Ad: BlueJ Better Tax Answers. -Accomplish hours of research in seconds -Instantly draft high-quality communications -Verify answers using a library of trusted tax content. Learn more

Carlisle & Lanning on Nonrecognition of Corporation’s Settlement of Contract on Its Stock

Tax_analysts_30Linda E. Carlisle & Geoffrey B. Lanning (both of White & Case, Washington, D.C.) have published IRS: Nonrecognition Treatment for Corporation’s Settlement of Contract on Its Stock, 106 Tax Notes 591 (2005), also available on the Tax Analysts web site as Doc 2005-925, 2005 TNT 20-30. Here is the abstract:

In a recent private letter ruling (LTR 2004-50-016), the IRS ruled that under § 1032(a) a corporation does not recognize gain from the receipt of cash payments to settle contracts to sell its own stock. The contracts were included in publicly traded investment units commonly referred to as mandatory convertible securities that the corporation had issued to the public. In this report, Carlisle and Lanning review the history of § 1032(a), the tax treatment of a corporation’s dealings in its stock, and the tax treatment of mandatory convertible securities. The report then reviews the private letter ruling and analyzes the significance of the ruling.


About the Author

Ad: BlueJ Better Tax Answers. Blue J's generative AI tax research solution is transforming how tax experts work. Learn more.
Information and rates on advertising on TaxProf Blog