Lawyers: Rent-A-Center Ruling is Good News for Captives - McDermott Will & Emery

Lawyers: Rent-A-Center Ruling is Good News for Captives

Overview


Thomas Jones called a U.S. Tax Court decision allowing a rent-to-own company’s subsidiaries to deduct payments made to the company’s wholly-owned insurance captive “definitely favourable for taxpaying organisations that would like to set up a captive and get insurance tax treatment.” Mr. Jones noted that “in considering risk distribution the majority of the Court did not apply the strict IRS revenue ruling standards,” adding that if the decision is upheld the use of pool insurance may decline.