Indiana: Subsidiary sales treated as business income and interest expense disallowed

A Letter of Findings held that income from taxpayer’s subsidiary sale was business income. The decision found that the US Supreme Court Meadwestvaco decision did not require that a unitary relationship exist. The decision disallowed related party interest expenses because they resulted in a failure to ‘fairly reflect’ Indiana income. The decision could be read to apply Indiana’s addback (for intangible expenses and related intangible interest expenses) to related party loan interest expense.

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