The Fourth Circuit Court of Appeals reversed the Tax Court and remanded for further proceedings. The appellate court held that the transfers between investor partners and the partnership were not non-taxable capital contributions followed by partnership distributions as previously determined by the Tax Court but rather were disguised sales of state tax credits subject to tax.
Read the Fourth Circuit’s opinion here.
Virginia Historic Tax Credit Fund 2001 LP v. Commissioner, No. 10-1333 (4th Cir., March 29, 2011)
Read the Tax Court opinion here.
Virginia Historic Tax Credit Fund 2001 LP v. Commissioner, TC Memo. 2009-295