§53 — Credit for prior year minimum tax liability
120 citing cases
Statute Text — 26 U.S.C. §53
There shall be allowed as a credit against the tax imposed by this chapter for any taxable year an amount equal to the minimum tax credit for such taxable year.
For purposes of subsection (a), the minimum tax credit for any taxable year is the excess (if any) of—
the adjusted net minimum tax imposed for all prior taxable years beginning after 1986, over
the amount allowable as a credit under subsection (a) for such prior taxable years.
The credit allowable under subsection (a) for any taxable year shall not exceed the excess (if any) of—
the regular tax liability of the taxpayer for such taxable year reduced by the sum of the credits allowable under subparts A, B, D, E, and F of this part, over
the tentative minimum tax for the taxable year.
For purposes of this section—
The term “net minimum tax” means the tax imposed by section 55.
The adjusted net minimum tax for any taxable year is—
the amount of the net minimum tax for such taxable year, reduced by
the amount which would be the net minimum tax for such taxable year if the only adjustments and items of tax preference taken into account were those specified in clause (ii).
The following are specified in this clause—
the adjustments provided for in subsection (b)(1) of section 56, and
the items of tax preference described in paragraphs (1), (5), and (7) of section 57(a).
In the case of a corporation—
the preceding provisions of this subparagraph shall not apply, and
the adjusted net minimum tax for any taxable year is the amount of the net minimum tax for such year.
The term “tentative minimum tax” has the meaning given to such term by section 55(b).
In the case of a corporation—
subsection (b)(1) shall be applied by substituting “the net minimum tax for all prior taxable years beginning after 2022” for “the adjusted net minimum tax imposed for all prior taxable years beginning after 1986”, and
the amount determined under subsection (c)(1) shall be increased by the amount of tax imposed under section 59A for the taxable year.
Treasury Regulations
-
Treas. Reg. §1.53-1Limitation based on amount of tax
(a) General rule—(1) Targeted jobs credit. For taxable years beginning after December 31, 1978, the amount of the targeted jobs credit allowed by section 44B (as amended by the Revenue Act of 1978) shall not exceed 90 percent of the tax imposed by chapter 1, reduced by the credits enumerated in section 53(a).
(2) New jobs credit. For taxable years beginning before January 1, 1979, the amount of the new jobs credit allowed by section 44B (as in effect prior to enactment of the Revenue Act of 1978) shall not exceed the tax imposed by chapter 1, reduced by the credits enumerated in section 53(a).
(b) Special rule for 1978-79 fiscal year. In the case of a taxable year beginning before January 1, 1979, and ending after that date, the sum of the targeted jobs credit (determined without regard to the tax liability limitation in paragraph (a)(1) of this section) and the new jobs credit (determined without regard to the tax liability limitation in (a)(2) of this section) shall not exceed the tax imposed by chapter 1, reduced by the credits enumerated in section 53(a).
-
Treas. Reg. §1.53-1(a)General rule—(1) Targeted jobs credit.
General rule—(1) Targeted jobs credit. For taxable years beginning after December 31, 1978, the amount of the targeted jobs credit allowed by section 44B (as amended by the Revenue Act of 1978) shall not exceed 90 percent of the tax imposed by chapter 1, reduced by the credits enumerated in section 53(a).
(2) New jobs credit. For taxable years beginning before January 1, 1979, the amount of the new jobs credit allowed by section 44B (as in effect prior to enactment of the Revenue Act of 1978) shall not exceed the tax imposed by chapter 1, reduced by the credits enumerated in section 53(a).
-
Treas. Reg. §1.53-1(b)Special rule for 1978-79 fiscal year.
Special rule for 1978-79 fiscal year. In the case of a taxable year beginning before January 1, 1979, and ending after that date, the sum of the targeted jobs credit (determined without regard to the tax liability limitation in paragraph (a)(1) of this section) and the new jobs credit (determined without regard to the tax liability limitation in (a)(2) of this section) shall not exceed the tax imposed by chapter 1, reduced by the credits enumerated in section 53(a).
-
Treas. Reg. §1.53-2Carryback and carryover of unused credit
(a) Allowance of unused credit as a carryback or carryover—(1) In general. Section 53(b) (formerly designated as section 53(c) for taxable years beginning before 1979) provides for carrybacks and carryovers of unused targeted jobs credit (new jobs credit in the case of wages paid before 1979). An unused credit is the excess of the credit determined under section 51 for the taxable year over the limitation provided by § 1.53-1 for such taxable year. Subject to the limitations contained in paragraph (b) of this section and paragraph (f) of § 1.53-3, an unused credit shall be added to the amount allowable as a credit under section 44B for the years to which an unused credit can be carried. The year with respect to which an unused credit arises shall be referred to in this section as the “unused credit year.”
(2) Taxable years to which unused credit may be carried. An unused targeted jobs credit (new jobs credit in the case of wages paid before 1979) shall be a new employee credit carryback to each of the 3 taxable years preceding the unused credit year and a new employee credit carryover to each of the 15 taxable years succeeding the unused credit year. An unused credit must be carried first to the earliest of the taxable years to which it may be carried, and then to each of the other taxable years (in order of time) to the extent that the unused credit may not be added (because of the limitation contained in paragraph (b) of this section) to the amount allowable as a credit under section 44B for a prior taxable year.
