Trapped income of a RIC

Article Abstract:

The splitting of regulated investment company (RIC) income into investment company taxable income and net capital gain income, which can result in taxable trapped income, defies Congress's desire that RIC income pass on to RIC shareholders. Trapped income, which can be subjected both to income and excise taxation, occurs when a RIC's earnings and profits are less than what is needed to make a deductible dividend capable of canceling out the net capital gain. However, RICs can usually evade income and excise taxes through use of the dividends paid deduction.

Profits, Dividends, Mutual funds, Excise taxes, Corporate profits, Excise tax

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Sale of subsidiary did not constitute a change in ownership or control for purposes of the golden parachute rules under Section 280G

Article Abstract:

The IRS declared that payments made because of the sale of a subsidiary in preparation for the sale of its parent did not constitute a change in ownership for the parent. Therefore, the payments were not to be considered a golden parachute for tax purposes.

Subsidiary corporations, Subsidiaries, Tax deductions, Corporate divestiture, Divestiture, Golden parachutes

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Section 357(d) - old can, new worms

Article Abstract:

The author discusses the impact of IRC section 357(d), which closes an international corporate tax shelter but may change the role of debt in property transactions under income tax laws.

Debt, Tax shelters

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