H, (CH), for the purpose of acquiring Corporation B, (CB). CH acquired the stock of CB o...
Accounts Receivable Constitute "Related Party Indebtedness"
November 12, 2013 - Volume 7 Issue 218 Print Report
Petitioner, (P), is a U.S. corporation that develops and licenses computer software. P's wholly-owned BSEH was a controlled foreign corporation under Sec. 957 of th...
Another "Opco/Propco"
November 11, 2013 - Bulletin Print Report
The Ensign Group, Inc., (EG),will be embarking ona plan to separate its real estate from its operating business in a manner that parallels the steps taken...
Direct Mailer Not Entitled To Sec. 199 Deduction
November 11, 2013 - Volume 7 Issue 217 Print Report
During 2005-2007, ADVO, Inc., (A), distributed direct mail advertising in the United States. Direct mail advertisers distribute advertising material through the Uni...
Taxpayer Did Not Hold Realty In His "Dealer" Capacity
November 8, 2013 - Volume 7 Issue 216 Print Report
The petitioner, (G), an individual taxpayer, is self-employed. On the Schedule C attached to his 2004Form 1040, he described his business a "carpentry/si...
More Sales Tax Problems for Home Depot
November 7, 2013 - Volume 7 Issue 215 Print Report
Home Depot (HD), in the state of Washington,entered into an agreement with General Electric Capital Corporation(GECC) tohaveGECC issue HD&nb...
Endo and Paladin Plan "Double" Inversion
November 6, 2013 - Bulletin Print Report
Thelatestvariety of "inversion" transaction involves thecombination of two operating companies, each incorporated in a high-tax jurisdicti...
Weyerhaeuser Will Engage In an "RMT" Transaction
November 6, 2013 - Bulletin Print Report
Weyerhaeuser Company, (WY), a real estate investment trust, (REIT), announced that it has entered into a definitive agreement to combine its homebuilding business wit...
A Parent and Its Subsidiaries Are Not "The Same Taxpayer"
November 6, 2013 - Volume 7 Issue 214 Print Report
On September 20, 2000, EE Corporation, (EE), acquired CMP, Inc., (CMP). EE acquired RGE, Inc., (RGE), on July 1, 2002. Subsequent to their respective acquisitions,...
Excise Tax Credits Not Includible In Gross Income
November 5, 2013 - Bulletin Print Report
Blenders that produce and sell qualifying biodiesel mixtures to third parties have claimed Sec. 6426(c) biodiesel mixture credits against their excise tax liabiliti...
NOL Preservation Plan Does Not Impair REIT Status
November 5, 2013 - Volume 7 Issue 213 Print Report
T is a Real Estate Investment Trust, (REIT). T's stock is publicly-traded on the "Exchange". T's operations have resulted in a net operating loss (NOL) ca...
California Provides Grim News For Homeowners Facing Foreclosure
November 4, 2013 - Bulletin Print Report
The California Franchise Tax Board (FTB), in the most recent edition of Tax News (dated November 4, 2013),set forththe tax consequences homeowner...
Waiving Dividends On "Hook" Stock
November 4, 2013 - Volume 7 Issue 212 Print Report
P Corporation, (P), is not a life insurance company. As of "c", P's authorized common stock consisted of "d" shares of "e" par value c...
When Restricted Stock Is Awarded to a Spouse In a Divorce
November 1, 2013 - Volume 7 Issue 211 Print Report
On Date 1, "a" shares of restricted stock were issued to X, by C, X's employer, as compensation for services rendered. &nbs...
"Inbound" Reorganizations Are Taxable
October 31, 2013 - Volume 7 Issue 210 Print Report
Ordinarily, when a transaction qualifies as a reorganization, the shareholders of the acquired corporation are permitted to exchange their stock therein for the&nbs...
Sandell Group's Elegant Plan For Spectra Energy
October 30, 2013 - Bulletin Print Report
Sandell Group, a significant shareholder in each of Spectra Energy Corporation, (SE), and Phillips 66, (PSX), has devised a plan intended to "unlock unrecogniz...
Royalty Income Not "DPGR"
October 30, 2013 - Volume 7 Issue 209 Print Report
The taxpayer, (TP), developed "X" using specificscientific processes. TP produces the product containing "X" in commercial quantities with...
MWV's Tax-Efficient Disposal of Its Timber Properties
October 29, 2013 - Bulletin Print Report
MeadWestvaco Corporation, (MWV), announced that it has reached a definitive agreement with Plum Creek Timber Company, Inc., (PCL), whereby PCL will, among other thing...
Deducting Civil Settlement Payments
October 29, 2013 - Volume 7 Issue 208 Print Report
TP manufactures and sells "A" in area "B". TP was investigated by the Department of Justice (DOJ) for possibleviolations of the Sherman An...
Caesar's To Begin Reporting Deferred COD Income
October 28, 2013 - Bulletin Print Report
During the height of the financial crisis, both Congress and the I.R.S. took steps to ease the application of certain tax rules that would have, without such mitiga...
Are Assumed Liabilities Added To Basis?
October 28, 2013 - Volume 7 Issue 207 Print Report
AmerGen Energy Co. LLC, (AG), purchased Three Mile Island Unit1, (TM-1), a nuclear power plant, in December, 1999. AG agreed to pay $23,000,000 in cash for TM...
Debt Incurred To Combine Coop Apartments Is Acquisition Indebtedness
October 25, 2013 - Volume 7 Issue 206 Print Report
In Year 1, Y purchased an apartment unit in a cooperative apartment complex. In Year 2, Y incurred indebtedness of Amount 1 and used "$b" of the proceeds...
"COBE"
October 24, 2013 - Volume 7 Issue 205 Print Report
For a transaction to qualify as a reorganization, it must satisfy not only the "terms of the specifications" (set forth in Sec. 368 of the Internal Revenue...
REIT Merger To Qualify As a Reorganization
October 24, 2013 - Bulletin Print Report
American Realty Capital Properties, Inc., (ARCP), and Cole Real Estate Investments, Inc., (C), each of which is a real estate investment trust(REIT),hav...
I.R.S. Restricts Application Of "Segregation Rules"
October 23, 2013 - Volume 7 Issue 204 Print Report
A "loss corporation" (i.e., a corporation with net operating loss (NOL)carryovers or with net unrealized built-in losses) experiences an "ownersh...
Will NRG Get A Cost Basis In EME's Assets?
October 22, 2013 - Bulletin Print Report
NRG Energy, Inc., (NRG), recently entered into an agreement with Edison Mission Energy (EME) and Edison International (EIX) which provides forNRG's acquisitio...
Income From Sale of Carbon Dioxide Credits Is "Good" REIT Income
October 22, 2013 - Volume 7 Issue 203 Print Report
T is engaged in the acquisition and ownership of timberland throughout the United States. T is a Real Estate Investment Trust (REIT). Substantially all of its busin...
Internet Retailer's Obligation To Collect Use Tax Is Voided
October 21, 2013 - Bulletin Print Report
Sales tax, in Illinois, is comprised of two complementary taxes, the Retailers' Occupation Tax Act, which is the principal means for taxing the retail sale of tangi...
High-Tech Company Qualifies For D.C. Tax Exemption
October 21, 2013 - Volume 7 Issue 202 Print Report
District of Columbia, (DC), Code Sec. 47-1817.01 et seq ., grants certain high-technology companies a temporary exemption from the DC corporate franchise ta...
Carbon Emission Units Constitute "Real Estate Assets"
October 18, 2013 - Volume 7 Issue 201 Print Report
T is a Real Estate Investment Trust (REIT). T is primarily engaged in timberland operation and management. T's Country Z timber operations are conducted through A,...
Irish Tax Proposal Will Have Limited Impact
October 17, 2013 - Bulletin Print Report
Recently, the Irish Minister of Finance, Mr. Michael Noonan,announced that legislation banning so-called "stateless companies" would be incorporated...
No Tax Break For Sec. 951 Inclusions
October 17, 2013 - Volume 7 Issue 200 Print Report
The I.R.S. determined that, for 2003 and 2004, the gross income the Appellants reported based on their ownership of stock of a controlled foreign corporation (CFC)...
Income From Removal of Waste Is Qualifying Income
October 16, 2013 - Volume 7 Issue 199 Print Report
X is a limited partnership whichhas beenorganized under the laws of State. X engages in activities that X represents as producing qualifying income unde...
Is Yahoo Running Out of Time?
October 15, 2013 - Bulletin Print Report
Yahoo!, (Y),ownsgreater than 20 percent stakes in each of Alibaba, (AL),and Yahoo Japan, (YJ). These stakes are highly appreciated and a taxable d...
Federal Basis Controls for N.J."GIT"
October 15, 2013 - Volume 7 Issue 198 Print Report
The taxpayers (S), husband and wife,are New Jersey residents who owned a large, vacant parcel of property in the Borough of Tinton Falls. In 1998, they sold t...
Safeway Does Some Tax Planning
October 14, 2013 - Bulletin Print Report
In June, 2013, Safeway, Inc., (SWY), announced that ithadentered into an agreement to sell its Canadian operations "though a sale of substantially...
Oilfield Service Provider Earns Qualifying MLP Income
October 14, 2013 - Volume 7 Issue 197 Print Report
X is a limited liability company organized under the laws of State. X intends to form Y and cause Y to become a publicly-traded partnership (PTP or MLP). Y will ear...
Liberty Media's Latest Restructuring Actions Are Tax-Efficient
October 11, 2013 - Bulletin Print Report
Liberty Media Corporation, (LMC), announced, on October 10, 2013, a series of restructuring actions each of which is fraught with tax implications. 1....
Gifts of "Future Interests" Ruled Taxable
October 11, 2013 - Volume 7 Issue 196 Print Report
In 2000, 2001, and 2002, the Fishers transferred 4.762 percent membership interests in GHP, LLC, (LLC), to each of their seven children. LLC's principal asset was a...
A Split-Off Is Not a "Liquidation"
October 10, 2013 - Volume 7 Issue 195 Print Report
A corporate division (which took the form of a "split-off")was precipitated bya dispute between the two shareholders who had previously had eq...
Classifying (as Real or Personal Property) Outdoor Advertising Displays
October 9, 2013 - Volume 7 Issue 194 Print Report
TP is in the business of erecting, maintaining, and renting outdoor advertising displays. Structure X and structure Y are representative of two types of sign struct...
Will An Acquisition of BEAM Jeopardize Its Spin-Off?
October 8, 2013 - Bulletin Print Report
In October, 2011, Fortune Brands, Inc.spun-off its home and security business, sold off its golf activities, and changed its name to Beam, Inc., (BEAM). The s...
Dual Character of Bankruptcy Expenses
October 8, 2013 - Volume 7 Issue 193 Print Report
TP emerged from Chapter 11 on Date 2. The principal purpose of the Chapter 11 proceeding was the settlement of tort claims arising out of TP's business....
Gyrodyne Is Liquidating
October 7, 2013 - Bulletin Print Report
Gyrodyne Company of America, Inc., (GYRO), is a real estate investment trust, (REIT). Several years ago, one of its properties was condemned by New York State. New Yo...
"Tax Loans" Produce Qualifying REIT Income
October 7, 2013 - Volume 7 Issue 192 Print Report
TP is a Real Estate Investment Trust, (REIT). TP is in the business of making advances for the payment of real property taxes in the form of "Tax Loans"....
MTNs Acquired By a Foreign Bank Are "(b)(3)" Securities
October 4, 2013 - Volume 7 Issue 191 Print Report
Foreign Bank ("FB") engages in the banking business in the U.S. through a branch office ("B"). B participated in soliciting and negotiating vari...
Vodafone Not a "Passive" Investor In Verizon Wireless
October 3, 2013 - Volume 7 Issue 190 Print Report
Vodafone(V)owned a 45 percent interest in CPS, a general partnership organized under the laws of Delaware. CPS, which was doing business as "Verizon...
REIT's Condemnation Claim Does Not Jeopardize Status
October 2, 2013 - Volume 7 Issue 189 Print Report
T is a Real Estate Investment Trust, (REIT). In Year 2, T brought a claim for just compensation for "a" acres of its property in City Y and City Z in Stat...
BPY Seeks To Acquire BPO
October 1, 2013 - Bulletin Print Report
Brookfield Property Partners, L.P., (BPY) is proposing to acquire the shares of Brookfield Office Properties, Inc., (BPO), which it does not currently own at a pric...
The Interaction of Sec. 965 and Sec. 172(b)(1)(H)
October 1, 2013 - Volume 7 Issue 188 Print Report
M is a U.S. shareholder in a controlled foreign corporation, (CFC). In 2004, M received dividends from the CFC and elected the one-time 85 percent dividends receive...
Software Not "U.S. Property"
September 30, 2013 - Volume 7 Issue 187 Print Report
Various foreign subsidiaries of S, a U.S. corporation, own software that is protected by copyright laws in the U.S. and foreign countries. The foreign subsidiaries...
Will J.C. Penney's NOLs Be Impaired By Its Stock Offering?
September 27, 2013 - Bulletin Print Report
In fiscal 2012, J.C. Penney Company, Inc., (JCP), incurred a net operating loss (NOL)of approximately $1.5 billion of which only $284 million is available for...
Production of Photo Products Is "MPGE" of "QPP"
September 27, 2013 - Volume 7 Issue 186 Print Report
TP is a pharmacy care provider. At the end of Year X, TP had #a retail drugstores and #c retail specialty pharmacy stores. &nbs...
Regulations Limit Duplication of "Built-In Losses"
September 26, 2013 - Volume 7 Issue 185 Print Report
Reg. Sec. 1.362-4 implements the provisions of Sec. 362(e)(2). These regulations were finalized on August 30, 2013. The purpose of Sec. 362(e)(2) and its implementi...
Does Asset "Character" Carry Over In a Sec. 332 Liquidation?
September 25, 2013 - Volume 7 Issue 184 Print Report
The issue is whether a loss sustained by the taxpayer, (TP), a corporation, was an ordinary loss or a capital loss. The...
Cheniere To Create a "Blocker" Corporation For MLP Investment
September 25, 2013 - Bulletin Print Report
Although the virtues of investing in Master Limited Partnerships (MLPs) have been well documented, there are classes of investors who usually, for reasons unrelated...
Series of Transactions Amounts to a Liquidation
September 24, 2013 - Volume 7 Issue 183 Print Report
P, a domestic corporation, owns all of the stock of FS1, a Country B corporation, and FS2, a Country A corporation. T is also a Country A corporation. FS1 will form...
Berry's Merger With LinnCo Should Constitute a Reorganization
September 23, 2013 - Bulletin Print Report
It appears, notwithstanding the accounting controversy in which LinnCo, (LC),has been recentlymired, thatthe merger of Berry Petroleum Company, (B...
Parent Acts As Bank's Agent With Respect To Tax Refund
September 23, 2013 - Volume 7 Issue 182 Print Report
NetBank, Inc., (NB), is the parent corporation of a number of subsidiaries, including NetBank, f.s.b., (B or "the Bank"). NB filed consolidated income tax...
Mortgage Secured By Only One Residential Condo Unit
September 20, 2013 - Volume 7 Issue 181 Print Report
Petitioners own and reside in an individual residential condominium unit (Unit C) in New York City which they bought in 2008. When the adjacent condominium (Unit B)...
How Quickly Can HUN Spin-Off Its Pigments Business?
September 19, 2013 - Bulletin Print Report
Huntsman Corporation, (HUN), announced that it entered into an agreement with Rockwood Holdings, Inc., (ROC) pursuant to which HUN will acquire, in a taxable transa...
What Is An "Amortizable Sec. 197 Intangible"
September 19, 2013 - Volume 7 Issue 180 Print Report
B started a cellular telephone business in the 1990s by organizing a wholly owned 'S' corporation, R, in 1991. That same year, he purchased an FCC license to operat...
SWY Stock Buyback Should Constitute a Partial Liquidation
September 18, 2013 - Bulletin Print Report
JANA Partners, LLC, (JP), has announced the accumulation of a 6.2 percent stake in Safeway, Inc., (SWY). JP has had discussions with SWY, which are ongoing, regardi...
Age Discrimination Settlement Payment Is "Wages"
September 18, 2013 - Volume 7 Issue 179 Print Report
After Credit Suisse, (CS),terminated his employment, Mr. G (G)filed a complaint with the U.S. Equal Employment Opportunity Commission, (EEOC),asse...
"Buy-Writer" Is Not a Trader
September 17, 2013 - Volume 7 Issue 178 Print Report
In 2006, petitioner, (P), began a new endeavor, purchasing and selling stocks and call options. P typically sold call options with a term between one and five months. P's...
Analyzing Penn National Gaming's Groundbreaking I.R.S. Ruling
September 16, 2013 - Volume 7 Issue 177 Print Report
Penn National Gaming, Inc., (PNG or D2), submitted its ruling request to the I.R.S. on June 28, 2011. The favorable ruling was finally received by the company on Se...
Are Traders Subject To Extraordinary Dividend Penalties?
September 13, 2013 - Bulletin Print Report
The dividend that will be paid by Vodafonein 2014, consisting of a substantial portion of the proceeds itexpects to derivefrom the sale to Verizon...
Debt Payable in Stock is Equity
September 13, 2013 - Volume 7 Issue 176 Print Report
H Corporation, (H), owns all of the stock of Sub. The latter owns all of the membershipinterests in FS1, a disregarded entity, and also owns all of the stock...
An "Attribute" of Stock
September 12, 2013 - Volume 7 Issue 175 Print Report
M Corporation, (M), acquired all of the outstanding stock of O Corporation, (O), solely in exchange for itspreviously unissued voting convertible preferred st...
Liquidation Is a 'D' Reorganization
September 11, 2013 - Volume 7 Issue 174 Print Report
Corporation A, (CA), is an 'S' corporation all of the stock of which was owned by Mr. C. Mr. C, on Date 1, transferred by gift "a%" of the stock to his ch...
CCI Will Convert To REIT Status Without a Ruling
September 10, 2013 - Bulletin Print Report
Crown Castle International Corporation, (CCI), announced that "it is commencing the steps necessary to reorganize CCI to qualify as a real estateinvestme...
AT&T On The Verge Of Funding Its Pension Plan
September 10, 2013 - Bulletin Print Report
AT&T (T) appears, based on recent press reports, to be on the precipice of making "pension history." Apparently, the company has finally received permis...
I.R.S. Expands "Straddle" Rules
September 10, 2013 - Volume 7 Issue 173 Print Report
A corporation which owns an appreciated equity stake in another corporation may seek to "monetize" the stake, rather thandispose of it. Such a strat...
Fluids Management Activities Produce Qualifying MLP Income
September 9, 2013 - Bulletin Print Report
X, a domestic corporation, intends to form Y and contribute to Y all or a part of its assets and business operations. X intends for Y to become a publicly traded pa...
Two Corporations Can Constitute A Controlled Group
September 9, 2013 - Volume 7 Issue 172 Print Report
Sec. 851(b)(3)(B) provides that, to qualify as a regulated investment company, (RIC), a taxpayer must meet a diversification test pursuant to which not more than 25...
A Charitable Contribution Deduction Depends on Substantiation
September 6, 2013 - Volume 7 Issue 171 Print Report
Does a donor who discovers that he failed to obtain a "contemporaneous written acknowledgement" under Sec. 170(f)(8)(A) of the Internal Revenue Code...
Is Physical Presence a Pre-Requisite for "Nexus"?
September 4, 2013 - Volume 7 Issue 170 Print Report
Lamtec Corp. (L) is a New Jersey corporation. L manufactures its products at its New Jersey headquarters. L sells these products to customers throughout the United...
Verizon Will Not Obtain A Basis Step-Up
September 3, 2013 - Bulletin Print Report
If Verizon Communications, Inc. (VCI)could deduct, for Federal income tax purposes, all or even a portion of the amount it is paying for the 45 percent intere...
Vodafone Agrees To Dispose of Its Interest In Verizon Wireless
September 3, 2013 - Bulletin Print Report
Vodafone (VOD) has owned a 45 percent stake in Verizon Wireless (VZW) for over a decade and has seen the stake dramatically increase in value over that period. It has...
Corporation's Satisfaction of Shareholder's Obligation Not a Dividend
September 3, 2013 - Volume 7 Issue 169 Print Report
JM owned all of the stock of B Corporation, (B). JM and his brother, TM, each owned 50 percent of the stock of BR Corporation, (BR)....
Finessing Sec. 1042(e)
August 30, 2013 - Volume 7 Issue 168 Print Report
TP, an individual, acquired 666,363 shares of C Corporation, (CC), stock in 1993. CC is the sponsor of an Employee Stock Ownership Plan (ESOP)....
I.R.S. Defines "Marriage" For Tax Purposes
August 30, 2013 - Bulletin Print Report
In Rev. Rul. 58-66, 1958-1 C.B. 60, the I.R.S. stated that a couple would be treated as married for purposes of Federal income tax filing status and personal exempt...
Wells Fargo's "Sham" Transaction Fails To Produce Capital Loss
August 29, 2013 - Volume 7 Issue 167 Print Report
In 1996, Old Wells Fargo, (OWF), acquired First Interstate, (FI), in a hostile takeover. In 1998, OWF merged with Norwest Corporation to become WFC Holdings Corpora...
OSG Describes Its Tax Dilemma
August 28, 2013 - Bulletin Print Report
Overseas Shipholding Group, Inc., (OSG), recently filed its Form 10-K for 2012in which it described in some detail the tax problems it is currently facing. Th...
WorldCom "Victim" Denied Tax Relief
August 28, 2013 - Volume 7 Issue 166 Print Report
Mr. Robert Gourley, (G), was employed by WorldCom, Inc., (W), from 1995 through 2000. As part of his compensation, G received non-qualified options (NQOs)to p...
Whistleblower Engaged In a Trade or Business
August 27, 2013 - Volume 7 Issue 165 Print Report
From 1967 until 1993, B worked for TRW, Inc. (TRW). TRW was a defense contractor.During his employment,B became aware of false claims made by TRW to the...
COR's Ruling Bodes Well For EQIX
August 26, 2013 - Bulletin Print Report
COR's ruling was finallymade public this weekendand it was just as advertised: the telecommunication service of "cross-connectivity" was ruled...
Most Receipts Constitute "Gross Income"
August 26, 2013 - Volume 7 Issue 164 Print Report
A question once pondered by the Supreme Court is whether money received as exemplary damages for fraud or as the punitivetwo-thirds portion of atreble-d...
Tax Refund Not Property of Bankruptcy Estate
August 23, 2013 - Volume 7 Issue 163 Print Report
This case involves the allocation of tax refunds pursuant to a Tax Sharing Agreement ("TSA") entered into in 1997 by two members of a Consolidated Group (...
The Multistate Tax Compact Is a "Binding Compact" Upon Michigan
August 22, 2013 - Volume 7 Issue 162 Print Report
Article III of the Multistate Tax Compact (MTC) allows taxpayers to elect to apportion income taxes according tothe member state's laws or
Non-Recourse Debt Is Included in the "Amount Realized"
August 21, 2013 - Volume 7 Issue 161 Print Report
On August 1, 1970, Mr. CP and his wholly-owned corporation, CI, Inc., (CI), formed a general partnership. The purpose of the partnership was to construct an apartme...
Maker of "Gift Baskets" Engaged in "MPGE"
August 20, 2013 - Volume 7 Issue 160 Print Report
D began selling gift baskets in 1984. D and O incorporated this business as Houdini, Inc., (H). In 1998, H was changed from a C corporation to an 'S' corporation. D...
When Is Tax Avoidance The "Principal" Purpose For an Acquisition?
August 19, 2013 - Volume 7 Issue 159 Print Report
MGI, Inc., (MGI), was incorporated under the laws of Texas on August 28, 1963. Its business was commercial photography. By December, 1965, MGI had accumulated a &qu...
Cubist Pharmaceuticals To Issue CVRs
August 16, 2013 - Bulletin Print Report
BRGO, a newly-created and wholly-owned subsidiary of Cubist Pharmaceuticals, Inc., (C), is offering to purchase all of the outstanding shares of common stock of Tri...
Class Certification Denied "BLIPS" Investors
August 16, 2013 - Volume 7 Issue 158 Print Report
In the late 1990s and early 2000s, KPMG, a "Big 4"accounting firm, and Brown & Wood, a prominentlaw firm, created andmarketed an ill...
Allocating Overhead to UBTI
August 15, 2013 - Volume 7 Issue 157 Print Report
Rensselear Polytechnic Institute, (RPI), owns and operates a fieldhouse which is devoted to both student uses and commercial uses. It is undisputed that the net inc...
Certain Built-In Gains Need Not Be Recognized by REITs
August 14, 2013 - Volume 7 Issue 156 Print Report
When a C corporation elects REIT status, it must rid itself of its earnings and profits accumulated in non-REIT years. This excision must be completed by the close...
Mr. Wygod's "Firm and Fixed Plan"
August 13, 2013 - Bulletin Print Report
WebMD Health Corporation, (WBMD), is, as has become its custom, offering to purchase a portion of its outstanding stock (the "Offer"). In this case, the c...
S.E.C. Disgorgement Can Be Measured By Taxes Avoided
August 13, 2013 - Volume 7 Issue 155 Print Report
The Wyly brothers are in hot water. The S.E.C. claims that the brothers did not properly report that they beneficially owned securities in quantities sufficient to...
I.R.S. Has Wide Discretion to Deny Accounting Method Change
August 12, 2013 - Volume 7 Issue 154 Print Report
The petitioner designs, develops, and markets logic devices and related software. The petitioner traditionally incurredregular expenses for prepaid insurance,...
No Fixed Liability Existed With Respect To Policyholder Dividends
August 9, 2013 - Volume 7 Issue 153 Print Report
New York Life Insurance Company, (NYL), is a mutual life insurance company. The company issues policies that entitle their holders to receive a "policyholder d...
Control Must Be Disgorged "In The Distribution"
August 8, 2013 - Volume 7 Issue 152 Print Report
T Corporation, (T), owned approximately 90 percent of the stock of P Corporation, (P). The remainder of the Pstock was widely-held....
Sotheby's Discussing Like-Kind Exchange
August 7, 2013 - Bulletin Print Report
The New York Post is reporting tha...
Radio Station Bereft Of Goodwill
August 7, 2013 - Volume 7 Issue 151 Print Report
Plaintiff is a holding company for various subsidiaries. The latter include BIC, which owns and operates radio stations in large markets throughout the U.S. In tandem...
Tax Benefits From Sale of Boston Globe
August 7, 2013 - Bulletin Print Report
The New York Times Company, (NYT), recently announced the sale, to the owner of the Boston Red Sox, Mr.John W.Henry, of its New England Media Group subs...
Income From Sale of Urea Is Qualifying Income
August 6, 2013 - Bulletin Print Report
X is a limited partnership organized under the laws of State. X is a publicly traded partnership. X is engaged in the production and marketing of nitrogen fertilize...
Net Operating Loss ("NOL") Primer
August 6, 2013 - Volume 7 Issue 150 Print Report
An NOL is defined in Sec. 172(c) of the Internal Revenue Code as the excess of the deductions "allowed by this chapter" over the gross income. An NO...
OIS To Spin-Off Accommodations Business
August 5, 2013 - Bulletin Print Report
Oil States International, Inc., (OIS), recentlyannounced its intention to separate its accommodations business, by means of a tax-free spin-off, from its oil...
Reduction Of Stock Subscription "Liability" Does Not Produce "CODI"
August 5, 2013 - Volume 7 Issue 149 Print Report
The issue is whether two individuals, RW and RIW, realized income when FTP, Inc., (FTP), discharged a portion of their "debts" on stock subscriptions. The...
Caesars Entertainment's Rights Offering
August 2, 2013 - Bulletin Print Report
Caesars Entertainment Corporation, (CEC), has announced a plan to distribute to each holder of its common stock non-transferable subscription rights to purchase share...
REIT Can Disregard Loan to "OP"
August 2, 2013 - Volume 7 Issue 148 Print Report
TP is a Real Estate Investment Trust (REIT). TP owns substantially all of its assets and conducts substantially all of its business through OP, a limited partnershi...
WhiteWave's Ruling Indicates That a "Share Collapse" Is Imminent
August 1, 2013 - Volume 7 Issue 147 Print Report
D, which is undoubtedly Dean Foods, is engaged, directly and thorough its subsidiaries,in the active conduct of each ofBusiness A, Business B, and Busin...
Elan Shareholders Will Be Taxed On The Exchange Of Their Shares
July 31, 2013 - Bulletin Print Report
The "inversion" transactionin which Elan Corporationplc (ELN) and Perrigo Company (PRGO)will beparticipating is being structured in...
A Private Equity Fund Is A "Trade Or Business"
July 31, 2013 - Volume 7 Issue 146 Print Report
Sun CapitalAdvisors, Inc., (SCAI), is a privateequity firm founded by two ex-Lehman Brothers' investment bankers, Marc Leder (ML) and Rodger Krouse (RK)...
When Do Policyholder Dividends Accrue?
July 30, 2013 - Volume 7 Issue 145 Print Report
Under New York law, New York Life Insurance Company, (NYL), must distribute, annually, a portion of its surplus earnings to the owners of "participating"...
Provider of Fluid Handling Services Will Earn Qualifying Income
July 29, 2013 - Bulletin Print Report
X is a corporation. X intends to form Y. Y will be a publicly traded partnership. Y will earn income from the provision of "essential fluid handling services&q...
Omnicom/Publicis--An Economic But Not a Tax "Inversion"
July 29, 2013 - Bulletin Print Report
Omnicom Group, Inc. (OMC) and Publicis Groupe SA, (P), announced a plan and agreement pursuant to which each of OMC and P will become subsidiaries of a newly-create...
Upstream Merger Not a Reorganization
July 29, 2013 - Volume 7 Issue 144 Print Report
OC, Inc., (OC), was formed in 1965. On October 21, 1977, the owners of 98 percent of the stock agreed to sell their shares. On May 5, 1978, BS, Inc., (BS), a newly-...
Lin TV's Stock Performance: A High Class Problem
July 26, 2013 - Bulletin Print Report
Lin TV Corporation, (TVL), earlier this year, realized a gain of $715.5 million. This gain arose from a leveraged partnership transaction entered into by TVL severa...
Amortization of OID Ceases Upon Conversion
July 26, 2013 - Volume 7 Issue 143 Print Report
On December 31, 1969, the taxpayer, a C corporation, had outstanding bonds in the face amount of $1,000x that were convertible, at the holder's option,into it...
Preserving CSE's NOL
July 25, 2013 - Bulletin Print Report
PacWest Bancorp (PACW) and CapitalSource, Inc. (CSE) announced a plan and agreement pursuant to which CSE will be merged with and into PACW. The transaction &...
Purchase Money Note Gives Rise To Bad Debt Deduction
July 25, 2013 - Volume 7 Issue 142 Print Report
The taxpayers are C, an individual who is the sole beneficiary of D and E. D and E are trusts. D and E were each members of F, a partnership engaged in the business...
Provision of Services Does Not Result In a Constructive Dividend
July 24, 2013 - Volume 7 Issue 141 Print Report
TWC is a construction company specializing in multifamily housing projects. For most jobs that closed during 2006, TWC had profit margins of 6 percent to 7 percent....
Private Foundation May Invest In Hedge Fund Without Tax Consequences
July 23, 2013 - Bulletin Print Report
Y is an exempt organization described in Sec. 501(c)(3) of the Internal Revenue Code. Y is classified as a private foundation under Sec. 509. &nb...
Charitable Deductions Turn On Adequate Substantiation
July 23, 2013 - Volume 7 Issue 140 Print Report
On their 2001 and 2002 Federal income tax returns, Mr. and Mrs. Friedman claimed $217,500 in non-cash charitable contribution deductions for donations of diagnostic...
The OECD Report--Will Ireland Lose Its Allure?
July 22, 2013 - Bulletin Print Report
Recently, the OECD Secretary-General presented a Report to the G-20 Finance Ministers and Central Bank Governo...
Deferred Tax Assets Slated For Reduction
July 22, 2013 - Bulletin Print Report
FIN 48, Accounting for Uncertainty in Income Taxes , requires entities to evaluate the efficacy of the "positions" that have been taken in their t...
"Reward Points" Are Not Gross Income
July 22, 2013 - Volume 7 Issue 139 Print Report
Company, (C), offers a variety of "X" to "Y" through "Z". C affords enrollees in each of its"Z" the option to receive...
Insurance Company Not Deconsolidated From Parent
July 19, 2013 - Volume 7 Issue 138 Print Report
P is a holding company and the common parent of an affiliated group of corporations that files a consolidated income tax return (the "Parent Group"). P ow...
Valuing Leap's Net Operating Losses
July 18, 2013 - Bulletin Print Report
AT&T, Inc., (T), and Leap Wireless International, Inc., (L), have entered into a plan and agreement pursuant to which T will acquire the stock of L from the latte...
Calculating Gambling Gains and Losses
July 18, 2013 - Volume 7 Issue 137 Print Report
The I.R.S. taxes non-resident alien gamblers differently than U.S. citizen gamblers. The Service allows U.S. citizens to subtract losses from their winnings within...
A "Divisive" Transaction Cannot Be an 'A' Reorganization & AMT Rumor
July 17, 2013 - Volume 7 Issue 136 Print Report
A target corporation, (TC), transfers some of its assets and liabilities to an acquiring corporation, (AC), retaining the remainder of its assets and remaining in e...
Loblaw/Shoppers Drug Mart: A Tax-Free Reorganization?
July 16, 2013 - Bulletin Print Report
Loblaw Companies Limited, (L), and Shoppers Drug Mart Corporation, (SC), each a Canadian corporation, announced a definitive agreement under which "L will acqu...
Right of First Refusal Does Not Spoil Continuity of Interest
July 16, 2013 - Volume 7 Issue 135 Print Report
A-P, Inc., (AP), acquired the assets of W, Inc., (W), through corporate reorganization procedures effected on November 11, 1959. On the date of the reorganization,...
Linn Energy – Accounting for Derivatives
July 15, 2013 - Bulletin Print Report
Linn paid $1.4 billion for pu...
Income Derived From "Integral" Activities Is Qualifying Income
July 15, 2013 - Bulletin Print Report
X is a limited partnership organized under the laws of State. X currently engages principally in activities that produce "qualifying income" from the pipe...
"Exempt" Assets Count for Measuring "Insolvency"
July 15, 2013 - Volume 7 Issue 134 Print Report
A and B, a married couple, are residents of State D. They own both real and personal property as "tenants by the entirety". Each tenant, in a tenancy by t...
"DRIPS" and Constructive Dividends
July 12, 2013 - Volume 7 Issue 133 Print Report
Corporation X, (X), is a publicly-held corporation. X maintains a dividend reinvestment (DRIP) and stock purchase plan ("the Plan"). The purposes of the P...
Disposing of "QRP"
July 11, 2013 - Volume 7 Issue 132 Print Report
The taxpayer, (TP), an individual, is a shareholder of Corporation A, (CA), a closely-held domestic Ccorporation. CA has no stock outstanding that is readily tr...
Tribune To Separate Newspapers From Broadcasting
July 10, 2013 - Bulletin Print Report
Tribune Company, ("TC"), which has reportedly been "shopping" its newspaper business, has now decided, instead, to spin-off such business to its s...
FASB Proposes Changes To Intangible Asset Accounting
July 10, 2013 - Bulletin Print Report
The Financial Accounting Standards Board (FASB)has proposed changes to the manner in which identifiableintangible assets and goodwill arising from a bus...
Sec. 1042 Is a Stern Taskmaster
July 10, 2013 - Volume 7 Issue 131 Print Report
The petitioner, (JC), an individual, owned over 82 percent of the shares of R, Inc., (R), a domestic C corporation that had no stock outstanding that was 'readily t...
I.R.S. Will Allow Certain "Wash Sale" Losses
July 9, 2013 - Bulletin Print Report
A money market fund (MMF) is a type of investment company registered under the Investment Company Act of 1940 (the "'40 Act"). Unlike other types of mutua...
Personal Injury Claimants Are "Qualified Creditors"
July 9, 2013 - Volume 7 Issue 130 Print Report
TP purchases and sells "Product" to customers that serveend users or that purchase Product at wholesale for resale. As of the date of the Proposed T...
Merger Does Not Trigger "Buy-In" Payment
July 8, 2013 - Volume 7 Issue 129 Print Report
Acquiring Corporation, (A), a domestic corporation, owned all of the stock of Acquiring CFC, (ACFC), a foreign corporation. Target Corporation, (T), a domestic corp...
Conversion "Fixes" Worthless Stock Loss
July 5, 2013 - Volume 7 Issue 128 Print Report
TP, Inc., (TP),is awholly-owned, indirect subsidiary of FP, Inc., (FP), a foreign corporation,and isthe common parent of an affiliated group t...
Tribune Receives a Basis Step-Up
July 3, 2013 - Bulletin Print Report
Tribune Company, (TC), has announced the acquisition of all ofthe TV stations owned by a private entity, Local Holdings, LLC, (LH), for $2.725 billion in cash...
PWC Partner Improperly Used Installment Method
July 3, 2013 - Volume 7 Issue 127 Print Report
M joined PriceWaterhouseCoopers, LLP, ("PWC"), sometime before tax year 2002. M was a partner in the consulting business of PWC until tax year 2002, when...
Tyco's Intercompany Debt Called Into Question
July 2, 2013 - Bulletin Print Report
Tyco International, Ltd. (TYC) announced the receipt of a Notice of Deficiency (NOD) from the I.R.S. assertingthat several of TYC's former U.S. subsidiaries...
Marvel Entertainment Challenges Attribute Reduction Rule
July 2, 2013 - Bulletin Print Report
Sec. 108(a)(1)(A) of the Internal Revenue Code provides that "gross income does not include any amount which (but for this subsection) would be included in gro...
A Merger Is The Origin of the Claim Settled
July 2, 2013 - Volume 7 Issue 126 Print Report
Sec. 483 requires taxpayers to impute interest according to a statutory formula for payments on account of the sale or exchange of property which constitutes p...
EFH's Ruling Confirms Elimination of "ELA" and "DIG"
July 1, 2013 - Bulletin Print Report
P is the common parent of an affiliated group that files a consolidated income tax return. P is EFH. Partnership owns "a%" of the stock of P and certai...
Internet Retailer Has Substantial Nexus With New Mexico
July 1, 2013 - Volume 7 Issue 125 Print Report
Bn.com (BNC) is a Delaware corporation that sells books...over the internet. In 2006, the New Mexico (NM)Taxation and Revenue Department (the "Department...
E&Y Partner Runs Afoul of "Constructive Receipt" Doctrine
June 28, 2013 - Volume 7 Issue 124 Print Report
On February 28, 2000, Ernst & Young, (E), the international accounting behemoth,and CapGemini, S.A., (C), executed a Master Agreement ("the agreement...
FASB Proposes New "Going Concern" Guidance
June 27, 2013 - Bulletin Print Report
Financial statements, not surprisingly, are prepared under the inherent presumption that a reporting entity will be able to continue as a "going concern:" t...
When Is a Facility "Placed in Service"?
June 27, 2013 - Volume 7 Issue 123 Print Report
TP acquired technology for making briquettes in Year 1. In Year 3, TP began negotiations with CO for the construction of a facility at "Location" owned by...
Convertible Debentures Are Not "Stock"
June 26, 2013 - Volume 7 Issue 122 Print Report
X Corporation, (X), entered into an agreement with the shareholders of Y Corporation, (Y), to acquire all of the stock of Y in exchange solely for voting stock of X...
I.R.S. No-Ruling Policy Is a Non-Event
June 25, 2013 - Bulletin Print Report
The I.R.S. announced, in Rev. Proc. 2013-32,that it will no longer issue rulings with respect to the tax consequences of, among other things, subsidiary liqui...
'F' Reorganization Not Spoiled By Asset Sale
June 25, 2013 - Volume 7 Issue 121 Print Report
Oldco has one class of common stock outstanding, all of which is held by SH, a U.S. citizen. Oldco made an election to be an 'S' corporation effective Date 2. Oldco...
Dean Foods To Divest Its Stake in WhiteWave
June 24, 2013 - Bulletin Print Report
Dean Food Company, (DF), recently completed the distribution to its shareholdersof Class A common stock and Class B common stock of its subsidiary, The WhiteWav...
Circuit Court Concludes That FNMA Is Exempt From All Taxation
June 24, 2013 - Volume 7 Issue 120 Print Report
The Michigan State Real Estate Transfer Tax and the Michigan County Real Estate Transfer Tax impose a tax when a deed is recorded during the transfer of real proper...
Massachusetts Vendor Escapes "Use" Tax
June 21, 2013 - Volume 7 Issue 119 Print Report
TF is a Connecticut corporation whose principal business is the retail sale and installation of automobile tires. TF operates 18 stores in Massachusetts and three s...
Risk Reduction Results in Loss of DRD
June 20, 2013 - Volume 7 Issue 118 Print Report
X is theparent company of A, B, C, and D ("Related Party Subsidiaries" or "RPS"). Each subsidiary is owned 100 percent by X. The Related P...
Natural Gas Processor Will Earn Qualifying Income
June 19, 2013 - Bulletin Print Report
X is a corporation organized under the laws of State. X has formed a publicly traded partnership (PTP or MLP) by organizing LP under the laws of State. The interest...
Stock Transfer Restrictions Effective To Deter Ownership Change
June 19, 2013 - Volume 7 Issue 117 Print Report
P Corporation, (P), has outstanding a single class of common stock and several classes of preferred stock; Series A, Series B, Series C, and Series D. P is a "...
The State of Charter's Net Operating Losses
June 18, 2013 - Bulletin Print Report
As of December 31, 2012, Charter Communications, Inc., ("CC"), reported a total of $7.7 billion of net operating losses (NOLs), capital loss carryovers, and...
Expatriating Spin-Offs
June 18, 2013 - Volume 7 Issue 116 Print Report
Can a U.S. corporation, with a view towards minimizing its worldwide tax burden, contribute assets to a newly-created foreign corporation and distribute the stock o...
I.R.S. Rejects Tribune's "Leveraged Partnership" For Newsday
June 17, 2013 - Volume 7 Issue 115 Print Report
In Year 2, A, (the Zell interests), purchased X, (Tribune). X, as is now well known, converted from a C corporation to an 'S' corporation effective Date 1. Th...
IRM's Precursor & Elan Update
June 14, 2013 - Volume 7 Issue 114 Print Report
Company, ("C"), was formed on Date 1 to own andoperate cold storage warehouses. C's only assets are cold storage warehouses and central refrigeratio...
Partial Days Count For NY Residency Purposes
June 13, 2013 - Volume 7 Issue 113 Print Report
Petitioners filed joint New York State (NYS) nonresident income tax returns for 2005 and 2006. Both returns indicated petitioners' residence as Delray Beach, Florid...
Former N.Y. Knick Was A California Resident
June 12, 2013 - Volume 7 Issue 112 Print Report
One of the more notorious decisions Isiah Thomas made during his checkeredtenure as the general manager of the New York Knicks was to lavish a generous contra...
Royalty Pharma Ups the Ante
June 11, 2013 - Bulletin Print Report
Royalty Pharma (RP) has once again increased its offer for Elan Corporation plc, (E) in its dogged pursuit of the Irish pharmaceutical company. The new offer featur...
FASB Finalizes Guidance On "Liquidation" Accounting
June 11, 2013 - Volume 7 Issue 111 Print Report
With the publication of ASU No. 2013-7, the Financial Accounting Standards Board (FASB) has finalized its guidance regarding the use of the "liquidation basis...
U.K. Windfall Tax Is An "Excess Profits" Tax
June 10, 2013 - Volume 7 Issue 110 Print Report
During the 1980s and 1990s, the U.K.'sConservative Party privatized a number of government-owned companies. Most of the companies became more efficient and ea...
Observations on Iron Mountain
June 7, 2013 - Bulletin Print Report
Obviously, we are disappointed by the news emanating from IRM but the communication, while very detailed, leaves us with more questions than answers....
Market Transactions Measure Fair Market Value
June 7, 2013 - Volume 7 Issue 109 Print Report
On January 14, 1957, petitioner, (FF), acquired 4,000 shares of L common stock having a basis of $34,010.26. On September 5, 1968, a merger of LT and L was publicly...
Parent Not a "Party" To an 'F' Reorganization
June 6, 2013 - Volume 7 Issue 108 Print Report
P Corporation, (P), owned 99 percent of the stock of S Corporation, (S), an operating subsidiary. P created Newco, (N), and the latter acquired substantially all of...
'S' Corporation Status (and QSub Status) Is Not "Property of the Estate"
June 5, 2013 - Volume 7 Issue 107 Print Report
BDI is an Indiana corporation. B, an individual,was the sole shareholder of BDI. BDI, a small business corporation, hadelected to be treated as an 'S' c...
Income From "Hydraulic Fracturing" Is "Qualifying" MLP Income
June 4, 2013 - Bulletin Print Report
X is a Delaware LLC that is treated as a partnership for tax purposes. X intends to form a publicly-traded partnership ("PTP" or "MLP"). After t...
Sale of State Tax Credits Produces Capital Gains
June 4, 2013 - Volume 7 Issue 106 Print Report
The petitioners donated a qualified conservation easement to the Greenlands Reserve, a qualified organization, on approximately 54 acres of petitioners' land in Col...
Valero Shifted Debt To CST In Connection With Its Spin-Off
June 3, 2013 - Bulletin Print Report
In a conventionalspin-off, a parent corporation, simply,distributes the stock of a controlled subsidiary to its shareholders. If the spin-off satisfies th...
Nature of Property Distinguishes Rents From Royalties
June 3, 2013 - Volume 7 Issue 105 Print Report
TP has elected to be taxed as a REIT. TP owns "a%" of LP1. TP directly and indirectly owns approximately "e%" of LP3. A "d%" interest...
"Outbound 'F'" Reorganization Triggers Intangible Property Gain
May 31, 2013 - Volume 7 Issue 104 Print Report
Parent, (P), owns Sub 1 and Sub 2, each a domestic corporation. Sub 1 conducts Business X. Sub 2 owns FH, a foreign corporation organized under the laws of Country...
REIT Merger Produces Basis Step-Up
May 30, 2013 - Bulletin Print Report
American Realty Capital Properties, Inc., ("P"), and CapLease, Inc., ("T") have entered into a definitive merger agreement "under which P w...
Why Six Flags Needs "Propco/Opco" In Order To Be a REIT
May 30, 2013 - Volume 7 Issue 103 Print Report
Taxpayer, (TP), is a personal holding company. TP plans to purchase all of theproperty and equipment of an amusement park. The park will be owned and operated...
LPS Shareholders Will Be Taxed On FNF's Stock
May 29, 2013 - Bulletin Print Report
Fidelity National Financial, Inc., (FNF), and Lender Processing Services, Inc., (LPS), have entered into a definitive merger agreement pursuant to which FNF will ac...
Subpart F Inclusions Constitute "Qualifying" Income
May 29, 2013 - Volume 7 Issue 102 Print Report
X is a limited liability company. X offered its common interests to the public in an initial public offering on Z, an established securities market. &n...
"Tax Loans" Are Real Estate Assets
May 28, 2013 - Volume 7 Issue 101 Print Report
Taxpayer, (TP), which intends to elect to be treated as a Real Estate Investment Trust, (REIT), is in the business of making advances for the payment of real proper...
Fannie Mae (and Freddie Mac) Not Subject to Va. Recording Tax
May 24, 2013 - Volume 7 Issue 100 Print Report
The Virginia Recordation Tax Act requires every circuit court clerk in Virginia to collect certain recordation taxes. Fa...
Pfizer Intends To Split-Off Zoetis
May 23, 2013 - Bulletin Print Report
Pfizer, Inc., ("P"),recently transferred its animal health business to newly-formed Zoetis, Inc., ("Z"), in exchange for Class A common stoc...
ROE Determines Whether Compensation is Reasonable
May 23, 2013 - Volume 7 Issue 99 Print Report
Mr. M, Mr. P, and Mr. S each owned 26 percent of the stock of MPS, Inc., (MPS), an accounting and consulting firm. Mr. M, Mr. P, and Mr. S each owned 1/3 of the sto...
Correctional Facilities Are Not "Health Care Facilities"
May 22, 2013 - Volume 7 Issue 98 Print Report
TP intends to elect to be treated as a REIT. TP appears to be CXW (the ruling we wrote about several weeks ago appears to have been issued to GEO Group). TP and its...
Inversion Primer
May 21, 2013 - Volume 7 Issue 97 Print Report
In an inversion, a foreign corporation acquires the stock or substantially all of the assets of a domestic corporation in a transaction that is ordinarily structured to q...
Actavis Will Invert
May 20, 2013 - Bulletin Print Report
In a transaction that is, structurally at least, almost identical to the recently completed Cooper/Eaton transaction, Actavis, Inc. (ACT) and Warner Chilcott plc (W...
Exchanging "Securities" In a 'B' Reorganization
May 20, 2013 - Volume 7 Issue 96 Print Report
X Corporation, (X), acquires all of the outstanding stock of Y Corporation, (Y),in exchange for voting stock of X....
Will WhiteWave "Collapse" Its Classes of Stock?
May 17, 2013 - Bulletin Print Report
WhiteWave Foods Co., (WW), has 23 million sharesof "low-vote" Class A common stock outstanding, all of which isheld by the public. Its "h...
Another Way To Achieve A Basis Step-Up
May 17, 2013 - Volume 7 Issue 95 Print Report
When a purchaser acquires the stock of a target corporation, the basis for the stock, in the purchaser's hands, is the amount paid, i.e., a "cost" basis....
"Bargain Sale" Gives Rise to Gross Income
May 16, 2013 - Volume 7 Issue 94 Print Report
On October 22, 1998, the taxpayers, a husband and wife,incorporated BP, Inc., an 'S' corporation. On October 27, 1998,the taxpayerscreated, for BP...
Size Does Not Matter
May 15, 2013 - Volume 7 Issue 93 Print Report
For more than five years, P Corporation, (P), has owned and actively conducted a sizable clothing manufacturing business. S Corporation, (S), P's wholly-owned subsi...
No Deduction Without "Contemporaneous Acknowledgement"
May 14, 2013 - Volume 7 Issue 92 Print Report
On December 30, 2004, RS, an individual, executed a document entitled "Preservation and Conservation Easement Agreement", ("the agreement") gran...
A Liquidating Distribution Is an "Exchange"
May 13, 2013 - Volume 7 Issue 91 Print Report
On September 7, 1973, WS, an individual, was granted a "qualified" stock option to purchase shares of his employer, K, Inc., (K). On May 27, 1976, WS exer...
FNMA Reverses Its Valuation Allowance
May 10, 2013 - Bulletin Print Report
Federal National Mortgage Association, (FNMA), in common with other corporations, recognizes "deferred tax assets" (DTAs)with respect toits&nb...
Exchangeable Debentures Cannot Be Bifurcated To Avoid Straddle Rules
May 10, 2013 - Volume 7 Issue 90 Print Report
On Date 1, TP issued two tranches of Exchangeable Debentures ("EDEs"). The debentures, which are similar to convertible debentures, contain exchange featu...
Sprint Must Include "USF" Payments in Gross Income
May 9, 2013 - Volume 7 Issue 89 Print Report
In 1983, the Federal Communications Commission, (FCC), created the Universal Service Fund, (USF), which included a high-cost support program designed to assist loca...
Grant of Irrevocable Proxy "Breaks" Consolidation
May 8, 2013 - Volume 7 Issue 88 Print Report
Mr. J and Mr. C each owned 50 percent of the stock of S Corporation, (S). S, in turn, owned 100 percent of the stock of I Corporation, (I). In anticipation of a spl...
MBIA Settlement--Many Unanswered Questions
May 7, 2013 - Bulletin Print Report
MBIA, Inc., (MBI), announced that it has settled its disputes with Bank of America, (BAC), regarding the latter's liability, as successor to Countrywide,with...
AIG Stock Is "Investment Capital"
May 7, 2013 - Volume 7 Issue 87 Print Report
In 1943, MS formed SICO. In 1950, MS formed C.V. Starr & Co., Inc. (S or petitioner). S is the parent of a group of entities engaged in the insurance agency bus...
Kodak's NOLs--Will They Survive Bankruptcy?
May 6, 2013 - Bulletin Print Report
Eastman Kodak Company, (EK), recently filed its Disclosure Statement in which it summarized its Plan of Reorganization under Chapter 11. The Statement is designed t...
Rents From "Opco" Are "Rents From Real Property"
May 6, 2013 - Volume 7 Issue 86 Print Report
Company, (C),elected to qualify as a REIT. C's common stock is traded on the Exchange. S is a qualified REIT subsidiary (QRS) of C. &n...
Cancellation of Distributorship Gives Rise to Capital Gain
May 3, 2013 - Volume 7 Issue 85 Print Report
X Corporation, (X) manufactures automobile N. X sells N through a network of distributors with which X enters into distributor agreements. In 1994, A, an individual...
Fire Fee Is Not a Real Property Tax
May 2, 2013 - Volume 7 Issue 84 Print Report
In 2011, California enacted legislation requiring the State Board of Equalization to charge an amount not to exceed $150 as "fire prevention fee" ("f...
No Deduction for Worthless Goodwill
May 1, 2013 - Volume 7 Issue 83 Print Report
Dealer, (D), sells and services Manufacturer's products pursuant to franchise agreements. On Date 1, D purchased certain assets of another automobile dealer. This s...
Tax-Motivated "Preliminary" Steps Will Be Recognized
April 30, 2013 - Volume 7 Issue 82 Print Report
In order for a "reverse Morris Trust" transaction to remain tax-free at the distributing corporation level, the shareholders ofsuch distributing cor...
CXW Ruling Offers Valuable Insights Into I.R.S. Thinking
April 29, 2013 - Volume 7 Issue 81 Print Report
Taxpayer, undoubtedly Corrections Corporation of America, (CXW or TP), owns, leases, and operates correctional, detention, and re-entry facilities. TP's facilities...
Inventory Is Property Held for "Productive Use"
April 26, 2013 - Volume 7 Issue 80 Print Report
TP is the common parent of a group of corporations that file a consolidated income tax return. Operating L.P. is a partnership wholly owned by members of the group....
Transfers to REIT Exchange Fund, Inc. Will Be Taxable
April 25, 2013 - Bulletin Print Report
REIT Exchange Fund, Inc., (RXF), was recently created to provide investors in non-traded REIT shares an opportunity to diversify their investments and, in essence,...
Non-Shareholder Contributions to Capital
April 25, 2013 - Volume 7 Issue 79 Print Report
Taxpayer (TP) constructed "Development" (D) in "County" (C). C agreed to finance a portion of the costs TPwas to incurin connection...
How NYS Views Sec. 338(h)(10)
April 24, 2013 - Volume 7 Issue 78 Print Report
P Corporation, (P), owns 100 percent of the stock of T Corporation, (T). P and T file New York State (NYS) general business corporation combined franchise tax retur...
How Will ASML's "Boot" Payment Be Taxed?
April 23, 2013 - Bulletin Print Report
The acquisition by ASML Holding, N.V. (ASML) of Cymer, Inc. (CY) is nearing the finish line and, apparently, some questions have arisen as to how the cash element o...
Barnes Group's Plan To Access Foreign Cash Fails
April 23, 2013 - Volume 7 Issue 77 Print Report
Barnes Group, Inc., (B), manufactures and distributes precision metal products and industrial supplies. As of August 31, 2000, B and its subsidiaries collectively h...
Damages For "False Imprisonment" Not Excluded from Income
April 22, 2013 - Volume 7 Issue 76 Print Report
The taxpayers, Mr. and Mrs. Stadnyk, purchased a used automobile for $3,430. Mrs. Stadnyk, (BS), tendered two checks as partial payment from a checking account main...
House Not Included in Gross Estate
April 19, 2013 - Volume 7 Issue 75 Print Report
On April 19, 2000, the decedent, (SR), executed the Sylvia Riese Qualified Personal Residence Trust (QPRT) under Reg. Sec. 25.2702-5, and executed a deed transferring...
Not All Stock and Securities Need Be Distributed in a Spin-Off
April 18, 2013 - Volume 7 Issue 74 Print Report
X Corporation, (X), is engaged in various business enterprises, principally through subsidiary corporations. All of the stock of each such subsidiary has been held by...
Not All Capital Contributions Reduce The Value of LossCo's Stock
April 17, 2013 - Volume 7 Issue 73 Print Report
T is a State A corporation engaged in Business A. On Dates 1, 2, and 3, T raised additional capital in the amounts of "$a," "$b," and "$c,&...
DISH Network Enters The Fray
April 16, 2013 - Bulletin Print Report
DISH Network Corporation, (DISH), has submitted a merger proposal to the board of directors of Sprint Nextel Corporation, (S), which it believes is superior to the...
Disability Payments Not Excludible From Gross Income
April 16, 2013 - Volume 7 Issue 72 Print Report
The petitioner, (R), served in the U.S.Marine Corps from 1966 through 1972. From December, 1966 though February, 1968 he served in Vietnam where he sustained...
AIG's "Spread Banking" Transactions Lacked Economic Substance
April 15, 2013 - Volume 7 Issue 71 Print Report
From 1993-1997, AIG Financial Products Corporation, (FP), a wholly-owned subsidiary of American International Group, Inc., (AIG), entered into six transactions. In...
Tax Court Characterizes a Golfer's Endorsement Income
April 12, 2013 - Volume 7 Issue 70 Print Report
Petitioner, (P), Sergio Garcia, is a well-known professional golfer. On October 8, 2002, P entered into a seven year endorsement agreement with TaylorMade, (TM), unde...
CXW Declares E&P "Purge" Dividend
April 11, 2013 - Bulletin Print Report
Corrections Corporation of America, (CXW), in connection with its conversion to REIT status, announced that its Board of Directors has declared a special dividend,...
Short Term Debt Not Investment In U.S. Property
April 11, 2013 - Volume 7 Issue 69 Print Report
X, a domestic corporation, wholly owns Y, a controlled foreign corporation, (CFC). X maintains a revolving line of credit with Outside Lender, (OL), in the amount&n...
New York's "Internet Tax" Is Not Unconstitutional
April 10, 2013 - Volume 7 Issue 68 Print Report
Amazon.com LLC is a limited liability company formed in Delaware; Amazon Services, LLC is a limited liability company formed in Nevada (collectively "Amazon&qu...
CyrusOne's Ruling Sheds Light On "Usual and Customary" Services
April 9, 2013 - Volume 7 Issue 67 Print Report
Company, (C), is owned by Parent, (P), and owns and leases several data centers throughout the U.S. and abroad. TP, which is undoubtedly CyrusOne, Inc., will be a n...
Activities "Integral" To Transportation Produce Qualifying Income
April 8, 2013 - Bulletin Print Report
X is a publicly traded partnership (PTP or MLP). X earns income by terminalling, storing, and transporting crude oil, refined petroleum products, and liquefied natu...
Classifying Modular Structures
April 8, 2013 - Volume 7 Issue 66 Print Report
Do modular structures used as retail outlets constitute "tangible personal property" thereby qualifying the structures for the now-repealed Investment Tax...
Changes In Conversion Ratio Can Yield Deemed Stock Distributions & Sara Lee Update
April 5, 2013 - Volume 7 Issue 65 Print Report
TP is a real estate investment trust, (REIT). TP intends to make one or more distributions with respect to its common stock for the taxable years ending on Date 1 a...
Market-Maker Not a "Banking Corporation" for NYS Tax Purposes
April 4, 2013 - Volume 7 Issue 64 Print Report
Petitioner, (P), a Delaware corporation, directly owns a 79.7 percent limited partnership interest in ABC Holding Company, LP, (ABC), a foreign limited partnership....
Eaton Now Pays "Return of Capital" Distributions
April 3, 2013 - Bulletin Print Report
Perhaps the largest of the recent "inversion" transactions (in which a U.S. corporation becomes a subsidiary of a foreign corporation, either newly-created...
Accounting for "Non-Monetary" Exchanges
April 3, 2013 - Volume 7 Issue 63 Print Report
Accounting for non-monetary exchanges, historically, has been governed by APB Opinion No. 29. The guidance in APB Opinion No. 29 is based on the principle that exch...
New "Mortgage" REIT Will Soon Make Its Market Debut
April 2, 2013 - Bulletin Print Report
Newcastle Investment Corporation, (NIC), will soon be distributing to its shareholders all of its stock in a newly-formed corporation, New Residential Investment Corp...
Final Four Program Does Not Produce UBTI
April 2, 2013 - Volume 7 Issue 62 Print Report
The National Collegiate Athletic Association, (NCAA), is an exempt organization pursuant to Sec. 501(c)(3) of the Internal Revenue Code. The NCAA sponsors coll...
Management Fees Constitute Qualifying Income For an MLP
April 1, 2013 - Bulletin Print Report
X is a publicly-traded partnership (PTP or MLP). X, through its affiliated operating entities, is principally engaged in the transportation and storage of Products,...
Unrealized Appreciation Does Not Create Earnings & Profits
April 1, 2013 - Volume 7 Issue 61 Print Report
In 1948 and 1949, certain corporations engaged in the construction of residential housing developmentsmade pro-rata cash distributions, in excess of $6 millio...
Tax Refund Not Property of "Originating" Bank
March 28, 2013 - Bulletin Print Report
On November 30, 2009, AFC and five affiliated corporations filed for Chapter 11 bankruptcy protection. On December 4, 2009, the Office of Thrift Supervision (OTS) c...
The Functional Test For Identifying "Business Income"
March 28, 2013 - Volume 7 Issue 60 Print Report
C is a public utility and is therefore governed, for Oregon taxation purposes, by ORS 314.280. That statute provides: "If a taxpayer has income from a business...
Boat Slips Are "Real Estate Assets"
March 27, 2013 - Volume 7 Issue 59 Print Report
TP intends to acquire a leasehold interest in the Property. The Property is comprised of residential rental property units (the "Apartments") as well as a...
Sec. 351's "Control" Test
March 26, 2013 - Volume 7 Issue 58 Print Report
CK, an individual, incorporated K, Inc., (K), and transferred to it the assets of a business CK previously had operated as a sole proprietorship. After this incorpo...
Deductible Payments Must Be Made Out of Income
March 25, 2013 - Volume 7 Issue 57 Print Report
The taxpayer, JW, an individual,had beenpreviously married to CW. The twohad beendivorced on July 24, 2002. &...
Acquisitions Can Free Up DTAs
March 22, 2013 - 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 en...
"Guaranty" Payments Are Capital Expenditures
March 22, 2013 - Volume 7 Issue 56 Print Report
Prior to November 4, 1955, the taxpayer, (M), an individual, owned approximately 94 percent of the outstanding stock of PPRP, Inc., (PP). &...
The I.R.S. Pays Interest on Overpayments
March 21, 2013 - Volume 7 Issue 55 Print Report
An employer pays wages to its employee and dulydeducts the employee's share of FICA tax fromsuch wages. The employer pays that amount,together wit...
Will FNMA's Deferred Tax Assets Be "Liberated"
March 20, 2013 - Bulletin Print Report
Many of the companies that received federal assistance during the financial crisis have weathered the storm and, for the most part, are poised to enjoy success as t...
When Is an Exchange Right "Other Property"?
March 20, 2013 - Volume 7 Issue 54 Print Report
P Corporation, (P), owned 100 percent of the outstanding stock ofS1 Corporation, (S1), and thelatter owned all of the outstandingstock of S2 Corpo...
Dividends Or Sales Proceeds?
March 19, 2013 - Bulletin Print Report
Annaly Capital Management, Inc., (NLY), recently announced that, through a newly-formed, transitory subsidiary, it has commenced an offer to purchase all of the sha...
Tax Efficient Divestitures
March 19, 2013 - Volume 7 Issue 53 Print Report
1. P owns 31 percent of the stock of T and has owned such stock for more than five years.* If T repurchases P's T stock, owing to P's low basis in the stock, the 'redemption' will give rise to a...
"OREO" Is Not "Acquired For Resale"
March 18, 2013 - Volume 7 Issue 52 Print Report
In the ordinary course of its lending business, Bank, (B), lends money to enable borrowers to purchase real property from third parties. Each loan is secured by the...
"Excess" RBILs Must Be Carried Over
March 15, 2013 - Volume 7 Issue 51 Print Report
The loss corporation ("LossCo" or "Taxpayer") is a C corporation and the common parent of a consolidated group. &...
Timber Monetization Strategy Gets I.R.S. Approval
March 14, 2013 - Volume 7 Issue 50 Print Report
In Year 1, TP held approximately "J Amount" of Asset (almost certainly timberlands) in various locations around the United States. &nb...
Camp Spares REITs and MLPs
March 13, 2013 - Bulletin Print Report
Rep. Dave Camp, R-Mich., the chairman of the House Ways & Committee, the legislative body from which all tax legislation must emanate, hasreleased a &q...
Imputed Interest and Stock Price "Guarantees"
March 13, 2013 - Volume 7 Issue 49 Print Report
Y Corporation, (Y), acquired the stock of Z Corporation, (Z), in exchange solely for shares ofvoting stock of Y. The acquisition qualified as a reorganization...
Liberty Global Will Use "The Killer B Rules" To Its Advantage
March 12, 2013 - Volume 7 Issue 48 Print Report
Liberty Global, Inc., (LGI), and Virgin Media, Inc., (VMI), will, pursuant to an agreement struck in February, 2013, become subsidiaries of a newly-formed U.K. corpor...
"Tracking" Stock Is Stock Of The Issuing Corporation
March 11, 2013 - Volume 7 Issue 47 Print Report
TP is a privately held State corporation and the common parent of an affiliated group that files a consolidated income tax return. TP has one class of voting common...
"Family Hostility" and Sec. 302(b)(1)
March 8, 2013 - Volume 7 Issue 46 Print Report
HG Corporation, (HG), redeemedits stock owned by severaltrustswhich had been created for the benefit of the founder's children. At issue was wheth...
Increasing the Stock Price Is a Valid Corporate Business Purpose
March 7, 2013 - Volume 7 Issue 45 Print Report
D Corporation, (D), conducts Business 1 and Business 2, indirectly,through its subsidiaries. The twobusinesses attract different investors some of which...
Consulting Agreement Creates a Prohibited Interest
March 6, 2013 - Volume 7 Issue 44 Print Report
The stock of LC Corporation, (LC), was owned by a father, (F),and his son, (S). OnDecember 17th, 1975, F resigned as a director and officer of LC. On De...
Elan's New Dividend Policy
March 5, 2013 - Bulletin Print Report
Elan Corporation, plc, (ELN), recently announced a transformative transaction in which it will sell to its partner, Biogen Idec, (BI), its interest in the venture,...
Dual-Use Property
March 5, 2013 - Volume 7 Issue 43 Print Report
Dealers in construction and agricultural equipment purchase equipment from a manufacturer and generally seek to resell the equipment to customers as soon as possibl...
When Does The Statute Of Limitations on Civil Penalties End?
March 4, 2013 - Bulletin Print Report
Under the Investment Advisers Act of 1940 (the "Act"), it is unlawful for an investment adviser...to engage in any transaction, practice, or course of bus...
Fannie Mae and Freddie Mac Exempt From Excise Taxes
March 4, 2013 - Volume 7 Issue 42 Print Report
Fannie Mae and Freddie Mac (the "Enterprises") are private corporations that were chartered by the federal government to create stability in the financial...
Liberty Global Is "Inverting"
March 1, 2013 - Bulletin Print Report
Liberty Global, Inc., (LG), in connection with its plan to acquire the properties of Virgin Media, Inc., (VM), will also be accomplishing an "inversion."...
I.R.S. Limits The "Damage" From Notice 2008-83
March 1, 2013 - Volume 7 Issue 41 Print Report
TP, perhaps Wells Fargo, acquired T, perhaps Wachovia (the "Acquisition"). T was a loss corporation. For purposes of Sec. 382, TP determined that T had a...
Mr. Malone's CRUT
February 28, 2013 - Bulletin Print Report
On February 4, 2013, Mr. John Malone and his wife contributed all of the shares of Series B Common Stock in Liberty Global, Inc. owned by them to "the Malone L...
Taxpayer Retained Dominion and Control of Donated Property
February 28, 2013 - Volume 7 Issue 40 Print Report
The petitioner, (V), owned a 50 percent interest in a medical practice which he sold in 1998, generating a taxable gain of $2,261,750. V made several transfers of s...
Mutual Membership Rights Have No Value
February 27, 2013 - Volume 7 Issue 39 Print Report
In 1989, the Reuben Trust, (RT), purchased an insurance policy from Manulife, (M), a mutual life insurance company. In a mutual life insurance company, the policyho...