(b) Limitations on allowance of unused credit—(1) In general. The amount of the unused targeted jobs credit (new jobs credit in the case of wages paid before 1979) from any particular unused credit year which may be added under section 53(b)(1) (section 53(c)(1) in the case of a new jobs credit) to the amount allowable as a credit under section 44B for any of the preceding or succeeding taxable years to which such credit may be carried shall not exceed the amount by which the limitation in § 1.53-1 for such preceding or succeeding taxable year exceeds the sum of (i) the credit allowable under section 44B for such preceding or succeeding taxable year, and (ii) other unused credits carried to such preceding or succeeding taxable year which are attributable to unused credit years prior to the particular unused credit year. Thus, in determining the amount, if any, of an unused credit from a particular unused credit year which shall be added to the amount allowable as a credit for any preceding or succeeding taxable year, the credit earned for such preceding or succeeding taxable year, plus any unused credits originating in taxable years prior to the particular unused credit year, shall first be applied against the limitation based on amount of tax for such preceding or succeeding taxable year. To the extent the limitation based on amount of tax for the preceding or succeeding year exceeds the sum of the credit earned for such year and other unused credits attributable to years prior to the particular unused credit year, the unused credit from the particular unused credit year shall be added to the amount allowable as a credit under section 44B for such preceding or succeeding year. If any portion of the unused credit is a carryback to a taxable year beginning before January 1, 1977, section 44B shall be deemed to have been in effect for such taxable year for purposes of allowing such carryback as a credit under section 44B. To the extent that an unused credit cannot be added for a particular preceding or succeeding taxable year because of the limitation contained in this paragraph, such unused credit shall be available as a carryback or carryover to the next succeeding taxable year to which it may be carried.
(2) Special rules for an electing small business corporation. An unused targeted jobs credit (new jobs credit in the case of wages paid before 1979) under section 44B of a corporation which arises in an unused credit year for which the corporation is not an electing small business corporation (as defined in section 1371(b)) and which is a carryback or carryover to a taxable year for which the corporation is an electing small business corporation shall not be added to the amount allowable as a credit under section 44B to the shareholders of such corporation for any taxable year. However, a taxable year for which the corporation is an electing small business corporation shall be counted as a taxable year for purposes of determining the taxable years to which such unused credit may be carried.
(3) Corporate acquisitions. For the carryover of unused credits under section 44B in the case of certain corporate acquisitions, see section 381(c)(26) and § 1.381(c)(26)-1.
(4) Examples. This paragraph may be illustrated by the following examples.
-
Treas. Reg. §1.53-2(a)Allowance of unused credit as a carryback or carryover—(1) In general.
Allowance of unused credit as a carryback or carryover—(1) In general. Section 53(b) (formerly designated as section 53(c) for taxable years beginning before 1979) provides for carrybacks and carryovers of unused targeted jobs credit (new jobs credit in the case of wages paid before 1979). An unused credit is the excess of the credit determined under section 51 for the taxable year over the limitation provided by § 1.53-1 for such taxable year. Subject to the limitations contained in paragraph (b) of this section and paragraph (f) of § 1.53-3, an unused credit shall be added to the amount allowable as a credit under section 44B for the years to which an unused credit can be carried. The year with respect to which an unused credit arises shall be referred to in this section as the “unused credit year.”
(2) Taxable years to which unused credit may be carried. An unused targeted jobs credit (new jobs credit in the case of wages paid before 1979) shall be a new employee credit carryback to each of the 3 taxable years preceding the unused credit year and a new employee credit carryover to each of the 15 taxable years succeeding the unused credit year. An unused credit must be carried first to the earliest of the taxable years to which it may be carried, and then to each of the other taxable years (in order of time) to the extent that the unused credit may not be added (because of the limitation contained in paragraph (b) of this section) to the amount allowable as a credit under section 44B for a prior taxable year.
-
Treas. Reg. §1.53-2(b)Limitations on allowance of unused credit—(1) In general.
Limitations on allowance of unused credit—(1) In general. The amount of the unused targeted jobs credit (new jobs credit in the case of wages paid before 1979) from any particular unused credit year which may be added under section 53(b)(1) (section 53(c)(1) in the case of a new jobs credit) to the amount allowable as a credit under section 44B for any of the preceding or succeeding taxable years to which such credit may be carried shall not exceed the amount by which the limitation in § 1.53-1 for such preceding or succeeding taxable year exceeds the sum of (i) the credit allowable under section 44B for such preceding or succeeding taxable year, and (ii) other unused credits carried to such preceding or succeeding taxable year which are attributable to unused credit years prior to the particular unused credit year. Thus, in determining the amount, if any, of an unused credit from a particular unused credit year which shall be added to the amount allowable as a credit for any preceding or succeeding taxable year, the credit earned for such preceding or succeeding taxable year, plus any unused credits originating in taxable years prior to the particular unused credit year, shall first be applied against the limitation based on amount of tax for such preceding or succeeding taxable year. To the extent the limitation based on amount of tax for the preceding or succeeding year exceeds the sum of the credit earned for such year and other unused credits attributable to years prior to the particular unused credit year, the unused credit from the particular unused credit year shall be added to the amount allowable as a credit under section 44B for such preceding or succeeding year. If any portion of the unused credit is a carryback to a taxable year beginning before January 1, 1977, section 44B shall be deemed to have been in effect for such taxable year for purposes of allowing such carryback as a credit under section 44B. To the extent that an unused credit cannot be added for a particular preceding or succeeding taxable year because of the limitation contained in this paragraph, such unused credit shall be available as a carryback or carryover to the next succeeding taxable year to which it may be carried.
