- 6 -
which represented 20 percent of the loss claimed on petitioner’s
original 1984 return. Remaining losses associated with the sale
of the loan portfolio were deferred pursuant to section 267(f).3
Tax Treatment of the Loan Portfolio Deferred Loss for Taxable
Year 1988
On its Federal income tax return for taxable year 1988,
petitioner originally claimed no deduction for any loss resulting
from the sale of the loan portfolio in 1984. Instead, as
previously discussed, petitioner initially sought to deduct such
losses with respect to its 1984 taxable year. The settlement of
its 1984 taxable year having resulted in an allowance for that
year of only $2,314,379 of the losses, petitioner sought an
affirmative adjustment for its 1988 taxable year, claiming that
losses deferred from the 1984 loan portfolio sale should be
restored to petitioner on October 31, 1988, when it left the
Standard Chartered controlled group. Respondent disallowed
petitioner’s claim.
The Competent Authority Process
For United Kingdom income tax purposes, Standard Chartered-
U.K. claimed losses with respect to the loan portfolio predicated
3 The appeals settlement left unresolved the value of the
loan portfolio at the time of its sale to Standard Chartered-U.K.
Accordingly, the amount of any loss deferred under sec. 267 was
not determined as part of the settlement agreement.
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