Corporate taxation George K. Yin

Contents
Machine generated contents note: A.Passthrough System under Subchapter S
1.Tax Responsibilities of the S Corporation
2.Shareholder Inclusion of Tax Items
Problem 2-1
3.Shareholder Basis Adjustments
Problem 2-2
4.Limitation on the Passthrough of Losses
Uri v. Commissioner
Problem 2-3
Gitlitz v. Commissioner
5.Absence of Inside Basis Adjustments
Notice 2002-65
6.Distributions by S Corporations Without E&​P
Problem 2-4
B.Eligibility and Election
1.Eligibility for S Status
a.Limited Number of Shareholders
b.Only Individuals and Certain Entities May Be Shareholders
Rev. Rul. 92-64
c.No More Than One Class of Stock
Paige v. United States
Problem 2-5
2.Election and Termination of S Status
Problem 2-6
Problem 2-7
C.Some Data on S Corporations and Other Business Entities
A.Classification Issues
1.Incorporated Entities
Commissioner v. Jesse C. Bollinger
2.Unincorporated Entities
Contents note continued: B.Taxation of C Corporation Income and Loss
1.Brief Overview of Taxation of C Corporations
Treasury Department Excerpt
2.Brief Overview of Taxation of Investors in C Corporations
3.Avoiding or Mitigating the Effect of the "Double Tax"
a.Compensation
Menard, Inc. v. Commissioner
b.Capital Structure
Problem 3-1
Notice 97-21
Notice 94-48
c.New Financial Products
Alvin C. Warren, Jr., U.S. Income Taxation of New Financial Products
Problem 3-2
d.Earnings Accumulation
C.Reforming the Taxation of C Corporations
1.Corporate Integration
Joint Committee on Taxation Excerpt
2.Providing Greater Conformity Between Book and Taxable Income
3.Broadening the Corporate Income Tax Base
A.Judicial Principles
Gregory v. Helvering
United Parcel Service of America, Inc. v. Commissioner
B.Other Government Responses to Tax Avoidance
Contents note continued: 1.Introduction
Notice 2004-30
2.Disclosure and Related Requirements to Curb Tax Avoidance
C.Codification of Economic Substance Doctrine
A.Shareholder-Level Consequences
1.Earnings and Profits
Rev. Rul. 2009-25
Problem 5-1
Rev. Rul. 74-164
2.Taxation of Dividends Received by Shareholders Who Are Individuals
Problem 5-2
3.Taxation of Dividends Received by Corporate Shareholders
a.Dividends-Received Deduction
The Progressive Corp. v. United States
b.Special Treatment of "Extraordinary Dividends"
Problem 5-3
c.Debt-Financed Portfolio Stock
Rev. Rul. 88-66
Problem 5-4
B.Corporate-Level Consequences
General Utilities &​ Operating Co. v. Helvering
Problem 5-5
C.Distributions by S Corporations with E&​P
Problem 5-6
A.Introduction
B.Taxation of Corporate Redemptions
1.Shareholder-Level Consequences
a.Constructive Ownership Rules
Problem 6-1
Contents note continued: Problem 6-2
b.Substantially Disproportionate Redemptions
Rev. Rul. 81-41
Problem 6-3
c.Redemptions Terminating the Shareholder's Interest
Lynch v. Commissioner
Rev. Rul. 77-293
Problem 6-4
Problem 6-5
Problem 6-6
d.Redemptions Not Essentially Equivalent to a Dividend
United States v. Davis
Patterson Trust v. United States
Rev. Rul. 76-385
Rev. Rul. 81-289
e.Partial Liquidations
Rev. Rul. 60-322
f.Section 303
2.Corporate-Level Consequences
Problem 6-7
3.Redemptions by S Corporations
Problem 6-8
Problem 6-9
C.Tax Planning Involving Corporate Redemptions
Grove v. Commissioner
Zenz v. Quinlivan
Rev. Rul. 69-608
Notice 2001-45
H.J Heinz Co. v. United States
A.Transfers of Property by Shareholders to Corporations
1.The Required Transfer of "Property"
James v. Commissioner
2.The "Control" Requirement
Kamborian's Estate v. Commissioner
Contents note continued: 3."Solely for Stock" Requirement
Rev. Rul. 68-55
4.Preservation of Gain or Loss Not Recognized in Section
Transaction
Problem 7-1
5.Contributions to Capital
Commissioner v. Fink
B.Assumption of Liabilities
1.Basic Rules
Lessinger v. Commissioner
Problem 7-2
2.Anatomy of a Tax Shelter
Rev. Rul. 95-74
Notice 2001-17
Coltec Industries, Inc. v. United States
A.Brother-Sister Acquisitions
Rev. Rul. 71-563
Merrill Lynch &​ Co. v. Commissioner
B.Parent-Subsidiary Acquisitions
Bhada v. Commissioner
Problem 8-1
A.Distributions of Stock or Stock Rights of the Distributing Corporation
