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Clarification of economic substance doctrine

2 rules0 of 5 subsections

in view

Whole section

Encodings · 2

transaction_has_economic_substance26 USC § 7701 (o) · derived

26 USC 7701(o)

name: transaction_has_economic_substance
kind: derived
entity: Transaction
dtype: Judgment
period: Year
source: 26 USC 7701(o)
metadata:
  proof:
    atoms:
      - path: versions[0].formula
        kind: condition
        source:
          corpus_citation_path: us/statute/26/7701
          excerpt: >-
            changes in a meaningful way (apart from Federal income tax effects)
            the taxpayer's economic position
      - path: versions[0].formula
        kind: condition
        source:
          corpus_citation_path: us/statute/26/7701
          excerpt: >-
            the taxpayer has a substantial purpose (apart from Federal income
            tax effects)
versions:
  - effective_from: '2024-01-01'
    formula: >-
      economic_substance_doctrine_is_relevant_to_transaction

      and
      transaction_changes_taxpayer_economic_position_meaningfully_apart_from_federal_income_tax_effects

      and
      taxpayer_has_substantial_non_federal_income_tax_purpose_for_transaction

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profit_potential_taken_into_account_for_economic_substance26 USC § 7701 (o) · derived

26 USC 7701(o)

name: profit_potential_taken_into_account_for_economic_substance
kind: derived
entity: Transaction
dtype: Judgment
period: Year
source: 26 USC 7701(o)
metadata:
  proof:
    atoms:
      - path: versions[0].formula
        kind: condition
        source:
          corpus_citation_path: us/statute/26/7701
          excerpt: >-
            only if the present value of the reasonably expected pre-tax profit
            from the transaction is substantial in relation to the present value
            of the expected net tax benefits
versions:
  - effective_from: '2024-01-01'
    formula: >-
      transaction_relies_on_profit_potential_for_economic_substance

      and
      present_value_of_reasonably_expected_pretax_profit_is_substantial_in_relation_to_expected_net_tax_benefits

open in graph ↗

▸rulespec code

Shown source

statutes/26/7701.yaml

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This encoding covers the parent provision us/statute/26/7701; no dedicated encoding exists for this exact provision yet.

View on GitHub

Rules

motor_vehicle_business_use_minimum_fraction

Parameter

source: 26 USC 7701(h)

- name: motor_vehicle_business_use_minimum_fraction
  kind: parameter
  dtype: Rate
  source: 26 USC 7701(h)
  metadata:
    proof:
      atoms:
        - path: versions[0].formula
          kind: parameter
          source:
            corpus_citation_path: us/statute/26/7701
            excerpt: >-
              more than 50 percent of the use of the property subject to such agreement is to be in
              a trade or business of the lessee
  versions:
    - effective_from: '2024-01-01'
      formula: '0.50'

qualified_motor_vehicle_operating_agreement

Derived

source: 26 USC 7701(h)

- name: qualified_motor_vehicle_operating_agreement
  kind: derived
  entity: MotorVehicleOperatingAgreement
  dtype: Judgment
  period: Year
  source: 26 USC 7701(h)
  metadata:
    proof:
      atoms:
        - path: versions[0].formula
          kind: condition
          source:
            corpus_citation_path: us/statute/26/7701
        - path: versions[0].formula
          kind: import
          import:
            target: us:statutes/26/7701#motor_vehicle_business_use_minimum_fraction
            output: motor_vehicle_business_use_minimum_fraction
            hash: sha256:local
  versions:
    - effective_from: '2024-01-01'
      formula: >-
        agreement_is_with_respect_to_motor_vehicle_including_trailer

        and
        lessor_personal_liability_plus_eligible_pledged_property_value_equals_or_exceeds_acquisition_financing

        and lessee_separately_signed_perjury_certification_of_trade_or_business_use_fraction >
        motor_vehicle_business_use_minimum_fraction

        and
        lessee_separately_signed_notice_that_lessee_will_not_be_treated_as_owner_for_federal_income_tax

        and not lessor_knows_certification_is_false

motor_vehicle_agreement_treated_as_lease

Derived

source: 26 USC 7701(h)

