State Payout Bonuses were Capital Contributions  

Oleh:

Reichert, Charles J.

Jenis: Article from Bulletin/Magazine
Dalam koleksi: Journal of Accountancy vol. 211 no. 3 (Mar. 2011), page 54-55.
Topik: Federal Court Decisions; States; Bonuses; Contributions to Capital; Insurance Companies; Internal Revenue Code -- Section 118(a)

Ketersediaan

Perpustakaan Pusat (Semanggi) Nomor Panggil: JJ85.30 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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The US District Court for the Middle District of Florida held that payments received by an insurance company from the state of Florida were capital contributions and not income, since the state intended the payments to be nonshareholder capital contributions to encourage capital investment by private insurers in the Florida insurance market. IRC § 118(a) excludes any contribution to the capital of the taxpayer from income. It held that the language of Florida's legislation intended that the bonuses would be paid-in capital, not income. The bonuses were bargained for, since the two parties negotiated the takeout arrangements.

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