News & Analysis as of

Passive Activity

Foster Garvey PC

A Journey Through Subchapter S / A Review of The Not So Obvious & The Many Traps That Exist For The Unwary: Part X – Converting a...

Foster Garvey PC on

When considering converting a C corporation to an S corporation, tax advisers and taxpayers need to pay careful attention to the many perils that exist. Failure to pay close attention to the road in this area could result in...more

Smith Anderson

What Limited Partners Should Know About Soroban

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The Tax Court’s use of a functional analysis test to determine limited partner status in Soroban Capital Partners LP has had a ripple effect in the world of asset management. The decision’s impact will be felt in the tax and...more

Pillsbury Winthrop Shaw Pittman LLP

Treasury Department and IRS Issue Final Regulations Regarding the Transferability of Tax Credits Under Section 6418 of the...

The final regulations adopt the provisions of the previously proposed regulations with modest modifications and clarifications. The registration portal for transferring tax credits is open, and no significant changes have...more

Latham & Watkins LLP

Passive Foreign Investment Companies: Reinterpreting the Active Banking Exception for the Modern Banking Industry

Latham & Watkins LLP on

The passive foreign investment company (“PFIC”) rules generally impose unfavorable tax treatment on certain U.S. shareholders of foreign corporations that generate excess passive income or hold excess passive assets. In...more

Gray Reed

Understanding IRS Rules on Passive Activity Losses

Gray Reed on

Several abusive tax shelters in the 1970s and 1980s caused Congress to enact rules to prevent taxpayers from deducting losses when a taxpayer doesn’t materially participate in the activity.  These passive loss rules apply to...more

Hogan Lovells

CFIUS legislation takes final form, moves closer to president’s desk

Hogan Lovells on

Congress has moved closer to expanding the jurisdiction and powers of the Committee on Foreign Investment in the United States (CFIUS), the U.S. interagency committee that conducts national security reviews of foreign...more

A&O Shearman

M&A Watch: Changes to CFIUS Reviews are Coming, Likely Sooner than Later

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Proposed legislation that would sharpen the law governing U.S. national security reviews by the Committee on Foreign Investment in the United States (CFIUS) continues to move through Congress with bipartisan support, and...more

Williams Mullen

Control of a Set-aside Entity

Williams Mullen on

In this episode of GovCon Perspectives, Will Wozniak talks with Shayn Fernandez about what to do when passive investments raise questions of affiliation. Protestors often raise issues of affiliation in the form of size...more

Lowndes

5 Helpful Things to Know About the New Limitation on Claiming Losses

Lowndes on

Last month, President Trump signed into law the much publicized Tax Cut and Jobs Act. In part of our ongoing series discussing the changes made by the Act, the following answers five common questions regarding the new...more

Orrick, Herrington & Sutcliffe LLP

Blackrock Talks … And U.S. Companies Must Listen: The Revolution In U.S. Equity Markets And Its Increasingly Important Impact On...

On January 16, the day after the Martin Luther King Jr. holiday weekend, BlackRock's CEO and Co-founder, Larry Fink, released his annual letter to companies...more

Foley & Lardner LLP

FERC Confirms that FPA Section 203 Approval is Not Required for Tax Equity Investment

Foley & Lardner LLP on

Federal Energy Regulatory Commission (“FERC”) has issued a declaratory order confirming that no approval under Section 203 of the Federal Power Act (“FPA”) is required in connection with the transfer or issuance of passive...more

Akin Gump Strauss Hauer & Feld LLP

FERC Holds Certain Passive Equity Interests in Public Utilities Are “Non-Voting Securities” for Purposes of Section 203 of the...

