COD income and basis in subsidiary stock

Article Abstract:

COD income, income from the discharge of indebtedness that is not included in gross income, should not result in positive adjustments in a consolidated group's basis in stock of a subsidiary when section 1503(e)(1)(B) is applied, according to the Tax Court ruling in CSI Hydrostatic Testers, Inc. v. Commissioner. Similar results are attained by new regulations section 1.1502-32(b)(4). However, the regulations take a different approach in offsetting positive and negative basis adjustments for COD income. The regulations also unfortunately increase the amount of loss disallowed.

Extinguishment of debts, Debt cancellation, Cases, Basis (Taxation)

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The brave new world of consolidated returns: an analysis of the recently proposed stock basis adjustment regulations

Article Abstract:

The IRS on Nov 10, 1992 proposed changes to the regulations under IRC Section 1502 concerning the consolidated return stock basis adjustment system. This system decides the basis of each parent corporation in its consolidated subsidiary and the earnings and profits (E&P) of each subsidiary. If adopted, the new rules would simplify the existing system by using the rules for determining subsidiaries' E&P to calculate stock basis. Annual reporting would thus become both easier and less expensive.

Conglomerate corporations, Profits, Corporate profits

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SRLY and consolidated section 382 regulations

Article Abstract:

The authors discuss IRS proposed regulations issued June 26, 1996 under IRC section 382 which provide guidance concerning corporate consolidated tax returns. The regulations include rules for allocating net operating losses which are incurred in separate return limitation years. The discussion includes details concerning effective dates and transition rules.

United States, Public Finance Activities, Corporate Tax Deductions & Exemptions, Accounting and auditing, Affiliated corporations, Corporate taxes

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