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IRS Ruling on Loss Portfolio Transfer Reaches an Unexpected Result, for Even More Unexpected Reasons  


Author:  F. Roy Sedore.


Source: Volume 20, Number 06, July/August 2007 , pp.26-29(4)




Journal of Taxation and Regulation of Financial Institutions

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Abstract: 

On March 19, with little fanfare, the Service issued PLR 200711017, which may portend significant changes in the tax treatment of what many considered fairly run of the mill reinsurance transactions. In doing so the Service raised, without addressing, a number of important issues regarding whether a transaction will be treated as insurance for tax purposes. The Service’s “fortuity” requirement, which has appeared in recent rulings as a prerequisite for tax treatment as insurance, has yet to be explained.

Keywords: Insurance losses; reinsurance; IRC Section 482; Section 845

Affiliations:  1: Baker & McKenzie LLP.

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