Community Banks: Good News for S Corporation Banks on Municipal Interest Expenses
Author: James D. Goeller.
Source: Volume 23, Number 05, May/June 2010 , pp.56-57(2)
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Abstract:
There has been some controversy as to whether the municipal interest expense disallowance provisions (sometimes referred to as the TEFRA disallowance as a result of the law that introduced the provisions) apply to an S corporation bank, since the income passes through to the shareholders, and individuals are generally not subject to those provisions. Controversy remains, but a March 2010 decision by the Seventh Circuit is favorable for S corporation bank taxpayers.Keywords: FIRPTA interest disallowance; municipal interest expense; Vainisi v. Commissioner; IRC Section 291
Affiliations:
1: Perry-Smith LLP.