The Sale of Tax Credits Revisited: A CCA Consecrates (Most of) Tempel

Posted: 22 May 2012

See all articles by Erik M. Jensen

Erik M. Jensen

Case Western Reserve University School of Law

Date Written: May, 21 2012

Abstract

In a 2011 decision, Tempel v. Commissioner, the Tax Court had held, among other things. that gain on sales of state income tax credits was capital gain. In a Chief Counsel Advice released later in the same year, the IRS accepted the result, and most of the analysis, of Tempel, and it also provided guidance about the tax consequences to a purchaser of credits. This article analyzes the CCA, discusses the remaining disagreements between the Service and the Tempel court, and stresses that the CCA’s conclusions were explicitly limited to nonrefundable credits.

Keywords: Tempel v. Commissioner, CCA 201147024, sale of state tax credits, character of gain, capital asset, property

JEL Classification: K34

Suggested Citation

Jensen, Erik M., The Sale of Tax Credits Revisited: A CCA Consecrates (Most of) Tempel (May, 21 2012). Journal Taxation of Investments, Spring 2012, at 59; Case Legal Studies Research Paper No. 2012-15. Available at SSRN: https://ssrn.com/abstract=2064149

Erik M. Jensen (Contact Author)

Case Western Reserve University School of Law ( email )

11075 East Boulevard
Cleveland, OH 44106-7148
United States
216-368-3613 (Phone)
216-368-2086 (Fax)

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