- name: motor_vehicle_agreement_treated_as_lease
  kind: derived
  entity: MotorVehicleOperatingAgreement
  dtype: Judgment
  period: Year
  source: 26 USC 7701(h)
  metadata:
    proof:
      atoms:
        - path: versions[0].formula
          kind: condition
          source:
            corpus_citation_path: us/statute/26/7701
        - path: versions[0].formula
          kind: import
          import:
            target: us:statutes/26/7701#qualified_motor_vehicle_operating_agreement
            output: qualified_motor_vehicle_operating_agreement
            hash: sha256:local
  versions:
    - effective_from: '2024-01-01'
      formula: |-
        qualified_motor_vehicle_operating_agreement
        and agreement_contains_terminal_rental_adjustment_clause
        and agreement_would_be_treated_as_lease_but_for_terminal_rental_adjustment_clause

lessee_not_owner_during_motor_vehicle_operating_agreement

Derived

source: 26 USC 7701(h)

- name: lessee_not_owner_during_motor_vehicle_operating_agreement
  kind: derived
  entity: MotorVehicleOperatingAgreement
  dtype: Judgment
  period: Year
  source: 26 USC 7701(h)
  metadata:
    proof:
      atoms:
        - path: versions[0].formula
          kind: condition
          source:
            corpus_citation_path: us/statute/26/7701
        - path: versions[0].formula
          kind: import
          import:
            target: us:statutes/26/7701#qualified_motor_vehicle_operating_agreement
            output: qualified_motor_vehicle_operating_agreement
            hash: sha256:local
  versions:
    - effective_from: '2024-01-01'
      formula: |-
        qualified_motor_vehicle_operating_agreement
        and agreement_contains_terminal_rental_adjustment_clause

transaction_has_economic_substance

Derived

source: 26 USC 7701(o)

- name: transaction_has_economic_substance
  kind: derived
  entity: Transaction
  dtype: Judgment
  period: Year
  source: 26 USC 7701(o)
  metadata:
    proof:
      atoms:
        - path: versions[0].formula
          kind: condition
          source:
            corpus_citation_path: us/statute/26/7701
            excerpt: >-
              changes in a meaningful way (apart from Federal income tax effects) the taxpayer's
              economic position
        - path: versions[0].formula
          kind: condition
          source:
            corpus_citation_path: us/statute/26/7701
            excerpt: the taxpayer has a substantial purpose (apart from Federal income tax effects)
  versions:
    - effective_from: '2024-01-01'
      formula: >-
        economic_substance_doctrine_is_relevant_to_transaction

        and
        transaction_changes_taxpayer_economic_position_meaningfully_apart_from_federal_income_tax_effects

        and taxpayer_has_substantial_non_federal_income_tax_purpose_for_transaction

profit_potential_taken_into_account_for_economic_substance

Derived

source: 26 USC 7701(o)

- name: profit_potential_taken_into_account_for_economic_substance
  kind: derived
  entity: Transaction
  dtype: Judgment
  period: Year
  source: 26 USC 7701(o)
  metadata:
    proof:
      atoms:
        - path: versions[0].formula
          kind: condition
          source:
            corpus_citation_path: us/statute/26/7701
            excerpt: >-
              only if the present value of the reasonably expected pre-tax profit from the
              transaction is substantial in relation to the present value of the expected net tax
              benefits
  versions:
    - effective_from: '2024-01-01'
      formula: >-
        transaction_relies_on_profit_potential_for_economic_substance

        and
        present_value_of_reasonably_expected_pretax_profit_is_substantial_in_relation_to_expected_net_tax_benefits

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us/statute/26/7701/o — Clarification of economic substance doctrine · Axiom

