CF Headquarters Corporation, 164 T. C. 5, filed 3/4/25, claims the $3.1 million it got from NY State to stay in NYC post-9/11, when its subsidiary Cantor Fitzgerald lost 658 of its 1000 employees on 9/11, was a contribution to capital, or a gift, or disaster relief. Anyway, it’s not taxable income, they say.
In a “REVIEWED” full-dress T. C., Ch J Kathleen (“TBS = The Big Shillelagh”) Kerrigan says no. For some background, see my blogpost “Continuation,” 9/16/20.*
The NYS grants weren’t part of permanent working capital, but went to pay rent and salaries, which the terms of the grants required. The only capital items were furniture, furnishings and equipment, and Taishoff says even those might have gotten Section 179 treatment.
The grants aren’t gifts because NYS hoped for tax revenue from corporate operations and employee State income taxes. Quid pro quo.
Section 139 disaster relief money is excludable only by individuals, which CF Headquarters Corporation isn’t.
But CF does escape penalties, because it cites all the right cases, so substantial authority. A Taishoff “Good Try” to Kevin M. Flynn, Esq., CF’s trusty attorney.
JJ. Foley, Buch, Nega, Pugh, Ashford, Urda, Copeland, Jones, Toro, Greaves, Marshall, Weiler, Way, Landy, Arbeit, Guider, Jenkins, and Fung are all on board.
Taishoff Law 