When looking at the economic family cases, it’s important to have some type of structure. Therefore, I’ll be using the fact patterns outlined in Revenue Ruling 77-316 and then looking at the cases which most resemble those fact patterns. What follows is an excerpt from my book U.S. Captive Insurance Law.

The first fact pattern outlined in Revenue Ruling 77-316 is entirely insular:

During the taxable year domestic corporation X and its domestic subsidiaries entered into a contract for fire and other casualty insurance with S1, a newly organized wholly owned foreign “insurance” subsidiary of X. S1 was organized to insure properties and other casualty risks of X and its domestic subsidiaries. X and its domestic subsidiaries Read More

In my previous post (Captive Cases Series – The Flood Plane Cases, Part I), we looked at the first flood plane case Consumers Oil. This week, we’ll take a look at the second flood plane case — U.S. v. Weber Paper Company.

To place this case in perspective, here is a bit of relevant history:

In mid-July 1951, heavy rains led to a great rise of water in the Kansas River and other surrounding areas. Flooding resulted in the Kansas, Neosho, Marais Des Cygnes, and Verdigris river basins. The damage in June and July 1951 exceeded $935 million dollars in an area covering eastern Kansas and Missouri, which, adjusting for inflation, is nearly $7 billion dollars in 2005.[1] The flood resulted in the loss of 17 lives and displaced 518,000 people.[2] Read More