Clarification of economic substance doctrine

2 rules0 of 5 subsections

Official source

in view

Whole section

Encodings · 2

transaction_has_economic_substance26 USC § 7701 (o) · derived

26 USC 7701(o)

name: transaction_has_economic_substance
kind: derived
entity: Transaction
dtype: Judgment
period: Year
source: 26 USC 7701(o)
metadata:
  proof:
    atoms:
      - path: versions[0].formula
        kind: condition
        source:
          corpus_citation_path: us/statute/26/7701
          excerpt: >-
            changes in a meaningful way (apart from Federal income tax effects)
            the taxpayer's economic position
      - path: versions[0].formula
        kind: condition
        source:
          corpus_citation_path: us/statute/26/7701
          excerpt: >-
            the taxpayer has a substantial purpose (apart from Federal income
            tax effects)
versions:
  - effective_from: '2024-01-01'
    formula: >-
      economic_substance_doctrine_is_relevant_to_transaction

      and
      transaction_changes_taxpayer_economic_position_meaningfully_apart_from_federal_income_tax_effects

      and
      taxpayer_has_substantial_non_federal_income_tax_purpose_for_transaction

open in graph ↗

profit_potential_taken_into_account_for_economic_substance26 USC § 7701 (o) · derived

26 USC 7701(o)

name: profit_potential_taken_into_account_for_economic_substance
kind: derived
entity: Transaction
dtype: Judgment
period: Year
source: 26 USC 7701(o)
metadata:
  proof:
    atoms:
      - path: versions[0].formula
        kind: condition
        source:
          corpus_citation_path: us/statute/26/7701
          excerpt: >-
            only if the present value of the reasonably expected pre-tax profit
            from the transaction is substantial in relation to the present value
            of the expected net tax benefits
versions:
  - effective_from: '2024-01-01'
    formula: >-
      transaction_relies_on_profit_potential_for_economic_substance

      and
      present_value_of_reasonably_expected_pretax_profit_is_substantial_in_relation_to_expected_net_tax_benefits

open in graph ↗

▸rulespec code

Shown source

statutes/26/7701.yaml

Displaying the canonical repository encoding.

This encoding covers the parent provision us/statute/26/7701; no dedicated encoding exists for this exact provision yet.

View on GitHub

Rules

motor_vehicle_business_use_minimum_fraction

Parameter

source: 26 USC 7701(h)

- name: motor_vehicle_business_use_minimum_fraction
  kind: parameter
  dtype: Rate
  source: 26 USC 7701(h)
  metadata:
    proof:
      atoms:
        - path: versions[0].formula
          kind: parameter
          source:
            corpus_citation_path: us/statute/26/7701
            excerpt: >-
              more than 50 percent of the use of the property subject to such agreement is to be in
              a trade or business of the lessee
  versions:
    - effective_from: '2024-01-01'
      formula: '0.50'

qualified_motor_vehicle_operating_agreement

Derived

source: 26 USC 7701(h)

- name: qualified_motor_vehicle_operating_agreement
  kind: derived
  entity: MotorVehicleOperatingAgreement
  dtype: Judgment
  period: Year
  source: 26 USC 7701(h)
  metadata:
    proof:
      atoms:
        - path: versions[0].formula
          kind: condition
          source:
            corpus_citation_path: us/statute/26/7701
        - path: versions[0].formula
          kind: import
          import:
            target: us:statutes/26/7701#motor_vehicle_business_use_minimum_fraction
            output: motor_vehicle_business_use_minimum_fraction
            hash: sha256:local
  versions:
    - effective_from: '2024-01-01'
      formula: >-
        agreement_is_with_respect_to_motor_vehicle_including_trailer

        and
        lessor_personal_liability_plus_eligible_pledged_property_value_equals_or_exceeds_acquisition_financing

        and lessee_separately_signed_perjury_certification_of_trade_or_business_use_fraction >
        motor_vehicle_business_use_minimum_fraction

        and
        lessee_separately_signed_notice_that_lessee_will_not_be_treated_as_owner_for_federal_income_tax

        and not lessor_knows_certification_is_false

motor_vehicle_agreement_treated_as_lease

Derived

source: 26 USC 7701(h)