Divesting BKS's Retail Business
February 26, 2013 - Bulletin Print Report
Mr. Leonard Riggio and his wife, through their wholly owned corporation, (LRBKS), own approximately 30 percent of the stockof Barnes & Noble, Inc., (BKS),...
Accounting for "Marker Discounts"
February 26, 2013 - Volume 7 Issue 38 Print Report
Casino, (C), owns and operates a licensed gambling casino. C routinely extends lines of credit to its customers to encourage their continued patronage....
Production and Sale of "Non-Ag" Fertilizer Produces Qualifying Income
February 25, 2013 - Bulletin Print Report
X is a publicly traded partnership (PTP or MLP). X, through a subsidiary, is engaged in the production and marketing of nitrogen fertilizer products. &...
Unrecognized Gain Is Not Income
February 25, 2013 - Volume 7 Issue 37 Print Report
Petitioners, electing small business trusts, had legal residence in Pennsylvania. In June 1997, petitioners and a 10th shareholder ("10") directly owned 1...
Bankrupt Corporation Avoids the "Sec. 382 Limitation"
February 22, 2013 - Volume 7 Issue 36 Print Report
Parent, (P), a publicly traded State A corporation, is a pureholding company and the common parent of an affiliated group of corporationsthat file...
LNCO Will Acquire BRY
February 21, 2013 - Bulletin Print Report
LinnCo, LLC, (LNCO), and Berry Petroleum Company, (BRY), have announced the signing of a definitive merger agreement which envisions the merger of BRY with and into a...
"Substantial Compliance" Not Sufficient to Abate Penalties
February 21, 2013 - Volume 7 Issue 35 Print Report
OnSeptember 17, 2005, EP passed away, and B was named executor of the estate. B retained DB, a certified public accountant, to prepare and file a federal esta...
Avon May Repatriate Foreign Earnings
February 20, 2013 - Bulletin Print Report
During the fourth quarter, Avon Products, Inc., (AP), decided that the company "may" repatriate offshore cash to meet certain domestic funding needs. Acco...
A CFC Is Not a PFIC
February 20, 2013 - Volume 7 Issue 34 Print Report
Partnership X, (PSX),a domestic partnership, has "s" members, "t" of which are U.S. persons. The U.S. members of PSX consist of (i)U...
Berkshire Hathaway's Latest Dividend Play
February 19, 2013 - Bulletin Print Report
A consortium led by Berkshire Hathaway, Inc., (BHI), has reached an agreement to acquire all of the stock of H.J. Heinz Company, (HJH). BHI and its partner will be fo...
Funds With Common Investment Adviser Not An Entity
February 19, 2013 - Volume 7 Issue 33 Print Report
Trust is a State A business trust. TP is a series of the Trust and is an open-end investment company. TP has qualified as a regulated investment company, (RIC). <...
AMR's Acquisition of US Airways Focuses on Preserving NOLs
February 15, 2013 - Bulletin Print Report
AMR Corporation, (AMR or Newco) and U.S. Airways Group, Inc., (USA), have entered into an agreement and plan of merger pursuant to which USA will become a wholly-ow...
Canadian "Rollovers"
February 15, 2013 - Volume 7 Issue 32 Print Report
In the United States, a shareholder of a corporation can exchange his or her stock in such corporation for stock in another corporation on a tax-free basis if the t...
No Duty of Consistency in State Tax Reporting
February 14, 2013 - Volume 7 Issue 31 Print Report
The underlying substantive issue in Oracle Corporation and Subsidiaries v. Oregon Department of Revenue , Or. T.C. No. TC-MD 070762C, February 11, 2010, is...
LIN TV Is Liquidating
February 13, 2013 - Bulletin Print Report
LIN TV Corporation, (TVL), has announced a transformative transaction that has as its centerpiece the complete liquidation of TVL. The business conducted by TVL, ho...
Family Limited Partnership Withstands I.R.S. Scrutiny
February 13, 2013 - Volume 7 Issue 30 Print Report
The taxpayer, (S), died, testate , on January 21, 2002. The Barge Family, of which S was a member, owned and managed timberlands in Mississippi....
What If Cedar Fair Acquired Six Flags?
February 12, 2013 - Bulletin Print Report
In general, a publicly traded partnership (PTP) is "treated as a corporation" and is thereforesubjected to the indignities of thedouble taxati...
Payments To Partners Not Deductible For NYC UBT Purposes
February 12, 2013 - Volume 7 Issue 29 Print Report
Petitioners, MKM and MKQ, are eachlimited liability companies engaged in the business of performing real estate brokerage services. MKM and MKQ are limited li...
Tax Considerations Regarding An AAPL Preferred Stock Distribution
February 11, 2013 - Bulletin Print Report
A renowned investor has suggested, in no uncertain terms, that Apple, Inc., (AAPL), should seriously consider a distribution of "perpetual preferred stock"...
CFC Invests In U.S. Property
February 11, 2013 - Volume 7 Issue 28 Print Report
TP, a U.S. entity, is a distributor of information technology products and services. TP develops software in the U.S. pursuant to a "cost sharing agreement&quo...
Holding Company Lacked "Substantial Nexus" With Taxing State
February 8, 2013 - Volume 7 Issue 27 Print Report
Washington Mutual, Inc., (WMI), is a bank holding company that formerly owned Washington Mutual Bank, (WMB). WMB and certain of its subsidiaries, ("the WMB Ent...
"Advanced Expenses" Are Loans
February 7, 2013 - Volume 7 Issue 26 Print Report
HFM is a law firm that primarily conducts "plaintiff-side litigation." HFM files its tax returns using the cash receipts and disbursements method of accou...
A Hess Corp. Spin-off Would Meet The "Active Business" Test
February 6, 2013 - Bulletin Print Report
Elliott Associates, L.P., (EA), and Elliott International, L.P., (EI, and collectively, EAI), have accumulated a nearly five percent stake in Hess Corporation, (HC)...
Asset Sale Gain Is "Business Income" In PA
February 6, 2013 - Volume 7 Issue 25 Print Report
Appellant, (A),a corporation organized under Maryland law with itsheadquarters in Pennsylvania, (PA), is a wholly-owned subsidiary of PHG, (P). P, a PA...
Law Partnership's "Special Allocation" Does Not Hold Up
February 5, 2013 - Volume 7 Issue 24 Print Report
During its 2004 tax year, a law firm's partners consisted of Mr. R, Mr. C, andMr. W, all lawyers, and RCGW, Inc., (RCGW), an 'S' corporation. RCGW was owned b...
Pfizer Poised To Distribute Zoetis Stock To Its Shareholders
February 4, 2013 - Bulletin Print Report
Pfizer, Inc., (P), recently formed Zoetis, Inc., (Z), and transferred to Z the stock of its subsidiaries holding substantially all of the assets and liabilities of...
Taxes and Religion--Will the Twain Ever Meet?
February 4, 2013 - Volume 7 Issue 23 Print Report
Mr. Sklar, of Los Angeles, is one of the more persistent taxpayers we have encountered. He has, for well over a decade, been seeking tax deductions for a portion of...
What Has Become of California's DRD?
February 1, 2013 - Volume 7 Issue 22 Print Report
Corporate earnings are, unfortunately, under our "classical" system of taxation,taxed twice; once when they are earned by such corporationand...
REIT Primer
January 31, 2013 - Volume 7 Issue 21 Print Report
With the popularity of real estate investment trusts, (REITs), at historically high levels investors have been focusing on which "nontraditional" entity will be...
Periodic Redemption Plan Does Not Give Rise To A Deemed Distribution
January 30, 2013 - Volume 7 Issue 20 Print Report
X Corporation, (X),wanted to acquire all of the stock of Y Corporation, (Y). X and Y were unrelated, except that shareholders of X owning 10 percent of its st...
"Neutered" Stock Is Still "Voting" Stock--Part 2
January 29, 2013 - Volume 7 Issue 19 Print Report
M is a tax-exempt organization and a private, non-operating, foundation. N is a "disqualified person" with respect to M. M has "excess business holding...
Service No Longer Rules on Certain Spin-off Issues
January 29, 2013 - Bulletin Print Report
Sec. 355(a)(1)(A) of the Internal Revenue Code provides that if a corporation distributes to its shareholders with respect to its stock, or distributes to its secur...
How to Tender SUPERVALU Shares
January 29, 2013 - Bulletin Print Report
Symphony Investors, LLC, is offering to purchase for cash up to 30 percent of the outstanding shares of common stockof SUPERVALU, Inc. at a price of $4 per sh...
Compuware's Restructuring Plan
January 28, 2013 - Bulletin Print Report
Compuware Corporation, (CPWR), has been targeted for scrutiny by several formidable "activist" investors who have seen substantial value in CPWR and who h...
Calculating South Carolina Job Development Tax Credits
January 28, 2013 - Volume 7 Issue 18 Print Report
In 1995, the South Carolina General Assembly enacted "the Act". In order to qualify for tax incentives, under the Act, businesses were required to enter i...
Accounting for "Consent" Payments
January 25, 2013 - Volume 7 Issue 17 Print Report
On Date 2, TP, a corporation, announced a Tender Offer and a "consent solicitation" to obtain the consent of the Note holders to certain amendments to the...
Will MSFT Invest in Dell's Buyout?
January 24, 2013 - Bulletin Print Report
It has been rumored that Microsoft, Inc., (MSFT), is considering investing in the leveraged buy out of Dell Computer (Dell), news of which has dominated the busines...
Warrants and Spin-Offs
January 24, 2013 - Volume 7 Issue 16 Print Report
P Corporation, (P), a holding company,has three common shareholders, I1, I2, and I3 ("the Shareholders").In addition, P has outstanding conver...
Claiming a DRD For RIC Dividends
January 23, 2013 - Volume 7 Issue 15 Print Report
X, a corporation, qualifies as a "Regulated Investment Company", (RIC). Y, a domestic corporation that holds shares of X stock, received a dividend from X...
Corporate Contribution Does Not Give Rise To Constructive Dividend
January 22, 2013 - Volume 7 Issue 14 Print Report
By resolution of M's Board of Directors, M will institute a program of making charitable contributions to charities designated by its shareholders. &nb...
T Will Report An "Actuarial" Loss in Q4
January 18, 2013 - Bulletin Print Report
AT&T, (T), announced that it expects to record a non-cash pre-tax charge of approximately $10 billion "related to actuarial gains and losses" on pensi...
Cemetery Company Not a "Beneficiary" of Perpetual Care Trust
January 18, 2013 - Volume 7 Issue 13 Print Report
Plaintiff, (P), operates an 85 year old memorial gardencemetery. P sells rights to be buried, entombed, or inuredat Michigan Memorial Park, "which...
Microsoft's License Fees Not California Gross Receipts
January 17, 2013 - Volume 7 Issue 12 Print Report
Plaintiff, Microsoft Corporation, is a corporation organized and existing under the laws of the State of Washington. During the relevant tax years, plaintiff entere...
DISH Network Not Liable For N.Y. "Use" Tax
January 16, 2013 - Volume 7 Issue 11 Print Report
Petitioner, EchoStar Satellite Corporation, (ES), is popularly known as "DISH Network." ES owns a number of orbital satellites that broadcast television s...
SUPERVALU's New Capital Loss
January 15, 2013 - Bulletin Print Report
SUPERVALU, (SVU), recently announced a transformative transaction in which it sell the stock of New Albertson's Inc., (NAI), a direct wholly-owned subsidiary of SVU...
"Flow-Through" Miles Are "Revenue Miles"
January 15, 2013 - Volume 7 Issue 10 Print Report
D Corporation, (D), through its subsidiaries, was engaged in the receipt,transportation, storage, and delivery of natural gas in various states, including Ill...
Outdoor Advertising Displays Are "Inherently Permanent Structures"
January 14, 2013 - Volume 7 Issue 9 Print Report
Company, (C), constructs and maintains outdoor advertising displays (billboards), and rents advertising space on the billboards to customers. &nb...
Unconventional Income Does Not Spoil REIT Election
January 11, 2013 - Volume 7 Issue 8 Print Report
TP intends to elect to be taxed as a real estate investment trust, (REIT). TP is a wireless and broadcast infrastructure company. Together with its taxable REIT sub...
Taxpayer Maintained a Permanent Place of Abode in New York
January 10, 2013 - Volume 7 Issue 7 Print Report
An audit of petitioner's nonresident and part-year resident New York State tax returns resulted in the Department of Taxation and Finance issuing a notice of defi...
Accounting for Deferred Tax Assets and Liabilities--Citigroup
January 9, 2013 - Volume 7 Issue 6 Print Report
A deferred tax liability (DTL) or deferred tax asset (DTA) is recognized for the expected future tax effects attributable to "temporary differences" and carry-f...
Pre-Sale Dividends
January 8, 2013 - Volume 7 Issue 5 Print Report
A, an individual, owned all of the stock of Y. X entered into negotiations with A to buy, for cash, all ofthe stock of Y.  ...
Refining MLP Not Treated as a Corporation
January 7, 2013 - Bulletin Print Report
X is a limited partnership organized under the laws of State. X is engaged in the business of refining, blending, processing, packaging, marketing, and distribution...
"Neutered" Stock Is Still "Voting" Stock
January 7, 2013 - Volume 7 Issue 4 Print Report
P Corporation, (P),owns all of the stock of each ofSub 1 and Sub 2. Sub 2, in turn, owns all of the stock of each of Sub 3 and Sub 4. Sub 4 owns all of...
Punitive Damages Not Excluded From Gross Income
January 4, 2013 - Volume 7 Issue 3 Print Report
The taxpayer, (G), an individual, purchased a disability income insurance policy from Paul Revere Life Insurance Co., (PR), in 1988....
Knight Capital's "Global" Sec. 351 Transaction
January 3, 2013 - Volume 7 Issue 2 Print Report
Knight Capital Group, Inc., (KC), and GETCO Holding Company, LLC, (G),a partnership,announced that they have entered into an agreement for a "strat...
Taxpayer Expenses Then Amortizes Self-Created Intangible Assets
January 2, 2013 - Volume 7 Issue 1 Print Report
Donald Fitch, (DF), has been a licensed C.P.A. in California since February, 1993. Upon receiving his license, he started an accounting practice ("C.P.A. pract...
Tax Bill Passes Senate 89-8
January 1, 2013 - Bulletin Print Report
The Senate passed, by an overwhelming 89-8 margin, "fiscal cliff" legislation containing several notable tax provisions. The bill will now be sent to the...
Deficiency Interest is "Personal" Interest
December 31, 2012 - Volume 6 Issue 250 Print Report
Pursuant to Sec. 163(h) of the Internal Revenue Code, individual taxpayers may not deduct interest on indebtedness except, among other things, "interest paid o...
Identifying the "Control Group"
December 28, 2012 - Volume 6 Issue 249 Print Report
Four individuals, (TPs), owned 76 percent of the stock of X Corporation, (X), and two of them, as trustees for the wife of another, held slightly in excess of 13 pe...
The "Expansion" Doctrine Can Facilitate a Spin-Off
December 27, 2012 - Volume 6 Issue 248 Print Report
D Corporation, (D), has operated a retail shoe store business, under the name "D", since Year 1, in a manner that meets the (active business)require...
Sec. 357(b) Requires a Tax-Avoidance Purpose
December 26, 2012 - Volume 6 Issue 247 Print Report
Indian Corporation, (IC), was engaged in the consumer finance business. On June 30, 1964, the directors of IC authorized the purchase of 52.846 percent of the stock...
MLPs and Asphalt
December 24, 2012 - Volume 6 Issue 246 Print Report
Even though the "modern" Master Limited Partnership (MLP or PTP) rules have been in effect for nearly 22 years we are still discovering new activities in...
FASB Proposes New Standards For "Expected Credit Losses"
December 21, 2012 - Bulletin Print Report
In the aftermath of the global economic crisis, the overstatement of assets caused by delayed recognition of credit losses was identified as a "weakne...
S&Ls Can Deduct Dividends
December 21, 2012 - Volume 6 Issue 245 Print Report
E Corporation, (E), and SS Corporation, (SS), were each domestic building and loan associations. All SS depositors were owners of withdrawable shares which were con...
68 Percent Stock Consideration Not Enough For a Reorganization
December 20, 2012 - Bulletin Print Report
Markel Corporation, (MC), and Altera Capital Holdings, Ltd. (AC), a Bermuda corporation,have entered into a plan and agreement pursuant to which MC will acqui...
Mixed-Use Community is a Health Care Facility
December 20, 2012 - Volume 6 Issue 244 Print Report
TP was incorporated on Date 1 and made an election under Sec. 856 to be taxed as a real estate investment trust, (REIT). TP owns an "a%" membership intere...
Sandell Sets Its Sights On Compuware
December 19, 2012 - Volume 6 Issue 243 Print Report
Sandell Asset Management Corp., (SAM), led by theformidable Thomas E. Sandell, has communicated its views to the management of Compuware Corporation, (CPWR), in...
Gain From Sale of Blimpie Stock Attributed To Donor
December 18, 2012 - Volume 6 Issue 242 Print Report
On July 11, 2001, petitioner, one of the principal shareholders of Blimpie, Inc., (BI), presented his wife with a letter, which stated: "...I hereby gift to yo...
Offshore Platform Is "Real Property" (And Hence REIT-Eligible)
December 17, 2012 - Volume 6 Issue 241 Print Report
X is a publicly traded partnership, (PTP). X is in the process of negotiating a Lease of an offshore platform and related machinery and equipment i...
A RIC Has Unlimited Capital Loss Carryover Potential
December 14, 2012 - Volume 6 Issue 240 Print Report
R is taxed as a regulated investment company, (RIC), and uses a taxable year ending on June 30. R recognized long-term capital losses on November 1, 2010, January 3...
REIT "Purges" Its Earnings and Profits
December 13, 2012 - Volume 6 Issue 239 Print Report
TP intends to elect to be treated as a real estate investment trust, (REIT), effective the first day of Year 1. In conne...
Payments In Settlement of Litigation Can Be Deducted
December 12, 2012 - Volume 6 Issue 238 Print Report
DS and C1 were each non-stock corporations, associations whose ownership is definedby membership interests. Pursua...
Liberty Cannot Spin-Off TripAdvisor
December 11, 2012 - Bulletin Print Report
Liberty Interactive Corporation, (L), has purchased a total of 4,799,848 shares of TripAdvisor, Inc., (T), from Barry Diller (and from a family foundation) at a pri...
Contingent Obligation Not a "Continuation" of a Fixed Obligation
December 11, 2012 - Volume 6 Issue 237 Print Report
The taxpayer, (J), operated a dairyfarm in Wisconsin. Mortgages, held by the FmHA, encumbered 135 acres (out of a total of 235 acres)of J's property....
Retention of NYC Residence Does Not Bar Change of Domicile
December 10, 2012 - Volume 6 Issue 236 Print Report
Petitioners,husband and wife,filed joint New York State resident income tax returns for the 2002-2004 tax years. They did not file New York City returns...
FCX Announces Two Simultaneous Acquisitions & Sirius/Liberty Media Update
December 7, 2012 - Bulletin Print Report
Freeport McMoRan Copper and Gold, Inc., (FCX), has entered into a plan and agreement pursuant to whichit will acquire, via a forwardmerger, the properti...
Redemption + Reincorporation = Reorganization
December 7, 2012 - Volume 6 Issue 235 Print Report
The stock of F, Inc., (F), was owned by father, mother, son, daughter, and son-in-law (daughter's husband). On March 31, 1944, father transferred 217 shares of F st...
M.B.A. Studies Improved Taxpayer's Employment Skills
December 6, 2012 - Volume 6 Issue 234 Print Report
The taxpayer, (B), became a full-time student at Baldwin-Wallace College, (BWC), and graduated in 1974 with a B.A. in English. She was then hired as a "personnel...
A Reorganization Depends on Continuity of Interest
December 5, 2012 - Volume 6 Issue 233 Print Report
SJ, a Ccorporation, merged with and into PSE&G, another previously unrelatedCcorporation. The plan provided that the shareholders of SJ should...
Saputo Quantifies The Benefits of an "(h)(10)" Election
December 4, 2012 - Bulletin Print Report
Saputo, Inc., (SAP), announced that it has signed a definitive agreement to acquire Morningstar Foods, LLC, (M), a subsidiary of Dean Foods Company, (DFC). The purc...
Is Vodafone's Sale of "Cellco" Taxable In the U.S.?
December 4, 2012 - Volume 6 Issue 232 Print Report
Foreign Partner 1, (FP1), a nonresident alien individual, is a partner in Partnership 1, (PS1), which is engaged in a trade or business through a fixed place of bus...
I.B.M. Must Use Single Factor Apportionment Formula
December 3, 2012 - Volume 6 Issue 231 Print Report
I.B.M. calculated its Michigan Business Income Tax and Modified Gross Receipts Tax liabilities based on a three-factor approach taking into consideration property,...
Disclosing a Private Letter Ruling
November 30, 2012 - Volume 6 Issue 230 Print Report
On October 1, 2004, the taxpayer, (A), submitted a request with the National Office of the I.R.S.for a Private Letter Ruling (PLR). On September 17, 2007 (nea...
COST's Dividend Can Be "Stripped"
November 29, 2012 - Bulletin Print Report
Costco Wholesale Corporation, (COST), announced that its Board of Directors has declared a "special cash dividend" on COST common stock in the amount of $...
Merger of Foreign Corporations Is an 'A' Reorganization
November 29, 2012 - Bulletin Print Report
Fiat Industrial S.p.A., (FI) and CNH Global N.V., (CNH), announced an agreement in connection with which each of FI and CNH will be merged with and into a new corpo...
Selective Application of the Constructive Ownership Rules
November 29, 2012 - Volume 6 Issue 229 Print Report
The decedent (D) died in 1957. At the time of his death, he owned, directly, 88.9 percent of the stock in PS Corporation (PS), a holding company,and a small p...
No Ordinary Loss For Want of a "Seizure"
November 28, 2012 - Volume 6 Issue 228 Print Report
Company (C) wanted to build a power plant. In Year 1, C and a group of investors entered into a contract providing for the formation of aPartnership (PS) to c...
Ralcorp Finally Succumbs To ConAgra's Entreaties
November 27, 2012 - Bulletin Print Report
ConAgra Foods, Inc., CAG, and Ralcorp Holdings, Inc., RAH, have announced the execution of a definitive agreement under which CAG will acquire the stock of RAH from...
Stock Options Do Not Constitute "Money Remuneration"
November 27, 2012 - Volume 6 Issue 227 Print Report
Sec. 3201 of the Internal Revenue Code imposes a tax on the income of each railroad employee equal to the applicable percentage of the compensation receive...
Can Realogy Use Its NOL?
November 26, 2012 - Bulletin Print Report
Realogy Holding Corporation, (RHC), is in possession of over $2 billion in Net Operating Losses, (NOLs). It is counting on using these NOLs to reduce its "cash...
Couple Cannot Avoid "Mansion Tax"
November 26, 2012 - Volume 6 Issue 226 Print Report
In November, 2004, petitioner MS entered into a contract of sale to purchase Unit 34B in a building located in New York City for $900,000. At the same time, his wif...
Co-Borrower Analogized to a Guarantor
November 23, 2012 - Volume 6 Issue 225 Print Report
The taxpayers, husband and wife, own 100 percent of the stock in X, an 'S' corporation. On July 18, 1978, the taxpayers as primary applicants and X as a secondary a...
ELA Triggered In a "Closed" Year
November 21, 2012 - Volume 6 Issue 224 Print Report
LPC owned 100 percent of the stock of C. C was a member of a group of companies owned by LPC and consolidated for tax reporting purposes. C ceased operations before...
"Restitution" Payments Ruled Deductible
November 20, 2012 - Volume 6 Issue 223 Print Report
The taxpayers are physicians who practice medicine under several professional entities, including Practice Entity G and Practice Entity H, limited liability compani...
Penn National Gaming's REIT Conversion Breaks New Ground
November 19, 2012 - Volume 6 Issue 222 Print Report
Penn National Gaming, (PNG), will not only be the first casino company to convert to REIT status, it will do so in an unprecedented manner. PNG is not going to use th...
Tax Court Finds Absence of "Salable" Goodwill
November 16, 2012 - Volume 6 Issue 221 Print Report
Mr. S owned all of the stock of HIA, Inc., (HIA), an insurance agency located in rural North Dakota. Under a purchase agreement, HIA agreed to sell "all files,...
Paying a Child's Expenses
November 15, 2012 - Volume 6 Issue 220 Print Report
The petitioner, (L), timely filed her 2006 Federal income tax return. On Schedule A of such return, L claimed a total of $35,355 in itemized deductions, consisting...
Leucadia/Jefferies Update
November 14, 2012 - Bulletin Print Report
It is intended that Leucadia...
"Premature" Withdrawals From Retirement Plans
November 14, 2012 - Volume 6 Issue 219 Print Report
The taxpayer, Mr. Armbrust, (AT), decided to buy a house. AT's father, in light of AT's poor credit rating,closed the purchase, recorded the deed, and obtaine...
Is Loral's Special Dividend a Distribution in "Partial Liquidation?"
November 13, 2012 - Bulletin Print Report
On November 2, 2012, Loral Space & Communications, Inc., (L), completed the sale of its wholly-owned subsidiary, SS/L, to MDA. Prior tosuch sale,...
Sec. 179D Deductions Are Not Special
November 13, 2012 - Volume 6 Issue 218 Print Report
Sec. 179D of the Internal Revenue Code permits a deduction for part or all of the cost of "energy efficient" commercial building property that a taxpayer...
Leucadia National Moves To Accelerate Use of Its NOLs
November 12, 2012 - Bulletin Print Report
Leucadia National Corporation, (L), owned, as of December 31, 2011, an aggregate of 58,006,024 sharesof Jefferies Group, Inc., (J). During 2011, L purchased,...
Kayak Software's Public Tenure Will Be Brief
November 12, 2012 - Bulletin Print Report
Kayak Software Corporation, (KSC), which had only recently "gone public," has entered into a plan and agreement pursuant to which the company will be acqu...
Cash Purchases Can Spoil a 'B' Reorganization
November 12, 2012 - Volume 6 Issue 217 Print Report
P Corporation, (P), owns all of the stock of S Corporation, (S). P desired to obtain control of X Corporation, (X), by acquiring all the shares of X in exchange sol...
EFH's Solution To Its "ELA" Problem
November 9, 2012 - Bulletin Print Report
EFH appears to be taking steps to insure that its excess loss account (ELA) with respect to its stock of its wholly-owned subsidiary, EFCH, will not become an item...
Taxation of Partners and Partnerships
November 9, 2012 - Volume 6 Issue 216 Print Report
A partnership is treated as an entity separate and distinct from its partners. Once its income or loss is determined, a partnership is treated as a "cond...
Stifel's Stock Should Be Tax-Free
November 8, 2012 - Bulletin Print Report
Stifel Financial Corporation, (SFC), and KBW, Inc., (KBW), have entered into a plan andagreement pursuant to which SFC will "acquire the stock" of K...
Sole Member of DRE Does Not Own Its Property/EFH Update
November 8, 2012 - Volume 6 Issue 215 Print Report
X, an individual, is the sole member of a single-member LLC ("LLCY") formed under the laws of West Virginia. A...
DTV Avoids a Local Tax Levy
November 7, 2012 - Volume 6 Issue 214 Print Report
The laws of Kentucky authorize local district boards of education to levy a "utility gross receipts tax" for schools on the gross receipts derived from fu...
PVH's Stock Will Be Taxable
November 6, 2012 - Bulletin Print Report
PVH Corporation, (PVH), and Warnaco Group, Inc., (W), have entered into a plan and agreement pursuant to which a newly-created subsidiary of PVH, Merger Sub, will b...
Classifying Convertible Debentures (Debt or Equity?)
November 6, 2012 - Volume 6 Issue 213 Print Report
Pursuant to an agreement, AC Corporation, AC, acquired all of the stock of T Corporation, T. The aggregate purchase price was "$q", consisting of "$r...
Seagate's Stock Buyback Plans Influenced By Its NOLs
November 5, 2012 - Bulletin Print Report
Seagate Technology plc, (ST), has approximately $2.7 billion of U.S. Federal net operating losses (NOLs) which can be used to shelter from taxationan equivale...
Olefins and MLPs
November 5, 2012 - Volume 6 Issue 212 Print Report
X is a publicly traded partnership, (PTP or MLP). X intends to acquire and operate a facility that processes ethane and propane ("NGLs") into olefins thro...
Financial Crisis Did Not Rob Taxpayer of "Dealer" Status
November 2, 2012 - Volume 6 Issue 211 Print Report
TP is the holding company for each offour subsidiaries. Company B, (CB), one of the subsidiaries, is a registered (with the S.E.C.)broker/dealer. TP is...
I.R.S Concludes That Fairfax Financial Never Controlled Odyssey Re
November 1, 2012 - Volume 6 Issue 210 Print Report
Several years ago, Fairfax Financial Holdings, (Fairfax),a corporation with substantial Net Operating Losses, (NOLs), which owned a majority of the stock of O...
EFH's (and TXU's) "Excess Loss Account"
November 1, 2012 - Bulletin Print Report
EFH Corporation, (EFH), files a consolidated income tax return as the common parent of an affiliated group which includes EFCH, TCEH, and EFIH, but not Oncor.
CSR plc's Unusual Self-Tender Offer
October 31, 2012 - Bulletin Print Report
CSR plc, (CSR), a U.K. corporation, is preparing to return capital to its shareholders. The capital to be returned represents, at least in part, the proceeds the co...
63 Percent Is Not "Substantially All"
October 31, 2012 - Volume 6 Issue 209 Print Report
Mr. B (petitioner, and together with his spouse, petitioners) owns two businesses, including ITL, a charter fishing operation. The operation is based in Orange Beac...
IDT Accelerates Its 2013 Distributions
October 30, 2012 - Bulletin Print Report
IDT Corporation, (IDT), has decided to pay a "special dividend" in the amount of $0.60 per share to the holders of its Class A and Class B common stock. T...
Pole Dancing Is Not a "Choreographed Performance"
October 30, 2012 - Volume 6 Issue 208 Print Report
Petitioner, the owner andoperator of a "juice bar" in upstate New York, contends that the admission charges and private dance performance fees it co...
Will An ADT Stock Repurchase Jeopardize Its Spin-Off?
October 29, 2012 - Bulletin Print Report
Corvex Management, L.P., (CML), led by the estimable Keith Meister, has taken a 5.02 percent stake in ADT Corporation, (ADT). The stock of ADT was recently distribu...
Deducting Restitution Payments - Part II
October 29, 2012 - Volume 6 Issue 207 Print Report
Mr. PC (PC) was a dentist. His wife, KC, kept the books for PC's dental practice and handled the billing. In 1995, KC be...
ESOP's Redemption Is a Dividend
October 26, 2012 - Volume 6 Issue 206 Print Report
C Corporation, C, established an Employee Stock Ownership Plan, ESOP, on April 1, 1986. AI, an individual, owned 100 percent of C's stock....
"Control for Voting Stock"
October 25, 2012 - Volume 6 Issue 205 Print Report
P Corporation, (P), and T Corporation, (T), are widely-held manufacturing companies each of which wasorganized under the laws of State A. &...
Have OSG's Foreign Earnings Been Repatriated?
October 24, 2012 - Bulletin Print Report
Overseas Shipholding Group, Inc., (OSG or the Company), recently made a disturbing announcement. It disclosed that it "is in the process of reviewing a tax iss...
Dividend Requires Diminution of Net Worth
October 24, 2012 - Volume 6 Issue 204 Print Report
J, an individual, has at all times been the sole shareholder of B, an insurance company. T, J's brother, was thepresident of P Corporation, P. &n...
ADT Has "Hidden" Tax Assets
October 23, 2012 - Bulletin Print Report
ADT Corporation, (ADT), recently spun off from Tyco International, Ltd., (TYC), has a substantial amount of intangible assets, including "subscriber system ass...
AT&T Proposes To Fund Its Pension Plan
October 23, 2012 - Bulletin Print Report
AT&T, Inc., (T), has announced a bold initiative to fully fund its currently underfunded pension plans. It is proposing to make an "in-kind" contribut...
Raising Debt Capital as a Business Purpose For a Spin-Off
October 23, 2012 - Volume 6 Issue 203 Print Report
P is a closely-held corporation that owns and operates a golf and tennis resort in State A. P has, for more than five years, owned all ofthe stock of S, a cor...
Cross Border Acquisitions: ASML/Cymer
October 22, 2012 - Bulletin Print Report
ASML Holding NV, (ASML), and Cymer, Inc., (CYMI), have announced that they have entered into a definitive merger agreement pursuant to which ASML will acquire CYMI...
SUB Payments Are Not "Wages"
October 22, 2012 - Volume 6 Issue 202 Print Report
Quality Stores, Inc., (Q), was the largest agricultural-specialty retailer in the country. In October, 2001, an involuntary Chapter 11 bankruptcy petition was filed...
Supplies Used in the Conduct of Qualified Research
October 19, 2012 - Volume 6 Issue 201 Print Report
Union Carbide Corporation, (U), conducted three research projects during the 1994 and 1995 tax-credit years. The firstwas the Amoco anticoking project. The se...
Delayed Boot
October 18, 2012 - Volume 6 Issue 200 Print Report
Tribune Publishing Co., (T), in 1969, owned 6,109 shares, or 7.1 percent, of the stock ofWest Tacoma NewsprintCorporation, (N). T's basis in the stock w...
Comverse Update
October 17, 2012 - Bulletin Print Report
Comverse Technology, Inc., (CTI), owns all of the stock of Comverse, Inc., (C), and a majority of the stock of Verint, (V). CTI, earlier this year, announced a plan t...
A "Casual" Gambler Cannot Offset Losses Against Gains
October 17, 2012 - Volume 6 Issue 199 Print Report
During 2005, the taxpayers, a husband and wife, gambled, "recreationally", at a West Virginia casino. On March...
SoftBank and Sprint Nextel To Join Forces
October 16, 2012 - Bulletin Print Report
SoftBank Corporation, (SBC), and Sprint Nextel Corporation, (SNC), have announced a complex transaction which will result in SBC emerging with an approximate 70 perce...
Purchasing an Interest In a Single-Member LLC--Walgreen/Alliance Boots
October 16, 2012 - Volume 6 Issue 198 Print Report
Each LLC has a single owner, A, and is disregarded as an entity separate fromsuch owner for federal tax purposes. All the assets held by each LLC are either&n...
IRM Commences Its "E&P" Purge
October 15, 2012 - Bulletin Print Report
Iron Mountain, Inc., (IRM), in connection with its transformation to REIT status, has commenced the process of ridding itself of its earnings and profits (E&P). S...
Corporations Must Recognize Gain On "In-Kind" Distributions
October 15, 2012 - Volume 6 Issue 197 Print Report
On December 20, 1985, Pope & Talbot, Inc., PT, borrowed $22.5 million, secured by the "Washington Properties", WP, and then transferred WP to a partners...
Mid-Stream Acquisition of Issuer of Contingent Stock Rights
October 12, 2012 - Volume 6 Issue 196 Print Report
It is well-settled that, in the case of a tax-free reorganization, the issuance by the acquirer of contingent contractual rights to acquire additional stock will no...
Gross Receipts Broadly Defined for Purposes of Research Credit
October 11, 2012 - Volume 6 Issue 195 Print Report
For each of the taxable years in issue, Hewlett-Packard Company, (HP), claimed tax credits for "increasing research activities." In determining its availa...
"Primarily for Sale" To Customers
October 10, 2012 - Volume 6 Issue 194 Print Report
T is exempt from tax under Sec. 501(c)(3) of the Internal Revenue Code. Property held for non-charitable purposes includes income-producing real property and securi...
Cemeteries, REITs, and MLPs
October 9, 2012 - Volume 6 Issue 193 Print Report
StoneMor Partners, L.P., (SMP),a publicly traded partnership, (PTP or MLP), is the second largest operator of cemeteries in the United States. It has been an...
Clearwire's Vanishing NOL
October 8, 2012 - Bulletin Print Report
Clearwire Corporation, (CC), conducts its business through a partnership, Clearwire Communications, LLC, (CCL), whose other partners are alsothe principal sha...
CG Shares Constructively Received By E&Y Partner
October 8, 2012 - Volume 6 Issue 192 Print Report
In exchange for their interests in CGE&Y, the consulting partners of Ernst & Young, the international accounting and auditing firm,were to receive sha...
Merger Not A Reorganization
October 5, 2012 - Volume 6 Issue 191 Print Report
P is a real estate investment trust, (REIT). P is engaged in Business AA through its "a%" ownership interest in PLP, a State Y limited partnership. PLP ha...
Determining the "Issue Price" of a Debt Instrument
October 4, 2012 - Volume 6 Issue 190 Print Report
The "issue price" of a debt instrument is determined under Sec. 1273(b), or in the case of certain debt instruments issued for property, under Sec. 1274....
How Will MetroPCS' Shareholders Be Taxed?
October 3, 2012 - Bulletin Print Report
Deutsche Telekom, (DTE), and MetroPCS Communications, Inc., (PCS), announced that they have executed a definitive agreement pursuant to which DTE's subsidiary, T-Mo...
The Fiscal Cliff
October 3, 2012 - Volume 6 Issue 189 Print Report
If action is not taken during the "lame duck" session of Congress that is expected to follow the elections, the tax code will change, due primarily to the...
Accounting for Black Liquor Clarified
October 2, 2012 - Volume 6 Issue 188 Print Report
"Black Liquor" (BL) is a liquid byproduct of certain paper making processes that, before January 1, 2010, met the definition of "alternative fuel&quo...
No Minnesota Apportionment of the Sec. 382 Limitation
October 1, 2012 - Volume 6 Issue 187 Print Report
The issue is whether DPS, a subsidiary of Express Scripts, Inc., (ESI), is required to apportion, for Minnesota tax purposes, its "Sec. 382 limitation." T...
Tax Court Endorses PepsiCo's Tax Planning
September 28, 2012 - Volume 6 Issue 186 Print Report
In many instances, one of the most effective tools an international tax planner has at his or her disposal is the "hybrid" financial instrument: a financi...
Stock Is Either Preferred or Common
September 27, 2012 - Volume 6 Issue 185 Print Report
TP is a closely held company engaged in Business A. TP is a profitable company and haspaid dividends over three of the four years preceding the transaction....
No Annual Exclusion for Gifts of Future Interests
September 25, 2012 - Volume 6 Issue 184 Print Report
On September 11, 1997, the taxpayers, a husband and wife, (P), formed PILP, a limited partnership. When PILP was formed, its assets consisted of all of the stock of...
PepsiCo's Victory in Tax Court Should Boost Earnings
September 24, 2012 - Bulletin Print Report
PepsiCo, Inc., (PEP), has been embroiled in a nastydispute with the I.R.S. regarding the proper characterization for Federal income tax purposes of certain fi...
"Ancillary and Subsidiary" Services
September 24, 2012 - Volume 6 Issue 183 Print Report
Mr. Ruge, (R), was formerly employed as a professor of engineering at theMassachusetts Institute of Technology, (MIT). While still employed, he made an invent...
Breach of Contract Does Not Produce "Theft" Loss
September 21, 2012 - Volume 6 Issue 182 Print Report
In May, 2006, the petitioner, KR, entered into a contract with a local contractor for an extensive renovation and expansion of his personalresidence....
Qualified Stated Interest
September 20, 2012 - Volume 6 Issue 181 Print Report
On January 1, 1995, Y Corporation, (Y), issued a 15-year debt instrument to Mr.A for $100. The instrument provides for quarterly interest payments of $2. Thus...
Yahoo Begins to Divest Its Alibaba Stake
September 19, 2012 - Bulletin Print Report
Yahoo! Inc., (Y), announced the closing of step one of its plan to divest itself of its stake in Alibaba Group Holding Ltd., (AGH), a stake amounting tosome 4...
Redemption of Non-Voting Common Stock Is an "Exchange"
September 19, 2012 - Volume 6 Issue 180 Print Report
The Company, (C), is a privately-held holding company which has two classes of common stock outstanding: Class A and Class B shares. The two classes are identical e...
"Take Out" Bonuses Ruled Contributions to Capital
September 18, 2012 - Volume 6 Issue 179 Print Report
In the aftermath of Hurricane Andrew in 1992, a number of property and casualty insurers ceased writing and/or renewing windstorm insurance policies in Florida. In...
Non-Voting Preferred Stock Prevents Sec. 332 Liquidation
September 14, 2012 - Volume 6 Issue 178 Print Report
In 1962, the petitioner, HKP, paid $219,336 for all ofthe stock of PA, an Australian business corporation. HKP thenloaned PA the funds it needed to oper...
Club Member Not N.Y. Resident
September 13, 2012 - Bulletin Print Report
Petitioner, (P), is a domiciliary of New Jersey where he maintains a permanent place of abode. He commutes to his workplace in New York City and is present in New Y...
Massachusetts Changes Its Tune Regarding ITC Recapture
September 13, 2012 - Volume 6 Issue 177 Print Report
G.L. C. 63, Sec. 31A (Massachusetts) allows a credit against the corporate excise tax for manufacturing corporations and business corporations engaged primarily in...
Non-Qualified Preferred Stock
September 12, 2012 - Volume 6 Issue 176 Print Report
Quanex Corporation, (Q),realized substantial capital gain income from the disposition of the stock of several of its subsidiaries. In an attempt to shelter th...
The Liquidation Basis of Accounting
September 11, 2012 - Volume 6 Issue 175 Print Report
The Financial Accounting Standards Board, (FASB), has issued an Exposure Draft for a Proposed Accounting Standards Update (ASU) regarding Topic 205 (of the Accounti...
Sanofi Tenders for "CVRs"
September 10, 2012 - Bulletin Print Report
In connection with its acquisition of Genzyme Corporation, (G),in 2011, Sanofi, (S), issued to the G shareholders a combination of cash and contingent value r...
Transporting Water Produces Qualifying Income For MLP
September 10, 2012 - Volume 6 Issue 174 Print Report
X is a publicly traded partnership, (MLP or PTP). X engages in the transportation and processing of natural gas within the United States. &...
"Excess Servicing Spread" Is a Real Estate Asset
September 7, 2012 - Volume 6 Issue 173 Print Report
TP is a real estate investment trust, (REIT). Originators of mortgage loans often bundle and sell the loans. Buyers of the loans will either service the loans thems...
I.R.S. Rules on Milestone Payments and "Go Shop" Provisions
September 6, 2012 - Volume 6 Issue 172 Print Report
Two recent Chief Counsel Advice Memoranda address the tax issues surrounding nonrefundable"milestone payments" made to an investment banker in conne...
Accruing California State Taxes
September 5, 2012 - Volume 6 Issue 171 Print Report
Every year, Wells Fargo, (W), pays California state taxes for the privilege of doing business in California. The amount of the state taxes is calculated on the basi...
Hudson City and M&T Will Join Forces
September 4, 2012 - Bulletin Print Report
Hudson City Bancorp, (H), the parent of Hudson City Savings Bank, (HSB), willbe mergingwith and into Wilmington Trust Corporation, (WTC), a direct, whol...
Aggregated Dividends Can Be Extraordinary
September 4, 2012 - Volume 6 Issue 170 Print Report
On November 30th, W Corporation, W, purchased common stock in X Corporation, X, for $90 per share. On February 1st of the following year, X declared a dividend of $...
"Agriculture and Farming" West Virginia Style
August 31, 2012 - Volume 6 Issue 169 Print Report
HF is a North Carolina limited partnership that has invested in wooded lands in West Virginia, WV. Theoperations of HF are limited to (i) managing the timberl...
An Exchange of "Securities" is a Recapitalization
August 30, 2012 - Volume 6 Issue 168 Print Report
In 1937, the trustees of a trust under the will of Sigmund Neustadt exchanged their holdings of 20-year six percent debentures of PP, Inc., (PP), for a like face amou...
Plan Distributions Are Taxed to the "Distributee"
August 29, 2012 - Volume 6 Issue 167 Print Report
After his father's death, DN, a minor, was paid funds held in his father's 401(k) retirement account. DN acknowledges th...
AOL Makes Good On Its Promise To Return Cash To Shareholders
August 28, 2012 - Bulletin Print Report
In June, 2012, AOL, Inc., (AOL) sold over 800 patents to Microsoft Corporation, (M),and granted (M) a non-exclusive license with respect to its retained paten...
Sub's Dual Status Does Not Prevent Worthless Stock Deduction
August 28, 2012 - Volume 6 Issue 166 Print Report
H Corporation, (H), owns all of the stock of X Corporation, (X), and the latter owns all of the stock of Y Corporation, (Y). Y, in turn, owns all of the stock of F...
The Same Property Can Be Taxed Twice
August 27, 2012 - Volume 6 Issue 165 Print Report
VM is a Florida LLC that operates 46 Wendy's restaurants in Tennessee. All persons "doing business" in that state must pay thefranchise tax, annuall...
Carrying On a Trade or Business
August 24, 2012 - Volume 6 Issue 164 Print Report
Oddly, the concept of "carrying on a trade or business", a phrase that appears in the Internal Revenue Code scores of times, has never been definitively e...
Special Dividends Picking Up Steam?
August 23, 2012 - Bulletin Print Report
As the end of the year approaches and the "Bush tax cuts" near their expiration date, we would expect, as we saw the last time (the last half of 2010)&nbs...
Wife Not Liable for Husband's Pre-Marriage Tax Deficiencies
August 23, 2012 - Volume 6 Issue 163 Print Report
The petitioner, (P), was recently married to X. P has no tax debts owedto the New York State Department of Taxation and Finance. However, Xis the subjec...
Refco Executive Denied N.J. Tax Refund
August 22, 2012 - Volume 6 Issue 162 Print Report
On March 15, 1999, Mr. JosephMurphy, (M), joined Refco, Inc., (R), as the President of one of its subsidiaries. R and its subsidiaries constituted a comm...
Aetna Will Acquire Coventry in a Fully Taxable Transaction
August 21, 2012 - Bulletin Print Report
Aetna, Inc., (A) and Coventry Health Care, Inc., (C), have announced a business combination in which A will acquire the stock of C in exchange for consideration con...
Illinois Trader Successfully Redomiciles to Florida
August 21, 2012 - Volume 6 Issue 161 Print Report
Plaintiffs,Mr. and Mrs. C,weremarried 46 years ago and began living in Illinois, where Mr. C worked as a self-employed trader at the CBOE until 19...
New Segment Rates Will Reduce Pension Underfunding
August 20, 2012 - Bulletin Print Report
Sec. 430 of the Internal Revenue Code specifies the "minimum funding requirements" that generally apply to single-entity defined benefit pension plans pur...
Foreign Income Inclusions Constitute Qualifying Income for a REIT
August 20, 2012 - Volume 6 Issue 160 Print Report
TP has elected to be treated as a real estate investment trust (REIT). TP is an "umbrella" REIT (UPREIT): it conducts substantially all of its business th...
"In-Service" Pension Distribution Exempt From New York Tax
August 17, 2012 - Volume 6 Issue 159 Print Report
The petitioner is an employee of the United States Postal Service and is a long-timeparticipant in the Federal Employees' Retirement System. The petitioner, a...
The Implications for Liberty Media of a Sirius "Special Dividend"
August 16, 2012 - Bulletin Print Report
Apparently, Liberty Media, (LM), the owner of approximately 48 percent of the stock of Sirius XM Radio, Inc., (S), has expressed an interest in recouping a portion,...
Sara Lee's Restructuring Gets I.R.S. Seal of Approval
August 16, 2012 - Volume 6 Issue 158 Print Report
Distributing, (D), which is undoubtedly Sara Lee Corporation, (SLC), is a widely-held publicly traded State A corporation with a single class of common stock outstand...
Trade or Business Not Actively Conducted for Five Years
August 15, 2012 - Volume 6 Issue 157 Print Report
Insurance, (I), is a corporation engaged since 1948 in the business of selling insurance. In addition to the insurance business, I had also engaged, until January,...
Comverse Makes Good On Its Intention to Restructure
August 14, 2012 - Bulletin Print Report
Comverse Technology, Inc., (CTI), is a holding company which owns the stock of Comverse, Inc., (CNS), and, on a fully-diluted basis, approximately 56 percent of the...
Pfizer To Divest Animal Health
August 14, 2012 - Bulletin Print Report
Pfizer, Inc., (P), has announced its intention to divest its animal health business. Step 1 of the divestiture process will be an IPO of Class A shares of the P sub...
Closing Short Sales At Year-End---Proceed With Caution
August 14, 2012 - Volume 6 Issue 156 Print Report
In January of Year 1, T directs its broker to borrow 100 shares of XYZ Corporation, (XYZ), stock and sell the shares in the market ("the short sale"). <...
Fannie Mae and Freddie Mac Are Exempt From Excise Taxes
August 13, 2012 - Bulletin Print Report
The District of Columbia, (DC), imposes a tax when a deed that conveys title to real property or a security interest instrument is submitted for recordation. This &...
When Must A Dependent's Citizenship Exist?
August 13, 2012 - Volume 6 Issue 155 Print Report
Petitioners have been married since 1990. C is a U.S. citizen. F, her husband, was born in Israel and is not a citizen of the U.S., nor has he ever resided in the U...
REIT's Income From Granting Easements is "Good" Income
August 10, 2012 - Volume 6 Issue 154 Print Report
On Date 1, the taxpayer, (TP), a REIT, purchased "the Property" through a qualified REIT subsidiary and has operated the Property as a rental property sin...
Corrections Corporation and Geo Group REIT Update/Visteon's NOLs
August 9, 2012 - Bulletin Print Report
Each of Corrections Corporation of America, (CCA), and The Geo Group, Inc., (GG), recently announced the taking of decisive stepswhich should leadto the t...
Ruling Addresses Warrants and "Deductible" Liabilities in a Spin-Off
August 9, 2012 - Volume 6 Issue 153 Print Report
Where a transaction qualifies as a reorganization, the transferor of property recognizes neither gain nor loss on the receipt of "non-recognition" propert...
Sales Proceeds Need Not Emanate From Vendee
August 8, 2012 - Volume 6 Issue 152 Print Report
A trust, (T), owned 250 shares of MS, Inc., (MS), less than one percent of the outstanding stock. 97 percent of the outstandingstock was owned by Mr. HC, (HC)...
Who Is "Entitled" To BAH's Special Dividend?
August 7, 2012 - Bulletin Print Report
On August 1, 2012, Booz Allen Hamilton Holding Corporation, (BAH), declared (in addition to its regular quarterly dividend) a special cash dividend in the amount of...
Regulatory Example Merely Clarifies Existing Law
August 7, 2012 - Volume 6 Issue 151 Print Report
The taxpayer (PT) is a Delaware corporation that maintains its principal place of business in Connecticut. PT is a subsidiary of P Corporation (P). PT is engaged in...
Target's Insolvency Does Not Prevent Reorganization
August 6, 2012 - Volume 6 Issue 150 Print Report
Norman Scott, (NS), and his wife, (JS), owned approximately 99 percent of the common stock of Norman Scott, Inc., (NSI), Continental Corporation, (C), and River Oak...
FRS--A Partial Liquidation?
August 6, 2012 - Bulletin Print Report
On May 17, 2012, Frisch's Restaurants, Inc., (FRS), announced the closing of the sale of all of its Golden Corral, (GC), operations and real estate. The purchase pr...
Identifying the "Custodial" Parent
August 3, 2012 - Volume 6 Issue 149 Print Report
On her 2004 Federal income tax return, Ms. B (B) claimed two dependency exemption deductions; a child care tax credit; and a child tax credit. On his 2004 Federal i...
NCR Addresses Pension Deficit
August 2, 2012 - Bulletin Print Report
NCR Corporation, (N), whose pension plan "shortfall" (the amount by which its projected benefit obligation exceeds the value of plan assets) represents a...
Purchase Price Paid After Asset Is Fully Depreciated
August 2, 2012 - Volume 6 Issue 148 Print Report
In connection with its January 3, 1986 purchase of the magazine, Ladies' Home Journal, Meredith Corporation, (M), assumed certain contingent obligations of the sell...
Taxpayer Fails to Establish "Insolvency"
August 1, 2012 - Volume 6 Issue 147 Print Report
In November, 2007, petitioners' credit card company, Capital One, referred petitioners' delinquent account to an outside collection agency. The balance due, at the...
Can Tribune Spin-Off Its Newspaper Business?
July 31, 2012 - Volume 6 Issue 146 Print Report
Tribune Corporation, (TRB), recentlysecured approval to emerge from bankruptcy. In connection withits emergence, the stock of the reorganized corporatio...
PPG and Georgia Gulf Will Engage in an "RMT"
July 30, 2012 - Volume 6 Issue 145 Print Report
PPG Industries, Inc., (PPG), and Georgia Gulf Corporation, (GGC), have announced that PPG's commodity chemicals business will be acquired by GGC. However, the trans...
FASB To Ease "Impairment" Testing For Indefinite-Lived Intangibles
July 30, 2012 - Bulletin Print Report
The Financial Accounting Standards Board, (FASB), has released an Accounting Standards Update, ASU 2012-02, Testing Indefinite-Lived Intangible Assets for Impai...
District Court Denies Use of "Open Transaction" Doctrine
July 27, 2012 - Volume 6 Issue 144 Print Report
In 1995, plaintiffs formed the Trust which purchased five life insurance policies in 1996 from five different insurance companies. All of the policies were purchase...
ILFC Secures A Sec. 338(h)(10) Ruling From the I.R.S.
July 26, 2012 - Volume 6 Issue 143 Print Report
Parent, (P), owns all of the stock of Seller, (S). S, in turn, owns all of the common stock of Target, (T). T is engaged in Business C and owns numerous subsidiaries...
California's Attempt To Raise Corporate Taxes Ruled Ineffective
July 26, 2012 - Bulletin Print Report
Many years ago, in order to stave off federal encroachment on their taxing powers, state tax administrators and other state leaders drafted the Multistate Tax Compa...
"Collapsing" a Stock Acquisition and Prearranged Liquidation
July 25, 2012 - Volume 6 Issue 142 Print Report
In 1931, the petitioner, HTB, BOC, and SL organized TAC, Inc., (TAC), for the manufacture and sale of orthopedic appliances and artificial limbs. Each shareholder c...
Preventing "Loss Duplication"
July 24, 2012 - Volume 6 Issue 141 Print Report
The I.R.S. has always been concerned about the possibility that taxpayers might secure more than one tax deduction for a single economic loss. Certain provisions of...
Warrants Not a Second Class of Stock
July 23, 2012 - Volume 6 Issue 140 Print Report
X Corporation, (X), is an 'S' corporation. X has "a" shares of Class Avoting common stock outstanding which are allowned by Mr. A and has ...
Madoff Victim Scores Estate Tax Refund
July 20, 2012 - Volume 6 Issue 139 Print Report
Mr. W died testate on May 27, 2006. His Estate filed New Jersey Form IT-Estate on or about July 30, 2007. On the Form, the executors reported the date of death valu...
Income From "Qualifying Government Bonds" Not Passive
July 19, 2012 - Volume 6 Issue 138 Print Report
Sec. 1297(a) provides that a Passive Foreign Investment Company, (PFIC), an unfavorable designation, is any foreign corporation if 75 percent or more of its gross i...
U-Haul Not Entitled to a Deduction for "Damages"
July 18, 2012 - Volume 6 Issue 137 Print Report
Certain members of the family controlling U-Haul Company of Oregon, (UH), sought to achieve greater liquidity in respect of their ownership interest in UH. These me...
Investing In an MLP Through a "Blocker" Corporation
July 17, 2012 - Bulletin Print Report
Tax-exempt organizations, such as pension trusts and I.R.A.'s, are nonetheless taxed on their "unrelated business taxable income." (UBTI). &n...
CPB's Acquisition of Bolthouse Provides Tax Benefits
July 17, 2012 - Bulletin Print Report
In an acquisition transaction, a purchaser's objective, at leastfrom a tax viewpoint, is to secure a "cost" basis in the target's assets. Such a cos...
Forced Sale of Stock Is an "Involuntary Conversion"
July 17, 2012 - Volume 6 Issue 136 Print Report
On Date 1, "the Investors" purchased "n%" of the stock of X Corporation, (X). On Date 2, Government, (G), passed Act 1. As part of this legislat...
I.R.S. Moves to Curtail Tax-Free Repatriation of Foreign Earnings
July 16, 2012 - Volume 6 Issue 135 Print Report
Enterprising taxpayers have found that the I.R.S. has little tolerance for schemes that enable U.S. corporations to access the earnings of their foreign subsidiarie...
eBay Escapes Windy City Tax
July 13, 2012 - Volume 6 Issue 134 Print Report
eBay, Inc. owns and operatesthe website, www.ebay.com, which acts as a website for millions of customers, worldwide, who wi...
Alimony Deduction Requires a "Cash Payment"
July 12, 2012 - Volume 6 Issue 133 Print Report
The petitioner, (WR), and his ex-wife divorced in 2007. The divorce court found that WR was due a $69,000 "property equalization payment" from his ex-wife...
Marital Trust Not Disregarded
July 11, 2012 - Volume 6 Issue 132 Print Report
The petitioner, (DD), in form, sold the stock of DDR, Inc., (DDR), a family holding company. The I.R.S. contended that, in substance, DD sold (or,more accurat...
Correcting a "Defective" Consolidated Income Tax Return
July 10, 2012 - Volume 6 Issue 131 Print Report
On Date 2, Year 1, all of the stock of P corporation, (P), was issued to a group of investors ("the Investors"). As of Date 2, Year 1, all of the common s...
HGSI's "Financial Assets" Are Valuable
July 9, 2012 - Bulletin Print Report
Human Genome Sciences, Inc., (HGSI), has rejected an offer from GlaxoSmithKline, Plc, (GSK) to pay $13 for each HGSI share. Its reasons for rejecting the offer were...
"Mobile" Sales Within Illinois Establish "Nexus"
July 9, 2012 - Volume 6 Issue 130 Print Report
The taxpayer's (TP) total sales are $51 million, with some$490,000 thereofin Illinois (I). Of that amount, some 8 percent, or $33,000, is made on a &quo...
The Risks and Rewards of a Sec. 83(b) Election
July 6, 2012 - Volume 6 Issue 129 Print Report
Sec. 83(a) provides that if, in connection with the performance of services, property is transferred to any person (other than the person for whomsuch service...
Why Isn't MSFT's Goodwill Impairment Charge Tax-Deductible?
July 5, 2012 - Bulletin Print Report
Microsoft Corporation, (MSFT), recently announced that it will take a non-cash, non-tax deductible income statement charge for the fourth quarter o...
Calculating the "Debt/Equity" Ratio
July 5, 2012 - Volume 6 Issue 128 Print Report
Mr. B owned 25 percent of the stock of F Corporation, (F), and his father-in-law, Mr. H, owned the remainder of the stock. &nbs...
Congress Reduces Pension Liabilities With The Stroke Of A Pen
July 3, 2012 - Bulletin Print Report
In general, employers are entitled to deduct from taxable incomethe amount of the contributions such employer makes to a pension plan it maintains for the ben...
Business Purpose Need Not Be Achieved
July 3, 2012 - Volume 6 Issue 127 Print Report
D Corporation, (D), is a publicly-traded corporation that conducts Business A and Business B directly and Business C indirectlythrough its wholly-owned subsid...
Marketing and Service Income is Qualifying Income for an MLP
July 2, 2012 - Bulletin Print Report
X is a limited partnership. X will earn income from the "extractive logistics business" and the refined products blending business. &nb...
Late Election Cannot Be Salvaged By "Substantial Compliance"
July 2, 2012 - Volume 6 Issue 126 Print Report
The taxpayer (K) began working for Infospace (I)in 1996. K received stock options as part of his compensation package. K began buying and selling securities i...
"Basis of Indebtedness" & Congress Poised to Reduce Pension Liabilities
June 29, 2012 - Volume 6 Issue 125 Print Report
Under Sec. 1366(d)(1), the aggregate amount of losses and deductions that a shareholder takes into account for any taxable year cannot exceed the sum of the shareho...
Loral's Sale of SSL Will Be Accompanied By a Special Distribution
June 28, 2012 - Bulletin Print Report
Loral Space & Communications, Inc., (L), has entered into an agreement to dispose of its subsidiary, Space Systems/Loral, Inc., (SSL), in a transaction in which...
Expanding Access to Credit Is a "Good" Business Purpose
June 28, 2012 - Volume 6 Issue 124 Print Report
The shares of Corporation P, (P), are widely-held and publicly-traded. P has operated a retail lumber yard throughout the past five years....
Tax Accounting for Stock-Based Compensation
June 27, 2012 - Volume 6 Issue 123 Print Report
Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation , the issuance of which was accompanied by substantial controve...
Are Floating Gaming Facilities REIT-Eligible?
June 26, 2012 - Volume 6 Issue 122 Print Report
The Act authorized the Commission to issue licenses for the express purpose of riverboat gambling in State. On Date 2, the Commission issued a license to TP for a r...
Intercompany Advance Ruled Indebtedness
June 25, 2012 - Volume 6 Issue 121 Print Report
NAGP, (N), was a Nevada general partnership and elected to be treated as a corporation for Federal tax purposes. ScottishPower, (SP), indirectly owned all of N. SP...
Fifth Circuit Finds That U.K. "Windfall Tax" Is Creditable
June 22, 2012 - Volume 6 Issue 120 Print Report
Entergy Corporation, (E), owns London Electricity, (LE), one of 32 companies the U.K. privatized through the '80s and '90s. The Windfall Tax was designed to address...
I.R.S. Disappoints Investors in G.M.'s "GUC" Trust
June 21, 2012 - Bulletin Print Report
Investors in the General Motors "GUC" Trust ("the trust")have recently learned that the I.R.S. regards the trust as a "Disputed Owner...
RICs Use "Blockers" To Transform Commodity Income
June 21, 2012 - Volume 6 Issue 119 Print Report
Fund 1 will elect to be a Regulated Investment Company, RIC, under Sec. 851 of the Internal Revenue Code. Qualification as such a RIC will enable the entity to secu...
Sale vs. Contribution to Capital
June 20, 2012 - Volume 6 Issue 118 Print Report
Mrs. H owned 25 percent of the stock of HI, Inc., HI, and her husband, Mr. H, owned 64 percent of such stock. In Februar...
Shares In a Money Market Fund Constitute "Cash and Cash Items"
June 19, 2012 - Volume 6 Issue 117 Print Report
R Corporation, (R), has elected to be taxed as a real estate investment trust, (REIT). During the first quarter of its 2011 taxable year, R purchased shares of F, a...
Is "COD" Income "Qualifying Income" For an MLP?
June 18, 2012 - Bulletin Print Report
Sec. 61(a)(12) of the Internal Revenue Code provides that gross income includes income from discharge of indebtedness ("COD" income). &...
The I.R.S. Drops Another Sec. 269 Case
June 18, 2012 - Volume 6 Issue 116 Print Report
The petitioners, MM and CB, were equal owners of all the stock in "the operating company" and in "the management company." In 1994, petitioners...
Tax-Free "Merger" of a Corporation and a Partnership
June 15, 2012 - Volume 6 Issue 115 Print Report
Only corporations can engage in reorganizations . Accordingly, a combination of a corporation and a partnership cannot constitute a reorganization: a partne...
Out-of-State Licensor Not Engaged in Business In West Virginia
June 14, 2012 - Volume 6 Issue 114 Print Report
ConAgra Foods, Inc., (CAF), owned a large number of trademarks and trade names in the food products industry. In 1997, CAF established ConAgra Brands, Inc., (CAB),...
JNJ's Tax-Efficient Repatriation
June 13, 2012 - Bulletin Print Report
Johnson & Johnson, (JNJ) has received regulatory approval for its proposed acquisition of Synthes, Inc., (S). Each outstanding share of S common stock will be...
Inventor Denied Capital Gains Relief
June 13, 2012 - Volume 6 Issue 113 Print Report
The petitioner, BF, invented a method and apparatus for transferring fluid from a vial into a syringe without using a needle ("needleless syringe"). BF ap...
Avoiding Foreign Taxes as a Business Purpose for a Spin-Off
June 12, 2012 - Volume 6 Issue 112 Print Report
P Corporation, P, owned all the stock of FX Corporation, FX, which it had held for more than five years. FX is incorpora...
Transfer Restrictions Do Not Create "Substantial Risk of Forfeiture"
June 11, 2012 - Volume 6 Issue 111 Print Report
Sec. 83(a)of the Internal Revenue Codeprovides that if, in connection with the performance of services, property is transferred to any person...the exce...
I.R.S. Moves Forcefully To Inhibit "Expatriations"
June 8, 2012 - Volume 6 Issue 110 Print Report
Over the pastseveral months,a group ofU.S. companies, most recently Eaton Corporation,have announced "expatriation" transactions....
Contingent Liabilities and Sec. 351
June 7, 2012 - Volume 6 Issue 109 Print Report
P Corporation, P, is engaged in various ongoing businesses, one of which involves the operation of a manufacturing plant ("the Manufacturing Business"). T...
Iron Mountain Announces Intent to Explore REIT Conversion
June 6, 2012 - Bulletin Print Report
After extensive deliberations lasting almost a year, Iron Mountain, Inc., (IRM), has announced that its Board has unanimously approved a plan for the company to pur...
"Summer Associate" Not Engaged in a Trade or Business
June 6, 2012 - Volume 6 Issue 108 Print Report
Petitioner, (P), isa citizen of Belgium. In June, 1997, he graduated from KU, in Belgium, where he earned a law degree. After graduation, and until August, 19...
Determining a Partner's Insolvency
June 5, 2012 - Volume 6 Issue 107 Print Report
X, an investor other than a partnership, and H, a corporation, are equal partners in PRS, a partnership. In Year 1, PRS...
Did the I.R.S. "Overreach" in Hewlett-Packard?
June 4, 2012 - Volume 6 Issue 106 Print Report
It is rare for the I.R.S. to argue that an investment in the form of equity is, in substance and reality, indebtedness. It has taken this position, with a singular...
GET Announces Plans To Convert To REIT Status
June 1, 2012 - Bulletin Print Report
Gaylord Entertainment Co., (GET), hasannounced its intention to become a Real Estate Investment Trust, (REIT), effective for the taxable year beginning on Jan...
Postpetition Taxes Not "Incurred" By Chapter 12 Estate
June 1, 2012 - Volume 6 Issue 105 Print Report
In 1986, Congress enacted Chapter 12 of the Bankruptcy Code, Sec. 1201 et seq. , to allow farm debtors with regular annual income to adjust their debts. <...
Depreciating (Not Deprecating) Matt Kemp
May 31, 2012 - Volume 6 issue 104 Print Report
On May 1, 2012, Guggenheim Baseball Management, LLC, (GBM), completed the purchase, for a reported $2.15 billion, of the Los Angeles Dodgers baseball franchise. The...
Couple Not Eligible For Home Sale Gain Exclusion
May 30, 2012 - Volume 6 Issue 103 Print Report
In January, 2002, the petitioners, Mr. and Mrs. Chiarito, started a catering business called "Goodfellas Catering". Because the localhealth departme...
"Placed in Service"
May 29, 2012 - Volume 6 Issue 102 Print Report
The taxpayer, Mr. Brown, (B), was employed full-time as an electrical engineer. However, he harbored a desire to engage in the recordedmusic business and, fin...
Senior Living Community Doubles as "Health Care Facility"
May 25, 2012 - Volume 6 Issue 101 Print Report
TP is a Real Estate Investment Trust, (REIT). TP intends to enter into a joint venture with C establishing Entity, (E). TP will contribute property and cash to E an...
DVA Will Enjoy a Basis "Step-Up"
May 24, 2012 - Bulletin Print Report
Most acquisitions are structured as purchases of stock. The acquiring entity purchases the stock of the target entity from the shareholders of such target. The buyer's ba...
The Perils of "Thin Capitalization"
May 24, 2012 - Volume 6 Issue 100 Print Report
On September 27, 1962, New Plantation, NP, obtained $150,000 from B for which it issued 6.5 percent debentures. These debentures were subordinated to all other inde...
ORI Is Planning a Taxable Spin-Off
May 23, 2012 - Bulletin Print Report
Old Republic International Corporation, (ORI), recentlyannounced a two-part plan to separate from its main business its poorly-performing mortgage guaranty an...
Gift of Stock Not an "Assignment" of Impending Dividend Income
May 23, 2012 - Volume 6 Issue 99 Print Report
In January, 1942, EB owned 942 shares of common stock and 698 shares of seven percent cumulative preferred stock in GF Corporation, GF. His son, LB, owned 176 share...