(2) Special rules for an electing small business corporation. An unused targeted jobs credit (new jobs credit in the case of wages paid before 1979) under section 44B of a corporation which arises in an unused credit year for which the corporation is not an electing small business corporation (as defined in section 1371(b)) and which is a carryback or carryover to a taxable year for which the corporation is an electing small business corporation shall not be added to the amount allowable as a credit under section 44B to the shareholders of such corporation for any taxable year. However, a taxable year for which the corporation is an electing small business corporation shall be counted as a taxable year for purposes of determining the taxable years to which such unused credit may be carried.
(3) Corporate acquisitions. For the carryover of unused credits under section 44B in the case of certain corporate acquisitions, see section 381(c)(26) and § 1.381(c)(26)-1.
(4) Examples. This paragraph may be illustrated by the following examples.
-
Treas. Reg. §1.53-3Separate rule for pass-through of jobs credit
(a) In general. Under section 53(b), in the case of a new jobs credit or targeted jobs credit earned under section 44B by a partnership, estate or trust, or subchapter S corporation, the amount of the credit that may be taken into account by a partner, beneficiary, or shareholder may not exceed a limitation under section 53(b) separately computed with respect to the partner's, beneficiary's, or shareholder's interest in the entity. A credit is subject to the limitation of section 53(b) with respect to a partner, beneficiary, or shareholder if it is earned by a partnership, estate or trust, or subchapter S corporation in a taxable year ending within, or ending before, a taxable year beginning before January 1, 1979 of the partner, beneficiary, or shareholder. See paragraph (f) of this section for rules on carryback or carryover of a credit subject to separate limitation. This section prescribes rules, under the authority of section 44B(b), relating to the computation of the separate limitation. For purposes of this section, references to section 53(a) and (b) are to that section as it existed before it was amended by the Revenue Act of 1978. This paragraph may be illustrated by the following examples:
(b) Application of credit earned. A credit earned under section 44B by a partnership, estate or trust, or subchapter S corporation shall be applied by a partner, beneficiary, or shareholder, to the extent allowed under section 53(b), before applying any other credit earned under section 44B. For example, if an individual has a new jobs credit from a proprietorship of $2,000 and from a partnership (after applying section 53(b)) of $1,800, but the credit must be limited under section 53(a) to $3,000, the entire $1,800 credit from the partnership would be applied before any part of the $2,000 amount is applied.
(c) Amount of separate limitation. The amount of the separate limitation is equal to the partner's, beneficiary's, or shareholder's limitation under section 53(a) for the taxable year multiplied by a fraction. The numerator of the fraction is the portion of the taxpayer's taxable income for the year attributable to the taxpayer's interest in the entity. The denominator of the fraction is the taxpayer's total taxable income for the year reduced by the zero bracket amount, if any.
(d) Portion of taxable income attributable to an interest in a partnership, estate or trust, or subchapter S corporation—(1) General rule. The portion of a taxpayer's taxable income attributable to an interest in a partnership, estate or trust, or subchapter S corporation is the amount of income from that entity the taxpayer is required to include in gross income, reduced by—
(i) The amount of the deductions allowed to the taxpayer that are attributable to the taxpayer's interest in the entity; and
(ii) A proportionate share of the deductions allowed to the taxpayer not attributable to a specific activity (as defined in paragraph (e)).
If a deduction comprises both an item that is attributable to the taxpayer's interest in the entity and an item or items that are not attributable to the interest in the entity, and if the deduction is limited by a provision of the Code (such as section 170(b), relating to limitations on charitable contributions), the deduction must be prorated among the items taken into account in computing the deduction. For example, if an individual makes a charitable contribution of $5,000 and his distributive share of a partnership includes $2,000 in charitable contributions made by the partnership, and if the charitable contribution deduction is limited to $3,500 under section 170(b), then the portion of the deduction allowed to the taxpayer that is not attributable to a specific activity is $2,500 ($3,500 × ($5,000 ÷ $7,000)) and the portion of the deduction allowed to the taxpayer that is attributable to the interest in the partnership is $1,000 ($3,500 × ($2,000 ÷ $7,000)).
