3rd Circ. Closes Qualified Subsidiary Tax Election Loophole

Law360, New York (February 12, 2014, 3:09 PM EST) -- The Third Circuit on Wednesday rejected a Pennsylvania-based investment corporation's attempt to avoid taxes on more than $230 million realized from a 2003 stock sale, saying the company violated Internal Revenue Service rules allowing companies to claim the value of their subsidiaries’ assets.

In a unanimous three-judge opinion, judge Franklin Van Antwerpen said shareholders of Wind River Investment Corp. improperly increased the stated value of their stock by claiming income from a qualified subchapter S subsidiary tax election, called a Qsub, allowing them to deem the...
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Case Information

Case Title

R Ball for R Ball III by Appt, et al v. Commissioner of IRS

Case Number



Appellate - 3rd Circuit

Nature of Suit

Date Filed

May 2, 2013

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