Comm’r IRS v. BrokerTec Holdings

In a case based on Section 118 of the IRS Code before it was amended by Congress, the 3rd Circuit reversed the Tax Court and held, because New Jersey did not restrict how BrokerTec could use grants it received from the state, and because the grants were calculated based on the amount of income tax revenue that new BrokerTec jobs in the state would generate, the grants were taxable income, not contributions to capital.

IRS