The Economic Substance Doctrine: Coming To A State Near You?

By Jonathan Prokup Pennsylvania may soon join the other states that have challenged the use of the so-called Delaware Loophole, according to our colleagues at the State and Local Tax Blawg.  The legislation, contained in Pa. House Bill 2150, would disallow deductions that a parent operating corporation claims for royalty payments made to a "Delaware … Continue reading The Economic Substance Doctrine: Coming To A State Near You?

Southgate Master Fund: The Sham Partnership Doctrine Gets Messy… Or Does It?

By Jonathan Prokup Two weeks ago, the Fifth Circuit summarily rejected a taxpayer request for an en banc rehearing in Southgate Master Fund LLC v. United States.  The appellate court had previously concluded that the taxpayer was not entitled to a claimed capital loss from a transaction involving the acquisition of distressed debt via a … Continue reading Southgate Master Fund: The Sham Partnership Doctrine Gets Messy… Or Does It?

After the Flood: Has Codification Changed Economic Substance?

By Jonathan Prokup The passage of President Obama's health-care legislation will no doubt have long-lasting consequences for the economy in general and the health-care industry in particular.  Less noticed by the general public, but central in the minds of tax professionals, has been a single provision in the accompanying reconciliation bill that codifies the so-called … Continue reading After the Flood: Has Codification Changed Economic Substance?