United States Third Circuit

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Ball v. Commissioner of IRS, 13-2247

In an action arising out of nine consolidated cases before the United States Tax Court regarding the tax implications of an S Corp.'s election to treat its subsidiary as a "qualified subchapter S subsidiary" (Qsub) under Internal Revenue Code section 1361, the Tax Court's decision finding that the Qsub election and subsequent sale of the S Corp. parent did not create an item of income requiring the parties who held stock in the parent S Corp. to adjust their bases in stock, is affirmed, where the Tax Court properly concluded that: 1) unrecognized gain from a Qsub election does not constitute an item of income; and 2) the increase in stock bases and declared losses were improper.

Appellate Information

  • Decided 02/12/2014
  • Published 02/12/2014




  • United States Third Circuit


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