Eaton Will Expatriate
May 22, 2012 - Bulletin Print Report
Eaton Corporation, (ETN), and Cooper Industries plc, (CBE), announced a definitive agreement pursuant to which ETN will acquire CBE. In connection with the acquisit...
Goodwill Belongs To a Holding Company's Operating Subsidiaries
May 22, 2012 - Volume 6 Issue 98 Print Report
SCT is a publicly traded Delaware corporation with its principal place of business in Pennsylvania, (P). SCT's activities consist of providing corporate "overs...
TRB Secures Favorable I.R.S. Ruling on Debt Issuance Costs
May 21, 2012 - Bulletin Print Report
TP, who we believe to be Tribune Corporation, converted from a 'C' corporation to an 'S' corporation. On Date 3, TP file...
NOL and COD Primer
May 21, 2012 - Volume 6 Issue 97 Print Report
NOLs NOLs are defined as the excess, if any, of the deductions allowable under Chapter 1 of the Internal Revenue Code over the gross income. See S...
When Is Depreciation "Allowable"
May 18, 2012 - Volume 6 Issue 96 Print Report
In 1984, Congress enacted theForeign Sales Corporation, (FSC), regime. A qualifying FSC was permitted to treat roughly 30 percent of its "foreign trade i...
Sears Holdings Announces Partial Spin-Off of Sears Canada
May 17, 2012 - Bulletin Print Report
Sears Holdings Corporation, (SHLD), which earlier in the year announced its intention to distribute warrants to purchase stock of one of its subsidiaries to its sha...
Stock Sale Gain Is "Business Income" - Part II
May 17, 2012 - Volume 6 Issue 95 Print Report
On March 17, 1994, Crane Corporation (C) acquired the stock ofELDEC (E). E sought a "strategic partnership" with POWEC (P).In July, 1995, ...
Redemption Rights Are Not "Other Property"
May 16, 2012 - Volume 6 Issue 94 Print Report
T Corporation, T, was acquired by a subsidiary of P Corporation, P, in a transaction intended to qualify as a reorganization under Sec. 368(a)(1)(A) and Sec. 368(a)...
Can Liberty Divest Sirius Tax Efficiently?
May 15, 2012 - Volume 6 Issue 93 Print Report
Liberty Media, (L), though its Liberty Radio LLCunit, currently owns approximately 45 percent of the stock of Sirius XM Radio Inc., (SIRI). It has owned&...
When Is a Short Sale Consummated?
May 14, 2012 - Volume 6 Issue 92 Print Report
In March, 1997, the taxpayer, TP,entered intoa short sale of 100 shares of XYZ stock. Toaccomplish this, TP borrowed 100 shares from Broker A and...
Relocation Payment Is a Contribution to Capital
May 11, 2012 - Volume 6 Issue 91 Print Report
Utility, U, is in the business of generating, transmitting, and distributing electric energy. County, C, decided to proceed with "project". The purpose of...
The "Step-Transaction" Doctrine Has Its Limits
May 10, 2012 - Volume 6 Issue 90 Print Report
VCC Corporation, VCC, owns 100 percent of the stock of FHV Corporation, FHV. VCC owns 31 percent of the stock of TP Corporation, TP, and FHV owns 62 percent of such...
Will Validus Holdings' Stock Buyback Give Rise to Dividend Income?
May 9, 2012 - Bulletin Print Report
Validus Holdings Ltd., (VHL), is a Bermuda-based insurance holding company whose operations are conducted exclusively through its wholly-owned Bermuda subsidiaries,...
Redemption Agreement Does Not Create a Second Class of Stock
May 9, 2012 - Volume 6 Issue 89 Print Report
Company, C, was taxable as a 'C' corporation from its incorporation until Date 5. C elected to be treated as an 'S' corporation effective Date 5.  ...
Investment Certificate is an "Annuity"
May 8, 2012 - Volume 6 Issue 88 Print Report
The taxpayer (TP) will invest money in "the account". The amount thatTP can invest is limited by "theCertificate". In exchange for a...
Fixing the Worthlessness of a Consolidated Subsidiary
May 7, 2012 - Bulletin Print Report
M is a holding company and is the common parent of a consolidated group, which includes member S1. In Year A, the M grou...
E&P Transfers in Sec. 381 Transactions
May 7, 2012 - Volume 6 Issue 87 Print Report
In order to make it clear that earnings and profits (E&P)are only transferred from one corporation to another corporationin limited circumstances, t...
"Owner-Occupied" Real Estate and Spin-offs
May 4, 2012 - Volume 6 Issue 86 Print Report
MD Corporation, MD, operated a trucking business. It owned all of the stock of I Corporation, I, M Corporation, M, and R Corporation, R. &n...
CXW Is Assessing REIT Conversion
May 3, 2012 - Bulletin Print Report
Corrections Corporation of America, (CXW), announced, on May 3, 2012, that it is "assessing the feasibility of a Real Estate Investment Trust, (REIT) conversio...
Separation Solves "Market Perception" Problem
May 3, 2012 - Volume 6 Issue 85 Print Report
D Corporation, D, is a publicly-held corporation that conducts a pesticides business. C Corporation, C, is a wholly-owned subsidiary of D that conducts a baby foods...
"Fair Market Value" Includes Sales Tax
May 2, 2012 - Volume 6 Issue 84 Print Report
On June 9, 2004, a fire broke out in the kitchen of the rented house at which H and her children lived. The fire damaged or destroyed some of the family's personal...
ETP and SUN Are Combining
May 1, 2012 - Bulletin Print Report
In a deal that is almost a carbon copy, at least structurally, to its recent acquisition of SUG, Energy Transfer Partners, L.P., (ETP), will acquire, by means of a...
Insurance Proceeds Not "Gross Income From Mining"
May 1, 2012 - Volume 6 Issue 83 Print Report
The taxpayers are partners in a partnership engaged in the mining, processing, and sale of coal. On January 17, 1953, certain equipment belonging to the partnership...
Being "On Call" Is Not Performing Services
April 30, 2012 - Volume 6 Issue 82 Print Report
Mr. James F. Moss, JM, works at a nuclear power plant in Hope Creek, N.J. operated by PSE&G. During 2007, JM was employed full time, 40 hours per week, for a to...
New NY Resident Hit With Capital Gains Tax
April 27, 2012 - Volume 6 Issue 81 Print Report
Petitioner, (P), purchased a home in Greenwich, Connecticut on April 27, 1973. In January, 2003, P listed thehome for sale. In early September, 2004, an offer...
Supreme Court Clarifies When Amount is "Omitted" From Gross Income
April 26, 2012 - Bulletin Print Report
Ordinarily, the Government must assess a deficiency against a taxpayer within three years after the return is filed. See Sec. 6501(a). The three-year period is extend...
Spin-off Primer
April 26, 2012 - Volume 6 Issue 80 Print Report
Spin-off requirements (Sec. 355 of the Internal Revenue Code) 1. Control Requirement-Immediately before the distribution, the distributing corporation, (DC), must &...
Ralcorp's Plans For Its Retained Post Shares Revealed in Ruling
April 25, 2012 - Volume 6 Issue 79 Print Report
D,undoubtedly Ralcorp Holdings, Inc., isidentified in LTR 201216023, January 19, 2012, as a widely held, publicly traded State A corporation with a sing...
Will the New Sec. 1248 Regulations Accomplish Their Stated Goal?
April 24, 2012 - Bulletin Print Report
Sec. 1248(a) of the Internal Revenue Code provides that if a U.S. person sells or exchanges stock in a foreign corporation, and such person owns...10 perce...
"Nominal" Shares and 'D' Reorganizations
April 24, 2012 - Volume 6 Issue 78 Print Report
In order for a transaction to qualify as a reorganization within the meaning of Sec. 368(a)(1)(D) (a 'D' reorganization), one corporation must transfer all or part...
Sharing a Trademark With an In-State Affiliate Creates Nexus
April 23, 2012 - Bulletin Print Report
Barnesandnoble.com, (TP), is an LLC organized under the laws of the State of Delaware with all of its operations, facilities, and personnel located outside of the S...
Investment Funds Treated as an "Entity"
April 23, 2012 - Volume 6 Issue 77 Print Report
TP is the U.S. parent of an affiliated group of foreign and domestic corporations. On Date 1, TP and certain of its domestic subsidiaries filed voluntary petitions...
Distributing Partnership Interests
April 20, 2012 - Volume 6 Issue 76 Print Report
S is an indirect, wholly-owned subsidiary of TP. S contributed all of its assets, except for certain working capital and Assets 3-5, for itsinterest in a part...
SXC and Catalyst Agree to Merge
April 20, 2012 - Bulletin Print Report
SXC Health Solutions Corp., (SXC), a corporation organized under the laws of Canada, and Catalyst Health Solutions, Inc., (CHS), a domestic corporation, have entere...
Settling a Put Option With Borrowed Shares
April 19, 2012 - Volume 6 Issue 75 Print Report
On Date 1, TP entered into four share option transactions ("Transactions"). Each Transaction was styled as a "collar" that consisted of European...
Entrepreneur Denied Bad Debt Deduction
April 18, 2012 - Volume 6 Issue 74 Print Report
The taxpayer, (J), has worked as an independent manufacturers sales representative for furniture and lighting manufacturers, including DIA.  ...
Liabilities Can Constitute "Ownership Interests"
April 17, 2012 - Volume 6 Issue 73 Print Report
The taxpayer, TP, a loss corporation, had outstanding voting common stock, non-voting preferred stock, subordinated notes,six percent junior subordinated debe...
Theft Loss Requires "Privity" Between Victim and Perpetrator
April 16, 2012 - Volume 6 Issue 72 Print Report
Taxpayers, husband and wife, each invested in Investment Fund 1, an investment fund managed indirectly by Fund Manager 1 and Fund Manager 2 ("the fund managers...
Cash in Lieu of Fractional Shares
April 13, 2012 - Volume 6 Issue 71 Print Report
On July 26, 1954, the taxpayers, shareholders of a domestic C corporation, in exchange for all of their stock, were each issued 1,595 shares of voting common stock...
Jazz Goes to Ireland
April 12, 2012 - Volume 6 Issue 70 Print Report
On January 18, 2012, Jazz Pharmaceuticals, Inc., (JPI), a U.S. corporation,was acquired by Azur Pharmaceuticals Ltd., (AP), a corporation organized under th...
Sony's Losses Precipitate Valuation Allowance
April 11, 2012 - Bulletin Print Report
Sony recently announced its intention to report a substantial loss for the fourth quarter of its March 31,2012 fiscal year. Much of this loss is "below t...
Spin-Off Reduces State and Local Taxes
April 11, 2012 - Volume 6 Issue 69 Print Report
P, a publicly traded corporation organized under the laws of State 1, owns all the stock of D, a State 2 corporation. D...
When Is a Loss Reimbursed?
April 10, 2012 - Volume 6 Issue 68 Print Report
The taxpayer, TP, is a regulated utility which operates in"State". In Year 1, State was hit by "X" (some sort of natural disaster). TP incur...
Colorado's "Amazon" Law Ruled Unconstitutional
April 9, 2012 - Bulletin Print Report
A Colorado law ("the Act")requires retailers that sell products to customers in Colorado, but do not collect and remit sales tax on these transactio...
Earnings and Profits Differs From "Book" Net Income
April 9, 2012 - Volume 6 Issue 67 Print Report
The petitioners owned publicly traded shares in five Canadian entities through a brokerage account maintainedwith Charles Schwab. Petitioners held shares in C...
"Put Option" Eliminates Dividends Received Deduction
April 5, 2012 - Volume 6 Issue 66 Print Report
TP is a domestic corporation and is the common parent of an affiliated group that files a consolidated income tax return.  ...
"LIFO Conformity"
April 4, 2012 - Volume 6 Issue 65 Print Report
The taxpayer, (TP), a C corporation, owns all of the stock of Subsidiary, (S). S uses theLIFO methodto account for its inventory for tax purposes.
Alternative Fuel Mixture Credits--The Gift That Keeps on Giving
April 3, 2012 - Bulletin Print Report
Tax Notes (see Black Liquor Highlights Unresolved Excise Tax Questions , byMatthew Dalton, 4/3/12) is reporting that S.E.C. filings from comp...
Private Delivery Company Not a "Common Carrier"
April 3, 2012 - Volume 6 Issue 64 Print Report
The taxpayer, (YB), publishes and distributes telephone directories to New York State residents and businesses free of charge. YB arranges through various dis...
Competitive Advantage Not Prerequisite to Imposition of UBIT
April 2, 2012 - Volume 6 Issue 63 Print Report
The taxpayer, (T), is a trust that was formed to financially support Cornell University. The I.R.S. granted T's application for tax-exempt status under Sec. 501(c)(...
Acquirer Can Remit "Parachute" Payments
March 30, 2012 - Volume 6 Issue 62 Print Report
Mr. H served as Chairman of the Board of each of two banks: CSB and IBT. On January 28, 1987, Mr. H and CSB entered into a contract in which Mr. H agreed to provide...
How Are "Termination Fees" Taxed? (In the U.S. and Canada)
March 29, 2012 - Volume 6 Issue 61 Print Report
On Date 1, TP entered into an Agreement and Plan of Merger with B to acquire the stock of B for a combination of cash, stock, and debt assumption. Under the terms o...
TYC Announces "Reverse Morris Trust" Transaction
March 29, 2012 - Bulletin Print Report
We now know that one of the companies whose stock Tyco International, Ltd., (TYC), will be distributing in connection with its previously announced restructuring wi...
Expedia's Spin-Off of TripAdvisor Appears to Escape Sec. 355(e)
March 28, 2012 - Volume 6 Issue 60 Print Report
D Corporation, (D), which is Expedia, Inc., has three classes of stock outstanding: (i) Common Stock, (ii) Class B Common Stock, and (iii) Preferred Stock....
Can Liberty "Monetize" Its Expedia Holdings Tax-Free?
March 27, 2012 - Bulletin Print Report
Liberty Interactive, Inc., (L), owns stock possessing 60 percent of the voting power and 25 percent of the value of the outstanding stock of Expedia, Inc., (E). E r...
Sale of Rights to Future Income vs. Loan
March 27, 2012 - Volume 6 Issue 59 Print Report
X Corporation, (X), designs, manufactures, markets, and services Equipment. X entered into Agreements with financial institutions ("lenders"). These Agree...
How Valuable Are Great Wolf's NOLs?
March 26, 2012 - Volume 6 Issue 58 Print Report
Apollo Global Management, LLC, (APO),has initiateda tender offer for the shares of Great Wolf Resorts, Inc., (WOLF). The offer price is $5 per share for...
Expense Reimbursements Are Not Always Gross Income
March 23, 2012 - Volume 6 Issue 57 Print Report
The "Department", a municipal agency,is obligated to provide transportation services to eligible "City" students. The Department is develo...
When Does Holding Period Commence?
March 22, 2012 - Volume 6 Issue 56 Print Report
If stock acquired pursuant to the exercise of an incentive stock option is "prematurely" disposed of, the taxpayer will be charged with ordinary compensat...
Right of First Refusal Does Not Reduce Gift Value
March 21, 2012 - Volume 6 Issue 55 Print Report
In 2000, 2001, and 2002, the Fishers transferred 4.762 percent membership interests in Good Harbor Properties, LLC, (GH), to each of their seven children. <...
Part Debt/Part Equity
March 20, 2012 - Volume 6 Issue 54 Print Report
Although the conventional wisdom is that a "hybrid" instrument is either all debt or all equity, there is one case that indicates that such an instrument...
Furner Not Limited To One-Year Hiatus
March 19, 2012 - Volume 6 Issue 53 Print Report
TP was employed as the principal ofthe school in "X". TP had aM.A. degree.He did not renew his contractat the close of the 1967/19...
A Violation of Sec. 7206 is an "Aggravated Felony"
March 16, 2012 - Volume 6 Issue 52 Print Report
Petitioners,husband and wife,are citizens of Japan who have been "lawful permanent residents" of the U.S. since June 21, 1984. &n...
Tax Court Rules That "Shelving" Is Real Property
March 15, 2012 - Volume 6 Issue 51 Print Report
AST established AS32, a partnership, in 2003, toacquire for $10,250,000,the Garden House Apartments ("Garden House") in Mesquite, Texas. Garde...
Senate Moves To Restrict "Leveraged" Spin-Offs
March 15, 2012 - Bulletin Print Report
Buried in the recesses of the "Moving Ahead for Progress in the 21st Century Act," (S.1813), the so-called "transportation bill" which passed th...
Spin-Off Falters On Business Purpose Requirement
March 14, 2012 - Volume 6 Issue 50 Print Report
Guy's Oil Company, (GO), was engaged in the business of operating a service station; conducted a fuel oil business; and owned real estate most of which was used in...
Sec. 501(c)(3) Organization Escapes Pension "Reversion" Tax
March 13, 2012 - Volume 6 Issue 49 Print Report
Petitioner, (P), is a non-profit corporation incorporated in New York in 1912. P is, and has been since the enactment of the income tax, exempt from Federal income...
No Deduction For Donation of Soon-to-be Destroyed Home
March 12, 2012 - Volume 6 Issue 48 Print Report
Taxpayers purchased lakefront property in Wisconsin. Not satisfied with the house that stood on the property, they decided to demolish it and build another....
Telecommuting Employee Subjects Corporation to N.J. CBT
March 9, 2012 - Volume 6 Issue 47 Print Report
T Corporation, (T), is incorporated in Delaware and has its offices in Maryland. The employee in question develops and writes software code from a laptop computer i...
WebMD Health Initiates Another Self-Tender Offer
March 8, 2012 - Bulletin Print Report
WebMD Health Corp., (WMD), has been buying back its stock, in relatively large increments, over the past several years. Since April 8, 2010, it appears that the com...
A "Reverse Mortgage" Is a "Real Estate Asset"
March 8, 2012 - Volume 6 Issue 46 Print Report
TP is a limited partnership. TP and Sponsor intend to engage in a "roll-up" transaction whereby a corporation, (N), will be formed that will qualify as a...
Sale or License?
March 7, 2012 - Volume 6 Issue 45 Print Report
On July 1, 1957, Mr. P and Mr. H were the joint owners of certain secret formulas and trade names which they had thenheld for more than six months. The formul...
Dispelling Cash Rich Split-Off Myths
March 6, 2012 - Volume 6 Issue 44 Print Report
Concerns are frequently expressed to usregarding the efficacy of the "cash-rich" split-off technique. Investors havequestioned why the cash that...
CCO Declares "Special Cash Dividend"
March 5, 2012 - Bulletin Print Report
Clear Channel Outdoor Holdings, Inc., (CCO), 89 percent of the stock of which is owned by Clear Channel Communications, (CCC), has declared a "special cash div...
I.R.S. Finally Releases Charter's NOL Ruling
March 5, 2012 - Volume 6 Issue 43 Print Report
TP, which appears to be Charter Communications, Inc., is a holding company that, through entities it controls, operates Business A. TP owns two principal assets: (i...
SLE Couples a Spin-Off With an "Inversion"
March 2, 2012 - Bulletin Print Report
Sara Lee Corporation, (SLE), has received its long-awaited I.R.S. ruling regarding the tax consequences of its plan to separate its beverage business from its other...
Early Withdrawal Penalty Upheld
March 2, 2012 - Volume 6 Issue 42 Print Report
The I.R.S. issued to Mr. and Mrs. Willhite with respect to their 2000 tax year,a document, with the heading "Notice of Intent to Levy", dated Decemb...
RDC Will "Invert"
March 1, 2012 - Bulletin Print Report
Rowan Companies, Inc., (RDC), has, in a move reminiscent of the one recently announced by Aon Corporation, decided to engineer an "inversion" transaction....
Pension Contribution Not a "Schedule C" Deduction
March 1, 2012 - Volume 6 Issue 41 Print Report
During 2006, petitioner was a self-employed real estate agent. That year, she contributed $34,408 to the LKL Defined Benefit Pension Plan and Trust. &n...
Sec. 351 Transferee Steps Into Transferor's Shoes
February 29, 2012 - Volume 6 Issue 40 Print Report
Taxpayer, TP,a widely-held and publicly-traded corporation, will "drop down" certain assets to X Corporation, X, in exchange for all of the stock of...
AIG "Releases" Valuation Allowance
February 28, 2012 - Bulletin Print Report
American International Group, Inc., (AIG), reported net income of $19.8 billion for its quarter ended December 31, 2011, compared to "only" $11.2 billion...
A Sec. 338(h)(10) Election Can Facilitate a Partial Liquidation
February 28, 2012 - Volume 6 Issue 39 Print Report
P Corporation, (P), has a single class of voting common stock outstanding held by more than 50 shareholders. S Corporation, (S), was a wholly-owned subsidiary of P....
Sears To Divest Assets Via a Rights Offering
February 27, 2012 - Bulletin Print Report
Sears Holdings Corporation, (S), intends to separate its Sears Hometown and Outlet businesses and certain hardware stores, all of which will be placed into a holdin...
The Erosion of "Quill" Continues
February 27, 2012 - Volume 6 Issue 38 Print Report
Scholastic Book Clubs, Inc., (SBC), is a Missouri corporation that markets and sells books and other publications and products to teachers and students at schools acr...
Can Foreign Earnings Be Repatriated Via a "Deadly D?"
February 24, 2012 - Volume 6 Issue 37 Print Report
Periodically, when a U.S. corporation announces an acquisition, the company will add that it intends to pay for the acquisition, in whole or in part, with "off...
Can Alibaba.com Be "The" Active Business?
February 23, 2012 - Bulletin Print Report
Alibaba Group, (AG), recently announced its intention to make a proposal to the Board of Directors of Alibaba.com, (AC), to "privatize" the company. The p...
Making Basis Disappear
February 23, 2012 - Volume 6 Issue 36 Print Report
Prior to 1964, the petitioner was in the business of processing freshly slaughtered hogs. It did not own the facilities necessary for slaughtering the hogs; it used...
License Fees Constitute "Rents From Real Property"
February 22, 2012 - Volume 6 Issue 35 Print Report
TP will elect to be taxed as a Real Estate Investment Trust,(REIT). TP is Empire State Realty Trust, a newly-formed corporation which will own the famed...
K and PG Will Structure an "Asset Acquisition"
February 22, 2012 - Bulletin Print Report
A buyer's principalobjective, from a tax point of view, is to secure a "cost" basis in the assets ofan acquired entity. Such a goal, however,...
Wynn Resorts: A True Bargain Purchase?
February 21, 2012 - Bulletin Print Report
Wynn Resorts, Limited, (W), announced that, following an investigation on the part of its Compliance Committee, a major shareholder of the company, Aruze USA, Inc.,...
Sec. 16(b) and a "Substantial Risk of Forfeiture"
February 21, 2012 - Volume 6 Issue 34 Print Report
In connection with the initial public offering of the stock of Aurora Foods, Inc. (AF), Mr. Gudmundsson (G), an officer of AF, received the right to the distributio...
'S' Corporation Shareholder Denied NY Tax Relief
February 17, 2012 - Volume 6 Issue 33 Print Report
The taxpayer (TP) is a New York City resident and is the sole shareholder of a corporation that has made an 'S' election at both the Federal and New York State leve...
Redemption Dividends Are Not "Preferential" Dividends
February 16, 2012 - Volume 6 Issue 32 Print Report
Fund, (F), is a closed-end investment company and is a "regulated investment company", (RIC). F never offered its shares to the public. Its capital was ob...
Taxpayer Denied "Like-Kind" Exchange Treatment
February 15, 2012 - Volume 6 Issue 31 Print Report
Ocmulgee Fields, Inc., (OF), entered into a contract to sell a parcel of highly appreciatedreal property, (WS),to the McEachern Family Trust, (MFT), in...
Can Liberty Media Access SIRI's NOLs?
February 15, 2012 - Bulletin Print Report
Liberty Media Corporation, (L), in 2009, acquired voting convertible preferred stock issued by Sirius XM Radio, Inc., (SIRI). The preferred is convertible into common...
Stock Sale Gain Is "Business" Income
February 14, 2012 - Volume 6 Issue 30 Print Report
On August 1, 2002, CenturyTel, Inc., (CTI), sold all of the shares of its wireless subsidiary for $1.59 billion. CTI and the purchaser, an unrelated corporation, fi...
Portfolio Recovery Associates Uses the "Cost Recovery" Method
February 13, 2012 - Bulletin Print Report
In the February 13, 2012 edition of Barrons , a rather critical analysis is presented of themanner in which Portfolio Recovery Associates, Inc., (PRA)...
REIT Avoids Tax On "NRBIGs"
February 13, 2012 - Volume 6 Issue 29 Print Report
TP terminated its status as a C corporation by electing to be taxed as a Real Estate Investment Trust (REIT) effective Date 1 ("the Conversion")....
Alibaba.com Stock Not Incompatible With "Cash Rich" Split-Off
February 10, 2012 - Bulletin Print Report
The New York Times is reporting that one of the assets that might be contributed to Newco by Alibaba, in connection with the long-awaited "cash rich&q...
Estate Tax Discount For "Built-In" CG Tax Liability Allowed
February 10, 2012 - Volume 6 Issue 28 Print Report
As of the date of the decedent's death, she owned 164 of the 200 outstanding shares in WK Corporation, (WK), a closely-held C corporation. WK's principal asset was...
Liquidating Payments Are "Guaranteed" Payments
February 9, 2012 - Volume 6 Issue 27 Print Report
From 1991 until 2003, Donald W. Wallis, (DW), a tax lawyer, was an "equity partner" at the law firm of Holland & Knight, (HK). &nbs...
Signs Are "Real Property"
February 8, 2012 - Volume 6 Issue 26 Print Report
TP intends to make an election to be treated as a Real Estate Investment Trust, (REIT). TP will acquire an interest in the partnership that owns the land and buildi...
Keeping Real Estate Out Of The Estate
February 7, 2012 - Volume 6 Issue 25 Print Report
A decedent, (D), and her son, (S), lived on the first two floors of a five-story brownstone in Manhattan which D had bought in 1968. On October 1, 1999, D leased th...
A REIT Can Be "Active"
February 6, 2012 - Volume 6 Issue 24 Print Report
In Rev. Rul. 73-236, 1973-1 C.B. 183, X Corporation, (X), was engaged, for more than five years, in the sale of real estate that it developed and improved, and in t...
Comcast's "Termination Fee" is "Business Income"
February 6, 2012 - Bulletin Print Report
Comcast Corporation, (CC), received a $1.5 billion "termination payment" in 1999after its merger talks with MediaOne, (MO), fell apart....
Taxpayer Bound By Allocation Agreements
February 3, 2012 - Volume 6 Issue 23 Print Report
P and the members of its affiliated group were engaged in the business of poultry processing. P acquired a poultry processing plant in Sebastopol, Mississippi. P al...
"Payments on the Notes"
February 2, 2012 - Volume 6 Issue 22 Print Report
Corporation A, (CA), is, and has been since prior to Date 1, a member of the affiliated group of which TP is the common parent ("the Group). CA issued the non-...
Wash Sales and Put Options
February 1, 2012 - Volume 6 Issue 21 Print Report
Where a taxpayer sells a security and realizes a loss on the sale, the loss will be deductible provided that the taxpayerhas not engaged in a "wash sale&...
Adjunct Professor Is a "Common Law" Employee of University
January 31, 2012 - Volume 6 Issue 20 Print Report
Petitioner, (S),served asan adjunct professor at Nova Southeastern University, (NSU), during 2006 and taught online courses in economics. &...
Eastman Chemical Will Benefit From Solutia's NOLs
January 30, 2012 - Bulletin Print Report
Eastman Chemical Company, (E), and Solutia, Inc., (S), each a company that was spun-off manyyears agofrom another company, announced that they have ente...
When Is a Joint Undertaking a "Partnership"?
January 30, 2012 - Volume 6 Issue 19 Print Report
By 2004, Holdner Farms, (HF), had grown into a profitable cattle farming operation. Mr. Randal Holdner, (RH), managed HF's day-to-day operations while Mr. William H...
Tax Court Chides I.R.S. With Respect to "Forgivable" Loans
January 27, 2012 - Bulletin Print Report
Dain Rauscher, Inc., (D) recruited Mr. Brooks, (B), as a stockbroker in March, 1998. As part of his compensation, D lent B more than $500,000. &n...
Taxpayer Loses Race To Change Her Domicile
January 27, 2012 - Volume 6 Issue 18 Print Report
The issue is whether petitioner effected a change of domicile from New York to Tennessee and was therefore not subject to tax as a resident of N.Y. for the period A...
Deduction Denied For Lack of "Economic Performance"
January 26, 2012 - Volume 6 Issue 17 Print Report
C is a partnership. On December 31, 1999, C entered into a contract with RRE, Inc., (RRE). Under the contract, RRE assigned to C a 74.33 percent interest in a well...
Small Shareholder Exception Is Broader Than We Thought
January 25, 2012 - Volume 6 Issue 16 Print Report
Partnership X, (PSX), acquired, in 1995, 3,300x of shares of common stock of Y Corporation, (Y). Y's stock is listed on the New York Stock Exchange. It has outstand...
Sec. 36 Requires a "Prospective" Analysis
January 24, 2012 - Volume 6 Issue 15 Print Report
In 2008, the petitioner, W, found a house for sale in Rice, Texas ("the Rice house"). On December 18, 2008, W entered into an agreement for deed to purcha...
U.K. "Windfall" Tax Is Not Creditable
January 23, 2012 - Volume 6 Issue 14 Print Report
PPL Corporation, (PPL), in 1997, held a 25 percent stake in SWEB, a utility in the United Kingdom. SWEB was one of 32 U.K. companies subject to a one-time "win...
Building Contractor Did Not Commit "Larceny"
January 20, 2012 - Volume 6 Issue 13 Print Report
In May, 2006, the petitioner entered into a contract with a local contractor for an extensive renovation and expansion of his residence. The total contract price fo...
Ralcorp's Plan for Its Retained Post Shares
January 19, 2012 - Bulletin Print Report
Ralcorp Holdings, (RH), is in the final stages of carrying out its plan to distribute 80 percent of the stock of Post Holdings, (PH), to its shareholders in a trans...
"Personal" Goodwill
January 19, 2012 - Volume 6 Issue 12 Print Report
In 1980, Dr. Howard, (DH), incorporated his dental practice. At the time of such incorporation, DH entered into an employment agreement as well as a covenant not to...
Payments on Redemption of Preferred Stock Not Redemption Premium
January 18, 2012 - Volume 6 Issue 11 Print Report
On Date 0, C1 entered into a series of transactions with B. The end result was C1 holding "$y" in Series A preferred shares ("the Preferred Stock&quo...
"Internal" Spin-Off and Contribution to Capital Not Integrated
January 17, 2012 - Volume 6 Issue 10 Print Report
P Corporation, (P), owns all of the stock of D Corporation, (D), and all of the stock of Sub1 and Sub2. Sub1 and Sub2 are engaged in the active conduct of Business...
Aon Corporation Is Planning an "Inversion"
January 17, 2012 - Bulletin Print Report
We have received numerous inquiries over the past few days regarding the announcement by Aon Corporation, (AON), of its intention to "move its corporate headqu...
When Does Amortization of "Sec. 197 Intangibles" Begin?
January 13, 2012 - Volume 6 Issue 9 Print Report
The taxpayer, Mr. B, purchased an RSA license ("the M4 license") in 1991. Mr. B organized RFB, an 'S' corporation, in 1991. He contributed the M4 license...
Buying a "Contemplated" Dividend
January 12, 2012 - Volume 6 Issue 8 Print Report
MF is the father of LF, ("the Fs"). During the year 1926, they were president and vice-president of KTC, Inc., (KTC). The stock of KTC was closely-held, t...
Comverse Is Planning To Restructure
January 11, 2012 - Bulletin Print Report
Comverse Technology, Inc., (CMVT),the beleaguered technology giant, has announced its intention to restructure in a transaction that might best bedescri...
Closing Out a "Short" Call Option
January 11, 2012 - Volume 6 Issue 7 Print Report
The taxpayer, (TP), engaged in numerous calloption "spread" transactions. TP would buy a call option on a particular stock and sell a call option wi...
P&G Denied Foreign Tax Credits
January 10, 2012 - Volume 6 Issue 6 Print Report
The products sold by Procter & Gamble Northeast Asia, (NEA), a corporation incorporated in Singapore whose principal office was located in Kobe, Japan, in Japan...
Yahoo's Ruling Request Should Not Unduly Delay Deal
January 9, 2012 - Bulletin Print Report
In last Friday's Wall Street Journal article, "Yahoo Puzzles Over $4 Billion Tax Break", the following passage has caused some consternation for...
Estate and Trust Fees Subject to the "2 Percent Floor"
January 9, 2012 - Volume 6 Issue 5 Print Report
Sec. 67(e) of the Internal Revenue Code provides for an exception to the "2 percent floor" on miscellaneous itemized deductions (in the case of an individ...
Lease vs. Conditional Sale
January 6, 2012 - Volume 6 Issue 4 Print Report
During 2004, the taxpayers, (TP), acquired the use of a 2004 Ford Explorer (the truck)from DWF, Inc., (DWF), for business purposes. &...
"Closed Year" NOL Increased by New Deductions
January 5, 2012 - Volume 6 Issue 3 Print Report
TP, on its Year 1 and Year 2 tax returns, took the position that its interest deductions were limited by Sec. 163(j). The branch of the I.R.S. that administers Larg...
Proving "Material Participation"
January 4, 2012 - Volume 6 Issue 2 Print Report
On their joint income tax returns for 2003 and 2004, Mr. and Mrs. Bogus reported, on Schedule C thereof, losses of $77,598 and $85,292, respectively. The I.R.S. dis...
Sears Will "Write-Down" Its DTAs
January 3, 2012 - Bulletin Print Report
Sears Holding Corporation, (S), isexperiencing well-publicized business issues that will necessitate the shuttering of hundreds of its stores. These business...
A "VPFC" + An "SLA" = A Current Sale
January 3, 2012 - Volume 6 Issue 1 Print Report
Mr. Philip F. Anschutz, (MA), is the sole shareholder of AC, an 'S' corporation. AC was the sole shareholder of TAC. AC elected to treat TAC as a qualified subchapt...
The Expansion Doctrine and Sec. 355(b)(2)(D)
December 30, 2011 - Volume 5 Issue 251 Print Report
GP, a foreign corporation, owned all of the stock of FS1, a foreign corporation engaged in the active conduct of Business A. FS1 owned all of the stock of FS2, a fo...
AIG Announces Tax Consequences of Warrant Distribution
December 29, 2011 - Bulletin Print Report
In January, AIG distributed 0.533933 of a warrant with respect to each share of its common stock. Each warrant enables the holder to purchase one share of AIG commo...
"An Interest as a Limited Partner"
December 29, 2011 - Volume 5 Issue 250 Print Report
Sec. 469(a)(1) of the Internal Revenue Code limits the ability of certain taxpayers to deduct losses from passive activities . &nbs...
Total Will Increase Its Stake in SunPower
December 28, 2011 - Bulletin Print Report
Total Gas & Power, (TO),a French corporation, currently owns 60 percent of the stock of SunPower, Inc., (SPWR). TO also owns all of the stock of Total Ene...
Parent is an "Old and Cold" Shareholder
December 28, 2011 - Volume 5 Issue 249 Print Report
Where a recently-acquired subsidiary is merged with and into the acquiring parent, the merger will qualify as a reorganization under Sec. 368(a)(1)(A) if the stock...
Third Circuit Ruins PPL's Holiday
December 27, 2011 - Bulletin Print Report
PPL Corporation, (PPL),in 1997, owned an approximate 25 percent stake in a U.K. utility named SWEB. The latter was subjected to a "windfall" tax imp...
An "ANDA" is a Franchise
December 27, 2011 - Volume 5 Issue 248 Print Report
The transactions at issue which generated the professionalfees at issue arose from the filing by X Corporation, (X), of Abbreviated New Drug Applications, (AN...
The "Signing Date" Rule Facilitates Satisfaction of the COI Requirement
December 23, 2011 - Volume 5 Issue 247 Print Report
Requisite to a reorganization (of the "acquisitive" variety) is a continuity of interest (COI) on the part of those persons who, directly or indi...
"Disappearing" Basis in an "All-Cash" 'D' Reorganization
December 22, 2011 - Volume 5 Issue 246 Print Report
Reg. Sec. 1.368-2(l)(1) provides that in a transaction qualifying as a reorganization under Sec. 368(a)(1)(D), a corporation must transfer all or part of its assets...
Yahoo! Inches Closer to a "Cash-Rich" Split-Off
December 22, 2011 - Bulletin Print Report
It now seems clear that Yahoo!, (Y), will be embarking on a tax-efficient pathwith respect to the divestiture ofits "Asian assets", its stakes...
N.Y. Provides Guidance Regarding a "Permanent Place of Abode"
December 21, 2011 - Bulletin Print Report
New York residents are taxed on theirincome from all sources, whereas non-residents, generally speaking, are taxed, in New York, only on their "New York so...
Margin Interest Cannot Be Capitalized
December 21, 2011 - Volume 5 Issue 245 Print Report
From 1963-1968, the petitioner, (P), purchased numerous shares of stock on margin. P paid interest to the brokerage firms on the margin accounts.  ...
United Rentals/RSC Holdings--Just Enough Stock To Meet COI
December 20, 2011 - Bulletin Print Report
On Friday, December 16th, 2011, United Rentals, Inc., (URI), and RSC Holdings, Inc., (RRR), announced that they had entered into a definitive merger agreement under...
Market Crash Buys A Private Foundation More Time
December 20, 2011 - Volume 5 Issue 244 Print Report
The taxpayer, (PF), is classified as a "private foundation" under Sec. 509(a) of the Internal Revenue Codeand is, therefore, exempt from Federal inc...
Lam Research/Novellus Systems: Buybacks Should Be Benign
December 19, 2011 - Bulletin Print Report
Lam Research Corp., (L), and Novellus Systems, Inc., (N), have entered into a definitive agreement pursuant to which L will acquire all of the stock of N from the s...
Taxpayer Denied The Benefits of "Option Lapse" Treatment
December 19, 2011 - Volume 5 Issue 243 Print Report
TP Corporation (TP) and CP Corporation (CP) each owned 50 percent of the stock of Sub1 Corporation (S1). On Date 1, TP a...
Eight (Hours Per Month) is Enough for "Material Participation"
December 16, 2011 - Volume 5 Issue 242 Print Report
During the tax year in issue, the taxpayer, Mr. Sean Hegarty, (SH), was employed full-time by Carteret Mortgage Corporation and his spouse, Ms. Kerry Hegarty, (KH),...
Derecognition of "In Substance" Real Estate
December 15, 2011 - Bulletin Print Report
Ordinarily, when a corporation ceases to have a "controlling financial interest" (i.e., a majority voting interest) in another corporation, the parent is...
Sale/Leaseback "Respected" As Such
December 15, 2011 - Volume 5 Issue 241 Print Report
The taxpayer, (TP), is a specialty retailer of consumer electronics. TP owns retail stores throughout the United States....
Billboards Constitute "Real Estate Assets"
December 14, 2011 - Volume 5 Issue 240 Print Report
TP is a Real Estate Investment Trust, (REIT). TP is the managing general partner of Partnership, (PS). TRSA is a wholly-owned subsidiary of PS. TP rents space on ou...
Martin Marietta Launches a Tender Offer for Vulcan Materials
December 14, 2011 - Bulletin Print Report
Martin Marietta Materials, Inc., (MMI), is offering to exchange each of the issued and outstanding shares of common stock of Vulcan Materials Company, (VM), for 0.5...
"Assignment Fee" Is Business Income
December 13, 2011 - Volume 5 Issue 239 Print Report
AP, based in North Carolina, is one of the leading automotive retailers in the United States. As of January 31, 2010, AP owned 145 dealership franchises at 122 deal...
"Sec. 951 Inclusions" Are Not Dividends
December 12, 2011 - Volume 5 Issue 238 Print Report
The issue is whether amounts included in gross income under Sec. 951(a)(1)(B) constitute qualified dividend income (QDI) under Sec. 1(h)(11). The U.S. Tax...
Stock Option Cancellation Payments Are Not Deductible in Canada
December 9, 2011 - Volume 5 Issue 237 Print Report
The issue is whether I Corporation, (I), a Canadian corporation, in computing its income for income tax purposes, is entitled to deduct payments made to its own emp...
"SC2" Tax Shelter Does Not Withstand Court Scrutiny
December 8, 2011 - Volume 5 Issue 236 Print Report
In June, 2000, SCV, Inc., (SCV), timely elected to be treated as an 'S' corporation. During the late 1990s, KPMG, the international accounting and auditing behemoth...
Foreign Taxes and Economic Substance
December 7, 2011 - Volume 5 Issue 235 Print Report
A substantial portion of a taxcontroversy involving Wells Fargo & Co., (WFC),arises from a challenge to the legality of foreign tax credits claimed...
"Appropriated" Surplus Not Equity--Implications for Ambac?
December 6, 2011 - Bulletin Print Report
P Corporation, (P), is the common parent of an affiliated group that joins in the filing of a consolidated income tax return. P whollyowns Sub 1 and Sub 1 who...
Entergy and ITC To Embark on an "RMT" Transaction
December 6, 2011 - Bulletin Print Report
Entergy Corporation, (ETR), and ITC Holdings Corporation, (ITC), have announced a transaction in which the electrictransmission business of ETR will be divest...
The "New" Continuity of Interest Requirement
December 6, 2011 - Volume 5 Issue 234 Print Report
On March 4, 1946, the taxpayers, Mr. J and Mr. H, the owners of all of the stock JH, Inc.(JH), signed an agreement with unrelatedP Corporation (P) for t...
"Significant Modification" of Debt Creates Deemed Exchange
December 5, 2011 - Volume 5 Issue 233 Print Report
Reg. Sec. 1.1001-3 provides rules for determining whether a modification of the terms of a debt instrument results in an exchange for purposes of Reg. Sec....
Retiree Not Subject to NY Tax on Deferred Compensation Payments
December 2, 2011 - Bulletin Print Report
The taxpayer, (TP),maintains several non-qualified deferred compensation plans for its former employees. Prior to...
IFRS and LIFO
December 2, 2011 - Volume 5 Issue 232 Print Report
On Date 1, TP becamea wholly-owned subsidiary of ABC and a member of the ABC consolidated group. ABC, in turn, is wholly-owned by Foreign Parent, (FP). FP rep...
Taxpayer Did Not "Maintain" a Permanent Place of Abode in NYC
December 1, 2011 - Bulletin Print Report
The petitioners moved out of their New York City apartment on May 14, 2010 and changed their domicile from N.Y. to Connecticut.  ...
What is "Real Property"?
December 1, 2011 - Volume 5 Issue 231 Print Report
Corporation, (C), provides public refrigerated warehouse space for customers to store perishable products. C provides services typically provided in both the cold a...
A Status of Liquidation
November 30, 2011 - Volume 5 Issue 230 Print Report
During the years in issue, the petitioners owned 12,133 shares of common stock in SC, Inc., (SC). As of 1960, SC's operations consisted of receiving royalties pai...
Adjustment to Conversion Ratio Not Deemed Distribution of Stock
November 29, 2011 - Volume 5 Issue 229 Print Report
D is a multi-bank holding company. C, a wholly-owned subsidiary of D, is engaged in the business of banking in City X. P is a multi-bank holding company unrelated t...
I.R.S. Proposes Exceptions to the "Segregation" Rules
November 28, 2011 - Volume 5 Issue 228 Print Report
Sec. 382 of the Internal Revenue Code imposes a limitation on a corporation's use of net operating loss (NOL) carryovers (and recognized built-in losses)in th...
AT&T Will Accrue a "Break-Up Fee" in Q4
November 28, 2011 - Bulletin Print Report
AT&T, (T), quietlyannounced, on FridayNovember 25th, that "...as a result of the Federal Communications Commission's action, T expects to recog...
'G' Reorganization Prevents "Qualified Stock Purchase"
November 25, 2011 - Volume 5 Issue 227 Print Report
B Corporation, (B), owned all of the stock of C Corporation, (C). The latter owned all of the stock of E Corporation, (E), and E owned all of the stock of F Corpora...
I.R.A. Not an Eligible Shareholder of an 'S' Corporation
November 23, 2011 - Volume 5 Issue 226 Print Report
The taxpayer, (T), a domestic corporation, elected 'S' corporation status. T's sole shareholder during 2003 was a "custodial"RothI.R.A. accoun...
N.J. Refund Awarded For Taxes Paid On "Madoff" Income
November 22, 2011 - Bulletin Print Report
In 2000, the plaintiffs invested $655,500 with Bernard L. Madoff Investment Securities, (BLMIS). They invested an additional $40,000 in January, 2003....
"Upstream" Exchanges (Even in a Reorganization) Are Taxable
November 22, 2011 - Volume 5 Issue 225 Print Report
On February 24, 1953, the board of directors of the Hickok Company, (HC), adopted a plan of recapitalization involving the creation of $1 million face amou...
"North-South" Ruling Policy is Liberal
November 21, 2011 - Volume 5 Issue 224 Print Report
D2 owns all of the stock of D1 and the latter owns all of the stock of C. Each corporation is engaged in the active conduct of at least one trade or business and ha...
Charitable Contributions of Inventory
November 18, 2011 - Volume 5 Issue 223 Print Report
TP, a C corporation, manufactures food products and sells such products to wholesalers. TP regularly allows certain discounts, or "vendor allowances", to...
Sec. 355(e) Gain Is Not "Passive" Income
November 17, 2011 - Volume 5 Issue 222 Print Report
D, a Country C corporation, has outstanding a single class of common stock. SHA, D's principal shareholder, owns "a%" of the stock. SHB, a U.S. person,&...
I.R.S. Finalizes Partnership Debt/Equity Exchange Rules
November 17, 2011 - Bulletin Print Report
A debtor corporation that transfers stock to a creditor in satisfaction of its indebtedness will realize income in an amount equal to the excess of the adjusted iss...
Intragroup Stock Transfer Is Found to Be a "QSP"
November 16, 2011 - Volume 5 Issue 221 Print Report
P Corporation, (P), was engaged, through its subsidiaries, in Business A and Business B. P was the common parent of an affiliated group of corporations filing a lif...
KMI/EP--Multiple Mergers
November 15, 2011 - Bulletin Print Report
The S-4 issued with respect to the acquisition by Kinder Morgan, Inc., (KMI) of El Paso Corporation, (EP), indicates that no fewer than three mergers will be undert...
Loss of Access Does Not Render Property Worthless
November 15, 2011 - Volume 5 Issue 220 Print Report
The taxpayer, (DL), a C corporation, used a "cash method" of accounting. DL is in the business of residential real estate construction.  ...
"Pass-Through" Payments Are Not "Gross Income"
November 14, 2011 - Volume 5 Issue 219 Print Report
Washington Imaging Services (WIS) operates medical imaging facilities. WIS generates the medical image and, because it does not have a medical license, contracts fo...
Deducting Bonus "Pools"
November 11, 2011 - Volume 5 Issue 218 Print Report
X Corporation, (X), uses an accrual method of accounting for tax purposes. X pays bonuses to a group of employees pursuant to a program that defines the terms and c...
Marriott's Built-In Losses
November 10, 2011 - Bulletin Print Report
Marriott International, Inc., (MAR), is in the final stages of distributing to its shareholders the stock of a newly-created subsidiary, Marriott Vacations Worldwid...
Deducting Deferred Compensation
November 10, 2011 - Volume 5 Issue 217 Print Report
The taxpayer (TP) is taxable under Part II of Subchapter L of the Internal Revenue Code as a non-life insurance company. TP provides retiree medical benefits to its...
Assessing When Compensation Is "Reasonable" - Part II
November 9, 2011 - Volume 5 Issue 216 Print Report
Customers bring their products to Multi-Pak Corporation, (MPC), which packages them according to the customers' specifications and returns them as finished goods wh...
Cubist Pharmaceuticals Will Issue "CPRs"
November 8, 2011 - Bulletin Print Report
Cubist Pharmaceuticals, Inc., (C), has commenced, through its newly-created and wholly-owned subsidiary, (S), a tender offer to acquire all shares of the issued and...
Capital One's Tax Accounting Rejected
November 8, 2011 - Volume 5 Issue 215 Print Report
Capital One Financial Corporation, (CO),is a financial and bank holding company. Its principal subsidiaries, COB and FSB, provide consumer lending products an...
Ford On Course To Reduce Valuation Allowance
November 7, 2011 - Bulletin Print Report
Deferred tax assets are required to be established by entities, like Ford Motor Company, (F), which have accumulated"deductible temporary differences&quo...
Boot or Dividend?
November 7, 2011 - Volume 5 Issue 214 Print Report
D2 Corporation, (D2), owns all of the stock of D1 Corporation, (D1). D1 is engaged in the active conduct ofBusiness A. D1 owns all of the stock of C Corporati...
Mandatorily Redeemable Instrument Is Equity
November 4, 2011 - Volume 5 Issue 213 Print Report
Fund, (F), is a regulated investment company. There are two classes of F shares outstanding: common shares and a class of preferred shares comprised of (i) a single...
Democrats Unveil Tax on Financial Transactions
November 3, 2011 - Bulletin Print Report
Senator Harkin, (D-IA), and Rep. De Fazio, (D-OR), introduced legislation in the Senate and House to place a tax on certain securitiestrading activities. The...
Stock "Entitled to Vote"
November 3, 2011 - Volume 5 Issue 212 Print Report
P Corporation, (P), is the common parent of an affiliated group of corporations that joins in the filing of a consolidated income tax return. &nb...
Partnership Found to be a "Sham"
November 2, 2011 - Volume 5 Issue 211 Print Report
S is treated as a partnership for federal income tax purposes. CC, a Chinese quasi-governmental entity, contributed non-performing loans, (NPLs) to S. CC's basis in...
Accounting for Intangible Assets in a Business Combination
November 1, 2011 - Volume 5 Issue 210 Print Report
The "pooling of interests" method of accounting for a business combination has been defunct for 10 years. All such combinations are nowaccounted for...
Options Are Not "Stock" (Sometimes)
October 31, 2011 - Volume 5 Issue 209 Print Report
The taxpayer, (N), became an employee of C Corporation, (C), a domestic 'C' corporation, before 2001. N received options to purchase C stock as compensation for ser...
What Is a "Cash-Rich" Split-Off?
October 28, 2011 - Bulletin Print Report
The Wall Street Journal is reporting that Yahoo!, (Y), is seriously exploring a tax-efficient means of divesting its stakes in Yahoo Japan, (YJ), and Alibaba...
"Hot" Stock Loses Its Taint
October 28, 2011 - Volume 5 Issue 208 Print Report
Sec. 355(a) provides that, under certain circumstances, a corporation may distribute stock and securities in a corporation it controls (within the meaning of Sec. 3...
Rep. Camp's Bold Initiative
October 27, 2011 - Bulletin Print Report
Representative Dave Camp, R-MI., the Chairman of the House Ways and Means Committee, has floated a proposal to dramatically reform the manner in which U.S. corporat...
Is a Concert "Entertainment" or "Education"?
October 27, 2011 - Volume 5 Issue 207 Print Report
Milwaukee Symphony Orchestra (MSO)is incorporated as a not-for-profit corporation.In July 1997, MSOfiled, with the State of Wisconsin, amended sal...
Who "Owns" A Non-Profit Corporation?
October 26, 2011 - Volume 5 Issue 206 Print Report
Parent, (P), owned all of the stock of Sub1, (S1), and the latter owned all of themembership interestsof Sub 3, (S3). S3 is a State A, non-profit, non-s...
When Does A Waiver Of Compensation Have To Be Filed?
October 25, 2011 - Volume 5 Issue 205 Print Report
The legislative body of State X enacted "Statute A" in response to the fiscal crisis facing the State. Statute...
Ambac Update
October 24, 2011 - Bulletin Print Report
A hearing is scheduled on October 26th in federal bankruptcy court regarding, among other things, certain tax disputes existing between Ambac Financial Group (AFG)&...
"Emission" Certificates Can Be Exchanged Tax-Free
October 24, 2011 - Volume 5 Issue 204 Print Report
The concentration of "smog" (ground-level ozone) in "Region" often exceedsEnvironmental Protection Agency, (EPA),standards. Smog is...
Gift of "QRP" Does Not Trigger Recapture
October 21, 2011 - Volume 5 Issue 203 Print Report
The taxpayer, (TP), an individual, sold "A" shares of shares of stock in Company, (C), representing approximately "B percent" of theoutsta...
When Is a Residence "Under Construction"?
October 20, 2011 - Volume 5 Issue 202 Print Report
In 2005, the petitioners, (R), began searching for property along the Florida coastline on which they could build a vacation house....
ETP Will Defer the Gain From the Sale of Its Propane Business
October 19, 2011 - Bulletin Print Report
Energy Transfer Partners, L.P., (ETP), and AmeriGas Partners, L.P., (AG), have entered into a complex "Contribution and Redemption" Agreement, the purpose o...
Waiving Literal Compliance With the Active Business Requirement
October 19, 2011 - Volume 5 Issue 201 Print Report
UST (who we believe is NYSE Euronext) is a domestic corporation. UST's common stock is publicly-traded. As of Date C, the market capitalization of UST was approxima...
Federal Circuit Continues to Pan "Son-of-Boss"
October 18, 2011 - Volume 5 Issue 200 Print Report
A transaction called for K Corporation, (K), to infuse unrelatedT-T Corporation, (T-T) with cash equal to a 50 percent equity position. At the same time, T-T'...
Election of Extended Carryback Period Is a Regulatory Election
October 17, 2011 - Volume 5 Issue 199 Print Report
P is the common parent of an affiliated group of corporations that join in filing a consolidated income tax return. P seeks to carry back the "Year 2 consolida...
KMI Will Issue Warrants to EP Shareholders
October 17, 2011 - Bulletin Print Report
Kinder Morgan, Inc., (KMI), and El Paso Corporation, (EP), have announced a definitive agreement whereby KMI will acquire EP in a transaction that will create the f...
DDS Changes Auditors
October 17, 2011 - Bulletin Print Report
Dillard's, Inc., (DDS), in January, 2011, formed a REIT and transferred certain appreciated property to the REIT. If pro...
PE Executive's Tax Understatement Not Due To Reasonable Cause
October 14, 2011 - Volume 5 Issue 198 Print Report
In 1998, the taxpayer, (W), an individual and the founding member of Summit Partners,entered into an agreement that undertook a transaction that the parties d...
Deteriorating Creditworthiness Boosts Earnings
October 13, 2011 - Bulletin Print Report
JP Morgan Chase, JPM,reported third quarter earnings that included a familiar item from the days of the financial crisis. The bank reported "debit valuat...
Finessing the Continuity of Interest Requirement
October 13, 2011 - Volume 5 Issue 197 Print Report
P is a foreign corporation formed in Country. P owns X, a domestic corporation formed in State A. Y is a public corporation formed in State A. X is engaged in Busin...
SPN Proposes to Acquire CPX
October 13, 2011 - Bulletin Print Report
Superior Energy Services, (SPN), has entered into a definitive merger agreement with Complete Production Services, (CPX), pursuant to which the former will acquire...
Terminating A Hedge
October 12, 2011 - Volume 5 Issue 196 Print Report
TP, a corporation, issues a debt instrument. The debt instrumentpossesses a 10-year term and provides for interest to be paid at a fixed rate. &n...
Gross Income Sometimes Means Gross Receipts
October 11, 2011 - Volume 5 Issue 195 Print Report
Sec. 6501(e)(1)(A) of the Internal Revenue Code provides that if a taxpayer omits from gross income an amount properly includible therein which is in exces...
Deducting Bankruptcy Expenses
October 10, 2011 - Volume 5 Issue 194 Print Report
Group wasengaged in Business A. On Date a, Group filed a voluntary petition for bankruptcy under Chapter 11 of Title 11 of the United States Code....
"Turning Off" the Step-Transaction Doctrine
October 7, 2011 - Volume 5 Issue 193 Print Report
Oldco (O) will form Newco (H) and the latter will formSubsidiary (S). S will then merge with and into O. In the merger, the shareholders of O will receive stock...
Repatriation Holiday and Millionaire's Surtax
October 7, 2011 - Bulletin Print Report
Sen. Hagan (D-N.C.) and Sen. McCain (R-Az.) plan to introduce a bill that would provide for the tax-efficient repatriation of earnings accumulated outside of the U....
I.R.S. Tightens Ruling Policy on Debt for Debt Exchanges
October 6, 2011 - Bulletin Print Report
In LTR 201029007, March 12, 2010, a corporation, (D), spun-off the stock of its controlled subsidiary, (C), to its shareholders. The distribution was ruled to be tax-...
The Service Takes a Broad View of "Real Property"
October 6, 2011 - Volume 5 Issue 192 Print Report
Taxpayer (TP) intends to elect to be treated as a Real Estate Investment Corporation (REIT). TP will conduct its operations through a "downstream" partner...
Qualified Dividend Income
October 5, 2011 - Volume 5 Issue 191 Print Report
Sec. 1(h)(1) of the Internal Revenue Code provides that a taxpayer's "net capital gain" for any taxable year will be subject to a maximum tax rate of 15 p...
What Are the Sales Tax Consequences of "Groupons"
October 4, 2011 - Volume 5 Issue 190 Print Report
An on-line company ("the deal site") solicits customers to purchase vouchers through its Web site. The deal site collects the purchase price of the vouche...
HCA Used "Recap" Accounting In Connection With Its LBO
October 3, 2011 - Bulletin Print Report
The estimable Professor Briloff and his daughter penned an article for October 3rd edition of Barron's in which they found fault with the manner in which t...
Hedging Gains Cannot Be Deferred
October 3, 2011 - Volume 5 Issue 189 Print Report
On Date 2, TP, a C corporation, issued "A" Amount of junior subordinated debentures for an issue price of "B" Amount per debenture....
"Pledge" of QRP is a Sale Thereof
September 30, 2011 - Volume 5 Issue 188 Print Report
In 1994, thepetitioner, (L), organized New York Medical, Inc., (NYM). Later, NYM, whose success was attributable to the efforts of L and its employees,e...
Ohio Withstands Challenge to "CAT" Tax
September 28, 2011 - Volume 5 Issue 187 Print Report
The Ohio Constitution permits laws providing for bothexcise and franchise taxes except that no excise tax shall be levied or collected upon the sale...
Tronox Is Moving Offshore
September 28, 2011 - Bulletin Print Report
Tronox, Inc., (T), which emerged from bankruptcy inearly 2011, recently announced a transformative transaction in which (i) it will acquire the mineral sands op...
RAH Will Retain a Stake in Post Holdings
September 27, 2011 - Bulletin Print Report
The Form 10 for Post Holdings, Inc., (PHI), was filed last night and it fills in some of the crucialdetails surrounding the separation of PHI from Ralcorp Hol...
Stripping Buckle's Special Dividend
September 27, 2011 - Bulletin Print Report
The Buckle, Inc., (BKE), has announced that its board of directors has authorized a $2.25/share special cash dividend to be paid to shareholders of record at the cl...
A "Party" To a Reorganization
September 27, 2011 - Volume 5 Issue 186 Print Report
Pursuant to an agreement, The Hays Corporation, (HC), transferred 5,800 shares of its previously authorized but unissued shares of voting common stock to the shareh...
Groupon Is an "Agent"
September 26, 2011 - Bulletin Print Report
Groupon Inc.'s S-1 (Registration Statement) discloses a restatement that is based on the realization, however belatedly, that its relationship with its suppliers is...
Transaction Is Not a Securities Loan
September 26, 2011 - Volume 5 Issue 185 Print Report
Under Sec. 1058 of the Internal Revenue Code, when a taxpayer transfers securities under an agreement that meets certain requirements, no gain or loss shall be reco...
Wendy's Ruling Provides Insight Into Post Spin-Off Buybacks
September 23, 2011 - Volume 5 Issue 184 Print Report
D Corporation, (D), which is almost certainly Wendy's Inc., has a single class of voting common stock outstanding which is "widely-held and publicly-traded&quo...
Tyco Spin-Off Has Few U.S. Tax Implications
September 22, 2011 - Bulletin Print Report
Tyco International, (TI), a company organized under the laws of Switzerland, has announced its intention to undertake a spin-off in which TI will distribute to its...
"Secured" Installment Obligation Not Incompatible With Deferral
September 22, 2011 - Volume 5 Issue 183 Print Report
In Year 4, TP signed a purchase and sale agreement which provided that, on Date 2, it would sell its stock in various corporations to C1. TP received from C1&...
Exiting a Joint Venture Tax-Efficiently
September 21, 2011 - Volume 5 Issue 182 Print Report
Uniroyal, Inc. (U) and Imperial Chemical Industries (ICI) each owned 50 percent of the stock of R Corporation (R). On December 28, 1981,R organized R2 Corpora...
Investment Company Status Avoided
September 20, 2011 - Volume 5 Issue 181 Print Report
C is a publicly-traded corporation and the sole general partner of Partnership, (PS). As of Date A, C owned an approximate combined "a%" general and limit...
Cell Phones Are an Excludible "Fringe Benefit"
September 19, 2011 - Volume 5 Issue 180 Print Report
Sec. 61 of the Internal Revenue Code defines gross income as "all income from whatever source derived". Sec. 61(a)(1) provides that gross income includes...
FASB Eases Goodwill Impairment Testing Rules
September 19, 2011 - Bulletin Print Report
FASB, in ASU 2011-08, Testing Goodwill for Impairment , September, 2011, has introduced a subjective test (for goodwill impairment) that will allow entities...
Raising the Stock Price Is a Valid Corporate Business Purpose
September 16, 2011 - Volume 5 Issue 179 Print Report
D Corporation, (D), had several series of long-term debt outstanding, (i) the "Senior Notes", (ii) the "Senior Subordinated Notes", and (iii) th...
Income From Factoring Receivables Is Not Subpart F Income
September 15, 2011 - Volume 5 Issue 178 Print Report
TP, a domestic corporation, owns "Supplier", (S), a Country B corporation, which is one ofthe C industry's suppliers of products.  ...
MMI/GOOG: Adhering to the Sec. 355(e) "Safe Harbor"
September 14, 2011 - Bulletin Print Report
Motorola Mobility, Inc., (MMI), was spun-offby Motorola Solutions, Inc., (M), on January 4, 2011. The spin-off was intended to qualify for tax-free treatment...
Investment Funds Not Treated as an "Entity"
September 14, 2011 - Volume 5 Issue 177 Print Report
Company, (C), is a "loss corporation". Its stock is widely-held and publicly-traded on an over-the-counter market using "pink sheets". <...
Simultaneous Acquisition of "Puts" Does Not Affect Ownership
September 13, 2011 - Volume 5 Issue 176 Print Report
The taxpayer, (TP), was organized as a Massachusetts business trust. It was formedfor the purpose ofinvesting in municipal obligations the interest ...
Enron Did Not "Compensate" Ken Lay
September 12, 2011 - Volume 5 Issue 175 Print Report
Kenneth L. Lay, (L), was chairman of the board of directors and chief executive officer, (CEO),of Enron, Inc., (E), from 1986 until 2001. In February, 2001, L...
Accounting for Fees Imposed by the Patient Protection Act
September 9, 2011 - Volume 5 Issue 174 Print Report
The Financial Accounting Standards Board, (FASB), has issued Accounting Standards Update, (ASU), No. 2011-06 (July, 2011), in which it provides guidanceon how...
Is "Tax Avoidance" The Principal Purpose For an Acquisition?
September 8, 2011 - Volume 5 Issue 173 Print Report
On July 13, 1967, WWB-Cal, a wholly-owned subsidiary of WWB-NY which operated an advertising agency, acquired all of the stock of HSI, which alsooperated an adv...
Westinghouse Transaction Motivated By Accounting Concerns
September 8, 2011 - Bulletin Print Report
Toshiba Corporation, (TC), recently announced that the company will increase its ownership in Westinghouse Electric, (WE), by acquiring all shares (20 percent of th...
Basis Overstatement Is Not an "Omission" From Gross Income Revisited
September 7, 2011 - Volume 5 Issue 172 Print Report
In general, a six year limitations period (for assessing tax) is triggered when a taxpayer or partnership omits from gross income an amount properly includ...
LBOs and Sec. 269
September 6, 2011 - Volume 5 Issue 171 Print Report
On July 8, 1957, CR was incorporated by four "principals", including Mr. M. On July 15, 1957, Mr. M, as nominee for CR, made a written offer to purchase a...
ILFC Will Exit the AIG Family With a Valuable "Basis Step-Up"
September 3, 2011 - Bulletin Print Report
AIG is going to "monetize" its stake in International Lease Finance Corporation, (ILFC), by means of a public offering of the stock of a holding company,...
Purchase From Related Person Bars Homebuyer Credit
September 2, 2011 - Volume 5 Issue 170 Print Report
The issue is whether the taxpayer, (AS), is entitled to the first-time homebuyer credit as provided in Sec. 36 of the Internal Revenue Code. AS was denied such cred...
Acquisition Indebtedness
September 1, 2011 - Volume 5 Issue 169 Print Report
P was a profit-sharing plan, maintained by employer,which was qualified under Sec. 401(a) of the Internal Revenue Code. A credit facility was established with...
The E&Y Losing Streak Continues Unabated
August 31, 2011 - Volume 5 Issue 168 Print Report
Cap Gemini, (CG), bought the information-technologyconsulting business of Ernst & Young, (EY), the international accounting and consulting firm,in 2...
"Beneficial" Ownership Counts For Sec. 269 Purposes
August 30, 2011 - Volume 5 Issue 167 Print Report
Ach Corporation, (AC), hadoperated a dairy business in connection with the conduct of which substantial net operating losses (NOLs) were amassed. The stock of...
Softbank Reduces Its Yahoo! Stake
August 29, 2011 - Bulletin Print Report
In 2004, Softbank Corporation (SC)announced that its U.S. subsidiary, SBA, had "financed" approximately $1.135 billion from Citibank, N.A. The loan,...
Cablevision's Leveraged Spin-Off
August 29, 2011 - Volume 5 Issue 166 Print Report
On June 30, 2011, Cablevision Systems Corporation, (CSC), completed the "leveraged" spin-off of AMC Networks, Inc., (AMC). Each of CSC's Class A and Class...
"Normal Course of Business"
August 26, 2011 - Volume 5 Issue 165 Print Report
BP ProductsNorth America, Inc., (BP), a subsidiary of BP plc, was involved in exploration and production of oil and gas; transportation of its products throug...
Berkshire To Make "Tax-Advantaged" Investment in BAC
August 25, 2011 - Bulletin Print Report
Bank of America Corporation, (BAC),has announced that it reached an agreement to sell 50,000 shares of Cumulative Perpetual Preferred Stock, ("the Prefer...
The "Expansion" Doctrine Insulates a "Tainted" Control Acquisition
August 25, 2011 - Volume 5 Issue 164 Print Report
On Date 2, FP Corporation, (FP),owned all of the stock of P Corporation, (P). P was a holding company. P, in turn, owned100 percentof the voting&n...
Hedging and Depletion
August 24, 2011 - Volume 5 Issue 163 Print Report
Mining companies enter into price protection or"hedging" transactions in orderto ensure a certain level of price stability for the selling pri...
"Sale" Occurs When Option is Exercised (Not When Granted)
August 23, 2011 - Volume 5 Issue 162 Print Report
On December 31, 1981, G Corporation, (G),transferred property to L Corporation, (L), valued at approximately $31.5 million in exchange for five percent of L's...
Taxpayer Cannot Disavow Form Selected for Transaction
August 22, 2011 - Volume 5 Issue 161 Print Report
93 percent of the stock of M Corporation, (M),had beenpledged to L Corporation, (L),as collateral for a loan from Lto O, which was in defaul...
Revisiting Viacom/CBS and Its Implications for RAH
August 19, 2011 - Bulletin Print Report
Approximately 10 years ago, Viacom, (P),had obtained a ruling from the I.R.S. regarding the tax consequences of a proposed split-off of Blockbuster. The rulin...
MMI Has Received An Unqualified Tax Opinion
August 18, 2011 - Bulletin Print Report
The acquisition of Motorola Mobility, Inc., (MMI), by Google, Inc., (GOOG), is a seminal transaction for any number of different reasons, including taxation. It is...
"Tax Benefit Rule" Requires Income Inclusion
August 18, 2011 - Volume 5 Issue 159 Print Report
Q Corporation, (Q), was a C corporation. Effective with its 1986 tax year, Q made an election to be treated as an 'S' corporation. Its shareholders consented to suc...
