Tax Court Reversed on Historic Rehabilitation Credits in Historic Boardwalk

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August 30, 2012

[Note:  Miller & Chevalier filed a brief in this case on behalf of National Trust for Historic Preservation]

In a detailed 85-page opinion, the Third Circuit has reversed the Tax Court’s opinion that upheld a claim for historic rehabilitation tax credits by the private partner in a public/private partnership that rehabilitated a historic property on the Atlantic City boardwalk.  See our earlier report here.  The government had argued both that the transaction lacked economic substance and that the private partner, Pitney Bowes, was not a bona fide partner in the enterprise.  The Third Circuit agreed with the government’s second … Read More

Briefing Completed and Oral Argument Set in Historic Boardwalk Case

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February 2, 2012

[Note:  Miller and Chevalier represents amicus National Trust for Historic Preservation in this case]

The government has filed its reply brief in the Historic Boardwalk case in the Third Circuit.   (See our prior report and the other briefs here.)  The brief mostly goes over the same ground as the opening brief in seeking to deny section 47 historic rehabilitation credits to the private investor partner in the partnership that rehabilitated East Hall on the Atlantic City boardwalk.  It attempts to side-step the Ninth Circuit’s economic substance analysis in Sacks by arguing that the Third Circuit did not explicitly … Read More

Third Circuit Considering Historic Rehabilitation Tax Credits in Historic Boardwalk Case

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January 12, 2012

[Note:  Miller and Chevalier represents amicus National Trust for Historic Preservation in this case]

We present here a guest post by our colleague David Blair who has considerable experience in this area and authored the amicus brief in this case on behalf of the National Trust for Historic Preservation.

The government has appealed to the Third Circuit its loss before the Tax Court in Historic Boardwalk Hall, LLC v. Comm’r, which involves a public/private partnership that earned historic rehabilitation tax credits under Code section 47.  The partnership rehabilitated East Hall, which is located on the boardwalk in Atlantic City.  … Read More

Tenth Circuit Affirms Tax Court in Anschutz

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December 27, 2011

As we have previously reported (see herehere, and here), in Anschutz the Tax Court collapsed two transactions and held that they amounted to a taxable sale of stock.  The Tenth Circuit was unmoved by the taxpayer’s appeal and has now affirmed, barely five weeks after hearing oral argument.  In its decision, the court of appeals analyzes the transaction through the lens of the eight factors for determining a sale listed in Grodt & McKay Realty, Inc. v. Commissioner, 77 T.C. 1221, 1237 (1981).  With respect to the factor that assesses whether an equity interest was … Read More

Update on GI Holdings

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December 13, 2011

In our earlier discussion of the disguised sale cases, we noted that the federal district court in New Jersey had issued an unpublished opinion in the GI Holdings case that applied the disguised sale rule of 26 U.S.C. § 707(a)(2)(B) to undo a transaction.  We noted that there was not yet an appealable order in that case, but at some point an appeal to the Third Circuit was possible.  It now appears that the case has been settled and will be formally dismissed in the coming weeks.  Thus, there will be no appeal to the Third Circuit, and the Fourth … Read More

Tenth Circuit Hears Oral Argument in Anschutz

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November 17, 2011

On November 16, the Tenth Circuit heard oral argument in the Anschutz case, involving the taxpayers’ appeal from the Tax Court’s decision to collapse two transactions involving the use of prepaid variable forward contracts (“PVFCs”) and concurrent share lending agreements (“SLAs”), and treat them as a taxable sale of stock.  A fuller description of the case and the parties’ briefs can be found in our prior reports here and here.

The panel hearing oral argument was Chief Judge Briscoe (a Clinton appointee and former Kansas state court judge and Assistant U.S. Attorney), Senior Judge McKay (a Carter appointee who … Read More

Government Files Response in Anschutz

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June 29, 2011

The government filed its response brief in Anschutz Co., et al. v. Commissioner, Nos. 11-9001 & 11-9002 (10th Cir.), on June 22, 2011 (linked below).  See our prior coverage here.  Not surprisingly, the government argues that the Tax Court got it right in viewing the putatively separate variable prepaid forward contracts and stock loans as two parts of one overall arrangement, designed to monetize the value of the taxpayer’s low-basis stock at the outset of the deal.  The Tax Court held that, in substance, the overall arrangement was a sale for tax purposes because the benefits and … Read More

Briefing Under Way in Anschutz

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May 17, 2011

As we’ve reported in the last few months, several securities lending cases are percolating in the appellate courts (see here and here).  On April 29, 2011, Anschutz Company filed the opening brief in its appeal of the Tax Court’s decision for the government (opinion and brief linked below).

At issue in Anschutz is the appropriate tax treatment of a set of transactions between the taxpayer and Donaldson, Lufkin & Jenrette Securities Corp. (“DLJ”).  The taxpayer sought to leverage long-held shares in publicly-traded railroad companies to obtain financing for other endeavors.  In the taxpayer’s hands, the shares had a low … Read More

Fourth Circuit Reverses Tax Court in Virginia Historic

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March 31, 2011

On March 29, 2011, the Fourth Circuit rendered its opinion in Virginia Historic Tax Credit Fund 2001 LP v. Comm’r, No. 10-1333 (opinion linked below).  As described in our previous coverage, the case involved an IRS challenge to the taxpayer’s treatment of partnerships used as marketing vehicles for state tax credits derived from historic rehabilitation projects.  Agreeing with the government’s disguised sale theory, the court reversed the Tax Court and ruled that the transactions at issue were taxable sales of state tax credits, as opposed to non-taxable capital contributions followed by partnership distributions.

After quickly dispensing with the … Read More

More Securities Loan Cases on Appeal

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March 21, 2011

A while ago we reported on a spate of IRS successes in cases involving purported securities loans (here).  The Samueli case is fully briefed in the Ninth Circuit and is expected to be argued in the next couple of months.  As we anticipated, two more of those cases, Anschutz and Calloway, have been appealed to the Tenth and Eleventh Circuits, respectively.  The taxpayer in Calloway filed his opening brief on March 15, 2011 (linked below).  Briefing has not yet begun in Anschutz.

In Calloway, the taxpayer was an IBM employee of many years who had … Read More

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