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