GEORGE MASON UNIVERSITY SCHOOL OF LAW. CORPORATE TAX Course Number: Credit Hours. Spring 2015 Tuesday 6:00-8:40 p.m.

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1 GEORGE MASON UNIVERSITY SCHOOL OF LAW CORPORATE TAX Course Number: Credit Hours Spring 2015 Tuesday 6:00-8:40 p.m. Hazel Hall Professor Sean W. Mullaney sean.w.mullaney@us.pwc.com Professor John J. Merrick John.j.merrick@irscounsel.treas.gov Office Hours: By Appointment I. Course Description This class is an introduction to the taxation of corporations and their shareholders. The class will focus on the formation of a corporation, the treatment of corporate distributions, redemptions of stock, and liquidations. The goal of the course is to provide an overview of the relevant U.S. tax law, emphasizing not only the applicable rules but also the relevant policy considerations. II. Prerequisites Income Tax III. Course Materials Bittker & Eustice, Federal Income Taxation of Corporations and Shareholders (7 th Ed. Student Ed.), including 2014 Cumulative Supplement. [ISBN: ] Eustice, Federal Income Taxation of Corporations and Shareholders, Revised Study Problems (7 th Ed.). [ISBN: ]

2 Assigned sections of the Internal Revenue Code ( Code) and treasury regulations. Hard-copy volumes of the Code and treasury regulations need not be acquired; instead, the sections may be accessed electronically (for example, via Westlaw or Lexis). Supplementary readings (to be made available). IV. Examination Procedures, Grading and Attendance The course will graded based upon a final examination, scheduled for 6:00 pm, April 30, Constructive class participation, such as insightful comments or questions, may increase your final examination grade to the next higher grade (e.g., from a B to a B+). The final examination will be anonymously graded, open-book, and taken in-class. You will be permitted to consult any written materials during the examination, including the course textbooks and other course materials. However, you may not copy into your examination answers any passages from materials brought by you into the examination room or otherwise accessed. In addition, you will not be permitted to confer or otherwise collaborate with anyone else -- classmates or otherwise -- in answering the examination questions. Your answers to the examination questions must be entirely your own, written during the in-class examination session. Expected class participation includes regular attendance and arrival on time (subject to health issues or other unforeseen circumstances). Attendance will be taken at the beginning of each class. V. Class Assignments Set forth below is a tentative schedule of assignments. The instructors may adjust the assignments periodically over the course of the semester. The primary materials for the course and, thus, the materials that should be emphasized when preparing -- consist of the assigned slide decks, sections of the Internal Revenue Code/regulations, court cases, and revenue rulings. Assignments from B&E, including the study problems, are used to supplement these primary materials. It is important to note that chapters 8 and 9 in the 2014 cumulative supplement supersede those chapters in the main volume. Thus, please consult these chapters only as included in the 2014 cumulative supplement. 2

3 Class 1 (January 6 th ): Introduction to Corporate Tax Code: 11(a); 7701(a)(2)-(3); 7704(a)-(b). Regulations: , (a) through -2(c)(2)(i), (a) and - 3(b)(1). B&E: Skim all of the following ; ; , Study Problems (Lesson 1): (1)-(4), (6). Class 2 (January 13): Requirements of 351 Nonrecognition Code: 248; 351; 368(c); 441(a)-(e); 448(a)-(b); 1001(a)-(c); 1012(a); Regulations: , (a) through -2(c)(2)(i), (a) and - 3(b)(1). Cases and Rulings: Rev. Rul ( I.R.B. 938). B&E: ; , 3.12, 3.15[1]; 5.06[1], Study Problems (Lesson 3A): (1)-(4), (6) and (8). Class 3 (January 20 th ): Transfer of Property, Receipt of Boot, Gain Recognition, Basis Determination Code: 118; 351; 358; 362; Cases and Rulings: Commissioner v. Fink, 483 U.S. 89 (1987); E.I. dupont de Nemours v. United States, 471 F.2d 1211 (Ct. Cl. 1973); Rev. Rul , C.B. 133; Rev. Rul , C.B. 179; Rev. Rul , C.B. 140; Rev. Rul , C.B. 101; Rev. Rul , C.B. 139; Rev. Rul , C.B. 79; Rev. Rul , C.B. 117; Rev. Rul , I.R.B B&E: 3.04; 3.05, Study Problems: (Lesson 3B): (1)-(5). Class 4 (January 27 th ): Treatment of Liabilities; Midstream Transfers Code: 357; 358; 362;

