Debt acquisition by a related (or to-be-related) party: section 108(e)(4) and the final regulations
Article Abstract:
The Treasury Dept has extended the reach of IRC 108(e)(4) and imposed taxes on parties unrelated to debtors who buy the debt at a price less than the balance owed at the time of purchase. This policy extends the related party rule ratified by the US Supreme Court in US v. Kirby Lumber Co, which transfers the debtor's would-be taxable earned income on the debt sale if he had bought the discount debt to the related debt buyer. By tracing the creditor's gain back to the debtor's would-be tax liability, the Dept rules are intended to curb collusive deals by debtors and non-related creditors who try to transfer debts at discount prices tax-free.
Publication Name: Virginia Tax Review
Subject: Law
ISSN: 0735-9004
Year: 1993
User Contributions:
Comment about this article or add new information about this topic:
The rise and fall of arm's length: a study in the evolution of U.S. international taxation
Article Abstract:
US international tax policy has shifted away from use of the traditional arm's-length transaction standard for valuing transfer pricing between related parties, despite asserting in a 1988 Treasury Department White Paper that the arm's-length approach is alive and well. The traditional standard encompasses use of actual uncontrolled sales figures as well as the cost plus method and the resale price method. The methods that are being used in place of traditional methods include global and formulary methods that are applied at the group level and not at the entity level.
Publication Name: Virginia Tax Review
Subject: Law
ISSN: 0735-9004
Year: 1995
User Contributions:
Comment about this article or add new information about this topic:
Equity derivatives: principles and practice
Article Abstract:
Coherent tax rules must be developed to account for and tax equity derivative instruments. Under derivative contracts, the ownership of the underlying equity is not generally transferred to the buyer of the derivative. The IRS needs to address the split of legal and economic interests that can occur under derivatives contracts. Questions of when losses and gains are to be recognized also need to be considered. Timing issues are also raised in characterization of gains as short-term or long-term and capital or ordinary.
Publication Name: Virginia Tax Review
Subject: Law
ISSN: 0735-9004
Year: 1995
User Contributions:
Comment about this article or add new information about this topic:
- Abstracts: A guide to practical knowledge of the FMLA and its complex new final regulations
- Abstracts: "Adrift on an uncharted sea": a survey of section 1404(a) transfer in the federal system. Ex parte Young after Seminole Tribe
- Abstracts: Terminated dealers adopt new tactics. Teams and leagues face off in court over relocations
- Abstracts: Seeking a preliminary injunction. Copyright and the franchise. Defeating requests for preliminary injunctive relief in franchise termination cases
- Abstracts: Corporate introspection in the nineties: "to thine own self be true." Personal trading by portfolio managers revisited: the Institute's recommendations a year later