TAMs force recognition of deferred gains in member stock

Article Abstract:

The IRS has released three technical advice memoranda interpreting the former intercompany transaction regulations in a light unfavorable to taxpayers despite the fact that the new regulations issued in 1995 offer intercompany stock transfers more favorable treatment. The new regulations provide consolidated groups with relief by allowing losses on a deemed taxable liquidation to offset gain on the stock of the corporation being liquidated. The memoranda assert that stock redemptions took place and that deferred gain is triggered into income by the exchange of stock.

Public Finance Activities, Corporate Income Taxes, Taxation, Corporate reorganizations, Recognition of gain or loss (Taxation), Recognized gain or loss (Taxation), Stock redemption, Related party transactions

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Temporary regulations: application of Section 382 to a consolidated group

Article Abstract:

The applicability of IRC s. 382 to corporate consolidated tax returns is the covered under proposed 1996 temporary regulations. Groups with new business investments may incur inappropriate penalties, however. Topics discussed in this area include loss group definition, subgroup apportionment, departing members, new loss members, fold-in rules for new members, unrealized built-in net gains and losses, and effective dates of the provisions.

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Kohler v. United States - application of Section 1504(d)

Article Abstract:

Kohler v. US, Trinova v. Commissioner, and the IU International are three 1997 tax decisions affecting law on consolidated returns. Kohler concerns the applicability of IRC s. 1504(d) to Mexican and Canadian corporate subsidiaries. Investment tax credit recapture is the focus of Trinova, while IU Intl concerns intra-group spin-off basis issues.

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