Convertibility and consolidated returns highlight recent developments

Article Abstract:

Recent tax rulings and decisions regarding financial instruments and corporate finance have focused on tax-free reorganizations, convertible securities, buy-outs and taxation of interest and dividends. Voting power percentages alone will no longer determine management control in tax-free reorganizations, and the IRS will look to actual control. The IRS allowed payments to optionholders to be deducted despite the fact they occurred during a buyout. Accrual of original issue discount cannot be avoided under the doubtful collectibility exception for earned interest.

United States, Laws, regulations and rules, Convertible bonds, Consolidated tax returns

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Shareholder tax savings highlight recent transactions

Article Abstract:

Review of recent corporate finance transactions reinforces the importance of considering the tax implications of such activity. Stock issuances by Occidental Petroleum and the employee buyout at United Airlines both integrated tax considerations of existing stockholders into their planning. Wash sale rules and original issue discount rules are inspiring new securities products. Corporations are using C and E reorganizations based on tax reasons.

Analysis, Tax planning, Securities, Securities taxes

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Recent developments

Article Abstract:

Recent developments in taxation of corporate finance vehicles are discussed. These include issues concerning the treatment of losses incurred in liability hedging. For losses to be treated as ordinary rather than capital, a hedge must be an exception to capital asset treatment. Contingent payment debt instruments, acquisitions and convertible debt instruments are also discussed.

Management, Capital gains tax

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