Capital assets: the inventory exception to Section 1221 revisited
Article Abstract:
IRC Section 1221 and two Supreme Court decisions determine to what extent corporations can claim common stock as inventory that can be included in losses. Section 1221(1) allows the sale or exchange of inventory and other assets to be treated as ordinary income or loss. The Supreme Court ruled in Corn Products Refining Co v Commissioner in 1955 that the inventory exception includes hedging transactions and in Arkansas Best Corp v Commissioner in 1988 that losses from selling common stock held as investments must be treated as capital assets.
Publication Name: Journal of Corporate Taxation
Subject: Law
ISSN: 0094-0593
Year: 1993
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The hidden perils of preferred stock
Article Abstract:
IRC changes have affected Loss Groups' use of preferred stock in acquiring money-making Target companies. Loss Groups, or consolidated groups with net operating losses (NOL), and Targets have often found preferred stock transactions to be tax-free and hence preferable. However, both groups should be aware of new tax hazards created by IRC regulations in 1984, 1986, 1989 and 1990. In particular, Loss Groups must decide whether the transaction is a reverse acquisition and to what degree the NOLs protect the issuer's income from taxation.
Publication Name: Journal of Corporate Taxation
Subject: Law
ISSN: 0094-0593
Year: 1992
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United States tax considerations in organizing a foreign joint venture
Article Abstract:
US corporations planning joint ventures with foreign corporations should know how US tax laws affect such arrangements. IRC Section 904 restricts foreign tax credits, while Section 367 collects taxes on the transference of intangible property including technology. The passive foreign investment company rules of Sections 1291 to 1297 can be costly unless the joint venture is set up to minimize this tax. In addition, Section 1491 exacts a 35% excise tax on joint ventures structured as foreign partnerships.
Publication Name: Journal of Corporate Taxation
Subject: Law
ISSN: 0094-0593
Year: 1993
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