Liberty Global Met With Skepticism in Foreign Tax Credit Appeal

A Tenth Circuit judge expressed wariness Monday of Liberty Global Inc.'s arguments for revival of its disallowed foreign tax credit claim on gains from a Japanese stock sale.

Liberty Global told the appellate court that a $2.3 billion portion of its gain should be considered foreign-source income in support of its claimed $241 million credit because that amount was in excess of what was required to recapture the company’s overall foreign loss.

When a US company’s foreign-source losses exceed its aggregate foreign-source income, it may generally use the resulting OFL to offset US taxable income. The telecommunications company gained $3.25 ...