- 5 -
The 1984 Sale of the Loan Portfolio
On December 31, 1984, Union Bank sold to Standard Chartered-
U.K. loans that it had made to various foreign countries (the
loan portfolio). The sales price was $422,985,520. The face
value of the loan portfolio was $434,557,415.
On October 31, 1988, when SCOH sold all its stock in
Standard Chartered to California First Bank, the loan portfolio
had not been disposed of outside of the controlled group.
Standard Chartered-U.K. transferred the loan portfolio outside of
the controlled group in 1989.
Tax Treatment of the Loan Portfolio Sale for Taxable Year 1984
On its 1984 corporate Federal income tax return, petitioner
claimed a loss of $11,571,895 in connection with the sale of the
loan portfolio, corresponding to the difference between
petitioner’s basis in the loan portfolio ($434,557,415) and the
sales price ($422,985,520). In 1995, in the course of
respondent’s Appeals Office review of the audit determinations
for the 1984 taxable year, petitioner filed an amended Federal
income tax return for its 1984 taxable year, claiming a revised
loss of $84,079,067 on the sale of the loan portfolio to Standard
Chartered-U.K. Respondent denied this affirmative adjustment.
Petitioner and respondent reached a partial appeals
settlement for taxable year 1984, under which respondent allowed
petitioner a loss deduction in 1984 in the amount of $2,314,379,
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011