(2) Deductions attributable to an interest in an entity. Examples of deductions that are attributable to the taxpayer's interest in an entity include (but are not limited to) a deduction under section 1202 attributable to a net capital gain passed through the entity, and a deduction attributable to a deductible item (such as a charitable contribution) that has been passed through the entity.
(3) Computation of the proportionate share of deductions not attributable to a specific activity. The proportionate share of a deduction of the taxpayer not attributable to a specific activity is obtained by multiplying the amount of the deduction by a fraction. The numerator of the fraction is the income from the entity that the taxpayer is required to include in gross income, reduced by the amount of the deductions of the taxpayer that are attributable to the taxpayer's interest in the entity. The denominator is the taxpayer's gross income reduced by the amount of all the deductions attributable to specific activities.
(4) Examples. The method of determining the amount of taxable income attributable to an interest in a partnership, estate or trust, or subchapter S corporation is illustrated by the following examples:
(e) Deductions not attributable to a specific activity—(1) Specific activity defined. A specific activity means a course of continuous conduct involving a particular line of endeavor, whether or not the activity is carried on for profit. Examples of a specific activity are:
(i) A trade or business carried on by the taxpayer;
(ii) A trade or business carried on by an entity in which the taxpayer has an interest;
(iii) An activity with respect to which the taxpayer is entitled to a deduction under section 212;
(iv) The operation of a farm as a hobby.
(2) Types of deductions not attributable to a specific activity. Examples of deductions not attributable to a specific activity include charitable contributions made by the partner, beneficiary, or shareholder; medical expenses; alimony; interest on personal debts of the partner, beneficiary, or shareholder; and real estate taxes on the personal residence of the partner, beneficiary, or shareholder. For purposes of this section, in cases in which deductions are not itemized, the zero bracket amount is considered to be a deduction not attributable to a specific activity.
(f) Carryback or carryover of credit subject to separate limitation. A credit subject to the separate limitation under section 53(b) that is carried back or carried over to a taxable year beginning before January 1, 1979, is also subject to the separate limitation in the carryback or carryover year. For purposes of the preceding sentence, a credit that is earned by a partnership, a trust, or estate, or a subchapter S corporation in a taxable year of such entity ending within, or after, the taxable year of a partner beneficiary or shareholder beginning after December 31, 1978, will not be subject to the separate limitation in section 53(b) with respect to such partner, beneficiary, or shareholder. The taxpayer to whom the credit has been passed through shall not be prevented from applying the unused portion in a carryback or carryover year merely because the entity that earned the credit changes its form of conducting business if the nature of its trade or business essentially remains the same. The computation of the separate limitation in such a case shall reflect the income attributable to the taxpayer's interest in the entity in its revised form. Thus, a shareholder carrying over a credit from a subchapter S corporation may include dividends declared by that corporation after the subchapter S election had been terminated as income attributable to that person's interest in the entity. Similarly, if a partnership incorporates in a carryover year, any income attributable to an interest in the corporation will be regarded, for purposes of computing the separate limitation under section 53(b), as income attributable to an interest in the entity. This paragraph may be illustrated by the following examples:
-
Treas. Reg. §1.53-3(a)In general.
In general. Under section 53(b), in the case of a new jobs credit or targeted jobs credit earned under section 44B by a partnership, estate or trust, or subchapter S corporation, the amount of the credit that may be taken into account by a partner, beneficiary, or shareholder may not exceed a limitation under section 53(b) separately computed with respect to the partner's, beneficiary's, or shareholder's interest in the entity. A credit is subject to the limitation of section 53(b) with respect to a partner, beneficiary, or shareholder if it is earned by a partnership, estate or trust, or subchapter S corporation in a taxable year ending within, or ending before, a taxable year beginning before January 1, 1979 of the partner, beneficiary, or shareholder. See paragraph (f) of this section for rules on carryback or carryover of a credit subject to separate limitation. This section prescribes rules, under the authority of section 44B(b), relating to the computation of the separate limitation. For purposes of this section, references to section 53(a) and (b) are to that section as it existed before it was amended by the Revenue Act of 1978. This paragraph may be illustrated by the following examples:
-
Treas. Reg. §1.53-3(b)Application of credit earned.
Application of credit earned. A credit earned under section 44B by a partnership, estate or trust, or subchapter S corporation shall be applied by a partner, beneficiary, or shareholder, to the extent allowed under section 53(b), before applying any other credit earned under section 44B. For example, if an individual has a new jobs credit from a proprietorship of $2,000 and from a partnership (after applying section 53(b)) of $1,800, but the credit must be limited under section 53(a) to $3,000, the entire $1,800 credit from the partnership would be applied before any part of the $2,000 amount is applied.
-
Treas. Reg. §1.53-3(c)Amount of separate limitation.
Amount of separate limitation. The amount of the separate limitation is equal to the partner's, beneficiary's, or shareholder's limitation under section 53(a) for the taxable year multiplied by a fraction. The numerator of the fraction is the portion of the taxpayer's taxable income for the year attributable to the taxpayer's interest in the entity. The denominator of the fraction is the taxpayer's total taxable income for the year reduced by the zero bracket amount, if any.
