Canteen Corp. v. Commonwealth

OPINION BY

Judge LEADBETTER.1

The issue presented is whether a corporate taxpayer’s gain from the fictional liq*596uidation of assets deemed to occur under a federal tax election pursuant to 26 U.S.C. § 338(h)(10) is taxable by the Commonwealth of Pennsylvania as business income or non-business income. In exceptions to the decision by a panel of this court,2 Canteen Corporation (Canteen) challenges the legal conclusion that its parent corporation’s federal tax election under Section 338(h)(10) of the Internal Revenue Code (IRC), 26 U.S.C. § 338(h)(10), which results in a fictitious sale of…