Do Corps pay tax under Bush-Tribune $1.4B earnings/no tax now in Tax Court

[papau]

Seems there are no capital gains that are taxable for a sale of corporate assets if instead of receiving cash directly for its assets, it receives shares in a specially created corporations who it controls and which gets the cash proceeds of the sale of the assets. The corporation uses all the cash, but it never folds the new corporation that now has zero assets but which still carries the deferred tax liabilty - and the corporation never pays taxes. If the IRS had not developed the case in Clinton 2000 with opinion published in 2001, do you think Bush IRS would have objected? They already say they are ready to settle for dimes on the dollar!

http://www.latimes.com/business/la-fi-taxbill7dec07.story
Tribune and IRS Face Off in Tax Court
The agency wants the firm to pay $915 million for a 1998 deal by the former Times Mirror.
By Josh Friedman and E. Scott Reckard
Times Staff Writers

December 7, 2004

A long-running tussle between Tribune Co. and the Internal Revenue Service shifted to U.S. Tax Court in Los Angeles on Monday as a trial began over fallout from business deals the media company inherited when it purchased Times Mirror Co.<snip>

Times Mirror reported gains of nearly $1.4 billion on the transactions. Its attorneys, however, told the IRS that the company had no tax liability because the units had been "disposed" of in separate tax-free reorganizations. <snip>

Hatef Behnia, a tax attorney at Gibson, Dunn & Crutcher who reviewed the deal for Times Mirror, testified that the deal's structure apparently originated with the accounting firm PricewaterhouseCoopers and was presented to Times Mirror by Goldman, Sachs & Co., the investment bank retained by the media company.<snip>

Douglas A. Schaaf, a Paul Hastings tax partner in Costa Mesa, noted that the IRS issued a legal opinion in 2001 challenging Times Mirror's deal and saying it would not accept sales structured in such a way in the future.<snip>

Given the huge amounts at stake, legal experts said they wouldn't be surprised to see the two sides reach a settlement before a verdict, which isn't expected until late next year.