Jeffrey A. Galant and Dana L. Mark on CRI-Leslie – Musings on Plain Meaning, Absurdity and Capital Gain

Jeffrey A. Galant, counsel to Meltzer Lippe’s Tax & Tax Controversy, Trusts & Estates, Tax-Exempt Organizations, and Wealth Preservation & High Net Worth Planning practice groups, and Dana L. Mark provide commentary to practitioners on CRI-Leslie, a recent case illustrating the methodology used by the courts to interpret certain IRS code provisions. The authors’ commentary was published in the LISI Income Tax Planning Newsletter #137 (April 3, 2018).

The authors write that “the importance of capital gain treatment may have lessened under the new tax law (PL 115-97) due to the reduction in the corporate tax rate to 21% and the 20% pass through deduction. However, capital gain treatment is certainly still meaningful. That being said, a recent noteworthy case is CRI-Leslie, LLC v Commissioner. CRI-Leslie found against capital gain treatment in a matter of first impression. However, the decision’s greater importance may be its illustration of the methodology used by the courts to interpret the relevant Code provisions. Or, more to the point, whether the courts were justified in relying on the plain meaning rule rather than the legislative history in determining what the Code provisions mean.”

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