Law Commons^™

What Corporate Tax Shelters Can Teach Us About The Structure Of Subchapter C, Glenn E. Coven

Faculty Publications

Coven argues that the rules extending nonrecognition treatment to the incorporation of property never have been properly integrated with the double taxation of corporations. As a result, the duplicate burden or benefit is applied retroactively. That defect, Coven believes, has been long overlooked, but now that it has been exploited by one popular version of the loss replicating corporate tax shelter, it must be addressed. The remedy applied by Congress to the tax shelter in section 358(h) is insufficient, does not operate correctly and undermines the integrity of the code, he says.

This article proposes a more comprehensive solution that …

Basis Shifting - A Radical Approach To An Intractable Problem, Glenn E. Coven

Faculty Publications

Coven asserts that one of the lingering ambiguities in subchapter C is how an appropriate tax benefit can be obtained from the tax basis that "disappears" when a shareholder's interest is completely redeemed but the transaction is treated as a dividend because stock held by others is attributed to the former shareholder. He believes that Treasury was content to rely on manifestly inadequate regulations to resolve that issue until taxpayers discovered how to convert those regulations into a potent tax shelter. The amendment to those regulations, proposed in 2002, however, was fatally flawed, according to Coven.

In this article, Coven …

Who Should Be Entitled To Claim The New Education Credits?, Glenn E. Coven

Faculty Publications

Professor Coven believes that the education assistance provisions enacted in 1997, while long overdue, were ill-considered and poorly constructed. Focusing on what should have been the simple question of who is entitled to claim an education tax credit, this report illustrates the harm that inadequate drafting produces. While section 25A appeared to deny a credit to a dependent child, an unfair and unwise result, the proposed regulations allow parents to shift the credit to their children but only on the forfeiture of the deduction for the personal exemption. That rule, says Coven, imposes a harsh penalty on low and middle-income …

Partnership Profits Share For Services: An Aggregate Exegesis Of Revenue Procedure 93-27 (Part 1), John W. Lee

Faculty Publications

In this article, Lee charts two alternative methods for implementing an aggregate solution to the problem of partnership profits share exchanged for services. The functional, or judicial, method, he explains, is to handle (1) the exchange of partner-capacity services for a profit share subject to the risk of the venture with the Culbertson "common law relation of partnership," nonrealization event doctrine, implicitly contemplated by the 1984 legislative history to section 707(a)(2); (2) the classic Diamond transitory partner with a substance-over-form rule or step-transaction rule; and (3) a sale of the partnership interest in circumstances that would result in ordinary income …

Capital Expenditures: A Result In Search Of A Rationale, John W. Lee, Nina R. Murphy

Faculty Publications

No abstract provided.