In Rent-A-Center, Inc. v. Commissioner, the majority court affirmed deductions for premiums paid to the taxpayer’s Bermuda captive insurance subsidiary, finding that the captive was adequately capitalized with qualified assets that meaningfully shifted risk. The dissenting judges disagreed with the majority’s conclusions on the facts and the law finding that Rent-A-Center’s captive arrangement did not constitute insurance for tax purposes. Split decisions in the Tax Court are infrequent and an appeal may be in store.
Read the full opinion here:
Rent-A-Center, Inc. v. Commissioner, 142 T.C. No. 1 (2014)