The Benefits of 'S' Corporation Status
August 17, 2011 - Volume 5 Issue 158 Print Report
An 'S' corporation is, with certain importantexceptions, not subject to income taxes. A C corporation is so subject with respect to its taxable income and its...
GOOG Should Reap Tax Benefits From the MMI Acquisition
August 16, 2011 - Bulletin Print Report
The acquisition by Google, Inc.,(G), of the stock of Motorola Mobility, Inc., (MMI), should provide the former with tax benefits that MMI might not have been...
Assignments of Derivative Contracts
August 16, 2011 - Volume 5 Issue 157 Print Report
Reg. Sec. 1.1001-1(a) provides that gain or loss is recognized upon an exchange of property for other property differing materially eitherin kind or in ex...
New York Casts a Wide Net for Finding Residents
August 15, 2011 - Volume 5 Issue 156 Print Report
On or about April 25, 1997, the taxpayer, (JG), purchased an automotive service station, (AAC), located in Staten Island, N.Y. In 1993 or 1994, JG purchased the Old...
MMI Agrees to be Acquired by GOOG
August 15, 2011 - Bulletin Print Report
Motorola Mobility Holdings, Inc., (MMI), just 7 1/2 months after being spun-off by Motorola, (MO), has entered into an agreementpursuant towhich Google,...
Washington Rebuffed In Attempt to Tax Out-of-State Seller
August 12, 2011 - Volume 5 Issue 155 Print Report
Dot Foods, Inc. (DF) sells food products to food service companies in the state of Washington. DF contracts with its wholly-owned subsidiary, DTI, to solicit the sa...
Gift and Sale Are "Stepped" Together
August 11, 2011 - Volume 5 Issue 154 Print Report
The taxpayer, (P), organized the single-member LLC, (PLLC), on July 13, 2000. P transferred $4.25 million of cash and marketable securities to PLLC on September 15, 2...
Recasting a Gift--Legally Binding Obligation vs. "Understanding"
August 10, 2011 - Volume 5 Issue 153 Print Report
What is the tax outcome when a shareholder of a corporation (T) donates all or a portion of his or her T stock to a charity and, as expected, the charity promptly c...
RAH's Acquisition Not Incompatible With Spin-Off
August 9, 2011 - Bulletin Print Report
Ralcorp Holdings, Inc., (RAH), has announced its entry into a definitive agreement to acquire the North American private brand refrigerated dough business of Sara L...
Valuing a Minority Interest For Purposes of the "BIG" Tax
August 9, 2011 - Volume 5 Issue 152 Print Report
The taxpayer, (RTC), a C corporation, made a valid election to be classified as an 'S' corporation, effective January 1, 2000....
Who "Owns" a Net Operating Loss?
August 8, 2011 - Volume 5 Issue 151 Print Report
P Corporation, (P), is a foreign corporation which isengaged in Business A. In the United States, P conducts Business A through "U.S. Branch", (USB)...
Can Motorola Mobility Safely "Monetize" Its Patents?
August 5, 2011 - Bulletin Print Report
Motorola Mobility, Inc., (MM), was spun-off from Motorola Solutions, Inc., (MS), on January 4, 2011. The spin-off was tax-free to both MS and the distributee shareh...
The Attribution Rules Have Their Limits
August 5, 2011 - Volume 5 Issue 150 Print Report
Mr. Brams, (B), owned 100 percent of the stock of L Corporation, (L), and T Corporation, (T). He also owned 31.6 percent of the stock of C Corporation, (C). His son...
Finessing Sec. 355(e)
August 4, 2011 - Volume 5 Issue 149 Print Report
D Corporation, (D), is engaged in the active conduct ofBusiness A and Business B. Acquiring Corporation, (ACQ), is engaged in the active conduct of Business C...
PAETECH, Kodak, and "RBIGs"
August 3, 2011 - Bulletin Print Report
PAETECH Holding Corp., (P), has entered into an agreement pursuant to which it will be acquired by Windstream Corp., (W). The shareholders of P will receive, in exc...
A Covenant Not to Compete Is a "Sec. 197 Intangible Asset"
August 3, 2011 - Volume 5 Issue 148 Print Report
RG, Inc., (RG), was an 'S' corporation. RG redeemed the stock of Mr. E, a holder of 23 percent of RG's stock, for a price of $255,908. In addition, Mr. E entered in...
Tax Notes Examines AAPL's Effective Tax Rate
August 2, 2011 - Bulletin Print Report
Martin A. Sullivan penned an interesting article in this week's edition of Tax Notes in which he analyzes Apple, Inc.'s accounting for income taxes and cri...
A Writer of "Indemnity Reinsurance" is an Insurance Company
August 2, 2011 - Volume 5 Issue 147 Print Report
IC Y and Z are each licensed and registered as insurance companies. Moreover, IC Y is an "insurance company" for Federal income tax purposes, subject to t...
Gain Ineligible for Installment Method
August 1, 2011 - Volume 5 Issue 146 Print Report
Mr. Cox, (R), owned 100 percent of the stock of RCI. R and his wife, collectively, owned100 percent of the stock of NR....
Hormel Denied Royalty Expense Deductions
July 29, 2011 - Volume 5 Issue 145 Print Report
Hormel Foods Corporation, (H), has its principal place of business and commercial domicile in Minnesota. H is engaged in business bothwithin and without Wisco...
Do Taxes Stand In the Way of an Acquisition of WMB?
July 28, 2011 - Bulletin Print Report
Over the past few days, we have fielded numerous questions from investors regarding the issue of whether Williams (WMB) has, because of the pending spin-off of its...
Liquidation/Reincorporation Treated as a 'C' Reorganization
July 28, 2011 - Volume 5 Issue 144 Print Report
P Corporation, (P), owns all of the outstanding common and preferred stock of S Corporation, (S). The preferred stock is non-voting preferredstock. S conducts,...
E*TRADE's NOLs Should Be Unaffected By an Acquisition
July 27, 2011 - Bulletin Print Report
E*TRADE Financial Corporation, (ETFC), is now officially in play and TD Ameritrade has beenmost often cited as apotential acquirer of the company.
Avoiding "Zero Basis" Problems
July 27, 2011 - Volume 5 Issue 143 Print Report
The taxpayer, (T), is a domestic corporation which owns100 percentof the stock of each of three foreign corporations, FS1, FS2, and FS3. T's stock is bo...
Tower Company Qualifies for REIT Status
July 26, 2011 - Volume 5 Issue 142 Print Report
TP, almost certainly American Tower Corporation, is a wireless and broadcast communication infrastructure company with over "a" communication sites, inclu...
Prohibited "Interest" Not Acquired
July 25, 2011 - Volume 5 Issue 141 Print Report
Mr. A and his son, C, own all of the stock of each of X Corporation, X, and Y Corporation, Y. In 1985, X redeemed all of Mr. A's stock for cash. In order for the...
Validus Proposes a Tax-Free Exchange
July 25, 2011 - Bulletin Print Report
Validus Holdings, Ltd., (V), has offered to acquire the stock of Transatlantic Holdings, Inc., (T) for a combination of stock and cash. This offer, it believes, is su...
The Long Arm of Sec. 483
July 22, 2011 - Volume 5 Issue 140 Print Report
On October 31, 1966, Mr. K, (K),entered into a reorganization agreement with A Corporation, (A),to convey all the stock of H Corporation (H), of which K...
Option or Stock?
July 21, 2011 - Volume 5 Issue 139 Print Report
In some instances,the labels attached to financial instruments do not govern their characterization for tax purposes. Thus, it is well-known that instruments pu...
Express Scripts/Medco: Horizontal Double Dummy
July 21, 2011 - Bulletin Print Report
Express Scripts, Inc. and Medco Health Solutions, Inc. have announced one of the largest business combinations of the year. The acquisition by Express of the stock...
Ralcorp: Cash or Stock?
July 21, 2011 - Bulletin Print Report
It is our view that, because Ralcorp has publicly-announced its intention to spin-off Post and such spin-off is to be carried out for corporate business purposes ot...
Nalco and Ecolab Announce a Merger
July 20, 2011 - Bulletin Print Report
Ecolab, Inc., (E), and Nalco Holding Co., (N), have announced a merger that is intended to qualify as a tax-free reorganization under Sec. 368(a)(1)(A) (by reason of...
Calculating COD Income When a Parent Cancels a Sub's Debt
July 20, 2011 - Volume 5 Issue 138 Print Report
Foreign Parent, (FP), owns all of the stock of U.S. Parent, (USP); the latter owns100 percentof the stock of Sub1, (S1)....
Warranty Income Cannot Be Deferred
July 19, 2011 - Volume 5 Issue 137 Print Report
In July, 1998, Koch Industries, Inc.,(K), and the state of New Mexico entered into a contract regarding the expansion of State Highway 44. The contract was di...
Senator Levin Continues His Crusade Against Stock Options
July 18, 2011 - Bulletin Print Report
Senator Levin (D-MI) has made the tax treatment of employee stock options one of his pet projects. He has once again introduced a bill, "Ending Excessive Corpo...
Closing Another Repatriation Loophole
July 18, 2011 - Volume 5 Issue 136 Print Report
Sec. 951(a) of the Internal Revenue Codeprovides that if a foreign corporation is a controlled foreign corporation, (CFC), for an uninterrupted period of 30 d...
Ralcorp Tosses a Curve Ball
July 15, 2011 - Bulletin Print Report
Ralcorp Holdings, Inc., (R), hasannounced its intention to spin-off its Post Foods business to shareholders in a transaction expected to qualify as a tax-free...
"Up-C" Incorporations Feature "Tax Receivable Agreements"
July 15, 2011 - Volume 5 Issue 135 Print Report
Where a partnership transforms itself into a corporation for the purpose of facilitating a public offering of ownership interests, the newly-formed corporation, in...
Closing Agreement Does Not Preclude Use of Notice 2003-65
July 14, 2011 - Volume 5 Issue 134 Print Report
In 1991, the predecessor of Vail Resorts, Inc., (VRI),a"loss corporation",experienced an "ownership change" within the meaning...
Inversion Transactions
July 13, 2011 - Volume 5 Issue 133 Print Report
P Corporation, (P), owns all of the stock of S Corporation, (S). P will exchange its shares of S common stock for new shares of S common stock. The number of shares...
Charter's "Tax Attributes"
July 12, 2011 - Bulletin Print Report
Charter Communications, Inc., (CCI), emerged from bankruptcy on November 30, 2009 with an impressive array of tax attributes that will likely keep the company free...
The Ernst & Young Losing Streak Continues
July 12, 2011 - Volume 5 Issue 132 Print Report
Mr. Robert Bergbauer, (RB), an Ernst & Young, (EY), consulting partner, received in exchange for his CGE&Y membership interest (in connection with the sale...
Self-Created Intangible Assets
July 11, 2011 - Volume 5 Issue 131 Print Report
In Year 1 through Year 2, the taxpayer, (TP), acquired approximately "H" customers through a series of acquisitions ("the acquired customer relations...
"Seller Paper" Ruled True Indebtedness
July 8, 2011 - Volume 5 Issue 130 Print Report
Shortly after its formation, First M&F Corporation, (FMF), purchased approximately87 percent of the stock of Merchants and Farmer's Bank, (MFB). Thus, in...
Taxpayer's "Dwelling Unit" Used as a "Residence"
July 7, 2011 - Volume 5 Issue 129 Print Report
The taxpayer, (TP), was the sole owner of a three-bedroom home in California, ("the cabin"). On his tax return, TP claimed $20,258 of Schedule E expenses...
Legal Fees Paid By Defendant Not Included in Plaintiff's Income
July 6, 2011 - Volume 5 Issue 128 Print Report
The taxpayer, (TP), was one of several plaintiffs who brought a lawsuit against Defendants. The lawsuit was not a class action.  ...
Eminent Domain and Gain Deferral
July 5, 2011 - Volume 5 Issue 127 Print Report
The taxpayer, (TP), has held certain land in State A for investment and development purposes since Date 1. State Agency...
'F' Reorganization Does Not Imperil Treaty Benefits
July 1, 2011 - Volume 5 Issue 126 Print Report
B Corporation, (B), a U.K. corporation, owns (through a single-member LLC) 100 percent of the stock of D Corporation, (D), a U.S. corporation. B has directly owned...
Loss Corporation Deemed To Continue Business Enterprise
June 30, 2011 - Volume 5 Issue 125 Print Report
The taxpayer, (TP), a Ccorporation, was engaged in Business A. During Year 1 through Year 3, it was engaged in "business development". In this perio...
Can BAC Deduct Its Settlement Payments for Tax Purposes?
June 29, 2011 - Bulletin Print Report
Bank of America, (BAC), announced that it has reached anagreement to "resolve nearly all of the legacy Countrywide-issued first lien residential mortgage...
Prearranged Merger Will Not Produce Basis Step-Up for PNC
June 29, 2011 - Volume 5 Issue 124 Print Report
RBC Bank (USA), (Bank), the company whose stock will soonbe acquired by PNC, is a wholly-owned subsidiary of RBC USA Holdco, (Seller), and the latter is a who...
Tax Court Determines the Nature and Source of a Golfer's Income
June 28, 2011 - Volume 5 Issue 123 Print Report
Retief Goosen, (G), a citizen of South Africa, resided in the United Kingdom at the time he filed his petition. G is a professional golfer. G automatically obtained...
Assignment of "Receive" Leg of Interest Rate Swap Is a Loan
June 27, 2011 - Volume 5 Issue 122 Print Report
Schering-Plough, Inc., (SP), now known as Merck, Inc., in the early 1990s, owned two foreign subsidiaries, S and L,which conducted substantial business activiti...
Sears To Spin-Off Orchard Supply Hardware Stores
June 27, 2011 - Bulletin Print Report
Sears Holdings Corporation, (SHLD), has announced its intention to distribute to its shareholders its holdings in Orchard Supply Hardware Stores Corporation, (OS)....
Rebates Reduce Gross Income
June 24, 2011 - Volume 5 Issue 121 Print Report
The Taxpayer (TP) is a Real Estate Investment Trust (REIT) which acquires, develops, leases, and manages shopping centers. TP, in addition,is a partner in Com...
MLPs and "CRUTs"--Handle With Care
June 23, 2011 - Volume 5 Issue 120 Print Report
The taxpayer, ina case entitled Lelia G. Newhall Unitrust v. Commissioner , 105 F.3d 482 (9th Cir. 1997), is a charitable remainder unitrust (CRUT). O...
Investment Adviser Not Conflated With Its Client Mutual Fund
June 22, 2011 - Volume 5 Issue 119 Print Report
The Supreme Court was asked to decide whether Janus Capital Management, LLC, (JCM), a mutual fund investment adviser, can be held liable in a private action under S...
PNC's Accounting for RBC's Troubled Loans
June 21, 2011 - Bulletin Print Report
The PNC Financial Services Group, Inc., (PNC) announced an agreement to acquire from Royal Bank of Canada, (RY), RBC Bank (USA), the U.S. retail banking subsidiary...
Troubled Financial Institution Remains in Affiliated Group
June 21, 2011 - Volume 5 Issue 118 Print Report
Beginning in 1985, Franklin Savings Corporation, (FSC), and members of its affiliated group, including Franklin Savings Association, (FSA), and other subsidiaries,...
RV Manufacturer Not "Doing Business" in New York
June 20, 2011 - Volume 5 Issue 117 Print Report
Jayco Corporation, (JC), an 'S' corporation organized under the laws of the state of Indiana, owns all of the stock of Jayco, Inc., (JI), Starcraft RV, Inc., (S), a...
"Impermissible Tenant Service Income"
June 17, 2011 - Volume 5 Issue 116 Print Report
The taxpayer, (TP), is a Real Estate Investment Trust, (REIT). Contractor, (C),is an independent construction services company that has provided various const...
SUG Will Be Folded Into ETE
June 16, 2011 - Bulletin Print Report
Energy Transfer Equity, L.P., (ETE), and Southern Union Company, (SUG), have announced a definitive merger agreement pursuant to which ETE will be acquiring the sto...
Gain On Settlement of Claim is Ordinary Income
June 16, 2011 - Volume 5 Issue 115 Print Report
W, a corporation, sued X, a corporation, for damages arising from X's alleged breach of contract with W to "sell it a computer system that would satisfy all of...
Cargill's Preliminary Recapitalization Will Be Quickly Undone
June 15, 2011 - Volume 5 Issue 114 Print Report
LTR 201123030, November 15, 2010, was issued to Cargill in connection with its split-off of Mosaic. The ruling depicts an exceedingly complex transaction that feature...
LyondellBasell Industries NV Retained Some Tax Attributes
June 15, 2011 - Bulletin Print Report
Where a taxpayer's indebtedness is discharged (or reduced) in the course of a "Title 11 case", the resulting cancellation of indebtedness (COD) income is...
Transatlantic's U.S. Shareholders Will Incur Tax Liability
June 14, 2011 - Bulletin Print Report
The "merger of equals" of Transatlantic Holdings, Inc., (TH), and Allied World Assurance Company Holdings, AG, (AW), a corporation organized under the law...
WEN's Sale of Arby's Yields "Income Tax Benefits"
June 14, 2011 - Bulletin Print Report
Wendy's/Arby's Group, Inc., (WEN) has announced a definitive agreement for the sale of Arby's Restaurant Group, Inc., (ARG), to a buyer, ARGIH, a subsidiary of ARG...
"Hybrid" Instrument is Equity
June 14, 2011 - Volume 5 Issue 113 Print Report
Fund, (F), is a closed-end management company that qualifies as a regulated investment company (RIC) under Sec. 851 of the Internal Revenue Code. F's common shares...
Assignment of Legal Claim Does Not Produce Income
June 13, 2011 - Volume 5 Issue 112 Print Report
X, a corporation, is the plaintiff in a legal proceeding pending inthe "C", entitled "D". X has asserted various claims. X requests "...
How Will AIG's Warrants Be Taxed?
June 13, 2011 - Bulletin Print Report
On January 19, 2011, each holder of AIG's common stock (other than the Treasury Department) received from the company, with respect to each share of stock, 0.533933...
"Attributable" Income is "Good" REIT Income
June 10, 2011 - Volume 5 Issue 111 Print Report
TP, a corporation, has elected to be treated as a Real Estate Investment Trust (REIT). TP owns stock of several foreign subsidiaries for whichtaxable REIT sub...
A REIT Cannot Be "Closely Held"
June 9, 2011 - Volume 5 Issue 110 Print Report
The term, Real Estate Investment Trust, (REIT), means a corporation, trust, or association...which is not closely held . See Sec. 856(a)(6). This is one of...
Federal Circuit Pans Wells Fargo's SILOs
June 8, 2011 - Volume 5 Issue 109 Print Report
A SILO transaction consists of twoconcurrent leases of an asset owned by a tax-exempt entity. In the first lease, which isknown as the "head lease&...
"Like-Kind" Exchange Treatment Denied
June 7, 2011 - Volume 5 Issue 108 Print Report
On October 31, 1990, Mr. Goolsby, (G), purchased the W property for $270,000. The W property is a single-family residence owned by G as an investment property.
Owner of "DRE" is "The Taxpayer" For Purposes of Sec. 108
June 6, 2011 - Volume 5 Issue 107 Print Report
Sec. 61(a)(12) of the Internal Revenue Code provides that income from discharge of indebtedness is includible in gross income. However, such income may be excludibl...
AMT's Subpoena Should Not Impede REIT Conversion
June 6, 2011 - Bulletin Print Report
Recently, American Tower, Inc., (AMT) received a subpoena from the S.E.C. requesting certain documents from 2007 to the present "including, in particular, docu...
"Readily Tradable on an Established Securities Market"
June 3, 2011 - Volume 5 Issue 106 Print Report
Sec. 4975(e)(7) of the Internal Revenue Codedefines an Employee Stock Ownership Plan (ESOP) as a defined contribution plan which is a stock bonus plan which i...
When Is a Distribution Charged to Earnings and Profits?
June 2, 2011 - Volume 5 Issue 105 Print Report
In 1942, the taxpayer, (G), received a distribution, in the amount of $800,000, from SGS, Inc., (SGS), a corporation in which he owned100 percentof the...
How Not To Do a "Reverse Morris Trust" Transaction
June 1, 2011 - Volume 5 Issue 104 Print Report
D Corporation, (D), owned all of the stock of each of T Corporation, (T), and C Corporation, (C). On or about October 28, 1981, T merged with and into S1 Corporatio...
Liberty Global Launches an Exchange Offer
May 31, 2011 - Bulletin Print Report
Liberty Global, Inc., (LGI), is offering to exchange cash and shares of LGI's Series A and Series C common stock for LGI's 4 1/2 percent convertible subordinated no...
Terms of Agreement Controls "Allocation" of Payments
May 31, 2011 - Volume 5 Issue 103 Print Report
TP, a State corporation, is engaged in Business. It has common stock outstanding which is traded on "a major exchange". SH, a State corporation, owned app...
Licensor Earns R&D Tax Credits
May 27, 2011 - Volume 5 Issue 102 Print Report
Taxpayer (TP), a C corporation, was formed by Company 1 and Company 2 ("the companies") to allow them to jointly develop and commercialize inventions. Eac...
Can Stock Buybacks "Poison" an Otherwise Tax-Free Spin-Off?
May 26, 2011 - Bulletin Print Report
Liberty Media, (LM), is in the process of effecting a split-off in which tracking stock ina new entity, known as "Splitco", will be distributed to t...
Liquidation/Reincorporation Not a Reorganization
May 26, 2011 - Volume 5 Issue 101 Print Report
Fund, (F), is a closed-end management investment company registered under the Investment Company Act of 1940. F qualified as a "regulated investment company&qu...
Donation of LLC Interests To Private Foundation Not "Self-Dealing"
May 25, 2011 - Volume 5 Issue 100 Print Report
Mr. A, (A), and his spouse, (B), will donate to a private foundation some of A's units in a closely-held limited liability company, (LLC). A owns "xx" LLC...
Sony Establishes a Valuation Allowance
May 24, 2011 - Bulletin Print Report
Sony will be reporting a net loss for the fiscal year ended March 31, 2011, it revealed recently, primarily because of a massive charge of approximately 360 billion...
Displaced Taxpayer Found To Be New York "Resident"
May 24, 2011 - Volume 5 Issue 99 Print Report
On May 19, 2002, David Leiman's residence, locatedin BocaRaton,Florida, was completelydestroyed by fire and his thenfiancee was seriou...
Capital Gains From the Sale of "QSBS" Are Not Taxed
May 23, 2011 - Volume 5 Issue 98 Print Report
Although net capital gains are generallytaxed at rates not exceeding 15 percent (at least through the end of 2012), a certain variety of capital gain income&nbs...
Is Tracking Stock "Other Than Common Stock"?
May 23, 2011 - Bulletin Print Report
Liberty Media, (LM),is poised to effect a split-off in connection with which the stock of "Splitco" will be distributed to the holders of LCAPA, LCA...
"Title Defense" Expenses Cannot Be Deducted
May 20, 2011 - Volume 5 Issue 97 Print Report
In the 1990s, Wellpoint, Inc.'s predecessor (Anthem, Inc.)acquired three companies. After the acquisitions, the attorneys general of the three states of the a...
Desire to Achieve "Risk Reduction" Justifies Spin-Off
May 19, 2011 - Volume 5 Issue 96 Print Report
D Corporation, D, an 'S' corporation, is engaged in the active conduct of Business 1. D owns all of the stock of C Corporation, C, and C owns all of the stock of CS...
Joy Global's Basis Step-Up
May 19, 2011 - Bulletin Print Report
Joy Global, Inc., (JGI), and Rowan Companies, Inc., (RCI), have entered into an agreement pursuant to which JG will purchase the stock of RCI's manufacturing subsid...
I.R.S. Finalizes "Killer B" Regulations
May 18, 2011 - Bulletin Print Report
The I.R.S., ever vigilant regarding schemes to repatriate foreign earnings tax-efficiently, has issued regulations which render ineffective a technique that had bee...
Federal Circuit Finds "Son-of-Boss" Wanting
May 18, 2011 - Volume 5 Issue 95 Print Report
The Ervin brothers realized substantial capital gains from the sale of their cable TV business and sought losses to shelter those gains from taxation. They entered...
Open-Air Parking Structures are "Buildings"
May 17, 2011 - Volume 5 Issue 94 Print Report
Open-air parking structures typically provide multi-level parking accessed by a ramp system. These structures typically have hydraulic elevators, internal stairwell...
Can Non-Tendering Shareholders Be Taxed?
May 16, 2011 - Volume 5 Issue 93 Print Report
H&Q Life Sciences Investors, a "closed end fund", is offering to purchase for cash up to 35 percent of its outstanding stock at a price equal to 98 pe...
Income From Option Exercises Deferred Due to "Pooling" Restrictions?
May 13, 2011 - Volume 5 Issue 92 Print Report
Ordinarily, when an employee is compensated with "non-statutory" stock options that do not have a "readily ascertainable fair market value" at t...
Another Repatriation Holiday?
May 12, 2011 - Bulletin Print Report
A bipartisan group ofmembers ofThe House of Representativeshas introduced legislation which would allow for the repatriation by U.S. corporate&nbs...
MS Sufferer Escapes Penalty Tax On IRA Withdrawal
May 12, 2011 - Volume 5 Issue 91 Print Report
The taxpayer, TP, an employee of an investment counseling firm for some15 years, was diagnosed with multiple sclerosis, MS, in 1996. In 2002, symptoms from th...
REIT's Dividends Are Not "Preferential"
May 11, 2011 - Volume 5 Issue 90 Print Report
TP intends to qualify as a Real Estate Investment Trust, (REIT). TP's shares of common stock will not be listed on a securities exchange. Stockholders of TP will,&n...
Hertz Raises the Ante
May 10, 2011 - Bulletin Print Report
Hertz Global Holdings, Inc., (HGH), has substantiallyincreased its offer to acquire Dollar Thrifty Automotive Group, Inc., (DTAG). Whether this latest offer w...
"Percentage Rent" Is Good REIT Income
May 10, 2011 - Volume 5 Issue 89 Print Report
The taxpayer, (TP), is a Real Estate Investment Trust (REIT). TP owns more than "a%" of the outstanding units of LP1, a limited partnership. LP1, in turn,...
'S' Bank Secures Interest Deduction On Debt Related to Munis
May 9, 2011 - Volume 5 Issue 88 Print Report
The Vainisis own a holding company, HC,that owns all of the stock of First Forest Park National Bank and Trust Company, FF. In 1997, HC became an 'S' co...
Regulations Render Nielsen Decision Obsolete
May 6, 2011 - Volume 5 Issue 87 Print Report
Oak Park, Inc., (OP), was organized on November 8, 1956 for the purpose of conducting a hospital business. A hospital business was actively conducted by OP, in Stoc...
No Withholding On Tax Refund Collections
May 5, 2011 - Volume 5 Issue 86 Print Report
On Date 1, X Corporation, (X), and one of its subsidiaries, (XS), commenced voluntary cases under Chapter 11 of the Bankruptcy Code. On Date 2, the debtors filed a pr...
JNJ's Stock Will Be Taxable
May 4, 2011 - Bulletin Print Report
Johnson & Johnson, (JNJ), has entered into a plan and agreement for the acquisition of Synthes, Inc., (SY). The majority of the consideration to be paid by JNJ...
No Deduction For Loss On "Indirect" Sales to Related Parties
May 4, 2011 - Volume 5 Issue 85 Print Report
On April 16, 1948, the taxpayer, (FB), transferred 500 shares of stock she owned in WP, Inc. to her mother-in-law who paid, with her own funds, $7,688 for the block...
Accounting for "TIPS"
May 3, 2011 - Volume 5 Issue 84 Print Report
Treasury Inflation-Protected Securities, (TIPS), are securities issued by the Department of the Treasury. The principal amount is adjusted for any inflation or defl...
The Demise of "Repo 105"
May 2, 2011 - Bulletin Print Report
A "repurchase agreement" can be accounted for, by the transferor,as either(i) a secured borrowing or (ii) a sale and a "forward repurchas...
No "Significant Modification" of Debt From Change in Obligor
May 2, 2011 - Volume 5 Issue 83 Print Report
P Corporation, (P), owns all of the stock of S1 Corporation, (S1). The latter owns, through a series of LLCs, the stock of S2 Corporation, (S2). S2, in turn, owns a...
Taxpayer Found to Have "Sold" (Not Hypothecated) QRP
April 29, 2011 - Volume 5 Issue 82 Print Report
The taxpayer, (KS), was the president and sole owner of SM, Inc., (SMI)., a corporation which had no stock outstanding which was readily tradable on an established...
Consolidated Group Members Not the "Same Taxpayer"
April 28, 2011 - Volume 5 Issue 81 Print Report
Energy East Corporation, (EE), acquired CMPG, CMP's parent, on September 1, 2000. On July 1, 2002, EE acquired RG&E's parent, RGSEG. CMP and RG&E each survi...
Intentional Avoidance of Sec. 332 is Permissible
April 27, 2011 - Volume 5 Issue 80 Print Report
Mr. I, (I), owned all of the stock of H Corporation, (H), and the latter owned all of the stock of S1 Corporation, (S1), and S2 Corporation, (S2). I, S1, and S2 eac...
CVS Caremark--Can a Tax-Free Spin-Off Occur Before 2012?
April 26, 2011 - Bulletin Print Report
Recently, the number of observers calling for the separation of Caremark from CVS--the companies were joined in a merger that was completed at the end of March, 200...
"Deferral" Method Available to Retailer Operating Through LLC
April 26, 2011 - Volume 5 Issue 79 Print Report
Corporation A, (A), is the sole member of "Entity B", (EB), a single-member Limited Liability Company, (LLC),that is disregarded (as an entity separ...
FASB Eases "Testing" Rules For Goodwill Impairment
April 25, 2011 - Bulletin Print Report
Current accounting guidance requires an entity to test goodwill for impairment on a least an annual basis. The first step of the impairment test compa...
Unwinding a High Vote/Low Vote Stock Structure Is Not Difficult
April 25, 2011 - Volume 5 Issue 78 Print Report
D1 Corporation, (D1), owns all of the stock of D2 Corporation, (D2). The latter owns a portion of the Class A stock of Controlled Corporation, (C). C was formerly a...
Members of LLCs Are Not Limited Partners--Part 2
April 21, 2011 - Volume 5 Issue 77 Print Report
On March 19, 2002, the taxpayer, Mr. Thompson (T), formed MA, LLC (LLC)under the laws of the State of Texas. T directly held a 99 percent interest inLLC...
NDAQ and ICE Unveil Their Proposal
April 20, 2011 - Bulletin Print Report
NASDAQ OMX, (NDAQ), and Intercontinental Exchange, (ICE), have filed their merger proposal pursuant to which the companies seek to carve up the assets of NYSE Euron...
Intangible Assets Can Produce "RBIGs"
April 20, 2011 - Volume 5 Issue 76 Print Report
On Date 2, Corporation A, (CA), entered into a Sub-License Agreement with Corporation B, (CB), that provided CA with patents, know-how, and the rights to develop an...
Court Finds "Tenancy By The Entirety"
April 19, 2011 - Volume 5 Issue 75 Print Report
RG, in 1968, transferred to her children, including Mr. Oscar Goldberg, (OG), her interest in real property, the "37-35" property and the "37-40"...
Silgan Holdings To Acquire Graham Packaging
April 18, 2011 - Bulletin Print Report
Silgan Holdings, Inc., (S), has entered into a merger agreement pursuant to which it will acquire Graham Packaging Company, Inc., (G). The merger is structured as a...
Accounting for Contingent Liabilities in an Acquisition
April 18, 2011 - Volume 5 Issue 74 Print Report
D was an unincorporated division of C Corporation. In 1975, D acquired a license from unrelated T Corporation to sell, and later manufacture and sell, robots.
No Rollover Dispensation Necessary
April 15, 2011 - Volume 5 Issue 73 Print Report
Ms. A, (MA), participated in Plan X, a qualified retirement plan, sponsored by her employer,Company 1, (C1). A left C1's employ and found a job with Company 2...
"Manufacturing" Massachusetts Style
April 14, 2011 - Volume 5 Issue 72 Print Report
Onex Corporation (O) was formed in 1999 for the purposeof designing and selling integrated circuits. Its efforts yielded the "OMNI chip". The produc...
A Partnership Can Be a "Qualified Investor" in an "FIA"
April 13, 2011 - Volume 5 Issue 71 Print Report
TP was a partnership. TP sold membership interests to investors and used the funds to invest in loans originated by C. I...
G.M.'s Ownership Change Not Subject to "Sec. 382 Limitation"
April 12, 2011 - Bulletin Print Report
Predecessor, (PR), was a manufacturer of products. PR had substantial net operating losses (NOLs). On Date 1, PR entered...
Level 3 Will Adopt a "Rights" Plan
April 12, 2011 - Bulletin Print Report
Level 3 Communications, Inc., (L), has reached an agreement to acquire Global Crossing, Ltd., (G), in what is advertised as "a tax-free stock for stock exchang...
Taxes and the "Equity Method" of Accounting
April 12, 2011 - Volume 5 Issue 70 Print Report
Under the "equity method" of accounting, which isgenerallyemployed in cases where a corporateinvestor has an investment of 20 percent or...
I.R.S. Institutes "Safe Harbor" for "Success-Based" Fees
April 11, 2011 - Bulletin Print Report
Sec. 263(a)(1) of the Internal Revenue Code and Reg. Sec. 1.263(a)-2(a) of the Income Tax Regulations provide that no deduction shall be allowed for any amount paid...
Preventing Dilution Tax-Efficiently--Form Controls
April 11, 2011 - Volume 5 Issue 69 Print Report
A corporation, (X), has outstanding both common stock and convertible preferred stock. A distribution is made with respect to the common stock and, to prevent dilut...
Valuing "Restricted" Stock
April 8, 2011 - Volume 5 Issue 68 Print Report
G, an individual, was an officer of AU Corporation, (AU), which marketed food products. AU made an initial public offering of 14.5 million registered shares of comm...
Sec. 338(h)(10) Election Not Made "By" The Corporate Taxpayer
April 7, 2011 - Volume 5 Issue 67 Print Report
Trawick Construction Company, Inc., (T), was a closely-held Florida 'S' corporation. However, for Georgia state income tax purposes, T was a 'C' corporation which p...
Taxpayer's Activities Not a Trade or Business
April 6, 2011 - Volume 5 Issue 66 Print Report
The taxpayers, a husband and wife, are each CPAs. The husband specializes in forensic accounting while the wife's specialty is taxation. &n...
PG Reprises Its Favorite Tax Structure
April 5, 2011 - Bulletin Print Report
For at least the third time, Procter & Gamble Company, (PG), has chosen a tax-efficient method for disposing of a non-core business: the method is popularly&nbs...
Partnership "Sold" Tax Credits to Partners
April 5, 2011 - Volume 5 Issue 65 Print Report
Under the rules of the state of Virginia, any person rehabilitating an historic property can seek state approval and certification of the project. Once the property...
Crediting Puerto Rican Excise Taxes
April 4, 2011 - Volume 5 Issue 64 Print Report
On October 25, 2010, Puerto Rico enacted legislation amending the Puerto Rican Internal Revenue Code. The legislation ad...
Conversion of Subsidiary Into LLC is a 'C' Reorganization
April 1, 2011 - Volume 5 Issue 63 Print Report
P Corporation, (P), owned all of the stock of Corporation A, (CA). The latter owned all of the stock of S Corporation, (S), a controlled foreign corporation. CA als...
Investing (Other Peoples' Money) Is a Trade or Business
March 31, 2011 - Volume 5 Issue 62 Print Report
In 1994, Mr. Todd Dagres, (TD), met with Mr. William Schrader, (WS), who had co-founded PSINet, (PN). Because TD "made a favorable impression on WS", the...
Downstream Merger is an 'F' Reorganization
March 30, 2011 - Volume 5 Issue 61 Print Report
X Corporation, (X), made an election to be treated as an 'S' corporation, effective Date 1. Y Corporation, (Y), is wholly-owned by X. Y was formed in Year 1 and mad...
"Restorative" Payments Do Not Jeopardize Qualified Plan Status
March 29, 2011 - Volume 5 Issue 60 Print Report
M Corporation, (M), sponsors Plan X, a defined contribution plan. Plan X is qualified under Sec. 401(a) of the Internal Revenue Code and its accompanyingtrust...
"Reforming" a Loan Does Not Give Rise to COD Income
March 28, 2011 - Bulletin Print Report
Corporation provided funding to Bank to finance loans to Borrowers. Borrowers used the proceeds of the loans to finance Assets, and the Assets secured Borrowers' ob...
Yet Another View on the Status of Basis Overstatement
March 28, 2011 - Volume 5 Issue 59 Print Report
Surprisingly, what has clearly become the most heavily debated (and litigated) taxation issue is whether a basis overstatement constitutes an "omission" f...
Election Deadlines Must Be Adhered To
March 25, 2011 - Volume 5 Issue 58 Print Report
The Internal Revenue Code provides for numerous elections that taxpayers can voluntarily make with respect to the myriad of items that go into the calculation of on...
Co-Op Shareholder Not Entitled to Casualty Loss Deduction
March 24, 2011 - Volume 5 Issue 57 Print Report
During 2005, the taxable year in issue, the taxpayer, (CA), an individual, owned shares of stock in Castle Village Owners Corporation, (CV), a cooperative housing c...
"Squeezing Out" Minority Shareholders
March 23, 2011 - Volume 5 Issue 56 Print Report
Corporation, (C), is a State A corporation the stock of which is owned by Shareholder 1, (SH1), Shareholder 2, (SH2), and minority shareholders, (M). SH1 owns "...
AT&T Will Not Obtain a Basis Step-Up In T-Mobile's Assets
March 22, 2011 - Bulletin Print Report
A buyer's primaryobjective, from a tax viewpoint, is tosecure a "cost" basis in the target's assets. Obtaining such a cost basis will enable t...
Citigroup Announces "Reverse" Stock Split
March 22, 2011 - Bulletin Print Report
Citigroup, Inc., (C), announced a 1-for-10 "reverse" stock split, (RSS), of its common stock. The RSS will be effective after the close of trading on May...
Coal Is "Sold" Despite Retained Royalty Interest
March 22, 2011 - Volume 5 Issue 55 Print Report
The taxpayer (TP), a domestic corporation, elected to be an 'S' corporation effective Date 1. TP's seventh year since electing to be an 'S' corporation ended on Dat...
"Drop Down" of Stock Acquired in a Merger Not Fatal
March 21, 2011 - Volume 5 Issue 54 Print Report
P Corporation (P) directlyowned all of the stock of T Corporation (T) and all of the stock of S Corporation (S). S, in turn, directlyowned all of the st...
Universal American Knows How To Structure a "Bad" Morris Trust
March 18, 2011 - Bulletin Print Report
Universal American Corporation, (UAM), has agreed to sell its Medicare Part D business to CVS Caremark, (CVS). In lieu of an outright sale (and distribution of the...
Disproving An "Ownership Change" With Actual Knowledge
March 18, 2011 - Volume 5 Issue 53 Print Report
Where a "loss corporation" (a corporation with net operating loss (NOL) carryovers or with net unrealized built-in losses) experiences an ownership ch...
Guaranty Fees Are Not U.S. Source Income
March 17, 2011 - Volume 5 Issue 52 Print Report
On March 28, 1991, Vitro International, Inc., (VI), a wholly-owned U.S. subsidiary of Vitro, S.A., (VSA), a Mexican corporation, issued senior notes, in order to fi...
Retiring Bond/Stock Purchase Contract Units
March 16, 2011 - Volume 5 Issue 51 Print Report
On Date 2, Company, (C), issued "a" units in exchange for "$b" in cash. Each unit had an initial purchase price of "$c" and is traded...
Financial Adviser Ruled an Employee of Merrill Lynch
March 15, 2011 - Volume 5 Issue 50 Print Report
The taxpayer, (P), is a financial adviser. He began his careerat D.A. Davidson, (D). He left D, where he was the firm's "top producer", to work at M...
Guidance on Accounting for CVRs Issued
March 14, 2011 - Bulletin Print Report
Sanofi-Aventis, (SA), has offered some guidance on how to account, for tax purposes, for the CVRs it will issue in connection with its acquisition of the stock of Gen...
A Member of an LLC Is Not a "Limited Partner"
March 14, 2011 - Volume 5 Issue 49 Print Report
During 2001-2003, the taxpayer, (N), owned all of the stockin M Corporation, (M), an 'S' corporation. M incurred losses that were deducted by N on his income...
"Induced" Conversions of Convertible Debt
March 11, 2011 - Volume 5 Issue 48 Print Report
In some instances, an issuer of convertible debt which is "out-of-the-money" (the conversion priceis in excess ofthe applicable stock price) w...
AIG Moves to Protect Its "Tax Attributes"
March 10, 2011 - Bulletin Print Report
American International Group, Inc., (AIG), has joined the long list of "loss corporations" which have taken affirmative steps, specifically the adoption o...
Microsoft Loses California Tax Skirmish
March 10, 2011 - Volume 5 Issue 47 Print Report
Microsoft Corporation, (MSFT), is organized under the laws of the State of Washington. For California tax purposes, MSFT and all of its domestic and foreign subsidi...
Liberty Media Suffers From I.R.S. Change of Heart
March 9, 2011 - Volume 5 Issue 46 Print Report
In Liberty Media's most recentForm10-K, the company discloses the following: "...in 2009 we settled 'variable share forward sale contracts' relatin...
Washington Mutual Scores a Major Tax Victory
March 8, 2011 - Volume 5 Issue 45 Print Report
On November 5, 1981, Home Savings of America, FSB, (HS), submitted a proposal to acquire Southern Federal S&L, (S), Hamiltonian Federal S&L, (H), and Securi...
New Jersey Embraces "Economic Nexus"
March 8, 2011 - Bulletin Print Report
New Jersey's Business Tax Reform Act, (BTRA), enacted July 2, 2002, made numerous amendments and supplements to the Corporation Business Tax Act, (CBTA). Those amen...
Ownership Changes in Reorganizations--Revisiting RVI/DSW
March 7, 2011 - Bulletin Print Report
Shareholder A owned "X%" of T Corporation, (T); the balance of the stock is publicly held. T is a "loss corporation" (we believe T is RVI). Acqu...
To What Year Are Taxes "Attributable"?
March 7, 2011 - Volume 5 Issue 44 Print Report
On October 31, 2001, CMS Enterprises Company (CMS) and Marathon E.G. Holding Limited (M) executed a stock purchase agreement (SPA)in which M bought all the st...
A 'C' Reorganization Can Be the "Back-End" of a Morris Trust
March 4, 2011 - Volume 5 Issue 43 Print Report
In most cases, a spin-off (or split-off) is preceded by a transfer of assets from the distributing corporation (T) to the corporation (C)whose stock and secur...
Loss From Worthless Bank Stock Is Ordinary
March 3, 2011 - Volume 5 Issue 42 Print Report
P Corporation, (P), is a savings and loan holding company. S, P's subsidiary, operated as a federally-chartered savings bank and previously was B, which was acqui...
Liberty Media's New Capital Loss
March 3, 2011 - Bulletin Print Report
Liberty Media, (LM), in its recently-filed Form 10-K, has disclosed a new tax benefit that should enable to avoid over $450 million in federal incometaxes it...
Yahoo's Options With Respect to Yahoo Japan
March 2, 2011 - Bulletin Print Report
Press reports are indicating that Yahoo!, (Y), is inching closer towardsthe adoption ofa strategy to divest its stake in Yahoo Japan, (YJ), on a "t...
Ralston Denied a Deduction for "ESOP Dividends"
March 2, 2011 - Volume 5 Issue 41 Print Report
In 1989, Ralston Purina Company, (RP), established an Employee Stock Ownership Plan (ESOP). A trust held the ESOP's assets, consistingprimarily of...
TV News Anchor Cannot Deduct Her Clothing Expenses
March 1, 2011 - Volume 5 Issue 40 Print Report
On Schedule A of her Federal income tax returns for the years 2005-2008, the taxpayer, (AH), claimed deductions for "unreimbursed business expenses" of $2...
Rental MLPs Can Qualify for Partnership Benefits
February 28, 2011 - Volume 5 Issue 39 Print Report
X is a limited partnership the interests in which are either (i)traded on an established securities market or (ii)readily tradable on a secondary market...
Fifth Circuit Finds That Overstatement of Basis Is Not an "Omission"
February 25, 2011 - Volume 5 Issue 38 Print Report
The taxpayers, who had participated in a "Son of Boss" tax shelter, argue that an overstatement of basis does not constitute an omission from gross income...
Impending IPO Informs Valuation of Sub's Stock
February 24, 2011 - Volume 5 Issue 37 Print Report
P Corporation, (P), owned 100 percent of the stock of D Corporation, (D). D, in turn, owned all of the stock of C Corporation, (C). D will distribute its C stock to...
Interest Income is "Portfolio" Income
February 23, 2011 - Volume 5 Issue 36 Print Report
X Corporation, (X), is an 'S' corporation. X has been granted valuablelicenses toconstruct and operate"Facilities" in State 1 and State...
"Proxy Agreement" Does Not Deprive Parent of Control of Sub
February 22, 2011 - Volume 5 Issue 35 Print Report
Foreign Parent, (FP), owned all of the stock of United States Parent, (USP), and the latter owned all of the stock of Distributing Corporation, (D). D, in turn, own...
Sanofi's CVRs Raise Tax Questions
February 18, 2011 - Bulletin Print Report
Sanofi-aventis, (SNY), and Genzyme Corporation, (GENZ), at long last, announced a defintive agreement under which SNY will acquire the stock of GENZ for $74.00 per...
Not All Bad Debts Are "RBILs"
February 18, 2011 - Volume 5 Issue 34 Print Report
TP is a bank holding company. T is also a bank holding company and wholly-owns S, a bank. S is an accrual method taxpayer, does not use the "reserve method&quo...
NYX and DBI Will Combine
February 17, 2011 - Bulletin Print Report
Deutsche Boerse AG, (DBI), and NYSE Euronext, (NYX), announced that they have entered into a business combination agreement following the receipt of approval...
Courts Continue To Take Liberties With "Physical Presence" Test
February 17, 2011 - Volume 5 Issue 33 Print Report
Lamtec Corporation, (LC), manufactures its products at its facility in New Jersey and has no permanent facilities, office, address, phone number, or employees in th...
Will RehabCare and Kindred Engage in a "Forward" Merger?
February 16, 2011 - Bulletin Print Report
Kindred Healthcare, Inc., (K), and RehabCare Group, Inc., (R), have announced the adoption of a merger agreement in which R will be merged with and into K. The merg...
Interest on Tax Deficiencies Is "Personal Interest"
February 16, 2011 - Volume 5 Issue 32 Print Report
The Redlarks (Rs) operated an unincorporated business. When the I.R.S. examined the Rs' Federal income tax returns, it determined that "extensive adjustments&q...
SLE's Restructuring Plan Is Replete With Tax Considerations
February 15, 2011 - Volume 5 Issue 31 Print Report
Sara Lee Corporation, (SLE), has terminated negotiations with respect to the sale of the company and has decided, instead, to pursue a restructuring plan the center...
Basis Overstatement Is Not an "Omission" From Gross Income
February 14, 2011 - Volume 5 Issue 30 Print Report
The taxpayers argue that the six-year statute of limitations is inapplicable because HC's overstated basis did not constitute an omission from gross income. The tax...
Basis Overstatement Is an "Omission" From Gross Income
February 11, 2011 - Volume 5 Issue 29 Print Report
In a "Son of Boss" transaction, an individual uses a short sale mechanism to artificially increase his basis in a partnership interest prior to selling th...
Installment Method For Sale of Publicly-Traded Stock?
February 10, 2011 - Volume 5 Issue 28 Print Report
Corporation, (C), has one class of stock outstanding which is listed and traded on "the Market". Mr. A,(A), was the President of C until Date 2 and...
RVI To Merge "Downstream" Into DSW
February 9, 2011 - Bulletin Print Report
Retail Ventures, Inc., (RVI), isa holding company whose principal asset is a 62 percent stake in DSW, Inc., (DSW). RVI's largest shareholder is Schottenstei...
Connecticut Vacationers Found To Be NYS Residents
February 9, 2011 - Volume 5 Issue 27 Print Report
The petitioners, Mr. and Mrs. Barker, were Connecticut domiciliaries during the years in issue. Mr. Barker was an investment manager for Neuberger Berman in New Yor...
Delivering Borrowed Shares Does Not Defer Gain Recognition
February 8, 2011 - Volume 5 Issue 26 Print Report
Trust, (T),entered into three "variable forward contracts" with Bank, (B), with respect to shares of common stock owned by T. Upon executing the for...
ESV and PDE Plan a "Taxable" Merger
February 8, 2011 - Bulletin Print Report
Ensco plc, (ESV), and Pride International, Inc., (PDE), have announced the signing ofa merger agreement pursuant to which the latter will become an indirect,...
Identifying the "Owners" of an Insolvent Corporation
February 7, 2011 - Volume 5 Issue 25 Print Report
FSI Corporation, (FSI), owned, directly and indirectly, 100 percent of the stock of Holdings III Corporation, (HIII), Holdings II Corporation, (HII), Allied Corpora...
Insurance Company Allowed "Fresh Start" Loss Deductions
February 4, 2011 - Volume 5 Issue 24 Print Report
B Corporation, (B), a health insurance entity which wasformerly exempt from taxes, became a taxable entity on January 1, 1987. In that regard, B became subjec...
NEM Will Acquire FRG
February 3, 2011 - Bulletin Print Report
Newmont Mining Corporation, (NEM), and Frontier Gold Gold, Inc., a Canadian corporation, (FRG), have entered into an agreement pursuant to which NEM will acquire al...
Worthless Stock Loss Not Barred By "Intercompany" Account
February 3, 2011 - Volume 5 Issue 23 Print Report
On Date 1, P Corporation, (P),at that timean "a%"-owned subsidiary of GP Corporation, (GP), purchased "b%" of the stock of S Corporati...
'S' Election Does Not Taint C Corporation's Spin-Off
February 2, 2011 - Volume 5 Issue 22 Print Report
D Corporation, (D), a C corporation,was engaged in the active conduct of each of Business A and Business B. 50 percent of D's single class ofstock was o...
Bondholders Not Entitled to "Just Compensation"
February 1, 2011 - Volume 5 Issue 21 Print Report
In 1996, the Village of Bensenville (Ill.) authorized "tax increment allocation financing" through the issuance of "TIF" bonds. The Village took...
ANR Is Planning A "Reverse Triangular Merger"
February 1, 2011 - Bulletin Print Report
Alpha Natural Resources, Inc., (ANR), has reached an agreement with Massey Energy Company, (MEE), with respect to the acquisition by the former of all of the latter...
Acquisitions Following Spin-Offs: The Rules of the Road
January 31, 2011 - Volume 5 Issue 20 Print Report
Recently, severalnotable spin-off transactions have been announced by companies as diverse as Fortune Brands, Sara Lee, and IT&T. Questions have arisen re...
IRA "Wrap" Fees Can Be Paid With Non-IRA Funds
January 31, 2011 - Bulletin Print Report
X is a securities broker-dealer and investment adviser. X offers IRAs and Roth IRAs to its clients. X was approved as a "non-bank custodian for IRAs. <...
"De-Controlling" a CFC
January 28, 2011 - Volume 5 Issue 19 Print Report
T Corporation, (T), is a foreign corporation. Its stock is owned by X Corporation, (X), and Y Corporation, (Y), each of which is a foreign corporation. The stock of...
Service Allows Late "Election Out" Of Sec. 382(l)(5)
January 27, 2011 - Volume 5 Issue 18 Print Report
On Date 1, the taxpayer, (TP), a "loss corporation", underwent an "ownership change" within the meaning of Sec. 382(g) of the Internal Revenue C...
Smurfit-Stone Container To Be Acquired by Rock-Tenn
January 26, 2011 - Bulletin Print Report
Smurfit Stone Container Corp., (SSC), only recently emerged from bankruptcy, has agreed to be acquired by Rock-Tenn Co., (RT), in a transaction which will be struct...
Illinois and Amazon.com--Will the Supreme Court Revisit Quill?
January 26, 2011 - Volume 5 Issue 17 Print Report
Illinois, in addition to imposing substantial increases in its personal and corporateincome tax rates, is also taking steps to require that out-of-state retai...
The Partial Liquidation "Safe Harbor" Requires Two Businesses
January 25, 2011 - Volume 5 Issue 16 Print Report
A distribution by a corporation in redemption of its stock will qualify, under Sec. 302(a), as a distribution "in part in full payment in exchange for the stoc...
G.E.'s Earnings Benefit From Reinstated Tax Rule
January 25, 2011 - Bulletin Print Report
General Electric, (GE), has consistently enjoyed a rather low effective tax rate. By the company's own admission, this phenomenon can be traced to the fact that a s...
Are Legal Fees Ordinary and Necessary Business Expenses?
January 24, 2011 - Volume 5 Issue 15 Print Report
Mr. Daniel L. Gordon (G) was hired, in 1998, by Merrill Lynch (ML), to start an energy trading division called GEM. In 2000, G became president of GEM....
Medical Residents Are Not "Students"
January 21, 2011 - Volume 5 Issue 14 Print Report
An issue that reached the Supreme Court is whether doctors who serve as medical residents are properly viewed as students whose service Congress hase...
When Is a Debt Instrument "Traded on an Established Market"
January 20, 2011 - Volume 5 Issue 13 Print Report
The "issue price" of a debt instrument is determined under Sec. 1273(b) or Sec. 1274 of the Internal Revenue Code. The issue price has important tax conse...
Mosaic and Cargill Will Part Company
January 19, 2011 - Bulletin Print Report
Cargill, (CG),a privately-held corporation, owns 64 percent of the stock of Mosaic Company, (MOS). CG, in order to assuage its shareholders' desire for liquid...
GlaxoSmithKline's Avandia Woes Continue
January 19, 2011 - Bulletin Print Report
GlaxoSmithKline, (GSK), announced a "legal charge" for the fourth quarter of 2010 of $3.4 billion. Taking into account the "deferred tax benefit"...
Calculating "Loan Value" On a Modified Loan
January 19, 2011 - Volume 5 Issue 12 Print Report
To qualify as a Real Estate Investment Trust (REIT), and thussecure the ability to deduct from taxable income dividends paid to shareholders, at least 95 perc...
Stock Option Termination Payments: Capital or Current?
January 18, 2011 - Volume 5 Issue 11 Print Report
On July 31, 1971, in accordance with an agreement and plan of reorganization with M Corporation, (M), and the shareholders of M, L Corporation, (L), acquired all of...
I.R.S. Rules on Status of NOLs After Emerging from Bankruptcy
January 14, 2011 - Volume 5 Issue 10 Print Report
P Corporation, (P), is the common parent of a consolidated group engaged in Business A. On Date 1, P and Entity X, a disregarded entity of Sub Y, filed for bankruptcy...
T Alters Its Accounting for Pensions
January 13, 2011 - Bulletin Print Report
AT&T, (T), following the lead of Honeywell, has announced a dramatic change in the manner in which it will account for certain aspects of its pension and post-r...
Recovering Basis In a Contingent Payment Installment Sale
January 13, 2011 - Volume 5 Issue 9 Print Report
In Month 1, the taxpayer, (PS), a domestic partnership, entered into an agreement to sell its business and certain assets ("the acquired assets") to B. Th...
Service Issues Rare "Adverse" Ruling
January 12, 2011 - Volume 5 Issue 8 Print Report
It is extremely unusual for the I.R.S. to actually issue an adverse ruling to a taxpayer who requested a private letter ruling regarding the tax consequences of a p...
Repurchase Premiums on Convertibles Are Difficult to Deduct
January 11, 2011 - Volume 5 Issue 7 Print Report
T Corporation (T) issued, at face value, $X million of "a%" convertible debentures. At the option of the holder, each $Y of debt principal was convertible...
Massachusetts Court Denies REMIC Trustee's Foreclosure Claim
January 11, 2011 - Bulletin Print Report
On December 1, 2005, AI took out a $103,500 loan for the purchase of property in Springfield, Massachusetts, secured by a mortgage to the lender, RM. Several days l...
AIG's Warrants May Be Taxable
January 10, 2011 - Bulletin Print Report
American International Group, Inc., (AIG), announced that its Board of Directors has conditionally declared a distribution of approximately 75 million warrants to p...
No Deduction for "Repurchase Premium" on "Exchangeable" Debt
January 10, 2011 - Volume 5 Issue 6 Print Report
CLEO, a wholly-owned subsidiary of Clark Equipment Company (CE), issued $15 million principal amount of debentures on March 1, 1966. The debentures, known as "...
High-Vote to Low-Vote "Sweetener" Not Taxable
January 7, 2011 - Bulletin Print Report
In a recent "Heard on the Street", the author, Mr.Martin Peers, suggested that investors are betting on an "unwinding" of dual-class stock...
Reimbursement of ADR Issuer's Expenses Yields Gross Income
January 7, 2011 - Volume 5 Issue 5 Print Report
Programs that make stock of foreign issuers available in domestic markets are known as "ADR programs". In an ADR program, an issuer's stock is placed with...
"Bonus" Depreciation
January 6, 2011 - Volume 5 Issue 4 Print Report
In order tospur capital spending, the tax code has, for the past several years, allowed for enhanced depreciation deductions with respect to certain property, b...
Iowa Supreme Court Disputes Need for "Physical Presence"
January 5, 2011 - Volume 5 Issue 3 Print Report
In KFC Corporation v. Iowa Department of Revenue , No. 09-1032 (Sup. Ct. IA 2010), the Iowa Supreme Court was called upon to decide whether the State of Iow...
BAC Settles Up with Fannie and Freddie/UAM's "Taxable MT"
January 4, 2011 - Bulletin Print Report
Bank of America, (BAC),announced that it has reached an agreement with each of Freddie Mac and Fannie Mae with respect to repurchase claims involving resident...
Carrying Back Investment Credits
January 4, 2011 - Volume 5 Issue 2 Print Report
The taxpayers own a controlling interest in a number of "pass-through" entities that eachown and operate rental properties. In particular, the taxpa...
Rovi/Sonic Solutions: Three Steps Become One
January 3, 2011 - Bulletin Print Report
Rovi Corporation, (R), has entered into a plan and agreement with Sonic Solutions, (SS), pursuant to which the former will acquire the latter in exchangefor a...
Gillette's Close Shave
January 3, 2011 - Volume 5 Issue 1 Print Report
Massachusetts law imposes a corporate excise tax on bothforeign and domestic corporations which areengaged in business in the Commonwealth. In addition,...
Sourcing "Qualified Fails Charges"
December 31, 2010 - Volume 4 Issue 254 Print Report
A trading practice governing failed deliveries of Treasury securities was published in 2008 by the Trading Market Practices Group (TMPG) and the Securities Industry...
How Would Sec. 7701(o) Affect Compaq Computer?
December 30, 2010 - Volume 4 Issue 253 Print Report
On September 16, 1992, 21st Securities, acting on behalf of Compaq Computer, (CC), purchased 10 million Royal Dutch Shell ADRs from the "designated seller"...
COD Income Can Be "Qualifying" Income for a RIC
December 29, 2010 - Volume 4 Issue 252 Print Report
F Corporation (F) is a State A corporation registered as a business development company (BDC)under the Investment Company Act of 1940. F is a regulated invest...
"Secured By Real Property"
December 28, 2010 - Volume 4 Issue 251 Print Report
The taxpayer (TP) is a partnership which owns interests in several Limited Liability Companies (LLCs) each of which is treated as a "disregarded entity" f...
Novartis/Alcon Update
December 27, 2010 - Volume 4 Issue 250 Print Report
The Form F-4 filed by Alcon, Inc., (AL),in connection with its merger with and into Novartis A.G., (NOV), discusses the tax consequences of the transaction, inc...
Dealer or Investor?
December 23, 2010 - Volume 4 Issue 249 Print Report
The petitioners, in Rice v. Commissioner , T.C. Memo. 2009-142, lived and worked in Texas where they have a business that designs and administers 401(k) pla...
Bank of Montreal/MI--A Forward Triangular Merger Is Planned
December 22, 2010 - Bulletin Print Report
Bank of Montreal, BMO, has agreed to acquire the properties of Marshall & Ilsley Corp., MI, in a transaction that the parties intend will qualify, for U.S. tax...
"Son-of-Boss" Found Wanting
December 22, 2010 - Volume 4 Issue 248 Print Report
The notorious "son-of-boss" tax shelter has been given a uniformlyrude reception by the courts that have considered its efficacy. In the latest taxp...
"Captive REIT" Strategy Found Wanting
December 21, 2010 - Volume 4 Issue 247 Print Report
An "aggressive"approach that many corporationsemployed to reduce their state and local tax burdens was known as the "captive REIT" s...
Accounting for Pharmaceutical Manufacturer Fees
December 20, 2010 - Bulletin Print Report
Certain recentActs of Congress, overhauling the nation's health care system, among other things,impose an annual fee on the pharmaceutical manufacturing...
Stock Redemption Not an "Involuntary Conversion"
December 20, 2010 - Volume 4 Issue 246 Print Report
Mr. C (C), owned 41 percent of the stock of PL Corporation (PL) and Mr. J (J) owned 36 percent thereof. Upon the creation of PL, C had owned 51 percent of its stock...
Distributions From Deferred Compensation Plans
December 17, 2010 - Volume 4 Issue 245 Print Report
State X maintains Plan Y, an eligible deferred compensation plan under Sec. 457(b) of the Internal Revenue Code. Under t...
Novartis/Alcon--Is the Merger a "Reorganization"? (Part 2)
December 16, 2010 - Bulletin Print Report
Novartis AG, (N), owns approximately 77 percent of the stock of Alcon, Inc., (AL). Apparently, N acquired its stake in AL in two tranches: 25 percent of such stock wa...
Deferred Compensation Constitutes "Pensions and Annuities"
December 16, 2010 - Volume 4 Issue 244 Print Report
The "Plan" in question is an unfunded contractual agreement between the petitioner and his former employer under which the petitioner provided services to...
DRD Available for Foreign Dividends & Tax Reduction in Japan
December 15, 2010 - Volume 4 Issue 243 Print Report
Corporation A (A) owns all of the stock of U.S. Subsidiary (US). US recently acquired, for cash, all of the stock of Target Corporation (T), adomestic corpora...
Extending the "Bush Tax Cuts"
December 14, 2010 - Bulletin Print Report
The Tax Relief, Unemployment Reauthorization and Job Creation Act of 2010 ("the Act")is designed to, among other things, extend the "Bush tax c...
Rescinding An Incorporation
December 14, 2010 - Volume 4 Issue 242 Print Report
When a corporation completelyliquidates, and distributes its assets (subject to its liabilities)to its shareholders in complete cancellation and redempt...
Valuing Tenet's NOL
December 13, 2010 - Bulletin Print Report
Tenet Healthcare Corporation, THC, received a proposal from Community Health Systems, Inc., CYH, to acquire all of THC's stock for $6.00 per share. The purchase pri...
Capital Contribution Does Not Reduce Equity Value
December 13, 2010 - Volume 4 Issue 241 Print Report
Where a "loss corporation" experiences an ownership change, within the meaning of Sec. 382(g) of the Internal Revenue Code, the amount of taxable income f...
Fortune Brands Will Separate Its Businesses
December 10, 2010 - Volume 4 Issue 240 Print Report
Fortune Brands, Inc., (FO), has announced that its Board of Directors has approved a planpursuant towhich its three consumer businesses--distilled spiri...
Royalties Are "Active Income"
December 9, 2010 - Volume 4 Issue 239 Print Report
P Corporation (P) owned 100 percent of the stock of T Corporation (T). T is a software development corporation. T had developed a proprietary software technology ca...
The COI Requirement Applies to Insolvency Reorganizations
December 8, 2010 - Volume 4 Issue 238 Print Report
In order for an acquisitive transaction to qualify as a reorganization, it must satisfy the continuity of interest requirement. This is true, moreover, even when the...
AGL and Nicor Are Planning a "Two-Step" 'A' Reorganization
December 8, 2010 - Bulletin Print Report
AGL Resources, Inc., (AGL), and Nicor, Inc., (N), have announced a merger whichwill, the agreement reveals,be structured with the intention of qualifyin...
I.R.S. Rules That COD Income is "Investment" Income
December 7, 2010 - Volume 4 Issue 237 Print Report
Mr. A (A) owns 100 percent of the stock of each of W Corporation (W) and X Corporation (X). A is the debtor on three notes: Y Corporation (Y) holds two of the notes...
Sycamore's Tricky Special Dividend
December 6, 2010 - Bulletin Print Report
Sycamore Networks, Inc., (SCMR), has announced a substantial special dividend the timing of which suggests a keen awareness that the concept of qualified divide...
TRB's ESOP's Trustee Violated Its Fiduciary Duties
December 6, 2010 - Volume 4 Issue 236 Print Report
In a case entitled Neil v. Zell et al , _F.Supp.2d_ (N.D. Ill. 2010), the transaction at issue is the Tribune Corporation's ESOP's purchase from Tribune (TR...
Liberty Media's Tax-Efficient Exit From IAC
December 3, 2010 - Bulletin Print Report
Liberty Media Corporation, LM, announced that it has exchanged its entire equity stake in IAC for a combination of operating assets and cash "in a transaction...
Punitive Damages Not "Losses Incurred"
December 3, 2010 - Volume 4 Issue 235 Print Report
The petitioner, (SFM), issued an automobileinsurance contract to Mr. Campbell, (C). The effective date of the contract was August 8, 1980....
Higher Expensing Limits for Capital Goods Extends Through 2011
December 2, 2010 - Bulletin Print Report
Sec. 179(a) of the Internal Revenue Code provides that a taxpayer may elect to treat the cost of "Sec. 179 property", for the taxable year in whichs...
Investors Were "Partners" in State Tax Credit Partnerships
December 2, 2010 - Volume 4 Issue 234 Print Report
Partnership interests were marketed to investors who were interested in (i) rehabilitating historic structures in Virginia and (ii) earning State rehabilitation tax...
"Discharge" Or "Extinguishment" of Indebtedness?
December 1, 2010 - Volume 4 Issue 233 Print Report
On May 30, 1986, Mrs. McGowen (M) purchased a single-premium variable life insurance policy, on her own life, for $500,000. The death benefits with respect to the p...
The Elusive Definition of "Research"
November 30, 2010 - Volume 4 Issue 232 Print Report
We have found, through the years, that one of the most elusive concepts contained in the Internal Revenue Code is the notion of "research". Nevertheless,...
Scotiabank Is Acquiring Dundee Wealth, Inc.
November 30, 2010 - Bulletin Print Report
Scotiabank, (S), has agreed to acquire the stock in Dundee Wealth, Inc., (DWI), which it does not already own. S currently owns 18 percent of the stock of DWI; Dund...
Can Loral "Monetize" Its Telesat Stake?
November 29, 2010 - Bulletin Print Report
Loral Space & Communications, Inc., (LOR), owns 64 percent, by value,of the stock of Telesat Holdco, (TH). Such stock represents only 33 1/3 percent of th...
Is Knox Still "Good Law"?
November 29, 2010 - Volume 4 Issue 231 Print Report
An "antique" wash sale case produced an exceedingly taxpayer friendly result and the question has recentlyarisen whether the decision can still be r...
Calculating Earnings Per Share
November 26, 2010 - Volume 4 Issue 230 Print Report
The rules for calculating the all-important and closelyfollowed earnings per share (EPS) figuresare found in Statement of Financial Accounting Standards...
Pre-Sec. 362(d) "Basis Bump" Transaction Respected
November 24, 2010 - Volume 4 Issue 229 Print Report
A so-called"basis bump" transaction was designed to provide a U.S. taxpayer with a stepped-up basis in assets (a basis in excess of the value of suc...
WMI's Disclosure Statement Reveals Potential Tax Benefits
November 23, 2010 - Volume 4 Issue 228 Print Report
Washington Mutual, Inc., (WMI) is poised to emerge from bankruptcy. Will it emerge with taxattributes that will enable it to shelter income it hopes to earn i...
Is LTD's Special Dividend "Extraordinary"?
November 23, 2010 - Bulletin Print Report
Limited Brands, Inc., (LTD), has joined the growingparade of companies who are remitting special dividends in advance of next year's scheduled increase in tax...
"Leveraged Spin-Offs" Often Beget Special Dividends
November 23, 2010 - Bulletin Print Report
Cablevision Systems Corporation, CVC, recently announced its intention to pursue a "leveraged spin-off" of its Rainbow Holdings LLC business to its shareh...
