Overview
Russian Debt Transaction Lacked Economic Substance: In Russian Recovery Fund Ltd. v. United States, the US Court of Appeals for the Federal Circuit upheld a US Court of Federal Claims decision disallowing approximately $50 million of losses and imposed a 40% penalty on the partners of Bracebridge Capital LLC, including co-founder Nancy Zimmerman. The court ruled that a 1999 transaction to acquire nearly worthless Russian sovereign debt lacked economic substance, in part because investors were aware that the transaction was part of a plan to acquire assets with built-in tax losses when they entered into the transaction. The court also held that losses claimed on Zimmerman’s 2001 tax return were not protected by the standard three-year statute of limitations because the losses were “attributable to” the loss claimed in the partnership’s 2000 tax return.
House Budget Committee to Markup AHCA: The House Budget Committee scheduled a markup of the Affordable Care Act replacement legislation, the American Health Care Act, for Thursday, March 16 at 10:00 a.m.