-
Treas. Reg. §1.53-3(d)Portion of taxable income attributable to an interest in a partnership, estate or trust, or subchapter S corporation—(1) General rule.
Portion of taxable income attributable to an interest in a partnership, estate or trust, or subchapter S corporation—(1) General rule. The portion of a taxpayer's taxable income attributable to an interest in a partnership, estate or trust, or subchapter S corporation is the amount of income from that entity the taxpayer is required to include in gross income, reduced by—
-
Treas. Reg. §1.53-3(e)Deductions not attributable to a specific activity—(1) Specific activity defined.
Deductions not attributable to a specific activity—(1) Specific activity defined. A specific activity means a course of continuous conduct involving a particular line of endeavor, whether or not the activity is carried on for profit. Examples of a specific activity are:
-
Treas. Reg. §1.53-3(f)Carryback or carryover of credit subject to separate limitation.
Carryback or carryover of credit subject to separate limitation. A credit subject to the separate limitation under section 53(b) that is carried back or carried over to a taxable year beginning before January 1, 1979, is also subject to the separate limitation in the carryback or carryover year. For purposes of the preceding sentence, a credit that is earned by a partnership, a trust, or estate, or a subchapter S corporation in a taxable year of such entity ending within, or after, the taxable year of a partner beneficiary or shareholder beginning after December 31, 1978, will not be subject to the separate limitation in section 53(b) with respect to such partner, beneficiary, or shareholder. The taxpayer to whom the credit has been passed through shall not be prevented from applying the unused portion in a carryback or carryover year merely because the entity that earned the credit changes its form of conducting business if the nature of its trade or business essentially remains the same. The computation of the separate limitation in such a case shall reflect the income attributable to the taxpayer's interest in the entity in its revised form. Thus, a shareholder carrying over a credit from a subchapter S corporation may include dividends declared by that corporation after the subchapter S election had been terminated as income attributable to that person's interest in the entity. Similarly, if a partnership incorporates in a carryover year, any income attributable to an interest in the corporation will be regarded, for purposes of computing the separate limitation under section 53(b), as income attributable to an interest in the entity. This paragraph may be illustrated by the following examples:
-
Treas. Reg. §1.53-3(i)§1.53-3(i)
A trade or business carried on by the taxpayer;
(ii) A trade or business carried on by an entity in which the taxpayer has an interest;
(iii) An activity with respect to which the taxpayer is entitled to a deduction under section 212;
(iv) The operation of a farm as a hobby.
(2) Types of deductions not attributable to a specific activity. Examples of deductions not attributable to a specific activity include charitable contributions made by the partner, beneficiary, or shareholder; medical expenses; alimony; interest on personal debts of the partner, beneficiary, or shareholder; and real estate taxes on the personal residence of the partner, beneficiary, or shareholder. For purposes of this section, in cases in which deductions are not itemized, the zero bracket amount is considered to be a deduction not attributable to a specific activity.
120 Citing Cases
§ 53.4958-4(a)(2)(i). The same is true where a disqual- ified person derives an indirect benefit from the diversion of charitable 76 [*76] funds to a third party. See, e.g., Ononuju v. Commissioner, T.C. Memo. 2021-94, 122 T.C.M. (CCH) 109, 113 (holding that a taxpayer en- gaged in an excess benefit transaction when she diverted a charity’s funds
§ 53.4958-4(a)(2)(i). The same is true where a disqual- ified person derives an indirect benefit from the diversion of charitable 76 [*76] funds to a third party. See, e.g., Ononuju v. Commissioner, T.C. Memo. 2021-94, 122 T.C.M. (CCH) 109, 113 (holding that a taxpayer en- gaged in an excess benefit transaction when she diverted a charity’s funds
reasons for our conclusion that the microcaptive arrangement is not insurance in the commonly accepted sense, and therefore does not constitute insurance for federal income tax purposes, we discuss the legal effect of that conclusion in the next subsection. 53 [*53] 1. Commonly Accepted Notions of Insurance To determine whether an arrangement constitutes insurance in the commonly accepted sense, we look at numerous factors including: (1) whether the insuring company was organized, operated, and
