The US Tax Court has held that a US corporate taxpayer's equity investment in a foreign entity was a loan for US Federal income tax purposes. Hewlett-Packard Company and Consolidated Subsidiaries v. Commissioner of Internal Revenue, T.C. Memo. 2012-135 (Docket Nos. 21976-07, 10075-08, 14 May 2012). The indirect foreign tax credits arising from the investment, and the capital loss incurred upon sale of the investment, were accordingly denied.
The case involved a US corporation (HP) that…