Determining voting power under section 1504(a)(2)

Article Abstract:

The Tax Court in Alumax and Consolidated Subsidiaries v. Commissioner held for purposes of consolidated tax returns that substance and not form determined whether stock voting power fell within the IRC section 1504(a) 80% test. The court rejected Alumax's argument that application of a mechanical test of power to elect the board of directors was proper and not actual management control of the elected directors. The IRS revoked Letter Ruling 9605015 regarding consolidated returns and professional corporations.

Afghanistan, Tax policy, Voting rights (Stockholders)

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Calculation of consolidated taxable income: the treatment of specified liability losses

Article Abstract:

The IRS issued 1997 guidance taking the position that consolidated group taxable income and specified liability losses should be treated under the so-called separate entity approach, rather than as single entities. This position may be incorrect and in contrast to the general trend toward single entity treatment. Specified liability losses are a main focus of the IRS's tax memorandum and will be subject to further scrutiny.

Loss deductions

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Regulations affecting transactions in parent stock

Article Abstract:

The authors discuss IRS final regulations under regulation section 1.1502.13(f)(6) issued March 14, 1996 which provide guidance concerning consolidated tax return parent stock issues. The regulations contain rules for recognition of gains and losses on parent stock transactions.

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

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