And it must issue to each income beneficiary a Schedule K–1 properly describing the tax character of all distributions. See I.R.C. § 6034A(a); Treas. Reg. § 1.6034-1(a). G. Burden of Proof The Commissioner’s determinations in a notice of deficiency are generally presumed correct, and the taxpayer bears the burden of proving those de
Section 53 authorizes a taxpayer to claim a credit for net minimum tax imposed in prior years, adjusted for specified items. The minimum tax credit allowable for a taxable year is the excess, if any, of the adjusted net minimum tax imposed for all prior taxable years, over the amount allowable as a credit under section 53(a) for all prior taxable y
A summary of the requirements Section 170(f)(11) imposes, for charitable contribution deductions, heightened substantiation requirements on taxpayers, depending on the value of the contribution.27 Section 170(f)(11)(A)(i) provides that for 26 If SCT were to fail to enforce the terms of the easement deed, then “the Attorney General or the district attorney of the circuit in which the major portion of trust property lies shall represent the interests of the beneficiaries and the interests of this
It must issue to each income beneficiary a Schedule K–1, Beneficiary’s Share of Income, Deductions, Credits, etc., properly describing the tax character of all distributions. See § 6034(a); Treas. Reg. § 1.6012-3(a)(6). And it must maintain a record of the basis of all property contributed to it. See § 1015(a). 2. Analysis As petiti
irs of the organization.” Sec. 4958(f)(1)(A). B. Analysis 1. “Disqualified Person” The Department of the Treasury has issued comprehensive regulations un- der section 4958, including an elaboration of what it means to be a “disqualified person.” See sec. 53.4958-3, Foundation Excise Tax Regs. Persons holding specified powers and responsibilities with respect to a charity are automatically deemed to be “in a position to exercise substantial influence over * * * [its] af- fairs.” Id. para. (c). Th
53a-119(1) (2016). Respondent agrees that Connecticut law controls and that embezzlement constitutes a "theft." See sec. 1.165-8(d), Income Tax Regs. (defining "theft" to include "embezzlement"). But respondent disputes that Mr. Bruno's actions amounted to felony embezzlement under Connecticut law. We share respondent's concern. Embezzlement w
53-12-203 (2017); Ohio Rev. Code Ann. sec. 5807.02 (West 2017); Okla. Stat. tit. 60, sec. 175.24(E) (2017); Unif. Trust Code sec. 702(a) (Unif. Law Comm'n 2016). Since the MTAs are explicitly labeled "trust agreements," we find the requirement ofcollateral to be a neutral factor here. - 57 - • Whether repayments were made: As far as the recor
53-12-203 (2017); Ohio Rev. Code Ann. sec. 5807.02 (West 2017); Okla. Stat. tit. 60, sec. 175.24(E) (2017); Unif. Trust Code sec. 702(a) (Unif. Law Comm'n 2016). Since the MTAs are explicitly labeled "trust agreements," we find the requirement ofcollateral to be a neutral factor here. - 57 - • Whether repayments were made: As far as the recor
53-4- 63(a) (West 1996). In an effort to identify and define the residue, the parties focus on Items Eight and Nine ofClyde Sr.'s will. Item Eight expresses Clyde Sr.'s intent to leave assets to Jewell undiminished by any estate, inheritance, succession, death, or similar taxes and having a value "equal to the maximum marital deduction".6 5The
On that record, we further find that during each ofthe years 2010, 2011, and 2012 AHA was an applicable tax-exempt organization, as defined in section 4958(e).
10- (continued...) - 34 - [*34] The Commissioner does argue that the stock sale by itself, quite apart from the redemption, was a liquidation, but that still wouldn't free it from the MBCA's restrictions.2° Following the plain language ofthe statute and the reasoning of these courts, we hold that neither the stock redemption nor the stock sale and redemption together is governed by MUFTA.
10- (continued...) - 34 - [*34] The Commissioner does argue that the stock sale by itself, quite apart from the redemption, was a liquidation, but that still wouldn't free it from the MBCA's restrictions.2° Following the plain language ofthe statute and the reasoning of these courts, we hold that neither the stock redemption nor the stock sale and redemption together is governed by MUFTA.
10- (continued...) - 34 - [*34] The Commissioner does argue that the stock sale by itself, quite apart from the redemption, was a liquidation, but that still wouldn't free it from the MBCA's restrictions.2° Following the plain language ofthe statute and the reasoning of these courts, we hold that neither the stock redemption nor the stock sale and redemption together is governed by MUFTA.
Petitioner protests that caselaw concerning entitlement to deductions is inapposite because the issue at bar is entitlement to a credit.
