Unionbancal Corporation - Page 9

                                        - 9 -                                         

              Section 267(f) prescribes special rules for losses incurred             
         on the sale or exchange of property between related taxpayers                
         that are members of the same controlled group.6  Section 267(f)(2)           
                   (2) Deferral (rather than denial) of loss from sale or             
              exchange between members.--In the case of any loss from the             
              sale or exchange of property which is between members of the            
              same controlled group and to which subsection (a)(1) applies            
              (determined without regard to this paragraph but with regard            
              to paragraph (3))--                                                     
                        (A) subsections (a)(1) and (d) shall not                      
                   apply to such loss, but                                            
                        (B) such loss shall be deferred until the property            
                   is transferred outside such controlled group and there             
                   would be recognition of loss under consolidated return             
                   principles or until such other time as may be                      
                   prescribed in regulations.                                         

               the taxpayer a loss sustained by the transferor is not                 
               allowable to the transferor as a deduction by reason of                
               subsection (a)(1) * * *; and                                           
                    (2) * * * the taxpayer sells or otherwise disposes of             
               such property * * * at a gain,                                         
               then such gain shall be recognized only to the extent that             
               it exceeds so much of such loss as is properly allocable to            
               the property sold or otherwise disposed of by the taxpayer.            
               * * *                                                                  
               6  For this purpose, a controlled group is determined under            
          the rules provided in sec. 1563(a), except that stock ownership             
          of more than 50 percent is substituted for the requirement in               
          sec. 1563 for stock ownership of at least 80 percent.  See sec.             
          267(f)(1).  It is undisputed that Standard Chartered-U.K. and               
          Union Bank were part of the same controlled group at the time of            
          the sale of the loan portfolio and immediately thereafter.  Cf.             
          Turner Broad. Sys., Inc. & Subs. v. Commissioner, 111 T.C. 315,             
          329-338 (1998).                                                             

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