Could The New Economic Substance Statute Apply To End-Of-Year Stock Sales And Repurchases?

By Phil Karter With the looming increase in tax rates on investment income and capital gains in particular, a large number of stock market investors have been selling long-term positions to lock in the 2012 rate, which currently tops out at 15%.  Come January 1,2013, gain on the same sale could be taxed at a … More Could The New Economic Substance Statute Apply To End-Of-Year Stock Sales And Repurchases?

TARP’s “Godfather” Investment Should Give Rise To Deductible Interest

By:  Dustin Covello Earlier this year, my former colleague Jonathan Prokup and I published an article in the Journal of Taxation and Regulation of Financial Institutions.  In the article, we considered the federal tax consequences of Treasury’s capital purchase program – the centerpiece of TARP.  Under the program, Treasury invested several hundred billion dollars into … More TARP’s “Godfather” Investment Should Give Rise To Deductible Interest

Should Banks Be Entitled To Tax Deductions For “Dividends” On TARP Stock?

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 … More Should Banks Be Entitled To Tax Deductions For “Dividends” On TARP Stock?

Treasury Finalizes Conduit Financing Regulations Under Section 881

By 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 … More Treasury Finalizes Conduit Financing Regulations Under Section 881

Businesses Prepare For The End Of The Euro; Will Treasury Do The Same?

By 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., … More Businesses Prepare For The End Of The Euro; Will Treasury Do The Same?

Treasury Finalizes New Debt Modification Regulations

By 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 … More Treasury Finalizes New Debt Modification Regulations

When Is Debt No Longer Debt? Treasury Proposes To Ease Debt-Modification Regulations

By 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 When Is Debt No Longer Debt? Treasury Proposes To Ease Debt-Modification Regulations