ability need not have been known when the transfer was made." Wyche v. Commissioner, 36 B.T.A. 414, 419 (1937); see also Scott v. Commissioner, 117 F.2d 36, 38 (8th Cir. 1941), a_ffg 1939 WL 12120 (B.T.A.); 14A Mertens Law ofFederal Income Taxation, sec. 53.40 (2014) ("A transferee is retroactively liable for the transferor's taxes in the year ofthe transfer and also prior years, to the extent ofthe assets received from the transferor. This rule applies even where the transferor's tax liability
ability need not have been known when the transfer was made." Wyche v. Commissioner, 36 B.T.A. 414, 419 (1937); see also Scott v. Commissioner, 117 F.2d 36, 38 (8th Cir. 1941), a_ffg 1939 WL 12120 (B.T.A.); 14A Mertens Law ofFederal Income Taxation, sec. 53.40 (2014) ("A transferee is retroactively liable for the transferor's taxes in the year ofthe transfer and also prior years, to the extent ofthe assets received from the transferor. This rule applies even where the transferor's tax liability
ability need not have been known when the transfer was made." Wyche v. Commissioner, 36 B.T.A. 414, 419 (1937); see also Scott v. Commissioner, 117 F.2d 36, 38 (8th Cir. 1941), a_ffg 1939 WL 12120 (B.T.A.); 14A Mertens Law ofFederal Income Taxation, sec. 53.40 (2014) ("A transferee is retroactively liable for the transferor's taxes in the year ofthe transfer and also prior years, to the extent ofthe assets received from the transferor. This rule applies even where the transferor's tax liability
ability need not have been known when the transfer was made." Wyche v. Commissioner, 36 B.T.A. 414, 419 (1937); see also Scott v. Commissioner, 117 F.2d 36, 38 (8th Cir. 1941), a_ffg 1939 WL 12120 (B.T.A.); 14A Mertens Law ofFederal Income Taxation, sec. 53.40 (2014) ("A transferee is retroactively liable for the transferor's taxes in the year ofthe transfer and also prior years, to the extent ofthe assets received from the transferor. This rule applies even where the transferor's tax liability
ted liability as being that ofa transferee or of a transferee ofa transferee nor to evaluate its legal effect.'" Frank Sawyer Trust of May 1992 v. Commissioner, 712 F.3d 597, 612 n.5 (1st Cir. 2013) (quoting 14A Mertens Law ofFederal Income Taxation sec. 53:24, at 53-68). In Bos Lines, Inc. v. Commissioner, T.C. Memo. 1965-71, 1965 Tax Ct. Memo. LEXIS 259, at *31, aff'd, 354 F.2d 830 (8th Cir. 1965), we also said: "This identificationmay be necessary ifand when the additional one-yearperiod ofth
edit); sec. 30 (credit for qualified electric vehicles); sec. 30A (Puerto Rico economic activity credit); sec. 30B (alternative motor vehicle credit); sec. 30C (alternative fuel vehicle refueling property credit); sec. 38 (general business credit); sec. 53 (credit for prior year minimum tax liability); and sec. 54 (credit to holders ofclean renewable energy bonds). In using that same phrase, the general business credit under section 38 brings along with it more than 30 other credits that must al
redit); sec. 30 (credit for qualified electric vehicles); sec. 30A (Puerto Rico economic activity credit); sec. 30B (alternative motor vehicle credit); sec. 30C (alternative fuel vehicle refueling property credit); sec. 38 (general business credit); sec. 53 (credit for prior year minimum tax liability); sec. 54 (credit to holders of clean renewable energy bonds). In using that same phrase, the general business credit under section 38 brings along with it more than 30 other credits that must also
Conclusión In summary, we hold that (1) Èëtitioner is a pedper party before this dourt, ( ) Donald Cave, the assoaiate attorneys, and Mr.
2002 petitioner subsequently filed Forms 1120X, Amended U.S . Corporation Income Tax Return, for the consolidated group . For 1996 through 1998 petitioner's returns reflected a liability for regular income tax which was reduced by AMT credits under section 53 . For 1999 and 2000, petitioner's returns reflected a liability for AMT under section 55 . For 2001 and 2002 petitioner's returns reflected a liability for regular - 5 - income tax that was reduced by AMT credits under section 53 . Petitio
nd 2002 petitioner subsequently filed Forms 1120X, Amended U.S. Corporation Income Tax Return, for the consolidated group. For 1996 through 1998 petitioner’s returns reflected a liability for regular income tax which was reduced by AMT credits under section 53. For 1999 and 2000, petitioner’s returns reflected a liability for AMT under section 55. For 2001 and 2002 petitioner’s returns reflected a liability for regular income tax that was reduced by AMT credits under section 53. Petitioner paid
Section 53 authorizes a taxpayer to claim a credit for net minimum tax paid in prior years, adjusted for specified items . The minimum tax credit allowable under section 53 is the exbess - 12 - if any of the adjusted net minimum tax imposed for all prior taxable years beginning after 1986, over the amount allowable as a credit under section 53(a)
Although petitioners were not subject to the AMT in 2001, they computed their 2001 AMTI to ascertain the amount of the section 53 credit for prior year minimum tax liability that they could claim in 3 A statement attached to petitioners' 2001 return reports that the selling price of the shares totaled $248,972 and that the resulting gain was $149,024 ($248,972 - $99,948) .
Although petitioners were not subject to the AMT in 2001, they computed their 2001 AMTI to ascertain the amount of the section 53 credit for prior year minimum tax liability that they could claim in 2001.