- name: motor_vehicle_agreement_treated_as_lease
  kind: derived
  entity: MotorVehicleOperatingAgreement
  dtype: Judgment
  period: Year
  source: 26 USC 7701(h)
  metadata:
    proof:
      atoms:
        - path: versions[0].formula
          kind: condition
          source:
            corpus_citation_path: us/statute/26/7701
        - path: versions[0].formula
          kind: import
          import:
            target: us:statutes/26/7701#qualified_motor_vehicle_operating_agreement
            output: qualified_motor_vehicle_operating_agreement
            hash: sha256:local
  versions:
    - effective_from: '2024-01-01'
      formula: |-
        qualified_motor_vehicle_operating_agreement
        and agreement_contains_terminal_rental_adjustment_clause
        and agreement_would_be_treated_as_lease_but_for_terminal_rental_adjustment_clause

lessee_not_owner_during_motor_vehicle_operating_agreement

Derived

source: 26 USC 7701(h)

- name: lessee_not_owner_during_motor_vehicle_operating_agreement
  kind: derived
  entity: MotorVehicleOperatingAgreement
  dtype: Judgment
  period: Year
  source: 26 USC 7701(h)
  metadata:
    proof:
      atoms:
        - path: versions[0].formula
          kind: condition
          source:
            corpus_citation_path: us/statute/26/7701
        - path: versions[0].formula
          kind: import
          import:
            target: us:statutes/26/7701#qualified_motor_vehicle_operating_agreement
            output: qualified_motor_vehicle_operating_agreement
            hash: sha256:local
  versions:
    - effective_from: '2024-01-01'
      formula: |-
        qualified_motor_vehicle_operating_agreement
        and agreement_contains_terminal_rental_adjustment_clause

transaction_has_economic_substance

Derived

source: 26 USC 7701(o)

- name: transaction_has_economic_substance
  kind: derived
  entity: Transaction
  dtype: Judgment
  period: Year
  source: 26 USC 7701(o)
  metadata:
    proof:
      atoms:
        - path: versions[0].formula
          kind: condition
          source:
            corpus_citation_path: us/statute/26/7701
            excerpt: >-
              changes in a meaningful way (apart from Federal income tax effects) the taxpayer's
              economic position
        - path: versions[0].formula
          kind: condition
          source:
            corpus_citation_path: us/statute/26/7701
            excerpt: the taxpayer has a substantial purpose (apart from Federal income tax effects)
  versions:
    - effective_from: '2024-01-01'
      formula: >-
        economic_substance_doctrine_is_relevant_to_transaction

        and
        transaction_changes_taxpayer_economic_position_meaningfully_apart_from_federal_income_tax_effects

        and taxpayer_has_substantial_non_federal_income_tax_purpose_for_transaction

profit_potential_taken_into_account_for_economic_substance

Derived

source: 26 USC 7701(o)

- name: profit_potential_taken_into_account_for_economic_substance
  kind: derived
  entity: Transaction
  dtype: Judgment
  period: Year
  source: 26 USC 7701(o)
  metadata:
    proof:
      atoms:
        - path: versions[0].formula
          kind: condition
          source:
            corpus_citation_path: us/statute/26/7701
            excerpt: >-
              only if the present value of the reasonably expected pre-tax profit from the
              transaction is substantial in relation to the present value of the expected net tax
              benefits
  versions:
    - effective_from: '2024-01-01'
      formula: >-
        transaction_relies_on_profit_potential_for_economic_substance

        and
        present_value_of_reasonably_expected_pretax_profit_is_substantial_in_relation_to_expected_net_tax_benefits

Clarification of economic substance doctrine

motor_vehicle_business_use_minimum_fraction

qualified_motor_vehicle_operating_agreement

motor_vehicle_agreement_treated_as_lease

lessee_not_owner_during_motor_vehicle_operating_agreement

transaction_has_economic_substance

profit_potential_taken_into_account_for_economic_substance

Clarification of economic substance doctrine

motor_vehicle_business_use_minimum_fraction

qualified_motor_vehicle_operating_agreement

motor_vehicle_agreement_treated_as_lease

lessee_not_owner_during_motor_vehicle_operating_agreement

transaction_has_economic_substance

profit_potential_taken_into_account_for_economic_substance

(1)Application of doctrine#

(2)Special rule where taxpayer relies on profit potential#

(3)State and local tax benefits#

(4)Financial accounting benefits#

(5)Definitions and special rules#