By Jonathan Prokup & Dustin Covello Four years have passed since Congress enacted the Troubled Assets Relief Program, better known as TARP. After Treasury determined that frozen credit markets were threatening the U.S. financial industry and even the entire economy, it asked Congress to authorize the purchase of illiquid mortgages from banks. Congress obliged, authorizing [...]
Archive for the ‘Financial Products’ category
Treasury Finalizes Conduit Financing Regulations Under Section 881
January 9, 2012By Jonathan Prokup On December 9th, the IRS issued final regulations under Code section 881 that treat a disregarded entity as a person to determine whether a “financing arrangement” exists for purposes of applying the conduit financing regulations. The finalized regulations may deny tax benefits otherwise available from U.S. tax treaties when a multi-party financing [...]
Businesses Prepare For The End Of The Euro; Will Treasury Do The Same?
November 29, 2011By Jonathan Prokup According to the Financial Times, companies around the world are preparing for the possibility of a breakup of the euro. Given the currency devaluation that would likely occur in countries coming out of the euro, these companies are preparing for the impact that such an event would have on balance sheets (e.g., [...]
Treasury Finalizes New Debt Modification Regulations
January 10, 2011By Jonathan Prokup On Friday, the Treasury Department issued final regulations under Code section 1001 relating to the modification of debt instruments. In relevant part, the regulation provides that, following the modification of a debt instrument, the classification of the modified instrument as debt or equity for federal income tax purposes does not take into [...]
When Is Debt No Longer Debt? Treasury Proposes To Ease Debt-Modification Regulations
June 18, 2010By Jonathan Prokup Times are tough, and many troubled companies are facing the need to modify debts that were issued when times were better (and the companies were financially much stronger). For companies that wish to modify their debts, and for investors that hold those debts, federal tax law imposes an unfortunate limitation. An outstanding [...]
More on Wyden-Gregg’s Interest Disallowance Rule
April 28, 2010By Jonathan Prokup and David Shakow You might recall our prior post on the Wyden-Gregg tax reform proposal in which we discussed the proposed limitation on corporate interest deductions. To summarize, the legislation would limit the deductibility of payments on corporate debt to the amount of the interest in excess of the annual rate of [...]
The Wyden-Gregg Tax Reform Bill – Part I (cont’d)
March 8, 2010By Jonathan Prokup and David Shakow We previously discussed how the Wyden-Gregg bill proposes reducing interest deductions to the extent the interest simply compensates for inflation. Inflation affects tax calculations in two ways. First, it affects the dollar figures in the Code so that, for example, when your wages keep up with inflation, but you [...]
Lee Sheppard Takes on Container Corp.
March 8, 2010By Jonathan Prokup In her column last Monday, Lee Sheppard criticized Judge Holmes of the Tax Court for, as she put it, “strain[ing] to find a reason to hold for the taxpayer” in the recent case of Container Corp. v. Comm’r, 134. T.C. No. 5. (For our prior discussion of this case, see here. For [...]
The Wyden-Gregg Tax Reform Bill – Part I
February 28, 2010By Jonathan Prokup Last Tuesday, Senators Ron Wyden (D-Ore.) and Judd Gregg (R-N.H.) released a proposed tax reform bill (the “Bipartisan Tax Fairness and Simplification Act of 2010″) that has received substantial press coverage. For the full text, see here. For the sponsors’ summary, see here. For some initial reactions, see here, here, and here. [...]
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Phil Karter
Jonathan Prokup
David Shakow
George Connelly, Jr.
Buck Buchanan
David Bernard
Dustin Covello
Heather Pesikoff
Hale Sheppard
