Deck chairs rearranged: the final Cottage Savings regulations
Article Abstract:
Final regulations under IRC section 1001, released by the IRS in June 1996, are as problematic as the case that spawned the regulations, Cottage Savings Ass'n v. Commissioner. In Cottage Savings, the US Supreme Court found that realization had occurred when contemporaneous sales and purchases of mortgage participation interests of equal value were made. Under the final regulations, exchange of a debt instrument for a modified instrument differing materially from the original is considered a significant modification. A significant modification triggers realization of income or loss.
Publication Name: Journal of Corporate Taxation
Subject: Law
ISSN: 0094-0593
Year: 1997
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The Treasury's debt modification regulations: Cottage Savings proves a perilous beacon
Article Abstract:
The Treasury Dept and the IRS on Dec 1, 1992 proposed changes to IRC Section 1001 concerning when the changing of a debt constitutes a realizable and therefore taxable event. The Supreme Court's 1991 decision in Cottage Savings v Commissioner, which emphasized form in determining realization, prompted the proposed regulations. The new rules would set up a two-tier process to decide if an event is realizable. However, both the Court and the Treasury Dept are too concerned with formalities. The regulations should specify the conditions necessary for an event to be realizable.
Publication Name: Journal of Corporate Taxation
Subject: Law
ISSN: 0094-0593
Year: 1993
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One step forward - final check-the-box entity classification regulations issued
Article Abstract:
The final IRS check-the-box entity classification regulations identify when business entities will be able to elect pass-through income taxation and when they will be taxed as corporations. The regulations assess whether the entity exists separate from its owners, whether it is a business entity and whether it is a per se corporation. The regulations identify a number of entities, both foreign and domestic, that will always be taxed as corporations. The regulations also detail election procedures.
Publication Name: Journal of Corporate Taxation
Subject: Law
ISSN: 0094-0593
Year: 1997
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