Merrill Lynch & Co., Inc. & Subsidiaries - Page 1
















                                   120 T.C. No. 3                                     


                               UNITED STATES TAX COURT                                


               MERRILL LYNCH & CO., INC. & SUBSIDIARIES, Petitioner v.                
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      


               Docket No. 18170-98.             Filed January 15, 2003.               


                    MP is the parent of an affiliated group (P) that                  
               filed consolidated income tax returns for the taxable                  
               years at issue.                                                        
                    1986 Transactions: In 1986, P decided to sell the                 
               principal investments business of MLL, a second tier                   
               subsidiary.  Because P wanted to retain certain assets                 
               of MLL, consisting of its lease advisory business and                  
               certain other assets (the 1986 retained assets) within                 
               the consolidated group while minimizing or eliminating                 
               gain on the sale of MLL outside the consolidated group,                
               P adopted and implemented a plan consisting of the                     
               following steps: (1) MLL distributed the 1986 retained                 
               assets to its subsidiary, Merlease; (2) MLL then sold                  
               Merlease cross-chain to a sister corporation (MLAM) in                 
               a transaction that qualified as a sec. 304, I.R.C.,                    
               deemed redemption; (3) MLL then distributed a dividend                 
               of the gross sale proceeds to its parent, MLCR, a                      
               wholly owned subsidiary of MP; (4) P then completed the                
               sale of MLL to a third party.  Under the consolidated                  





Page:   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