1.Stock Distributions Subject to Shareholder Election to Receive Property Other Than Stock
Rev. Rul. 83-68
Problem 9-1
2.Stock Distributions with Disproportionate Effect
Rev. Rul. 78-60
Problem 9-2
Review Problem 9-3
B.Preferred Stock Bailouts
1.Definition of Section 306 Stock
Contents note continued: 2.Dispositions of Section 306 Stock
3.Exceptions
1.In General
2.Liquidating Distributions to a Controlling Corporate Shareholder
Problem 10-1
1.Pre-1986 Law
2.Liquidations under Current Law
House Ways and Means Committee Report
Problem 10-2
3.Asset Acquisitions under Current Law
a.Effect of Purchase Price Allocation Agreement
Commissioner v. Danielson
b.Allocation of Purchase Price to Intangible Assets
Problem 10-3
4.Stock Acquisitions under Current Law
a.Transactions Qualifying under Section 338
b.Transactions Qualifying under Section 336(e)
c.Transactions Involving Intermediaries
Notice 2008-111
C.Taxable Acquisitions and Liquidations Involving S Corporations
2.The Built-In Gains Tax
Problem 10-4
3.Excess Passive Investment Income
A.Origins of the "Reorganization" Concept
Marr v. United States
Contents note continued: B.Definition of a Nondivisive Reorganization
1.Introduction
2.Nonstatutory Requirements
a.Continuity of Interest (COI) Doctrine
May B. Kass v. Commissioner
J.E. Seagram Corp. v. Commissioner
T.D. 8760
Problem 11-1
b.Continuity of Business Enterprise (COBE) Doctrine
T.D. 7745
c.Business Purpose Requirement
3.Asset Acquisitions Qualifying as Reorganizations
a.Merger of Target into Issuing Corporation
Rev. Rul. 2000-5
b.Forward Triangular Merger
S. Rep. No. 90-1653
c.Acquisition of Target's Assets
Rev. Rul. 88-48
Bausch &​ Lomb Optical Co. v. Commissioner
Problem 11-2
Problem 11-3
4.Stock Acquisitions Qualifying as Reorganizations
a.Acquisition of Target's Stock
Chapman v. Commissioner
Problem 11-4
b.Reverse Triangular Merger
S. Rep. No. 91-1533
Problem 11-5
Tribune Co. v. Commissioner
5.Summary[&​#x2014;]Acquisitive Transactions as Reorganizations
Problem 11-6
Contents note continued: Rev. Rul. 2008-25
6.Other Nondivisive Reorganizations
a.Transfer of Assets to Controlled Corporation
Problem 11-7
b.Mere Change in Identity, Form, or Place of Organization of One Corporation
Rev. Rul. 96-29
c.Recapitalization
Bazley v. Commissioner
C.Tax Consequences of a Nondivisive Reorganization
1.Threshold Considerations
2.Tax Consequences to T
3.Tax Consequences to S and P
a.Recognition of Gain or Loss
b.S's Basis in T Assets or Stock
c.P's Basis in S Stock
d.Survival of T's Attributes
4.Tax Consequences to T Shareholders and Security Holders
b.Amount and Character of Gain or Loss
c.Basis in Properties Received
Problem 11-8
D.Final Observation
Rockefeller v. United States
B.Tax Consequences to the Distributee
2."Control" and "Distribution of Control"
Contents note continued: Commissioner v. Gordon
3.Not a "Device"
Rev. Rul. 64-102
Problem 12-1
4.Active Business Requirement
Rev. Rul. 2003-38
5.Nonstatutory Requirements
Problem 12-2
6.Tax Consequences to Distributee in Qualifying Section
C.Tax Consequences to the Distributing Corporation
1.Distributions Preceded by Certain Stock Purchases
Problem 12-3
2.Distributions That Are Part of Certain Planned Acquisitions
Rev. Rul. 2005-65
Problem 12-4
3.Cash-Rich Split-Offs and the Problem of Disguised Exchanges
Problem 12-5
4.Section 355 Alternatives
Notice 94-93
A.Introduction and Prior-Law Limitations
1.Developments Prior to 1954 Code
Libson Shops, Inc. v. Koehler
2.Developments Between 1954 and 1986
B.Current-Law Limitations on NOL Carryovers
1.Section 382 Limitation and Required Business Continuity
2.Ownership Change
H. Conf. Rep. No. 99-841
Problem 13-1
Problem 13-2
Contents note continued: 3.Built-In Gains and Losses
Problem 13-3
4.Anti-Avoidance Rules
Berry Petroleum Co. v. Commissioner
B.Eligibility
Alumax Inc. v. Commissioner
Problem 14-1
C.Computation of Consolidated Taxable Income and the Special Treatment of "Intercompany Transactions"
Problem 14-2
D.Investment Adjustment Rules
Woods Investment Co. v. Commissioner
Problem 14-3
E.Loss Limitations on Dispositions of Member Stock