Omnicare Tenders For Convertible Debentures
November 22, 2010 - Bulletin Print Report
Omnicare, Inc., (O), is offering to purchase up to $525 million in aggregate principal amount of its 3.25% convertible subordinated debentures, due 2035. The amount...
The Breadth of the Wash Sale Rule
November 22, 2010 - Volume 4 Issue 227 Print Report
On October 1, 1974, Mr. Maxwell J.Estroff (E) sold 7,486 shares of FR stock, over-the-counter, to Mr. Fink (F), his "close personal friend and business a...
Is Issuance of Form 1099-C Synonymous With Debt Cancellation?
November 19, 2010 - Volume 4 Issue 226 Print Report
When the Fossetts (F) bought a car in 2001, they entered into a "purchase money security agreement" which was eventuallyassigned to Amtrust Bank (AB...
HON Changes Its Accounting for Pensions
November 18, 2010 - Bulletin Print Report
Honeywell, Inc., (HON), announced that it is changing its policy for recognizing pension expense from its current accounting that amortizes deferred gains and losses...
Tax Consequences of Year-End Closings of Short Sales
November 18, 2010 - Volume 4 Issue 225 Print Report
In January of Year 1, the taxpayer, (TP), directed its broker to borrow 100 shares of XYZ Corporation (XYZ) stock and sell the shares in the market. Thus, TP execut...
Accrued Dividends Received on Redemption of Preferred Stock
November 17, 2010 - Bulletin Print Report
Tanger Factory Outlet Centers, Inc., (SKT), recently announced that it will call for redemption all of its Class C Preferred Shares. The redemption date is set for...
Sports Club Precluded From "Double Dipping"
November 17, 2010 - Volume 4 Issue 224 Print Report
A professionalsports club (C) employs "Player" (P). In Year T, P was transferred to C. Prior to that, P had been employed by A. P had entered into a...
A "Stockless" 'D' Reorganization Is Permissible
November 16, 2010 - Volume 4 Issue 223 Print Report
In order for a transaction to qualify as a reorganization for Federal income tax purposes, both the "terms of the specifications" (set forth in S...
Allocating Legal Fees In An "Asset Acquisition"
November 15, 2010 - Volume 4 Issue 222 Print Report
Mr. A entered into an agreement to purchase the assets of CC Corporation (CC). Mr. A assigned the purchase rights to a corporation (WCM) of which he was the sole sh...
Tax Rate Changes Require Deferred Tax Adjustments
November 15, 2010 - Bulletin Print Report
The National Commission on Fiscal Responsibility and Recovery has come up with some provocative recommendations for reforming the U.S. tax code. One of the alternat...
Hedge Fund's "Option" Confers Beneficial Ownership
November 12, 2010 - Volume 4 Issue 221 Print Report
The taxpayer, (HF), is a Delaware limited partnership that operates as a hedge fund. GP was the general partner of HF. H...
Post-Acquisition Spin-Off Does Not Run Afoul of Sec. 355(e)
November 11, 2010 - Volume 4 Issue 220 Print Report
D Corporation, (D), is a publicly-traded corporation that conducts a pharmaceutical business. C Corporation, (C), a wholly-owned subsidiary of D, conducts a cosmeti...
Ambac's NOLs
November 10, 2010 - Bulletin Print Report
Ambac Financial Group, Inc., (ABK), has filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code. The company will continue to operate its busi...
"RIC" Stock Is Not "QRP"--What About REIT Stock?
November 10, 2010 - Volume 4 Issue 219 Print Report
Sec. 1042(a) of the Internal Revenue Code provides that if a taxpayer elects the "application of this section" with respect to any sale of qualified s...
Atlas Energy Will Be Acquired by Chevron
November 9, 2010 - Bulletin Print Report
Chevron Corporation, (CVX), and Atlas Energy, Inc., (ATLS), announced today that CVX would acquire ATLS for cash of $3.2 billion and the assumption of net debt in t...
WYNN Declares Its Annual Special Payout
November 9, 2010 - Bulletin Print Report
In what is becoming a very pleasant annual ritual, Wynn Resorts, Ltd., (WYNN), recently announced a "special distribution" amounting, this time, to some $...
PTP Avoids Corporate Status
November 9, 2010 - Volume 4 Issue 218 Print Report
X is a publicly-tradedpartnership formed to invest in fixed income assets held by structured finance entities which are commonly known as "CDO" issu...
Amazon.com Must Collect N.Y. Sales Tax
November 8, 2010 - Bulletin Print Report
In a recently-decided court case, the issue was the constitutionality of a recent amendment to the New York Tax Law intended to force on-line retailers to collect a...
Can a Pattern of Granting Redemption Requests Confer an Election?
November 8, 2010 - Volume 4 Issue 217 Print Report
Sec. 305(a) of the Internal Revenue Codeprovides that gross income does not include distributions of stock of the distributing corporation with respect to tha...
She Ain't Heavy She's My Sibling
November 5, 2010 - Volume 4 Issue 216 Print Report
Sec. 421(a) of the Internal Revenue Code provides that if a share of stock is transferred to an individual in a transfer "in respect of which the requirements...
General Motors' Unique Tax Status
November 4, 2010 - Bulletin Print Report
General Motors (GM)is reporting "net deferred tax assets" in the amount of approximately $45 billion. (The "valuation allowance", essentia...
Accelerating Debt Repayment Gain
November 4, 2010 - Volume 4 Issue 215 Print Report
The shareholders of an 'S' corporation are permitted to record their pro-ratashares of the corporation's losses on their personal income tax returns and, in t...
MTB's Acquisition of WL is Taxable
November 3, 2010 - Bulletin Print Report
M&T Bank Corporation, (MTB), has entered into a definitive agreement to acquire the stock of Wilmington Trust Corporation, (WL). The acquisition will be effecte...
Casualty Loss Deduction Not Denied on "Public Policy" Grounds
November 3, 2010 - Volume 4 Issue 214 Print Report
On August 12, 2005, the taxpayer (TP) purchased a Ford F-350 pickup truck for $40,210.65. On October 28, 2005, TP attended a gathering at a friend's home. After ret...
"Blocker" Corporation Facilitates Hedge Fund Investment
November 2, 2010 - Volume 4 Issue 213 Print Report
The taxpayer, (TP), is a charitable remainder unitrust, (CRUT), exempt from tax under Sec. 664(c) of the Internal Revenue Code.  ...
WY's Tax Windfall
November 1, 2010 - Bulletin Print Report
Weyerhaeuser Company, (WY), recentlyreported third quarter earnings of $1.116 billion. However, substantially all of those earnings can be traced to an "...
No Loss From Abandonment of Partnership Interest
November 1, 2010 - Volume 4 Issue 212 Print Report
The taxpayers (TP) were partners in an agricultural partnership that generated large "farming" expense deductions for its partners. After an audit and in...
Gyrodyne---What Can It Do With Its Condemnation Award?
October 29, 2010 - Volume 4 Issue 211 Print Report
Goldman Sachs Issues 50-Year Notes
October 28, 2010 - Bulletin Print Report
The Goldman Sachs Group, Inc., (GS), recently issued senior notes that, while callable beginning five years after issuance, have a maturity date that is some5...
Exploring the Concept of "Personal Goodwill"
October 28, 2010 - Volume 4 Issue 210 Print Report
In 1995, Mr. K incorporated his consulting business as a C corporation, KCG. K did not have an employment agreement with KCG nor did he have a non-competit...
Can "Forbearance" Payments Be Deducted?
October 27, 2010 - Volume 4 Issue 209 Print Report
In or before 2000, the petitioner, MSI, issued 5,197,176 shares of Series A preferred stock and 231,389 shares of Series B preferred stock to "the Series A inv...
Reimbursements Not Included in Gross Income
October 26, 2010 - Volume 4 Issue 208 Print Report
The taxpayer (TP) is organized as an umbrella partnership REIT(an UPREIT) which conducts its operations through a subsidiary operating partnership, OP....
The Progressive Corporation's Special Dividend
October 26, 2010 - Bulletin Print Report
The Progressive Corporation, (PGR), pays annual dividends to its shareholders the amount of which is directly tied to the corporation's performance. The dividend is...
Reincorporation of Assets Does Not Prevent Complete Liquidation
October 25, 2010 - Volume 4 Issue 207 Print Report
A Real Estate Investment Trust (REIT) owned "a%" of a limited partnership (LP). Unrelated parties owned the remaining interests therein.LP, in turn,...
I.R.S. Issues Two Favorable "Black Liquor" Rulings
October 25, 2010 - Bulletin Print Report
During calendar year 2009, the taxpayer, TP, owned all of the stock of S Corporation, S, a pulp mill located in the United States that uses the "semi-chemical&...
Is a Construction Permit a "Sec. 197 Intangible Asset"?
October 22, 2010 - Volume 4 Issue 206 Print Report
The taxpayer (TP)is a regulated electric utility. TP's subsidiary, SA, is taking steps to obtain approvals that would permit the construction andoperati...
Stock Repurchases and 'C' Reorganizations
October 21, 2010 - Volume 4 Issue 205 Print Report
In June, 1946, T Corporation (T) acquired substantially all of the assets of PG Corporation (PG). 4,920 shares of T's voting common stock were issued to PG in excha...
M.B.A. Expenses Ruled Deductible
October 20, 2010 - Volume 4 Issue 204 Print Report
The taxpayer (S-C) earned a bachelor of science degree in nursing (BSN) from New York University in 1984. She became a registered nurse (RN)and for the next 2...
St. Jude Announces an Acquisition
October 19, 2010 - Bulletin Print Report
St. Jude Medical, STJ, and AGA Medical Holdings, AGAM, have announced an agreement pursuant to which STJ will acquirethe stock of AGAM. The consideration to b...
Sun Healthcare Plans a Makeover
October 19, 2010 - Volume 4 Issue 203 Print Report
On May 24, 2010, Sun Healthcare Group, Inc.,(SH), announced its intention to restructure its business bydividing its real estate assets and its operatin...
House Passes "RIC Modernization Act of 2010"
October 18, 2010 - Volume 4 Issue 202 Print Report
The House of Representatives recently passed a bill, "The Regulated Investment Company Modernization Act of 2010", H.R. 4337, which is strongly supported...
Loan Can Be Both "Acquisition" and "Home Equity" Indebtedness
October 15, 2010 - Bulletin Print Report
It is extremely rare for the I.R.S. to renounce a hard-earned court victory. However, in Rev. Rul. 2010-25, the Service has done just that.  ...
Assumption of Liabilities In a "363" Sale Must Be Capitalized
October 15, 2010 - Volume 4 Issue 201 Print Report
On Date 1, Seller, (S), filed bankruptcy petitions under Chapter 11 of the Bankruptcy Code. On Date 2, Taxpayer, (TP), filed with the court an "asset purchase...
FASB "Clarifies" Accounting by Creditors for "TDRs"
October 14, 2010 - Volume 4 Issue 200 Print Report
Some debt restructurings constitute "troubled debt restructurings", TDRs, a classification that engenders a special set of accounting rules....
Testing for Impairment of Goodwill
October 13, 2010 - Volume 4 Issue 199 Print Report
For financial accounting purposes, goodwill shall not be amortized. Instead, goodwill shall be tested for "impairment" at a level of reporting re...
Drywall Damage Is a Casualty Loss
October 12, 2010 - Volume 4 Issue 198 Print Report
Well-publicized problems haveoccurred with respect to certain imported drywallinstalled in homes between 2001 and 2008. Homeowners have reported blacken...
Last Chance for Qualified Dividend Income
October 11, 2010 - Bulletin Print Report
It is entirely possible that the concept of qualified dividend income (QDI) will expire at the close of the year. Under current law, QDI is analogized to c...
MLPs and Ethanol
October 11, 2010 - Volume 4 Issue 197 Print Report
X is a "publicly-traded partnership" (PTP or MLP). Xhas longbeenengaged in the transportation, storage, and distribution of refined petr...
Is An NOL "Personal" To The Shareholders?
October 8, 2010 - Bulletin Print Report
Spirit Airlines, Inc., SA, is an "ultra low-cost, low-fare, airline" based in Fort Lauderdale, Florida. It is presently owned by Oaktree and Indigo Partne...
Mutual Fund Mergers and Continuity of Business Enterprise
October 8, 2010 - Volume 4 Issue 196 Print Report
AF Corporation (AF) is a regulated investment company (RIC) as is TF Corporation (TF). AF invests primarily in common stocks and other equity securities of "Y&...
CCE's Split-Off Has Been Completed
October 7, 2010 - Bulletin Print Report
Coca-Cola Enterprises, OldCCE, has completed its restructuring. The transaction involved a distribution of the stock of New CCE (the assets of which are compr...
Will "CoCos" Pass Muster as Indebtedness?
October 7, 2010 - Volume 4 Issue 195 Print Report
UBS A.G.and Credit Suisse, it has been recently reported,maybe requiredto hold total capital equal to a whopping 19 percent of their "r...
U.S./China Tax Convention Found Inapplicable
October 6, 2010 - Volume 4 Issue 194 Print Report
The Chinese government owned all of the stock of GITIC Corporation (GITIC) and GITIC owned all of the stock of GXE Corporation (GXE) and owned50 percent of th...
"Flash Crash" Gains Cannot Be Deferred
October 5, 2010 - Bulletin Print Report
On the date of theinfamous"flash crash", (May 6, 2010), many investors had their holdings sold because of stop-loss orders . In some c...
Tax Attribute Reduction Cannot Be Easily Circumvented
October 5, 2010 - Volume 4 Issue 193 Print Report
Cancellation of indebtedness income ("COD income") is ordinarily included in gross income. See Sec. 61(a)(12). However, if the COD income is realized in c...
When Is Rental Real Estate An Active Business?
October 4, 2010 - Volume 4 Issue 192 Print Report
P Corporation (P) owns all of the stock of S Corporation (S); P is engaged in the active conduct of a trade or business....
When Is An Expense "Reimbursed"?
October 1, 2010 - Volume 4 Issue 191 Print Report
On January 16, 2009, the I.R.S. concluded that a taxpayer (TP), a corporation, may not take a deduction, under Sec. 162, for compensation paid to an employee (E) be...
AIG Announces a "Recapitalization"
September 30, 2010 - Bulletin Print Report
American International Group, Inc., AIG, announced a comprehensive recapitalization plan today the principal features of which, from our point of view, are--...
The Five-Year Active Business Requirement
September 30, 2010 - Volume 4 Issue 190 Print Report
For at least five years prior to October 15, 1955, Boiler Corporation (B) had been actively engaged in (i) the boiler business, (ii) the fabrication business, and (...
Kinross "Paper" Is Taxable
September 29, 2010 - Bulletin Print Report
It is unusual for a shareholder of a target corporation who receives solely "paper" (stock and securities) of the acquiring corporation to be taxed on the...
A Change In Conversion Ratio Is a Recapitalization
September 29, 2010 - Volume 4 Issue 189 Print Report
A corporation, (C), has outstanding "x" shares of common stock and "y" shares of preferred stock. The preferred stock is-- --conver...
LUV/AAI--Should the Steps Be Collapsed?
September 28, 2010 - Bulletin Print Report
Southwest Airlines, LUV, has announced its intention to acquire the properties ofAirTran Holdings, Inc., AAI, the parent of AirTran Airways, in a two-step tra...
Deferral Clause Does Not Deny Debt Status
September 28, 2010 - Volume 4 Issue 188 Print Report
B was a closely-held corporation activelyengaged in the business of selling and servicing automobiles under a franchise granted by General Motors Corporation...
"Qualified Production Activities Income"
September 27, 2010 - Volume 4 Issue 187 Print Report
X Corporation (X) manufactured Product A from 1996 through 2004 and manufactured Product B from 2005 through 2008. Product B is the "next generation" of P...
I.R.S. Relaxes Schedule UTP Requirements
September 27, 2010 - Bulletin Print Report
Certain corporations with audited financial statements must file Schedule UTP (Uncertain Tax Positions) beginning with the 2010 tax year. In Announcement 2010-75, t...
"Escheated" Stock is Considered "Involuntarily Converted"
September 24, 2010 - Volume 4 Issue 186 Print Report
The taxpayer (TP) is a family limited partnership. The original assets of TP were shares of stock in A Corporation (A). Later, B Corporation (B), a publicly-held co...
When the "Ex-Date" Follows the Record Date
September 23, 2010 - Volume 4 Issue 185 Print Report
Reg. Sec. 1.61-9(c) provides that "...when stock is sold after the declaration of a dividend, and after the date as of which the seller becomes entitled to the...
The Supreme Court's Guidance in the Debt/Equity Area is Sparse
September 22, 2010 - Volume 4 Issue 184 Print Report
One of the most litigated areas of the tax law is thequestion of whether a financial instrument, particularly one issued by a closely-held corporation, is ind...
Royal Dutch Shell's New Dividend Program
September 21, 2010 - Bulletin Print Report
Royal Dutch Shell plc, RDS, has announced the introduction of a "Scrip Dividend Program". A scrip dividend program is a program that allows shareholders to...
"Midco" Transaction Rejected By Fifth Circuit
September 21, 2010 - Volume 4 Issue 183 Print Report
Mr. Langley (L) owned all of the stock of Bishop Group, Inc. (BG). L sought to sell his stock in BG. The most likely acquirer, Midcoast (M), preferred to purchase B...
Cardinal Health Cashes Out of CareFusion
September 20, 2010 - Bulletin Print Report
Cardinal Health, CH, on August 31, 2009, distributed to its shareholders 81 percent of the stock of CareFusion, CF, the entity CH formed to conduct its clinical and...
Plan Can Deny Pension Benefits Which Violate Tax Code
September 20, 2010 - Volume 4 Issue 182 Print Report
Mr. Wetzler (W) began working at the Illinois C.P.A. Society in 1984 and participated in theSociety's Retirement Income Plan (the Plan)throughout his em...
REIT Not A "Dealer" In Real Estate
September 17, 2010 - Volume 4 Issue 181 Print Report
The taxpayer (TP) is a Real Estate Investment Trust (REIT). Through its interest in a limited partnership (LP), TP owns a portfolio of rental real estate. <...
CIT Elects "(l)(6)"
September 16, 2010 - Bulletin Print Report
CIT Group, Inc., (CIT), experienced an ownership change upon its emergence from bankruptcy. CIT's "five-percent shareholders" (the creditors to w...
Debt in Form Is Debt in Substance
September 16, 2010 - Volume 4 Issue 180 Print Report
One of the most enduring, and intractable, tax disputes is the status of a financial instrument as debt or equity. In most cases, it is preferable that the instrume...
Florida's "Homestead Exemption" Denied Landlord
September 15, 2010 - Volume 4 Issue 179 Print Report
The state of Florida's "homestead tax exemption" enables taxpayers who maintain a permanent residence in Florida to substantially reduce their property ta...
I.R.S. Issues Guidelines Regarding Economic Substance Doctrine
September 14, 2010 - Bulletin Print Report
Sec. 1409 of the Health Care and Education Reconciliation Act of 2010, Public Law No. 111-152, among many other things, added Sec. 7701(o) to the Internal Revenue C...
The Limited Role of Private Letter Rulings
September 14, 2010 - Volume 4 Issue 178 Print Report
AmerGen Energy Co., LLC, (AG), purchased three nuclear power plants and took over their operation in 1998-1999. A dispute arose with the I.R.S. Such dispute concern...
Asset Purchaser Forced to Defray Seller's Liabilities
September 13, 2010 - Volume 4 Issue 177 Print Report
One of the principalbenefits of structuring a deal as an acquisition of assets, rather than stock, is that the purchaser only assumes those liabilities of the...
Whose E&P Can "Support" a "Boot" Dividend?
September 10, 2010 - Volume 4 Issue 176 Print Report
P Corporation, (P), owned all of the stock of DSub1, (D1), and the latter owned all of the stock of FSub1, (F1). P also owned all of the stock of FSub4, (F4), FSub5...
A Member's Excluded COD Income Reduces The CNOL
September 9, 2010 - Volume 4 Issue 175 Print Report
A member of a consolidated tax return group realized income from the discharge of indebtedness (COD). Sec. 61(a)(12) requires a taxpayer to include in gross income an...
Berkshire Hathaway Seeks To Acquire WSC's Minority Interest
September 8, 2010 - Bulletin Print Report
Since 1973, 80.1 percent of the stock of Wesco Financial Corporation, WSC, has been owned by BCS, a wholly-owned subsidiary of Berkshire Hathaway, Inc., BRK. WSC is...
Physical Presence Through A Partnership Is Sufficient
September 8, 2010 - Volume 4 Issue 174 Print Report
A group of corporations ("the corporations") were created under the laws of Nevada or Delaware. The corporations manage investments in various legal entit...
Like Kind Exchange Not Abrogated by "Related Party" Rules
September 7, 2010 - Volume 4 Issue 173 Print Report
Upon the death of Mother, a valuable parcel of "Farmland" (F) was transferred to her three children, T, B, and C, in equal shares as "tenants in comm...
Court Refuses To Dismiss Claim Based on Pall Corp. Tax Fraud
September 3, 2010 - Volume 4 Issue 172 Print Report
Pall Corporation (P) sells blood and drug filters to medical and biopharmaceutical markets worldwidethrough various subsidiaries. A lawsuit wasinstitute...
Corporations and Shareholders Are Separate Entities
September 2, 2010 - Volume 4 Issue 171 Print Report
Mr. and Mrs. Cezar, (C), owned all of the stock of R.V.J. Cezar Corporation, (RVJ). The corporation built "spec" houses that it sold to the public....
"Seamless" Conversion to 'S' Corporation Status
September 1, 2010 - Volume 4 Issue 170 Print Report
On January 1, 2009, X is organized in "State" as an unincorporated entity that is classified as a partnership. X elects, under Reg. Sec. 301.7701-3(c)(1)(...
WOTC and WtW Tax Credits Require Certification
August 31, 2010 - Volume 4 Issue 169 Print Report
Pursuant to Sec. 51 of the Internal Revenue Code, employers are entitled to tax credits if certain conditions are fufilled regarding their hiring of specified categ...
Withholding Taxes and CCE's Payment of "Boot"
August 31, 2010 - Bulletin Print Report
Coca-Cola Enterprises, CCE,is in the final stages of effecting a split-off in which its shareholders, other than Coca-Cola, KO, will receive, in exchange for&...
Debt Modifications Can Result in "Deemed Exchanges"
August 30, 2010 - Volume 4 Issue 168 Print Report
The gain or loss realized from the exchange of property for other property "differing materially in kind or in extent" is treated as income...
Marriott Loses "Son of Boss" Appeal
August 27, 2010 - Volume 4 Issue 167 Print Report
On April 25, 1994, MORI, Inc., a wholly-owned subsidiary of Marriott International (MI), established a short position in five-year Treasury securities with a face a...
Pharmaceutical Manufacturer Fees Will Be Operating Expenses
August 27, 2010 - Bulletin Print Report
The Financial Accounting Standards Board, FASB, has issued an Exposure Draft addressing the manner in which certain fees, newly levied on pharmaceutical manufacture...
Do Warrants Count For "Continuity of Interest" Purposes?
August 26, 2010 - Volume 4 Issue 166 Print Report
TP Corporation, (TP), owns all of the stock of Sub 1 and Sub 2. TP is a holding company which does not directly engage in the conduct of a trade or business....
Since When Are Securities "Other Property"?
August 25, 2010 - Volume 4 Issue 165 Print Report
LTR 201032017, February 5, 2010, describes a rather "typical" (if there is such a thing) "reverse Morris Trust" (RMT) transaction....
WCRX Special Dividend Update
August 24, 2010 - Bulletin Print Report
Warner-Chilcott's board of directors declared a special cash dividendin theamount of$8.50/share. The dividend is payable to shareholders of record...
"COBRA" User Hit With Accuracy-Related Penalties
August 24, 2010 - Volume 4 Issue 164 Print Report
In Murfam Farms LLC v. United States , _F.3d_ (Fed. Cl. 2010), the issue was whethercertain users of the well-known tax shelter, known as COBRA, were...
Bringing Leases Onto The Balance Sheet
August 23, 2010 - Volume 4 Issue 163 Print Report
The Financial Accounting Standards Board, FASB, and the International Accounting Standards Board, IASB, have jointlyissued an exposure draft (ED)that, i...
FNFG Will Acquire NAL In a "Reverse Triangular Merger"
August 23, 2010 - Bulletin Print Report
In the largest bank merger since the onset of the financial crisis, First Niagra Financial Group, Inc., (FNFG), will acquire New Alliance Bankshares, Inc., (NAL), i...
Class Action Lawsuit Based on DTAs Permitted to Proceed
August 20, 2010 - Volume 4 Issue 162 Print Report
In Russell Hoff et al. v. Popular, Inc. et al. , _F.Supp.2d_ (DC P.R. 2010), the plaintiffs, in this class suit, purchased or acquiredPopular, Inc.,&n...
Treasury's Sale of GM Stock Will Not Create an Ownership Change
August 19, 2010 - Bulletin Print Report
General Motors Corporation, (GM), has announced an IPO in connection with which the Treasury Department, (TD),will be selling an undisclosed portion of its ap...
I.R.S. Adopts Broad Definition of "Home Equity Indebtedness"
August 19, 2010 - Volume 4 Issue 161 Print Report
The tax law allows taxpayers to deduct interest on two categories of indebtedness secured by their residences. The first category is acquisition indebtedness
Distributions by 'S' Corporations
August 18, 2010 - Volume 4 Issue 160 Print Report
Mr. A and his daughter owned all of the stock of X Corporation, (X). X was an electing small business corporation (an 'S' corporation). &nb...
What Can BAC Do With Its BLK Stake?
August 17, 2010 - Bulletin Print Report
Bank of America, BAC, in connection with its acquisition of Merrill Lynch, acquired a substantial position in BlackRock, BLK, which, according to press reports, it...
Deere's Lost Research Tax Credits
August 17, 2010 - Volume 4 Issue 159 Print Report
During each of its taxable years ended October 31, 1997 through October 31, 2001, Deere & Co. (D) received income from operations conducted through unincorporat...
New Law Makes Foreign Acquisitions Less Attractive
August 16, 2010 - Bulletin Print Report
A U.S. taxpayer is allowed to claim a credit against its U.S. tax liability for the foreign income taxes that it pays. Notably, a domestic corporation that owns, di...
"Postponement" Provision in Debt Instrument Not Fatal
August 16, 2010 - Volume 4 Issue 158 Print Report
The stock of B Corporation (B) was owned by mother (249 shares); son (149 shares); daughter1 (51 shares); and daughter2 (51 shares). B redeemed the mother's shares...
I.R.S. Issues Regulations Regarding "Deferred" COD Income
August 13, 2010 - Volume 4 Issue 157 Print Report
Sec. 108(i) of the Internal Revenue Code was enacted as part of the American Recovery and Reinvestment Tax Act of 2009, Public Law 111-5, the so-called "stimul...
Form Controls (Except When It Doesn't)
August 12, 2010 - Volume 4 Issue 156 Print Report
P Corporation, (P), launches a tender offer for the stock of T Corporation, (T). P successfully acquires, for cash, 91 percent of T's stock. The remaining nine pe...
"Insider" Selling at WBMD
August 12, 2010 - Bulletin Print Report
WEBMD Health Corporation, (WBMD), is offering to purchase three million of its common shares, representing approximately 5.1 percent of its outstanding stock, at a...
"Universal Service" Payments Are Gross Income
August 11, 2010 - Volume 4 Issue 155 Print Report
In AT&T, Inc.v. United States ,_F.Supp.2d_(W.D. Tx. 2009), the issue to be resolved was the tax treatment of certain payments that AT&T (T)&nb...
Option Payments Give Rise to Capital Losses
August 10, 2010 - Volume 4 Issue 154 Print Report
P Corporation (P) owned all of the stock of Sub1 (S1)and Former Sub (FS). During Month 1 of Year 2, P's equity interest in FS was cancelled after FS emerged f...
Are P's and T's Securities Substantially Identical?
August 9, 2010 - Volume 4 Issue 153 Print Report
Do the wash sale provisions of the Internal Revenue Code ("the Code") apply in a case in which a taxpayer, (TP), an individual who is not a "deale...
Tax Court Finds "LevPar" Gives Rise To a "Disguised Sale"
August 6, 2010 - Volume 4 Issue 152 Print Report
One of the more popular techniques for divesting assets on a tax-deferred basis has been the so-called"leveraged partnership". In fact, Tribune Corpor...
Spun-Off Corporation Does Not Inherit Distributor's Tax Attributes
August 6, 2010 - Volume 4 Issue 151 Print Report
P1 Corporation, (P1), owned all of the stock of each ofSub1, Sub2, and Sub3. The corporations joined in the filing of a consolidated income tax return....
Merger "Direction" Matters
August 5, 2010 - Bulletin Print Report
Cerberus APB Investor, LLC, (CA), which we assume is treated as a partnership for tax purposes, is an affiliate of Cerberus, LP, (CL). CA owns 55.39 percent of the...
Are "Carried Interests" Taxable Upon Receipt?
August 5, 2010 - Volume 4 Issue 150 Print Report
In 1979, Mr. William G.Campbell, (C), received a two percent "special limited partnership interest" (a "profits" or "carried" in...
The Anti-Morris Trust Rules Do Not Operate in Canada
August 4, 2010 - Volume 4 Issue 149 Print Report
M Corporation, (M), owned all of the stock of L Corporation, (L). Mr. S owned 42 percent of the stock of M; the public owned 35 percent of such stock; and B Corpora...
House Passes REIT Stimulus Legislation
August 3, 2010 - Bulletin Print Report
A foreign person is taxable on its taxable income which is "effectively connected" with the conduct of its trade or business within the U.S. For non-effec...
Can Dividend Income Be "Assigned"?
August 3, 2010 - Volume 4 Issue 148 Print Report
Mr. Caruth (C) owned 75 percent of the Class A voting common stock of NP Corp. (NP). He also owned 75 percent of NP's Class B non-voting common stock and 100 percen...
Warner-Chilcott's Debt-Financed Special Dividend
August 2, 2010 - Bulletin Print Report
Warner Chilcott plc, (WCRX), intends to incur some $2.25 billion in new indebtedness, both senior secured and unsecured indebtedness, for the express purpose of fun...
When Does Business Begin?
August 2, 2010 - Volume 4 Issue 147 Print Report
On February 15, 2004, Mr. Woody (W) started investigating the real estate market so he could acquire real estate "for investment or rental". As the year u...
Applying "Arrowsmith"
July 30, 2010 - Volume 4 Issue 146 Print Report
Mr. Bresler (B) owned 39 percent of the stock of Best Ice Cream Corp. (BICC), an "electing small business corporation"---an 'S' corporation....
Avis Tops Hertz's Offer for Dollar Thrifty
July 29, 2010 - Bulletin Print Report
Avis Budget Group, Inc., (ABG), is attempting to derail the merger agreement involving Hertz Global Holdings, Inc., (H), and Dollar Thrifty Automotive Group, Inc.,...
New Markets Credit Not a Passive Activity Credit
July 29, 2010 - Volume 4 Issue 145 Print Report
On February 1, 2010, X, an individual, acquired a qualified equity investment, (QEI), in a qualified community development entity, (CDE). A "new markets tax cr...
"Sales" and "Gross Receipts" Are Not Synonymous
July 28, 2010 - Volume 4 Issue 144 Print Report
M.D.C. Holdings, Inc. (MDC) was engaged, in Arizona and elsewhere, in the construction, sale, and financing of housing. HomeAmerican Mortgage Company, (HA), a wholl...
Retirement of "Contingent" Debt Does Not Produce COD Income
July 27, 2010 - Volume 4 Issue 143 Print Report
W Corporation, (W), owned all of the stock of X Corporation, (X). X owned all of the stock of three subsidiaries. X tran...
G.E.'s "Castle Harbour" Partnership is Respected
July 26, 2010 - Volume 4 Issue 142 Print Report
On July 26, 1993, General Electric Capital Corporation, (GECC), a subsidiary of General Electric Company, (GE), through three wholly-ownedsubsidiaries, TIFD I...
Employers Get New Pension Funding Relief
July 26, 2010 - Bulletin Print Report
Employers gainedneeded time to fund their defined benefit (pension) plans with the recent enactment of H.R. 3962, "The Preservation of Access to Care for...
Prepaid Variable Forward Contracts Treated as Current Sales
July 23, 2010 - Volume 4 Issue 141 Print Report
Mr. Philip Anschutz, (PA), owned all of the stock of Anschutz Corporation, (AC). AC elected, effective August 1, 1999, to be an 'S' corporation. AC owned all of the...
Stock Is Always "Property Held for Investment"
July 23, 2010 - Volume 4 Issue 140 Print Report
Mr. Russon (R) is an employee of RB Corporation (RB). R is a mortician . On December 23, 1985, R, his brother, and his cousins, agreed topurchase...
Capital Gain Dividends
July 22, 2010 - Volume 4 Issue 139 Print Report
With tax rates imposed on dividend incomepoised to increase from today's level of 15 percent to as high as 39.6 percent,attention should shift to compan...
"Deemed Paid" FTCs Require "Direct" Ownership
July 21, 2010 - Volume 4 Issue 138 Print Report
Relief from international double taxation is generally accomplished by means ofthe foreign tax credit rules. Thus, in general, a U.S. taxpayer may offs...
WY and the "Wash Sale" Rules
July 20, 2010 - Bulletin Print Report
The ex-dividend date with respect to Weyerhaeuser's special dividend has been set for today, July 20. The record date for such special dividend is July 22. (Despite...
Taxpayer Cannot Exclude Gain From Sale of "Dwelling Unit"
July 20, 2010 - Volume 4 Issue 137 Print Report
On December 14, 1984, Mr. G purchased the "SR property" for $150,000. The SR property included an 880 square-foot two-story building with a study on the s...
California Casts A Wide (Taxation) Net
July 19, 2010 - Volume 4 Issue 136 Print Report
Personal Selling Power, Inc. (PSP) is incorporated in Virginia. PSP publishes a magazine entitled Selling Power ; issues a monthly audio magazinenamed...
Goldman Agrees To Forgo Tax Deduction For Settlement Payment
July 16, 2010 - Bulletin Print Report
The Final Judgment to which Goldman, Sachs & Co., (GS), and the S.E.C. are parties orders GS to pay (i) "disgorgement" in the amount of $15 million an...
Surrendering or Selling a Life Insurance Contract
July 16, 2010 - Volume 4 Issue 135 Print Report
On January 1 of Year 1, Mr. A (A), an individual, entered into a life insurance contract with "cash value". A was the "insured" under the contra...
"Derivium" Agreement Ruled a Sale
July 15, 2010 - Volume 4 Issue 134 Print Report
On August 9, 2001, the taxpayer, (C), instructed First Union Securities to transfer 990 shares of IBM stock to Morgan Keegan and to credit Derivium's account accord...
More Thoughts on WY's Special Dividend
July 14, 2010 - Bulletin Print Report
WY has provided some additional information on the tax consequences of its record-breaking special dividend, and other topics, that bears mentioning. &...
Preventing Double Taxation of the Same Income
July 14, 2010 - Volume 4 Issue 133 Print Report
In many instances, residents of one state or other jurisdiction are taxed on income earned in states or other jurisdictionswith respect towhich they are...
Celgene/Abraxis--An "Open" Transaction?
July 13, 2010 - Volume 4 Issue 132 Print Report
Celgene Corporation, (C), and Abraxis BioScience, Inc., (AB), recentlyannounced a merger agreement in connection withwhich a newly-created and wholly-owne...
Aon/Hewitt Associates Plan a Reorganization
July 13, 2010 - Bulletin Print Report
Aon Corporation, (AC), and Hewitt Associates, Inc., (HA), have announced their intention to effect a merger. It is intended, and in fact is a condition to closing,...
"Black Liquor" Constitutes Cellulosic Biofuel
July 12, 2010 - Bulletin Print Report
The I.R.S. had alreadyconcluded, in CCA 200941011, June 3, 2009,that black liquor, (BL), is a liquid fuel derived from biomass and is therefore eligible f...
WY Announces "REIT Qualification Dividend"
July 12, 2010 - Bulletin Print Report
The board of directors of Weyerhaeuser, (WY), has declared a special dividend in the amount of $5.6 billion . This dividend includes the regular quarterly dividen...
Is Managing a Trademark "Engaging" in Business?
July 12, 2010 - Volume 4 Issue 131 Print Report
The purpose of the Blistex Bracken Limited Partnership (BBLP) is to acquire, own, manage, and maintain certain trademarks, including the well-known* BLISTE...
Compensatory Damages Can Be a Tax-Deductible Expense
July 9, 2010 - Volume 4 Issue 130 Print Report
On January 18, 2000, Fresenius Medical Care Holdings, Inc., (FR), and the United States signed a "Global Agreement" resolving a series of suits against FR...
Bankrupt Corporation Undergoes a 'G' Reorganization
July 8, 2010 - Volume 4 Issue 129 Print Report
C Corporation, (C), owned all of the stock of Sub1 Corporation, (S1), and FSub Corporation, (FS), a foreign corporation. C also owned all of the interests in LLC1 w...
FIS Offers Another Dividend Stripping Opportunity
July 8, 2010 - Bulletin Print Report
Fidelity National Information Services, Inc., (FIS), is offering to purchase for cash up to 86,206,896 of its common stock pursuant to tenders at prices specified b...
When Can A "Process" Be Patented?
July 7, 2010 - Volume 4 Issue 128 Print Report
An individual, (B), applied for a patent. His application sought patent protection for a claimed invention that explains how buyers and sellers of commodities, in t...
NOL "Poison Pill" Plan Passes Muster Under Unocal
July 6, 2010 - Volume 4 Issue 127 Print Report
A case decided by the Delaware Court of Chancery, Selectica, Inc. v. Versata Enterprises, Inc. , C.A. No. 4241-VCN (Ct. Chan. DE 2010) was, in the court's o...
"Actual Knowledge" and Ownership Changes
July 2, 2010 - Volume 4 Issue 126 Print Report
Where a "loss corporation" experiences an "ownership change" (within the meaning of Sec. 382(g)(1) of the Internal Revenue Code), certain limits...
"In Loco Parentis"
July 1, 2010 - Volume 4 Issue 125 Print Report
Scholastic Book Clubs, Inc. (SBC) is a wholly-owned subsidiary of Scholastic, Inc. SBC is a Missouri corporation with headquarters in Jefferson City, Mo. SBC distri...
Celgene Will Issue "CVRs"
June 30, 2010 - Bulletin Print Report
Celgene Corp., (CELG), and Abraxis BioScience, Inc., (ABII), haveannounced a merger in connection with which ABII will become a subsidiary of CELG.
General Mills' Futures Transactions Produce "Gross Receipts"
June 30, 2010 - Volume 4 Issue 124 Print Report
General Mills is a unitary group of corporations operating both within and outside of California. Accordingly, the percentage of its income that is subject to Calif...
Unique "Dividend Stripping" Opportunity In Valeant/Biovail Merger
June 29, 2010 - Bulletin Print Report
The merger agreement filed by Valeant, (V),and Biovail, (B),discloses that the transaction will be structured as a merger of a newly-created second-tier...
The "Exchange" Requirement of Sec. 351
June 29, 2010 - Volume 4 Issue 123 Print Report
DuPont (DD) organized a French subsidiary (SA) to manufacture urea herbicide in France. DD granted SA a royalty-free, non-exclusive, license to "make, use, and...
FASB Addresses Revenue Recognition From Customer Contracts
June 28, 2010 - Volume 4 Issue 122 Print Report
The Financial Accounting Standards Board (FASB) has determined that the accounting for revenues arising from contracts with customers can use an overhaul and it has...
State Tax Credits Do Not Imperil REIT Election
June 25, 2010 - Volume 4 Issue 121 Print Report
LTR 200916014, January 9, 2009, addresses the case of a taxpayer (TP)which has elected to be taxed as a Real Estate Investment Trust (REIT). TP's principal as...
Another Liberty Split-Off Is In the Works
June 24, 2010 - Bulletin Print Report
Liberty Media Corporation, (L), recently announced its intention to place the assets currently attributed to the Starz Group and the Capital Group into a new corporat...
"PIK" Debt Is Not "Stock" For Purposes of Sec. 382
June 24, 2010 - Volume 4 Issue 120 Print Report
Foreign Parent (FP) owned all of the common stock of Parent (P). P's preferred stock was owned by two funds. P, a loss corporation, formed Subsidiary (S) by contrib...
Accounting For a Long-Term Contract Termination
June 23, 2010 - Volume 4 Issue 119 Print Report
On Date 1, Sub1, a subsidiary of Taxpayer (TP), entered into a fixed price contract with B for Sub1 to design, test, and fabricate C1. Sub1 consistently treated the...
VRX/BVF Agree to Merge
June 22, 2010 - Bulletin Print Report
Valeant, (VRX),and Biovail, (BVF), announced that each company's Board has approved a merger agreement in which VRX would be merged with and into BVF (or an a...
Variable Annuities--Who Owns the "Underlying"?
June 22, 2010 - Volume 4 Issue 118 Print Report
In Rev. Rul. 82-54, 1982-1 C.B. 11, the I.R.S. addressed the case of "Insurance Company", (IC), a life insurance company. IC issues"contracts&q...
Can BP Obtain Tax Deductions For Its "Compensatory" Payments?
June 21, 2010 - Volume 4 Issue 117 Print Report
Can BP America, Inc., (BPA), secure tax deductions for the amounts it will be "voluntarily" paying to compensate the parties adversely affected by its act...
"Hold Constant Principle" Reduces Likelihood of Ownership Change
June 18, 2010 - Volume 4 Issue 116 Print Report
Where a "loss corporation" experiences an ownership change , limitations are placed on the amount of taxable income, for any taxableyear end...
Sen. Baucus Weighs In On Carried Interest
June 17, 2010 - Bulletin Print Report
The Senate is drafting its own version of the "extenders" bill (the House has already passed its version thereof). While each such version contains a prov...
The "Source" of Royalty Income
June 17, 2010 - Volume 4 Issue 115 Print Report
The taxpayer, TP, a corporation, owns and licenses artistic and literary intellectual property. TP licenses this property (most of which is copyrighted or trademark...
"Book Gain" Not Included in Utility's Gross Income
June 16, 2010 - Volume 4 Issue 114 Print Report
In LTR 200852002, September 25, 2008, the taxpayer (T) is a public electric utility. T owned LX and unrelated buyer (B) agreed to purchase, from T, Unit 1 and Unit...
CVC's Asset Purchase
June 15, 2010 - Bulletin Print Report
A buyer's objective, in the case of a taxable acquisition, is to secure a "cost basis" in the target's assets. This is so because depreciation and amortiz...
Recap Makes A Spin-Off Possible
June 15, 2010 - Volume 4 Issue 113 Print Report
D Corporation, (D), a holding company, owns 97.6 percent of the voting common stock of C Corporation, (C): there are 3,692 Cshares outstanding of which D owns...
A Closer Look At The “Carried Interest” Proposal(s)
June 14, 2010 - Volume 4 Issue 112 Print Report
It certainly appears that Congress is poised to pass legislation (that President Obama is sure to sign) that will increase, rather dramatically, the tax rate imposed on t...
Avoiding Pitfalls On the Sale of Rental Real Estate
June 11, 2010 - Volume 4 Issue 111 Print Report
The stock of T Corporation (T) is owned by Trustee (EE). The taxpayer (TP) and EE are equal partners in three partnerships, PS1, PS2, and PS3. TP and EE each hold a...
I.R.S. Attacks "Blocker" Partnerships
June 10, 2010 - Volume 4 Issue 110 Print Report
The taxpayer, (TP), a U.S. corporation, owns all of the stock of CFC1 and CFC2. CFC1 and CFC2 are equal partners in a domestic partnership, (PS), which owns all of...
Allscripts Will Acquire Eclipsys
June 9, 2010 - Bulletin Print Report
Allscripts, (MDRX), has announced a plan pursuant to which it will acquire Eclipsys, (ECLP), in a merger transaction intended to qualify as a reorganization, and re...
Judge Posner Breathes Life Into Sec. 269
June 9, 2010 - Volume 4 Issue 109 Print Report
South Beach Securities, Inc., (SBS), filed a petition under Chapter 11 of the Bankruptcy Code and submitted a plan of reorganization. The bankruptcy judge refused t...
E&Y Consulting Partners Cannot Defer CG Income
June 8, 2010 - Volume 4 Issue 108 Print Report
Several years ago, the consulting partners of Ernst & Young (EY) received shares in Capgemini, S.A.(CG) in exchange for their partnership interests. The shares...
"Incentive Payments" Yield Ordinary Income
June 7, 2010 - Volume 4 Issue 107 Print Report
T Corporation (T) has outstanding two classes of common stock, Class A Common Stock and Class B Common Stock. The Class A Common Stock has lesser voting rights than...
A Rare Earnings and Profits Ruling
June 4, 2010 - Volume 4 Issue 106 Print Report
Mr. A (A) holds a "paid-up" life insurance contractwith respect tohis own life. On the first day of Year 1, X Corporation (X), a C corporation...
Equity Method Under Siege
June 3, 2010 - Bulletin Print Report
Last week's proposal, in which FASB is seeking to expand the types of assets and liabilities that must be marked to market, also contains a rather radicalalte...
"Mezzanine" Loans Do Not Terminate REIT Status
June 3, 2010 - Volume 4 Issue 105 Print Report
T Corporation (T) is a REIT. T is the managing general partner of a limited partnership(LP) and owns "a%" of the common units of LP. T, through LP,...
Bay State Court Nixes TJX's Deductions
June 2, 2010 - Volume 4 Issue 104 Print Report
On November 20, 1992, on the advice of its accountants, Coopers & Lybrand, The TJX Companies,(TJX),a Massachusetts corporation,transferred &qu...
FASB Proposes to Alter The Accounting for "Financial Instruments"
June 1, 2010 - Volume 4 Issue 103 Print Report
The Financial Accounting Standards Board (FASB) has published a proposal which will alter, in a fairly dramatic way, the manner in which financial instruments* are...
"Circular Flow of Funds" Ignored
May 28, 2010 - Volume 4 Issue 102 Print Report
Mr. and Mrs. Kerzner each owned 50 percent of the interests in a partnership, HCA, and 50 percent of the outstanding stock of an 'S' corporation, HCI. HCA borrowed...
CCE's Split-Off Should Produce Capital Gains
May 27, 2010 - Bulletin Print Report
The Form S-4 regarding Coca-Cola Enterprise's (Old CCE) split-off was recently issued and it confirms the tax treatment for the cash element of the consideration...
Clarus Moves To "Monetize" Its NOLs
May 27, 2010 - Volume 4 Issue 101 Print Report
Clarus Corporation, (CL), was formerly in the e-commerce solutions business. That business, however, was unsuccessful and CL has since discontinued its involvement...
"Extenders" Bill Encourages Capital Formation
May 26, 2010 - Bulletin Print Report
While much of the "extenders" bill, the passage of which is expected shortly, raises taxes on businesses and holders of investment services partnership in...
"Extenders" Bill Focuses on Foreign Tax Credit "Abuses"
May 26, 2010 - Bulletin Print Report
U.S. taxpayers may, in order to prevent international double taxation, claim tax credits, known as foreign tax credits, against the U.S. tax otherwise payable with...
"Mutually Exclusive" Transactions Revisited
May 26, 2010 - Volume 4 Issue 100 Print Report
On Date 1, the taxpayer, (T), a domestic corporation, engaged Consultant to provide advice with respect to "restructuring". From Date 1 to Date 2, T inves...
Covenant Not To Compete Is An "Amortizable Sec. 197 Intangible"
May 25, 2010 - Volume 4 Issue 99 Print Report
Mr. E, (E), owned 23 percent of the stock of RG, Inc., (RG). An agreement between E and RG called for RG to pay E a total of $805,363.33, $400,000 of which was for...
"Extenders" Bill Affects Taxation of "Carried Interests"
May 24, 2010 - Bulletin Print Report
It looks as though the taxation of so-called "carried interests" will, after years of discussion, finally be altered. The vehicle for this alteration is t...
Can Warrants Be Used to Effect a Spin-Off?
May 24, 2010 - Volume 4 Issue 98 Print Report
W Corporation, (W), owned all of the stock of S Corporation, (S). The Board of Directors of W decided to distribute to its shareholders warrants to purchase S stock....
"Extenders" Bill Will Crimp RMTs and Change "Boot" Rules
May 24, 2010 - Bulletin Print Report
The American Jobs and Closing Tax Loopholes Act of 2010, H.R. 4213, ("the extenders bill"), seems headed for passage now that Congressional tax writers ha...
Excluded Preferred Stock
May 21, 2010 - Volume 4 Issue 97 Print Report
Taxpayer (TP) is a publicly-traded domestic corporation with a single class of common stock and multiple classes of preferred stock outstanding, including Series X...
CIT's Tax Attributes
May 20, 2010 - Volume 4 Issue 96 Print Report
CIT recently emerged from bankruptcy with a revamped, and presumably sustainable, capital structure. In connection with its reorganization, substantial amounts of d...
FASB Updates SOP 03-3
May 19, 2010 - Volume 4 Issue 95 Print Report
SOP 03-3 (now Subtopic 310-30) applies to entities that acquire loans, but not just any loans. It applies to a loan with evidence of deterioration of credit quality...
Split-Offs and Sec. 355(e)
May 18, 2010 - Volume 4 Issue 94 Print Report
D Corporation, (D),is actively engaged in the conduct of Business M and has been so engagedfor well in excess of five years. Within the past five years,...
Validus Is Repurchasing Shares
May 17, 2010 - Bulletin Print Report
Validus Holdings, Ltd., (VH), a Bermuda corporation indirectly engaged in the insurance business, is offering torepurchase some $300 million of its stock. The...
Payments For Trade Secret Misappropriation Are Ordinary Income
May 17, 2010 - Volume 4 Issue 93 Print Report
C&F Packing Co., Inc., (CF), was an 'S corporation engaged in the business of supplying uncooked sausage (and other meats) to pizza vendors, including Pizza Hut...
Stock Transfer Restrictions Designed to Preserve NOLs
May 14, 2010 - Volume 4 Issue 92 Print Report
Prior to Date 1, P Corporation, a "loss corporation", had outstanding a single class of common stock and multiple classes of preferred stock described in...
Another "Taxable" Merger
May 13, 2010 - Bulletin Print Report
Comtech Telecommunications Corporation, (CMTL), and CPI International, Inc., (CPII), have entered into a definitive merger agreement in connection with which CMTL w...
Did The I.R.S., in Rev. Rul. 2008-25, Misuse The "Step" Doctrine?
May 13, 2010 - Volume 4 Issue 91 Print Report
In Rev. Rul. 2008-25, I.R.B. 2008-21,May 27, 2008,Mr. A owned 100 percent of the stock of T Corporation, (T). Tpossessed assets with a gross value...
Minority Veto Rights May Prevent Consolidation
May 12, 2010 - Volume 4 Issue 90 Print Report
Statement of Financial Accounting Standards No. 94, Consolidation of All Minority-Owned Subsidiaries , provides that consolidation is appropriate when one ent...
HCA's Earnings Bolstered By "Recap" Accounting
May 11, 2010 - Bulletin Print Report
When HCA, Inc., (H), was "taken private" several years ago, the sponsors formed an LLC, (HHII), which in turn formed a transitory acquisition company whic...
Stubhub Need Not Collect Chicago "Amusement" Tax
May 11, 2010 - Volume 4 Issue 89 Print Report
Stubhub, Inc. (SH),as every sports fan knows, is a venue which third parties use to buy and sell tickets. SH collects the purchase price from the buyer of the...
Should You Sign a "Sec. 302 Letter"?
May 10, 2010 - Bulletin Print Report
A tax of 30 percent is imposed on U.S. source dividend income received by a non-resident alien individual. This tax, the rate of which may be reduced by the terms o...
Customers of "Data Manipulator" Largely Escape NY Sales Tax
May 10, 2010 - Volume 4 Issue 88 Print Report
New York State Department of Taxation and Finance Advisory Opinion No. TSB-A-09(8)S, February 2, 2009, addresses the case of X the "products" of which are...
Gift of Interest in Single-Member LLC "Respected"
May 7, 2010 - Volume 4 Issue 87 Print Report
On July 13, 2000, the taxpayer, (T/P), an individual,organized the single-member "PLLC". Importantly, T/P did not elect to treat PLLC as a corporati...
Home Depot's Sales Tax Woes
May 6, 2010 - Volume 4 Issue 86 Print Report
The State of Ohio's tax statutes, specifically R.C. 5739.121, authorize a vendor to reduce its "taxable receipts" (for sales tax purposes) for a current s...
Accounting for "Progressive" Jackpots
May 5, 2010 - Volume 4 Issue 85 Print Report
There is apparentlya widediversity in practice regardingthe manner in whicha casino operator accounts for slot machine and other "jackp...
Can RVI Be Eliminated Tax-Efficiently?
May 4, 2010 - Volume 4 Issue 84 Print Report
Retail Ventures, Inc., (RVI), is a holding company whose principal asset is 62 percent of the stock of an operating company, DSW Inc., (DSW). In light of the fact t...
Synovus Terminates Exchange Offer
May 3, 2010 - Bulletin Print Report
Synovus Financial Corp., (SVN), is a loss corporation. Accordingly, it would like to avoid the occurrence of an "ownership change". Where a loss corporation...
Textron's "Work Papers" Not Protected From I.R.S. Scrutiny
May 3, 2010 - Volume 4 Issue 83 Print Report
Textron, Inc., (TEX), a publicly-traded corporation, is required to have public financial statements certified by an independent auditor. In order to prepare such f...
Contingent Interest Can Be "Portfolio Interest"
April 30, 2010 - Volume 4 Issue 82 Print Report
Corporation A, (A), a domestic subsidiary of Corporation T, (T), a domestic corporation, proposes to issue Notes which will be issuedin registered form. Most...
IPOs and Sec. 338(h)(10) Elections
April 29, 2010 - Volume 4 Issue 81 Print Report
Parent, (P), owns all of the stock of Corporation 1, (C1), and the latter owns100 percentof the stock of Seller Corporation, (S). S, in turn, owns all of...
Are Clients of a Common Investment Adviser an "Entity"
April 28, 2010 - Volume 4 Issue 80 Print Report
Where a "loss corporation" experiences an ownership change (within the meaning of Sec. 382(g) of the Internal Revenue Code), its ability to freely...
Synovus Adopts A Rights Plan
April 28, 2010 - Bulletin Print Report
Synovus Financial Corp., (SNV), has adopted a "shareholder rights" plan which is designed to insure that SNV's favorable tax attributes (primarily its &qu...
I.R.S.'s "Tardy" Notice of Deficiency Has No Force or Effect
April 27, 2010 - Volume 4 Issue 79 Print Report
Mr. and Mrs. KennethBeard (B) owned 76 percent of the stock of two 'S' corporations, MMCD and MMSD. B was persuaded to engage in a "son-of-boss" tra...
Hertz Will Acquire Dollar Thrifty
April 27, 2010 - Bulletin Print Report
Hertz Global Holdings, Inc., HTZ, and Dollar Thrifty Automotive Group, DTG, have entered intoan agreement pursuant to which HTZ will acquire all of the stock...
Is "Substantial Compliance" Sufficient?
April 26, 2010 - Volume 4 Issue 78 Print Report
In some instances, a taxpayer will fail to strictly adhere to statutory and/or regulatory requirements imposedfor securing a deduction or, perhaps, for making...
McVeigh Lawyer Denied a Tax Deduction
April 23, 2010 - Volume 4 Issue 77 Print Report
The taxpayer, Mr. Jones (J), was the lead defense counsel for Timothy McVeigh in the "Oklahoma City Bombing" trial. During the course of J's representatio...
Qwest's NOLs
April 22, 2010 - Bulletin Print Report
CenturyLink, (CTL), and Qwest Communications International, Inc., (Q), announced that their respective boards have approved a definitive merger agreement pursuant t...
Can The Device Test Be Used Offensively?
April 22, 2010 - Volume 4 Issue 76 Print Report
On July 11, 1996, United Dominion Industries, UDI,commenced an unsolicited tender offer to purchase all of the common stock of Commercial Intertech Corporatio...
Are "Surplus Notes" Disguised Equity?
April 21, 2010 - Volume 4 Issue 75 Print Report
In connection with a settlement, Ambac Assurance Corporation, AAC, will transfer some$2 billion principal amountof "surplus notes" (along with...
I.R.S. Unveils Schedule UTP
April 20, 2010 - Bulletin Print Report
The I.R.S., in an effort to increase its audit efficiency,will require corporations to disclose more information about what the Service refers to as the corpo...
Non-Resident Shareholders of N.Y. 'S' Corporation Escape Tax
April 20, 2010 - Volume 4 Issue 74 Print Report
The taxpayers were non-residents of New York Stateduring 2001. They were, during 2001, shareholders of SBS, Inc. (SBS). During the fiscal year ended August 31...
Avoiding Sec. 483 With "Escrowed" Stock
April 19, 2010 - Volume 4 Issue 73 Print Report
A privately-heldcorporation (I) was acquired by a publicly-traded corporation (KM)in a "forward triangular merger"which qualifieda...
Apache/Mariner: A "Forward" Merger Is Planned
April 16, 2010 - Bulletin Print Report
Apache Corp., (APA), and Mariner Energy Corp., (ME), announced the execution of a definitive agreement pursuant to which APA will acquire ME. &nb...
Insolvent Subsidiaries and Sec. 338(h)(10)
April 16, 2010 - Volume 4 Issue 72 Print Report
P Corporation, (P), owns all of the stock of S1 Corporation, (S1), and S1 owns at least80 percent of the stock of S2 Corporation, (S2). S2, in turn, owns all...
Option Grant Not a Present Sale of Optioned Property
April 15, 2010 - Volume 4 Issue 71 Print Report
The taxpayers were stockholders of Klauer Manufacturing Co., (KM), an 'S' corporation principallyengaged in the manufacture and sale of a variety of sheet met...
I.R.S. Publishes Guidelines for 5 Year NOL Carryback
April 14, 2010 - Volume 4 Issue 70 Print Report
Sec. 1211 of"The American Recovery and Reinvestment Tax Act of 2009" (Div. B of P.L. 111-5, Stat. 115, February 17, 2009) amends Sec. 172(b)(1)(H) o...
Accrued Interest on Convertibles--Read the Fine Print
April 13, 2010 - Volume 4 Issue 69 Print Report
A corporate taxpayer (T)issued convertible subordinated debenturesfeaturing a 20 year term. The debentures were convertible, at any time, at the holder'...
MIR's NOLs
April 12, 2010 - Bulletin Print Report
Mirant Corporation, MIR, and RRI Energy, Inc., RRI, announced that they have entered into a definitive agreement to create GenOn Energy. The transactionwill b...
Hoosier State "Nexus" Not Found
April 12, 2010 - Volume 4 Issue 68 Print Report
A corporation (C) is engaged in the sale of health and personal care products. Customers of C can order these products via mail-order, internet, telephone, or facsi...
Transfers to an "Investment Company"
April 9, 2010 - Volume 4 Issue 67 Print Report
Ordinarily, no gain or loss is recognized on the transfer of property by a partner to a partnership in exchange for an interest in such partnership. See Sec. 721(a)...
Maurice Greenberg Enters Into a "VPF" and Liberty Update
April 8, 2010 - Volume 4 Issue 66 Print Report
On March 17, 2010, Starr International, SI, Mr.Maurice Greenberg's investment vehicle, entered into the final agreement for a "VPF" (variable prepai...
I.R.S. Regulations Cannot Be Applied Retroactively
April 7, 2010 - Volume 4 Issue 65 Print Report
Each member of the Murphy family, through his or her single-member LLC, purchased and sold long and short foreign currency put options. These option positions were...
NYS Non-Resident Not Taxed on "Non-Compete" Payments
April 6, 2010 - Volume 4 Issue 64 Print Report
A taxpayer (T) was a resident of Connecticut and an employee of Merrill Lynch Pierce Fenner & Smith(M) in its New York City office until March 31, 2005. T...
SD and ARD Announce A "Reverse Triangular Merger"
April 5, 2010 - Bulletin Print Report
SandRidge Energy, Inc., (SD), and Arena Resources, Inc., (ARD), announced that they have entered into a definitive merger agreement under which ARD's shareholders w...
The Supreme Court's Views On Investment Adviser Fees
April 5, 2010 - Bulletin Print Report
The Investment Company Act of 1940, (ICA), regulates investment companies, including mutual funds. In most cases, an "investment adviser" will create a mu...
No Discount Allowed for Gift of "FLP" Interest
April 5, 2010 - Volume 4 Issue 63 Print Report
The Heckermans wished to make a gift to their children but only if the gift taxes imposed with respect to the transfer could be minimized or entirely eliminated. Th...
Primerica Will Enjoy a "Basis Step-Up"
April 1, 2010 - Volume 4 Issue 62 Print Report
Primerica, Inc., (P),in the process of being "spun-off" from Citigroup, Inc., (C), willobtain, as a result of the manner in which C is structu...
DB's Costly Overstatement of Deferred Tax Assets
March 31, 2010 - Bulletin Print Report
E*TRADE Financial Corporation and E*TRADE Bank, (E*TRADE), sued Deutsche Bank AG, (DB),for breach of a stock purchase agreement by which E*TRADE acquired the...
"ESO" Costs Need Not Be Shared--Xilinx Vindicated
March 31, 2010 - Volume 4 Issue 61 Print Report
Xilinx, Inc., (X), researches, develops, manufactures, and markets integrated circuit devices and related development software systems. With a view towards expandin...
Formation of JV Not a Present "Sale"
March 30, 2010 - Volume 4 Issue 60 Print Report
C Corporation (C) and U Corporation (U) entered into a joint venture agreement on July 1, 1968, which closed on July 31, 1968....
Treasury's Sale of C Stock Will Not Cause Ownership Change
March 30, 2010 - Bulletin Print Report
The U.S. Department of the Treasury has announced its intention to "fully dispose" of its approximately 7.7 billion shares of Citigroup, Inc., C, common s...
"Passing the Baton" Tax-Efficiently
March 29, 2010 - Volume 4 Issue 59 Print Report
Assume the existence of a family corporation the stock of which is owned, largely, by the founders of the corporation who are, increasingly, curtailing their involvem...
Liberty Update in Light of the Health Care Bill
March 26, 2010 - Bulletin Print Report
The Patient Protection and Affordable Care Act, recently signed into law by President Obama, codifies the venerable "economic substance" doctrine. Thus, f...
Royalty Costs Not Subject to Capitalization
March 26, 2010 - Volume 4 Issue 58 Print Report
Robinson Knife Manufacturing Co., Inc., (R), is a corporation whose business is the design, manufacture, and marketing of kitchen tools. &n...
Health Care Bill Will Cause Write-Down of DTAs
March 25, 2010 - Bulletin Print Report
The recently-enacted health care legislation (the Patient Protection and AffordableCareAct)will cause many companies to revaluate their deferred t...
Capital Contributions Are Not Income
March 25, 2010 - Volume 4 Issue 57 Print Report
The shareholders of an 'S' corporation made loans to the corporation. The corporation sustained losses which were passed through to the shareholders. The passed-thr...
Is a Holding Company "Unitary" With Its Operating Subsidiary?
March 24, 2010 - Volume 4 Issue 56 Print Report
In many leveraged buyouts (LBOs), a holding company is formed by the "sponsors" of the LBOto acquire the stock of one or more operating companies. T...
Health Care Bill Contains Some Tax Surprises
March 23, 2010 - Bulletin Print Report
The widely-heralded health care bill that the House of Representatives passed last weekend contains a few tax surprises that can hardly be described as pleasant sur...
Can Merger Expenses Ever Be Deducted?
March 23, 2010 - Volume 4 Issue 55 Print Report
It is axiomatic that expenses incurred in connection with a reorganization are non-deductible capital expenditures. Can these capitalized expenditures ever give ris...
WY Details Its Conversion Plan
March 22, 2010 - Bulletin Print Report
Weyerhaeuser Company, WY, seems to be inching closer to implementing a plan to convert the corporation into a Real Estate Investment Trust (REIT). Its recently rele...
New Jersey's Treatment of "Deemed Sale" Gains
March 22, 2010 - Volume 4 Issue 54 Print Report
McKesson Parent (MP) owned 100 percent of the stock of McKesson Water (MW). MW was incorporated in Delaware and its principal place of business was California.
I.R.S. Extends "Continuity" Regulations
March 19, 2010 - Bulletin Print Report
Under Sec. 7805(e)(2) of the Internal Revenue Code, temporary regulations expire three years after issuance, if not earlier withdrawn. Accordingly, Reg. Sec. 1.368-...
When Will Preliminary Distributions Impact Continuity of Interest?
March 19, 2010 - Volume 4 Issue 53 Print Report
In order for a transaction to qualify as a reorganization , it must, among other things, exhibit continuity of interest (COI). In fact, Reg. Sec. 1...
The Progenitor of The "Economic Substance" Doctrine
March 18, 2010 - Volume 4 Issue 52 Print Report
Congress is poised to codify a judge-made doctrine of tax law, the amorphous "economic substance" doctrine. It is doing so, ostensibly, because the courts...
WebMD's Latest Repurchase
March 17, 2010 - Bulletin Print Report
WebMD Health Corporation, (WMD), is embarking on another share repurchase in which it is seeking to retire approximately 11 percent of its outstanding stock, some 5...
Cars and Trucks Are "Like Kind" Properties
March 17, 2010 - Volume 4 Issue 51 Print Report
Taxpayer (T) operates a leasing business; T purchases vehicles for lease and sells the vehicles as the lease terminates. The vehicleswhich populateT's f...
Levin Bill Takes Aim at "Reverse Morris Trust" Transactions
March 16, 2010 - Bulletin Print Report
Often, in the case of a reverse Morris Trust (RMT) transaction, in which a corporation, (D),distributes the stock of a controlled corporation, (C),to it...
Is the NFL a Single Entity?
March 16, 2010 - Volume 4 Issue 50 Print Report
The National Football League (NFL)is an unincorporated association of 32 separately owned and operated teams that collectively produce an annualseries o...
Sec. 336(e) Elections Cannot Be Currently Made
March 15, 2010 - Volume 4 Issue 49 Print Report
P Corporation, (P), owns all of the stock of S Corporation, (S), and the latter owns all of the stock of T Corporation, (T). &n...
"Black Liquor" Withstands a Challenge
March 12, 2010 - Bulletin Print Report
Black liquor, a by-product of the paper milling process in craft mills, is a liquid fuel derived from biomass. The producer of black liquor adds a small amount of d...
More Sales Tax Woes for Home Depot
March 12, 2010 - Volume 4 Issue 48 Print Report
Several years ago, Home Depot, Inc. (HD) began providing its many customers the option of purchasing merchandise though a "private label" credit card. Som...
Continuity of Business Enterprise and NOLs
March 11, 2010 - Volume 4 Issue 47 Print Report
Where a loss corporation undergoes an ownership change, within the meaning of Sec. 382(g), limits are imposed on the amount of taxable income for any taxable year end...
C Issues Trust Preferred Securities and "Smart Grid" Grants
March 11, 2010 - Bulletin Print Report
Citigroup Capital XII, a grantor trust created by Citigroup, (C), for the purpose of issuing capital securities, has issued "Fixed Rate/Floating Rate Trust Pre...
What is the "Character" of a Sec. 16(b) Payment?
March 10, 2010 - Volume 4 Issue 46 Print Report
In 1959, Mr. Cummings, the Chief Executive Officer of Consolidated Food, Inc., purchased 51,500 shares of MGM, Inc. for approximately $1,030,000. He was promptly el...
Investment Holding Company Included In NYS Combined Return
March 9, 2010 - Volume 4 Issue 45 Print Report
The taxpayer, (IB), is a commercial bank organized and chartered under the New York State Banking Law on June 6, 1983. I...
Third Circuit Rules That ESOP Dividends Are Not Deductible
March 8, 2010 - Volume 4 Issue 44 Print Report
Conopco, Inc. (a subsidiary of Unilever USA and the successor-in-interest to Bestfoods, Inc. and CPC International, Inc.) created an Employee Stock Ownership Plan (...
BAC's Warrants--"Phantom" Income May Arise
March 5, 2010 - Bulletin Print Report
The Bank of America, (BAC),warrants sold by the Treasury Department to the public recently embody some unusual attributes that, as you might expect, engender...