olved for the subject years were as follows: - 8 - Date Principal Interest Amount Involved 1/1/96 $203,241 10% $20,324 1/1/97 223,565 10 22,356 1/1/98 245,922 10 24,592 1/1/99 270,514 10 27,051 1/1/00 297,565 10 29,756 124,079 Respondent noted that section 53.4941(e)-1(e)(1), Foundation Excise Tax Regs., treats prohibited transaction loans as occurring on the first day of each taxable year in the taxable period after the year in which the loan occurs and determined on the basis of these regulati
f an employees plan (sec. 401(a)) engaged in a prohibited transaction, then the entity lost its section 501(a) 7(...continued) the nature of the Plan's other assets, or (2) either the magnitude or the timing of the Plan's obligations. 8 We note that sec. 53.4941(d)-2(f), Private Foundation Excise Tax Regs., interprets sec. 4941(d)(1)(E), which is almost exactly the same as sec. 4975(c)(1)(D). Neither side cites this regulation for any purpose. Under the circumstances we do not explore in the ins
s. The phrase “substantially all of its income”, as used in the integral part test, has been interpreted to mean 85 percent or more of net income. Rev. Rul. 76-208, 1976-1 C.B. 161 (stating that the terminology should be given the same meaning as in sec. 53.4942(b)-1(c), Foundation Excise Tax Regs.). Since petitioner has indicated that it will distribute at least 85 percent of its net annual income, we focus on the further criteria intended to cultivate attentiveness. With respect to the first m
53-12-91 (1997), and constructive trusts, see Ga. Code 10 Prior to July 1, 1991, Georgia statutory law provided (Ga. Code Ann. secs. 53-12-22 and 53-12-26 (1982)): 53-12-22. Distinction between express and implied trusts. Trusts are either express or implied. Express trusts are those trusts created and manifested by agreement of the parties. I
Section 53- 2-115, hereby irrevocably and unqualifiedly disclaims, renounces and refuses to accept any and all rights, title and interest (including, but not limited to, rights in intestacy) in the Disclaimed Property Interest. Except for this disclaimer and refusal to accept any interest in the Disclaimed Property Interest, CATHY LASSITER SMITH [o
t fiduciary standards." Sec. 4975(f)(5). Where the prohibited transaction is the lending of money, the disqualified person corrects the transaction by repaying the principal plus reasonable interest. See Kadivar v. Commissioner, T.C. Memo. 1989-404; sec. 53.4941(e)-1(c)(4), Foundation Excise Tax Regs. Mr. Medina's assignment to the plan of future sales proceeds did - 8 - not result in the repayment of principal or interest. Therefore, petitioners did not correct the prohibited transaction, and t
t was likely to injure the pension plan." Commissioner v. Keystone Consol. Indus., Inc., supra at 160. In this case, the contribution of accounts receivable presents concern over valuation and imposes collection duties on the Plan. -12- 651 (1991); sec. 53.4941(a)-1(a)(3), Foundation Excise Tax Regs. Further, those who participate in a section 4975 prohibited transaction are liable for the excise tax notwithstanding that they may have acted innocently or in good faith. Rutland v. Commissioner, 8
Former Georgia Code section 53-7-7, applicable to decedents dying before January 1, 1998, provides in pertinent part as follows: (a) An executor * * * shall have the legal right to borrow money * * * for the purpose of paying any gift, estate, inheritance, income, sales, or ad valorem taxes due the United States * * * [or] state * * *.
For the reasons that follow, we hold that they cannot.
We conclude that the cited regulation, fashioned in an environment of “disqualified persons” and “prohibited transactions”, is distinguishable from what we face in the instant case, viz, “insiders” and “inurement”.
o extended the 1:00 p.m., deadline contained in the November 6 letter. It is hornbook law that, if an acceptance fails to comply with a time requirement in an - 20 - offer, the time requirement may be waived. E.g., 1 Jaeger, Williston on Contracts, sec. 53, at 171 (3d ed. 1957): Not infrequently an offeror who has imposed a limit of time in his offer does not care to insist upon it and by further negotiations may indicate a continued willingness to stand by the terms of his offer. Any such manif
53-12-4 (Michie 1978); (2) A corporation that has commenced business activity may dissolve voluntarily by written consent of the shareholders or by an act of the corporation. Id. at secs. 53-16-2 and 3; (3) Following the decision to dissolve the corporation, a statement of intent to dissolve must be filed with the State. Id. at sec. 53-16-4; a
o extended the 1:00 p.m., deadline contained in the November 6 letter. It is hornbook law that, if an acceptance fails to comply with a time requirement in an - 20 - offer, the time requirement may be waived. E.g., 1 Jaeger, Williston on Contracts, sec. 53, at 171 (3d ed. 1957): Not infrequently an offeror who has imposed a limit of time in his offer does not care to insist upon it and by further negotiations may indicate a continued willingness to stand by the terms of his offer. Any such manif
An unused section 29 credit of $6,057 from 1988 was carried over to 1989 pursuant to the section 53 minimum tax credit.
As security for the payment of Basic Rent, Lessee has delivered a letter of credit (herein, such letter of credit, and each extension or replacement thereof pursuant to this Section 53, is called the "Letter of Credit") in the aggregate amount equal to $8,872,245, with an expiry date of June 30, 1989, issued by Canadian Imperial Bank of Commerce ("CIBC") and Citicorp Real Estate, Inc., and with the Lessor * * * as beneficiary, which Letter of Credit may be assigned for collateral purposes by the
As security for the payment of Basic Rent, Lessee has delivered a letter of credit (herein, such letter of credit, and each extension or replacement thereof pursuant to this Section 53, is called the "Letter of Credit”) in the aggregate amount equal to $8,872,245, with an expiry date of June 30, 1989, issued by Canadian Imperial Bank of Commerce (“CIBC”) and Citicorp Real Estate, Inc., and with the Lessor * * * as beneficiary, which Letter of Credit may be assigned for collateral purposes by the