09-23-2009, 02:45 PM
<!--quoteo-->QUOTE <!--quotec-->IRS challenge to Cubs sale might add to Tribune Co. liability
September 23, 2009
BY DAVID ROEDER droeder@suntimes.com
The Sam Zell-orchestrated sale of the Chicago Cubs probably will be challenged by the IRS, a prominent tax expert said Tuesday.
Robert Willens said an IRS probe should not upset Tribune Co.'s plan to sell the team and related broadcasting assets for $845 million to the Ricketts family. That's because any IRS action would follow an audit that might not occur until 2011, long after the team is expected to change hands.
But a fight with the IRS could expose Tribune, which is trying to emerge from bankruptcy, to a liability of $300 million. The Cubs sale was structured to save about $300 million in capital gains taxes. It is set up as a partnership with Tribune keeping a 5 percent stake.
"The IRS is not favorably disposed to leveraged partnerships and this is about the highest profile leveraged partnership we've had," said Willens, who runs a consulting firm and publishes a tax newsletter. In response, Tribune issued a statement saying, "The Cubs transaction, while not yet concluded, meets both the letter and the spirit of the tax law."<!--QuoteEnd--><!--QuoteEEnd-->
September 23, 2009
BY DAVID ROEDER droeder@suntimes.com
The Sam Zell-orchestrated sale of the Chicago Cubs probably will be challenged by the IRS, a prominent tax expert said Tuesday.
Robert Willens said an IRS probe should not upset Tribune Co.'s plan to sell the team and related broadcasting assets for $845 million to the Ricketts family. That's because any IRS action would follow an audit that might not occur until 2011, long after the team is expected to change hands.
But a fight with the IRS could expose Tribune, which is trying to emerge from bankruptcy, to a liability of $300 million. The Cubs sale was structured to save about $300 million in capital gains taxes. It is set up as a partnership with Tribune keeping a 5 percent stake.
"The IRS is not favorably disposed to leveraged partnerships and this is about the highest profile leveraged partnership we've had," said Willens, who runs a consulting firm and publishes a tax newsletter. In response, Tribune issued a statement saying, "The Cubs transaction, while not yet concluded, meets both the letter and the spirit of the tax law."<!--QuoteEnd--><!--QuoteEEnd-->