'S' Corporations and MLPs
March 5, 2010 - Volume 4 Issue 43 Print Report
X Corporation (X) is an 'S' corporation--Accordingly, its income is not subject to entity level taxation. Such income, instead,is "passed-through" t...
AIG Settles Tax Dispute With I.R.S.
March 5, 2010 - Bulletin Print Report
It is being reportedthat AIG has received a favorable ruling from the I.R.S.with respect to the withholding tax issue that was impeding its sale of...
Volvo Secures a Tax Refund
March 4, 2010 - Volume 4 Issue 42 Print Report
Volvo (V) entered into an April 18, 1980 contract with Sajac Company, Inc. (S)---Manufacturers,such asV, would transfer their excess parts to S for &quo...
Foreclosure Doubles as a "Qualified Stock Purchase"
March 3, 2010 - Volume 4 Issue 41 Print Report
P Corporation, (P), owned100 percentof the stock of S1 Corporation, (S1), and S2 Corporation, (S2), and owned all of the membership interests in LLC, an...
Homebuilder's Losses Are Not "Product Liability" Losses
March 2, 2010 - Volume 4 Issue 40 Print Report
Homebuilders recently achieved a majortax victory by securing the ability to carry back certain losses, referred to as "applicable NOLs", for five y...
MXB/RISK---A Taxable Merger?
March 1, 2010 - Bulletin Print Report
MSCI, Inc., (MXB), and RiskMetrics Group, Inc., (RISK), announced that they have entered into a definitive merger agreement whereby MXB will acquire RISK "in a...
Stock Redeemed for Cancellation of Non-Recourse Notes
March 1, 2010 - Volume 4 Issue 39 Print Report
Corporation (C) was formed on Date A. C's commonstock was issued to the "Initial Shareholders" (the Initial Shareholders were comprised of the "...
Defending a Shareholders' Derivative Suit
February 26, 2010 - Volume 4 Issue 38 Print Report
Mr. BA (BA) was the majority shareholder of OA Corporation (OA) and owned 50 percent of the stock of each of L Corporation (L) andA Corporation (A). OA owned...
KO/CCE: A Split-Off with "Boot"?
February 25, 2010 - Bulletin Print Report
Although the details are sparse, it appears that Coca-Cola Enterprises, Inc., (CCE), will be engineering a split-off which will be accompanied by a cash payment; a...
Taxpayer Bound By Form In Which Transaction Cast
February 25, 2010 - Volume 4 Issue 37 Print Report
Insilco Corporation, (IC), owned 66 percent of the stock of Times Fiber Communication, Inc., (TFC), and the public owned the balance of such stock. Pursuant to an i...
R.H. Donnelley Denied Much Needed Tax Refund
February 24, 2010 - Volume 4 Issue 36 Print Report
R.H. Donnelley Corporation, (RHD), filed a consolidated income tax return for the year ending December 31, 1994. The I.R.S. examined this return and did not determi...
The Case for "Collapsing" Classes of Stock Grows
February 23, 2010 - Bulletin Print Report
D2 Corporation, (D2),owns all of the stock of D1 Corporation, (D1), engaged in Business 1, and Sub3 Corporation, (S3), engaged in Business 3. &nb...
Dispelling 10 Tax Myths
February 23, 2010 - Volume 4 Issue 35 Print Report
10. An increase in the conversion ratio of convertible debt (or convertible preferred stock) does not have immediate tax consequences. In fact, such an increase is...
ESOPs and 'S' Corporations
February 22, 2010 - Volume 4 Issue 34 Print Report
S1 Corporation, (S1), a foreign corporation,was owned by Shareholders 1, 2, and 3. In addition, these sameindividuals owned all of the stock of Corporat...
SLB's Foreign Status Does Not Prevent Tax-Free Reorganization
February 22, 2010 - Bulletin Print Report
Schlumberger, Ltd. (SLB) and Smith International, Inc. (SII) announced a merger agreement in which the shareholders of SII will, in exchange for each SII share, rec...
Avoiding "CAI" Penalties
February 19, 2010 - Volume 4 Issue 33 Print Report
Sec. 279(a), a provision enacted during the notorious"conglomerate era", in The Tax Reform Act of 1969, provides that "no deduction shall be allo...
Deducting Proxy Contest Costs
February 18, 2010 - Volume 4 Issue 32 Print Report
Expenses are deductible, in computing taxable income, if the expenses constitute ordinary and necessary expenses that are paid or incurred during the taxable year i...
What Is Delaying the ALICO Sale?
February 17, 2010 - Bulletin Print Report
The widely-anticipated sale of the stock of American Life Insurance Co. (ALICO) by AIG to MetLife (ML) is, apparently, being held upby a tax issue that ML's a...
GID Is a "Disease"
February 17, 2010 - Volume 4 Issue 31 Print Report
The taxpayer, (RO), was born a genetic male. However, "she" was uncomfortable in the male gender role from childhood and first wore women's clothing secre...
'S' Status Not Imperiled by Transfers of Stock to LLCs
February 16, 2010 - Volume 4 Issue 30 Print Report
X Corporation (X) is an 'S' corporation. The stock of X is owned, in equal proportions, by Individual 1 (I1) and Individual 2 (I2). I1 will transfer his shares in X...
Payments "Originating" In a Spin-Off Includible in Gross Income
February 12, 2010 - Volume 4 Issue 29 Print Report
X Corporation, (X), whom we believeto beFord Motor Co., transferred to Z Corporation, (Z), whom webelieveto beVisteon Corporation, cer...
COD Income vs. "Gain on Sale"
February 11, 2010 - Volume 4 Issue 28 Print Report
In March, 1978 the taxpayers (M) purchased a residence for $36,639. The property was, at the time of purchase,encumbered by a mortgage payable to P Bank. ...
Holding Property for Investment or Conducting a Business?
February 10, 2010 - Volume 4 Issue 27 Print Report
Many important taxation determinations turn on whether an entity or an individual is merely holding property for investment purposes or is, with respect to...
Vimpel Exchange Will Be Tax-Free
February 10, 2010 - Bulletin Print Report
The shareholders of Open Joint Stock Company VimpelCom (OJSC) have been asked to exchange their stock therein for stock in a newly-formed corporation, VimpelCom Ltd...
"Stripping" BOOT's Special Dividend
February 9, 2010 - Bulletin Print Report
Recently, LaCrosse Footwear, Inc., (BOOT), announced that its board of directors had approved a special cash dividend of $1.00 per share and a quarterly cash divide...
Broker Can Deduct Commission "Rebates"
February 9, 2010 - Volume 4 Issue 26 Print Report
The taxpayer (TP)had been a highly successful "day trader" of stocks and securities. He became the branch manager of A Corporation's (A) office in A...
Real Estate Leasing As A "Passive" Activity
February 8, 2010 - Volume 4 Issue 25 Print Report
During 2001 and 2002, Mr. Agarwal (H)workedfull-time as anengineer. Mrs. Agarwal (W) worked full-time as a real estate agent at Century 21. W was...
FedEx Properly Claimed "Research" Credits
February 5, 2010 - Volume 4 Issue 24 Print Report
In 1996, FedEx (F) identified a need for a new computer system with "better revenue controls" to insure timely and accurate billing and to eliminate reven...
Ambac Adopts "Rights" Plan
February 5, 2010 - Bulletin Print Report
Ambac Financial Group, Inc., (ABK), has joined the growing legion of companies which have adopted a shareholder "rights plan" for the express purpose of p...
PDL Biopharma Post-Mortem
February 4, 2010 - Bulletin Print Report
PDL BioPharma, Inc. (PDLI) recently announced the tax "profile" of the distributions it made to its shareholders during 2009. In 2009, PDLI made two cash...
Deducting Fines and Penalties--Part II
February 4, 2010 - Volume 4 Issue 23 Print Report
S Corporation, (S),a subsidiary of Talley Industries, Inc. (TI),manufactured ejection seats for military aircraft. S's primary customer was the Navy Dep...
President Obama's Budget Replete With Tax Proposals
February 3, 2010 - Volume 4 Issue 22 Print Report
President Obama's budget submission contains numerous tax proposals, many of them quite "hostile" towards business in general and "high-income"...
Tax Refunds Ruled to Be "Pre-Petition" Claims
February 2, 2010 - Volume 4 Issue 21 Print Report
On December 22, 2008, the Debtors filed voluntary petitions under Chapter 11 of the Bankruptcy Code. Certain of the Debtors and non-debtor affiliates ("the Fly...
The I.R.S. Addresses DTV's Stock Buybacks
February 2, 2010 - Bulletin Print Report
LTR 201004001, October 22, 2009, appears to address the tax consequences of Liberty Media's split-off of Liberty Entertainment, Inc.; the latter's merger with Direc...
The Device Test and Earnings and Profits
February 1, 2010 - Volume 4 Issue 20 Print Report
In order for a spin-off or split-off to qualify for tax-free treatment it cannot be found to have been used principally as a device for the distribution of...
Deducting "Success-Based" Banking Fees
January 29, 2010 - Volume 4 Issue 19 Print Report
The taxpayer, (TP), a domestic corporation, in connection with the exploration of its strategic alternatives,hired each ofCorporation X, (X), and Invest...
"Downstream" Transfer Qualifies as a Reorganization
January 28, 2010 - Volume 4 Issue 18 Print Report
Where a corporation's principal asset is stock in another corporation, and the corporation determines that such stock should properlyreside with its sharehold...
The "Matching Principle" Can Defer Deductions
January 27, 2010 - Volume 4 Issue 17 Print Report
With a viewtowards preventing a particularform of "tax arbitrage", Sec. 267(a)(2) provides that if-- --by reason of the meth...
The I.R.S. Will Require Disclosure of "Uncertain Tax Positions"
January 27, 2010 - Bulletin Print Report
Under FASB Interpretation No. 48 (FIN 48), Accounting for Uncertainties in Income Taxes, an Interpretation of SFAS No. 109 , (ASC subtopic 740-10), an enter...
Cablevision Announces Record Date for Spin-off of MSG
January 26, 2010 - Bulletin Print Report
The spin-off by Cablevision (C) of the stock of its subsidiary, Madison Square Garden, Inc. (MSG) will occur on February 9, 2010. On that date holders of C's Class...
Bare Escentuals Deal Features "National Starch" Element
January 26, 2010 - Bulletin Print Report
Shiseido Co. Ltd. (P), through a U.S. affiliate, is offering to purchase the stock of Bare Escentuals, Inc. (BE) for $18.20 per share in cash. Once the tender offer...
Allowed vs. Allowable
January 26, 2010 - Volume 4 Issue 16 Print Report
The State of Illinois estate tax law, at Sec. 3(a), provided an estate tax to be imposed on "every taxable transfer involving transferred property having a tax...
"Isolated" Redemptions Do Not Trigger Constructive Distributions
January 25, 2010 - Volume 4 Issue 15 Print Report
Company, (C), a closely-heldState X corporation, has two classes of common stock outstanding; Class A common stockand Class B common stock. The classes ar...
"Upstream" Transfer is Ruled a 'C' Reorganization
January 22, 2010 - Volume 4 Issue 14 Print Report
P Corporation (P) owned all of the stock of H Corporation (H). H, in turn, owned all of the stock of S1 Corporation (S1) and S2 Corporation (S2). S1 was incorporate...
Kraft and Cadbury Reach an Agreement
January 21, 2010 - Bulletin Print Report
Kraft Foods (K) and Cadbury (C) have reached an agreement pursuant to which the former will acquire the stock of the latter in exchange for a combination of K commo...
NY Non-Resident Escapes Tax on Option Income
January 21, 2010 - Volume 4 Issue 13 Print Report
Mr. Robert Abodeely (RA) worked for Pfizer, Inc., in New York State, from August 7, 1988 until his retirement on January 14, 1999. At all times during his employmen...
Brink's and Tyco Announce a "Forward" Merger
January 20, 2010 - Bulletin Print Report
Tyco International Ltd. (TYC) and Brink's Home Security Holdings, Inc. (CFL) announced an agreement pursuant to which CFL will be merged with and into a newly-creat...
Deducting "Going Private" Expenses
January 20, 2010 - Volume 4 Issue 12 Print Report
In November of Year 1, the board of directors of Company (C) decided to "explore strategic alternatives", including a sale of C....
MDR's Spin-Off Should Not Have U.S. Tax Implications
January 19, 2010 - Bulletin Print Report
McDermott International, Inc. (MDR), a Panamanian corporation, owns all of the stock of The Babcock & Wilcox Company (BW), a U.S. corporation, and J. Ray McDermot...
"Derived" From Interest
January 19, 2010 - Volume 4 Issue 11 Print Report
HomeStreet, Inc. (HS)is a residential mortgage lender that services certain of the loans that it sells or securitizes. For loans sold on a "service-retai...
Bank and Bonus "Taxes" Are Proposed
January 15, 2010 - Bulletin Print Report
On Thursday, January 14, 2010,two "levies" were introduced by President Obama on the one hand and members of the House of Representatives on the oth...
Pennsylvania's "Shares Tax" Is Constitutional
January 15, 2010 - Volume 4 Issue 10 Print Report
The State of Pennsylvania imposes a so-called"Shares Tax" on the taxable amount of a banking institution's shares of capital stock. The tax is based...
"General Welfare" Payments Are Not Includible in Gross Income
January 14, 2010 - Volume 4 Issue 9 Print Report
LTR 200908025, November 5, 2008,informs usthat State A recentlyenacted legislation establishing "Program M". Under the Program, State A...
"Distressed" Sales of Realty Are Not Prohibited Transactions
January 13, 2010 - Volume 4 Issue 8 Print Report
Taxpayer (TP) isa widely-held and publicly-tradedreal estate investment trust (REIT). TP conducts its business through a limited partnership (LP) of which...
Dueling Discount Rates
January 12, 2010 - Volume 4 Issue 7 Print Report
In 1991, three individuals, including L and S, won the Ohio State Lotto Jackpotamounting to$20 million. Each winner was entitled to receive 26 annual pa...
Accounting for "Elective" Cash/Stock Distributions
January 11, 2010 - Bulletin Print Report
Many REITs, and certain regulated investment companies (RICs), in order to (i) conserve cash, yet (ii)satisfy their dividend payment obligations, have resorte...
Wells Fargo's "SILOs" Do Not Pass Muster
January 11, 2010 - Volume 4 Issue 6 Print Report
Wells Fargo & Company(WF) claimed $115,174,203 in depreciation, interest, and transaction cost deductions for 2002. These deductions stemmed from WF's par...
"Retroactive" Taxation--Can It Withstand Scrutiny?
January 8, 2010 - Volume 4 Issue 5 Print Report
The Federalestate tax has been repealed with respect to decedents dying during 2010. Congress has threatened to reinstate the tax for 2010, even with respect...
Morgan Stanley's Windfall
January 7, 2010 - Bulletin Print Report
A New York Supreme Court Justice recently ruled that Discover Financial Services(D) could not escape its obligation underan agreement with Morgan Stanle...
Source of Income vs. Character of Income
January 7, 2010 - Volume 4 Issue 4 Print Report
Mr. Mintz (M) was a resident of Florida and a non-resident of New York. ESG, Inc. (ESG) was an New York 'S' corporation. M owned 27 percent of the stock of ESG. On...
I.R.S. Nixes Repatriation Gambit
January 6, 2010 - Volume 4 Issue 3 Print Report
Sec. 304(a)(1) of the Internal Revenue Code provides that, for purposes of Sec. 302 and Sec. 303, if one or more persons are in control of each of two corporations,...
Withholding on DIS/MVL Payment Can Be Avoided
January 5, 2010 - Bulletin Print Report
In connection with the merger of Marvel Entertainment (MVL) with and into Disney (DIS), the MVL shareholders will receive, in exchange for each MVL share, $30.00 in...
Replacing "Involuntarily Converted" Property
January 5, 2010 - Volume 4 Issue 2 Print Report
Where property is the subject of an "involuntary conversion", the gain from the transaction can be deferred if, within a specified period, the taxpayer re...
Estate Tax Repeal Affects Heirs' Basis in Inherited Property
January 5, 2010 - Bulletin Print Report
It is by now well-known that the estate taxhas beenrepealedwith respect todecedents passing away in 2010. This repeal, however, has some col...
Novartis/Alcon--Is the Merger a Reorganization?
January 4, 2010 - Bulletin Print Report
Not unexpectedly, Novartis A.G. (NVS) announced its intention to acquire full ownership of Alcon, Inc. (ACL) in a two-step transaction. The first step will see NVS...
I.R.S. Extends "AHYDO" Exemption
January 4, 2010 - Volume 4 Issue 1 Print Report
Under Sec. 163(e)(5) of the Internal Revenue Code, in the case of an Applicable High Yield Discount Obligation (AHYDO) as defined in Sec. 163(i), a corporation is n...
"Bargain Sale" Did Not Give Rise to "Constructive" Distribution
December 31, 2009 - Volume 3 Issue 254 Print Report
"...The hallmark of a constructive distribution is value passing from...the corporation to the shareholder, for which the shareholder does not give equivalent...
I.R.S. Extends REIT Stock Dividend Concession
December 30, 2009 - Volume 3 Issue 253 Print Report
Sec. 857(a)(1) of the Internal Revenue Codeprovides that the provisions of part II of subchapter M of Chapter 1 of the Internal Revenue Code(relating to...
Payments To Protect Goodwill
December 29, 2009 - Volume 3 Issue 252 Print Report
In general, payments made for the principal purpose of protecting an entity's goodwill and reputationare deductible even though such payments may also provide...
Nortel Networks, Inc. Settles I.R.S. Claim
December 28, 2009 - Bulletin Print Report
On August 20, 2009, the I.R.S. filed a "proof of claim" in which it asserted an unsecured priority claim against Nortel Networks, Inc. (NNI) for the taxab...
Reducing The Dilution Associated With Convertible Debentures
December 28, 2009 - Volume 3 Issue 251 Print Report
One of the issues surrounding the use of convertible debentures as a financing vehicle is the potential earnings per share dilution thatmight arisewhen...
What Is "Interest"
December 24, 2009 - Volume 3 Issue 250 Print Report
Michigan Bell Telephone Co. (MBT) filed its Michigan "single business tax" returns and included monies received from customers as "late payment fees&...
CIT Moves To Protect Its NOLs
December 23, 2009 - Bulletin Print Report
CIT Group, Inc. (CIT) has emerged from bankruptcy with its stock in the hands of its creditors and with its debt substantially diminished. The reduction of its debt...
Rescinding a Split-Off
December 23, 2009 - Volume 3 Issue 249 Print Report
D Corporation (D) was owned by SH Corporation (SH), a foreign corporation. Dhad beenengaged for more than five years in the active conduct of each of&nb...
District Court Finds That "LevPar" Is a "Disguised Sale"
December 22, 2009 - Volume 3 Issue 248 Print Report
On February 12, 1990, GAF Chemicals Corporation (GAF) and Rhone-Poulenc (RP) entered into a partnership agreement, forming RPSSLP, with GAF as a limited partner and...
TARP and Deferred Compensation
December 21, 2009 - Volume 3 Issue 247 Print Report
Through the years, Congress has, increasingly,"cracked-down" on non-qualified deferred compensation arrangements. This vigilance has culminated with...
PDL Pays A "Special Dividend"
December 21, 2009 - Bulletin Print Report
PDL BioPharma, Inc. (PDL) paid a "special dividend" in the amount of $1.67/share last Tuesday, December 15, 2009. Thus, for the year ended December 31, 20...
Interstate Taxation and The Commerce Clause
December 18, 2009 - Volume 3 Issue 246 Print Report
The Commerce Clause of the United States Constitution provides that "The Congress shall have the Power...To regulate Commerce...among the several States...&quo...
Veritas Scores A Major "Transfer Pricing" Victory
December 17, 2009 - Volume 3 Issue 245 Print Report
Veritas Software Corporation (VUS) is in the business of developing, manufacturing, marketing, and selling software products. On July 2, 2005, VUS was purchased by...
WY Will Convert To A REIT
December 16, 2009 - Bulletin Print Report
It has finally happened. Weyerhaeuser Company (WY) announced that its board of directors "has determined that conversion to a REIT would best support the compa...
Ending Entanglements Through a "Cash-Rich" Split-Off
December 16, 2009 - Volume 3 Issue 244 Print Report
Where a corporation (X) owns an appreciatedequity stake in another corporation (Y), but not a controlling interest therein, the market will rarely give X full...
C Inches Closer To An Ownership Change
December 15, 2009 - Bulletin Print Report
Citigroup (C)will be raising "fresh" capital, through the issuance of "T-DECS" and common stock, and the Treasury Department will begin to...
How Does the "Wash Sale" Rule Apply to Bonds?
December 15, 2009 - Volume 3 Issue 243 Print Report
The "wash sale" rule denies a taxpayer a deduction for a loss sustained from certain sales or other dispositions of stock or securities. Thus, under Sec....
Treasury's Sale Of C Stock Will Not Impair C's NOLs
December 14, 2009 - Volume 3 Issue 242 Print Report
Were Citigroup (C) toexperience an ownership change its deferred tax assets (DTAs) would become vulnerable because its ability to realize those...
Massachusetts Enacts a "SFAS 109 Deduction"
December 11, 2009 - Volume 3 Issue 241 Print Report
Statement of Financial Accounting Standards No. 109 , Accounting for Income Taxes , requires an entity to recognize a deferred tax liability (DTL) or deferre...
Extenders Bill Is Important for G.E.
December 10, 2009 - Bulletin Print Report
The "Extenders" bill passed the House, largely along party lines, on Wednesday, December 9. It faces an uncertain fate in the Senate. One of the more cont...
"Cross-Border" Spin-Offs Can Be Tax-Free
December 10, 2009 - Volume 3 Issue 240 Print Report
P Corporation (P) is a foreign corporation engaged, directly and indirectly, in the activeconduct of several businesses. P owns all of the stock of D Corporat...
Kraft Stock Will Be Taxable
December 9, 2009 - Volume 3 Issue 239 Print Report
Kraft Foods, Inc. (KFT) is offering to acquire all of the "ordinary" shares of Cadbury, plc (C), including those ordinary shares represented by ADSs. (Eac...
"Carried Interest" Changes Will Pay, In Part, For "Extenders"
December 9, 2009 - Bulletin Print Report
On December 7, Rep. Rangel (D-NY), the Chairman of the House Ways & Means Committee, introduced legislation, "The Tax Extenders Act of 2009" (H.R. 421...
Standard Pacific's NOL Woes
December 8, 2009 - Bulletin Print Report
Standard Pacific Corporation (SFC), one of the homebuilders hard hit by the economic crisis, has accumulated substantial "deferred tax assets". The princi...
I.R.S. Wins Another "Son-of-Boss" Case
December 8, 2009 - Volume 3 Issue 238 Print Report
One of the most widely-used strategies marketed by accounting firms as a way to reduce tax liabilities was the so-called "son-of-boss" technique. This str...
When Are Policyholder Dividends Deductible?
December 7, 2009 - Volume 3 Issue 237 Print Report
The taxpayer (TP) issues "participating" life insurance policies that entitle policyholders to receive two types of dividends: annual dividends and termin...
Complications Involving a REMIC Holder's Charitable Impulses
December 4, 2009 - Volume 3 Issue 236 Print Report
LTR 200850027, August 28, 2008, addresses the case of a corporation (T)that holds a "residual interest" in a Real Estate Mortgage Investment Conduit...
House Members Propose a "Transactions" Tax
December 4, 2009 - Bulletin Print Report
Members (there are at least 15 co-sponsors)of the House of Representatives, led by Congressman DeFazio, proposed legislation ominously entitled "Let Wall...
CFCs and "Voting Power"
December 3, 2009 - Volume 3 Issue 235 Print Report
The Obama Administration's tax proposals, focused heavily on altering the manner in which U.S.-basedmultinational corporations are taxed, has once again raise...
Disavowing a Covenant Not to Compete—“Strong Proof” Required
December 2, 2009 - Volume 3 Issue 234 Print Report
On March 31, 1998, representatives of C Corporation (C) and J Corporation (J) executed an "asset purchase agreement" which provided that C would acquire a...
"Basis Shifting" Scheme Thwarted
December 1, 2009 - Volume 3 Issue 233 Print Report
O Corporation (O) was in the business of developing, owning, and managing commercialreal estate. The stock of O was owned by a father (F) and his sons (S1 and...
Does BHI's S-4 Shed Light on the COI Issue?
November 30, 2009 - Bulletin Print Report
Berkshire Hathaway, Inc. (BHI), in connection with its planned acquisition of Burlington Northern Santa Fe Corporation (BNSF), has filed a preliminary proxy stateme...
Mr. Wygod Seeks "Exchange" Treatment For His Redemption
November 30, 2009 - Volume 3 Issue 232 Print Report
WebMD Health Corporation (WBMD) has been an activepurchaser of its stock for quite some time. In fact, its buybacks have been so extensive that they caused th...
Voting Trust Does Not Insulate Beneficiary From Subpart F
November 27, 2009 - Volume 3 Issue 231 Print Report
In 1989, Textron, Inc. (T) acquired substantially all of the stock of Avdel (A), a U.K. corporation. The FTC, however, intervened. The agency believed there might b...
Cost of "Supplies" Qualify for Research Credit
November 25, 2009 - Volume 3 Issue 230 Print Report
The taxpayer, TG Missouri Corporation (TGM), is in the business of manufacturing injection-molded products (steering wheels, air bags) for customers in the automoti...
Zions Is Keeping Busy
November 24, 2009 - Bulletin Print Report
Zions Bancorporation (ZION) recently announced its intention to engage in certain "financial" transactions that will have the effect of shoring up the com...
What If BHI's Stock Interest In BNSF Is Not "Old and Cold"?
November 24, 2009 - Volume 3 Issue 229 Print Report
Berkshire Hathaway, Inc. (BHI) currentlyowns approximately 22 percent of the stock of the stock of Burlington Northern Sante Fe Corporation (BNSF). The compan...
People's United Will Acquire Financial Federal Corporation
November 24, 2009 - Bulletin Print Report
People's United Financial, Inc. (PBCT), the holding company for People's United Bank, hasannounced a definitive agreement to acquire Financial Federal Corpora...
Exploiting the "HYDO" Suspension--Buyer Beware
November 23, 2009 - Volume 3 Issue 228 Print Report
In Rev. Rul. 2002-31, 2002-1 C.B. 1023, the I.R.S. bestowed itsstamp of approvalon a variety of debt instrument the issuance of which would provide the...
When To "Collapse" An Acquisition Merger and Upstream Merger
November 20, 2009 - Volume 3 Issue 227 Print Report
In Rev. Rul. 90-95, 1990-2 C.B. 67, P Corporation (P) formed S Corporation (S) and the latter merged with and into unrelated T Corporation (T). In the merger, the s...
E*TRADE's Ownership Change
November 19, 2009 - Bulletin Print Report
E*TRADE Financial Corporation (ETFC) has disclosed that, during the third quarter, it exchanged some $1.76 billion principal amount of "interest-bearing debt&q...
Lessee Can Deduct Capital Expenditures
November 19, 2009 - Volume 3 Issue 226 Print Report
A partnership (PS) operated the Sheraton Cleveland Airport Hotel. The Hotelwas owned by the City of Cleveland, Ohio. The Sixth "Supplement to Lease"...
Peet's Is Proposing A "Taxable Merger"
November 18, 2009 - Bulletin Print Report
Peet's Coffee & Tea, Inc. (PEET) is in the process of acquiring Diedrich Coffee, Inc. (DDRX) in a two-step transaction that entails a tender offer, launched on...
Can An "(h)(10)" Election Be Made In Connection With an IPO?
November 18, 2009 - Volume 3 Issue 225 Print Report
P Corporation (P) owned all of the stock of S Corporation (S); the latter was engaged in Business A. P desired to exit Business A and, to accomplish its objective,...
Accruing Disputed Payments
November 17, 2009 - Volume 3 Issue 224 Print Report
In Trinity Industries and Subsidiaries v. Commissioner , 132 T.C. No. 2 (2009), Trinity Industries (T) had entered into a series of contracts (the first con...
BMY Will Split-Off Mead Johnson
November 16, 2009 - Bulletin Print Report
Bristol-Myers Squibb Company (BMY) has announced its intention to effect a "split-off" of its holdings in Mead Johnson Nutrition Company (MJN). Such a split...
Surrendering A Life Insurance Contract
November 16, 2009 - Volume 3 Issue 223 Print Report
On December 31, 1980, New England Mutual (later acquired by MetLife) issued a life insurance policy insuring the life of Mr. HarveyBarr's mother. The policy s...
Sale of Partial Interests in Property Produces Capital Gains
November 13, 2009 - Volume 3 Issue 222 Print Report
In order for a capital gain to arise, a taxpayer must "sell or exchange" a capital asset. Ordinarily,a transaction willnot rise to the level o...
Capital Losses and RIC Distributions
November 12, 2009 - Volume 3 Issue 221 Print Report
It is reasonable toexpect that many regulated investment companies (RICs) racked up substantial capital losses in 2008. These losses will be carried forward t...
DOL Finds I.R.A. Owner Will Engage in a Prohibited Transaction
November 11, 2009 - Bulletin Print Report
A taxpayer's representative asked the Department of Labor (DOL)for advice on whether a transaction the taxpayer was contemplating would give rise to a pro...
The Expanding Concept of "Nexus"
November 11, 2009 - Volume 3 Issue 220 Print Report
Inlight of the fact that most states are quitestrapped for revenue, we can expect increasedefforts on their part tobring out-of-state entiti...
"CERT" Rules Restrict NOL Carrybacks
November 10, 2009 - Volume 3 Issue 219 Print Report
Congress has passed, and the President has signed, legislation extending the period to which Net Operating Losses (NOLs) sustained in 2008 or 2009 may be carried. T...
Tendering OSG America, LP Units
November 9, 2009 - Bulletin Print Report
Overseas Shipholding Group, Inc. (OSG), through its subsidiary, OSG Bulkships, Inc. (OSB), is seeking to acquire all of the partnership interests in OSG America, LP...
The "Compensatory Element" of an ISO Is Never Deductible
November 9, 2009 - Volume 3 Issue 218 Print Report
Corporation1 (C1) acquired the stock of Target Corporation (T). T granted incentive stock options (ISOs) and offered a Sec. 423 Employee Stock Purchase Plan (ESPP)...
MLPs Can "Manage" Their Interest Rate Exposure
November 6, 2009 - Volume 3 Issue 217 Print Report
C is a limited partnershipthe interests in which arepublicly-traded. C is engaged in the transportation, storage, and marketing of natural gas and propa...
Hedge Fund Legend Not A NYC "Resident"
November 5, 2009 - Volume 3 Issue 216 Print Report
The issue confronting Mr. Julian H. Robertson, the legendary founder and Chairmanof Tiger Management,and his spouse, Ms. Josephine Robertson, was whethe...
Tax Issues Surrounding BRK/BNI Transaction
November 4, 2009 - Bulletin Print Report
Itseems clear that the acquisition of Burlington Northern Santa Fe Corporation (BNI) by Berkshire Hathaway, Inc. (BRK) will be structured as a forward merger....
Accruing "Unbilled Receivables"
November 4, 2009 - Volume 3 Issue 215 Print Report
LTR 200903079, October 8, 2008 (a Technical Advice Memorandum ) addresses the case of a taxpayer (T) who enters into contracts with the U.S. Government...
TARP Beneficiaries Will Be Excluded From NOL Relief
November 3, 2009 - Bulletin Print Report
The statutory languageembodied in"The Worker, Homeownership, and Business Act of 2009" (H.R. 3548) has nowbeen released and such languag...
Invesco Will Acquire Van Kampen From Morgan Stanley
November 3, 2009 - Volume 3 Issue 214 Print Report
Invesco, Ltd. (I), a Bermuda corporation, has entered into an agreement to acquire the "Van Kampen" businesses from Morgan Stanley, Inc. (MS). The conside...
Retaining an "Interest" in the Corporation Under Sec. 302(c)(2)(A)
November 2, 2009 - Volume 3 Issue 213 Print Report
If a taxpayer's directly-owned stock is redeemed by the corporation, and if the taxpayer's only indirectownership of stock immediately after the redemption is...
PDL BioPharma Will "Monetize" Its Royalty Rights
October 30, 2009 - Bulletin Print Report
PDL BioPharma (PDL)announced a transaction that will have the effect of "monetizing" its assets, which consist primarilyof the right to receiv...
NOL Carryback Extension and SunPower Update
October 30, 2009 - Bulletin Print Report
Congress seems to be moving closer to implementing a lengthening of the period to which Net Operating Losses (at least those that are sustained in 2008 and 2009) ma...
'S' Corporations Are Taxed on "Built-In Gains"
October 30, 2009 - Volume 3 Issue 212 Print Report
Although 'S' corporations are ordinarily not subject to tax, an 'S' corporation that was formerly a 'C' corporation can incur tax liability if it has "net reco...
Royalties Must Be Capitalized
October 29, 2009 - Volume 3 Issue 211 Print Report
In Robinson Knife Manufacturing Co., Inc. v. Commissioner , T.C. Memo. 2009-9, the taxpayer (R) was activelyengaged in the business of designing, deve...
DTV's Buybacks: What Can We Expect?
October 29, 2009 - Bulletin Print Report
The ruling the I.R.S. issued to Liberty Media, with respect to its split-off of Liberty Entertainment, Inc. (LEI), will not be published for public consumption unti...
New Legislation Would Affect "Total Return Swaps"
October 28, 2009 - Bulletin Print Report
The Foreign Account Tax Compliance Act of 2009 (the Act)introduced on October 27, 2009 by Rep. Charles Rangel (D-NY) and Senator Max Baucus (D-Mont.), the cha...
Accounting For "Optional" Stock Distributions
October 28, 2009 - Volume 3 Issue 210 Print Report
Sec. 305(a) of the Internal Revenue Code provides that gross income does not include the amount of any distribution of the stock of a corporation made by such corpo...
How To Repatriate Foreign Earnings Tax-Free
October 27, 2009 - Volume 3 Issue 209 Print Report
Sec. 956(c) of the Internal Revenue Codedefines "U.S. property" to include an obligation of a "related U.S. person" held by a controlled f...
"Fresh Start" Reporting Gives Bankrupts a Boost
October 26, 2009 - Volume 3 Issue 208 Print Report
The American Institute of CPAs, through the vehicle of Statement of Position (SOP) 90-7, Financial Reporting by Entities in Reorganization Under the Bankruptcy...
Chipotle Proposes a Share "Collapse"
October 23, 2009 - Bulletin Print Report
Chipotle Mexican Grill, Inc. (CMG) has announced its intention to amend its certificate of incorporation to, at long last, effect a "reclassification" of...
Accounting for "Troubled Debt Restructurings"
October 23, 2009 - Volume 3 Issue 207 Print Report
Many companies nowforced to convince their creditors to accept equity or other assets in settlement of their indebtedness will be required tocharacteriz...
Equinix/Switch & Data: Constrained by Sec. 368(a)(2)(E)
October 22, 2009 - Bulletin Print Report
Equinix, Inc. (EQIX) and Switch & Data Facilities Company, Inc. (SDXC) have entered into a definitive agreement for EQIX to acquireSDXC for a combination...
When Does Stock Become Worthless?
October 22, 2009 - Volume 3 Issue 206 Print Report
When stock becomes worthless, the taxpayer is entitled to a loss deduction in an amount equal to the taxpayer's unrecovered basis in the stock. Thus, Sec. 165(g) pr...
Brazil Imposes a Transactions "Tax"
October 21, 2009 - Bulletin Print Report
Brazil's finance minister, Mr. Guido Mantega,on October 19, 2009, announced the imposition of a new "tax" (more accurately described as a fee or lev...
Deducting "Termination Fees"
October 21, 2009 - Volume 3 Issue 205 Print Report
In Santa Fe Pacific Gold Co. v. Commissioner , 132 T.C. No. 12 (2009), the issue was whether Santa Fe (SF)was entitled to a deduction for a payment ma...
Nordstrom's State Tax Gambit Fails
October 20, 2009 - Volume 3 Issue 204 Print Report
One of the most venerable techniques for reducing state and local tax burdenshas beento transfer intangible assets, such as trademarks and tradenames, t...
"Excluded" Corporations are "Members" of a Controlled Group
October 19, 2009 - Volume 3 Issue 203 Print Report
A single enterprise may be "artificially divided" between two or more related corporations in order to exploit, among other things,statutory allowan...
'S' Corporation Shareholder Denied Loss Pass-Through
October 16, 2009 - Volume 3 Issue 202 Print Report
In Russell v. Commissioner , T.C. Memo. 2008-246, the taxpayer was a shareholder in an 'S' corporation that had sustained operating losses. Sec. 1366(a) pro...
Black Liquor Is Eligible For "Sec. 40" Credits
October 15, 2009 - Bulletin Print Report
Inthis morning'sedition of Tax Notes Today , the highly-regardedeconomics writer, Mr. Martin A. Sullivan, points out that, when the alte...
FASB Eases Rules for "Multiple Deliverable" Arrangements
October 15, 2009 - Volume 3 Issue 201 Print Report
Vendors often provide their customers withmultiple products, services, rights to use assets, or a combination thereof ("deliverables"). EITF Issue N...
Must "Indirect Costs" Be Capitalized?
October 14, 2009 - Volume 3 Issue 200 Print Report
The taxpayer (T) is a diversified financial services company. In 2005, T opened "a" banking stores, "b" regional commercial banking offices, and...
The S.E.C. Weighs In On the Subject of Impairments
October 13, 2009 - Volume 3 Issue 199 Print Report
The S.E.C.'s accounting staff, in response to recent FASB initiatives in the area, has decided to offer its own views with respect to the controversial topic of i...
Emmis Communications Restates Earnings
October 13, 2009 - Bulletin Print Report
Emmis Communications Corp. (ECC) recently announced a restatement of its financial statements for the full year ended February 28, 2009 and for the interim period e...
I.R.S. Confirms Availability of "Black Liquor" Credit
October 12, 2009 - Bulletin Print Report
"Black Liquor" is the name given to a byproduct of the paper milling process in craft mills. Its chemical composition does not include alcohol or biodiese...
When Warrants Are Received In a Reorganization
October 12, 2009 - Volume 3 Issue 198 Print Report
On March 12, 1958, Mr. Bateman (B) owned 7,350 shares of WP Corporation (WP). On that day, WP wasmerged with and into SG Corporation (SG). The "two party...
Contributions to Capital Do Not Constitute Gross Income
October 9, 2009 - Volume 3 Issue 197 Print Report
State S (S) established a Fund to encourage economic development within its borders. Taxpayer (T), a C corporation, negotiated (with S) the terms of an "econom...
Can BMS Dispose of Mead Johnson "Tax Efficiently"?
October 8, 2009 - Bulletin Print Report
Most observers have conceded that a disposition of Mead Johnson Nutrition Co. (MJ) by Bristol-Myers Squibb (BMS) will be a taxable transaction andthe tax liab...
The Book and Tax Income Chasm
October 8, 2009 - Volume 3 Issue 196 Print Report
BusinessWeek's exhaustive survey of the rates at which "cash taxes" are remitted by the members of the S&P 500 produces, for those who are steeped in the su...
"Hedging" Income is "Qualifying" Income for a RIC
October 7, 2009 - Volume 3 Issue 195 Print Report
The corporation (C)addressed in LTR 200916016, December 11, 2008, has elected to be treated as a "business development company" under the auspices o...
TransDigm Group Will Pay a "Special Dividend"
October 7, 2009 - Bulletin Print Report
TransDigm Group, Inc. (TDG) announced the completion of a private placement of five-year notes the proceeds of which will be used to fund a "special dividend&q...
Can Stock of a Merger Candidate Be Effectively Donated?
October 6, 2009 - Volume 3 Issue 194 Print Report
A taxpayer owns stock in a companywhich has agreed to be acquired by another company. The taxpayer's basis in the stock, which has been held for more than one...
Liberty's Proxy Statement Bolsters Our Confidence
October 6, 2009 - Bulletin Print Report
Liberty Media (LM) released proxy materials regarding the split-off of Liberty Entertainment, Inc. (LEI) and the second-step business combination involving LEI and...
Taxpayer Cannot Use "Anti-Abuse" Rule "Offensively"
October 5, 2009 - Volume 3 Issue 193 Print Report
In CCA 200916023, February 27, 2009, the I.R.S. addressed the case of a domesticpartnership (PS)which had three partners. LP1 owned a 94 percent capital...
CIT Proposes a Recapitalization
October 5, 2009 - Bulletin Print Report
CIT Group, Inc. (CIT), in an attempt to stave off bankruptcy, is proposing a recapitalization in which itwill offerin exchange for a large array of its...
Sec. 1031(f)'s Long Reach
October 2, 2009 - Volume 3 Issue 192 Print Report
TE Corporation (TE), a real estate developer, transferred property OV to TGE, an unrelated party, and the latter sold OV to A, also unrelated to TE, for $1,468,500....
FDIC Requests Prepayment of Banks' Risk-Based Assessments
October 1, 2009 - Bulletin Print Report
The FDIC hasannounced that it will require insured institutions to prepay their entire quarterly risk-based assessments for the fourth quarter of 200...
Taxpayer Barred From "Grouping" Activities
October 1, 2009 - Volume 3 Issue 191 Print Report
In Senra v. Commissioner , T.C. Memo. 2009-79, the taxpayer, (Mr. S),owned 86.75 percent of the stock of KG, a C corporation engaged in the business o...
Xerox's Acquisition of ACS Should Constitute a Reorganization
September 30, 2009 - Bulletin Print Report
Xerox, (X),to the surprise of many observers, announced an agreement pursuant to which it will acquire Affiliated Computer Services (ACS) in exchange for a co...
Share Lending In Contemplation of a Financing
September 30, 2009 - Volume 3 Issue 190 Print Report
TheEmerging Issues Task Force (EITF), a committee operating under the auspices ofthe Financial Accounting Standards Board (FASB),recently reached...
Basis Overstatement Can Lead to Gross Income "Omission"
September 29, 2009 - Volume 3 Issue 189 Print Report
In response to certain recent defeats at the hands of the courts, the I.R.S. has taken the unusual step of issuing temporary regulations which it hopes will have th...
Foreign Lender Found Engaged in a U.S. Trade or Business
September 25, 2009 - Volume 3 Issue 188 Print Report
Foreign Corporation (FC) makes loans to U.S. persons within the United States. FC, however, has no office or employees in the United States. Instead, to originate l...
Capital One Can Defer "Interchange" Income
September 24, 2009 - Volume 3 Issue 187 Print Report
Capital One Financial Corp. (CO), it will come as no surprise to learn,is one the world's largest issuers of credit cards. One variety of income earned by CO...
TARP Beneficiaries Need Not Fear An Ownership Change
September 23, 2009 - Volume 3 Issue 186 Print Report
Most, if not all, of theinstitutions that have succumbed to thesubtle charmsof the "TARP" program, in which the Treasury Department (TD)...
Stripping BKE's Special Dividend
September 23, 2009 - Bulletin Print Report
The Buckle, Inc. (BKE) announced a $1.80/share special one-time cash dividend to be paid to holders of record at the close of business on Oct. 15, 2009. It will als...
Closed-End Redemption Plans
September 22, 2009 - Volume 3 Issue 185 Print Report
X is a partnership all of the "ordinary shares" of which are owned by a single entity, A. X also has outstanding 'B' shares. Prior to Date 2, these 'B' sh...
Barclays Excises "Toxic" Assets
September 21, 2009 - Bulletin Print Report
Barclays PLC, (B), recently announced a "structured" transaction which will have the effect of removing from its balance sheet (although not for regulator...
I.R.S. Continues to Pursue "Inversion" Transactions
September 21, 2009 - Volume 3 Issue 184 Print Report
At one time, so-called "inversion" transactions were quite popular. A U.S. corporation, for example Ingersoll-Rand and Nabors Industries, would create a n...
NNI's Tax Deficiencies--What About the Statute of Limitations?
September 18, 2009 - Volume 3 Issue 183 Print Report
The I.R.S. recently issued a "proof of claim" for taxes to Nortel Networks, Inc. (NNI). The claim includes some $1.8 billion in tax deficiencies and appro...
Loan Modifications Will Not Terminate REMIC Status
September 17, 2009 - Bulletin Print Report
Many commercialmortgage loans are held in "securitization" vehicles, such as REMICs and investment trusts. In each case, the entity is not subject t...
Taxpayer Denied Access to the "Bankruptcy Exception"
September 17, 2009 - Volume 3 Issue 182 Print Report
In CCA 200915033, December 24, 2008, a corporation,Acquirer, (A), on Date 3, purchased "AA" shares of Target's (T) stock (representing less than fiv...
TRB's Divestiture of the Cubs Reprises "LevPar" Structure
September 16, 2009 - Volume 3 Issue 181 Print Report
Tribune Corporation (TRB) is attempting to dispose of substantially all of its interest in the Chicago Cubs, Wrigley Field, and certain other assets (including its...
MER's "Cross-Chain" Sales Are Still Sales
September 15, 2009 - Volume 3 Issue 180 Print Report
In 1987, Merrill Lynch & Co., Inc. (MER) engineered a transaction that was designed to producelargecapital losses that could be offset against capit...
Attribute Reduction Is the Price of COD Exclusion
September 14, 2009 - Volume 3 Issue 179 Print Report
Sec. 108(a)(1) of the tax codeprovides that gross income does not include income from the discharge of indebtedness (COD income) if the discharge occurs in a&...
Ford Moves To Protect Its "Tax Assets"
September 14, 2009 - Bulletin Print Report
Ford Motor Company (F), following the lead of many other "troubled" companies, has taken affirmative steps to preserve its copious tax assets--most notabl...
The Service Chooses Equity Over Expediency
September 11, 2009 - Volume 3 Issue 178 Print Report
Sometimes, as a matter of principle, the I.R.S. will turn its back on tax revenue that is there for the taking. It will do this in cases where it perceives that suc...
I.R.S. Will Accommodate "PPIP" RICs
September 10, 2009 - Bulletin Print Report
The I.R.S. recently ruled that Public-Private Investment Partnerships (PPIPs) created under the Public-Private Investment Program will not constitute "taxable...
Interim Disclosures Reveal Loan Deterioration
September 10, 2009 - Volume 3 Issue 177 Print Report

We are pleased to present an additionalspecial report by our summer intern, David Feinberg.

Recording assets o...
SGP Denied a Tax Refund
September 9, 2009 - Volume 3 Issue 176 Print Report
Schering-Plough Corporation, (SGP), similar to many multinational corporations, had accumulated significant profits in subsidiaries located outside of the United St...
Expenses Attributable to "Alternative" Transactions
September 8, 2009 - Volume 3 Issue 175 Print Report
A corporate taxpayer (T) wished to conduct certain research and development (R&D) with public financing. Accordingly, it turned to a transaction that was in the...
BHI/BJS: Smooth Sailing
September 8, 2009 - Bulletin Print Report
Baker Hughes, Inc. (BHI) and BJ Services Company (BJS), BHI's former subsidiary, have announced a definitive merger agreement in connection with which BJS will be m...
Market Discount Bonds Yield Ordinary Income
September 4, 2009 - Volume 3 Issue 174 Print Report
It goes without saying that many debt instruments issued in better times are now trading in the markets at substantial discounts to their principal amounts. Some of...
"PPIP" Funds Will Not Be Taxed
September 3, 2009 - Bulletin Print Report
Pursuant to the "Public-Private Investment Program" (PPIP), the Treasury Department, in its ongoing efforts to "stabilize" the financial markets...
Trading Health Benefits for Salary Increases
September 3, 2009 - Volume 3 Issue 173 Print Report
In LTR 200914018, December 19, 2008, the taxpayer (T) is a corporation which provides retiree health insurance benefits to certain employees represented by "As...
GW/PDS Ruling Published
September 2, 2009 - Volume 3 Issue 172 Print Report
LTR 200913008, December 15, 2008, appears to be the ruling the I.R.S. issued to Grey Wolf International, Inc. (GW) with respect to its acquisition by Precision Drilli...
DIS/MVL: "Belt and Suspenders"?
September 2, 2009 - Bulletin Print Report
The Walt Disney Company (DIS) has agreed to acquire Marvel Entertainment, Inc. (MVL) in a stock and cash transaction. &nb...
Worthless Stock Deductions for "Operating Companies"
September 1, 2009 - Volume 3 Issue 171 Print Report
The taxpayer, (T), a domestic corporation, owned all of the stock of FSub, (F), a foreign corporation. As of December 31, Year 1, F's balance sheet showed liabiliti...
"True" Ownership Counts for Purposes of Sec. 382
August 31, 2009 - Volume 3 Issue 170 Print Report
In LTR 9104043, October 31, 1990, A Corporation (A), a domestic loss corporation, was wholly-owned by a foreign corporation, B Corporation (B). C Corporation, (C),...
PG and WCRX Will Execute an "(h)(10)" Election
August 28, 2009 - Bulletin Print Report
The purchase agreement in connection with which Warner Chilcott plc (WCRX)will acquire the pharmaceuticals business of The Procter & Gamble Company (PG) d...
Can the I.R.S. "Seize" Season Tickets?
August 28, 2009 - Volume 3 Issue 169 Print Report
A recalcitrant taxpayer (TP) owes Federal taxes that have not been paid.TP has alreadyreceived a "lien notice", under Sec. 6330 of the Interna...
Tax "Controversy" Expenditures Are Broadly Deductible
August 27, 2009 - Volume 3 Issue 168 Print Report
The petitioner, Mr. S, was the majority shareholder of SOC, Inc., (SOC), a Delaware corporation. In 1957, SOC acquired a leasehold interest in certain Venezuelan oi...
Navigating the Partial Liquidation Rules
August 26, 2009 - Volume 3 Issue 167 Print Report
If a distribution by a corporation to its shareholders qualifies as a distribution in partial liquidation, the distribution is treated as "in part or full paym...
Is CNO's Deferred Tax Asset in Jeopardy?
August 26, 2009 - Bulletin Print Report
Conseco, Inc., (CNO), in its latest 10-Q, is reporting "income tax assets" of $1.607 billion. Its shareholders' equity is some $2.415 billion. The income...
"Reasonable Prospect of Recovery"
August 25, 2009 - Volume 3 Issue 166 Print Report
Taxpayers who havesuffered theft losses through, for example, their participation in Ponzi schemes, may deduct these losses for tax purposes and in the proces...
"AHYDO" Exception Will Expire Soon
August 24, 2009 - Bulletin Print Report
Where a debt instrument is classified as an "Applicable High Yield Debt Obligation" (AHYDO), certain unattractive results ensue. Most notably, the Origina...
I.R.S. Guidance on COD Deferral Is Magnanimous
August 24, 2009 - Volume 3 Issue 165 Print Report
Sec. 108(i), enacted in the "stimulus bill" (the American Recovery and Reinvestment Tax Act of 2009, Public Law 111-5)earlier in 2009, provides that...
Do Sales of "Toxic" Assets Produce Deductible Losses?
August 21, 2009 - Volume 3 Issue 164 Print Report
Taxpayer, a corporation, is the parent of "Companies". The latter own interests in "Assets" that have declined in value vis a vis the price the&...
When Is A Redemption Part of a Plan?
August 20, 2009 - Volume 3 Issue 163 Print Report
A redemption of stockwill qualify for "exchange" treatment if the redeemed shareholder suffers a "sufficient" reduction of his or her prop...
LIFO Accounting Under Siege--by David Feinberg
August 19, 2009 - Volume 3 Issue 162 Print Report

We are pleased to present a special edition of The Willens Reporttoday, written by our summer intern, David Feinberg.

Invent...
Contingencies and Business Combinations
August 18, 2009 - Volume 3 Issue 161 Print Report
SFAS No. 141(R), Business Combinations ,was issued in December, 2007 and is effective for business combinations for which the acquisition date is on o...
Dynegy Will Redeem a Portion of Its Stock
August 18, 2009 - Bulletin Print Report
Dynegy, Inc. (DYN) is undertaking a complicated transaction in which it willconvey a portion of its assets and a note (of which DYN will be the obligor)...
FASB Will Seek to Expand Mark-to-Market Coverage
August 17, 2009 - Bulletin Print Report
At present, with respect to financial institutions, only debt and equity securities are required to be reported at fair value. See SFAS No. 115, Accounting for...
Psychologist Cannot Deduct Education Expenses
August 17, 2009 - Volume 3 Issue 160 Print Report
The taxpayer, (O), earned a master's degree from the University of Nebraska, in clinical psychology, in 1996. From April, 1977 through August, 2003, O worked for th...
CIT Seeks To Preserve Its NOL
August 14, 2009 - Bulletin Print Report
CIT Group, Inc. (CIT) has announced the adoption of a "Tax Benefits Preservation Plan" along the lines of the plan adopted recently by Citigroup....
Accruing Interest on "Troubled" Loans
August 14, 2009 - Volume 3 Issue 159 Print Report
During 1918, the taxpayer (T), a bank, made loans to B Corporation (B). Interest on the loans was accrued on T's books. B went into receivership on December 31, 191...
Barnes & Noble--No Sec. 338(h)(10) Election
August 13, 2009 - Bulletin Print Report
Barnes & Noble, Inc., (BN), has entered into an agreement to purchase the stock of Barnes & Noble College Booksellers, Inc., (BC), from its sole shareholder...
"Trust Preferred Securities"--The Best of All Worlds
August 13, 2009 - Volume 3 Issue 158 Print Report
If a financial instrument can be treated as "equity" for non-tax purposesyet as "indebtedness" for Federal income tax purposes, the issuer...
Good News for WY: I.R.S. Rules Favorably on a "REIT Spin-off"
August 12, 2009 - Volume 3 Issue 157 Print Report
D Corporation, (D),a publicly-traded corporation, was engaged, through its subsidiaries, in Business A and Business B; the latter appears to be a real-estate...
Comparing Canadian and U.S. NOL "Trafficking" Rules
August 11, 2009 - Volume 3 Issue 156 Print Report
The rules designed to inhibit "trafficking" in Net Operating Losses (NOLs) in the United States are principally found in Sec. 382 of the Internal Revenue...
Redeeming Shareholder Found to Be Corporation's "Agent"
August 10, 2009 - Volume 3 Issue 155 Print Report
The taxpayer (P) and Mr. JL (JL) each owned 50 percent of the stock of Arrow Capital Associates, Inc. (A). A lent JL a total of $700,000 and, on August 13, 2001, le...
State Taxes Can Mitigate The Benefit of an "(h)(10)" Election
August 7, 2009 - Volume 3 Issue 154 Print Report
In January, 1997,K Corporation (K) became a wholly-owned subsidiary of C Corporation (C). Some four months later, C sold 100 percent of K's capital stock to N...
Pepsico's Acquisitions Should Constitute Reorganizations
August 6, 2009 - Bulletin Print Report
Pepsico, Inc. (PEP) has reached an agreement to acquire both Pepsi Bottling Group, Inc. and PepsiAmericas, Inc. (BG). The transaction is conditioned on, among many...
"Hot Stock"
August 6, 2009 - Volume 3 Issue 153 Print Report
The mostfundamental of therequirements imposed for a spin-off to be tax-free is the active business requirement . See Sec. 355(a)(1)(C) and Sec....
Broadcom Co-Founder Did Not "Lend" Securities
August 5, 2009 - Volume 3 Issue 152 Print Report
The co-founder of Broadcom Corporation, Mr. Henry Samueli (S), decided to take a flyer on the direction of interest rates in late 2001. If he was correct, the arran...
Debt vs. Equity In the Reorganization Context
August 4, 2009 - Volume 3 Issue 151 Print Report
H Corporation (H) merged with and into newly-formedL Corporation (L). L will operate exclusively for charitable and educational purposes and was incorporated...
Limits on Deduction of Mortgage Interest Affirmed
August 3, 2009 - Volume 3 Issue 150 Print Report
During Year 1, Year 2, and Year 3 , Taxpayer (T)owned a principal residence (P). Prior to Year 1, T acquired the propertyfor "$u" and...
Rescinding a Merger
July 31, 2009 - Volume 3 Issue 149 Print Report
Prior to Date 1, T Corporation (T) had two classes of stock outstanding; convertible preferred stock and common stock. During Date 1 and Date 2, A Corporation (A) p...
CVC Will Spin-Off MSG
July 30, 2009 - Bulletin Print Report
Cablevision Systems Corporation (CVC) announced that its board of directors has authorized the company's management to proceed with the spin-off of the Madison Squa...
Deducting Payments to Settle Litigation
July 30, 2009 - Volume 3 Issue 148 Print Report
A consolidated class action complaint was filed against a taxpayer, a C corporation, (TP). The complaint alleges that TP violated provisions of the securities laws...
An Unusual Way to "Monetize" a Corporation's Tax Attributes
July 29, 2009 - Volume 3 Issue 147 Print Report
T Corporation (T), a publicly-traded corporation, owned all of the stock of TS1, engaged in business A, and TS2, engaged in business B. T's principal asset was a bl...
I.R.S. Addresses "Fails Charges"
July 29, 2009 - Bulletin Print Report
I.R.S. Notice 2009-61, issued on July 28, 2009, observes that, "in light of persistent delivery failures" in the pay-for-delivery market for U.S. Treasury...
Payment for "Idea" is Ordinary Income
July 28, 2009 - Volume 3 Issue 146 Print Report
Mr. Bachmann (B) developed a "novel" idea for small community banks to issue "trust preferred stock" (TPS) as a group and thereby lower the cost...
Valuing the Loss Corporation for Purposes of Sec. 382
July 27, 2009 - Volume 3 Issue 145 Print Report
T Corporation (T)is a "loss corporation". B Corporation (B) is also a loss corporation and T's acquisition of B, in which it issued its stock to the...
Wells Fargo Benefits From Recent FASB Pronouncement
July 27, 2009 - Bulletin Print Report
Wells Fargo's second quarter earnings report indicates that the bank continues to benefit from a recent FASB concession regarding the manner in which debt securitie...
SGP/MRK Update
July 24, 2009 - Bulletin Print Report
It appears that the Schering-Plough/Merck business combination will be closing on schedule. The structure of the deal is unusual because the parties were attempting...
I.R.S. Addresses Tax Issues Surrounding "Backdated" Options
July 24, 2009 - Volume 3 Issue 144 Print Report
In 2006, the I.R.S. became aware of instances in which stock options were granted with exercise prices which were less than the fair market value of the stock on th...
Senators Seek to Rein In Option Compensation Deductions
July 23, 2009 - Bulletin Print Report
When an option is granted to an employee (or independent contractor) in connection with the performance of services, Sec. 83 (which governs the taxation of property...
What is a "Gift"?
July 23, 2009 - Volume 3 Issue 143 Print Report
Sec. 61(a) of the Internal Revenue Code provides that, "except as otherwise provided in this subtitle", gross income means all income from whatever so...
Analyzing Sec. 351's "Control Immediately After" Requirement
July 22, 2009 - Volume 3 Issue 142 Print Report
Sec. 351(a) (and its predecessors) is one of the most venerable non-recognition provisions in the Internal Revenue Code. The provision was originally enacted to enc...
Caterpillar's LIFO Liquidation
July 22, 2009 - Bulletin Print Report
Caterpillar Inc. (CAT) reported second-quarter earnings of $0.60 per share, a figurewhich exceeded analysts' estimates, and CAT's stock price reacted accordin...
Warrants Issued To Guarantors--Does Sec. 83 Apply?
July 21, 2009 - Volume 3 Issue 141 Print Report
47 percent of the stock of F Corporation (F) was owned by E Corporation (E), Mr. G (G), and Mr. D (D). In March, 1978, in recognition of the risks assumed by D, G,...
House Delays "Worldwide Allocation of Interest Expense"
July 20, 2009 - Bulletin Print Report
In order to fund universal health care coverage, the House of Representatives is expected to propose a surtax on "high income" taxpayers. For taxpayers wi...
Trust Taxed on Gains From Sale of "Margined" Securities
July 20, 2009 - Volume 3 Issue 140 Print Report
"The Cornell Trust" is a tax-exempt non-profit organization pursuant to Sec. 501(c)(3) of the Internal Revenue Code which was formed for the exclusive pur...
Acquisitions of Debt by Related Parties
July 17, 2009 - Volume 3 Issue 139 Print Report
In order to insure that a taxpayer whose indebtednessis "effectively" retired or otherwise discharged does not escape the tax consequences that woul...
FASB's Ambitious Disclosure Plan for "Financing Receivables"
July 16, 2009 - Volume 3 Issue 138 Print Report
The Financial Accounting Standards Board (FASB) has issued, in the form of an "Exposure Draft", an ambitious new plan that will dramatically increase the...
Accounting for "Gift Cards"
July 15, 2009 - Volume 3 Issue 137 Print Report
In LTR 200849015, August 22, 2008, the taxpayer (T) oversaw the gift card program for P Corporation's (P) consolidated group. All gift cards used in stores operated...
Paying for Universal Health Coverage
July 14, 2009 - Bulletin Print Report
The opening salvo in the health care debate has been fired by the House Ways & Means Committee. The bill proposed by the Committee, "America's Affordable H...
A Member of an LLC or LLP Is Not "Limited"
July 14, 2009 - Volume 3 Issue 136 Print Report
The taxpayers owned interests in no fewer than seven Limited Liability Partnerships (LLPs) and two Limited Liability Companies (LLCs) that were allengaged in...
California's "IOUs" May Offer Unique Tax Advantages
July 13, 2009 - Volume 3 Issue 135 Print Report
The State of California, as aconsequence of its well-publicized budgetary woes, has issued (and will continue to issue)"registered warrants" t...
How Is a "Walking Billboard" Taxed?
July 10, 2009 - Volume 3 Issue 134 Print Report
Professional tennis players and golfers, you may have noticed, are, if they are fortunate, adorned in logos representing the many products that they endorse. They a...
Taxes and Credit Cards
July 10, 2009 - Bulletin Print Report
Credit and debit card companies charge a "convenience fee" to customers who pay their income taxes, electronically,employing a credit or debit card....
Depreciating "Listed" Property
July 9, 2009 - Volume 3 Issue 133 Print Report
Sec. 280F of the Internal Revenue Code limits depreciation deductions, otherwise available, with respect to what is referred to as"listed" property....
Do "Preferred Stock Dividend Rolls" Work?
July 8, 2009 - Volume 3 Issue 132 Print Report
Sec. 243(a)(1) provides that, in the case of a corporation, there shall be allowed as a deduction 70 percent of the amount received as dividends from a domestic cor...
General Motors--A 'G' Reorganization?
July 7, 2009 - Bulletin Print Report
One issuesurrounding the "movement" of "old" G.M.'s assets to "new" G.M. (now that the bankruptcy court has "signed off&q...
Data Firm Qualifies as an MLP
July 7, 2009 - Volume 3 Issue 131 Print Report
Xoperates asa limited partnership. Xhasbeenengaged throughout its existencein the business of acquiring and licensing both...
AHYDO Status Avoided By "Timely" Payments of Accrued Interest
July 6, 2009 - Volume 3 Issue 130 Print Report
During the 1980s, many deals were financed, at least in part, with "deferred interest" debt securities. Under the original issue discount (OID) rules, how...
Is an "Infringement" an "Involuntary Conversion"?
July 2, 2009 - Volume 3 Issue 129 Print Report
In LTR 200625032, March 3, 2006, an employee ofCorporation A (A) discovered, during Year4, that a Corporation B (B) product incorporated portions of A's copyr...
S.E.C. Will Allow "Covered Writing" With Respect to ESOs
July 1, 2009 - Volume 3 Issue 128 Print Report
The Securities Exchange Commission (S.E.C.)has approved a proposal submitted to it by theChicago Board Options Exchange (CBOE)which will allow acc...
Can Abbott Deduct (for tax purposes) Its Payments to JNJ?
June 30, 2009 - Bulletin Print Report
Abbott Laboratories (AL)has been ordered to pay $1.67 billion to Johnson & Johnson's Centocor unit for using the latter's invention to produce the Humira...
NOLs and "Inactive" Corporations
June 30, 2009 - Volume 3 Issue 127 Print Report
Where a loss corporation undergoes an ownership change , the amount of taxable income for any taxable year ending after the date of the ownership change whi...
The Citigroup Exchange Offer and the Wash Sale Rules
June 29, 2009 - Volume 3 Issue 126 Print Report
Under the well-known wash sale rules, a taxpayer cannot deduct a loss claimed to have been sustained from the sale of stock or securities if, within a peri...
Interest Deductions Not Saved By Treaty
June 26, 2009 - Volume 3 Issue 125 Print Report
In FAA 20090801F, April 24, 2008, a U.S. corporation, conducting a regulatedinsurance business,issuedseveral notes to its indirect foreign parent...
NQO's and "Substantial Risk of Forfeiture"
June 25, 2009 - Volume 3 Issue 124 Print Report
Sec. 83 governs the taxation of property thatis transferred "in connection with the performance of services". The property so transferred is taxable...
A "Substantial" Portion
June 24, 2009 - Volume 3 Issue 123 Print Report
Many important tax determinations are premised on the issue ofwhether a particular quantity constitutes a "substantial part or portion" of the whole...
"Pay for Performance" Payments Excludible From Gross Income
June 24, 2009 - Bulletin Print Report
Large numbers of homeowners are struggling to currently make their mortgage payments and are at risk of losing their homes. In response, the Federal Government anno...
Specified Liability Losses
June 23, 2009 - Volume 3 Issue 122 Print Report
A Net Operating Loss (NOL), in general,may be carried back to the two taxable years preceding the taxable year in which the NOL was sustained. See Sec. 172(b)...
HLTH's "Downstairs" Merger
June 22, 2009 - Bulletin Print Report
HLTH Corporation (HLTH) and WebMD Health Corporation (WBMD) have revived their off-again on-again proposal to combine. Thus, HLTH announced that it will be merging...
What is "Money"
June 22, 2009 - Volume 3 Issue 121 Print Report
Where property is sold or otherwise disposed of in a transaction not qualifying for non-recognition treatment, the gain or loss from the sale or disposal must be ca...
Distressed Investment Primer
June 19, 2009 - Volume 3 Issue 120 Print Report
The credit crisis has thrust into prominence certain tax issues that are, in better times, a mere afterthought. Thus, we are now quite concerned with the survival o...
I.R.S. Addresses Basis Recovery for Extraordinary Dividends
June 18, 2009 - Volume 3 Issue 119 Print Report
P Corporation (P) owned all of the stock of S Corporation (S) with which it filed a consolidated income tax return. S owned "a%" of the stock of R Corpora...
Identifiable Intangible Assets Are Not Part of Goodwill
June 17, 2009 - Volume 3 Issue 118 Print Report
Inyears past, prior to the enactment of Sec. 197 in 1993, the I.R.S.consistently took the position that so-called "customer based" intangible...
Consolidating "VIEs"
June 16, 2009 - Volume 3 Issue 117 Print Report
The Financial Accounting Standards Board (FASB) has issued an important new pronouncement that supplements and amends previous guidance regarding the issue of when...
FASB's Rules on Valuing "Alternative" Investment Vehicles
June 15, 2009 - Volume 3 Issue 116 Print Report
The Financial Accounting Standards Board (FASB) is proposing another in what has become a regularseries of amendments and clarifications to its landmark prono...
Accounting for "Share Lending" Arrangements
June 15, 2009 - Bulletin Print Report
The Emerging Issues Task Force of FASBhas reached a consensus on the manner in which certainspecializedshare lending arrangements are to be accoun...
Baucus/Grassley Inch Closer to Alternative Fuel Mixture Reform
June 12, 2009 - Bulletin Print Report
Instead of simply proposing legislation, Senators Baucus (D-Mont.) and Grassley (R-Iowa) have taken the unusual (in our experience) step of issuing a "legislat...
Can Citigroup Issue Equity?
June 12, 2009 - Bulletin Print Report
Citigroup (C), in connection withthe recapitalization in which it is issuing massive amounts of common stock in exchange for its preferred stock and trust pre...
I.R.S. Shoots Down Repatriation Gambit
June 12, 2009 - Volume 3 Issue 115 Print Report
An obscure, but highlyeffective, repatriation technique (the "cross-chain" sale")was recently closed by the I.R.S. through themediu...
New York State Imposes a New Tax on Non-Residents
June 11, 2009 - Bulletin Print Report
New York State has recently enacted a broad array of new taxes designed to assist it in closing its gaping budget deficit. One of the more obscure of these new levi...
Ramius/Cowen--The Need for Newco
June 11, 2009 - Volume 3 Issue 114 Print Report
Ramius LLC (R) and Cowen Group, Inc. (COWN) announced, on June 4, 2009,that they have signed an agreement to create a diversified financial services company w...
