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Full-Text Articles in Tax Law
The Liability-Offset Theory Of Peracchi, Bradley T. Borden, Douglas L. Longhofer
The Liability-Offset Theory Of Peracchi, Bradley T. Borden, Douglas L. Longhofer
Bradley T. Borden
Peracchi v. Commissioner is a lightning rod for commentators and the bane of students of corporate income tax. In short, the decision makes no sense because it grants the maker of a note a section 1012 basis in the note, violating a fundamental principle of income taxation. Nonetheless, the decision helped preserve a fundamental aspect of corporate taxation—the tax-free formation of and contributions to controlled corporations. Because of its unorthodox application of the section1012 basis rules, the Peracchi decision is the subject of severe criticism. Unfortunately, commentators who criticize Peracchi generally fail to offer an alternative that recognizes general income …
The Allure And Illusion Of Partners' Interests In A Partnership, Bradley T. Borden
The Allure And Illusion Of Partners' Interests In A Partnership, Bradley T. Borden
Bradley T. Borden
Favorable tax treatment and management flexibility make tax partnerships very popular. For starters, tax partnerships, unlike tax corporations, are not subject to entity-level taxes. Partnership taxable income flows through to the partners, and the partners report their shares of partnership taxable income on their individual tax returns. Partnership tax allocation rules determine the partners’ shares of partnership taxable income. Those rules rely upon the alluring concept of partners’ interests in a partnership. It seems intuitive that partners would know their interests in a partnership and be able to allocate partnership taxable income accordingly. This Article illustrates, however, that the concept …