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Indiana Tax Court finds department erred in reclassifying gain from sale of subsidiary as business income

On July 11, 2017, the Indiana Tax Court held that the Indiana Department of Revenue erred in reclassifying a corporation’s gain on a 2001 sale of a subsidiary from nonbusiness income to business income. The Tax Court also addressed the scope of the Department’s authority to make adjustments to net operating losses in closed tax years, holding that a calculation of a carryover credit from a closed year can be revisited only to determine the tax liability for an open year.