Calling Tax Credit Structures Into Question

Law360, New York (September 14, 2012, 12:40 PM EDT) -- In a much-anticipated decision, the Court of Appeals for the Third Circuit reversed the Tax Court and held that the tax credit investor in a historic rehabilitation project was not a bona fide partner for tax purposes, and therefore could not be allocated any of the federal historic tax credits generated by the project.

The unanimous decision found that the investor, Pitney Bowes, was not a partner because it had no meaningful downside risk or any meaningful upside potential in the business conducted by the purported...
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