Gain based on what was distributed, not received
Article Abstract:
The Court of Appeals for the Ninth Circuit supported the decision of the Tax Court in 'Pope and Talbot Inc' indicating that the gain of a corporation on the distribution of appreciated property to its shareholders should be treated as if the corporation has made a sale of the appreciated property during the distribution. Moreover, the appellate court agreed with the valuation of the distributed property by the Tax Court. At issue in the case was the valuation of the property distributed to the company's shareholders. Pope and Talbot appraised the distributed property in terms of the value of the partnership units given to each shareholder. However, the IRS contested this method and argued that the gain should be valued as if the company sold the properties for fair market value. The Tax Court sided with the IRS, prompting the company to file an appeal. The Ninth Circuit repudiated its claims and affirmed the Tax Court decision.
Publication Name: Practical Tax Strategies
Subject: Law
ISSN: 0040-0165
Year: 1999
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Give 'em a break: reassessing the use tax on interstate carrier property
Article Abstract:
State use taxes that do not provide for apportionment do not withstand constitutional scrutiny under the taxation of interstate commerce test developed by the Supreme Court in Complete Auto Transit, Inc. v. Brady. The "fairly apportioned" prong of the Complete Auto test, which requires both internal and external consistency, is particularly important in the use tax context. Apportionment based on the percentage of the fleet operating within the state and the percentage of miles travelled within the state will ensure that taxing states receive their fair share of use taxes.
Publication Name: Virginia Tax Review
Subject: Law
ISSN: 0735-9004
Year: 1997
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