Citigroup Will Adopt a "Tax Poison Pill" Plan
June 10, 2009 - Bulletin Print Report
Citigroup (C) announced the finalization of a definitive agreement with the U.S. Government and, accordingly, will now launch its long-awaited exchange offers for i...
Redemptions From Estates--Who Is a Beneficiary?
June 10, 2009 - Volume 3 Issue 113 Print Report
Where a redemption of stock is treated as a distribution in part or full payment in exchange for suchstock, the amount included in the redeemed shareholder's...
FASB Addresses Accounting For "Subsequent Events"
June 9, 2009 - Volume 3 Issue 112 Print Report
The Financial Accounting Standards Board (FASB) has issued a brandnew accounting pronouncement, Statement of Financial Accounting Standards (SFAS) No. 165,
States and Localities Reduce Corporate Tax Burden
June 8, 2009 - Bulletin Print Report
Even though most states and cities are strapped for revenue, some haveadopted a "supply side" approach to the problem and have proposed corporate ta...
Who Can Replace "Converted" Property"?
June 8, 2009 - Volume 3 Issue 111 Print Report
P1 is a generalpartnership which isengaged in the business of farming on Blackacre (B). The limited partners of P1 are AB and CD, each of which is...
Is G.M.'s Stock "Wholly Worthless"?
June 5, 2009 - Volume 3 Issue 110 Print Report
Sec. 165(g)(1) of the Internal Revenue Code provides that if any security which is a capital asset becomes worthless during the taxable year, the loss resu...
Cisco Systems Affected by Xilinx Decision
June 4, 2009 - Bulletin Print Report
The decision rendered by the Ninth Circuit Court of Appeals in the Xilinx case, the subject of today's report, impacts a tax positionadopted by...
"Cost Sharing" Arrangements Come Under Scrutiny
June 4, 2009 - Volume 3 Issue 109 Print Report
Many multinational companies establish joint venture arrangements with their foreign affiliates, particularly with those affiliatesthat are organized in count...
New York State Issues "Ponzi Scheme" Guidance
June 3, 2009 - Bulletin Print Report
The I.R.S. recently issued Rev. Rul. 2009-9 which describes the tax rules that apply to losses from "Ponzi-type" fraudulent investment arrangements. In addi...
A Loan With an "Equity Kicker" Is a Unitary Instrument
June 3, 2009 - Volume 3 Issue 108 Print Report
In LTR 200846019, August 5, 2008, the taxpayer (T) is a newly-formed limited liability company thatintends to elect to be treated as a "business developm...
Historic Shareholder Continuity of Interest
June 2, 2009 - Volume 3 Issue 107 Print Report
In order for a merger to qualify as a tax-free reorganization, under Sec. 368(a)(1)(A), it must meet not only the terms of the specifications (the merger must be a...
Recent Purchase Causes Disqualified Distribution
June 1, 2009 - Volume 3 Issue 106 Print Report
LTR 200905018, October 21, 2008, describes a split-off which features an inordinate number of "moving parts" and demonstrates how preliminary steps, under...
The SGP Merger Will Be A Redemption
May 29, 2009 - Volume 3 Issue 105 Print Report
The proxy statement issued withrespect to the historic combination of Merck & Co., Inc. (MRK) and Schering-Plough, Inc. (SGP) confirms what we had suspected;&nb...
"Hot Stock" Regulations Will Benefit Time Warner
May 29, 2009 - Bulletin Print Report
Time Warner, Inc. (TWX) announced that its Board of Directors has authorized management to proceed with plans to complete the "legal and structural separation&...
Will G.M. Experience an Ownership Change?
May 28, 2009 - Bulletin Print Report
Where a loss corporation experiences an "ownership change", certain limits are imposed on the corporation's ability to freely utilize its losses to offset...
REITs Receive Relief From Tax on "Prohibited Transactions"
May 28, 2009 - Volume 3 Issue 104 Print Report
Sec. 857(b)(6) of the Internal Revenue Code imposes a tax for each taxable year of a Real Estate Investment Trust (REIT) equal to 100 percent of the net income the...
The President Seeks to Alter the Treatment of Intangibles
May 27, 2009 - Volume 3 Issue 103 Print Report
The President's budget proposals entail sweeping changes to the manner in which multinational corporations are taxed. One such proposal envisions radical changes wi...
An NOL Waiver is "Property"
May 26, 2009 - Volume 3 Issue 102 Print Report
In United States v. Kapila , _F.Supp2d_(USDC SD FLA 2009), the taxpayer (T) purchased a sign manufacturing franchise, through his wholly-ownedL Corpor...
FASB Poised To Eliminate QSPEs
May 26, 2009 - Bulletin Print Report
FASB has approved the issuance of pronouncements which will alter the manner in which transferred financial assets are accounted for and expand the circumstances un...
"Fragmentation" Averted
May 22, 2009 - Volume 3 Issue 101 Print Report
In LTR 200903075, October 9, 2008, an 'S'corporation, (D),was engaged in the active conduct of business Bwhile its wholly-owned subsidiary, a &quo...
NetApp Will Acquire Data Domain
May 21, 2009 - Bulletin Print Report
On May 20, 2009, Data Domain, Inc. (DD) and NetApp, Inc. (NA) entered into an Agreement and Plan of Merger the structure of which is somewhat unusual. Thus, NA will...
The President's Plan To Overturn the Guardian Industries Case
May 21, 2009 - Volume 3 Issue 100 Print Report
The President's budget proposal contains a provision that is aimedcuring a perceived"defect" in current law. Thus, the proposal observes that...
ESOP Dividends Engender A Conflict Among the Circuits
May 20, 2009 - Volume 3 Issue 99 Print Report
General Mills, Inc. (GMI) established, for the benefit of its employees, three employee stock ownership plans (ESOPs). GMI contributed funds to the ESOPs for the be...
What Is An "Option"
May 19, 2009 - Volume 3 Issue 98 Print Report
Certain importanttax determinations are dependent on whether a financial instrument possessed by the taxpayer in questionis properly characterized as an <...
Deferring Estate Tax Requires A Closely-Held Business Interest
May 18, 2009 - Volume 3 Issue 97 Print Report
In order to insure that theowners of closely-held businesses would not have toliquidate the businesses in order to fund estate tax obligations, Congress...
Verizon's Latest Reverse Morris Trust
May 15, 2009 - Volume 3 Issue 96 Print Report
Verizon Communications, Inc. (VZ) recently announced a transaction with which it has more than a passing familiarity; a "reverse Morris Trust" transaction...
"Killer 'B'" Subject to Sec. 367(a)(1)
May 14, 2009 - Volume 3 Issue 95 Print Report
Taxpayer (T/P), a domestic corporation, owned all of the stock of X Corporation (X), a domestic corporation, and owned all of the stock of Y Corporation (Y), a fore...
DTV: When Is a Repurchase a "Separate" Transaction?
May 13, 2009 - Volume 3 Issue 94 Print Report
For a split-off to be tax-free (at the distributing corporation level), it must meet all of the requirements imposed by Sec. 355 of the tax code and, in addition, i...
More Details on President Obama's Tax Proclivities Released
May 13, 2009 - Volume 3 Issue 93 Print Report
On May 11, 2009, the so-called "Green Book", describing the "revenue" provisions of the President's budget plan, was published. It provides more...
Sen. Durbin Takes Aim at "Excessive Compensation"
May 12, 2009 - Bulletin Print Report
Sen. Richard Durbin (D. Ill.), the Senate Majority Whip,has introduced a bill, S.1007, that would amend the rules regarding an employer's ability to secure a...
I.R.S. Addresses "Return of Capital" Distributions
May 12, 2009 - Volume 3 Issue 92 Print Report
Accounting for distributions which are not, because they exceed the corporation's earnings and profits, dividends, is probably not a topic that will capture the ima...
Interest On Debt To "Carry" Municipal Bonds
May 11, 2009 - Volume 3 Issue 91 Print Report
In Vainisi v. Commissioner , 132 T.C. No. 1 (2009), FF, Inc. (FF) elected, on January 1, 1997, to be treated as an 'S' corporation. FF alsoelected to...
Can DTV Repurchase Stock?
May 11, 2009 - Bulletin Print Report
One issue that has arisen regarding the transaction to which Liberty Entertainment, Inc. (LEI) and DIRECTV (DTV) are parties--a transaction in which LEI will be &qu...
Exchanging Securities in a Reorganization
May 8, 2009 - Volume 3 Issue 90 Print Report
Where a transaction qualifies as a reorganization , the shareholders of the acquired corporation can exchange their stock for stock in the acquiring corporati...
T/RHD Update
May 8, 2009 - Bulletin Print Report
AT&T, Inc. (T) sufferedadefeat in the U.S. District Court (W.D. Tx.) that will depriveT of a more than $500 million tax refund it was seeking....
Unchecking the Box
May 7, 2009 - Volume 3 Issue 89 Print Report
President Obama's international tax proposalsattempt to accomplish two major goals. First and foremost, these proposals seek to curtail the benefit of defer...
How Are Multinationals Taxed?
May 6, 2009 - Volume 3 Issue 88 Print Report
President Obama's tax proposals have placed an unwelcomespotlight on the manner in which U.S. "multinational" corporations are taxed. Particularly i...
I.R.S. Extends International Liquidity Concessions
May 5, 2009 - Volume 3 Issue 87 Print Report
It is well-known that U.S. corporations are incontrol of earnings, which arelodged in theirforeign subsidiaries,which they areloath to r...
Liberty Entertainment and DIRECTV Will Combine
May 5, 2009 - Bulletin Print Report
Liberty Entertainment, Inc. (LEI) and DIRECTV (DTVG) have entered into a definitive agreement for a business combination that will beundertaken immediately af...
Physical Presence, Substantial Nexus and the Commerce Clause
May 4, 2009 - Volume 3 Issue 86 Print Report
A state's ability to tax businesses that operate in interstate commerce is, it is well-established, constrained by the commerce clause of the Constitution ....
Ascertaining the Fair Value of a Liability
May 4, 2009 - Bulletin Print Report
Companies, particularly those in the financial institutions space, have recorded massive write-downswith respect to their investments in debt and equity secur...
"Black Liquor" Tax Credit On the Brink of Elimination?
May 1, 2009 - Bulletin Print Report
Tax Notes , a highly regarded trade publication,is reporting that the powerful Chairman of the Senate Finance Committee, Sen. Baucus (D. Mont.), will...
Related-Party Indebtedness
May 1, 2009 - Volume 3 Issue 85 Print Report
Many investors have fond memories of the American Jobs Creation Act of 2004, Public Law 108-357, which, among other things,added Sec. 965 to the Internal Reve...
Indirect Repatriations Have Tax Consequences
April 30, 2009 - Volume 3 Issue 84 Print Report
When earnings accumulated by a controlled foreign corporation (CFC) are "repatriated", the U.S. shareholders of the CFC who benefit therefrom will be taxe...
Taxing "CVRs"
April 29, 2009 - Volume 3 Issue 83 Print Report
In some cases, in connection with an acquisition, the parties are simplyunable to agree on the value of the acquired corporation. The gap, in these instances,...
G.M. Announces Its Restructuring Plan
April 28, 2009 - Volume 3 Issue 82 Print Report
General Motors Corporation(GM) announced, on April 27, 2009, its long-awaited restructuring proposal. The centerpiece of the proposal is a swap of newly-issue...
WFC and SOP 03-3
April 27, 2009 - Volume 3 Issue 81 Print Report
Wells Fargo & Co. (WFC), in the course of reporting its first quarter earnings, devoted an entire section of its press release to the vagaries of SOP 03-3, a pr...
Why Can't CMG Get an I.R.S. Ruling on a Share "Collapse"?
April 24, 2009 - Bulletin Print Report
In order to accomplish a tax-free spin-off or split-off, thedistributing corporation must be, immediately before the spin-off or split-off, "in control&q...
Debt Forgiveness Is Rarely a Gift
April 24, 2009 - Volume 3 Issue 80 Print Report
Gross income, the kind on which taxes are imposed, is very broadly defined. Gross income, in fact, includes all income "from whatever source derived" unle...
Securing a "Cost" Basis in a Bankruptcy Reorganization
April 23, 2009 - Volume 3 Issue 79 Print Report
Invirtuallyeverybankruptcy reorganization, the debtor'spre-petition creditors willsucceed to ownership of most or all of the reorganiz...
WFC Benefits From FASB's Munificence
April 22, 2009 - Bulletin Print Report
Wells Fargo & Company (WFC) hasreported, by any standard,impressive first quarter earnings. Moreover, its financial position appears to be quite sou...
Development Rights Constitute "Real Property"
April 22, 2009 - Volume 2 Issue 78 Print Report
Sec. 1031(a) of the Internal Revenue Code provides that no gain or loss shall be recognized on the exchange of property held for productive use in a trade or busine...
Exchanging Multiple Properties
April 21, 2009 - Volume 3 Issue 77 Print Report
Sec. 1031(a) of the Internal Revenue Code provides that no gain or loss shall be recognizedon the exchange of property held for productive use in a trade or busi...
"Risk Reduction" As A Business Purpose For A Spin-Off
April 20, 2009 - Volume 3 Issue 76 Print Report
In order for a spin-off to achieve tax-free status certain familiarstatutory requirements, enumerated in Sec. 355 of the Internal Revenue Code, must be satisfie...
PEP/PBG/PAS: The "Direction" of the Merger is Critical
April 20, 2009 - Bulletin Print Report
PepsiCo (PEP) has proposed to acquire all of the outstanding shares of common stock it does not already own in its two largest "anchor" bottlers, The Peps...
Citi's "Beneficial Conversion Feature"
April 17, 2009 - Bulletin Print Report
Citigroup (C) is reporting, in connection with its impending exchange offer (in which it will issue common stock in exchange for specifiedamounts of its prefe...
PNC and MER Restructure Their Interest in BlackRock
April 17, 2009 - Volume 3 Issue 75 Print Report
In light of the fact that Merrill Lynch & Co., Inc. (MER)recently underwent a "change of control" (it was just recentlyacquired by Bank of...
Centex's "Deferred Tax Assets"
April 16, 2009 - Bulletin Print Report
During the conference call in which the Pulte Homes (P)/Centex Corp. (C) merger was announced, the noted housing analyst, Ivy Zelman, posed the following question--...
Accounting for Refundable State Tax Credits
April 16, 2009 - Volume 3 Issue 74 Print Report
Surprisingly, there has never been a reported case or I.R.S. pronouncement addressing the Federal incometax treatment of refundable state tax credits. This vo...
Accounting for Rebates--Part II
April 15, 2009 - Volume 3 Issue 73 Print Report
The taxpayer in question(T) is a retailer of consumer products. T has, as so many retailers do, a "cash rebate" program. Under the cash rebate progr...
ESRX Will Enjoy a Basis "Step-Up"
April 14, 2009 - Volume 3 Issue 72 Print Report
Express Scripts, Inc. (ESRX) and WellPoint, Inc. (WLP) announced that they have signed a definitive agreement under which ESRX will acquire WLP's "NextRX subsi...
Other Than Temporary Impairments
April 14, 2009 - Volume 3 Issue 71 Print Report
The Financial Accounting Standards Board (FASB) has issued new guidance with respect to the accounting for debt securities that have become other-than-temporarily i...
"HAMP" Modifications Will Not Imperil REMIC Status
April 14, 2009 - Bulletin Print Report
REMICsare securitization vehicles for mortgages. Under Sec. 860A(a), a REMIC shall not be subject to taxation "under this subtitle". If the REMIC wa...
FASB "Clarifies" Fair Value Reporting
April 13, 2009 - Volume 3 Issue 70 Print Report
The Financial Accounting Standards Board (FASB) recently issued a document which purports to clarify the circumstances under which a market is properly regarded as...
I.R.S. Identifies a "Transaction of Interest"
April 9, 2009 - Volume 3 Issue 69 Print Report
One problem that tax advisers frequently grapple withis how to avoid inclusion in the income of a "U.S. shareholder" ofsuch shareholder's shar...
Credit Card Fees Incurred In Paying Taxes are Deductible
April 9, 2009 - Bulletin Print Report
Reg. Sec. 301.6311-2T(a) provides that "internal revenue taxes" may be paid by credit card or debit card. The issuers of such cards typicallyimpose...
Pulte/Centex--What Happens to the NOLs?
April 8, 2009 - Bulletin Print Report
Pulte Homes, Inc. (PHM) and Centex Corp. (CTX) announced, today, that their boards of directors have approved a definitive merger agreement "under which PHM an...
Is the Accumulated Earnings Tax a Threat?
April 8, 2009 - Volume 3 Issue 68 Print Report
In the current environment corporations may find it prudent tohusband their cash reserves bycurtailing or reducing their dividend payments and postponin...
Metavante: Prior Spin Should Not Be Affected by Merger
April 7, 2009 - Bulletin Print Report
Recently, Metavante Technologies, Inc. (M) entered into a plan and agreement with Fidelity National Information Services, Inc. (F) in connection with which the form...
The Courts Will Not Permit Disavowal Of One's Own Agreement
April 7, 2009 - Volume 3 Issue 67 Print Report
A taxpayer is, almost always, bound by the terms of the agreement whichhe willingly enters into. The tax consequences arising from the transaction to which th...
Medical Expense Deductions Are Hard To Come By
April 6, 2009 - Volume 3 Issue 66 Print Report
Sec. 213(a) of the Internal Revenue Codeprovides for the deduction of expenses, which arenot compensated for "by insurance or otherwise", for...
Citigroup's Exchange Offer
April 3, 2009 - Volume 3 Issue 65 Print Report
Citigroup, Inc.(C) is on the verge of effecting a massive recapitalization in which the holders of much of C's preferred stock (each ofitsstraig...
International Paper's Tax Credits
April 3, 2009 - Bulletin Print Report
Recently, International Paper Company (IP) announced that its registration as an "alternative fuel mixer"had beenapproved. In light of that ap...
IRA Transfers Must Be Handled With Care
April 2, 2009 - Volume 3 Issue 64 Print Report
In Jankelovits v. Commissioner , T.C. Memo. 2008-285, the taxpayer (J) inherited twoIndividual Retirement Accounts (IRAs)from her aunt, MM. J me...
A Sec. 338 Election Is Not A Purchase of Assets
April 1, 2009 - Volume 3 Issue 63 Print Report
On December 8, 1986, Brunswick Corp. (B) acquired all of the stock of BM Corporation (BM), an 'S' corporation, and USM Corporation (USM), a C corporation. Each acqu...
S.E.C. Opines on "Impairment" With Respect to Preferred Stock
March 31, 2009 - Volume 3 Issue 62 Print Report
On October 14, 2008, in a letter from the Office of theChief Accountant (of the S.E.C.) to the Chairman of the Financial Accounting Standards Board (FASB), th...
Disposing of a "USRPI"
March 30, 2009 - Volume 3 Issue 61 Print Report
Sec. 897(a) of the tax code provides that gain or loss of a foreign corporation (or of a non-resident alien individual) from the disposition of a United States...
Tax Consequences of a "Taxable Merger"
March 27, 2009 - Volume 3 Issue 60 Print Report
Assume that a taxpayer (TP)owns stock in "Target Co.", (T), with an adjustedbasis, in his hands, of $500,000. "Parent Co.", (P), and...
Assessing When Compensation Is "Reasonable"
March 26, 2009 - Volume 3 Issue 59 Print Report
Sec. 162(a) provides that there shall be allowed as a deduction all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on a trad...
Agrium Proposes a "Taxable" Reorganization
March 25, 2009 - Bulletin Print Report
Agrium, Inc. (AGU), a Canadian corporation, is attempting to acquire CF Industries Holdings, Inc. (CF) which is, itself,seeking to acquire Terra Industries. A...
FASB's New Approach To "Impairments"
March 25, 2009 - Volume 3 Issue 58 Print Report
In cases where the fair value of a debt or equity security is less than the cost basis of the security at the "measurement date", U.S. Generally Accepted...
NDS Group's Letter Ruling Published
March 24, 2009 - Volume 3 Issue 57 Print Report
LTR 200912006, December 8, 2008 is, we have no doubt, the ruling that was issued to News Corp. (N) in connection with the transaction in which its affiliate, NDS Grou...
Petro-Canada and Suncor Will Effect an 'A' Reorganization
March 24, 2009 - Bulletin Print Report
Suncor Energy, Inc. (SU) and Petro-Canada (PCZ) have agreed to merge. The merger will be effected pursuant to a "Plan of Arrangement" under the Canadian B...
Payments In Lieu of Dividends
March 23, 2009 - Volume 3 Issue 56 Print Report
A taxpayer seeking to convert difficult to deduct capital losses into ordinary losses might consider entering into a short sale of stock shortly before the ex-divid...
Deductions For Worthless Stock of a Financial Institution
March 20, 2009 - Volume 3 Issue 55 Print Report
Ordinarily, a "worthless security" loss is a classified as a capital loss. See Sec. 165(g)(1).*This is unfortunate because capital losses are exceed...
Senate Bonus Bill is Both Draconian and Complex
March 20, 2009 - Bulletin Print Report
The Senate's effort in the area of taxation of bonuses is called the "Compensation Fairness Act of 2009" (S. 651); it has an impressive and therefore ...
House Set To Vote on Confiscatory Tax on "Bonuses"
March 19, 2009 - Bulletin Print Report
Therancor surrounding the bonuses paid to certain executives of A.I.G. has escalated and now, perhaps predictably, Congress has fashioned a "tax solution...
I.R.S. Accommodates Ponzi Scheme Victims
March 19, 2009 - Volume 3 Issue 54 Print Report
The I.R.S. has published guidanceaddressing the complex tax consequences confronting victims of Ponzi Schemes--referred to in the guidance, more delicately, a...
FASB "Relaxes" Fair Value Standards
March 18, 2009 - Bulletin Print Report
In some quarters, so-called "mark to market" accounting for financial assets and liabilities has been accorded an inordinate degree of blame for the credi...
"Mutual Into Stock" Merger Qualifies As a Reorganization
March 18, 2009 - Volume 3 Issue 53 Print Report
Mutual organizations are owned by their members. Typically, such membersoccupy a dual relationship to the organization: as members they have proprietary inter...
Reorganizations of Insolvent Corporations
March 17, 2009 - Volume 3 Issue 52 Print Report
Congress intended that "troubled" corporations,with a view towards affording theseentities a meaningfulchance for rehabilitation, be per...
The I.R.S. Permits the Tax-Free Swap of Intangible Assets
March 16, 2009 - Bulletin Print Report
On 1/13/06, the I.R.S. issued a Technical Advice Memorandum--LTR 200602034--in which it concluded that theregistered trademarks and tradenames of a business e...
Harrah's Is De-Leveraging
March 16, 2009 - Volume 3 Issue 51 Print Report
Harrah's Entertainment, Inc. (H) recently announced that its wholly-owned subsidiary, Harrah's Operating Company, Inc. (HOC), is seeking to consummate exchange offe...
Ownership Changes in Bankruptcy
March 13, 2009 - Volume 3 Issue 50 Print Report
Where a "loss corporation" experiences an ownership change , certain limits are placed on the use of its net operating losses (NOLs) and "bui...
Tax-Efficient Withdrawal From a Corporate JV
March 12, 2009 - Volume 3 Issue 49 Print Report
A corporation (T) and an individual (I)are equal shareholders in a joint venture (JV) arrangement whichisoperated as a corporation. However, as&nb...
Interest Rate Swaps, Treasury Locks, and MLPs
March 11, 2009 - Volume 3 Issue 48 Print Report
LTR 200841017, June 16, 2008 addresses the case of a publicly-traded partnership, C, which is principally engaged, as most such MLPs are, in the acquisition, exploi...
MRK/SGP: A "Reverse Merger" is Planned
March 10, 2009 - Volume 3 Issue 47 Print Report
Merck, Inc.'s(MRK)"acquisition" of its rival,Schering-Plough, Inc.(SGP), is being structured in an unusual manner. Despite the rel...
Renaissance Technologies Secures A NYS Advisory Opinion
March 10, 2009 - Volume 3 Issue 46 Print Report
A State of New York Advisory Opinion (Petitioner No. C070517B, TSB-A-08(6)(C), Corporation Tax, November 6, 2008) was recentlyissued to Renaissance Technologi...
Level 3's "Lost" NOLs
March 9, 2009 - Volume 3 Issue 45 Print Report
Level 3 Communications, Inc. (L3) was in possession of some $9.7 billion in net operating losses (NOLs) when 2008 commenced. However, as reported in its recently-fi...
Ford Will Redeem Its Convertible Notes
March 6, 2009 - Bulletin Print Report
Ford Motor Co. (F) is beginning the process of restructuring its indebtedness although, unlike G.M., F is not compelled to do so by the terms of loans obtained from...
Tax Deferral With Private Annuities
March 6, 2009 - Volume 3 Issue 44 Print Report
Mr. Katz owned all of the stock of ELA, a company that he hadfounded and that grew to be very successful in a brief period of time. He entered into a plan and...
Imputed Interest on Stock Issued in a Reorganization
March 5, 2009 - Volume 3 Issue 43 Print Report
Sec. 483 of the Internal Revenue Code applies to a contract for the sale or exchange of property if the contract (i) provides for one or more payments due more than...
"Revenue Raisers" In The Administration's Budget Plan
March 4, 2009 - Volume 3 Issue 42 Print Report
President Obama's budget is reflective of his campaign stance and, if enacted, will make good on many ofthose campaign promises. It does entail a major commit...
Citi Eschews Valuation Allowance
March 3, 2009 - Bulletin Print Report
Citi's recently-filed 2008Form 10-K reveals that it has accumulated some $44.5 billion in netdeferred tax assets (DTAs). These DTAs arise from carryforw...
Defining an "Intermediary Tax Shelter"
March 3, 2009 - Volume 3 Issue 41 Print Report
In a taxable acquisition (as opposed to a tax-free reorganization) a buyer's principal objective, from a tax viewpoint, is to secure a "cost" basis in the...
Citi's Recapitalization Should Not Cause an Ownership Change
March 2, 2009 - Bulletin Print Report
Citi has announced a recapitalization plan in connection with which preferred securities held by the U.S. Government (USG) and by private investors will be converte...
Trafficking in NOLs? Yes We Can!
March 2, 2009 - Volume 3 Issue 40 Print Report
A corporation, LC, had been engaged, without noticeablesuccess, in the active conduct ofa trade or business which it has now ceased to conduct.LC&...
"Inverted" Corporations Are Moving to Switzerland
February 27, 2009 - Bulletin Print Report
Several of the corporations that accomplished, in the late 1990s and early 2000s, "inversion" transactions, have now decided that, in order to make their...
CF Industries Will Be Going "Hostile"
February 27, 2009 - Volume 3 Issue 39 Print Report
CF Industries, Inc. (CF) recently announced that it will take its exchange offer directly to the shareholders of Terra Industries, Inc. (T) in light of the fact tha...
Redemptions and Options on "Unissued" Stock
February 26, 2009 - Volume 3 Issue 38 Print Report
If a corporation redeems its stock and if Sec. 302(b) applies to the redemption such redemption shall be treated as a distribution "in part or full payment in ex...
What Is a "Parachute Payment"
February 25, 2009 - Volume 3 Issue 37 Print Report
The tax law frowns upon parachute payments and certain, rather severe, penalties are exacted from both the paying corporation and the recipient "disqu...
Sirius XM Radio Inc.'s NOL Status
February 24, 2009 - Volume 3 Issue 36 Print Report
In July, 2008,Sirius Satellite Radio, Inc.(SSR)acquired the stock of XM SatelliteRadio, Inc.(XMR)in a transaction intended...
Wells Fargo Secures Tier 1 Capital Dispensation
February 24, 2009 - Bulletin Print Report
Under accounting rules, a deferred tax asset (DTA) is recognized for "temporary differences" that will result in (tax)deductible amounts in future y...
Time Warner Cable Will Be Spun (Not Split) Off
February 23, 2009 - Bulletin Print Report
Time Warner (TW)has announced that it intends to effect the distribution of Time Warner Cable's (TWC)stock as a pro-rata distribution (a spin-off) rathe...
No Tax Succor For a "Bubble" Era Victim
February 23, 2009 - Volume 3 Issue 35 Print Report
Many employees of technology firms exercised employee stock options at the height of the market hysteria now popularly known as the "bubble era". However,...
WAMU--To Whom Does the NOL "Belong"--Part II
February 20, 2009 - Volume 3 Issue 34 Print Report
In a case entitled In re Prudential Lines, Inc. v. PSS Steamship Co., Inc. , 928 F.2d 565 (2nd Cir. 1992), PSS owned all of the stock of PLI. The latter, wi...
The Ricketts' Redemption
February 19, 2009 - Bulletin Print Report
TD AMERITRADE Holding Corp. (AMTD) has announced that its Board of Directors has authorized the repurchase of 34 million shares from the family of the company's fou...
A "Transitory" Corporation is Disregarded
February 19, 2009 - Volume 3 Issue 33 Print Report
In some cases, a corporation which is both created and extinguished in an integrated transaction will be, for tax purposes, disregarded. Thus, a reverse triangular...
Business Tax Cuts Populate the Stimulus Bill
February 18, 2009 - Volume 3 Issue 32 Print Report
The "economicstimulus bill" (formally known as The American Recoveryand Reinvestment Tax Act of 2009, H.R. 1) contains several provisions that...
Goodwill Impairment/Equity Method Update
February 17, 2009 - Volume 3 Issue 31 Print Report
The stock market'shistoric decline raises the issue of whether the goodwill existing on Corporate America's collective balance sheet has become "impaired...
Charter's COD
February 17, 2009 - Bulletin Print Report
The announcement by Charter Communications, Inc. (C) of its intention topursue a restructuring of its copious indebtednessmay wellhave been prompt...
Citigroup Transfers Assets to "HTM"
February 13, 2009 - Volume 3 Issue 30 Print Report
Citigroup has transferred some $80 billion of debt securities to the "held to maturity" category. SFAS No. 115, Accounting for Certain Investments in...
Conferees Drop Extended NOL Carryback
February 12, 2009 - Bulletin Print Report
It is very unusual, almost unprecedented, for a conference committee, whose objective is to reconcile competing pieces of tax legislation, to drop (from the final b...
CBS Taxed on Its "Transfer" of Real Estate to Viacom
February 12, 2009 - Volume 3 Issue 29 Print Report
In March of 2000, CBS Corporation (CBS)and Viacom, Inc. (V)effected a merger in connection with which V was the "issuing" corporation. (Since...
Managers' Amendment Provides Clues to Conference Outcome
February 11, 2009 - Bulletin Print Report
Sen. Baucus' Managers' Amendment to H.R. 1, "The American Reinvestment and Recovery Act of 2009", was blocked by Senate Republicans. However, such Manager...
The “Cash Issuance Exception” and NOLs
February 11, 2009 - Volume 3 Issue 28 Print Report
Dow Jones recently reported that a group of telecommunications companies "is seeking to loosen tax rules to allow them to raise equity capital without eroding...
SPG Will Pay Its Dividend Largely In Stock
February 10, 2009 - Bulletin Print Report
Simon Property Group, Inc. (SPG) is one REIT that's taking full advantage of the I.R.S.'s concession with respect to the composition of a REIT's dividend. Thus, SPG...
Timing "Deferred Compensation" Deductions
February 10, 2009 - Volume 3 Issue 27 Print Report
Ordinarily, in the case of an accrual method taxpayer, a liability is incurred, and is therefore "taken into account", in the taxable year in which "...
Sequenom's "Two-Step"
February 9, 2009 - Volume 3 Issue 26 Print Report
Sequenom, Inc.(S) is proposing to acquire all of the stock of EXACT Sciences Corp. (E) through a two-step process embodying both a tender offer and a&qu...
Senate Focuses on Bonuses Paid By TARP Recipients
February 9, 2009 - Bulletin Print Report
An amendment to the Senate's version of the stimulus legislation,that was adopted by avoice vote lateon February 6, 2009, provides for an extraord...
WAMU--To Whom Does the NOL "Belong"
February 6, 2009 - Volume 3 Issue 25 Print Report
WMB,in connection withthe seizure of its assets, almost certainly sustained a loss. The amount of the loss which it sustained should be measured by the...
TARP Beneficiaries and Sec. 382
February 5, 2009 - Volume 3 Issue 24 Print Report
The I.R.S. recently issued Notice 2009-14 for the purpose of providing guidance regarding the application of Sec. 382 of the tax codeto corporate issuers with respe...
Senate Makes Progress on Tax Legislation
February 4, 2009 - Bulletin Print Report
The Senate is, slowly but surely, making progress with respect to the tax proposals that will form an integral part of the stimulus bill that President Obama has be...
Focus Media Will Be Distributing SINA's Stock
February 4, 2009 - Volume 3 Issue 23 Print Report
Recently, Focus Media Holding Ltd. (FMCN) and SINA Corp. (SINA) announced that they had reached agreement on a transaction the structure of which is, in our experie...
GM Needs More Tax Relief
February 3, 2009 - Bulletin Print Report
It has been reported that General Motors is seeking "relief" with respect to tax liabilities it might incur as a result of the "restructuring plan" it...
Relief for REMICs
February 3, 2009 - Volume 3 Issue 22 Print Report
The credit crisis has galvanized the I.R.S. (and the Treasury Department)into action. It has issued many ameliorative pronouncements, in the form of Notices and...
FASB Increases Disclosure Requirements for Financial Instruments
February 2, 2009 - Bulletin Print Report
FASB has issued (in proposed form) guidance that will increase, dramatically, the frequency with which issuers will be called upon to disclose information regarding the fai...
The Elusive Notion of “Income From Discharge of Indebtedness”
February 2, 2009 - Volume 3 Issue 21 Print Report
Gross income, for Federal income tax purposes, means "all income from whatever source derived", including, but by no means limited to, the items expressly enumerated...
Pfizer's Stock Will Be Taxable
January 30, 2009 - Bulletin Print Report
The merger agreement filed by Pfizer, Inc. (PFE) with respect to the Wyeth (WYE)deal indicates that the transaction will be structured as a "reverse triangular merger". Thus, PFE...
Fannie and Freddie Preferred Stock--Ordinary Loss Rule Expanded
January 30, 2009 - Volume 3 Issue 20 Print Report
In most cases, equity securities are, in the hands of the owners thereof, capital assets with the result that gain or loss from the sale or other disposition (includi...
"Value Fluctuations" Will Not Precipitate An "Ownership Change"
January 29, 2009 - Volume 3 Issue 19 Print Report
Where a "loss corporation" experiences an "ownership change", certain limits, sometimes quite restrictive, areimposed on the amount of tax...
Expect Mutual Funds and REITs To Be Less Charitable
January 28, 2009 - Volume 3 Issue 18 Print Report
Would taxpayers be less charitable if a tax deduction for charitable contributions was unavailable? We may find out in the case of mutual funds (RICs)and Real...
COD Update--SFC Begins Markup of Stimulus Bill
January 27, 2009 - Bulletin Print Report
As the Senate Finance Committee (SFC)begins its "mark up" of the tax portion of the stimulus legislation, we find that certain changes have already...
Can A Buyer's Losses Offset a Target's Profits?
January 27, 2009 - Volume 3 Issue 17 Print Report
Although the tax law places numerous restrictions on a buyer's ability to utilize the accumulated (and built-in) losses of an acquired corporation--not the least of...
WFC and PNC: Tax Refunds In the Offing?
January 26, 2009 - Volume 3 Issue 16 Print Report
Wells Fargo (WFC) and PNC will be acquiring Wachovia (WB) and National City Corp. (NCC), respectively, in transactionswhich willbestructured as di...
Senate Tax Bill Provides Relief For COD Income
January 23, 2009 - Bulletin Print Report
On Tuesday, January 27, 2009, the Senate Finance Committee (SFC) will begin "marking up"its version of the American Recovery and Reinvestment Tax Ac...
Amendments to NOL Provisions of Stimulus Bill Proposed
January 23, 2009 - Bulletin Print Report
As the House Ways & Means Committee began its "mark-up" of the "stimulus legislation" (the formal name for the bill is the "American Re...
I.R.S. Is Scrutinizing Foreigners' "Infrastructure" Investments
January 23, 2009 - Volume 3 Issue 15 Print Report
The I.R.S. has announced its intention to more closely examine the Federal incometax profile of foreign persons who make what the agency is referring to as in...
"TARP" Reform Bill Benefits Automakers
January 22, 2009 - Bulletin Print Report
On January 21, 2009 the House, by a comfortable margin (260 in favor and 166 opposed), passed the "TARP Reform and Accountability Act", H.R. 384. The bill...
Is New York Times' "Slim" Loan an "AHYDO"?
January 22, 2009 - Volume 3 Issue 14 Print Report
During the 1980s,scores ofdeals were financed, at least in part,with "deferred interest" securities. Due, however, to the operation of t...
The Tax Treatment of Foreclosure
January 21, 2009 - Volume 3 Issue 13 Print Report
In any downturn, particularly one that is precipitated by a marked decline in real estate values, the number of properties that are the subject of foreclosure proce...
VNO's "In-Kind" Dividend
January 21, 2009 - Bulletin Print Report
Vornado Realty Trust (VNO) recently announced that its Board of Trustees has declared a "regular quarterly dividend" of $0.95 per share. This dividend is...
Partnership Debt/Equity Swaps Clarified
January 20, 2009 - Volume 3 Issue 12 Print Report
Sec. 108(e)(8) of the Internal Revenue Code provides that, for purposes of determining income of a debtor from discharge of indebtedness, if (i)a debtor corpo...
House Ways & Means Committee Releases Details of Tax Plan
January 20, 2009 - Bulletin Print Report
Chairman Rangel (D-NY), on behalf of the House Ways & Means Committee, has released details of the tax component of the stimulus plan President-elect Obama has...
Citi's Gain From The Smith Barney "Sale"
January 16, 2009 - Bulletin Print Report
The Citi (C)/Morgan Stanley (MS)"joint venture" will result in the combination of C's Smith Barney unit with MS's Global Wealth Management Group. Under the term...
Amazon.com's New York Sales Tax Problem
January 16, 2009 - Volume 3 Issue 11 Print Report
Since 1995, Amazon.com (A) has been operating a retail internet business. Its goods are sold online and shipped to buyers worldwide, including to New York. A, howev...
First Draft of Stimulus Bill Contains Some Disappointments
January 15, 2009 - Bulletin Print Report
Rep. Rangel (D-NY), the Chairman of the House Ways and Means Committee, has released details of the tax component of the Economic Recovery Package andparticul...
Citigroup's Deferred Tax Assets
January 15, 2009 - Volume 3 Issue 10 Print Report
Citigroup (C) has approximately $28 billion worth of deferred tax assets (DTAs) with respect to which a "valuation allowance" (VA) has not been appended....
Continuity of Interest--How Low Can You Go?
January 14, 2009 - Volume 3 Issue 9 Print Report
In order for a forwardmerger (one in which the acquiring corporation is the surviving corporation)to qualify as a reorganization both "the terms of...
What Are "Receipts"?
January 13, 2009 - Volume 3 Issue 8 Print Report
One would think that a term as pedestrian as "receipts" would have a well-accepted meaning and that parties would not have to litigate thequestion o...
Sen. Ensign's New Year's Gift to Debtors
January 12, 2009 - Bulletin Print Report
Sen. Ensign (R-NV) has introduced a bill (S 33) which provides debtors with tax incentives to restructure their debts.The bill would add Sec. 108(a)(1)(F) to...
Preserving WorldCom’s NOLs
January 12, 2009 - Volume 3 Issue 7 Print Report
When the words employed in a tax statute are not inescapably ambiguous and the application of those words to the issue under scrutiny would not thwart the purpose o...
CTL/EQ--Who Is the Acquirer?
January 9, 2009 - Volume 3 Issue 6 Print Report
In the case of a business combination effected wholly, or at least primarily,through an exchange of equity interests--like the one recently announced by Centu...
I.R.S. Expands REIT Stock Dividend Dispensation
January 8, 2009 - Bulletin Print Report
Last month, the I.R.S. granted REITs permission to use stock to satisfy up to 90 percent of their dividend paymentobligations. This dispensation was granted f...
Tax Issues for Dreier "Investors"
January 8, 2009 - Volume 3 Issue 5 Print Report
Although, in sheer dollar terms, the ruse allegedly perpetrated by Mr. Marc Dreier does not measure up to the one engineered by Mr. Bernard Madoff, press reports in...
Debtors Lobbying For a "COD" Exclusion
January 7, 2009 - Bulletin Print Report
There is a powerful lobbying effort underway to insure that the President-elect's tax plan includes a provision that will allow even solvent debtors to exclude canc...
The Origin of the Claim Test Prevents a Tax Deduction
January 7, 2009 - Volume 3 Issue 4 Print Report
One of the more difficult tax determinations that taxpayers are almost daily called upon to make is whether an outlay is a deductible expense or is, instead, a capi...
What is "Computer Software"
January 6, 2009 - Volume 3 Issue 3 Print Report
Many important tax determinations depend on whether property is properly characterized as "computer software". For example, where an acquisition of a trad...
Tax Considerations for Victims of "Ponzi Schemes"
January 5, 2009 - Volume 3 Issue 2 Print Report
There have been severaldecided cases and I.R.S. pronouncements addressing the Federalincometax issues faced by victims of "Ponzi Schemes"...
The Obama Stimulus Plan Has a Tax Component
January 5, 2009 - Bulletin Print Report
It now appears clear that President-elect Obama's stimulus plan will, perhaps to secure Republican approval of the plan, be heavily freighted with tax reductions. W...
Open Market Purchaser Denied Theft Loss Deduction
January 2, 2009 - Volume 3 Issue 1 Print Report
P Corporation (P) had purchased, on the open market, shares in Novatek (N) on six separate occasionsduring 1995 and 1996. P purchased the shares through a sto...
Can Pre and Post-Judgment Interest Be Deducted?
December 31, 2008 - Volume 2 Issue 344 Print Report
In CCA 200836025, May 20, 2008,a taxpayer (T)was called upon to pay judgments in product liability suitsin connection witha product it had b...
Deducting Fines and Penalties
December 30, 2008 - Volume 2 Issue 343 Print Report
In FAA (Field Attorney Advice Memorandum)20084301F, September 25, 2008, States X, Y, and Z each filed a lawsuit against taxpayer, (T), in Federal court, accus...
FASB Sets New Disclosure Requirements for "Financial Assets"
December 29, 2008 - Volume 2 Issue 342 Print Report
FSP FAS No. 107-a establishes enhanced disclosure requirements for certainfinancial assets. It amends the disclosure requirements set forth in SFAS No. 107,&n...
Payments to Avoid "Breaking the Buck"
December 29, 2008 - Bulletin Print Report
The I.R.S. has issued numerous pronouncements this year designed to insure that adverse tax consequences do not get in the way of transactions that are otherwise he...
Options Can Reduce Corporate AMT Obligations
December 26, 2008 - Volume 2 Issue 341 Print Report
Although the Alternative Minimum Tax (AMT) has received the bulk of its notoriety for the privations it visits on individual, "middle-class", taxpayers, t...
Deferring Estate Tax With Closely-Held Business Interests
December 24, 2008 - Volume 2 Issue 340 Print Report
In order to insure that the estate tax can befunded without having to precipitouslyliquidate the business the value of which accounted for the bulk, if...
FASB Will Relax "Impairment" Rules
December 23, 2008 - Volume 2 Issue 339 Print Report
There have been numerous complaints lodged with the Financial Accounting Standards Board (FASB) regarding the rigidity of the rules that currently exist with respec...
Preserving Reorganization Treatment
December 23, 2008 - Volume 2 Issue 338 Print Report
InLTR 200842029, July 18, 2008, FC, a foreign corporation, created a domesticsubsidiary, MS, with andinto which T Corporation (T),an unrelat...
Will the Auto Bailout Dissipate GM's NOLs?
December 22, 2008 - Bulletin Print Report
Oneelement of the "auto bailout" is the requirement that the recipients of the Treasury Department's loan, G.M. and Chrysler, reduce their funded in...
Continuity of Interest and the "Signing Date Rule"
December 22, 2008 - Volume 2 Issue 337 Print Report
In order for a merger to qualify as a reorganization it must, among severalother requirements, exhibit continuity of interest (COI). It will...
Senator Grassley May Pursue Inversions
December 19, 2008 - Volume 2 Issue 336 Print Report
A once popular transaction, commonly known as an "inversion", is, due to a combination of unfavorable publicity and legislative actions, no longer being p...
"Start-Up" Expenditures Are Not Currently Deductible
December 18, 2008 - Volume 2 Issue 335 Print Report
Even though times are, to put it mildly, challenging, we have witnesseda number of new hedge funds (and other businesses, such as tax and accounting advisory servic...
A "Casual" Gambler's Wagering Activities Have Tax Implications
December 18, 2008 - Bulletin Print Report
The tax code provides, in Sec. 165(a),that there shall be allowed as a deduction any loss sustained during the taxable year (which is)not compensated fo...
Cinematic Alternative Investment
December 17, 2008 - Bulletin Print Report
Hedge funds interested in investing in "the arts" may be encouraged to do so by certain beneficial tax rules that have recently been extended for an addit...
Eli Lilly and "In-Process" R&D/Goodwill Impairments
December 17, 2008 - Volume 2 Issue 334 Print Report
Eli Lilly (LLY) recently completed the acquisition of ImClone. As a directresult of that acquisition, LLY dramatically reduced its earnings forecast for 2008....
Liberty Media Will Split-Off Liberty Entertainment
December 16, 2008 - Volume 2 Issue 333 Print Report
Liberty Media Corporation (L) recently announced that its board of directors has authorized a plan to distribute to the holders of its Liberty Entertainment group t...
Financial Institutions Receive More Treasury Largesse
December 16, 2008 - Volume 2 Issue 332 Print Report
One of the lesser known aspectsof the government's reaction to thecredit crunch has been an unprecedented relaxation by Treasury and the I.R.S. of punit...
Tax Issues Arising From The Madoff Revelations
December 15, 2008 - Volume 2 Issue 331 Print Report
Investors caught up in the apparent fraud perpetrated by Mr. Bernard Madoff (BM) may find that certain Federal income tax provisions,dealing with taxpayers wh...
Accruing Rights Fees
December 12, 2008 - Volume 2 Issue 330 Print Report
FAA (Field Attorney Advice)20084101F, June 11, 2008, addresses the case of a taxpayer (T) which is a TV network and cable/satellite programming provider. T&nb...
Sec. 382 and the "Auto Bailout"
December 11, 2008 - Bulletin Print Report
During the course of the credit crisis, the Treasury Department and the I.R.S. have taken steps to neutralize aspects of Sec. 382 of the Internal Revenue Codew...
A REIT Can Pay Its Dividends In Its Stock
December 11, 2008 - Volume 2 Issue 329 Print Report
Sec. 857(b) provides that "there is hereby imposed for each taxable year on real estate investment trust taxable income of every realestate investment tr...
U.S./U.K. Treaty Does Not Override Internal Revenue Code
December 11, 2008 - Volume 2 Issue 328 Print Report
Recently, in AM 2008-009, August 21, 2008, the I.R.S. was called upon to answer a question that had been posed to it by numerous taxpayers. The question involved th...
The Nature of a Put Option With Respect to ESOP Stock
December 10, 2008 - Volume 2 Issue 327 Print Report
LTR 200841042, June 17, 2008, addresses the case ofa corporation (T) which maintains an Employee Stock Ownership Plan (ESOP). The plan provides that "the...
Tax Issues Arising From TRB's Filing
December 9, 2008 - Volume 2 Issue 326 Print Report
Tribune Co. (TRB) announced, on December 8, 2008, that it is filing for bankruptcy. Tribune is an 'S' corporation and, presently, all of its outstanding stock is ow...
FASB Opines on "Going Concern" and "Subsequent Event" Issues
December 9, 2008 - Volume 2 Issue 325 Print Report
The Financial Accounting Standards Board, (FASB), on October 9, 2008, issued two Proposed Statements of Financial Accounting Standards ("Exposure Drafts) one dea...
A "Passive" Partner Can Be "Active" for Spin-Off Purposes
December 8, 2008 - Volume 2 Issue 324 Print Report
Under what circumstances, if any, can a partner in a partnership be treated as engaged in the active conduct of a trade or business, for purposes of the spin-off ru...
When Is Option Income Reported?
December 5, 2008 - Volume 2 Issue 323 Print Report
The tax consequencesarising fromexercising an employee stockoption are governed by Sec. 83 of the Internal Revenue Code. In general, income (equal...
Taxpayer Not a "Victim" of the 9/11 Terrorist Attacks
December 4, 2008 - Volume 2 Issue 322 Print Report
It is often said that almost every aspect of life and deathembodies a tax consequence and this point was recently made painfully clear in a decision rendered...
GW/PDS--No "Helen of Troy" Problem
December 3, 2008 - Bulletin Print Report
Grey Wolf International, Inc. (GW) is scheduled to merge, later this month, with and into a controlled subsidiary of Precision Drilling Trust (PDS)for a combination of cash and...
Bailing Out of Midway Games
December 3, 2008 - Bulletin Print Report
National Amusements, Inc. (NAI), Sumco, Inc. (SI), and Mr. Redstone himself (SMR) announced that, on November 28,2008, each had sold its entire interest in Midway Games,...
Curtailing DRD "Arbitrage"
December 3, 2008 - Volume 2 Issue 321 Print Report
In an attempt to prevent what might be termed "tax arbitrage" the tax law contains rules that are designed to prevent the unfettered enjoyment of certain...
AllianceBernstein's Competitive Advantage
December 2, 2008 - Volume 2 Issue 320 Print Report
AllianceBernstein Holding L.P. (AB)has a competitive advantage vis a vis its peers that operate as C corporations. AB, by contrast, is a partnership and a par...
Does Notice 2008-91 Incorporate Jacobs Engineering?
December 1, 2008 - Volume 2 Issue 319 Print Report
Where a controlled foreign corporation (CFC)--a foreigncorporation more than 50 percent of the stock of which is owned by one or more U.S. persons who each&nb...
Treating a Stock Transfer as an Asset Transfer under Sec. 336(e)
November 28, 2008 - Volume 2 Issue 318 Print Report
Sec. 336(e) was enacted some 22 years ago, in The Tax Reform Act of 1986 (P.L. 99-514), in connection with the repeal, in that Act, of the so-called"Gene...
H.R. 7300 Is Premised on "Separation of Powers"
November 26, 2008 - Volume 2 Issue 317 Print Report
Sec. 382(a) of the Internal Revenue Code is designed to inhibit a practice, referred to pejoratively, as"trafficking" in net operating losses (NOLs)...
Can An Acquirer's NOLs Offset a Target's Profits?
November 25, 2008 - Volume 2 Issue 316 Print Report
Many companies, particularly in the environment in which we currentlyfind ourselves,are in possession of copiousnet operating losses (NOLs) which...
Requiem for Notice 2008-83
November 24, 2008 - Bulletin Print Report
Where a "loss" corporation experiences an "ownership change", the amount of taxable income, for any taxable year ending after the date of the ow...
I.R.S. Issues Regulations Regarding "Outbound" Reorganizations
November 24, 2008 - Volume 2 Issue 315 Print Report
Where a domestic corporation acquires the properties of another domestic corporation in a transactionwhich qualifies as a reorganization--for example, in...
Berkshire Hathaway Takes A Stake in Goldman Sachs
November 21, 2008 - Volume 2 Issue 314 Print Report
Goldman Sachs (GS) recently announced that it had reached an agreement with Berkshire Hathaway (BH) in connection withwhich GS will issue to BH50,000 sh...
Gannett Is a Unitary Business
November 20, 2008 - Bulletin Print Report
In 1995, Gannett (G) purchased the stock of Multimedia, Inc. (MM). G immediately sold off MM's entertainment and security alarm businesses but chose not to sell its...
Taxes and Debt Swaps
November 20, 2008 - Volume 2 Issue 313 Print Report
It seems inevitable, as the credit crisis moves into new stages, that many debtors will be seeking to refinance outstanding indebtedness that, under current conditi...
The Investment Company Rules and REIT Formations
November 19, 2008 - Volume 2 Issue 312 Print Report
When property is transferred to a corporation in exchange for stock in such corporation, the exchange will be tax-free to the transferors (even though the value of...
Capital Contributions Can Affect NOL Usage
November 18, 2008 - Volume 2 Issue 311 Print Report
Sec. 382(a) of the Internal Revenue Code provides that the taxable income of a "new loss corporation", (1) for a taxable year follow...
Fannie and Freddie Establish a Valuation Allowance
November 17, 2008 - Bulletin Print Report
The third quarter earnings reports for both Fannie Mae and Freddie Mac embody massive non-cash charges resulting, primarily, from the establishment, by each such entity, of a substa...
MLPs and Tax-Exempt Organizations
November 17, 2008 - Volume 2 Issue 310 Print Report
Sec. 7704(a) of the Internal Revenue Code provides, as a general rule, that a publicly-traded partnership (PTP or MLP) "shall be treated as a corporation"...
I.R.S.'s Views Regarding The Auction Rate Securities Settlement
November 14, 2008 - Volume 2 Issue 309 Print Report
As many investors now know all too well, an auction rate security (ARS) is a security in which the payment rate is reset periodically pursuant to an auction rate se...
JPM's Unusual "Capital Raise"
November 13, 2008 - Bulletin Print Report
A parent company's share of the earnings of a subsidiary is included in consolidated earnings simply by inclusion of the subsidiary in the consolidated financial st...
Exelon/NRG--Are Two Steps Sufficient?
November 13, 2008 - Volume 2 Issue 308 Print Report
Exelon Corp. (EXC) recently announced thatit will launch, through a newly-created subsidiary (EX), an exchange offer for all of the outstanding shares of NRG...
HLTH's Buyback and NOLs
November 12, 2008 - Volume 2 Issue 307 Print Report
HLTH Corp. recently announced a massive stock buyback as an alternative to, and in lieu of, its planned merger, subsequently cancelled, with its 84 percent owned subsidia...
Taxpayer Denied "Trader" Status
November 11, 2008 - Volume 2 Issue 306 Print Report
There are any number of benefits associated with being designated as a trader (as opposed to an investor ) with respect to a taxpayer's activities...
Barring "Sidewise" Attribution
November 10, 2008 - Volume 2 Issue 305 Print Report
A corporation seekingto avail itself ofthe myriadtax advantages of Real Estate Investment Trust (REIT) status will not be successful unless, among...
Stock Distributions by REITs Can Be "Dividends"
November 7, 2008 - Volume 2 Issue 304 Print Report
Sec. 857(b)(1 ) of the Internal Revenue Code imposes, for each taxable year, a tax on a real estate investment trust's (REIT) taxable income. However, unlike...
CFCs and Partnerships--Ruling Breaks New Ground
November 6, 2008 - Volume 2 Issue 303 Print Report
A "U.S. shareholder" of a controlled foreign corporation (CFC) is required to include in gross income such U.S. shareholder's share of the CFC's "att...
A Guide to Pension Accounting
November 5, 2008 - Volume 2 Issue 302 Print Report
With the market in the doldrums investors have turned their attention to the vagaries of pension accounting on the theory that a declinein the value of pensio...
WFC Alters Terms of Merger With WB
November 4, 2008 - Bulletin Print Report
The S-4 recently filed by Wells Fargo (WFC) in connection with its acquisition of Wachovia (WB) reveals a change in the structure of the business combination. Originally,...
TARP Warrants Constitute Permanent Equity
November 4, 2008 - Bulletin Print Report
The warrants that the Treasury Department (TD) is purchasing in connection with the CPP portion of TARP have a 10 year term and are immediately exercisable. The TD will a...
I.R.S. Will Not Rigorously Apply the "AHYDO" Rules
November 4, 2008 - Volume 2 Issue 301 Print Report
Where a debt instrument is classified as an "Applicable High Yield Discount Obligation" (AHYDO), the issuer will be stripped of its ability to deduct the...
A Change in Plans--BAC's Acquisition of MER May Be Taxable
November 3, 2008 - Volume 2 Issue 300 Print Report
Bank of America (BAC) has gone to some lengths to insure that its pending acquisition of Merrill Lynch (MER) will constitute a tax-free reorganization. However, if...
On Target?
October 31, 2008 - Bulletin Print Report
We read with great interest the plan formulated by Pershing Square LLP with respect to the restructuring of Target Corp. (TGT). The plan involves a strategy that we...
Fannie Mae's DTA Will Be Eliminated
October 31, 2008 - Volume 2 Issue 299 Print Report
It comes as no surprise that Fannie Mae (FNM) announced, on October 29, 2008, its intention to "take" a valuation allowance against its deferred tax asset (DTA)...
Tax Court Concludes That Redemption Dividends Are Not Deductible
October 30, 2008 - Volume 2 Issue 298 Print Report
One of the more contentious tax issues that has cropped up over the past few years is the question of whether distributions in redemption of stock held by an Employ...
WAMU's Insolvency Does Not Remove It From the WMI Group
October 29, 2008 - Volume 2 Issue 297 Print Report
The issue of who is entitled to the tax refund that will result from the carryback of the losses sustained by Washington Mutual Bank (WAMU) in connection with the t...
PNC/NCC - Big Profits in RBILs
October 28, 2008 - Bulletin Print Report
The PNC Financial Services Group, Inc. (PNC) and National City Corp. (NCC) signed a definitive merger agreement for PNC to acquire NCC for some $2.23/share. NCC sha...
Short Sales and Wash Sales
October 28, 2008 - Volume 2 Issue 296 Print Report
The well-known and universally feared wash sale rule, found in Sec. 1091(a) of the tax code,disallows as a deduction (under Sec. 165))any...
Will the Liquidation of a "SPAC" Produce Capital Gains?
October 27, 2008 - Volume 2 Issue 295 Print Report
During the bull market that has now so unceremoniously come to ajarring halt, a new type of corporation appeared on the investment scene and, for a time, thes...
Is Stock Held By A Voting Trust "Owned" By The Settlor?
October 24, 2008 - Volume 2 Issue 294 Print Report
It goes without saying that many important tax determinations turn on the issue of who "owns" a share of stock. For example, the ability to file a consoli...
Marriott is Denied A Loss Deduction
October 23, 2008 - Volume 2 Issue 293 Print Report
In 1994, Marriott International, Inc. (M)found itselfin need of some tax deductions and entered into a transaction, the principal element of which was a...
Analyzing OMX's Tax Profile
October 22, 2008 - Volume 2 Issue 292 Print Report
OfficeMax, Inc. (OMX) is paying "cash taxes" each year yet is reporting, at the same time, a substantial amount of "credit carryforwards" that,...
More Tier 1 Capital News from the Fed
October 21, 2008 - Bulletin Print Report
Over the past few weeks, the Fed has taken some "heroic" measures to bolster the Tier 1 Capital ratios of its constituents. We have written about the first two initiatives...
Options and the Wash Sale Rules
October 21, 2008 - Volume 2 Issue 291 Print Report
The wash sale rules are, in broad outline, very well known to most investors and traders. However, there are certainintricacies that are not nearlyas we...
The Fed Bolsters Bank Capital
October 20, 2008 - Volume 2 Issue 290 Print Report
One of the provisions of The Emergency Economic Stabilization Act of 2008 (EESA) is designed to address the hardships faced by banks who invested in the preferred s...
Can Merger Arbitrage Be Used To Convert The "Character" of Gain?
October 17, 2008 - Volume 2 Issue 289 Print Report
Merger arbitrage, in the best of times,is a difficult business. Successful practitioners of this craft must be able to predict the likely outcome of a propose...
IVGN and ABI Amend Their Merger Agreement
October 16, 2008 - Volume 2 Issue 288 Print Report
Invitrogen Corp. (IVGN) and Applied Biosystems, Inc. (ABI) announced, on October 15, 2008,an amendment to their pending merger agreement. Under the prior term...
Valuing Liabilities With Credit Enhancement/"Defensive" Intangibles
October 15, 2008 - Volume 2 Issue 287 Print Report
Statement of Financial Accounting Standards(SFAS)No. 159, The Fair Value Option for Financial Assets and Financial Liabilities , hase...
Wells Fargo and Wachovia--What The Merger Agreement Reveals
October 14, 2008 - Volume 2 Issue 286 Print Report
The merger agreement,pursuant to the terms ofwhich Wachovia Corp. (WB) will be acquired by Wells Fargo & Co. (WFC), reveals some interesting informa...
Who Is Entitled to WAMU's Refund?
October 14, 2008 - Volume 2 Issue 285 Print Report
Ordinarily, thecommon parent of a consolidated tax returngroup (in this case Washington Mutual, Inc. or WMI) for any consolidated return year is th...
Precision Drilling Wins The Battle for Grey Wolf
October 13, 2008 - Volume 2 Issue 284 Print Report
Precision Drilling Trust (PDS),a Canadian mutual fund trust,has reacheda definitive agreement with Grey Wolf, Inc. (GW) in connection with which t...
NDS Group plc Is Going Private
October 10, 2008 - Volume 2 Issue 283 Print Report
NDS Group plc (NNDS) is largely owned by News Corporation (NWS). The latter owns all 42 million sharesof the former's Class B (high vote) stockwith the result...
Tax-Exempt Money Market Funds Get A Reprieve
October 8, 2008 - Volume 2 Issue 281 Print Report
A corporation shall be considered a Regulated Investment Company (RIC) with the result that itwill beentitled to reduce its taxable income by the divide...
Government Guarantees Will Not Imperil Variable Annuity Contracts
October 8, 2008 - Volume 2 Issue 282 Print Report
Once again, the I.R.S. is providing relief from certain untoward tax consequences that might otherwise result from the Treasury Department's extraordinary efforts t...
TY's "In-Kind" Redemption Should Be Tax-Efficient
October 8, 2008 - Volume 2 Issue 280 Print Report
Tri-Continental Corporation (TY) is a closed-end management investment company. Recently, it announced a settlement with a shareholder group whereby the members of...
Deducting Restitution Payments
October 7, 2008 - Volume 2 Issue 279 Print Report
In LTR 200834016, May 20, 2008, the taxpayer (T) was a physician who practiced medicine through his professional corporation, an 'S' corporation. T was indicted for...
Determining Fair Value in "Inactive" Markets
October 6, 2008 - Volume 2 Issue 278 Print Report
FASB has issued FSP FAS 157-d, a pronouncement of immense importance in light of current market conditions, which has as its objective the "clarification"...
I.R.S. Permits Increased Access To Funds Accumulated Abroad
October 6, 2008 - Volume 2 Issue 277 Print Report
The I.R.S. istaking actionto ease the credit crunch bypermitting U.S. corporations to access earnings accumulated by their foreign subsidiaries wi...
Tax Provisions of the "Bailout" Legislation
October 3, 2008 - Volume 2 Issue 276 Print Report
The Emergency Economic Stimulus Act of 2008, popularly known as the "bailout" legislation, contains some tax provisions that will benefit some taxpayers a...
PG/SJM--Assessing The Impact of the Anti-Morris Trust Rules
October 2, 2008 - Volume 2 Issue 275 Print Report
Procter & Gamble (PG) and J.M. Smucker Co. (SJM) will be engaging (for the second time in the past six years)in a "reverse Morris Trust" transacti...
S.E.C. and I.R.S. Issue Ameliorative Guidance
October 1, 2008 - Volume 2 Issue 274 Print Report
The S.E.C. and FASB took the extraordinary step of issuing, jointly, guidance with respect to the application of SFAS No. 157, Fair Value Measurements , in...
Spread the Word: Acquired NOLs Are More Valuable Than Ever
October 1, 2008 - Volume 2 Issue 273 Print Report
It has been five years since the I.R.S. issued a pronouncement, Notice 2003-65, I.R.B. 2003-40 (September 12, 2003), that had the effect of increasing the value, so...
Calculating Gain On A Deferred Payment Sale
September 30, 2008 - Volume 2 Issue 272 Print Report
Assume a taxpayer owns a parcel of real estate and enters into a contract for the sale of such realty for an ascertainable amount. The buyer remits a down payment, repres...
Lehman's Bankruptcy Will Not Adversely Affect Stock Lenders
September 29, 2008 - Volume 2 Issue 271 Print Report
The Internal Revenue Servicehas taken decisivesteps to insure that taxpayers who loaned stock or securities to Lehman Brothers, Inc. (LB) will not suffe...
BAC/MER: A Reorganization Is Intended
September 26, 2008 - Volume 2 Issue 270 Print Report
In contrast to the manner in which the JP Morgan Chase/Bear Stearns deal was carried out, the acquisition by Bank of America (BAC) of Merrill Lynch (MER) is intende...
The Fed Proposes To Change The Calculation of Tier 1 Capital
September 25, 2008 - Volume 2 Issue 269 Print Report
Recently, the Federal Reserve Board requested public comments on an interagency notice of proposed rulemaking that would alter the manner in which a banking organiz...
Can Income Be Accelerated?
September 24, 2008 - Volume 2 Issue 268 Print Report
Although it is generally preferable to defer reporting income for tax purposes, certain taxpayers, in exigent circumstances, will seek to do the exact opposite: The...
Mr. Ergen's GRAT
September 23, 2008 - Volume 2 Issue 267 Print Report
Mr. Charles W. Ergen has, a recently filed Form 4 reveals, transferred some 75 million Class B common shares of DISH to a trust for the benefit of his children. The...
SJM's "Extraordinary" Dividend
September 22, 2008 - Volume 2 Issue 266 Print Report
In connection with the acquisition of Folgers Coffee Company (FCC)by JM Smucker Company(SJM), the latter has announced the payment of a $5 special divid...
Post-Acquisition Spin-Offs Can Be Tax-Free
September 19, 2008 - Volume 2 Issue 265 Print Report
What, if any, tax rules operate to discourage a spin-off which closely follows an acquisition of the distributing corporation's stock? The onepotential impedi...
Settlement of "Equity Forward" Is a Non-Recognition Event
September 18, 2008 - Volume 2 Issue 264 Print Report
Many companies have chosento repurchase their shares bymeans of "equity forward" contracts. InCCA 200832002, April 23, 2008, A Corporati...
FASB Proposes Changes to the EPS Calculation
September 17, 2008 - Volume 2 Issue 263 Print Report
The Financial Accounting Standards Board (FASB) is proposing changes to the manner in which earnings per share (EPS)is calculated. The vehicle for the changes...
Dissecting Met Life's Split-Off of RGA
September 16, 2008 - Volume 2 Issue 262 Print Report
Met Life's (M) "split-off" of Reinsurance Group of America (RGA) is one of the most highly engineered transactions we have ever encountered. The private l...
Discovery Becomes a Pure Play Programmer
September 15, 2008 - Volume 2 Issue 261 Print Report
Discovery Holding Company (DHC) was, several years ago, spun-off from Liberty Media. DHC is now undertaking its own spin-off in conjunction with a series of re-stru...
Involuntary Conversions
September 12, 2008 - Volume 2 Issue 260 Print Report
When property is "involuntarily converted" in one of certain enumerated ways specified in Sec. 1033the tax code, the taxpayer can elect to defer the...
HOV's Tax "Poison Pill"
September 11, 2008 - Volume 2 Issue 259 Print Report
Hovnanian Enterprises, Inc. (HOV) announced, on August 4, 2008, that its Board of Directors has adopted a "shareholder rights" plan but not for the usual...
Deposits vs. Advance Payments
September 10, 2008 - Volume 2 Issue 258 Print Report
One of the most difficultdeterminations a tax accountant is called upon to make is whether a sum of money received by a taxpayer is properly characterized as...
The Fannie and Freddie "Bail-Out" Has A Tax Component
September 9, 2008 - Volume 2 Issue 257 Print Report
In addition to all of their other woes, Fannie Mae and Freddie Mac are, almost certainly, "loss corporations" for Federal income tax purposes. A loss corp...
Senators Seek to "Punish" Investors in Certain Commodities
September 9, 2008 - Volume 2 Issue 256 Print Report
On the dubious theory that the startling increase in oil prices (which, of late, certainlyseems to have abated) is caused, at least in part, by persons w...
Carolina Group Post-Mortem
September 8, 2008 - Volume 2 Issue 255 Print Report
The private letter ruling that was issued to Loews (L) in connection with its split-off of Lorillard (LO) was recently released by the I.R.S. for public consumption....
Can Idearc Repurchase Its Debt?
September 5, 2008 - Volume 2 Issue 254 Print Report
Idearc, Inc., (I)the exclusive publisher of Verizon's yellow and white pages, was spun-off from Verizon (V), in November, 2006. The spin-off featured a debt f...