On October 4, 2017, in a decision with significant implications for the energy project finance community, the Federal Energy Regulatory Commission (FERC or the “Commission”) granted a petition for declaratory order filed by...more

Stoel Rives - Renewable + Law

Tax Equity Investors Wave Goodbye to FPA Section 203

Tax equity investments, and potentially other passive investments, in renewable energy just became that much easier to make. Today, in response to a petition for declaratory order filed in January 2017 by a coalition of...more

Fisher Phillips

LinkedIn Over Her Head: When Broadcasting a Change in Employment Counts as Solicitation

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A recent blog post discussed an Illinois state court decision evaluating an employer’s claim against a former employee for breach of a non-solicitation agreement, when the employee had added former co-workers on LinkedIn...more

Fisher Phillips

Who Poked Whom First: Does a Friend Request or Social Media Invite Count as Solicitation?

Fisher Phillips on

When Gregory Gelineau quit his job at an Illinois-based insurance company to work for a competitor, he sent LinkedIn invitations to a group of his former co-workers. In response, Gelineau’s former company sued him. The...more

Bennett Jones LLP

Growing Concerns with Proposed Amendments Affecting Private Businesses and their Shareholders

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On July 18, 2017, Minister of Finance Bill Morneau announced sweeping changes to the way private businesses and their shareholders are taxed. The Government's proposals encompass three broad areas: (1) income sprinkling...more

Jones Day

Further Update on Federal Taxation - Australian Infrastructure Investment and Privatisation

Jones Day on

Last month, we reported in our White Paper on taxation proposals directed at infrastructure and utility privatisation transactions. Since we wrote, the Commonwealth Treasury ("Treasury") has published a policy paper directed...more

Eversheds Sutherland (US) LLP

California Court of Appeal Holds Doing Business ≠ Any Activity Engaged In for Pecuniary Gain

On January 12, 2017, the California Court of Appeal held in a published opinion that a taxpayer passively holding a 0.2 percent interest in a California-based limited liability company (CA LLC) was not “doing business” in the...more

Allen Matkins

O Frabjous Day! Court Holds Passive Member Is Not “Doing Business”

Allen Matkins on

The State of California imposes its franchise tax on every corporation (other than a bank, financial corporation or exempt corporation) that is “doing business” in California. Cal. Rev. & Tax Code § 23151. This tax is...more

Troutman Pepper Locke

SBA Expands and Clarifies Ability of SBICs to Finance in Passive Businesses

Troutman Pepper Locke on

New SBA rule affects the holding company and the blocker corporation exceptions for SBICs’ financing passive businesses. On December 28, the U.S. Small Business Administration (SBA) released a Final Rule modifying its...more

Akin Gump Strauss Hauer & Feld LLP

Renewable Energy Investor Group Asks FERC to Designate Certain Passive Equity Interests in Public Utilities as “Non-Voting...

On December 9, 2016, a group of investors in renewable energy projects (“Petitioners”) asked the Federal Energy Regulatory Commission (FERC) to find that certain non-managing (i.e., passive) “tax equity” interests in public...more

Miles & Stockbridge P.C.

Is Being a Real Estate Agent Sufficient to Show Material Participation under the Passive Activity Loss Rules?

In the recently decided case of Gragg v. United States, 118 AFTR 2d 2016-5091 (9th Cir. 2016), the U.S. Court of Appeals for the Ninth Circuit held that a taxpayer’s activities as a real estate professional were insufficient...more

Wilson Sonsini Goodrich & Rosati

Final IRS Regulations Clarify That Certain Solar Assets May Qualify as Real Property for REIT Purposes

On August 30, 2016, the IRS issued final regulations that clarify and expand the definition of "real property" for purposes of qualifying as a real estate investment trust (REIT). The final regulations substantially follow...more

Dorsey & Whitney LLP

Can a shareholder who is unable to rely on the HSR passive investor exemption still file a Schedule 13G? Maybe, says the SEC Staff...

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On July 12, 2016, the US Department of Justice announced a record $11 million fine against an activist investment firm for improperly claiming an exemption from Hart-Scott-Rodino’s notification and waiting period provisions...more

Parker Poe Adams & Bernstein LLP

Limited Liability Company Member Not an Employer Under NC Wage and Hour Act

The North Carolina Wage and Hour Act imposes liability on employers for failure to pay promised wages. The law is modeled after the federal Fair Labor Standards Act, and like the FLSA, individual managers and officers of a...more

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