Billion-dollar tax strategy comes apart

Trial Notebook

By Steven P. Garmisa

Hoey & Farina

Posted December 11, 2018 3:23 PM

Exelon generated $2.45 billion by selling some power plants. Faced with a gigantic tax bill, Exelon tried a variation of the sale-in, lease-out tax shelter — with an exquisitely crafted series of maneuvers (in deals with tax-exempt utilities in Texas and Georgia) that were designed to qualify for tax deferral as like-kind exchanges under Section 1031 of the Internal Revenue Code.The IRS blew a fuse and zapped Exelon with $87 million in penalties on top of $436 million in deficiencies. When the tax court affirmed …

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