Liberty Media Will Redeem Some Tracking Stock
September 4, 2008 - Volume 2 Issue 253 Print Report
Liberty Media Corporation (L) announced on September 3, 2008 that its board of directors has authorized its management to "proceed with thedevelopment of...
Allscripts Update
September 3, 2008 - Volume 2 Issue 252 Print Report
Allscripts Healthcare Solutions, Inc. (A) is inching closer towards completing its transformative deal with Misys plc (M). On September 22, 2008, the Ashareho...
The Lessons of Thor Power Tool Resonate In a Recession
September 2, 2008 - Volume 2 Issue 251 Print Report
Over the course of a recession corporate inventories tend to accumulate, particularly at companies that were unsuccessful in accurately forecasting the (depressed)...
Home Depot Denied a Refund of Indiana Sales Taxes
August 29, 2008 - Volume 2 Issue 250 Print Report
Home Depot, Inc.(HD)does business in Indiana. It offers its customers the option of purchasing merchandise with "private label" credit cards....
When Vested Shares Become Non-Vested
August 28, 2008 - Volume 2 Issue 249 Print Report
In Rev. Rul. 2007-49, 2007-31, I.R.B. 237, a group of investors formed a corporation (X). In exchange for Mr. A's agreement to perform services on behalf of X, X,...
Fording/Teck: Exit Stage Left?
August 27, 2008 - Volume 2 Issue 248 Print Report
Fording Canadian Coal Trust (FDG), an unincorporated,open-ended "mutual fund trust", and Teck Cominco Ltd. (TCK) have entered into a "plan of a...
Investor Denied Deductions for "Seminar" Expenses
August 26, 2008 - Volume 2 Issue 247 Print Report
Under Sec. 212(1) of the Internal Revenue Code, an individual is allowed a deduction for all of the ordinary and necessary expenses paid or incurred during the taxa...
Taxing Interest and Dividend Arrearages
August 25, 2008 - Volume 2 Issue 246 Print Report
Where debtsecurities with interestarrearagesorcumulativepreferred stock with accumulated dividends are purchased, the tax treatment of...
I.R.S. Issues New Rules Regarding Amortization of "Start-Up" Costs
August 22, 2008 - Volume 2 Issue 245 Print Report
Sec. 162(a) of the Internal Revenue Code provides that there shall be allowed as a deduction all of the "ordinary and necessary" expenses paid or incurred durin...
How the "Expansion Doctrine" Facilitates CY's Spin-Off of SPWR
August 21, 2008 - Volume 2 Issue 244 Print Report
LTR 200830005, April 16, 2008,permitsthe shareholders of acorporation that had acquired control of another corporation in a taxable transaction wi...
Deducting an MBA Candidate's Education Expenses
August 20, 2008 - Volume 2 Issue 242 Print Report
Can a candidate for a Masters of Business Administration (MBA) degree deduct, for Federal income tax purposes,her educational expenses? This is a question that...
Will the "Active Financing Exception" Be Allowed to Expire?
August 20, 2008 - Volume 2 Issue 243 Print Report
General Electric's (GE) effective tax rate, for the year ended December 31, 2007, was only 15.5 percent. The statutory rate, of course, is 35 percent. Virtually all...
Newsday Post-Mortem
August 19, 2008 - Volume 2 Issue 241 Print Report
Tribune Company (TRB) is an 'S' corporation. Its 'S' corporation election filed on March 14, 2008became effective on January 1, 2008. Sec. 1363(a) provides that &qu...
What Is a Deferred Tax Asset?
August 18, 2008 - Volume 2 Issue 240 Print Report
It is well-known that, in light of their different goals and objectives, income tax accounting and financial accountingtreat, in many cases,identical it...
Daxor's Unusual Tax Status
August 16, 2008 - Volume 2 Issue 239 Print Report
The July 21edition of Barrons , in Shirley Lazo's Speaking of Dividends column, discusses the recent announcement by Daxor (DXR) of its intention t...
Teva's Acquisition of Barr Will Constitute a Reorganization
August 15, 2008 - Volume 2 Issue 238 Print Report
Teva Pharmaceutical Industries, Ltd. (T) and Barr Pharamceuticals, Inc. (B) have entered into a definitive agreement pursuant to which T, a foreign corporation, will acqu...
"RMA" Accounts and Estate and Gift Taxes
August 14, 2008 - Volume 2 Issue 237 Print Report
Rev. Rul. 2008-35 tackles the issue of whether a taxpayer a portion of whose assets are held in a Restricted Management Account (RMA) at a bankmay, in li...
NYMEX--Is There a Case for Capital Gains?
August 13, 2008 - Volume 2 Issue 236 Print Report
The merger of NYMEX with and into a subsidiary of CME, a transaction intended to qualify as a reorganization under Sec. 368(a)(1)(A), has run into some turbulence fr...
Deducting Mortgage Interest
August 13, 2008 - Volume 2 Issue 235 Print Report
Sec. 163(a) of the Internal Revenue Code provides, generally, that there shall be allowed as a deduction all interest paid or accrued within the taxable year on indebtedn...
Tax Court Rejects I.R.S. Attempt to Find "Constructive" Dividend
August 12, 2008 - Volume 2 Issue 234 Print Report
Where a corporation makes a distribution of property to one or more of its shareholders "with respect to its stock", the distribution will be included in the re...
The "Open Transaction" Doctrine Lives
August 11, 2008 - Volume 2 Issue 233 Print Report
The I.R.S. may well have to pay out a large number of tax refunds as a result of a decision rendered by the United States Court of Federal Claims in a case entitled F...
Ashland/Hercules: The Stock Is Taxable
August 9, 2008 - Volume 2 Issue 232 Print Report
Recently, the boards of directorsof Ashland, Inc. (A) and Hercules, Inc. (H) reached an agreement with respect to a transaction in which A would acquire all of the...
How to Disqualify a Pension Plan
August 8, 2008 - Volume 2 Issue 231 Print Report
It has been reported that financial institutions have been eyeing underfunded,"frozen",corporate pension plans. The transaction that has...
Accounting for "Rebates"
August 7, 2008 - Volume 2 Issue 230 Print Report
In Chief Counsel Advice Memorandum (CCA) 200826006, March 12, 2008, the taxpayer (T) was a retailer of consumer products which had adopted a "cash rebate program&quo...
PCH Will Be Blazing New Spin-Off Trails
August 6, 2008 - Volume 2 Issue 229 Print Report
Potlatch Corporation (PCH), a real estate investment trust (REIT), recently announced that its Board of Directors had approved a plan pursuant to which PCH will spi...
BMY/IMCL--Time Is Of The Essence
August 5, 2008 - Volume 2 Issue 228 Print Report
Bristol-Myers Squibb Company (BMY) recently announced a proposal in which it seeks to enter into an agreement to acquire ImClone Systems, Inc. (IMCL)for $60 p...
ICGE's "Hidden" Tax Asset
August 4, 2008 - Volume 2 Issue 227 Print Report
Internet Capital Group, Inc. (ICGE) is a company which both builds and acquires internet software and service companies. ICGE refers to these companies as its "...
When Is Income "Constructively" Received?
August 2, 2008 - Volume 2 Issue 226 Print Report
Reg. Sec. 1.451-1(a) provides that gains, profits, and income are to be included in gross income for the taxable year in which they are eitheractually or...
Can "Retainer Fees" Be Deducted?
August 1, 2008 - Volume 2 Issue 225 Print Report
Frequently, corporations are required, in order to secure the services of a professional, to pay such professional a "retainer fee". In some cases, the fee...
The Limits of the "Claim of Right" Rule
July 31, 2008 - Volume 2 Issue 224 Print Report
During the years 1973 through 1981, Texaco, Inc. engaged insales of crude petroleum and refined petroleum products at prices that exceeded the price controls set by...
Deducting Expenses Incurred in a "Private Equity" Transaction
July 30, 2008 - Volume 2 Issue 223 Print Report
LTR 200830009, April 11, 2008 considers certain tax consequences associated with a "typical" private equity transaction. The conclusions the ruling reache...
"Peripheral" Oil and Gas Income Constitutes Qualifying Income
July 29, 2008 - Volume 2 Issue 222 Print Report
In the Revenue Act of 1987 (P.L. 100-203), Congress passed provisions designed to prevent the erosion of the corporate tax base. During the years leading up to the enactm...
Some Investment Interest Is Not An Itemized Deduction
July 28, 2008 - Volume 2 Issue 221 Print Report
Rev. Rul. 2008-12, 2008-10, I.R.B. 520, addressed the case of a taxpayer (LP)who was a partner in a partnership (perhaps a hedge fund) that is engaged in the trade...
A REIT Must Earn "Rents From Real Property"
July 26, 2008 - Volume 2 Issue 220 Print Report
In order for a Real Estate Investment Trust (REIT) to preserve its status as such, substantially all of its gross income must be derived from certain sources, most n...
BAC Will Reap the Benefits of "Purchase Accounting"
July 25, 2008 - Volume 2 Issue 219 Print Report
The acquisition of Countrywide (C) by Bank of America Corp.(B) was recently completed and preliminary details regarding the accounting for this transaction--w...
Fund of Fund's Management Fees Are "Sec. 212" Expenses
July 24, 2008 - Volume 2 Issue 218 Print Report
Rev. Rul. 2008-39 addresses the tax treatment of management fees paid by a partnership--popularly known as a "fund of funds"--which is, itself, a partner in one...
New Regulations Encourage Foreign Leasing Activity
July 23, 2008 - Volume 2 Issue 217 Print Report
In order to prevent undue deferral of U.S. taxeswith respect toforeign source income the Internal Revenue Code provides thata "United States shareh...
Navigating the 'S' Corporation Distribution Rules
July 22, 2008 - Volume 2 Issue 216 Print Report
When a C corporation seeks toelectto be taxed as a Real Estate Investment Trust (REIT) it must, among other things, rid itself of its earnings and profit...
Cleveland-Cliffs/Alpha Natural Resources---The "72% Solution"
July 21, 2008 - Volume 2 Issue 215 Print Report
On July 16, 2008, Cleveland-Cliffs, Inc. (CLF) and Alpha Natural Resources, Inc. (ANR) announced that each suchentity's board of directors had approved a defi...
Converting Capital Gain Into Dividend Income
July 19, 2008 - Volume 2 Issue 214 Print Report
When a corporation sells assets to another corporation, it is often a matter of indifference to the seller whether, in cases where the deal has to be financed, it receive...
Supreme Court Upholds Florida's Imposition of Stamp Taxes
July 18, 2008 - Volume 2 Issue 213 Print Report
The Bankruptcy Code provides a stamp tax exemption for any asset transfer under a plan confirmed under Chapter 11 of the Bankruptcy Code . At issue in a case whic...
FASB's Plan Will Bloat Balance Sheets
July 17, 2008 - Volume 2 Issue 212 Print Report
The Financial Accounting Standards Board (FASB) has signaled its intention to revise two important accounting pronouncements for the express purpose of making these...
InBev's Interest Expense--Deductible in the U.S.?
July 16, 2008 - Volume 2 Issue 211 Print Report
The Wall Street Journal for July 10, 2008 ran an article in its regular Breaking Views column regarding an interesting, tax-oriented, aspect of the pote...
Shell Oil's "Double Dipping" Strategy Pays Off
July 15, 2008 - Volume 2 Issue 210 Print Report
In the early '90s, with (if you can imagine it) oil prices severely depressed, many integrated oil companies were holding properties the market value of which was substan...
EK's Stock Repurchase Funded by Tax Refund
July 14, 2008 - Volume 2 Issue 209 Print Report
On June 24, 2008, Eastman Kodak Company (EK) announced that its Board of Directors had authorized a stock repurchase program totaling as much as $1 billion of the company...
I.R.S. Clamps Down on "Effective" Repatriations of Foreign Earnings
July 12, 2008 - Volume 2 Issue 208 Print Report
For the second time since early June, 2008 the I.R.S. has taken decisivesteps to prevent what it obviously considers one of the most objectionable tax outcomes in the...
How Will SJM's "Special Dividend" Be Taxed?
July 11, 2008 - Volume 2 Issue 207 Print Report
Procter & Gamble (PG) and J.M. Smucker Company (SJM), as we previously reported are teaming up (See The Willens Report,Student Loan Forgiveness Need Not Give Rise to Income
July 10, 2008 - Volume 2 Issue 206 Print Report
Under Sec. 61(a)(12) of the Internal Revenue Code, gross income includes incomefrom the discharge of indebtedness. However, certain exceptions to this general rule...
Has The Service Taken Undue Liberties With the Wash Sale Rule?
July 9, 2008 - Volume 2 Issue 205 Print Report
Sec. 1091(a) provides that in the case of any loss claimed to have been sustained from any sale or other disposition of shares of stock or securities where it appears tha...
Digimarc's "Two-Step"--How Will the Distribution Be Taxed?
July 8, 2008 - Volume 2 Issue 204 Print Report
Digimarc Corporation (D) is engaged in two businesses; the "secure ID" business and the "digital watermarking" business. L-1 Identity Solutions, Inc....
Gain From Sale of "CO2 Emission Allowances" Is Not "FPHCI"
July 7, 2008 - Volume 2 Issue 203 Print Report
Sec. 951 of the Internal Revenue Code requires a "U.S. shareholder" of a Controlled Foreign Corporation (CFC) to include in its gross income its pro-rata share...
How To Handle Restricted Stock and Options In A Spin-Off
July 6, 2008 - Volume 2 Issue 202 Print Report
In the case of a spin-off, ordinarily a whollytax-free transaction, the possibility for income recognition, on the part of both the distributing corporation and the...
KFT's Will Divest Post in A "Reverse Morris Trust"
July 5, 2008 - Volume 2 Issue 201 Print Report
Kraft Foods, Inc. (K) will be divesting its Post Cereals business (P) in a tax-efficient manner. In fact, Kshould be able to retire an amount of itsstock (uti...
FASB Offers New Guidance Regarding EPS Determinations
July 3, 2008 - Volume 2 Issue 200 Print Report
The staff of the Financial Accounting Standards Board (FASB) has, it seems, increased the rate at which accounting guidance is being issued. The latest offering involves...
Can STI Efficiently "Monetize" Its KO Stake
July 2, 2008 - Volume 2 Issue 199 Print Report
For many years, SunTrust Banks, Inc. (STI) has owned shares in Coca-Cola (KO). These shares have been, and continue to be, highly appreciated. Currently, the "unreal...
Can A Former Executive Be An "Outside" Director?
July 1, 2008 - Volume 2 Issue 198 Print Report
The Internal Revenue Code, at Sec. 162(m)(1), imposes certain limitations on a publicly-held corporation's ability to deduct certain compensation paid to a group of emplo...
A REIT Escapes "Prohibited Transaction" Treatment
June 30, 2008 - Volume 2 Issue 197 Print Report
It seems hard to believe, I know, but the Internal Revenue Code actually imposes, with respect to certain highlyobjectionable transactions, a 100 percent tax. For e...
Adding A "Liquidity Facility" to ARPS
June 29, 2008 - Volume 2 Issue 196 Print Report
The I.R.S. has recentlyobserved that "...in response to recent auction failures, issuers and third parties mayseek to add liquidity facilities to auction...
A Utility is Found to Have Changed Its "Method of Accounting"
June 28, 2008 - Volume 2 Issue 195 Print Report
Rev. Rul. 2008-30 addresses the case of a regulated public utility (U) that operates and maintains sewer lines and sewerage disposal plants. U charges a "customer co...
Will MasterCard's Payments to Amex Be Deductible?
June 27, 2008 - Volume 2 Issue 194 Print Report
MasterCard Incorporated (M) announced, on June 25, 2008, that it had reached an agreement to settle its outstanding litigation with American Express (A). The form of the...
Index Product Avoids "FIRPTA" Sanctions
June 26, 2008 - Volume 2 Issue 193 Print Report
A foreign person's investment in United States real property is robbed of some of its allure by the specter of income taxes. Thus, under Sec. 897(a) of the Internal Reven...
New Jersey's "Throw Out" Rule Judged to be Constitutional
June 25, 2008 - Volume 2 Issue 192 Print Report
New Jersey, in common with most States, taxes the income of a multistate enterprise by applying an "allocation factor"tothe group's total income. Th...
Willis Group and HRH Are Planning a Reorganization
June 24, 2008 - Volume 2 Issue 191 Print Report
Willis Group Holdings Limited (W) and Hilb Rogal & Hobbs (H) recently announced a transaction in which H will be absorbed by W in a transaction that will be structure...
GAP Retires Warrants--Is the Payment Tax Deductible?
June 23, 2008 - Volume 2 Issue 190 Print Report
On June 5, 2008, The Great Atlantic & Pacific Tea Company, Inc. (GAP) announced that it had "settled",for cash amounting to $45.7 million, some 4.657...
Repaying Debt In Connection With a "Leveraged" Spin-Off
June 22, 2008 - Volume 2 Issue 189 Print Report
Where a spin-off (or, for that matter, a split-off) is part of a 'D' reorganization--because the distributing corporation transfers property to the controlled corporation...
Will Goodwill Gain Earned by a REIT Be Qualifying Income?
June 21, 2008 - Volume 2 Issue 188 Print Report
The acquisition of a Real Investment Trust (REIT) almost always takes the form of an asset acquisition. This format enables the buyer to secure a "cost basis" i...
Service Denies Refund of "Erroneously Paid" FICA Taxes
June 20, 2008 - Volume 2 Issue 187 Print Report
The benefits of deferring compensation are well-known. The hope is that these amounts will be includible in gross income in a taxableyear, subsequent to the employe...
How Are Termination Fees Taxed?
June 19, 2008 - Volume 2 Issue 186 Print Report
LTR 2008823012, March 10, 2008, addresses the often-encountered, but surprisingly elusive,question of how termination fees (sometimes known as "break-up"...
FASB Seeks To Improve Loss Contingency Disclosure
June 18, 2008 - Volume 2 Issue 185 Print Report
Many important "users" of financial statements, particularly in uncertaintimes like those in which we nowfind ourselves, have groused that companies...
Will The Celera Split-Off Be Tax-Free?
June 17, 2008 - Volume 2 Issue 184 Print Report
Applera Corp. (A) and Invitrogen Corp. (I) have announced a business combination in which A will be merged with and into a LLC created by I for purposes of the transaction....
Accounting for Sales With A "Right of Return"
June 17, 2008 - Volume 2 Issue 183 Print Report
When an enterprise sells its products but affordsthe buyers a right to returnsuch products,revenue from the sales transaction is to be recognized, for f...
Capital One Is Denied a Tax Benefit
June 16, 2008 - Volume 2 Issue 182 Print Report
Capital One Financial Corporation (CO) owns subsidiaries whose principal business activity is the issuance of credit cards. These subsidiaries are among the largest such...
Combining A PE's Portfolio Companies
June 15, 2008 - Volume 2 Issue 181 Print Report
Many private equity (PE) enterprises in possession, on behalf of their clients, of a stable of portfolio companies, may find that one or more these investments have not &...
Qualifying for Partnership Tax Status
June 14, 2008 - Volume 2 Issue 180 Print Report
In general, a publicly-traded partnership (PTP) is treated, for Federal income tax purposes, as a corporation. See Sec. 7704(a). A PTP, in turn, is defined as a par...
O'Reilly Automotive and CSK's Path to a Business Combination
June 13, 2008 - Volume 2 Issue 179 Print Report
O'Reilly Automotive, Inc. (O) and CSK Auto Corporation (C) are taking steps to implement the merger agreement the parties entered intoon April, 1, 2008. The transac...
Retiring Debt In Connection With a Spin-Off
June 12, 2008 - Volume 2 Issue 178 Print Report
It has become standard operating procedurefor corporations engaging in spin-off transactions to, in addition to accomplishing the corporate business purpose or purp...
FASB Wants Better Disclosure of Credit Default Swaps
June 11, 2008 - Volume 2 Issue 177 Print Report
It ishardly arevelation that the credit derivative market has exploded over the recent past yet, in many (if not most)cases, investors are blissfully&nb...
Selling A Bank Charter
June 10, 2008 - Volume 2 Issue 176 Print Report
Franchises, including bank charters and insurance charters, can be exceedinglyvaluable commodities. Ordinarily, however, the charter, alone, cannot be sold. Instead...
District Court Upends "SILOs"
June 9, 2008 - Volume 2 Issue 175 Print Report
One of the most popular tax shelters of the recent past, the so-called "SILO",was dealt a stunning blow at the hands of the U.S. District Court for the No...
No "Doubtful Collectability" Exception for OID
June 8, 2008 - Volume 2 Issue 174 Print Report
Debt instruments which contain a "pay in kind" (PIK) feature are considered to have been issued with Original Issue Discount (OID). OID is defined, in Sec...
Donating Appreciated Property
June 7, 2008 - Volume 2 Issue 173 Print Report
One of the most widely-recommended tax planningstrategies isthe donation ofappreciated property to an organization to which tax deductible contributions c...
Accounting for Financial Guarantee Insurance Contracts
June 6, 2008 - Volume 2 Issue 172 Print Report
In light of the recentturmoil surrounding the purveyors offinancial guarantee insurance, the Financial Accounting Standards Board (FASB) decided it was high&n...
PG and SJM Team Up Again
June 5, 2008 - Volume 2 Issue 171 Print Report
For the second time in the past six years, theProcter & Gamble Company(PG) and theJ. M. Smucker Company (SJM) will be collaborating on a tax-efficient...
SII and WHQ Are Cutting It Close
June 5, 2008 - Volume 2 Issue 170 Print Report
Smith International, Inc. (SII) and W-H Energy Services, Inc. (WHQ) recently announced a "strategic combination" that will be structured as a "forward"...
What If the Charity Promptly Sells Donated Stock?
June 4, 2008 - Volume 2 Issue 169 Print Report
"...A sale by one person cannot be transformed...into a sale by another (person) by using the latter as a mere conduit through which to pass title..." See <...
MetLife and RGA To Part Company
June 3, 2008 - Volume 2 Issue 168 Print Report
MetLife, Inc. (M) presently owns 51.8 percent of the outstanding common stock of Reinsurance Group of America, Inc. (R). Some 3,000,000 shares of R were purchased by M in...
An ‘S’ Corporation’s “Built-In Gains”
June 3, 2008 - Volume 2 Issue 167 Print Report
An ‘S' corporation that was formerly a C corporation-for example Tribune Corp.-may be taxed on a particular variety of income know as "net recognized built-in...
I.R.S. Eliminates The Utility of “Killer ‘B’s”
June 2, 2008 - Volume 2 Issue 166 Print Report
One of the most difficult tasks a tax adviser is called upon to accomplish is the extraction of earnings from a U.S. corporation's foreign subsidiaries in a "tax-eff...
Clear Channel Communications--A "Public" LBO
June 1, 2008 - Volume 2 Issue 165 Print Report
Clear Channel Communications, Inc. (CCU) recently announced that the company, the sponsors of its long-running LBO, and the financiers of such LBO, had entered into a set...
Waiving Dividends
May 31, 2008 - Volume 2 Issue 164 Print Report
In some cases, a corporationis desirous of increasingits dividend payout but, in order to minimize the drain on the company's resources that such higher divid...
How Is A Foreclosure Taxed?
May 30, 2008 - Volume 2 Issue 163 Print Report
A taxpayer owns real property the acquisition of which was financed, largely, with debt. Assume that the mortgage secures a recourse obligation against the taxpa...
Contributions to Capital Do Not Constitute Gross Income
May 29, 2008 - Volume 2 Issue 162 Print Report
Virtually all "accessions to wealth" over which the taxpayer has "dominion and control" constitute gross income under Sec. 61 of the Internal Revenue...
UBS's Rights Offering--Part II
May 28, 2008 - Volume 2 Issue 161 Print Report
UBS's setbacks in the mortgage securities arena have caused it to visit the marketplace for the purpose of replenishing the capital its mortgage losses have eroded. Its l...
I.R.S. Weighs In On the Credit Crisis
May 27, 2008 - Volume 2 Issue 160 Print Report
The United States shareholders of a Controlled Foreign Corporation (CFC; a foreign corporation more than 50 percent of the voting power or value of the stock of which is...
"Instrument C"--The Verdict Is In
May 26, 2008 - Volume 2 Issue 159 Print Report
The Financial Accounting Standards Board (FASB) has finalized its "guidance" with respect to the accounting for a certain, immensely popular, variety of convert...
Allocating Earnings and Profits In a Spin-Off--Time For a Change?
May 25, 2008 - Volume 2 Issue 158 Print Report
In the case of a spin-off or split-off to which Sec. 355 applies, the Internal Revenue Code (see Sec. 312(h)(1))provides that "proper adjustment" with respe...
I.R.S. Ignores Technical Violation of the Control Requirement
May 24, 2008 - Volume 2 Issue 157 Print Report
Where property is transferred by one or more persons to a corporation in exchange forthe latter'sstock, no gain or loss will be recognized by such transferors...
TWX Announces Details of Its Separation Plan
May 23, 2008 - Volume 2 Issue 155 Print Report
Time Warner, Inc. (TWX) and Time Warner Cable, Inc. (TWC) announced, on May 21, 2008, that their respective boards of directors have approved an agreement that will resul...
Calpine/NRG--Are the NOLs in Peril?
May 23, 2008 - Volume 2 Issue 156 Print Report
NRG Energy, Inc. (N) recently proposed a business combination with Calpine Corp. (C) in connection with which N would acquire each of C's outstanding shares in exchange f...
I.R.S. Endorses Most Types of Post-Reorganization Transfers
May 22, 2008 - Volume 2 Issue 154 Print Report
Where the assets or stock acquired in a potentialreorganizationaretransferred shortly after the reorganization, the issue arises whether such transfer w...
5th Circuit Rejects Short Sale Version of "Son of Boss"
May 21, 2008 - Volume 2 Issue 153 Print Report
After a surprising loss in the District Court in Colorado regarding the efficacy of an "option" Son of Boss transaction, the I.R.S. scored a decisive victory, i...
High Court Upholds Differential Scheme For Taxing Muni Bonds
May 20, 2008 - Volume 2 Issue 152 Print Report
With respect to the taxation of interest on municipal bonds, some States exempt interest on their own bonds from taxes which are, nonetheless, imposedwith respect t...
Reducing Taxes on Timber--The "Farm" Bill Contains A Surprise
May 20, 2008 - Volume 2 Issue 151 Print Report
A "capital gain" is defined, succinctly, as gain from the sale or exchange of a capital asset. Corporations do not often generate capital gai...
How Are Abandoned Shares Treated In A Merger?
May 19, 2008 - Volume 2 Issue 150 Print Report
In order for a merger, or any other "acquisitive" transaction for that matter, to qualify as a tax-free reorganization, both the terms of the specifications (fo...
CVC Goes "Sundancing"
May 18, 2008 - Volume 2 Issue 149 Print Report
On May 7, 2008, Rainbow Media Holdings LLC, a programming subsidiary of Cablevision Systems Corporation (CVC), announced that it had reached an agreement to acquire the&n...
I.R.S. Clarifies Tax Treatment of Medicaid Rebates
May 17, 2008 - Volume 2 Issue 148 Print Report
The I.R.S. has recentlydeveloped anabidinginterest in the manner in which "rebates" are properlycharacterized for federal incometa...
"Stepping" Out Of A Reorganization
May 16, 2008 - Volume 2 Issue 147 Print Report
A corporation's acquisition of the stock of another corporation can qualify as a reorganization under Sec. 368(a)(1)(B) if the stock is acquired in exchange solely for th...
Forming "New Clearwire"
May 15, 2008 - Volume 2 Issue 146 Print Report
Clearwire Corporation (C) and Sprint Nextel Corporation (S) announced, recently, that they have entered into a definitive agreement to combine their "next generation...
Earnings & Profits Not Reduced by Capital Expenditures
May 14, 2008 - Volume 2 Issue 145 Print Report
If a foreign corporation is a Controlled Foreign Corporation (CFC; a foreign corporation more than 50 percent of the voting power or value of the stock of which is owned...
Accounting for Inventories Will Undergo an Overhaul
May 13, 2008 - Volume 2 Issue 144 Print Report
Generally accepted accounting principles (GAAP) normally requires the use of historical cost with respect to inventories and only in one case is a departure from this sta...
Can Sprint Spin-Off Nextel?
May 12, 2008 - Volume 2 Issue 143 Print Report
Sprint Corporation (S) isin the process of evaluatingits options with respect to Nextel Communications (N), its wholly-owned subsidiary, and, apparently, ...
How Does the I.R.S. View Leveraged Partnerships?
May 11, 2008 - Volume 2 Issue 142 Print Report
It seems likely that Tribune's plans for divesting assets will feature, prominently, a tax-saving technique popularlyknown as a "leveraged partnership"...
Qualifying for the "Bankruptcy Exception" Is Never Easy
May 10, 2008 - Volume 2 Issue 141 Print Report
When a "loss corporation" (T)is under the jurisdiction of a court in a "Title 11 or similar case" (a receivership, foreclosure, or similar proce...
Mergers of Mutual Funds--Satisfying "COBE"
May 9, 2008 - Volume 2 Issue 140 Print Report
Requisite to a reorganization is a continuity of business enterprise (COBE) through the issuing corporation under the modified corporate form. See...
What If The "(h)(10)" Subsidiary Is Insolvent?
May 8, 2008 - Volume 2 Issue 139 Print Report
Elections under Sec. 338(h)(10) are frequently made. They are ordinarilybeneficial because the election provides a buyer of corporate stock with acost basis i...
Genesco Will Distribute Finish Line Shares
May 7, 2008 - Volume 2 Issue 138 Print Report
On April 30, 2008, Genesco, Inc.(GCO) announced that its Board of Directors had declared a dividend on its common stock in order to distribute 6,518,971 shares of C...
Preliminary Views on Time Warner Cable
May 6, 2008 - Volume 2 Issue 137 Print Report
Time Warner, Inc. (TWX) has announced its intentionto distribute the stock of its controlled subsidiary, Time Warner Cable, Inc. (TWC) in the near future. No details...
Court Strikes Down "LILO" Tax Shelter
May 5, 2008 - Volume 2 Issue 136 Print Report
One of the more popular tax shelters of the recently concludedtax shelter era, a technique that wasemployed extensively by financial institutions, was the so-...
No Theft at WorldCom
May 4, 2008 - Volume 2 Issue 135 Print Report
Mr. Taghadoss was employed by WorldCom (W) for more than 17 years. During that span, he received stock options which he had exercised on October 31, 2000. He also acquire...
I.R.S. Loses "Son of Boss" Case
May 3, 2008 - Volume 2 Issue 134 Print Report
The I.R.S.'s unblemished record in "Son of Boss" cases came to ascreeching halt in Colorado the other day with its loss in the District Court of Colorado...
The Equity Method of Accounting
May 2, 2008 - Volume 2 Issue 133 Print Report
Where an investment in voting stock gives the investor the power to exercise "significant influence" over the operating and financial policies of the investee,...
Inter-Corporate Dividends Are Lightly Taxed
May 1, 2008 - Volume 2 Issue 132 Print Report
The U.S. tax system is considereda "classical" system. That, however, is merely a euphemism for "double taxation". Corporate income is taxed twi...
REITs Can Satisfy Dividend Requirements With Stock
April 30, 2008 - Volume 2 Issue 131 Print Report
Real Estate Investment Trusts (REITs) are not, contrary to popular belief, statutorily exempt from tax. Theirfavorable taxstatus necessitates the taking...
A "Dealer" Must Have Customers
April 29, 2008 - Volume 2 Issue 130 Print Report
Sec. 475 provides that, in the case of a dealer in securities , the securities held by such dealer must be "marked to market"--treated as ifthey w...
I.R.S.'s New Estate Regulations Reject "Kohler"
April 28, 2008 - Volume 2 Issue 129 Print Report
Sec. 2001 of the Internal Revenue Code imposes a tax on the transfer of the taxable estate of every decedent who is a citizen or resident of the United States. For this p...
Leucadia and Jefferies--What Are They Up To?
April 27, 2008 - Volume 2 Issue 128 Print Report
Leucadia National Corporation (L) and Jefferies Group, Inc. (J) recently announced an unusual transaction in which each corporation will exchange shares of its authorized...
Buying In "Discounted" Debt
April 26, 2008 - Volume 2 Issue 127 Print Report
Many issuers will find that the debt they recently issued is, due to the well-publicized upheavals that the capital markets have undergone, trading at a substantial disco...
Collapsing Chipotle's Classes of Stock
April 25, 2008 - Volume 2 Issue 126 Print Report
Chipotle Mexican Grill, Inc. (CMG) was "split-off" from McDonald's, Inc.(M)in October, 2006. At the time, M owned all ofCMG's Class B stock an...
PDL BioPharma Announces Radical Restructuring
April 24, 2008 - Volume 2 Issue 125 Print Report
PDL BioPharma, Inc. (PDL) announced, on April 10, 2008, that its board of directors had reached two momentous decisions. The board declared a "special cash dividend&...
Captive Insurance
April 23, 2008 - Volume 2 Issue 123 Print Report
Sec. 162 of the Internal Revenue Code provides that there shall be allowed as a deduction all of the "ordinary and necessary" expenses paid or incurred during t...
FNM Gets an Unexpected Windfall
April 23, 2008 - Volume 2 Issue 124 Print Report
On August 7, 2006, the Treasury Department and the Internal Revenue Service published proposed regulations, Prop. Reg. Sec. 1.1221-1(e), under Sec. 1221(a)(4) of the Internal Revenu...
Tribune Will Sell Newsday "Tax Efficiently"
April 22, 2008 - Volume 2 Issue 122 Print Report
It has been reported that Tribune Co. has reached an agreement in principle to "sell" Newsday to News Corp. The "selling price" would be in neighborho...
What Is the "Character" of Fannie Mae's Losses?
April 22, 2008 - Volume 2 Issue 121 Print Report
As of the end of its most recent fiscal year, Fannie Mae (F) was reporting some $12.967 billionof "net deferred tax assets" against which no "valuati...
Are "Sales Rebates" Gross Income?
April 21, 2008 - Volume 2 Issue 120 Print Report
The concept of gross income is exceedingly broad. Such concept encompasses virtually any "accession to wealth", which is clearly realized, andwit...
Cypress and SunPower--Is a Separation Imminent?
April 20, 2008 - Volume 2 Issue 119 Print Report
Cypress Semiconductor Corp. (CY) currently owns some 44.5 million Class B common shares of SunPower Corp. (S). The Class A common stock of S is widely-held and publicly-t...
Disavowing A Covenant Not To Compete--Part 2
April 19, 2008 - Volume 2 Issue 118 Print Report
When a covenant not to compete is entered into in connection with the sale of abusiness (or an interest therein), the sellerwill besaddled with ordinary...
Supreme Court Limits A State's Taxing Authority
April 18, 2008 - Volume 2 Issue 117 Print Report
At issue in a case entitled MeadWestvaco Corp. v. Illinois Department of Revenue _US_(2008) was the ability of the State ofIllinois to tax a portion of the...
Delta and Northwest Will Merge--What About the NOLs?
April 17, 2008 - Volume 2 Issue 116 Print Report
Delta Air Lines, Inc. (D) and Northwest Airlines Corp. (N) haveannounced that they have entered into a merger agreement pursuant to which D will be the issuing corpor...
Quanex Will Engage In a "Bad Morris Trust" Transaction
April 16, 2008 - Volume 2 Issue 114 Print Report
Quanex Corporation (NX) recently announced that its Board of Directors has set April 23, 2008 as both the record date and distribution date for the previously-announced s...
Update on JPM/BSC Deal
April 16, 2008 - Volume 2 Issue 115 Print Report
The S-4 regarding the business combination to be executed by JP Morgan Chase, Inc.(JPM) and Bear Stearns Companies (BSC) was filed with the S.E.C. on Friday, April...
Acquiring Control In Anticipation of a Spin-Off
April 15, 2008 - Volume 2 Issue 113 Print Report
In order fora spin-off to qualify for tax-free status, it is necessary that the distributing corporation (T) be "in control" (within the meaning of S...
"TRS" Can Own Stock in a Corporation That Operates Lodging Facilities
April 14, 2008 - Volume 2 Issue 112 Print Report
In order to qualify for the special tax treatment afforded to Real Estate Investment Trusts (REITs) numerous requirements, regarding the composition of the entity's asset...
I.R.S. Pronouncements Are Entitled to Deference
April 13, 2008 - Volume 2 Issue 111 Print Report
In some cases, Congress will grant, in connection with the enactment of a statute, the I.R.S. broad authority to promulgate rules and regulations for the implementation o...
Novartis and Nestle Strike A Deal For Alcon
April 12, 2008 - Volume 2 Issue 110 Print Report
Novartis International AG (NO), to further strengthen its healthcare portfolio, has reached an agreement with Nestle S.A. (NE) to acquire a 25 percent stake i...
Disavowing A Covenant Not To Compete Is Difficult
April 11, 2008 - Volume 2 Issue 109 Print Report
A taxpayer, Mr. Muskat (M), was the President and controlling shareholder of a corporation (JP) which had beenengaged, since 1933,in a very successfulme...
WaMu's "Capital Raising"--Will Its Losses Be Affected?
April 10, 2008 - Volume 2 Issue 108 Print Report
Washington Mutual, Inc. (WM) recentlyannounced that it has entered into definitive agreements to raise an aggregate $7 billion through a direct sale of "equity...
Accounting for Financial Instruments
April 9, 2008 - Volume 2 Issue 107 Print Report
No accounting issue has received more attention, during the course of the "credit crisis", than the question of how one properly accounts for financial assets a...
A Guarantor's Bad Debt Deduction Must Await "Payment"
April 8, 2008 - Volume 2 Issue 106 Print Report
Sec. 166(a) of the Internal Revenue Code provides that "there shall be allowed as a deduction any debt which becomes wholly worthless within the taxable year".&...
NOL Not Adversely Affected By Capital Contribution
April 7, 2008 - Volume 2 Issue 105 Print Report
When a "loss corporation" experiences an "ownership change", certain limits are placed upon its ability to utilize its net operating losses (NOL). An...
Senate Moves Toward Passage of Stimulus Legislation
April 6, 2008 - Volume 2 Issue 104 Print Report
The Senate is moving rather quickly, on a bipartisan basis,towards the passage of a stimulus bill that is primarilydirectedtowards stabilizing the housi...
NYMEX/CME Group--Measuring Continuity of Interest
April 5, 2008 - Volume 2 Issue 103 Print Report
On March 17, 2008, NYMEX Holdings, Inc. (NMX), entered into an agreement and plan of merger with CME Group, Inc. (CME) pursuant to which NMX will be merged with and into...
UBS's "Rights" Offering
April 4, 2008 - Volume 2 Issue 102 Print Report
UBS AG (UBS), in connection with its "Capital improvement program" (See Form 6-K, dated January 10, 2008),will beforegoing the payment of a cash div...
District Court Shoots Down "Midco" Transaction
April 3, 2008 - Volume 2 Issue 101 Print Report
Apurchasing corporation'sobjective, in the case of a taxable acquisition of another corporation, is (at least from a tax point of view) to secure a cost b...
A "TRS" Can Own A Health Care Facility
April 2, 2008 - Volume 2 Issue 100 Print Report
In order for a corporation to qualify as a Real Estate Investment Trust (REIT), numerous requirements must be satisfied. The most prominent requirements relate to the sou...
Rite Aid Struggles With SFAS No. 109
April 1, 2008 - Volume 2 Issue 99 Print Report
Recently, Rite Aid Corporation (RAD) made a stunning announcement. The company stated that in compliance with Statement of Financial Accounting Standards (SFAS) No. 109,...
Attempting to Read Between the Lines of the S.E.C.'s "157 Letter"
March 31, 2008 - Volume 2 Issue 98 Print Report
In March, 2008, the Division of Corporation Finance (of the S.E.C.) sent an eagerly-anticipated letter to certain public companies (presumably those in the financial serv...
Narrowly Averting PFIC Status
March 31, 2008 - Volume 2 Issue 97 Print Report
One designation which is always best to avoid is that of a "Passive Foreign Investment Company" (PFIC). A PFIC is, at the end of the day, nothing more than ...
Real Estate Intangibles Are Real Estate Assets
March 30, 2008 - Volume 2 Issue 96 Print Report
In order for a corporation (or trust or association) to qualify for the favorable tax treatment afforded Real Estate Investment Trusts (REITs), numerous requirements must...
Termination of Transferee Does Not Derail a "Like Kind" Exchange
March 29, 2008 - Volume 2 Issue 95 Print Report
Sec. 1031(a) of the Internal Revenue Code provides that no gain or loss shall be recognized on the exchange of property held for productive use in a trad...
Can a Successor Continue to Amortize a Predecessor's Deferred Costs?
March 28, 2008 - Volume 2 Issue 94 Print Report
Sec. 59(e) of the Internal Revenue Code provides that any qualified expenditure to which an election applies shall be allowed as a deduction, ratably, over the 10...
Death Knell for "Instrument C"?
March 27, 2008 - Volume 2 Issue 93 Print Report
The Financial Accounting Standards Board (FASB) has decided to issue final guidance with respect to the accounting treatment of a popular security known, at least in acco...
Does Disney Love New York?
March 27, 2008 - Volume 2 Issue 92 Print Report
New York State ("New York" or "the State"), as do most other states, permits or requires related corporations to report (for tax purposes) their resul...
Liberty Alters The Terms Of Its Exchangeable Debentures
March 26, 2008 - Volume 2 Issue 91 Print Report
In theaftermath of its settlement with the I.R.S. regarding the deductibility of interest accruals with respect to its numerous issues of exchangeable debentures (t...
A Tale of Two Spin-Offs
March 25, 2008 - Volume 2 Issue 90 Print Report
Two of the mostprominent corporate separations of the recent past are (i) the distribution by News Corp. (N) of its stock in DirecTV (D), along with some other asse...
Securing A Loss From The Liquidation Of A Subsidiary
March 24, 2008 - Volume 2 Issue 89 Print Report
When a parent liquidates a subsidiary (the subsidiary's assets are distributed to the parent in exchange for, and in complete cancellation andredemption of, the par...
Structure of BSC Deal Will Permit Recognition of Losses
March 23, 2008 - Volume 2 Issue 88 Print Report
It seems abundantly clear that, given the precipitous decline in the price of the stock, most shareholders of The Bear Stearns Companies, Inc. (BSC)are "sittin...
Income From Discharge of Indebtedness
March 22, 2008 - Volume 2 Issue 87 Print Report
Where a taxpayer borrows a sum of money, the proceeds of the borrowing does not constitute gross income because the influx of assets isprecisely offset by the oblig...
FASB Advocates Increased Disclosures About "Plan" Assets
March 21, 2008 - Volume 2 Issue 86 Print Report
The Financial Accounting Standards Board (FASB) has put forth a proposal that would dramatically increase the volume and "quality" of disclosures that an employ...
Can JPM "Use" BSC's Prospective Losses?
March 20, 2008 - Volume 2 Issue 85 Print Report
The proposed transaction, althoughat this point we are still in the dark regarding the structure to be employed, in which JPM will be acquiring BSC, will most likel...
Allscripts Will Pay A Special Cash "Dividend"
March 19, 2008 - Volume 2 Issue 84 Print Report
On March 18, 2008 Allscripts (A) and Misys Plc (M) announced that they had inked a definitive merger agreement. The agreement envisions a multi-step transaction in which...
JPM's "Bargain Purchase" of BSC
March 18, 2008 - Volume 2 Issue 83 Print Report
Even assuming that the reported book value (some $84/share) of The Bear Stearns Companies (BSC)is overstated because substantial asset write-downs have yet to be in...
Applera Corp. Will Effect a Split-Off
March 17, 2008 - Volume 2 Issue 81 Print Report
Applera Corp. (A) has two classes of tracking stock outstanding. One such class was issued to reflect the performance of its "Celera Group" activities. For seve...
IP Will Secure A "Cost Basis" in WY's Assets
March 17, 2008 - Volume 2 Issue 82 Print Report
Many observers believed that Weyerhaeuser (WY), which had announced its intention to explore strategic options with respect to its Containerboard, Packaging, and Recyclin...
Earning Research Credits With Respect To Licensed Property
March 16, 2008 - Volume 2 Issue 80 Print Report
The "Research Credit" has expired but, before too long, Congress will, if past practice is any guide, get around to extending it for at least oneadditiona...
Involuntary Acts Are Not Treated More Favorably Under the Tax Code
March 15, 2008 - Volume 2 Issue 79 Print Report
Certain tax penalties are triggered by acquisitions of control of a corporation and others are activated by dispositions of the stock of a corporation. For example,...
Effective Tax Rates Are Declining--Part 2
March 14, 2008 - Volume 2 Issue 78 Print Report
Two weeks ago, we reviewed the results of a study performed by Mr. Martin A. Sullivan for Tax Notes the results of which were a little unsettling. (SeeThe Wi...
Before Hong Kong Was Part of China
March 13, 2008 - Volume 2 Issue 77 Print Report
A company organized in the United States, New York Guangdong Finance, Inc. (NY), in the early '90s, entered into loan transactions with two, affiliated, foreign corporati...
An Abandoned Security Is A (Wholly) Worthless Security
March 12, 2008 - Volume 2 Issue 76 Print Report
The Internal Revenue Code, within certain specified limits, allows taxpayers to obtain a tax deduction for losses they sustain. Thus, in general, Sec. 165(a) andReg...
Berkshire Hathaway Not Immune To The Charms of The "Cash Rich Split-Off"
March 11, 2008 - Volume 2 Issue 74 Print Report
Berkshire Hathaway, Inc. (BH) has owned for more than five years some 16.3 percent of the stock (1,724,200 shares)of White Mountains Insurance Group, Ltd. (WM). Now t...
What Is "A Foreign Country"?
March 11, 2008 - Volume 2 Issue 75 Print Report
By far, the most frequently litigated tax issue of the recent past concerns the question of whether Antarctica is, for purposes of Sec. 911, a "foreign country"...
Navigating the NOL Survival Rules
March 10, 2008 - Volume 2 Issue 73 Print Report
Congress has always shown a keen interest in preventing what it has referred to, pejoratively, as "trafficking" in Net Operating Losses (NOLs). Accordingl...
Solving the Mystery of the Disappearing Basis
March 9, 2008 - Volume 2 Issue 72 Print Report
Where a shareholder's stock is redeemed by the issuingcorporation, the redemption may be treated as either an "exchange" or as a "distribution"....
Fannie Mae's Deferred Tax Asset
March 8, 2008 - Volume 2 Issue 71 Print Report
Fannie Mae's (F)consolidated balance sheet reflects a "net deferred tax asset" amounting to $12.967 billion. There is much emphasis placed uponF's &...
Raising Capital With "Equity Units" Provides Tax Advantages
March 7, 2008 - Volume 2 Issue 70 Print Report
Included in the package of securities that Ambac Financial Group, Inc. recentlyissued to shore up its depleted capital basewas, in addition to its common stoc...
Genesco and Finish Line Settle Their Differences
March 6, 2008 - Volume 2 Issue 69 Print Report
Genesco, Inc. (G) has entered into a settlement agreement with Finish Line, Inc.(FL; itserstwhile merger partner) and with UBS Securities LLC (UBS; the...
A Step-Up in Basis Is Hard To Come By
March 6, 2008 - Volume 2 Issue 68 Print Report
A buyer's objective, from a tax viewpoint, with respect to an acquisition, is to secure a "cost basis" with respect tothe target's assets. However, when a...
Does Intent Play a Role in Characterizing a Distribution?
March 5, 2008 - Volume 2 Issue 66 Print Report
The tax consequences of distributions of property (within the meaning of Sec. 317(a))by a corporation to its shareholders with respect to its stock is governed by S...
Examining the Tax Treatment of "ETNs"
March 5, 2008 - Volume 2 Issue 67 Print Report
Today, the House Ways & Means Select Revenue Measures Subcommittee will be holding hearings that will be of more than passing interest to a large cohort of Wall Stree...
Liberty Media Settles a Tax Dispute
March 4, 2008 - Volume 2 Issue 65 Print Report
Liberty Media Corp. (L) has, through the years,issued some $4.5 billion of exchangeable debentures . These debentures, which pay onlynominal interest, a...
Effective Tax Rates Are Declining
March 3, 2008 - Volume 2 Issue 64 Print Report
A recent study in Tax Notes (Volume 18, No. 110, March 3, 2008)performed by Mr. Martin A. Sullivan demonstrates, conclusively, that U.S. corporations are r...
Extracting Cash From A Spun-Off Subsidiary
March 3, 2008 - Volume 2 Issue 63 Print Report
Although a spin-off is, invariably, "carried out" for one or more corporate business purposes, some distributing corporations are reluctant to undertake spin-of...
Sprint Nextel Corp. Throws In The Towel
March 2, 2008 - Volume 2 Issue 62 Print Report
Sprint Nextel Corporation's (S)fourth quarter earnings release contained a rather unsettling piece of information. It revealed one of the largest write-offs o...
Parsing the Word "Substantial"
March 1, 2008 - Volume 2 Issue 61 Print Report
Many important tax determinations turn on establishing that an amount or quantity is substantial . For example, a transaction will qualify as a reorga...
HBS Graduate Denied A Tax Deduction For Education Expenses
February 29, 2008 - Volume 2 Issue 60 Print Report
The battle between the I.R.S. and Master of Business Administration (MBA) candidates seeking a tax deduction for the expenses of earning that prestigious degree rag...
Investment Advisory Fees--The I.R.S. Moves To Implement "Knight"
February 28, 2008 - Volume 2 Issue 59 Print Report
Whether a client can deduct, for tax purposes, the fees charged by an investment advisor is, for obvious reasons, an important issuefor readers of The Willens Report....
Changing The Tax Treatment of Cell Phones
February 28, 2008 - Volume 2 Issue 58 Print Report
Although most tangible personal property benefits from the accelerated cost recovery system provided for in Sec. 168 of the tax code (typically, this property is deprecia...
LINTA and NWS Close to Consummating Long-Awaited Split-Off
February 27, 2008 - Volume 2 Issue 57 Print Report
On February 25, 2008 Dow Jones Newswires reported that the Federal Communications Commission (FCC) "gave the green light" to the widely-publicized transaction i...
UAL's Special Distribution--Is It a Dividend?
February 26, 2008 - Volume 2 Issue 56 Print Report
United Airlines (UAL), on January 23, 2008, made a "special distribution" to its shareholders (of record as of January 9, 2008) in the amount of $2.15 per share...
"Disqualified Distributions"
February 25, 2008 - Volume 2 Issue 55 Print Report
Even where a spin-off (or split-off) meets each of the "base" requirements of Sec. 355, things can still go awry if the distribution is made, in substantial part,...
A REIT's Forex Profits Are "Qualifying Income"
February 24, 2008 - Volume 2 Issue 54 Print Report
In order for a Real Estate Investment Trust (REIT) to maintain its tax-favored status (REITs, unlike other corporations, are entitled to a tax deduction for the dividends...
Disgorging "Short Swing" Profits
February 23, 2008 - Volume 2 Issue 52 Print Report
CCA 200808019, November 13, 2007, addresses the case of a taxpayer (T/P) who founded Corporation (C). Shortly after its founding, C engaged in an initial public offering...
Foreign Shareholders Can (Legally) Escape Tax on REIT Distributions
February 23, 2008 - Volume 2 Issue 53 Print Report
The acquisition of a Real Investment Trust (REIT) almost always takes the form of a "forward cash merger". Thus, the target willmerge with and into...
The I.R.S. Throws Down The Gauntlet on Executive Compensation
February 22, 2008 - Volume 2 Issue 51 Print Report
A recently-issued private letter ruling, LTR 200804004, signaled a radicalchange in the I.R.S's position regarding the nature of certain compensation paid to exec...
Tax Benefits From Acquisition Of Corporate Express?
February 21, 2008 - Volume 2 Issue 50 Print Report
Staples, Inc. (S), on February 19, 2008, unveiled a proposal to acquire all of the outstanding shares of Corporate Express NV (C). The all cash proposal, according to S's...
Delta/Northwest: Will The NOLs Be Imperiled?
February 20, 2008 - Volume 2 Issue 49 Print Report
Many hurdles will have to be overcome before a business combination of Delta AirLines, Inc.(D) and Northwest Airlines Corp. (N)can be undertaken. Apparently,...
A Trader's Interest Expense Can Be "Investment Interest"
February 20, 2008 - Volume 2 Issue 48 Print Report
Certain limits are imposed on a non-corporate taxpayer's ability to deduct interest expense. Thus, such a taxpayer is not entitled to a tax deduction for personal int...
Will the Inverness Convertible Preferred Stock Be "Sec. 306" Stock?
February 19, 2008 - Volume 2 Issue 46 Print Report
We now know that the deal in which Inverness Medical Innovations, Inc. (I)will be acquiring Matria Healthcare, Inc. (M) is intended to qualify as a tax-free reorganiz...
Stamps.com Seeks To Protect Its NOL
February 19, 2008 - Volume 2 Issue 47 Print Report
Stamps.com, Inc. (S) has sustained a net operating loss (NOL) which it will use, unless restricted by certain tax law provisions, to offset its future taxable income.&nbs...
Attention to Detail Produces Favorable Tax Outcome
February 18, 2008 - Volume 2 Issue 45 Print Report
One of the failings. in the view of many observers, of our tax system, in addition to its mind-numbing complexity, is the fact that, in many cases, the manner in which a...
Auction-Rate Securities Ruling Proves Prophetic
February 17, 2008 - Volume 2 Issue 44 Print Report
In 1990, in Rev. Rul. 90-27, 1990-1 C.B. 50, the I.R.S. issued a ruling regarding certain tax aspects of "auction-rate" preferred stock. At the time, the...
Substance Trumps Form When It Comes to Like Kind Exchanges
February 16, 2008 - Volume 2 Issue 42 Print Report
In LTR 200807005, November 9, 2007, the taxpayer (T/P) owned a parcel of real estate which had been held by him for "productive use in a trade or business".&nbs...
I.R.S. Will Permit Tax-Free Exchanges of Dwelling Units
February 16, 2008 - Volume 2 Issue 43 Print Report
Ordinarily, the gain or loss realized from the exchange of property for other property "differing materially either in kind or in extent" is treated as income o...
Tax Talk From Washington D.C.
February 15, 2008 - Volume 2 Issue 41 Print Report
This report calls your attention to some tax developments, emanating from various locales in Washington, D.C. (specifically Congress and the I.R.S.), thatshould, ...
Clear Channel Deal On the Brink of Completion
February 14, 2008 - Volume 2 Issue 40 Print Report
The ground-breaking Clear Channel Communications (CCU) buy-out is finallynearing completion. On February 13, 2008the last regulatory hurdle was cleared as the...
Schering-Plough's "Interesting" Fourth Quarter
February 13, 2008 - Volume 2 Issue 39 Print Report
Schering-Plough Corp. (SGP) reported, for its fiscalfourth quarter, a net loss of $3.4 billion, or $2.08/share. However, this loss can be traced to "purc...
An Opportunity in Diamond's Buyback?
February 13, 2008 - Volume 2 Issue 38 Print Report
Diamond Management & Technology Consultants, Inc. (DMT) announced an intention to repurchase, through a Dutch Auction mechanism, some 5,000,000 of its outstanding sha...
Can EchoStar Communications Corp. Be Acquired?
February 12, 2008 - Volume 2 Issue 37 Print Report
On January 1, 2008, EchoStar Communications Corp. (ECC) completed the distribution of all of the shares of EchoStar Holding Corp. (ECH) in a spin-off intended to qualify...
Our Final, We Promise, Report on the "Economic Stimulus Act of 2008"
February 11, 2008 - Volume 2 Issue 36 Print Report
The final details of"The Economic Stimulus Act of 2008", H.R. 2140, (the Act)have been released and, in the interest of completeness, we will report...
Buying Stock In a Corporation Recently Emerged From Bankruptcy
February 11, 2008 - Volume 2 Issue 35 Print Report
Where a corporation which possesses Net Operating Losses(NOLs)is under the jurisdiction of the court in a "Title 11 or similar case" (a receivership...
Liquidation vs. Dissolution
February 10, 2008 - Volume 2 Issue 34 Print Report
Where a corporation is completely liquidated, it transfers all of its assets to its shareholders--be they cash or property--and the shareholders assume the corporation's...
Who Owns a Loss Corporation's Stock?
February 9, 2008 - Volume 2 Issue 33 Print Report
Where a "loss corporation" (a corporation entitled to use a net operating loss carryover or having a net operating loss for the taxable year in which an ownership cha...
Stimulus Bill Contains No NOL Relief/Alternative Investments in Music
February 8, 2008 - Volume 2 Issue 32 Print Report
The "Economic Stimulus Act of 2008", H.R. 2140 (the Act), was passed last night by both the House of Representatives and the Senate, in each case by overwhelmin...
Lennar's Tax Refund
February 7, 2008 - Volume 2 Issue 31 Print Report
A "Heard on the Street" article, by David Reilly, in the February 6th edition of The Wall Street Journal , describes the transaction that Lennar Corp. (...
Inverness/Matria--Merger Agreement Provides New Information
February 6, 2008 - Volume 2 Issue 30 Print Report
The information contained in the press release describing the merger agreement entered into by Inverness Medical Innovations, Inc. and Matria Healthcare, Inc. was, as it...
CNET's Quarterly Earnings Bolstered By Tax Benefit
February 6, 2008 - Volume 2 Issue 29 Print Report
CNET Networks, Inc. (CNET) reported, on February 5, 2008, an astonishing jump in its quarterly earnings relative to the earnings CNET reported in the comparable quarter o...
Is a Loan To a Corporation An "Interest" In The Corporation?
February 5, 2008 - Volume 2 Issue 27 Print Report
Sec. 2057 of the tax code, addressing an estate tax issue, is currently dormant but is scheduled to be re-instated in the case of estates ofdecedents dying after De...
Corporate Capital Gains
February 5, 2008 - Volume 2 Issue 28 Print Report
The tax rate imposed on a corporation's net capital gain is capped at 35 percent. See Sec. 1201(a). The net capital gain is the excess of the net long-term capit...
An IPO Involving a "Loss of Control" Can Still Be Tax-Free
February 3, 2008 - Volume 2 Issue 26 Print Report
A typical Initial Public Offering (IPO) transaction might entail a transfer by a corporation (X) of the assets and properties ofone of its (unincorporated) division...
“Real Property” Can Be Exchanged On A Tax-Free Basis
February 3, 2008 - Volume 2 Issue 25 Print Report
Sec. 1031(a)(1) of the Internal Revenue Code provides that no gain or loss shall be recognized on the exchange of property held for productive use in a trade or business, or fo...
Preliminary Observations on Microsoft/Yahoo!
February 1, 2008 - Volume 2 Issue 24 Print Report
The press release describing Microsoft's (MSFT) stunning proposal to the Board of Directors of Yahoo! (YHOO) "to acquire all the outstanding shares of YHOO common st...
Altria Announces PMI Spin-Off
January 31, 2008 - Volume 2 Issue 23 Print Report
Altria Group, Inc. (MO), on January 30, 2008, provided, in a press release, certain salientdetails surrounding its distribution of the stock of its wholly-owned sub...
Comparing The House and Senate Economic Stimulus Plans
January 30, 2008 - Volume 2 Issue 22 Print Report
On January 29, 2007 the House passed, by a wide margin, its version of the economic stimulus plan. Its plan entails approximately $146 billion in tax rebates and "bu...
Qwest's cash distribution
January 29, 2008 - Volume 2 Issue 21 Print Report
On January 28, 2007, inan 8-K filing, QwestCommunications International, Inc. (Q) supplied some interesting information regarding the likely tax consequences...
Inverness and Matria Announce a Merger
January 29, 2008 - Volume 2 Issue 20 Print Report
Inverness Medical Innovations (IMA) and Matria Healthcare, Inc. (MATR) announced, onJanuary 28, 2007, that they have entered into a definitive agreement pursuant to w...
Mergers of Mutual Organizations
January 28, 2008 - Volume 2 Issue 19 Print Report
Where mutual organizations--those entitiesthat are owned by their "members"; the policyholders in the case of a mutual insurance company and the share acc...
Taxation Without Receipt?—The “Ernst & Young Cases” Are Reaching That Disconcerting Result
January 26, 2008 - Volume 2 Issue 18 Print Report
On May 23, 2000, Ernst & Young (EY) entered into a transaction with Cap Gemini, S.A. (CG) in which EY together with its "accredited consulting partners" (ACPs) co...
Forfeiting a Tax Deduction For Executive Compensation
January 26, 2008 - Volume 2 Issue 17 Print Report
The question of whether executive compensation is, in general, excessive has been a hotly debated one. Studies have shown that executive compensation now represents a lar...
Business Incentives Form a Prominent Part of the Stimulus Package
January 25, 2008 - Volume 2 Issue 16 Print Report
Surprisingly, the Bush administration and Congressional leaders have reached a tentative agreement regarding the contours of an economic stimulus package which, for individual taxpa...
BAC Will Offer Preferred Stock
January 24, 2008 - Volume 2 Issue 15 Print Report
Bank of America (BAC)has announced its intention to shore up its "Tier 1 Capital" ratios through the issuance of equity securities. Apparently, the bank i...
Can Loews Spin-Off Diamond Offshore?
January 22, 2008 - Volume 2 Issue 14 Print Report
A recent article in Barron's , in which the value of Loews Corp. (LTR) was assessed on a "sum of the parts" basis, suggested that the value of LTR's net a...
Valuing Liabilities
January 21, 2008 - Volume 2 Issue 13 Print Report
One of the more controversial pronouncements issued by The Financial Accounting Standards Board (FASB) in the recent past, and the one with perhaps the most far-reaching...
Cypress Semiconductor and SunPower—Re-Visiting A Spin-Off
January 20, 2008 - Volume 2 Issue 12 Print Report
Cypress Semiconductor Corp. (CY) owns all of the Class B shares of SunPower Corp. (S). These shares represent approximately 90 percent of the total combined voting power...
GIS Can Deduct Payments Made To Its ESOP
January 18, 2008 - Volume 2 Issue 10 Print Report
General Mills (GIS)has longmaintained an Employee Stock Ownership Plan (ESOP). All of the assets of the ESOP were held and owned by a Trust established for th...
Bank of America/Countrywide Financial Corporation—A Forward Merger Is Planned
January 18, 2008 - Volume 2 Issue 11 Print Report
The merger agreement, in connection with which Bank of America (BAC) and Countrywide Financial Corporation (CFC) will be combined, has been published and it reveals the format...
Deducting Fees for Investment Advice—The Supreme Court Speaks
January 17, 2008 - Volume 2 Issue 8 Print Report
The taxable income of an individual taxpayer is calculated by subtracting from the individual's adjusted gross income (AGI) the itemized deductions incurred by such in...
MGM Mirage and Dubai World Launch a Tender Offer for MGM Stock
January 17, 2008 - Volume 2 Issue 9 Print Report
MGM Mirage (MGM) and Dubai World (DW) announced, on January 16, 2008, that they have amended the terms of their offer to acquire MGM stock. Thus, MGM and DW are now seeki...
When Does An Arrangement Constitute “Insurance”
January 16, 2008 - Volume 2 Issue 7 Print Report
A number of states have enacted statutes that provide for the creation of a legal entity known as a protected cell company (PCC). These entities enter into arran...
Will Tribune Pay Tax on Asset Divestitures?
January 15, 2008 - Volume 2 Issue 6 Print Report
Tribune Corp. (TRB), as is by now quite well-known, will be in a position to execute, for its 2008 taxable year, an election to be treated as an ‘S' corporation. Ordinari...
Can Bank of America Utilize Countrywide's Losses?
January 13, 2008 - Volume 2 Issue 5 Print Report
Bank of America (B) announced, on January 11, 2008, a definitive agreement to purchase Countrywide (C) "in an all-stock transaction" worth approximately $4 billion. U...
Personal Service Contracts Are Not Capital Assets
January 11, 2008 - Volume 2 Issue 4 Print Report
In order for an item of income to constitute a capital gain , and, accordingly, be taxed at preferential rates (not exceeding 15 percent), it must result from the sale...
Can Post-Petition Interest Be Deducted
January 9, 2008 - Volume 2 Issue 3 Print Report
In the case of a taxpayer employing the "accrual" method of accounting, a liability is incurred, and is therefore "taken into account", in the taxable year...
R.H. Donnelley Has a Unique "Tax Asset"
January 7, 2008 - Volume 2 Issue 2 Print Report
R.H. Donnelley (RHD) has an unusually high tax basis in its assets. Apparently, RHD's "step-up assets" add approximately $18/share of equity value and, therefore, RHD is no...
"Economic Substance" Doctrine Denies Tax Benefits the Tax Code Would Otherwise Afford
January 7, 2008 - Volume 2 Issue 1 Print Report
Perhaps the most difficult question tax advisers confront is the issue of when, if ever, a taxpayer who has scrupulously complied with the literal terms of a tax code provision...
Post-Merger Dividends Are Not “Boot”
December 30, 2007 - Volume 1 Issue 13 Print Report
Where distributions are made by an acquired corporation to its shareholders or by the acquiring corporation, following the business combination, to all of its shareholders, inc...
What the Lottery Cases Teach Us Regarding Capital Gains
December 27, 2007 - Volume 1 Issue 12 Print Report
It certainly seems that the most heavily litigated issue of the recent past involves the question of whether a taxpayer who has won the lottery and who sells, for a discounted am...
A New Exception to the General Rule That Provides That Discharged Debt Is Gross Income
December 26, 2007 - Volume 1 Issue 11 Print Report
In general, under Sec. 61(a)(12) of the tax code, gross income includes income from the discharge of indebtedness. Thus, if a taxpayer's indebtedness is forgiven, or is o...
S.E.C. Will Permit Use of a “Simplified Method” For Valuing Compensatory Options
December 25, 2007 - Volume 1 Issue 10 Print Report
With the advent of SFAS No. 123R, corporations which grant stock options to their employees (and independent contractors) are required to assign a value to such options and amo...
Net Operating Losses in Bankruptcy
December 24, 2007 - Volume 1 Issue 8 Print Report
Where a "loss corporation" (a corporation with net operating loss (NOL) carryovers to the year in question or which generates such a NOL in the current year) experien...
SonomaWest Holdings, Inc. Will Not Pursue a "Downstream" Merger
December 24, 2007 - Volume 1 Issue 7 Print Report
SonomaWest Holdings, Inc. (SWHI) is a corporation which, by its own admission, is in danger of becoming, within the meaning of the Investment Company Act of 1940, an "inad...
I.R.S. Clarifies Longstanding Wash Sale Rule Conundrum
December 24, 2007 - Volume 1 Issue 9 Print Report
One of the most well-known tax rules is the so-called "wash sale" rule. This provision operates to deny a deduction for a loss realized from the sale or other d...
Ingersoll-Rand Will Acquire Trane, Inc. For Approximately $10.1 billion
December 18, 2007 - Volume 1 Issue 6 Print Report
Ingersoll-Rand (IR) is an "inverted" corporation. Thus, the U.S. entity is a subsidiary of a Bermuda corporation the initial shareholders of which were th...
Loews Corp. Proposes To Spin-Off Lorillard
December 18, 2007 - Volume 1 Issue 5 Print Report
Loews Corp. (LTR) announced, on December 17, 2007, that its Board of Directors has approved a plan to "spin-off" its entire ownership interest in Lorillard, Inc. (LO) t...
Marshall & Ilsley's "Reverse Sponsored Spin-off"
December 15, 2007 - Volume 1 Issue 4 Print Report
Recently, Marshall & Ilsley completed a so-called "reverse sponsored spin-off" and the I.R.S. ruling it secured in connection with the transaction was recently rele...
Accounting For “Minority Interests” Will Undergo An Overhaul
December 14, 2007 - Volume 1 Issue 3 Print Report
In addition to changes, recently proposed by Statement of Financial Accounting Standards (SFAS) No. 141 (revised 2007), "Business Combinations", regarding the introdu...
FASB Introduces the “Acquisition Method” with Respect to Business Combinations
December 8, 2007 - Volume 1 Issue 1 Print Report
The accounting for business combinations has undergone some radical changes over the recent past. Thus, in 2001, The Financial Accounting Standards Board (FASB) decided t...
"Mutually Exclusive" Transactions
December 8, 2007 - Volume 1 Issue 2 Print Report
The ability to deduct costs incurred in connection with abandoned transactions depends, largely, upon whether the abandoned transaction and the transaction in which the taxpay...

10640 Results

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Welcome to this month's summary of deals. Full reports on some of these transactions can be found via the link in the description, or by searching the company name in our database.