Third Circuit loss duplication prevents taxpayer claims | KPMG | GLOBAL

Third Circuit: Taxpayer not allowed deductions under loss duplication rule

U.S. taxpayer not allowed deductions, loss duplication

The U.S. Court of Appeals for the Third Circuit today affirmed a decision of the U.S. Tax Court, that $199 million of losses claimed by the taxpayer for 2001 and for 2002-2003 were deducted for the same underlying economic loss in the form of an underlying decline in value of subsidiaries.

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The Third Circuit concluded that the Tax Court had properly applied the Ilfeld doctrine that effectively bars a taxpayer from the practical equivalent of a double deduction under the loss duplication rules for consolidated returns.

 

Read the Third Circuit’s decision [PDF 160 KB] that includes a dissenting opinion. The case is: Duquesne Light Holdings, Inc. v. Commissioner, No, 14-1743 (3d Cir. June 29, 2017)

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