Tax

Plain Language Since the code does not explicitly define the term “directly traceable”, the court had to look elsewhere. The case of Watson v. Ray, 192 F.3d 1153, claims that if no “specific definition of the term is given in the statute itself, court should look to the ordinary common sense meaning of the words.

Directly Traceable Prong Test Background In Revenue Ruling 88-66, the service examines three fact patterns in order to determine if the each one would fall under the control of §246A. Each of the fact patterns are provided below, followed by the Ruling’s analysis and then an examination of how it applies to the case.

OBH, Inc. v. Comm. In OBH, Inc. v. Comm., the commissioner tried to assert that OBH, Inc (referred to as Berkshire) used proceeds from a loan to purchase short term stock investments.

General Limitations Imagine a time where you could borrow money, use that to buy money, and then be paid by the government for doing so. Prior to the enactment of §246A, a corporation could do this.