4 Cases: Lessinger v. Commissioner, 872 F.2d 519 (2d Cir. 1989); Peracchi v. Commissioner, 143 F.3d 487 (9th Cir. 1998); Seggerman Farms v. Commissioner, 308 F. 3d 803 (7th Cir. 2002); Rev. Rul , C.B. 113; Rev. Rul , C.B. 122; Rev. Rul , C.B. 115; Rev. Rul , C.B. 36; Wham Construction Co., Inc. v. United States, 600 F.2d 1052 (4th Cir. 1979); Black & Decker Corp. v. United States, 436 F.3d 431 (4th Cir. 2006). B&E: 3.06, Study Problems: To Be Provided Class 5 (February 3 rd ): Capital Structure Debt/Equity; Dividends Received Deduction Code: 241; 243(a)-(c); 246(c); 246A(a); 385. Cases and Rulings: Fin Ray Realty Co. v. United States, 398 F.2d 694 (3d Cir. 1968). B&E: [3]; 4.04; 4.21; Study Problems Lesson 4: (2), (3) Lesson 2B: (1) Class 6 (February 10 th ): Distributions in General, Earnings and Profits Code: 301; 312; 316. Regulations: ; Cases and Rulings: Rev. Rul , C.B. 74; Rev. Rul , C.B. 101; Rev. Rul , C.B. 103; Rev. Rul , C.B. 108; Maher v. Commissioner, 469 F.2d 225 (8th Cir. 1972); Rev. Rul , C.B. 86. B&E (Cumulative Supplement): , Study Problems: To Be Provided Class 7 (February 17 th ): Distributions In Kind and Constructive Distributions Code: 311; 312(a)-(c). 4

5 Cases and Rulings: General Utilities and Operating Co. v. Helvering, 296 U.S. 200 (1935); Alterman Foods, Inc. v. U.S., 611 F.2d 866 (Cl. Ct. 1979). B&E (Cumulative Supplement): 8.06; Study Problems (Lesson 5B): (1), (2), (4) and (5) through (8). Class 8 (February 24 th ): Stock Redemptions Code: 301; 302; 317; 318. Regulations: Cases and Rulings: Himmel v. Commissioner, 338 F.2d 815 (2d Cir.1964); United States v. Davis, 397 U.S. 301 (1970). B&E (Cumulative Supplement): Study Problems: To Be Provided Class 9 (March 3 rd ): Bootstrap Acquisitions; Partial Liquidations; Collateral Consequences to Corporations/Shareholders Code: 162(k); 267(a)(1) and (f); 301(d); 302(b)(4); 312(a)-(c) and (n)(7); 1059(a)-(c). Regulations: (c) (including examples (1)-(3)). Cases and Rulings: Zenz v. Quinlivan, 213 F2d 914 (6 th Cir. 1954); Rev. Rul , C.B. 43. B&E: 5.04[6] B&E (Cumulative Supplement): 9.06; 9.07, (other than 9.23[2]). Study Problems: Lesson 6A: (7) Lesson 6B: (4) March 10 th No Class, Spring Recess 5

6 Class 10 (March 17 th ): Redemptions by Related Corporations Code: 301; 302; 304; 318; Regulations: ; Cases and Rulings: Estate of MacArthur v. United States, 580 F.2d 442 (Ct. Cl. 1978); Bhada v Commissioner, 89 T.C. 959 (1987), aff d 892 F. 2d 39 (6th Cir. 1989); Rev. Rul , C.B. 74; Rev. Rul , C.B. 97. B&E: 9.05, 9.09, 9.24[4]. Study Problems: Lesson 6C: (1)-(4) Class 11 (March 24 th ): Nontaxable Stock Distributions; Preferred Stock Bailouts Code: 305(a)-(d); 306; 307. Regulations: (a); through -3; ; (d) and (e). Cases and Rulings: Chamberlin v. Comm r, 207 F.2d 462 (6 th Cir. 1953); Estate of Rosenberg v. Comm r, 36 T.C. 716 (1961). B&E: Skim ; Read Study Problems: Lesson 7B: (1)(a)-(f) (ignore S corporation aspect of (1)(e)) Lesson 7A: (2)(a) Class 12 (March 31 st ): Complete Liquidations Code: 331, 334(a), 336. Regulations: (c). Cases and Rulings: Telephone Answering Service Co., Inc. v. Commissioner, 63 T.C. 423 (1974) (majority opinion only; ignore dissent); Commissioner v. Court Holding Co., 324 U.S. 331 (1945); United States v. Cumberland Public Service Co., 338 U.S. 451 (1950); Rev. Rul , C.B. 140; Rev. Rul , C.B

7 B&E: [3]; Study Problems (Lesson 8A): (1)(a) and (2)-(6) (ignore all aspects related to S corporations) Class 13 (April 7 th ): Subsidiary Liquidations Code: 332, 334(b), 336; 337; 381. Cases and Rulings: Rev. Rul , C.B. 67; Rev. Rul , C.B. 70; Rev. Rul , C.B. 120; George L. Riggs, Inc. v. Commissioner, 64 T.C. 474 (1975); H.K. Porter Co., Inc. v. Commissioner, 87 T.C. 689 (1986); Associated Wholesale Grocers, Inc. v. United States, 927 F.2d 1517 (10th Cir. 1991); Rev. Rul , C.B B&E: Study Problems: Lesson 8B: (1), (2), (5), (6) Class 14 (April 14 th ): Make-Up/Review Final Exam: Thursday, April 30 th, at 6:00 pm 7