John Hancock Loses $560 Million Tax Lawsuit

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John Hancock Loses $560 Million Tax Lawsuit

by Joseph M. Donegan on August 23, 2013

The U.S. Tax Court recently ruled against the John Hancock Life Insurance Co. in a tax lawsuit involving hundreds of millions in deductions, Bloomberg News reports.

The court opposed John Hancock's argument that tax deductions on a series of leveraged lease transactions - including depreciation, rental and interest expense, and transaction costs - amounting to $560 million were valid. The issue involves the insurance company's use of lease-in-lease-out and sale-in-lease-out transactions - notably referred to as LILO and SILO. These transactions occur when companies purchase sizable assets, which are then leased to third parties for use. Most companies then adopted the practice of claiming deductions on the assets, Bloomberg notes.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Joseph Donegan, Scarinci Hollenbeck | Attorney Advertising

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