The Sale of Tax Credits Revisited: A CCA Consecrates (Most of) Tempel
Posted: 22 May 2012
Date Written: May, 21 2012
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: Suggested Citation