Samueli v. Commissioner: The Ninth Circuit Weighs in on Securities Lending
Author: Eschrat Rahimi-Laridjani.
Source: Volume 29, Number 03, Spring 2012 , pp.59-68(10)
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Abstract:
In a 2011 decision, Tempel v. Commissioner, the Tax Court had held, among other things. that gain on sales of state income tax credits was capital gain. In a new Chief Counsel Advice, the IRS has accepted the result, and most of the analysis, of Tempel, and it has also provided guidance about the tax consequences to a purchaser of credits. This article analyzes the CCA, discusses the remaining disagreements between the Service and the Tempel court, and stresses that the CCA’s conclusions are explicitly limited to nonrefundable credits.Keywords: Tempel v. Commissioner; CCA 201147024; sale of state tax credits; character of gain; capital asset; property; nonrefundable vs. refundable credits
Affiliations:
1: Freshfields Bruckhaus Deringer US LLP.